[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 6
FARM AND FOREIGN AGRICULTURAL SERVICE PROGRAMS AND FOOD SAFETY
PROGRAMS
Page
Farm and Foreign Agricultural Service............................ 1
Farm Service Agency.......................................... 119
Risk Management Agency....................................... 364
Foreign Agricultural Service................................. 472
Food Safety...................................................... 901
Food Safety Inspection Service............................... 1062
Explanatory Notes for RVS, RHS, RBCS, and Index for Part 7... 1201
________
U.S. GOVERNMENT PRINTING OFFICE
79-821 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, March 13, 2002.
FARM AND FOREIGN AGRICULTURAL SERVICES
WITNESSES
J.B. PENN, UNDER SECRETARY, FARM AND FOREIGN AGRICULTURAL SERVICES
JAMES R. LITTLE, ADMINISTRATOR, FARM SERVICE AGENCY
ROSS J. DAVIDSON, JR., ADMINISTRATOR, RISK MANAGEMENT AGENCY
ELLEN TERPSTRA, ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE
MARY CHAMBLISS, ACTING GENERAL SALES MANAGER
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE
Introduction of Witnesses
Mr. Bonilla. The Subcommittee will come to order. We have
with us today Dr. J.B. Penn, the Under Secretary for Farm and
Foreign Agricultural Services, and along with him an all-star
cast: Mr. James Little, the Administrator of the Farm Service
Agency; Mr. Ross Davidson, the Administrator of the Risk
Management Agency; Ms. Ellen Terpstra, the Administrator of the
Foreign Agricultural Service; Ms. Mary Chambliss, the
Department's Acting General Sales Manager, and of course, Mr.
Steve Dewhurst. We are always delighted to see you, Steve.
We have read your statement, Dr. Penn, and it will be
included in the record in its entirety. Before we begin hearing
your testimony this morning, I am delighted to yield to my
colleague, Ms. Kaptur, for any opening remarks that she may
have.
Ms. Kaptur. Thank you Mr. Chairman.
I just welcome Dr. Penn and all of your associates here
today. I have been waiting for this particular group of experts
from USDA, and we look forward to your testimony this morning.
Thank you for your service.
Mr. Bonilla. Thank you, Ms. Kaptur.
We also have, for your information, 11 Appropriation
Subcommittee hearings going on simultaneously this morning, so
we will have Members coming in and out throughout the morning.
They are very interested in hearing what you have to say and
will have some questions for you. If you will just understand
and bear with the logistics we are dealing with this morning,
we would appreciate that.
And at this time we would be delighted to hear your opening
remarks.
Opening Statement
Dr. Penn. Well, thank you very much, Mr. Chairman. I am
very pleased to be here this morning with you and the Members
of this Committee to talk about the 2003 program and budget
proposals for the Farm and Foreign Agricultural Services
mission area in the Department.
As you indicated, I am surrounded by an all-star cast, and
I am very pleased to have members of that cast with me this
morning. On my right is Ms. Ellen Terpstra, who is in her
second week as the Administrator of the Foreign Ag Service. And
on my left is Mr. Ross Davidson, who is in his second week as
the Administrator of the Risk Management Agency. Mr. Jim
Little, also on my left, the Administrator of the Farm Service
Agency, has been around a lot longer than that. And also, as
you indicated, we have Steve Dewhurst, who is no stranger to
this Committee. And we have a lot of institutional memory and
expertise with Mary Chambliss, who has graciously consented to
be the Department's Acting General Sales Manager until that
position is permanently filled. And behind me are lots of other
experts, as you indicated. So I think among us we should be
able to provide the information that you require.
I would like to take just a couple of minutes. I will be
very brief and make some introductory remarks about the program
and budget proposals that we have presented to you.
I would note that the programs and services of the Farm and
Foreign Agricultural Services mission area are at the heart of
the Department of Agriculture's efforts to assist American
agriculture to respond to the challenges of the 21st century.
We provide a wide range of services among the three agencies
here--price and income supports, farm credit assistance, risk
management tools, conservation assistance, trade expansion, and
trade and export promotion programs. So we provide the
foundation for much of the economic safety net for America's
farmers and ranchers.
And the proposals that we have included in the 2003 budget
fully support all of these activities. First of all, the
development of sound domestic policies is covered in the
additional $73.5 billion in mandatory funding over the 2002-
2011 period that is included for new farm legislatoin. The
budget fully funds our risk management and crop insurance
activities. It supports our export expansion goals by providing
a program level of over $6 billion for the Department's
international activities. And it provides continued delivery of
a large and complex set of farm and related assistance
programs, while trying to improvethe management and delivery of
those programs.
The mission area that I look after comprises three large
agencies. I want to just very briefly mention those one by one.
The first of course is the Farm Service Agency. That is our
front-line agency for delivering farm service. That is our
presence in the countryside for dealing directly with farmers,
and the budget places a priority on enhancing the ability of
the Farm Service Agency to provide better service more
efficiently to America's farmers and ranchers.
The 2003 program levels for FSA salaries and expenses
support a ceiling of about 5,800 Federal staff years and 11,250
non-Federal county staff years. That is unchanged from the
current level of 2002.
Now, there will of course be workload implications from the
new farm bill for FSA. At the time the budget was developed,
what those workload implications would be was unclear, so we
have not included any proposal for increased resources for
implementing the new farm bill.
It is anticipated that most of the programs that FSA will
administer will be governed by the new farm bill. There are
lots of changes that potentially could occur as a result of the
farm bill, such as updating crop bases and program yields,
which is a major task that has not been done since 1985. There
could also be implementation of new and expanded programs, new
conservation programs, perhaps new payment limit requirements,
lots of programs that are going to substantially change the
workload nature of FSA, but once we know more clearly what the
final provisions of the farm bill are going to be, then we will
assess the resource requirements and we will make those known.
The Administration continues the practice of previous
Administrations in trying to develop a much more efficient
delivery of services by our Farm Service Agency. As you know,
the resources in that agency have been declining pretty
substantially over time as the nature of the farm programs has
changed. A lot of that has been due to the introduction of new
technology, new computer systems, and re-engineered business
processes.
We also have a couple of other obligations such as the
Freedom to E-File Act, and some management initiatives
involving the service centers that are laid on top of the
requirements in the new farm bill.
Very quickly, the 2003 budget supports about $4 billion in
farm loans, about a quarter of which would be direct loans and
the rest are guarantees. A substantial portion of the direct
loans are reserved for assistance to beginning and limited-
resource and socially-disadvantaged farmers and ranchers. So
overall there is a modest increase for the Farm Service Agency
without taking into account the new farm bill.
Let me turn quickly to the Risk Management Agency. The
Federal crop insurance program, and now revenue insurance and
livestock insurance, provides one of the strongest safety net
programs available to America's farmers and ranchers. In 2001
the insurance program covered nearly $37 billion in liability
and covered the production on 211 million acres. That is 5
million acres more than in the previous year. And we have seen
a very significant shift in the business over the past 2 years.
Instead of more producers electing crop insurance, we have seen
those that have it buy up to higher levels of coverage as a
result of the increased premium subsidies.
The 2003 budget requests an appropriation of such sums as
may be necessary as mandatory spending for all costs associated
with the program, except of course, for Federal salaries and
expenses, and the level of funding that is proposed we think is
necessary for that purpose. The budget also includes a proposal
to cap the amount of underwriting gains the insurance companies
may receive. That proposal is based on the fact that since
1994, the insurance companies have received over $2 billion in
underwriting gains, while the Federal Government has paid about
$1 billion in excess losses.
Now, let me turn very briefly to the Foreign Agricultural
Service and the international area. As is well known, I think,
to this Committee, our farmers have the capacity to produce
far, far more food and fiber than we can ever consume in the
domestic market. The application of new technology each year
makes that capacity grow faster than demand, so if we are to
have a profitable farm sector, we have to have increased access
to foreign markets. We have to have access to markets and the
customers in those markets, so we are pursuing a very
aggressive strategy to try to make sure that our farmers do get
access to those markets.
Multilateral trade negotiations, the so-called Doha Round,
regional trade initiatives, the Free Trade Area of the
Americas, the Central America Free Trade Area, and bilateral
free trade agreements, such as with Chile and Singapore, all
represent activities on the trade expansion front.
In addition to that, in FAS we try to monitor and enforce
the existing agreements to make sure that people live up to the
requirements that they have entered into, and in our budget
proposals, we have tried to make sure that we have adequate
resources for market promotion and development programs.
The budget includes an expansion of about $10 million. That
is largely for new technology, for new hardware and software,
which is so desperately needed by that agency. It also includes
an increase in the Cochran Fellowship Program, which has been
an outstanding program over the past several years, and some
minor increases elsewhere.
One last point I would note is that the Administration has
undertaken a review of the international food assistance
activities in order to reform and rationalize their
implementation and strengthen the effectiveness of those
programs, and the results of that review are reflected in the
2003 budget and program proposals. The P.L. 480 Food Assistance
Program has a total program level of $1.34 billion, which would
provide about 3.7 million metric tons. That reflects a
substantial increase in the donations under Title II, and the
reduction in 416(b).
Overall, Mr. Chairman, to conclude, let me just quickly
summarize and say that we believe that this is a good budget.
It does not reflect any marked departure in policy direction.
It attempts to provide resources to those areas where they are
most needed for the most immediate problems in the three
agencies.
So with that, I would conclude, and along with my
colleagues, would be happy to try to respond to any questions
that you might have.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
FARM BILL ADMINISTRATIVE COSTS
Mr. Bonilla. Thank you very much, Dr. Penn. You touched on
this briefly in your remarks, and you and I have talked about
this one-on-one. Can you give the Subcommittee an idea if and
when the farm bill is passed, what kind of figure you are
looking at for these additional administrative costs? These
costs are going to suddenly fall not just on your back, but on
our back as well, to try to figure out how to pay for them.
Dr. Penn. Well, as I indicated, we have been watching the
farm bill process very closely. The House completed its version
last October, so immediately thereafter Mr. Little and his
colleagues began a very careful assessment of what might be
involved in implementing that bill, and on the Senate side the
same thing, once we saw exactly what that bill might be. And as
I indicated in my remarks, there are some pretty substantial
departures from the existing law in that bill. Again, the
updating of acreage bases and yields is very time consuming,
involves a lot of interaction with farmers, a lot of time spent
in trying to make sure that farmers know what their options
are.
Also there are several new programs contemplated, like
conservation programs which we haven't had before, which would
be entirely new start-up programs.
So we have tried to monitor all of that. We have tried to
make some assessments of what the resource requirements are,
but we really can't do that with any definitiveness until we
know what the new farm bill is going to be. So at the point in
time where we think we have got a pretty good handle on that,
then we will try to polish up the numbers that we have. Then of
course we will meet within the Administration and with OMB.
Mr. Bonilla. Just so the Subcommittee can have a rough
idea, we are talking of a figure in excess of $100 million, are
we not?
Dr. Penn. Yes, we are. I don't want to, of course, be
pinned down.
Mr. Bonilla. We are not asking for an exact number, but we
would like to get an idea.
Dr. Penn. We are talking something on the order of more
than 2,500 staff years and something more than $100 million in
order to implement this bill in a timely fashion.
CAP ON UNDERWRITING GAINS
Mr. Bonilla. I want to now switch to crop insurance. The
budget request proposes language to establish a cap of 12\1/2\
percent on underwriting gains. You touched on this in your
opening remarks. It has come to our attention that the Risk
Management Agency issued Bulletin No. MGR-01-031 dated December
20th of last year, stating, and I quote: ``FCIC is not
canceling the 1998 Standard Reinsurance Agreement effective for
the 2003 reinsurance year. Therefore, it will remain in effect
for the 2003 reinsurance year.'' End of quote.
Doesn't this constitute a contract that would preclude the
proposed limitation? If you will note that question, I have a
couple of others that go along with it and you can answer them
all at one time. Why does the proposed language ask us to
legislate that ``application of this paragraph shall not
constitute the renegotiation of the Standard Reinsurance
Agreement''? Normally the ``appendix'' to the President's
budget request is not the place to go to find prose like this.
This year, the proposal to cap underwriting gains is described
as providing, and I quote, ``some constraints on windfall
profits.'' Why are gains beyond 12.5 percent considered
windfall profits? Has any consideration been given to returning
to the days when the crop insurance program was delivered by
USDA employees?
I asked you two or three things at one time, but go ahead.
Dr. Penn. Well, let me respond in general as best I can.
First of all, the Standard Reinsurance Agreement was last
entered into in 1998 and this is an agreement that is
applicable for five years. The Department only has one
opportunity in the course of that five years to renegotiate it
with the companies. There are some very ticklish legal issues
that get involved in terms of what constitutes a major change
in the Standard Reinsurance Agreement.
Of course we have spent a lot of time with our lawyers, and
the lawyers indicate that a change of the type that we are
proposing would not affect the Standard Reinsurance Agreement,
but I think to be on the safe side, lawyers always like to have
it in black and white, so that, I think, is the reason for the
addition of the new language.
Let me just say in a more general sense, Mr. Chairman, that
the Agricultural Risk Protection Act is a new concept. The law
was enacted in 2000 and we are still learning a lot about that.
Previously, the Crop Insurance Corporation at USDA developed
the insurance products, marketed the products, was the
regulator, provided oversight to the program, and it was
operated much as a farm program.
But this is a new type of program in which the products are
developed by the private sector, the products are delivered by
the private sector, and the Risk Management Agency is the
reinsurer and the regulator at the same time. So we have a new
concept here. It is truly a public/private partnership, and we
are trying very much to work with the insurance companies, and
trying to work with our own staff to be able to deliver this
product in a way that the Congress intended. There are stresses
and strains as we are trying to do this.
Finally, we have examined the financial aspects of this
very carefully, and it is our number one concern that the
interest of American farmers be looked after in all of this
insurance business. We think that the insurance companies are
on a solid enough footing, that the financial requirements to
participate in these programs are solid enough, that these
underwriting gains can be capped at 12\1/2\ percent and the
program not be materially affected.
As I indicated, the loss experience of the past few years
has been very favorable, and the underwriting gains to the
companies have been fairly considerable. Of course, the Federal
Government takes any excess losses, and we have paid out about
a billion dollars since 1998 in losses, while the underwriting
gains have been something on the order of $2 billion.
So that is a long answer, but you did have several
questions involved there.
Mr. Bonilla. I appreciate that, and just one final
observation before I yield to Ms. Kaptur. One of the fun things
to watch this time around is the big difference between OMB and
CBO numbers. OMB scored this language as saving $115 million in
both budget authority and outlays for fiscal year 2003. CBO
scores it as saving $62 million in budget authority and nothing
in outlays. Obviously, you have to live with OMB and we have to
live with CBO. This is, to the best of our recollection, the
largestdifference that we have ever seen in scoring something
like this.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Under Secretary Penn, this is your first formal appearance
before our Subcommittee.
Dr. Penn. Yes, it is.
Ms. Kaptur. And we welcome someone of your incredible
background to service in the Government of the United States. I
take it, is this the first time you have served in a major
position at the U.S. Department of Agriculture?
Dr. Penn. It is the first time I have had a political
appointment, yes. I was in a career position there many, many
years ago.
ROLE OF USDA IN DETERMINING FOOD AID POLICY
Ms. Kaptur. I wanted to say that you appear before us at a
time when Enduring Freedom captures a lot of our attention,
simply because of the magnitude of the challenge, and therefore
my first question to you relates to how you view your own
position. You have a really vast background in economic
analysis, and in working with many of the major commodity
groups and brokers in our country. But as I look at your budget
submission to us, and I think about Enduring Freedom in
particular, I am concerned about the lack of emphasis on
programs like Global Food for Education. In fact there is no
funding proposed for that, and yet we as a Nation are
confronting, regardless of how many Taliban we kill, madrasas
all over Central Asia that are turning out future Taliban or
mindsets, as we sit here today. So the lack of funding for
Global Food for Education is a concern of mine.
I won't have time in this round to ask you questions about
P.L. 480 and Section 416. You have essentially recommended the
elimination of Section 416. And what I view as a substantial
cut in international food programs, a de-emphasis on using
private voluntary organizations who are essential to civic life
in these places that we are engaged with now that really have
no governance and it is going to be a long time before we get
there.
My fundamental question to you is, do you view the role of
the Farm and Foreign Agricultural Services as largely a cash
register that merely moves product around the world, or do you
view the U.S. Department of Agriculture having some role to
play in the fashioning of policy for this country to help us
meet this enormous challenge for which Americans are now dying
on the ground?
Dr. Penn. Well, thank you for that question, and I think
that is a very fair question. I think anyone who knows me and
knows much about my background would certainly understand that
I don't view the Department of Agriculture as a cash register.
I take very seriously my responsibility that we are dealing
with the taxpayer dollars. President Bush, in a letter to all
the new political appointees said, ``Remember the money we're
spending belongs to the taxpayer, so make sure that every
single dollar is spent wisely.'' And I take that very
seriously, and I try to do that.
GLOBAL FOOD FOR EDUCATION INITIATIVE
I personally try to influence policy to the extent I can to
see that every dollar is spent in furthering some overall
objective of this Nation and certainly of the Department of
Agriculture and the farm sector. I understand about your
concern about the Taliban and the Global Food for Education
Initiative. I think that is a very good program and I think we
need programs like that that go to the village level, if you
will, that try to show what America is all about, that try to
transfer our values to people in these impoverished areas. You
know the history of that program far better than I. It is a
pilot program and we are in the second year. We are waiting for
our own evaluation of the program. We have the people and the
procedures in place to evaluate that. We have had some
anecdotal reports, and they have been very positive. I mean it
is really heartwarming when you hear reports about how villages
in Uganda have mobilized to support the schools, how the
enrollment of girls especially in school programs has
increased, how everybody has taken on a new objective, a new
meaning in trying to operate these programs.
So we are going to look at this very carefully, and as you
know, the farm bill is going to address the future of this
program as well, so we are waiting to see how it gets resolved
in that legislation.
Ms. Kaptur. I thank you for those comments, Mr. Secretary,
and I would just say to you that I don't think that the
Department of Agriculture has measured up as a participant on
the front lines in this war. I looked at all the testimony that
has come before us, and it isn't only yours. But the parts of
the world in which we are engaged, subsistence living is the
norm. We have the ability but we don't have the will nor the
vision to use food to build peace and to educate children in a
different way than they are currently being educated. And if
you look at the madrasas, and the chief lure in Pakistan and
ultimately in Afghanistan, when we get things settled down over
there, the schools are the key to the future. And the
Department of Agriculture can't be a back bencher in this. And
it can't diminish the role of private voluntary organizations
which we are going to need and have to form in order to have
some kind of stability over there. It is not going to be easy
to do.
What troubles me, as I look at your budget, just the
perspective and the way things are presented, I don't view the
Department of Agriculture as being a part of the solution in
this war, and yet I think you should be right at the front
lines. From a policy perspective, you are not there. And yet we
have the food here. It was interesting to me how they dropped
the food. We talked to Secretary Powell about doing that, and
he responded very favorably, and that is sort of an emergency
approach. But as we look toward the future, I would just urge
you to reconsider the budget that you have offered us and place
the Department of Agriculture on the front lines where it needs
to be. Right now you don't take us there with the omission of
key programs that I view as critical to the future. You have
the knowledge, maybe not in your part of USDA, but surely in
the cooperative research area and our extension system. You
have the commodities, you have those. In terms of the long-term
development that has to be done over there, I see in your
background quite extensive experience in Latin America and in
Poland.
This challenge in this region goes to the heart of
agriculture and subsistence, whether it is removing the hashish
fields and the opium fields in Afghanistan and finding farmers
an alternative form of support. I have been very disappointed
as I have watched the Administration come up here and present
their various requests to us, as if this wasn't even going on.
So that is my first round of questions and I appreciate
your appearance today.
Mr. Bonilla. Thank you, Ms. Kaptur. I would like to add a
note related to your comments. I was delighted to work with you
in trying to make sure that this country does get the
appropriate amount of recognition for some of the food we are
distributing in Afghanistan. After you and I signed the letter
asking that we have our products marked as U.S.A. products--if
you will look at the photo up over my shoulder in the corner--
we have proof that they are now trying to mark our donations on
a regular basis. We are playing a larger role in Afghanistan
above and beyond what our military is doing. Thank you very
much.
Mrs. Emerson.
FSA PROGRAM APPEALS
Mrs. Emerson. Thanks, Mr. Chairman, Secretary.
Time and time again, a producer may be wronged or may be
wronged inadvertently by a county FSA office. I don't know
which one of you wants to answer this question. Anyway, when
the country board of appeals overrules the local office
decision, and in many cases the State upholds the Board's
ruling, the national office--let me just wait till a couple
bells go here.
[Pause.]
Mrs. Emerson. The national office is required to make the
final decision, and they will deny the appeal. I can't tell you
how frustrating this is and it happens at an alarming rate, and
has happened in my district in Southeast and Southern Missouri.
Do you all have statistics on what frequency FSA or NAD
rule in favor of the farmer during an appeal like that?
Dr. Penn. I am going to ask Mr. Little to respond to that.
Mrs. Emerson. Okay.
Mr. Little. I don't believe we have statistics that would
actually go back and say State by State what the appeal process
has led to. The National Appeals Division reports to the
Secretary. On occasion when the State overrides a decision that
was made within the county committee, it does come to
Washington. We normally review it in house and then if we
disagree with the decision, we will appeal it to the National
Appeals Division.
On a case-by-case basis we can go back and check. As a
matter of fact, on a couple State issues, I have gone back and
asked what the statistics are. From a nationwide perspective, I
don't think we have a statistic, but we could gather it, I
believe.
Mrs. Emerson. Well, I am curious because I believe there
was an article last year that was written stating 85 percent of
the cases are overridden by the Secretary and at the farmer's
expense. So if a journalist or a researcher was able to catalog
those statistics, then I suspect you all could too. Therefore,
I would like to know this information, as it is a huge problem
and I wonder if you could also provide for me the criteria used
in making those decisions as to who is correct in a particular
instance.
Mr. Little. We can provide that for the record.
REPORTING FARM RECONSTITUTIONS
Mrs. Emerson. I have a couple of other quick questions.
This is an FSA-related question. Mr. Little, can you tell me
what benefit the 30-day time limit on reconstitutions has for
FSA offices? I have spoken to two separate county executive
directors in my district, both of whom see absolutely no
benefit in having a 30-day time limit. It has become a thorn in
the side of many of my farmers, many of those in Arkansas and
Mississippi, all along the Mississippi Delta. So what is the
benefit of this 30-day limit?
Mr. Little. The benefit is trying to bring the
reconstitution or the change in farm ownership to closure. It
was put into place so we would have a time specific by which we
knew that we would get the information.
Mrs. Emerson. What happens when our farmers don't know
anything about this or aren't told about this, and suddenly
find themselves in violation, which has happened on many
occasions? Do you send letters? Are the FSA county folks
supposed to tell people? I can't tell you how many cases we
have had where people have no clue and then are fined,
obviously, as a result of that.
Mr. Little. I appreciate your concern because since I have
been Administrator and as Acting Administrator, this has been a
time-consuming effort on my part and Dr. Penn's part as well.
The producers are supposed to be advised of the 30-day rule. It
is in regulation, although I understand that farmers don't
always read what the regulations say, but they are supposed to
be advised when they sign up what their responsibilities are
when they do reconstitute their farms. This is an issue that we
are looking at to see if we can improve it.
Mrs. Emerson. Because if you think about it from a common
sense perspective, if a farmer doesn't know this 30-day limits
exists and he or she gets penalized for having done a
reconstitution it is the Department's fault----
Mr. Little. They are supposed to be advised by letter, but
it is an issue that we are taking a look at to see if we can
improve the process.
Mrs. Emerson. Okay. So you will get back to me?
Mr. Little. Yes, ma'am.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
2002-CROP LOAN RATES
Mrs. Emerson. Okay, I appreciate that.
And then one question just real quick for you, Dr. Penn.
You know, the Secretary has announced that, or did announce I
think on the 4th of January, she intended to let the farm bill
process run its course before announcing loan rates for the
2002 crop year. Now, if the conferees aren't able to complete
the work sooner rather than later, at what point do you think
the Secretary would make a loan rate announcement?
Dr. Penn. Well, I think you are exactly right in what you
say. We are watching the process very carefully, and at some
point I think it will become clear that the conference can't
complete a bill in time for it to be applicable to the 2002
crops. So at that point in time then of course we would need to
announce the loan rate for 2002. The loan rates for 2003 and
subsequent years would be addressed in the farm bill.
Mrs. Emerson. I understand that, but aren't we creeping up
pretty close?
Dr. Penn. Well, I think we have made some announcements
with respect to the price elections for crop insurance, and we
have a July 1 deadline there for giving producers the option to
choose the new rate or the loan rates that we published in
January. But it is very difficult to predict when the
conference might conclude. You know, every day there is some
new development, and so we are watching it very closely. We do
understand the urgency, and we will try to make the
announcement at the earliest possible time.
Mrs. Emerson. Well, I would be grateful. I know that there
are many of us who are very concerned that the Department might
reduce the soybean loan rate to $4.92. I don't suppose I could
get you to clarify any kind of position on this, could I?
Dr. Penn. I understand your position very well. Thank you.
[Laughter.]
Mrs. Emerson. Thanks, Dr. Penn.
Dr. Penn. Thank you.
Mrs. Emerson. Mr. Chairman, thank you.
Mr. Bonilla. Thank you, Ms. Emerson.
Mr. Boyd.
FSA SALARIES AND EXPENSES
Mr. Boyd. Thank you, Mr. Chairman.
And, Dr. Penn, welcome to the Committee, and your
background is an impressive one and I know you bring a lot of
expertise along with the members of your team.
I want to follow up on a question that the Chairman asked
relative to the budget and the lack of funding for any
implementation of a new farm bill in 2003. It appears to me
that the salaries and expenses of FSA increased by about 4
percent, maybe $48 or $50 million in the budget, and there are
some assumptions of cost savings by about 3 percent, maybe $34
million, but there is no detail or justification on those cost
savings. Can you elaborate or maybe have Mr. Little elaborate
about your plan about how to do that? That appears to be a net
gain of somewhere of $80 million. Am I reading that right?
Dr. Penn. Let's ask Mr. Little to elaborate then.
Mr. Little. The net increase is $49 million. The majority
of the increase, as shown in our explanatory notes, is for
payroll and benefits. There is also an increase to cover the
Administration proposal that the agencies have to cover
accruing employee pension and annuitant health benefits. We are
taking some savings in travel and other operating costs. We are
identifying some reductions as we speak, and how those
reductions are going to be taken into account. I don't believe
we have any specifics at this time, but we do anticipate
savings.
Mr. Boyd. So I understand then that the $34 million figure
or about 3 percent is a goal that you are trying to identify
how you are going to reach it. Is that what your answer is?
Mr. Little. Yes, sir.
LEGISLATION FOR 2002 CROP
Mr. Boyd. To follow up on Ms. Emerson's line of questioning
about the date for the 2002 crop as it relates to the farm bill
and whether we will implement the farm bill with this crop. And
that is a rather simple implementation or change on some
commodities. But there are others that we are making
significant changes in. I will give you one, is the peanut
crop. And everybody has agreed that those reforms or changes
are going to have to be made. It seems to me that the deadline
for whether we get in on this crop or next year's crop would be
different there than it would be the others. Would you address
that and give me--I mean our guys are just a few days away from
planting, and when you have a drastic change in a program like
that, their planting intentions were--quite honestly, they are
having difficulties with their bankers right now. I mean I get
calls every day. Would you mind addressing this or maybe just
give me a commitment that we will leave it like it is in 2002
and your recommendation would be to implement with 2003?
Dr. Penn. Well, let me just comment generally, Congressman
Boyd. This is an extremely complex situation, as you can
understand. And some people forget, but we are implementing the
last year of the FAIR Act right now while we are talking about
a new farm bill that might also apply to this year. So starting
on October 1 last year, Mr. Little and his colleagues starting
making the last of the $4 billion in production flexibility
contract payments, and so we have got one farm bill process
under way at the same time now we are looking at implementing a
new one and it for the same crop year that we are in.
As I said before, if we have to get involved in updating
acreage bases for instance or updating program yields
orimplementing new programs where we have to collect a lot of
information and write new software, that is going to require a crash
effort on our part to continue to implement and to take account of the
payments that we have already made under the current law at the same
time we are trying to overlay the second law.
With respect to the peanut program, that is a special case.
As you indicated, that's a very substantial change in a
program. It would move that program from one that involves
quotas to one that basically becomes like the grains and
oilseeds, or the marketing loan program. So the difficulty is
not so much in our implementing that program, because the loan
rates and LDPs and all of that would be paid on the crop that
is yet to be planted and yet to be harvested, so that would not
cause us so much difficulty. The difficulty is caused to the
people who are planning for what to do in the current year, and
that is an uncertainty that we cannot remove just by saying one
thing or another. I mean it really does depend upon the
Conference Committee and whether they are going to reform the
program this year or not.
Mr. Boyd. Thank you, and I appreciate your difficulty in
trying to implement the last year of a very bad program that
this Congress did in 1996, and replace it with hopefully
something better, but who knows.
But you would concede that in any event that the date for
implementation in this crop year is nearing us?
Dr. Penn. Yes, sir.
Mr. Boyd. Very quickly.
Dr. Penn. Yes, I would.
Mr. Boyd. Thank you, Mr. Chairman. I have other questions,
but I would like to defer to the second round.
Mr. Bonilla. Thank you very much, Mr. Boyd.
Mr. Goode, before I yield to you, I would like to point out
that we are hearing from a witness today, Mr. Little, the
Administrator of FSA, a person who will not have to strain to
understand anything you are saying this morning. [Laughter.]
He spent a little time down in your territory, and also had
a nice time at Virginia Polytechnic Institute, where he
concentrated on developing a good ear for local accents. So,
you may proceed with the utmost confidence this morning, Mr.
Goode. [Laughter.]
FSA STAFFING
Mr. Goode. Thank you, Mr. Chairman. I hope Mr. Little can
answer this question, and I hope it will be a favorable or at
least not an unfavorable answer.
The FSA staff in Virginia and the other States, as I read
your statement, you don't anticipate any changes in that, any
reductions?
Mr. Little. No. The 2003 budget proposal has straight lined
the 2002 levels, and they are the same as 2001. But as Dr. Penn
mentioned in the introductory remarks, these do not reflect any
increases that we might need when the farm bill is established.
So once we know what the farm bill requires, hopefully we would
be able to provide additional staffing.
FOREIGN AID
Mr. Goode. Thank you.
Dr. Penn, I would like to make an observation about aid to
foreign countries. Many in my area certainly don't mind, in
support, getting U.S. produced and U.S. made food to foreign
nations, but many are highly upset with the billions--and this
doesn't come under the Department of Agriculture budget--but
the billions that go out under the foreign appropriations
section of the budget to foreign countries. And I just want you
to keep that in mind, that there is a flip side to the coin on
that. We are glad to feed them, but don't build them up too
much so a new religious fanatic can't come in and take it over
and use it against us. So you keep that thought in mind, I
would appreciate it.
Dr. Penn. I will do that.
Mr. Goode. Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Goode. Regarding the comment
you just made about some of the feedback you get in your
district, we want to emphasize that that is the same message
that a lot of us are receiving as well when we go home. This is
not by any means an overwhelmingly supported issue that we are
talking about here today.
Mr. Hinchey.
SPECIALTY CROPS
Mr. Hinchey. Thank you very much, Mr. Chairman.
Dr. Penn, welcome, and very nice to see you, and ladies and
gentlemen, you as well.
I would like to talk a little bit about the specialty crop
situation. We have done some work on apples recently here in
the committee. Last year's appropriations bill included a
provision for $75 million in apple market loss assistance to
growers to compensate for the low prices in the 2000 crop. Can
you give me any idea when growers can expect these payments to
be made?
Dr. Penn. Well, I was just handed a piece of paper that----
Mr. Hinchey. I saw that, and it was very well done.
[Laughter.]
Dr. Penn. The paper indicates that signup will be completed
in the spring, and payments will be made after the final
regulation is published in the Federal Register. I would ask
Mr. Little to verify this, but I think that means that the
payments will probably not be arriving until late summer or
early fall, given the time it takes to put notices in the
Federal Register and go through all of that process.
Mr. Little. Yes, that is correct. We are looking at a four-
week signup in April, and then making payments as soon as the
regs are published, so it should be early to late summer.
Mr. Hinchey. Well, of course, we wish it would be sooner
than that because the need is there presently. Two years ago we
appropriated $38 million for quality losses for both apples and
potatoes, and even though the signup period for this program
closed--I don't know exactly when it was but it was some time
ago--I understand that the payments still have not been made.
Any word on when these funds might be released?
Dr. Penn. Well, that is a little bit of an embarrassment. I
would like to say, Congressman, it occurred before my watch
started.
Mr. Hinchey. Yes, sir, I know that.
Dr. Penn. You can only get away with that so long.
Mr. Hinchey. Well, it is working so far. [Laughter.]
Dr. Penn. Well, I will have to be back next year, and I
want to make sure we don't have any more embarrassments like
this, but that was a very popular program. It was funded at $38
million, and it was way over-subscribed. It has taken some
considerable amount of time I understand to sort out exactlyhow
to allocate those monies. Mr. Little has some definitive word here, I
think.
Mr. Little. Yes. The signup did end in November, 2001. And
since the program is limited to $38 million and we had people
apply for more than that, we are now establishing a factor, so
we do expect the payments to go out very soon.
Mr. Hinchey. Would you recommend that we increase the
amount in the future since this is a program that demonstrates
a substantial need which is obviously not being fulfilled?
Mr. Little. I will be honest, Congressman, I have not seen
the actual dollar value of the claims that came in, so I really
can't say whether or not we would need additional funding, and
I don't know what the factor is going to be, to be honest.
Mr. Hinchey. Would you mind sending that information over
to us so that we could take a look at it?
Mr. Little. Certainly.
Mr. Hinchey. I would just be curious, actually more than
curious, to know what the numbers were of the people who signed
up, and so that we can try to judge need and interest out
there.
Mr. Little. Okay.
[The information follows:]
Apple and Potato Quality Loss Program
Claims for apple and potato quality loss assistance exceeded $129
million. Because program funding was limited to $38 million, farmers
will be paid about 27.8 percent of their qualifying losses. Payments
are expected to be issued beginning March 22, 2002.
Mr. Hinchey. I know that in one way or another we are all
interested in free trade and fair trade, but the trade
agreements under negotiation are going to be tough for people
to accept unless they contain environmental standards, give due
consideration of labor conditions, and contain real enforcement
mechanisms. So while we see the benefits of free trade, we want
very much for it to be fair. And those of us who represent
agricultural interests on this Committee, and I guess all of us
do in one way or another, are concerned about the dumping of
products, frankly, that occurs from countries in Central and
particularly South America.
So I am wondering what your attitude is, Dr. Penn, with
regard to environmental standards, labor standards, and
enforcement mechanisms in trade agreements so that we can do
whatever we can to prevent the dumping of these agricultural
commodities on the American market.
IMPORTANCE OF AGRICULTURAL TRADE AGREEMENTS
Dr. Penn. Well, there are a lot of issues wrapped up in
your comment, but I think you are asking about my philosophy,
and I certainly am pro trade. I am firmly convinced, as an
analyst, that the long-term health of U.S. agriculture lies in
foreign markets. I am firmly committed to that. If we can't
utilize the resources to provide products to these markets, and
the rate of return for agriculture farm incomes, all of these
things are not going to be at acceptable levels.
But having said that, I think that one of the best ways to
gain access to these markets is through these multilateral
trade agreements. I think if you bring everybody to the table,
you introduce disciplines, rules that everybody has to live by,
and then countries decide whether or not they think they can
live by these rules. Once they agree that they do, then I am a
strong believer that the rules ought to be enforced, and that
we ought to make sure that everybody meets their obligations.
And we are doing that.
For example, China is one of the newest members of the
World Trade Organization, just admitted late last year, and it
is a very complex society, a very big society. But it has
agreed to do certain things under the WTO. We have established
a group within USDA, a China Monitoring and Compliance Group,
so we are going to watch every single thing that the Chinese
do. We are going to try to make sure that they live up to the
agreements that they have signed. We don't think dumping is an
appropriate thing, of course, and wherever we find infractions,
we are going to try to get them corrected.
So I think these agreements are good things, but I think
people have to honor them, they have to live up to what they
have agreed to.
Mr. Hinchey. Well, thank you. I appreciate that, and I hope
that we can carry through on that.
FSA STAFFING
I just wanted to ask one question about the FSA, following
up on Mr. Goode's question to Mr. Little.
In New York, the State FSA office has lost 32 positions
over the past five years, while the work of the office has
grown exponentially. Is there any examination going on within
the Department of this situation, so that we might anticipate
the Administration requesting additional funds for FSA
staffing? The need is growing rapidly. But the number of
positions has dropped and the work is just not getting done
because there are not enough people to do it.
Mr. Little. Well, Mr. Congressman, we are looking at
overall staffing, current staffing, and how to redistribute
what we do have to the States that appear to have more workload
than some other States do, to do some reallocation with
existing staff years. And then in conjunction with whatever
comes out of the farm bill, for the additional staffing that we
are going to require, we would be doing another reallocation
amongst the 2,700 county offices that we have. So, yes, we are
analyzing it.
Mr. Hinchey. I appreciate that, but what you are saying to
me is that you are not going to anticipate any additional
positions, what you are going to try to do is tryto juggle what
you have got to see if you can meet needs that aren't being fulfilled
in some States and take it away from some others?
Mr. Little. Yes, sir.
Mr. Hinchey. I don't know, frankly, if that is going to do
the trick. But I would like to hear from you, if you don't
mind, with regard to how those States--New York is one--where
the need is great and not being met. What can we do to try to
meet that need?
Mr. Little. Well, the Administration has several management
initiatives ongoing right now that we are required to implement
between now and 2003, including looking at our current office
structure amongst the service center agencies and the
Department as a whole. We are looking at administrative
streamlining, cross-training between the agencies,
administrative convergence for the IT arena, improving our debt
servicing for the farm loan programs. We are looking at a lot
of new initiatives, additional IT, and improving our IT
infrastructure to try to give our employees the tools to better
do their business. Along with the redistribution of the
staffing, we believe that we can work within the staffing that
we do have, except for the additional workload that is going to
be generated by the farm bill.
Mr. Hinchey. Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Hinchey.
As you have heard from the bells, we have a vote pending. I
am going to yield to Mr. Boyd for a couple of minutes if you
want to ask your additional questions. Then Mr. Kingston is
going to come back, take the chair, and he will ask questions.
Then Ms. Kaptur will begin the second round.
Mr. Boyd, you go ahead and go as long as you like, before
we have to go vote.
Mr. Boyd. Thank you, Mr. Chairman.
Dr. Penn, I just jotted down, paraphrased what you said I
think a moment ago, the future health of U.S. agriculture
depends on foreign markets. And that is not an exact quote, but
paraphrasing. I would also submit to you that unless we can
keep domestic agriculture healthy, then we won't have to worry
about foreign markets, and I guess that is the thing that many
of us fear in this, looking at the current state, profitability
of the agricultural industry as a whole, where it appears that
about two-thirds of the bottom line of U.S. agriculture now is
coming directly out of the Treasury of the Federal Government,
and I guess that is the struggle that many of us deal with
daily on how do we mold a policy that works? So I just wanted
to throw that out for your consideration.
CCC FUNDING FOR EMERGENCY PEST CONTR0L
I wanted to mention to you another issue. We have a little
industry in Florida called the citrus industry, that is about
$9 billion, and it is under an extreme attack, has been for the
last 5 or 6 years or so by a little pest called canker that was
brought in through the Miami Airport, slipped through the APHIS
inspection system, and now this country has spent State and
Federal dollars, probably $300 or $400 million fighting that in
addition to the losses suffered by the industry itself.
The CCC, part of your operation, has a critical part in
that, and you have lowered the outlay budget estimate for CCC
in the coming year, which is in direct conflict with what is
happening over the last 4 or 5 years out of that budget, out of
that account. How do you justify that, and what is going to
happen? Does that mean that we are going to stop funding the
emergencies like citrus canker?
Dr. Penn. Congressman, I don't think so. I don't think that
is the intent at all. The CCC, as you know, is very complex and
has lots of different rules and regulations as to how the money
can be used, so I am going to ask Mr. Dewhurst if he would
respond to that question.
Mr. Dewhurst. Let me just say there is plenty of money in
the CCC to meet the emergency needs under our emergency
authorities. The actual outlay estimate, you are correct, is
down in fiscal 2003. That is a reflection of the current
baseline. It assumes the extension of the current '96 farm
bill, and it has some economics built into it that show some
favorable prices in some commodities. But that is a flexible
number, it is just an estimate. It is not a constraint. And the
money we have requested in this budget to reimburse the CCC for
its losses is very sufficient to make sure it can meet all of
its needs including those emergency needs that are of concern
to you.
Mr. Boyd. Thank you very much. Those are comforting words,
to know that we will have what we need to meet these estimates,
but I do want to make you aware, this has been discussed
significantly with the APHIS folks, that the request for the
$162 million set aside to fund the current ongoing existing
emergencies like citrus canker, like plum pox, like the other
that we are dealing with around the Nation, was not viewed very
favorably by this Committee, that plan. And so we just want to
make sure that if we have additional outbreaks of citrus canker
in the State, our growers want to know that the Government is
standing with them in helping fight this pest which slipped in
through the Government checkpoint.
Dr. Penn. Well, I think you can be assured of that.
Mr. Boyd. I have the show by myself? [Laughter.]
Well, I hate to leave. You know, I got it by myself. I
would like--this is----
[Laughter.]
Mr. Boyd. We might do some interesting work here now that
they are all gone.
I think though in the interest of what is best for
everybody concerned, including this Member who needs to
probably get down there and vote, we are going to stand in a
brief recess until Mr. Kingston returns. Thank you.
[Recess.]
Mr. Kingston [presiding]. Everybody is coming back from a
very difficult vote on the journal. Subcommittee Members will
be back here in a few minutes. So many members right now have
three or four committee meetings at once, that we are kind of
gunning and running--nothing new about that.
Dr. Penn, I wanted to ask you a few questions. A huge issue
in the State of Georgia has to do with the Russian boycott of
American poultry. As you know, it is a propped up, trumped up
kind of issue. They have done this before, but now it seems to
be a little bit more serious. I realize it is more with the
U.S. Trade Representative than with your office. I wish your
office was the sole broker on it. Then I think you could come
to a peace real quickly on it, but could you tell us a little
bit about that.
RUSSIAN BAN ON U.S. POULTRY
Dr. Penn. Yes, I can, and I think you make a very good
point. This is a very big market for U.S. poultry
products,something approaching $700 million, and we agree with you that
there is absolutely no merit in the claims by the Russians about the
quality and safety of our products.
We are making every effort, on multiple fronts, to try to
get this ban lifted immediately. The Office of the Special
Trade Representative, as you indicated, is working through
their channels with their counterparts in the Russian
Government, Secretary Evans at Commerce is working through his
channels, and Secretary Veneman is doing the same thing. In
fact, I was just with her earlier this morning, when we were
trying to talk to the Russian Minister of Agriculture. We were
unsuccessful in reaching him.
I think Secretary Veneman is going to call the Russian
ambassador to the U.S. later today, to once again say that we
think there is no merit in this ban and that we think it should
be lifted immediately and that there is a lot that is riding on
this. I mean, the Russians want to join the WTO, for instance.
The Russians want to improve relations with us, and this is not
the way to win friends and influence people. So we are trying
to do everything that we can. We are working very closely with
the USA Poultry and Egg Export Council and other people in the
broiler industry. So we are trying to make an all-out effort to
get this ban removed immediately.
Mr. Kingston. What can we, as Members of Congress, do about
it? Our constituents are truly concerned, and it is affecting
them economically, affecting jobs and so forth. Is there more
that we can be doing? I know we have got the first team in
there, and we know you guys are on the front line, but how can
we help you in this?
Dr. Penn. Well, I think everything is being done in an
organized fashion that can be done right at the moment, but it
certainly helps when the foreign government involved knows that
the members of our legislature are very keenly aware. We just
had another problem with the Japanese, as you well know,
involving poultry, and it was very helpful that several Members
of Congress weighed in directly with their counterparts. So I
think to the extent that you can make known that you are
watching this issue, that it is a serious issue and that our
efforts are coordinated from the U.S. Government side, I think
that is all very helpful.
Mr. Kingston. Are there any letters that you need? Would
that help you if we circulated some letters?
Dr. Penn. I do not think so right at this time. As you
know, this is, as you said, a trumped up charge, and we are
trying to be as responsive to the Russians as we can in
providing evidence on sanitary and phytosanitary aspects of
trade, but we do not want this to become bogged down and to get
sidetracked into a lot of technical discussions because we do
not think it merits that.
So right at the moment we are trying to keep this at a
policy level and trying to exert the maximum pressure that we
can, but thanks very much, and if we find a way that you can be
helpful, we will certainly be in touch.
Mr. Kingston. Keep up the good work. We are behind you.
The other question I wanted to ask gets back to one that
Chairman Bonilla and Mr. Goode had asked about the foreign ag
assistance. I think that we certainly have to be engaged in
food assistance programs, and I think it has a stabilizing
positive effect on marginal Governments. One of the issues that
this Committee and Chairman Bonilla led on last year, was
making sure that when we are giving food aid to a country like
Afghanistan, that the label on the food shows, ``Made in the
U.S.A.'' That label will foster a little more peace and
understanding between the two countries. You know, in a crude
sense, we want to get doggone credit for it, but there is a
real national security reason to do that as well.
How is that going in terms of labeling, and were you
involved in that? I apologize for not knowing off the top of my
head.
LABELING OF U.S. FOOD ASSISTANCE PACKAGING
Dr. Penn. No, that was a little before my time, but I do
know about it, and I think as the photograph on the wall there
indicates, that the bags in which food aid is provided now,
especially to Afghanistan, are clearly labeled, with ``U.S.A.''
on one side, and the American flag very prominent on the other
side of the bag. Then, where possible, in the recipient
country's language, it indicates that it is a product of the
United States.
So we are trying to make very clear that we fully identify
all of our food aid as being from the U.S.A.
Mr. Kingston. I also support the role of NGOs in world
affairs. However, sometimes NGOs are quick to get our money and
then quick to pretend like they deserve it. Not all of them do
that, and I am not indicting NGOs, but are NGOs cooperative in
saying, ``Yes, as a matter fact, this was from the Yanks''?
Dr. Penn. Well, I have no knowledge to the contrary. As far
as I know, the NGOs and the PVOs that have been involved in
this have been very cooperative. I have no knowledge otherwise.
Mr. Kingston. I am going to have a few more questions, but
let me yield the floor to Mrs. Emerson.
RICE TRADE ASSOCIATIONS
Mrs. Emerson. Mr. Chairman, thank you. My next question
goes to Ms. Terpstra. Congratulations on your new position. I
know that you have only been there a short time, but I know you
have familiarity with this issue.
In last year's ag appropriations bill, I sponsored an
amendment that requires FAS to withhold MAP and FMD funds to
participating rice trade associations, unless and until those
organizations get into an international activity agreement. The
purpose of that language was to promote fairness and prevent
the duplication of efforts under those programs. In fact, I
offered that amendment after FAS did a great job working with
those organizations to make sure that for the first time the
activity agreement to fund those organizations was in place for
the beginning of the fiscal year.
Now I guess I am confused and would like perhaps some
clarification from you about precisely why the Administration's
budget proposes to strike from the law this requirement that
has already proven its success.
Ms. Terpstra. Thank you very much for the question and the
opportunity to address this.
I believe that our concern is more with the issue of
precedence, in terms of having restrictions on program
administration. We think the Department has shown that it is
able to work with the various commodity groups involved to
quickly resolve the differences and would seek the opportunity
to continue to do that without the restriction.
Mrs. Emerson. Can you assure me that would, in fact, occur
without necessitating report language or something like that?
Ms. Terpstra. I do not know if I can assure you.
Dr. Penn. We will certainly do our best. I mean, we will
make a good-faith effort, of course.
Mrs. Emerson. Because, in fact, it does penalize some of
our smaller rice producers, and I hope that you all, and I
think that you do understand the great concern that I have
about this issue and would hope that you would be able to enter
into good faith continuation of that agreement.
Ms. Terpstra. Yes.
RICE TO UZBEKISTAN
Mrs. Emerson. Let me ask you another question, Madam
Administrator. Yesterday it was announced that an agreement
with the Government of Uzbekistan had been approved, under
which we would supply about $20 million worth of rice under
Title I of the P.L. 480 program. I am very excited about this
and congratulate you on that initiative, having met with
representatives of the Uzbeki Government, who want to purchase
U.S. rice from my constituents and who hope to sell it to them.
Can you tell me whether the purchase authorization, under
this agreement, will continue the policy established by USDA
last year and endorsed by this Committee to allow the Uzbekis
the free choice to purchase U.S. rice in the form of their
choice, whether it is rough, brown, milled, et cetera?
Ms. Terpstra. Would you like to take that one?
Ms. Chambliss. Sure, I would be happy to.
Congresswoman, yes, we will follow our standard policy. As
you are quite aware, we work with the governments, in this
case, the Government of Uzbekistan, to seek to determine what
kind of rice they are interested in purchasing. We will issue
the purchase authorization--we will do it very shortly in about
a week or so--so that they can buy the kind of rice that they
wish to buy. They are customers of ours.
2002-CROP ASSISTANCE
Mrs. Emerson. Excellent. Thank you very much.
And perhaps to you, Dr. Penn, one final question. We have
talked around this, and I wanted to see if there was perhaps a
definitive answer, if the farm bill does not become law in time
to implement it for the 2002 crop year, does the Administration
intend to provide a supplemental assistance package for farmers
as you all have in the last 3 years?
Dr. Penn. Well, I think it has been the Congress that has
initiated the supplementals in the last 4 years, since 1998,
but I think it is a general understanding among Members of
Congress, certainly, the Agricultural Committees and the
Administration, that should the farm bill not be applicable to
the 2002 crop, that there would be funds available for some
kind of supplemental. The budget contains, as you know, $73.5
billion for the 10-year period, and there is a specified amount
for fiscal year 2002.
Mrs. Emerson. How do you think a supplemental would impact
the overall budget for ag?
Dr. Penn. Well, it is included. I mean, there is----
Mrs. Emerson. So, within that $73.5 billion, included is
some sort of money for supplemental?
Dr. Penn. Well, there is money included for farm program
spending for fiscal year 2002 to 2011, and we would think that
if the farm bill is not applicable to 2002, that some of that
money could be used for a supplemental.
Mrs. Emerson. Do you have any idea of how much would be
available?
Dr. Penn. No, I think our indication has been that the
$73.5 billion would be available for the farm bill, and I do
not think that we have talked about the amount for a
supplemental.
Mrs. Emerson. Thank you.
Mr. Kingston. Dr. Penn, if the gentlewoman would yield, I
also know one of the practical problems right now is that
allocation will go to the Ag Committee, not necessarily to us,
in terms of who makes the spending decision, and so that is
something we will have to deal with as well.
Mrs. Emerson. Thank you, Mr. Chairman, Dr. Penn.
Mr. Kingston. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Mr. Under Secretary, I want to keep pursuing my own inquiry
into how intimately the USDA is involved in policy making for
the Administration at the very highest levels, and I am going
to try to do this with some specific questions.
OPIUM PRODUCTION IN AFGHANISTAN
I would like to ask you if the U.S. Department of
Agriculture participates in the Administration's discussions on
how to address the opium production problem in Afghanistan. Do
you participate in those discussions?
Dr. Penn. Let me ask Mary Chambliss if she knows
specifically about that issue.
Ms. Chambliss. I do not know specifically about
Afghanistan. I certainly am aware of similar discussions
dealing with opium-type crops in past years, where often
Agriculture's expertise, particularly through our International
Cooperation and Development program area, has been sought to
assist in developing alternative crops. I think we are probably
most involved in the discussions when it comes down to how to
carry out some of the policy goals.
We may also, depending upon the country and the
circumstances, have been involved at more senior-level policy
discussions, but I think not extensively. Mostly our role would
be helping to carry out the policies, and I am confident we
will be involved as this plays out with Afghanistan, as we have
been with other countries.
Ms. Kaptur. This is why I am trying to get the Secretary's
attention, to say you should be more than a down-chain player
here. You should be an up-front player, and I will give you an
example because of your extensive international work.
When the United States and Syria worked to remove the
hashish fields in Lebanon, there was never a policy to replace
those fields with other crops. We helped to cause many, many
areas of the country to be thrown into even more dire poverty
than they were already, and those became the breeding grounds
for the Hezbollah. One of my perspectives, after having served
for many years, is the Department of the Agriculture does not
make its weight felt in a world in which over half of the
people live at subsistence levels and where agriculture is
absolutely critical to the future. It is true in the Balkans,
it was true in Lebanon, it is true in Afghanistan and Pakistan,
and too often USDA is a downstream player, and she should be
right up at the head of the queue.
I wanted to also ask you, do you participate in any
Administration discussions that are ongoing on how to
counteract the enormous and ongoing power of the madrassas in
breeding new terrorists?
USDA ROLE IN ECONOMIC DEVELOPMENT ACTIVITIES
Dr. Penn. Let me address your question in a general sense.
I think I understand what your concern is. I would point out
that, as you well know, there are several agencies of the U.S.
Government that have some expertise in agriculture or have some
objectives that are very closelyrelated. Of course, we are
talking about the U.S. Agency for International Development, both in
terms of its responsibility for humanitarian assistance and for
economic development.
As you know, USAID, for many years, in the minds of many in
this field, neglected agriculture, paid very little attention
to development of the agricultural sector, and a lot of us I
think who had some experience in economic development thought
that that was not appropriate because of the importance, as you
are suggesting, that agriculture and rural life have in many of
the least-developed countries.
So there is an overall activity, within the U.S.
Government, to promote economic development. Now USAID has
elevated agriculture once again. We do have discussions with
that agency. We have made them aware of the expertise that we
have. We have an entity in the Foreign Agricultural Service,
the International Cooperation and Development group, in which
they source a lot of people, and through various
interdepartmental arrangements, we provide agricultural
expertise to USAID.
So, in that regard, we are very involved. We should be more
involved, I agree with you. At my level we are helping the
Administrator of USAID to make him more aware, and Secretary
Veneman is doing the same. On these other issues, there are
interagency committees, and our people are involved all of the
time in all of these discussions.
Ms. Kaptur. Mr. Secretary, let me just say we are going to
provide billions of dollars, enormous sums of money, to try to
deal with this Enduring Freedom problem, and it will be
continuing. And I am really pleased to see Mr. Natsios taking
more of an interest in agriculture publications and so forth.
But from your work around the world and from my work around the
world, we know what happens with AID in agriculture. I would
strongly urge you to build in the incredible capabilities of
our extension system, and our farmers, and our educators around
this country who will never give up on a place, and they are
not just in there for a 2-year contract. We can link to
communities across this country and really help to build a
better future. I fundamentally believe only agriculture can do
that because AID is not connected to this country. They have
these huge consulting groups that operate in places far flung,
and they do important things, but they do not connect back
here. They have their own sort of network. It is almost like
the Foreign Legion. They are almost like a Foreign Legion, and
they go and never come back home again.
Our extension service, regardless of whether it is
raspberry production or whether it is wells or whatever the
issue might be, whether it is feeding children in schools so
that they can learn, we have the experience through USDA and
your enormous connections through the farm service agencies and
our extension systems and universities across this country. I
would just urge you, in the strongest possible terms I can,
including additions to your budget, where appropriate, to get
that connection with AID, so that you can deliver because you
have the people who can deliver, and to connect in those
private voluntary groups that exist in our country who can
really make a difference.
My time has expired, and I look for the next round of
questions.
Thank you.
Mr. Bonilla [presiding]. Thank you, Ms. Kaptur.
Mr. Latham has joined us, and I will now yield to Mr.
Latham.
IMPACT OF STEEL TARIFF DECISION ON AGRICULTURAL EXPORTS
Mr. Latham. Thank you, Mr. Chairman. Welcome.
I guess to start off I would just like to get your
impression of the ruling the Administration recently made, with
respect to tariffs on steel, and the impact you believe this
could have on our agricultural exports, as far as new tariffs
levied in other countries; is there any feeling that you have
at this time?
Dr. Penn. Well, that is a very good question.
Mr. Latham. Thank you.
Dr. Penn. We have been very concerned in the agriculture
sector about the possibility of spillover from not only the
steel case, but the so-called FSC or Foreign Service
Corporation case with the European Union. We are in a very
interconnected, very interdependent world, and whatever happens
in one other sector of the economy can very quickly spill over
into agriculture.
We are in the process of analyzing the likely economic
impact that could possibly come from the steel decision. We are
hopeful that it will be nonexistent or at least very, very
minimal. There has been some discussion that the Russian
chicken ban that we were just discussing a little earlier might
be in some way connected to the steel case, but I personally
discount that pretty considerably. I think the Russians have
their own agenda with respect to poultry and are pursuing
something else, but it is a concern, and it is an
interconnected world, and we will be analyzing what we think
the impacts might be. And when we get that analysis done, I
would be very pleased to share it with you, if you would like.
IMPACT OF SANCTIONS ON TRADE
Mr. Latham. That brings up another area. What type of
impact, in your opinion, do U.S. sanctions against other
countries have on our agriculture exports? In other words, do
you believe that our normal agriculture trade is impeded in any
way?
Dr. Penn. I think it is very clear, and the evidence is
very clear that the imposition of sanctions does interfere with
normal trade flows. The question, of course, becomes at what
point are there other overriding objectives that involve the
national security or the national interests that are more
important than continuing trade with one particular sector of
the economy. Agriculture, of course, being very export
oriented, being very dependent upon foreign markets, gets
buffeted about quite a lot in sanctions, and I think that leads
to discussions of trying to find ways to protect our producers,
when the broader national security interest is sometimes being
served by these sanctions.
Mr. Latham. I am not going to make this long, but I would
like to get your impression, on the excise tax Mexico has on
high-fructose corn syrup. We have been trying to build a
facility in my district for the last five year and the Mexican
situation has been the hang-up. I think as soon as that issue
is resolved and adequate supplies of fructose can be shipped to
Mexico, the facility will be built. It is probably a $70- or
$80-million facilitywith a lot of good jobs. I just wondered
where we are on that situation.
MEXICAN TAX ON CORN SYRUP
Dr. Penn. The most recent development is that the Mexicans
have now removed the excise tax that they had placed on high-
fructose corn syrup being used in soft-drink products. We were
adamant, the Office of the Special Trade Representative was
adamant, in saying to the Mexicans that discussions could not
continue on resolving the overall sweetener and sugar problem
until that excise tax was removed. Well, they have now done so,
and they have been----
Mr. Latham. Is that permanent?
Dr. Penn. No, until September the 20th. So it does provide
a window, a negotiating window here, in which we can see if we
can try to resolve this issue. As you know, this issue is very
complex. It has a long history. It involves NAFTA, the side
letters, and it is going to take some concerted effort to
resolve, but I think it is in both of our interests to try to
resolve this as quickly as we can.
Mr. Latham. Good. You do not have any idea of how it will
be resolved or timing or----
Dr. Penn. No, but I do know that it is a high priority for
USTR. I know that they are trying to clear the slate of as many
of these lingering trade irritants as they can, and last year
they had some success with bananas and some other things, so
they would like to quickly resolve this one, as well as beef
hormones with the EU and some others.
So I do think they are going to be paying a considerable
amount of attention to it, and I think the industry, the high-
fructose industry, the sugar industry, and people who are
trading and investing in general hope that it gets resolved
fairly quickly.
Mr. Latham. So do I.
I can see I am out of time, Mr. Chairman. Thank you.
Mr. Bonilla. Thank you, Mr. Latham.
Mr. Boyd.
Mr. Boyd. Thank you, Mr. Chairman.
ARPA STATUS
Dr. Penn, I want to talk about the crop insurance program.
I know in 2001, the IG reviewed the operations of RMA and the
FSA in implementing the disaster programs in 1999. That was not
a very favorable report. You know we got a new law since then,
but that report on the 1999 year showed that we continued to
hand out millions of dollars to folks who probably were
overpaid insurance benefits.
Do you have any information about whether, at this point in
time, whether our new law is working any better, the incentives
we put in place to police ourselves, are they working and can
we expect a better report in the future?
Dr. Penn. Well, that is a very interesting point that you
bring up, and I think you said the critical thing when you said
we have a new law. The Agricultural Risk Protection Act of
2000, as I indicated before, is really trying to put risk
management on an insurance basis to try to develop some
actuarial soundness in this program. We are trying to implement
it and operate it in a way that protects the integrity of the
insurance program, the actuarial soundness of the program, to
the extent that we can.
It is not just another farm program. It now is a different
program. As I said earlier in my remarks, it involves not only
a Government agency, but now we have some 18 or 19 insurance
companies involved. These are private-sector companies that are
operating in our system for a profit, and we have to operate in
a much different manner than we probably have operated in the
past. So we are increasing compliance efforts.
The ARPA law itself had some direct mandates about
increased compliance efforts, and we are trying to carry those
out. We are trying to make sure that we can protect the
integrity of this program and that we do not have cases, as you
suggested before, where we have gross mismanagement or
overpayments or other missteps in the program.
Mr. Boyd. When will we be far enough along in the
implementation of the new law to get an independent review by
the IG or someone so that we will have sort of a baseline to
measure against how we are doing against how we were doing
before?
Dr. Penn. I think we are nearing the point of having enough
experience now. I think we are getting close after having gone
through the first year and the bumps, and then going through
the second year and having worked out some of those.
Mr. Boyd. Would that review come automatically or does the
Department have to call for one or how does that work?
Dr. Penn. I do not know. I will have to find that out.
Mr. Boyd. Okay. That would be good information for us to
have.
[The information follows:]
RMA has recently been contacted by the Office of the Inspector
General regarding plans to conduct an audit survey to assess
implementation of changes resulting from the passage of ARPA.
SUPPORT FOR BEGINNING FARMERS
Mr. Boyd. One other question. I noticed in a 2001 GAO
report that there has been a substantial decrease in the number
of farmers in this country under the age of 35 in the last
decade or so. In reviewing your budget, you continued to shift
away from direct loans and to guarantee loans. Many of us
believed, you know, I agree with you that is a good policy, but
could you talk to us briefly about that philosophy and how it
affects the young people, attracting young people into the
industry and what is the long-term effect of that.
Dr. Penn. There are two parts to that, and I am going to
ask Mr. Little to respond to the farm loan programs. I would
just respond on the RMA side that I think you make a good point
there. We are constantly trying to look at the profile of who
the customer is, the policy holder, and we are trying to
identify the underserved areas. We are trying to identify the
young and beginning farmers. We are constantly working with
outreach efforts to try to talk about risk management, to try
to teach people about how these tools can be used to their
advantage. So I know on the risk management side that there is
an active program underway and that young and beginning farmers
and disadvantaged farmers are especially targeted.
In terms of the much bigger loan programs, let me ask Mr.
Little to respond, if I could.
Mr. Little. As Dr. Penn mentioned, in the direct loan
programs, we are targeting towards the beginning farmers and
the socially disadvantaged farmers. As a matter of fact, in
2001, we provided $706 million of our loans to beginning
farmers, so it is an initiative where we are really trying to
get to that group of people.
We are doing a lot of outreach trying to get the word out
about our programs, not only to beginning farmers, but to other
disadvantaged elements of the society, and we are making good
progress on it.
Mr. Boyd. As one Member, I just want to encourage you, as
you shape your policy, to continue to direct it at the young
farmers. Those of us who have done it for a long time, if we
cannot do it without the help of Government agenciesand
lending, then maybe our time has passed, but it is almost impossible at
home for a young person to get into it unless he inherits it or has
some other advantage like that. So I would like to continue to
encourage you to shape your policy in that direction.
Mr. Bonilla. Thank you, Mr. Boyd.
If I could, Ms. Kaptur, I think Mr. Latham has just a
couple of remaining questions, and then I will yield to you to
finish out your questions.
Mr. Latham.
Mr. Latham. Thank you very much, Mr. Chairman, and Ms.
Kaptur.
REACTION TO CODEX ALIMENTARIUS COMMISSION REPORT
Recently, the Codex Alimentarius Commission, which
consisted of officials from the United Nations Food and
Agricultural Organization, the World Health Organization, and
nongovernmental organizations joined together in drafting a
document entitled, ``Principles for the Risk Analysis of Foods
Derived from Biotechnology.'' This document suggests that
efforts should be made to improve the capability of regulatory
authorities, particularly in developing countries, to assess
and manage the safety of GM foods as a result of European
protectionism, and in an effort to stem the tide of biotech
through questionable arguments not grounded in scientific
principles.
This comes at a time when our U.S. Trade Representative,
Mr. Zoellick, is weighing a World Trade Organization challenge
to European countries' unwillingness to accept U.S. biotech
products. Apparently, also, Dr. Henry Miller, from Stanford
University, said that ``the Codex has purposefully ignored
scientific principles and the basic axiom that the degree of
regulatory scrutiny should be proportionate to the risk, and as
a result,'' he said, ``a country that wished to block trade in
gene-spliced foods for any reason can defend against challenges
of unfair trade practices simply by demonstrating this
referring to Codex.''
Apparently, last year in our appropriation bill, the other
body put an additional $500,000 into the Commission;
unfortunately, it helped them make their case against us.
I just wondered what your reaction to that report is and
how we can work together with USTR to make sure those markets
stay open.
Dr. Penn. Well, I have got several reactions, and you
raised some pretty critical points.
First of all, with respect to biotechnology, we at the
Department are convinced of the scientific soundness of
biotechnology. We are very supportive. We think it is probably
the greatest technology for agriculture ever, beyond any that
we have ever seen before, and that we have only seen the tip of
the iceberg.
Now, having said that, there is a matter of consumer
acceptance, and there is a matter of getting this technology
fully rolled out and of trying to do that in a way that does
not interfere with trade.
Now we have argued, and others before us have argued, that
we should employ a sound science base in trying to determine
the sanitary and phytosanitary provisions that govern trade.
Once you move away from a sound science base, then everything
becomes arbitrary. So we are adamant in insisting upon that.
We have tried to develop international bodies, where there
can be agreement on this sound science basis. The Organization
of International Epizootics for animals, governing livestock
diseases and things of that nature, is one. There is an
International Plant Protection Convention, which governs
diseases and tests on plants that are internationally
recognized.
And we think that Codex, in a similar sense, should be an
international technical body, not a political body, not a
negotiating body. Mr. Tom Billy, as you know, from the United
States, is the chairman of Codex for this year and next year,
and he is of the same mind, of course, and is very actively
trying to make sure that Codex adheres to the technical aspects
and not the political aspects.
So we are trying, where we can, to keep the trade policy
and the trade negotiating aspects over in the WTO and to try to
keep the international scientific standards over in other
bodies that are more suited for that. So, to the extent that we
can bring that about, then maybe we can get the developing
countries, our other trading partners, everybody, to use sound
science and international conventions in setting the standards
for these products.
We certainly hope that is the case for biotechnology
because it is such an important new technology.
FARM SERVICE AGENCY STAFFING
Mr. Latham. I appreciate that.
A couple of quick questions on the Farm Service Agency. I
have heard from some of the local county office employees about
the lack of funding out in the country, and while we have built
up a lot of bureaucracy here in Washington. Outside of
Washington where the people are, where the rubber hits the road
and there is real contact with farmers, we have really shorted
those folks. It seems that a lot of work is done by temporary
people in new jobs that they have to assume all of the time,
with continual new training all of the time. Certainly, I would
encourage emphasis on putting money out in the country, rather
than having more bureaucracy here.
E-LDP PROCESS
I would also like to have you comment on a proposal about
the e-LDPs and how that is basically going to bypass the local
office and if there is going to be any scrutiny of these LDPs.
Mr. Little. On the electronic Loan Deficiency Payment
process, which is currently being tested, we hope to deploy
that within the next month or two. It is not going to bypass
the county office. The producer will have to come in before he
can get access to the electronic process. He will have to
actually sign up for the process and indicate to the county
office, this is my yield for this particular crop, this is what
I expect to initiate LDP payments for. We will basically be
giving him a drawing account for his maximum LDP benefits.
He will get a password to log into the system, and then
once he actually starts marketing the commodity, he will be
able to get on-line at home and start drawing down on
individual LDPs.
The information that is processed in our Kansas City office
will be certified by the producer. Clearly, you are correct
that they in Kansas City will not know exactly whether the
information is valid or not, but they will know the maximum the
county office has set for them to draw upon. So, based on the
certification that the producer is actually indicating on line,
the Kansas City system will start drawing down on the account.
The information is transmitted back to the county office. The
county office has access to it. It will become a part of the
producer's local record. So the process is not cutting the
county office out.
With respect to knowing exactly whether or not it is an
accurate payment, we believe that we have controls in place
that are going to ensure it. If the producer has a problem, he
is not going to be going back to Kansas City to correct it. He
is going to be going to the county office. Since the county
office will have the information there, they will be able to
take care of any issues on it.
Mr. Latham. I think a major concern is that the county
offices are going to clean up the mess after it happens, and
there are no controls. I am all for technology, but I can see
real problems out there.
Mr. Little. We realize there will be maybe some bumps in
the road as we first start this out, but we really believe down
the road we are going to be accountable for it. We believe it
is going to free time up in the county offices. Once a producer
has signed up, it will save him from having to fax his LDP
request in or come into the county office to actually process
it. It isgoing to free time up from the county offices'
perspective, it is going to free time up for the producer. And we
really believe that we will have controls in place so that the time
required for clean-up is going to be minimal. That is the way we are
looking at it.
Mr. Latham. But you are not expecting the people in Kansas
City then to really look at anything other than rubber stamp.
Mr. Little. I believe that they will be looking at what the
maximum is that they can draw down, and making sure what the
commodity that they say they are going to be drawing the LDP
upon is going to be. There will be areas that they will be
checking.
Mr. Latham. You can have a computer do that, once the light
goes off. I have got concerns about it.
Again, I want to emphasize that I want to see people out in
the country actually interact with and help the people. That is
where our safeguards are in the system.
Mr. Bonilla. Thank you, Mr. Latham.
Mr. Latham. Thank you.
Mr. Bonilla. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Again, I go back to one of my basic themes this morning,
and that is whether there is a foreign policy consciousness at
the USDA, as opposed to only a foreign sales consciousness.
Dr. Penn, you have incredible background it appears with
Dr. Balog in Poland, where farmland was never collectivized.
But as we move east into Russia, and Ukraine, and some of the
other countries, surely the situation was different. There is
no memory of the private market. And as I look at USDA's
activities in that part of the world over the last decade, I
want to make a part of the record the fact that of USDA
assistance into that part of the world in the form of food
commodities, for example, either through our 416 program or PL
480, there is 45-times more emphasis on Russia than on Ukraine.
Now, from a foreign policy standpoint, I do not think that
is a very wise posture to be in. I think there should be
equity. I think there should be an evenhandedness, and surely,
in terms of conversion of the former collective farms, the
experience is pitiful. Now the World Bank and others are
engaged in land-titling reform, but without the technical
assistance to help people function in a market economy, it will
not happen.
I just wanted to point this out and to ask if you might
consider writing the Committee or us a letter, where you might
sketch out the perspective of USDA toward the former
collectivized countries and what USDA might do over the next
few years in regard to the conversion of those collectivized
areas, what we can do to help move them toward a market
economy, perhaps it is signing agreements with AID, but again I
know the expertise is not there, and then also in the
assistance that has been given to strengthen the NGO sector
which is absent.
I tried to get seeds into Russia, into villages, during
this period where production has been reduced by about 80
percent and cannot do it. There are no networks to deliver it
that one can really trust, so I would just ask for your help
there. I would also ask for your help on our own continent.
This past weekend again there were uprisings in Chiapas, and
we, through APHIS, there is a screwworm facility down there to
eliminate screwworm on the continent, as you know. Through the
Clinton administration and now through the Bush administration,
there is not much vision in terms of how we might use
agriculture to help stabilize a really very tender and
difficult situation there. But in my own mind, without
question, agriculture is at the basis of a better future for
the people there.
So, if you have any suggestions of how we might better use
our resources in the Chiapas area, how we could broaden what is
being done at the screwworm facility, which is a very specific
function, but at least it has placement and has continuity. The
facility is not owned by us, but by the Mexican Government. We
rent space in it or something like that. It just seems to me
that in the area of tropical fruit production or technical
assistance, we could be doing something to contribute to a
safer and better world.
If you have any comments on either of those, either the
former Soviet Union or Chiapas, I would welcome them.
AGRICULTURE AND ECONOMIC DEVELOPMENT
Dr. Penn. Let me say just very briefly, as you indicate, I
have had a lot of experience in what we used to call Eastern
Europe and also have experience in Russia and Ukraine, and I
accept your comments. I would be happy to prepare a letter in
which I lay out some views because, for an economist, the
situation was absolutely fascinating to see how Poland
developed so quickly and why Russia and Ukraine have not
developed, and we are now more than 10 years past liberation.
So, anyway, I would be pleased to do that.
In terms of Mexico, let me just say that there is a new
initiative that is being led by President Fox and President
Bush called Partnership for Prosperity. Two weeks ago, Mexican
counterparts to USDA came, and we spent a couple of days
discussing how we might encourage investment, how we might
encourage trade, and how we might encourage development that
would bring new technology and bring new opportunities for the
most remote regions of Mexico, including Chiapas. So there is
some attention being given to that.
I think the problems that they face in those regions and
how those problems spill over to the United States, in terms of
out migration, and border crossings and things of that nature,
are well recognized. So, to the extent that you can create
economic development in the Chiapas and other regions, then you
help solve a lot of problems. There are some efforts under way
in that regard.
Ms. Kaptur. If I am not mistaken, that facility, our
screwworm facility, employs the largest number of people in
that region. It is not the prettiest work in the world, but at
least it is work, and it is income. If we have any positive
presence, maybe we could build on that. That is why I would ask
you to comment on how we might use that or some other
initiative that might help contribute toward a better future
for the people there, and frankly a better future for ourselves
as well.
Mr. Chairman, I have other questions, but I do not want to
not allow others to ask theirs.
Mr. Bonilla. Thank you, Ms. Kaptur.
Mr. Nethercutt.
Mr. Nethercutt. Thank you, Mr. Chairman.
Ladies and gentlemen, welcome. I am sorry to have missed
your testimony. I had conflicting hearings this morning, but I
appreciate your being here.
USE OF EXPORT ENHANCEMENT PROGRAM FUNDS
Let me ask about the question of EEP, Export Enhancement
Program funds. We have had EEP in the budget and appropriated
for years. If I am not mistaken, it is $478 million in the
fiscal year 2003 budget request. These funds are rarely used.
We used a bit for a barley account 3 or 4 years ago. What is
your take on EEP? Are we ever going to use it? Why are we
keeping it in the budget if it is not going to be used to help
our farmers? What is your philosophy and what is your intention
with respect to EEP funds and the utility of them?
Dr. Penn. Well, let me make a couple of observations, Mr.
Nethercutt.
First of all, you know the history of how we came to have
the Export Enhancement Program. I mean, it was one of the major
tools that the U.S. Government used to bring the Europeans to
the table in the Uruguay Round agreement, when it became pretty
clear that we had a war between the treasuries of the two
countries and that basically we were not doing either one any
good, but we were just spending the taxpayers' dollars.
So, after having successfully concluded the Uruguay Round
and having put some discipline on export subsidies, I think it
became the position of the Governments at the time to not use
the Export Enhancement Program funds, that they had served
onemajor purpose.
But a second, and perhaps even more important, point is
that the economists tell us that it would not do any good to
spend that money. It was largely used for wheat, and given the
fundamentals of the wheat market today, we could probably
subsidize a lot of exports, but it would only benefit the end
user. It probably wouldn't benefit the American farmer very
much. We are already pretty competitive in the wheat markets
and probably the only effect would be to drive down the price
for all of our wheat crop, not just for the marginal amount
that gets exported.
So I think the fact that the trade situation has
stabilized, and that we are into a new round of negotiations
where the elimination of export subsidies is on the table, is
one reason for not using the EEP. The second reason is just the
efficacy of the program. I think there are some legitimate
questions as to whether it would be of any benefit to American
farmers, especially wheat farmers.
Mr. Nethercutt. I think you have some wheat farmers in my
district who grow, and sell, and export soft white wheat who
may disagree with you. Assuming that what you say is the
position of the Administration, why are we budgeting $478
million? Why not spend that money on some other account that
would be better for production agriculture?
Dr. Penn. Well, I cannot answer that precisely, but I think
part of the reason is that it is an arrow to have in the
quiver. I mean, if the European Union started misbehaving, for
instance, we could always very quickly utilize the funding that
we have. I think it is a threat.
Mr. Nethercutt. So your assumption is they have not been
misbehaving in the last year that you have been in the
Administration and the prior years? I know Secretary Glickman
did not want to ever use it. My sense is it is there as a tool,
we ought to use it as a tool, and in the proper conditions.
Dr. Penn. I think, as I said, when we concluded the Uruguay
Round agreement in 1994 and started implementing it in 1995,
then there were limits placed on the amount of subsidies that
could be used, and then they have to be reduced, and they have
been reduced every year for the past 6 years.
And so in 2001, we had fully implemented the Uruguay Round
agreement, and now we have the new Doha Round which is to try
to build upon that, and it is the intent of the U.S. to try to
bring about the complete elimination of export subsidies. As
you rightfully indicate, the European Union uses export
subsidies far more than anybody else in the world.
Mr. Nethercutt. Right, I understand. Well, maybe we better
have further discussion on this one.
Dr. Penn. Okay.
Mr. Nethercutt. Let me ask a second question, if I may.
Administrator Terpstra, maybe this is the one for you. I have
talked to Secretary Veneman here in this hearing, a prior
hearing in this room, with respect to our competitive nature
with other nations who use a single-desk system in the
marketing of their commodities. My perception is we get the
short end of that stick because it takes us so long to deal
with State, and with Treasury and Ag in securing a sale and
issuing a credit so that we can capture a market. Pakistan, in
particular, sticks out in my mind. I think we have lost several
hundred million dollars' worth of sales to other competing
countries, because we have been slow to pull the trigger, so to
speak, and I am frustrated by that.
I think the testimony we have taken here is, we have got to
work better on that, and we are trying our best to have some
seamlessness between the agencies. But, again, respectfully I
refer to the State Department. I noticed in the newspaper this
morning, the Washington Post, that Mr. Reich as under secretary
made a rather negative comment about ag sales to Cuba. I know
he has a secondary motivation to make those comments. And some
of my colleagues may disagree with me on this issue, but I
happen to think it is a market that is available to our farmers
to take that money from this Communist dictator, and in turn
give him, I should say the country, the people of Cuba, our
American products that are superior to those that are grown in
China and Vietnam.
So I am going to get beyond this in a little while and deal
with it later, with respect to Mr. Reich's exclamations, but it
seems to me we are missing the boat if we have State
Department, Treasury Department, and Ag Department not
coordinating and communicating well, and one agency frustrating
the decision making that needs to be done to capture a market
to help our farmers. I know you have worked in the rice
industry and the apple industry. Well, they are going to buy a
thousand metric tons of apples from my State, and 20,000 metric
tons of peas. That means a lot to our farmers.
So having vented here a little bit, maybe you could give me
your impression or the Committee your impression about the
feasibility of really doing something substantive to have this
seamless policy occur and capture sales and markets abroad,
which is your job.
CAPTURING OVERSEAS SALES
Dr. Penn. Do you want to answer that?
Mr. Nethercutt. Or anybody, not just you, I mean, whoever
wants to answer it.
Dr. Penn. Congressman, let me say that Administrator
Terpstra is in her ninth day on the job, and so we want to save
her for a later date.
Mr. Nethercutt. I am sorry. Forgive me. Forgive me. Does
anybody else care to comment?
Dr. Penn. Just give her a little grace period, and then she
will be all yours, but today we will protect her. [Laughter.]
Mr. Nethercutt. I am respectful in my questioning, but I
just think it is a big problem, and we need to try to capture
markets.
Dr. Penn. Let me ask you, help me understand what you mean
in the first part of the question about the lack of
coordination among the departments in capturing markets.
Mr. Nethercutt. The single-desk mentality of the Canadians
and the Australians for sure, they virtually sit next to each
other, and they say, ``Let us cut through all of the
bureaucracy, and let us go get this sale. And if Pakistan
tenders, let us go get it, and we will grant the credits, and
we will counter whatever needs to be done by others, and we
will get the sale.'' That is what I mean.
And it seems to us by the time you make the decision to
secure a sale and issue the credit, you have got to get State
to approve, and then you have got to get Treasury to approve,
and by then, too late, lost the sale.
Dr. Penn. The export credit programs. I did notunderstand
the reference at the beginning there.
Well, I am going to ask Mary Chambliss, you know, she has
been here a long time, and I would just say we will try to do
better next year, but I will let her answer. [Laughter.]
I will let her respond.
Mr. Nethercutt. I do not want you to wait until next year.
We will follow up after the hearing, but go ahead.
Ms. Chambliss. Thank you, Congressman.
Maybe I can shed just a little bit of light because you
have mentioned a complex of issues, I think, the State trading
versus the situation in Pakistan. I am familiar with the
situation that occurred in Pakistan when the Australians got
the wheat business. I think that is what you are referring to,
right?
Mr. Nethercutt. Yes.
EXPORT CREDIT GUARANTEE PROGRAM
Ms. Chambliss. We do have the export credit guarantees, our
GSM program. Just for the record, we do not seek interagency
approval on the GSM programs. We, in the Department, are
responsible. We do seek information from other agencies,
particularly Treasury, on the financial situation of a country
because we are incurring risk on behalf of the American
taxpayers, so it is part of a process, but we do that early in
the year, and we announce lines.
We shared your disappointment. We made some special efforts
in the GSM program with Pakistan at that point in time to
extend the length of time of the guarantee. We did a number of
things that we sincerely hoped would assure that that purchase
came to the United States. At the end of the day, the Pakistani
financial analysis believed that they got a better deal with
the Australians. What all of the components of the deal were, I
do not know, but we certainly did have the program out there to
respond quickly. I think we generally can with the GSM program.
So just so you know it does not go through an interagency
process.
In countering our colleagues in the State Trading
Enterprise--STE arena, obviously, as Secretary Penn has noted,
one of our objectives in the next Doha Round is discipline on
STEs, is transparency of what is happening. I think that is
what we need as much as anything to understand how to counter
that, so we are going to continue to work on that aspect.
Mr. Nethercutt. Thank you.
Thank you for your forbearance, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Nethercutt.
Mr. Nethercutt should wear a badge of honor for always
advocating opening more markets for our producers in this
country. I think there is not a year that goes by or a week
that goes by that he is not pushing very hard for that.
I believe Ms. Kaptur has a couple of remaining questions,
and I will yield to her at this time.
Ms. Kaptur. Thank you, Mr. Chairman.
Dr. Penn, I will look forward to hearing from you on which
of your accounts would be the most important to augment to make
USDA's impact in the foreign policy arena more significant. I
have also asked, if you could, to please give us your
perspective on Russia and Ukraine and the Department's approach
in those two countries over the next few years.
I have asked you on the Chiapas situation for comments. I
forgot to also request, though I mentioned it, Lebanon, and
your recommendations on what we do to try to replace the fields
that have been burned, the hashish fields, and what actions we
might take or how we organize ourselves to address that
situation, which has been lingering for a very, very long time.
BIOFUEL
I wanted to shift gears, if I might, on the domestic front.
My own view is that one of the reasons that we have this
situation that we are dealing with in Central Asia and the
Middle East is for too long oil and petroleum imports have been
an excuse for our foreign policy. That is my own perspective,
others may disagree, but I have some numbers to support that.
In the past year, I think we had about a $60-billion trade
deficit in petroleum which continues to be a large and growing
share of our overall international trade deficit.
I have been as strong an advocate as I know how for the
development of biofuels. I am not the only person supporting
this. Senator Lugar has been a real leader in our country in
this regard. In fact, his article I commend to you that was
written in Foreign Policy magazine, 1999, along with former CIA
Director James Woolsey, called, ``The New Petroleum.'' I put it
in the Congressional Record again last Tuesday evening. But it
talks about the absolutely critical need for us to move more
quickly in the biofuels arena.
I would like to ask you, in the testimony that you have
presented today and as you look at the future in terms of what
you had jurisdiction over, what in your submission today deals
with a new fuels future for America based in agriculture. I
would also like to ask you to comment or any of your associates
on the $150 million that was put in the Commodity Credit
Corporation account for ethanol and biofuels over the last year
or so and how that has been used.
Dr. Penn. Let me just respond to the last point first.
As you noted, there has been a 2-year program funded from
CCC for $150 million each year to encourage additional
production of biofuels and at the same time to utilize the
products of American agriculture. The first year of that
program has been completed, and it did result in additional
fuel production and the utilization of agricultural products.
The second year is just under way. I think that the
allocations were just made, Jim, and the proposals accepted----
Mr. Little. Last week.
Dr. Penn [continuing]. Last week. So I am pretty timely
here. The second year of that program is being unfolded. I
think the only change from the first year is that the rendering
industry was included for participation in the second year. So
that program is well under way.
Now the scene shifts to the farm bill, and as you know,
there has been lots and lots of discussion about an energy
title in the farm bill, about biofuels, renewable fuels, and at
USDA we have been very involved in the energy area. We have
been very actively involved, especially through the Office of
the Chief Economist, and so we have had a lot of input with the
Agriculture Committees as these discussions have taken place.
We have tried to look at what might be some novel and
unique ideas and some cost-efficient ways to do exactly what
you are suggesting, to encourage greater development of
renewable fuels as a new market for agriculture. I mean, we
have had the food market for a long time, and here is an
industrial product market that could be expanded.
So there is a lot of activity in that area, and I think at
this point the objective is accepted. The idea is to find
programs that are workable, that are cost-effective ways to use
the taxpayers' money.
Ms. Kaptur. I would urge you, though I have been
unsuccessful myself in this regard, to engage in some
discussions with the Department of Interior and the Strategic
Petroleum Reserve administrators over there. Because we must
spend--I do not remember the number any more--it is over $175
million a year just for maintenance of storage of our reserves.
I have proposed amendments several years in the
Appropriations Committee to swap some of the oil in the reserve
and use the proceeds to purchase biofuels. If we had done that
3 years ago we would have doubled ethanol and biodiesel
production in this country. The excuse we are given by Interior
is, ``Well, you know, first of all, it is not our mandate,''
but the other one is, ``Well, we cannot store it. There are
problems with ethanol. There are problems with biodiesel.'' We
all know there are problems everywhere, but the point is we are
frozen in the petroleum age, we cannot get out of it, and USDA
has to help lead us out of it.
And if there is any way you could even spend some time over
there and talk to some of those folks, even encourage them to
use soy diesel in some of the vehicles that they power, and by
the way our Forest Service does not do a very good job of that.
We asked them that question when they were up here the other
day, and they are one of the biggest buyers of vehicles in this
country. They are not even ethanol and biofuels conscious. It
is a part of the Department of Agriculture, so I cannot even
imagine what part of Interior is thinking, but I just wanted to
encourage you along these lines.
Could you be a little more specific to tell me, of the
purchases that were made, what really happens? What really
happens when CCC expends those dollars?
Dr. Penn. I am going to ask Mr. Little to provide you with
the details.
Mr. Little. Companies which produce biodiesel fuel enter
into an agreement with the Commodity Credit Corporation where,
if they are going to increase production of biodiesel from
eligible commodities, we will reimburse them for part of their
increased purchase of eligible commodities. So, in 2001, we
were able to increase the use of eligible commodities. We
increased the production of bio-diesel fuel by 6.4 million
gallons by purchasing 4.6 million bushels of soybeans.
Dr. Penn. We basically subsidize the price of the
feedstock. So we make it cheaper to buy the feedstock, whether
it be corn or soybeans or whatever, so that they can produce
additional product. This has to be new production, not what
they were doing last year, but an expanded amount, and we make
it feasible for them to do that.
Ms. Kaptur. So you are saying, if you have an ethanol plant
in Minnesota or Indiana, that you somehow make it cheaper for
them to buy their feedstock that goes into the process?
Dr. Penn. That is exactly right, if they are going to
expand their capacity, if they are going to expand output, so
that we get new output. We do not want to just subsidize the
output that they are already doing, but we want to encourage
them, as you suggested, to produce more.
Ms. Kaptur. Mr. Chairman, I take it you want to ask some
questions or turn it over to Mr. Nethercutt.
Mr. Bonilla. Mr. Nethercutt has a remaining question or two
as well.
Did you have additional questions?
Ms. Kaptur. I do, but I am happy to yield to him.
Mr. Bonilla. Mr. Nethercutt.
Mr. Nethercutt. Thank you, Ms. Kaptur. Thank you, Mr.
Chairman.
Mr. Little, I want to commend to you Jim Fitzgerald, who is
doing a great job out in our part of the country with FSA and
the good committee. He is a fine good and really is committed
to the Agency. He wants to do a good job, and so you have got a
good man out there.
RISK MANAGEMENT EDUCATION
I would say, Mr. Davidson, it seems to me that the risk
management education for farmers is a good thing and that maybe
the best way to implement is through the extension system. I
think the extension system can do a good job in helping our
farmers with their risk management. Would you agree with that?
Does that make sense to you?
Mr. Davidson. I think you are correct. It is something that
is in place right now. There is a relationship.
Mr. Nethercutt. Right.
Mr. Davidson. There is a trust, and to the extent that that
can be a good delivery system, we would like to use it. We have
done quite a bit in expanding the education system over the
last little while, as prior legislation has encouraged us, and
you have provided us funds to do, and I am pleased to say that
we have spent those funds wisely.
Mr. Nethercutt. Are you encouraged by the progress that has
been made in risk management for farmers in the education part
of it?
Mr. Davidson. Well, I think education is the foundation of
risk management. If the farmers are not aware of ways in which
they can deal with the many risks that are presented to them,
we can help them out.
Mr. Nethercutt. No, my question is are you satisfied with
the progress that has been made so far?
Mr. Davidson. No, I do not think we ever should be
satisfied.
Mr. Nethercutt. So you think there is more we can do?
Mr. Davidson. Yes.
Mr. Nethercutt. Do you have some plans for this year?
Mr. Davidson. Yes, I will provide the plans for the record.
[The information follows:]
RMA is planning to establish educational partnerships for crop
insurance and risk management education programs this year, enlisting
the assistance of State agriculture departments, universities, and
other public and private agricultural organizations. The first program
will reach U.S. producers of speciality crops and underserved
commodities with broad risk management training, and the second will
reach agricultural producers in 15 underserved States with a program
focused on crop insurance education and information.
Mr. Nethercutt. One final question or comment.
Ms. Chambliss, I appreciate your comments about the whole
trade situation. I think the fact that in light of the legal
embargo that was imposed on Pakistan 4 years ago that the
Congress turned around and lifted in the aftermath of their
testing perhaps can be credited in some part with the
cooperation that our country has received from Pakistan in our
latest war effort.
So my point to you is, and to all of you, is I think
agriculture is a national security issue. And relationships,
and trade relationships, and capturing markets, and granting
credit, all of that has a benefit to our national security
because we do not know what we are going to need downstream.
I will also, Dr. Penn, I noticed the comments that you made
in Australia, with respect to the relationship between
Australia and the United States, and the relative assistance
that our farmers receive versus the Australians. Frankly, I
think the Australians, as you indicated, have a pretty good
deal. They are getting a benefit as it relates to dealing with
markets around the world, and we have to be a very tough
competitor, and that is why I think vehicles like EEP may be
necessary and other tactics that we might have to encourage
sales and prevail over the competitive nature of the world
markets. So I appreciate your thinking through that as youdo
your job well.
Dr. Penn. Thank you.
Mr. Nethercutt. Thank you, Mr. Chairman.
Thank you all.
Mr. Bonilla. Thank you, Mr. Nethercutt.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
SYMPOSIUM ON BIOFUELS
I wanted to invite Dr. Penn and any of your associates to a
conference, actually a symposium, that Congressman Nick Smith
of Michigan and I are hosting at the Ohio-Michigan border on
the subject of biofuels. We are looking for which individuals
from USDA we could invite who could present a complete picture
of what USDA is doing in the area of building a new energy
future for America. We were not quite sure who to put on that
invitation list, but we are exceedingly interested in the
topic.
Obviously, Mr. Smith serves on the authorizing committee as
the chairman of the Research Subcommittee. I sit over here, and
we have a region vitally interested in this question. As I
listened to your comments about the CCC, for example, and its
role in biofuels, yesterday we had the transit authorities of
our State in our offices, and my own local transit authority is
saying to me, ``Marcy, we will make biofuels, in order to help
contribute to a new future for America, 20 percent of the
volume we purchase annually. What do we buy, and where do we
buy it, and are our engines properly suited? Will the Cummins
engine work with soy diesel?''
I said, ``Do not ask me.'' But those are the questions, and
we want to get that specific, and we want to aggregate demand.
We want to help to build this industry in our region. We want
your help in how to do it. So, if there is any way you can
think about who at USDA might be the best persons to work with
us, we would be most grateful.
I wanted to turn, if I might, just for a second to a
continuing concern of mine which the Secretary has been
sensitive to, and that is if you look at the overall budget of
USDA, two-thirds of it is in nutrition programs and a third of
it in production agriculture programs. It has been a continuing
cause of mine to get the nutrition side of USDA to talk to the
production side of USDA, and it is very hard to do.
SENIOR FARMERS MARKET NUTRITION PROGRAM
Example: Yesterday I was out in my community at a major
announcement of our Senior Farmers Market Nutrition program for
this summer, and we had all of the farmers, potato growers, and
apple growers, and vegetable producers. I was asked questions
like, ``Well, can we sell cider, if we sell apples? Can we sell
honey?''
I said, ``I do not think so, but I have got to go back to
Washington and check.'' And this Senior Farmers Market
Nutrition program is so popular with specialty crop producers.
These are not necessarily row crop producers, but they are the
farmers that live in our area. What is very interesting about
them is they do not get any subsidies from the Government
because they are specialty crop producers, but they are the
ones that provided the food to our food banks. They donate
their commodities, and there is no Federal program--if there is
one, let me know--where they get credit or a payment for
donating food to the food banks. The food chains, for the most
part, do not. When we put out a plea across our community to
help feed the hungry, the farmers come forward.
And so when I see the very same people who donated to our
food banks being the ones that benefit from the Senior Farmers
Market Nutrition program or the WIC Farmers Market program, I
know I have hit a home run.
And so, Mr. Secretary, my explanation this morning is, A,
to inform you of how those programs impact, but they are so
terribly small. The Senior Farmers Market Nutrition program,
according to legislation we passed last year, asked the
Commodity Credit Corporation to expend approximately $15
million, and then we appropriated an additional $10-, For a
total of $25 million. It is really nothing across the country,
and I have letters here from Congresswoman Clayton that I am
going to submit for the record.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
I have information from other States where we cannot expand
these programs.
Mr. Little knows the trouble that our farmers are in, in
every single region of this country. These programs put real
dollars into their pocket. They deal directly with consumers.
They need to be expanded. We need to find a way to do that. We
can feed the people in our community who do not have enough
money to purchase good fruits and vegetables, and we need to
find direct income sources for our farmers. There are not
better programs that I have found anywhere.
My question to you is why does the Department appear to be
hesitant in expending funds out of CCC to expand the Senior
Farmers Market Nutrition program this year and for next year?
Dr. Penn. Well, let me say that is an unusual program in
that its genesis is on the food assistance side of the
Department, not on the farm or commodity side of the
Department, as you suggest. So the responsibility for the
program is in another mission area, but like you I have heard
only good things about the program. Virtually everybody who
talks about it says good things.
The State Commissioners of Agriculture met a couple of
weeks ago, as you know, and I saw several of them, and almost
to the person they mentioned what a great program it was in
their area.
We do have under consideration at the current time some
supplementary funding, funding that would augment the amount
that has been appropriated. That is in the decision process
within the Department, but as you know, we have to make
recommendations to OMB and go through the interagency process
to get all of the approvals for that. We are in the process of
doing that at the current time.
Ms. Kaptur. I believe, Mr. Secretary, that that is under
your jurisdiction. I might be incorrect in my understanding,
but----
Dr. Penn. Well, let us ask Mr. Dewhurst, who seems to know
all of these arcane matters here.
Mr. Dewhurst. The CCC funds that help support that program,
of course, come out of this jurisdiction, but the overall
management of the program is charged to the Food and Nutrition
Service. So it is a mixed responsibility.
Ms. Kaptur. Well, all right, then I think it is important,
and I will place on the record, nine programs that were not
funded: Connecticut, Florida, New Jersey, North Carolina, South
Carolina, West Virginia, Oklahoma, Grand Traverse Indian
Nations in Michigan and now Wisconsin, along with States like
my own only having the program operating in one region because
the squeaky wheel gets the oil.
But the point is, and I think the fact that it is
interjurisdictional within the Department is a very important
issue because this gets back to my question of the
Nutritionside of Ag being able to talk to the Production side of Ag,
and the Farm Service Agency can do a whole lot to help to cause these
discussions to occur at the local level.
I wanted to mention, also, other programs like the School
Breakfast and Lunch programs, our Temporary Emergency
Assistance Feeding programs. When the Department bids on those
programs or sends money to the States, believe me they do not
talk to the farmers. The farmers never get plugged into the
equation, maybe one or two places in America, but for the most
part, farmers are not encouraged, through the mechanisms at
USDA, to use in my State the hundreds of millions of dollars
that come down over a 5-year period to provide even apples,
apples into a school lunch program.
I know this is not under your jurisdiction only, but it is
a huge problem, and it is a source of income to our farmers.
Yesterday, I had apple people come up to me, Ohio apple people,
and talking about why was it so difficult? And I said, ``You
know why it is so difficult? Because when the money comes down
from Washington, it goes to the Ohio State Department of
Education.'' They know nothing about agriculture. So it is not
even in their mission. Their mission is feeding children, but
how do you make the connection?
One farmer said to me, ``Well, Marcy, you know, I got some
money years ago under the TEFAP program. I provided some
commodities. Whatever happened to that program?''
I said, ``Well, it still exists. You mean, they have not
been in touch with you?''
There is something missing in the juncture between your
side of Ag and the other side of Ag, and I am just highlighting
it since you are all new, and you can really do something about
it, and you have new energy and new vision.
And it needs to get right down into that county office.
They have got to see this as an opportunity and they have to
bid on it. In some cases, it will work; in some cases, they do
not have processing capabilities for some of the foods that are
required. But I am telling you we are missing the boat because
the bulk of the money that goes out is in the nutrition
programs. They have got to meet your producers, and that is not
happening, for the most part.
That is it for me, Mr. Chairman.
Mr. Bonilla. Thank you, Ms. Kaptur.
I want to thank all of you who have appeared before us
today and for your patience and willingness to answer all of
our questions.
Steve, thank you for always sitting there. Sometimes we do
not ask much of you, but you are always there when we need you,
and we appreciate that very much.
Mr. Dewhurst. Thank you.
Mr. Bonilla. You help us in our process as we put our bill
together, and we will be interacting with you beyond today's
hearing. I appreciate your cooperation and look forward to
putting together a good bill this year, in a bipartisan way,
that will help producers and all of the beneficiaries of our
programs through this bill.
Thank you very much.
Dr. Penn. Thank you, Mr. Chairman.
Mr. Bonilla. The subcommittee stands adjourned.
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Thursday, March 14, 2002.
FOOD SAFETY AND INSPECTION SERVICE
WITNESSES
ELSA MURANO, UNDER SECRETARY FOR FOOD SAFETY
MERLE D. PIERSON, DEPUTY UNDER SECRETARY FOR FOOD SAFETY
MARGARET O'K. GLAVIN, ACTING ADMINISTRATOR, FOOD SAFETY AND INSPECTION
SERVICE
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE
Mr. Bonilla. The committee will come to order. Good morning
to all who are participating in our hearing this morning.
Today, this subcommittee takes up the very serious issue of
food safety for this country. We are going to hear about that
and the administration's fiscal year 2003 budget request for
FSIS. I am very delighted to be welcoming Dr. Elsa Murano this
morning, the Under Secretary for Food Safety, who is appearing
for the first time. I have to say she is already making a
tremendous impact in the community. I speak for many who
appreciate the effort that you already have underway.
The Under Secretary is a respected microbiologist,
university professor and a member of several national advisory
committees on food safety. Dr. Murano, I think your expertise
is unsurpassed in terms of what you bring to this position, and
we all hope to learn a lot from you today.
We also extend a welcome to your colleagues, Merle Pierson,
the Deputy Under Secretary, and Margaret Glavin, the Acting
Administrator for FSIS, and of course Steve Dewhurst, who joins
us again today.
The job that FSIS inspectors, researchers and auditors do
is extremely important, and I hope they realize that all of us
appreciate their fine work. A safe food supply is crucial to
every one of us, and this Nation has been extremely successful
in continually raising the level of food safety for its people.
We look forward to continuing that success, but before we begin
hearing your opening comments, I would like to yield now to my
colleague, Ms. Kaptur, for any opening remarks that she may
have.
Ms. Kaptur. Thank you. I just wanted to welcome Dr. Murano
and her colleagues here this morning. We wish you very well.
Your service to the people of our country and, indeed, the
world, and there is no more important question, if you look at
our own jurisdiction, on the minds of the American people, than
the question of food safety.
The system we have set in place is one that is the finest
in the world, and we want to make it better. So we look forward
to your testimony, and I thank you so very much for being with
us this morning.
Mr. Bonilla. At this time, we would be delighted to hear
your opening remarks, Dr. Murano. We will include your
statement and Administrator Glavin's statement on the record.
Please proceed.
Ms. Murano. Thank you, Mr. Chairman and Ms. Kaptur. I am
pleased to appear before you today to discuss the fiscal year
2003 budget for Food Safety within the Department of
Agriculture.
Introduction of Witnesses
As the chairman said, I am Dr. Elsa Murano, Under Secretary
for Food Safety, and with me today are Dr. Merle Pierson,
Deputy Under Secretary for Food Safety; Margaret Glavin, Acting
Administrator of the Food Safety and Inspection Service, and
USDA's Budget Director, Stephen Dewhurst. We also have other
FSIS representatives here, including our deputies who are
sitting behind us.
Since this is my first time here, I would like to introduce
myself to you. I am a native of Havana, Cuba. I am a scientist
by profession, as you said, having earned an M.S. degree in
anaerobic microbiology and a Ph.D. in food science from
Virginia Tech. For the last 12 years, I have dedicated my life
to the study of food safety, as professor and researcher at
both Iowa State and Texas A&M University.
Opening Statement
At USDA, our number one goal is to protect the meat and
poultry supply for consumers here and abroad. Every day 7,600
inspection personnel insure that plants are meeting food safety
rules. The Pathogen Reduction and Hazard Analysis and Critical
Control Points (HACCP) rule has been implemented nationwide in
plants of all sizes. HACCP represents a significant
modernization in the way meat and poultry are processed, with
emphasis on prevention and control of food-borne hazards. The
success of the rule has been proven in a number of ways.
First, Salmonella testing data shows that the prevalence of
this pathogen has significantly decreased in all product
categories.
Secondly, data from the Centers for Disease Control and
Prevention (CDC) shows significant reductions in food-borne
illness, which CDC has stated are likely due to the
implementation of that rule.
We have made headway in food safety, and we are on the
right track. To help us continue our efforts, the fiscal year
2003 budget includes a record funding request for the Food
Safety and Inspection Service of $905 million, a $28-million
increase above the year 2002. So, as HACCP moves into the next
stages, we will work to improve it through two overriding
principles; first, that we use science to guide us and
technology to continue to improve the safety of meat and
poultry; and, second, that we have a transparent process, one
that provides the opportunity for those with different points
of view to have a forum in which to express them.
So, today, I would like to discuss five goals that I
believe will help us to keep going and to take food safety to a
new level. These are not listed in any specific order because I
strongly believe that they need to be pursued simultaneously in
order to achieve our mission of protecting the public's health.
Our first goal is to improve the management and
effectiveness of FSIS programs. Last March, FSIS conducted
reviews of small and very small Federally inspected meat and
poultry establishments in New York City and the New
Jerseymetropolitan area.
This review illustrated two important lessons: One,
communication within FSIS needs to be open and readily
available; and, two, we need to improve the accountability of
our workforce, including management. Their performance
expectations, lines of authority and accountability for
assuring compliance with regulatory requirements are essential
to meet our public health objectives.
Our second goal is to enhance coordination of food safety
activities within and outside USDA. We have several efforts
underway. For example, within USDA we are working to improve
the coordination of FSIS veterinarians with those in APHIS. One
effort involves joint training opportunities in foreign animal
diseases.
Outside of USDA, we are working with the Food and Drug
Administration (FDA). As you may know, FSIS and FDA have had an
agreement in place since 1999 to exchange information on an
ongoing basis about dual jurisdiction establishments. I believe
there are other opportunities for us to enhance coordination
with FDA in these types of establishments to further leverage
our resources for the maximum public health benefit.
We are currently working on a couple of initiatives with
FDA. One includes the possibility of deputizing FSIS inspectors
to help FDA address threats to the food supply.
The third goal is to enhance a scientific basis of existing
food safety policies and systems. Achievement of this goal is
essential if we are to make sound decisions in protecting the
public's health. One way to accomplish this is to use risk
assessments as a way to identify hazards and provide a basis
for making risk-management decisions. The analyses we make must
be complete, and the models that are generated must stand the
rigor of the peer-review process.
Another topic I want to discuss related to science-based
policy development is performance standards. Science tells us
that performance standards are needed, since they serve as a
measure of the success of food safety programs. For FSIS, they
serve as an important verification tool for HACCP. However, it
is not enough to set just any performance standard, we must set
performance standards that are accurate in terms of reflecting
when control of hazards has been lost.
As you know, we have turned to the scientific community to
get input on FSIS's microbiological performance standards. Both
the National Advisory Committee on Microbiological Criteria for
Foods and the National Academy of Sciences are studying this
issue. Both reports should be completed by the end of this
year.
In the meantime, we continue to use microbial sampling as
one way to verify whether HACCP or sanitation standard
operating procedures implemented by industry are successfully
controlling hazards. As you know, our inspectors are charged
with such verification activities, which also include record
reviews, visual monitoring of plant personnel and product
sampling. Since the vast majority of enforcement actions taken
by FSIS since implementation of the rule have to do with HACCP
and sanitation failures, verification of HACCP and sanitation
implementation is crucial to maintaining food safety.
As part of our efforts to ensure our policy decisions are
science based and that the process is transparent and inclusive
of all interested parties, we have planned a series of meetings
to discuss how FSIS can integrate scientific principles into
its activities and decision making. In January, for example, we
hosted a 2-day public meeting to discuss the role of
epidemiology, and its use in investigating food-borne illness
outbreaks and initiating product recalls.
We are planning a scientific meeting for May 7th and 8th to
discuss the state of pathogen reduction measures, including
HACCP and to discuss performance standards.
In addition, we are planning a risk analysis symposium for
the fall. These symposia will provide an opportunity for an
open discussion of ideas.
Our fourth goal is to enhance outreach and public education
efforts. We will host a food safety education conference in
September of this year, co-sponsored by the Department of
Health and Human Services (HHS) and the Partnership for Food
Safety Education. It will provide an opportunity for food
safety education and communication leaders from across the
country to present and share projects, assess current trends
and plan for the future.
And last, our final goal is to ensure that our meat and
poultry are safe from intentional contamination. We have taken
specific steps to accomplish this. Within the USDA Homeland
Security Council, we created the Food Biosecurity Action Team,
or F-BAT, to coordinate and facilitate all activities
pertaining to food biosecurity and emergency preparedness
within USDA. In addition, and in partnership with HHS, we
created the Food Threat Preparedness Network or Prep Net, which
includes all food safety agencies of the Federal Government.
Both of these entities, F-BAT and Prep Net, are fully engaged
in the development of plans to quickly respond to biosecurity
threats, as well as preparedness strategies designed to prevent
or contain events to the greatest extent possible.
And now for the fiscal year 2003 budget request. FSIS is
requesting a net increase in appropriated funds of $28 million.
Let me briefly explain the four specific components of this
request.
First, $10.8 million is for pay and benefits increases;
Second, we are requesting $14.5 million to implement the
FSIS Automated Corporate Technology Suite, FACTS. FACTS is an
initiative to replace FSIS's existing disjointed information
systems with a system that has data-sharing capabilities,
making program data available at all levels of the
organization;
Third, our budget includes a $1.5-million request to expand
risk prevention and management efforts in small and very small
meat, poultry and egg establishments; and,
Fourth, our budget contains a request of $1.2 million to
conduct targeted epidemiological surveys at slaughter
establishments. As part of this effort, raw product samples
will be taken at meat and poultry slaughter operations and
analyzed for the presence of lesions, and drug or chemical
residues. This information will allow the Agency to better
assist producers and processors in the prevention of food
safety hazards.
Mr. Chairman, I am committed to realizing these five goals,
and in doing so, strengthening the safety of our meat, poultry
and egg product supply.
This concludes my statement. Thank you for the opportunity
to testify before you on behalf of the Office of Food Safety at
USDA, and I do welcome your questions.
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Mr. Bonilla. Thank you, Dr. Murano. I would like to preface
my questions with a general remark and a suggestion for all of
you who are answering questions here today, and that is to feel
free to use charts, graphs or anything like that. We are very
interested in data, strong data that you may have to present
this morning, so please do that if the opportunity arises.
IMPORTED PRODUCT
My first question, Dr. Murano, has to do with imported
meat. There has been a lot of concern lately about meat
imported from Mexico. I think that people would be more assured
if they understood the standards, and the checkpoints that we
have in place to make sure that our meat supply is safe. I
think people would also be surprised to hear what a small
percentage of meat we are talking about that is consumed by
Americans in this country that comes from Mexico.
So can you tell us about the checkpoints along the border
that FSIS has and whether or not we should be scared.
Ms. Murano. Surely. I would be happy to.
Let me begin by explaining a little bit about our system.
It is a system based on equivalence, and it is a three-pronged
system that we believe works very well.
No. 1, when a country wants to export meat or poultry to
us, to the United States, they have to submit to us evidence
that they have an equivalent inspection system to what we have
here in the United States. That means having an inspector in
every plant, that means having a food safety program such as
HACCP, and sanitation procedures, good manufacturing practices
and so forth.
The second, or I suppose as part of that first prong, is
that we not only get these assurances from the country that is
planning to export to the United States, but we actually go and
visit that country and verify for ourselves if, in fact, they
do have the infrastructure, with inspectors, that they follow
the food safety methodologies that we follow, that they have a
system like HACCP and sanitation operating procedures and so
forth. At that point, they are approved to export to the United
States.
The second part of this three-pronged approach is the
reinspection of products within our borders at about 124
inspection houses here in the United States. And our
inspectors, as product comes from Mexico, let us say, reinspect
that product.
The third approach or the third part of this equivalence
system is that we do at least annual audits of those countries
that export to the United States. That means we send a team of
our experts to the country to do audits of several plants. If a
country has very few plants that are exporting to the United
States, we will visit every single plant. Countries that have a
lot of plants, we will visit a certain number of plants
designed by statistical analysis to be representative of that
country. So it is, we believe, a very extensive and systems-
approach-based methodology to ensure the safety of products
that are brought into the United States.
We do not tolerate noncompliance, and when I say ``we,'' I
mean me. I have been here 4 months as Under Secretary for Food
Safety, and when I was here hardly a month, we had visited,
FSIS inspectors, auditors, I should say, had visited Mexico and
had done an audit and found three of their processing plants
not to have Mexican Government inspectors on the premises,
which they are required to have if they are to have an
equivalent system to ours.
So the Agency moved quickly to delist those three plants,
and I took the opportunity, at that time, to make a phone call
to my counterpart in Mexico, Dr. Javier Trujillo, and spoke to
him very directly and said to him, in no uncertain terms, if
you want those three plants to be relisted, you have to act
promptly and swiftly, put inspectors in there that are
Government inspectors, and he did. He responded very, very
quickly. I know Dr. Trujillo to be someone who cares a lot
about food safety.
But, you know, trust, but verify. Somebody famous said
that, I believe, and I certainly ascribe to that tenet. So what
we have done is every shipment from Mexico, meat and poultry,
is receiving 100-percent reinspection here at the border by our
inspectors until we go back to Mexico in April and do another
audit, basically, and see how the situation is.
We feel so strongly about this that the Acting
Administrator of FSIS, and myself, and our congressional and
public relations officer, went to Mexico last week, I believe
it was. We visited with Dr. Trujillo, spoke about these issues,
and toured a few plants. One of the plants was one of the ones
that had been delisted by us in November that quickly had
inspectors from the Government put into place by Dr. Trujillo.
We reviewed very extensively their HACCP plans, certainly, and
visually inspected or audited the plant, I should say. I have
done a lot of HACCP workshops in my day before coming to USDA,
so I can tell you right away when I look at records whether
these are sound plans or not. And we were certainly satisfied
that the plant is operating as it should.
So it is a system that really depends on having a
relationship with a country where the way in which that country
responds and whether we can trust their assurances is critical
to our continuing doing business with them.
RESOURCE REQUIREMENTS
Mr. Bonilla. Dr. Murano, do you feel like the resources
that you are asking for are sufficient to continue making sure
the imported meat is safe?
Ms. Murano. I do, Mr. Chairman, because we have inspectors
at each of these 124 inspection houses, as we call them, who do
this reinspection of product. But let me add to that that one
idea that we discussed with Dr. Trujillo was the possibility of
perhaps having us send some of our personnel for, say, a month-
or 2-month-long visit to Mexico just to make sure that things
are going well and do that for a certain period of time.
These are the kinds of projects that if we come to an
agreement to do something like that, then we will probably be
utilizing some monies that I think we may be able to secure
through Homeland Security funds because it is, after all,
protection of the homeland when you are reinspecting product
that comes from other countries.
Mr. Bonilla. One more question before I yield to Ms.
Kaptur. It relates to the safety of the product in our country.
SALMONELLA PERFORMANCE STANDARD
A recent court decision stated that a plant cannot be
closed down solely in this country based on the presence of
Salmonella bacteria. I want to emphasize a point the Secretary
made during her hearing with us here just a few weeks ago that
this court decision does not impact food safety.
I want to reemphasize this point, Dr. Murano. Does the
court decision in this case impact the Agency's ability to
close down production when a safety hazard is present?
Ms. Murano. No, it does not.
Mr. Bonilla. There has been a lot reported, a lot of
information out there that indicates otherwise.
Ms. Murano. I realize that. I have read the articles
myself, and I would like to take this opportunity to
emphatically make sure everybody hears me when I say we have
not lost our ability to shut down meat or poultry plants that
fail to abide by our food safety requirements.
What we require of plants is to have a sound HACCP plan
that follows the seven principles of HACCP, and that they
operate with sanitation standard operating procedures.
The court decision basically stated that we could not take
enforcement action based only on the results from our
Salmonella testing. Now we continue to do Salmonella testing at
all of these plants because we are using it as a way to verify
whether a plant has control of the hazards, and the control of
the hazards, again, takes place through following a sound HACCP
plan and sanitation operating procedures.
So the crux of the matter is that HACCP, as I said in my
opening statement, is really the backbone, if you will, of our
food safety programs, as well as the sanitation procedures. And
the microbial testing simply helps us to point our eyes to do a
very detailed scrutiny of the HACCP plans, and the sanitation
operating procedures, to make sure that those are meeting the
objectives of controlling hazards.
So I can tell you certainly that since the Supreme Beef
decision, we have continued to take enforcement actions and
have done that in several instances.
Mr. Bonilla. Thank you, Dr. Murano.
Ms. Murano. You are welcome.
Mr. Bonilla. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
IMPORTED PRODUCT
Dr. Murano, according to information I have, the Centers
for Disease Control estimates that food-borne diseases cause
approximately 76 million illnesses annually in our country,
325,000 hospitalizations and 5,000 deaths each year. When we
have talked with the CDC and others, one of the difficulties in
getting accurate numbers sometimes is the lack of reporting
from the local public health service and hospitals to the CDC.
But we have been seeing these numbers over the years, and
they do not appear to be going down. Perhaps it is because our
population is increasing. But my question to you is, as you
look at the history of food inspection in this country, and you
look at the rising level of imports into the United States, do
you believe that the recalls in the last 2 years, over nearly
200 recalls, and I will go into these in a little more detail,
does the fact that this number appears to be increasing have
anything to do with rising amounts of imported product that are
blended or used in this country?
I am trying to get a sense of how important the imported
meat issue is compared to domestic difficulties that we may be
having. Give us some relationship here.
Ms. Murano. Sure. I would be happy to.
First, I should certainly reiterate the fact that since the
implementation of the Pathogen Reduction HACCP rule just a few
years ago, FSIS really drastically changed, if you will, the
way that it was inspecting meat and poultry products, and
certainly industry had to do a drastic change themselves in
having HACCP plans and so forth.
And the reason I am saying this to you is because part of
this new system that came into being, about 3 years ago,
consisted of checks and balances that have resulted in our
being able to document the microscopic, not visible with the
naked eye, hazards to the food supply. For that reason, it has
pointed us to problems that maybe before we were not
addressing.
So, when you see that change, you start to see certainly
more recalls, more enforcement actions and so forth, simply for
the reason that you have a new system and it's a system that is
very stringent, and it looks for these problems in food safety
for contamination and for causes of contamination within a
processing plant.
We do not know what the impact of imported products is to
foodborne illness any more than the Centers for Disease Control
does, but----
Ms. Kaptur. We know that, Doctor.
Ms. Murano. Because it is the same reason we do not, the
CDC, let me say, not everybody who gets sick goes to the
doctors you know very well. The reporting of foodborne
illnesses is not perfect in any country, and certainly it is
not in our country, but the CDC established a few years ago the
Food Net, which is a way to proactively try to seek out that
information from hospitals, from doctors and so forth to try to
get a better estimate. And so these figures that you quoted
basically come from the best estimates that CDC can provide
through the Food Net surveillance data.
PRODUCT RECALLS
Ms. Kaptur. But, Doctor, my question to you is, as we look
at the recalls and we look at the levels of illness and death
in our country, to what extent are those rising levels due to
imported product versus domestic product that is not being
properly presented to the public?
Ms. Murano. That is information that is not known.
Ms. Kaptur. It is not available.
Ms. Murano. It is not available, correct. But let me say
one thing, if I may, Ms. Kaptur, which is the fact that we have
seen, from 1996 to last year, that the incidence of foodborne
illness has actually been going down on several specific
pathogens; Salmonella, Listeria, E. coli 0157H:7, and so forth.
And CDC is ready to put out their new figures April 15th,
as I understand it, for the year 2001. They have told us so
far, preliminarily, that their results look very positive. Not
all pathogen diseases have gone down, but the ones that
certainly are of interest to us because they are involved with
meat and poultry, CDC tells us that those numbers are going
down.
Ms. Kaptur. For instance, information I have on recalls
here, there were 16,895,000 pounds of Cargill turkey products
that were recalled in Waco, Texas, and the pounds recovered for
Listeria, only 2 million pounds of that are recovered. When it
says ``turkey products,'' I look on here, it says, ``Imported
Product, No,'' and some do not have any indication for other
recalls, where the product might have originated. Are you
telling me that under your inspection system, you have no way
of distinguishing between what is a domestic product and what
is an imported product? Am I hearing you correctly?
Ms. Murano. That is correct, simply because, as product
comes in from another country, and let us say that it is a raw
product, it may end up in a plant here in the United States
where it is further processed into, say, sausage or some other
kind of product. It gets reinspected again, I might add to you,
and the recalls that you are seeing, what I am trying to tell
you is that it is a good sign, you have to look at it that way,
that our system is working because it is able to catch these
products. Again, I reiterate the fact that you have got,
according to the CDC, a decrease in foodborne illness from a
lot of these pathogens. This is the data that they provide to
us.
Ms. Kaptur. Let me just ask this: I am going to ask you
before you finish in this first round to give me the three
countries with which you feel we should have the most concern,
where we are bringing in product where we found problems.
And then I would like to know which companies are shipping
from those countries to us. Do you maintain that as a part of
the recall record?
Ms. Murano. Yes.
Ms. Kaptur. Could you give us a list of the those
companies.
Ms. Murano. Let me say a couple of words, and then I will
let Maggie Glavin, who can tell you more details on the
specific aspect of your question, I believe.
We, and in fact this goes back to a question that the
chairman asked that I failed to answer, we import from, just to
stay on Mexico, about .4 percent of our meat poultry comes from
Mexico. Canada, New Zealand, Australia are really the big
exporters to us of meat and poultry.
Having said that, certainly our system of audits that I
explained before shows us which countries are the ones that we
perhaps need to pay more attention to and do pay more attention
to. That is why we do audits more frequently on those
countries, and that is why we went down to Mexico and spoke
with Dr. Trujillo and talked about the possibility of our doing
more audits, and perhaps having someone resident for 1 or 2
months in the country, and so forth.
So, if you ask me for names of countries, Mexico would be
one that we, at least for now, would need to, and are, focusing
more attention to, Brazil is another one, and Italy. So I gave
you the three that you needed, but I will let Maggie Glavin,
perhaps----
Ms. Kaptur. Thank you, Doctor.
Ms. Glavin. I would just like to say that on the recalls,
the number of recalls for imports is a very small percentage of
total recalls, and I can get you the exact number for the
record.
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INCREASED LAB CAPABILITIES
Secondly, in terms of why so many recalls, it is really a
result of the increased ability we have to find contaminated
product through our increased microbial and chemical sampling
of product over the past several years. We have greatly
increased our lab capabilities so that we find things through,
our increased follow up, our improved ability to follow up on
foodborne outbreaks and our increased coordination with both
CDC and with State and local health departments.
The increased number of recalls is because we are finding
things that we did not find in the past. There is no indication
that there is an increase in problems, it is that we are better
able to find those things and get them out of the marketplace.
Mr. Bonilla. Thank you, Ms. Kaptur.
Ms. Emerson.
Mrs. Emerson. Thank you, Mr. Chairman.
Dr. Murano, thanks for being here.
MEXICAN MEAT IMPORTS
Let me follow or continue this line of questioning if I
could, and I apologize for missing the beginning and hope I am
not repeating something, but back on the 25th of February, the
Washington Post had a very scary, quite frankly, article
called, ``USDA Relies on Foreign Inspections.''
If I might quote just for a couple of sentences in here,
``The arrangement worked until U.S. inspectors paid a rare
visit to the plant in May 1999. Greeted by filth and flies, the
visitors cut off trade at once,'' Then we come to another
sentence here that said, ``Instead, the Agency, USDA, relied on
Mexico as the primary enforcer of U.S. sanitation laws, a
standard flunked by 5 out of 10 Mexican plants visited by U.S.
inspectors that spring.''
I am certain that my colleagues have also read this
article, and if you have not, I will provide copies to you
because it will make you very nervous or, hopefully, you will
make me feel better and not as nervous.
You say that you wanted to go down and visit with your
counterpart, Dr. Trujillo in Mexico.
Ms. Murano. Yes, we did.
Mrs. Emerson. Talk to me about how much meat comes from
this facility and what USDA and others are doing to assure we,
the consumers, that other facilities meet our standards and our
regulations.
Ms. Murano. Sure, I will be happy to.
The facility that is mentioned in the article, I guess, is
the one that you are referring to is----
Mrs. Emerson. Carnas Velmo.
Ms. Murano. Carnas Velmo, exactly. That facility, and I am
going to defer to Maggie Glavin if she wants to add something
to it. When we initially allowed Mexico to export meat and
poultry to us, and they proved that they had an equivalent
system and so forth, that was a facility, along with others,
that was put on the list as able to ship product to the United
States because, at the time that that decision was made, the
facility was in good shape.
We went on an audit and saw the conditions of the facility.
By the way, that particular company had never shipped product
to the U.S., even though it was on the list of approved plants
to ship, it had never shipped product to the United States. In
our annual audit in 1999, we went to that plant, saw the
conditions that you see described in that article, and promptly
delisted the plant. That plant has never shipped product to the
United States, not before the delisting and certainly not after
the delisting, which it really is a puzzlement to me.
I was actually interviewed by the reporter, as you can see,
because there are a couple of very small quotes that are
attributed to me. The reporter never did ask me about that
plant. He just simply asked me; ``can you tell me about your
inspection system, and can you tell me something about what you
do with Mexico.'' I could not respond to what he did not ask
me, and I certainly did not know he was going to put in a plant
that had never shipped product to the United States, which
seems interesting to me.
I am here to tell you we import about .4 percent of our
meat and poultry from Mexico, which I mentioned before. Our
visit to Mexico with Dr. Trujillo, during which we alsovisited
some plants, was meant to have an eyeball-to-eyeball dialogue where he
would realize, and he does, that we do not tolerate noncompliance, we
really do not. It is something that we feel very strongly about. This
is why we discussed with him the possibility of perhaps having some of
our inspection auditors go down and stay for a prolonged period of
time, to see where we go from there.
He and I talked about some initiatives that he is pursuing
with his own Government because, frankly, the three plants that
we delisted back in November were in very good shape,
hygienically speaking, HACCP plans, et cetera. They just did
not have the full complement of Government inspectors there. It
is a question of resources for them. Basically, their current
system does not give them resources to pay for enough
Government inspectors. This is something he is pursuing a
solution for with his own legislature, let us put it that way.
He has assured us that all of the plants that are exporting to
the United States now have a full complement of Government
inspectors.
We are, reinspecting 100-percent of the product that comes
in from Mexico because we need to verify that things are fine.
When we go back in April, we will see what we find.
REINSPECTION OF IMPORTED MEAT
Mrs. Emerson. So, when you said, very early on in your
comments, that a country has to prove to us that they have an
equivalent system, that is a HACCP-type of system, correct?
Ms. Murano. Correct.
Mrs. Emerson. And if, in fact, they do not have the
resources or the personnel to carry out the inspection
functions, then should we be allowing them to inspect on our
behalf? You talked about just .4 percent or Mexico you are
reinspecting----
Ms. Murano. Right.
Mrs. Emerson. Are we reinspecting all of the imported, 100
percent of every imported meat product?
Ms. Murano. From Mexico, from Mexico.
Mrs. Emerson. Only from Mexico, not----
Ms. Murano. From all of the other countries, we do a
reinspection, but it is not 100 percent because it is based on
the history of the audits that we do in each country. It is
based on statistics, if you will, that tell us how many
shipments we need to inspect to give us an idea of the quality
of the products that are coming in.
Again, do not forget that when we go do those audits, we
are looking at the infrastructure of those countries. When I
said that it is the Mexican Government that does not have the
resources to pay their inspectors, the plants are not owned by
the Mexican Government. They are owned by companies, obviously,
and they are the ones who have the burden of having a HACCP
plan, sanitation and so forth.
The Mexican inspectors are the ones that have to do what we
do in our own plants here, which is be there every day. That is
what we require them to do, be there every day, inspect their
product and make sure that it abides by HACCP and sanitation
operating procedures, which they have assured us now that that
is the case. We will return in April to make sure that that is
the case.
Mrs. Emerson. I think the gentlewoman from----
Ms. Kaptur. I just wanted to ask, for the record, if Dr.
Murano could tell us how many tons or pounds does .4 percent of
your volume represent annually?
Mrs. Emerson. I think Maggie knows this.
Ms. Glavin. First of all, it is .4 percent of imports are
coming from Mexico, and I believe it is about 16 million
pounds, but I will get you the exact number for the record.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Bonilla. I am impressed that you could even do that off
the top of your head like that.
Ms. Murano. We have been talking about this issue a little
bit lately. [Laughter.]
Mr. Bonilla. Thank you, Ms. Emerson.
Mrs. Emerson. I guess that means that I do not get one more
question?
Mr. Bonilla. Go right ahead, Ms. Emerson.
Mrs. Emerson. This will just take a minute, and I am not
sure you want to answer the question.
COUNTRY OF ORIGIN LABELING
Would some of these problems be alleviated or could we at
least make the American consumer feel more comfortable if we
actually then labeled imported meat as imported meat and
labeled American meat as--in other words, country of origin
labeling, would that be something that would make the consumer
feel more comfortable?
Ms. Murano. I will answer that question by telling you that
I feel very strongly that my mission is, and our mission
certainly at USDA is to make sure that the meat and poultry
that ends up on the dinner plate of our citizens, our
consumers, it does not matter where it comes from, whether it
comes from right here in the good old U.S. or from a country
that is exporting to us, that it is as safe as possible, and
that is why we have the system of import equivalency, and
audits, and reinspection at our border, and so forth and so on.
Let us put it this way, if we are doing a good job of
making sure that meat and poultry that is imported into the
United States is as safe as the product that is produced in
this country, then country of origin labeling is not a food
safety issue. It might be something that people may want to do
as a marketing tool or what have you, and that is just not
something that I think about.
Mrs. Emerson. I appreciate your answer.
Thanks, Mr. Chairman, for the extra time.
Mr. Bonilla. Thank you, Ms. Emerson.
Mr. Hinchey.
Mr. Hinchey. Thank you very much, Mr. Chairman. This is a
fascinating subject.
Ms. Murano. Yes, it is.
INCIDENCE OF FOODBORNE ILLNESS
Mr. Hinchey. I must admit I am a bit confused about these
situations, so I want to I guess go back over a little bit of
the ground that we have already covered and cite some of the
information that we have gotten.
Ms. Kaptur said a moment ago that the Centers for Disease
Control reports that 76 million people get ill, 325,000 are
hospitalized, and 5,000 die from foodborne illnesses every
year. It seems to me that that remains a very serious problem
if CDC is giving us those numbers.
They tell us also that from 1997 through 1999 food-borne
illnesses have declined at nearly 20 percent. At least 855,000
fewer Americans each year suffer from foodborne illnesses as
compared to pre-1997.
However, CDC estimates that food poisoning is still, even
with that progress, still 34 percent above what it was in 1948
and that officials at the Department of Health and
HumanServices project that food-borne disease reports may increase by
10 to 15 percent during the next 10 years. So, if HHS and CDC are
telling us this, it seems to me we have a problem on our hands that we
are not dealing with adequately, and the first thing we need to do is
face up to it.
Ms. Murano. Mr. Hinchey, you could not be more correct. The
whole reason why I left the safe confines of Texas A&M
University to come to USDA is because I want to do something
about this. I am not a bureaucrat or a politician, I am a
scientist, I am a university researcher, so that is why I came
here, for exactly what you just said.
It is a complicated issue because, exactly as you said, we
have seen decreases in foodborne illness lately, since we
implemented a lot of these food safety programs, like HACCP.
CDC attributes that some of these decreases may likely be due
to HACCP and so forth, but it is a big problem, obviously, in
the sense that you have a lot of people still ill from
consuming food.
The thing that we have to remember is that we, at USDA, are
doing everything that we possibly can do and do this every day
of the week on meat, and poultry and egg products, which is our
jurisdiction. Of course, the numbers that you see from CDC
include everything, all foods. We have had conversations with
CDC. I know that they are very interested in and very
diligently working at trying to ascribe those numbers, break
them down, to see which illnesses are due to meat, and which
are due to poultry, what is due to fruits and vegetables so
that we can hone in on where problems are.
And then adding to all of this, of course, is when you
compare to 1948, those are the years when we did not go out to
eat as much as we do now. We used to prepare our own food,
instead of having somebody else prepare it for us. Things have
changed tremendously, of course. We have had emerging new
pathogens, and so forth and so on. So I appreciate the
complexity of this, and it is something that we are working on.
Mr. Hinchey. I understand all of that, and of course that
is all true, but that does not excuse the problem.
Ms. Murano. No, absolutely.
Mr. Hinchey. It merely focuses what----
Ms. Murano. Correct.
Mr. Hinchey [continuing]. To merely focus our attention on
more acutely.
Ms. Murano. I agree.
Mr. Hinchey. And describe for us some of the things that we
need to do. Now, in that context, I am concerned not about your
approach to this personally, I happen to believe that it is
very good and that you are a person who is very sincere, and
diligent and is determined to do a very good job here, but I am
concerned about the authority that you have. Now the Fifth
Circuit Court has determined that you do not have the authority
to shut down a processing plant; nevertheless, you say that you
do. Now where is the truth in this?
SALMONELLA PERFORMANCE STANDARD
Ms. Murano. Can I explain this a little bit?
Sure, what the Circuit Court decision said is we cannot
shut down a grinding operation based solely on the Salmonella
performance standards. What I am contending here, and what I
can show you with records of plant shutdowns we have already
done since the Supreme Beef decision, is that we can shut them
down, and do, when they fail their HACCP plans; when they fail
their sanitation programs. The microbial test that we cannot,
solely based on it, in grinding operations use to shut down
plants, that is the same microbial test we continue to use as
an indicator that we need to look at that particular plant's
HACCP plan a little bit more closely.
Mr. Hinchey. Would you like the authority to close down
plants on the basis of finding Salmonella?
Ms. Murano. I am going to say that what the science says,
Mr. Hinchey, is that if we rely on finding a particular
pathogen, if we put all of our eggs in that basket and say to
ourselves we are going to rely on microbial testing, whether it
is Salmonella or whatever it is, we are going to rely on that
to tell us whether the product is safe or not, that is not a
good way to do it. Because it basically says that if I am
testing a product lot, and let us say you have 100 units of
whatever you want to call it, I cannot possibly microbially
test every single unit because then I will have no food left to
eat. I have to do statistical analysis and figure out how many
samples to take.
When you have a low incidence of pathogens, and some
pathogens are found in very low numbers, such as a 3-percent
incidence, in meat or poultry, then sampling is not perfect.
Sometimes you will not find a positive. The problem with
relying completely on those microbial tests is that when you do
not find a positive, you think everything is great. You think
the lot is safe, and it may not be.
[Clerk's note: The following information was added
subsequent to the hearing:]
In addition, a certain microbial performance standard may not be an
accurate predictor of the presence of all pathogens of concern. In
fact, the Salmonella performance standard is not a good predictor of
the presence of E. coli O157:H7. If you look at the data from November
2000 to November 2001, there were 23 establishments that had to recall
ground beef because it contained E. coli O157:H7. Every single one of
the 23 passed their pathogen performance standards, showing that the
Salmonella performance standard was not able to predict the presence of
this pathogen. By comparison, 17 of the 23 plants had at least one
HACCP failure and 18 out of 23 had at least one SSOP failure, pointing
to the advantages of relying on HACCP and SSOPs as the true measure of
safety.]
AUTHORITY TO CLOSE A PLANT
Mr. Hinchey. I am not suggesting that you rely completely
on any one thing, but I am concerned that the court has told
you that you do not have the authority to close down a plant
when you find Salmonella. Now you may find an abundance of
Salmonella, and you still cannot close down that plant. So I am
not suggesting that you ought to be closing down plants when
you find a tiny bit of bacteria, but it seems to me that you
ought to have the authority, when you go into a plant and find
an enormous amount of Salmonella, as was found in this
particular case, that you ought to be able to do something
about it.
The court has said that you do not have that authority.
Senator Harkin is introducing a bill to give you that
authority. It seems to me that you would want to have it, and
of course you would use good judgment, scientific procedures
and common sense in carrying out that authority, but I would
much rather see you have that authority than not. At the
present time, you do not have it because that is what the court
has said.
Ms. Murano. May I say to you that right now and 2 seconds
after the Supreme Beef decision, if we found a plant that had
Salmonella numbers exceeding what we had set as a standard, it
indicates a failure in HACCP or sanitation. So we could
certainly shut down the plant based on HACCP or sanitation
failures.
You see, what causes pathogens to be reduced or even
eliminated or controlled in food is HACCP; is sanitation. The
microbial test, as very good as it is, is a tool to indicate
that. It is almost like, if I give you the analogy, of someone
testing your cholesterol, doing that test of your cholesterol,
as a microbial test analogy, if youfind the cholesterol to be
high, you look at your diet, your exercise routine and so forth. The
same thing, if we find Salmonella, we look at the plant's HACCP and
SSOP plans.
If there are high numbers of Salmonella, as you said, there
is a failure in the HACCP plan. What we do is review the plant
to find the failure and then shut down the plant based on HACCP
failure, or based on sanitation failure. These are the systems
that are controlling that Salmonella hazard or are supposed to
be controlling it.
Mr. Hinchey. My time is up. I would just add I would like
to pursue this on the second round of questioning.
Again, I say we still have 5,000 people a year dying
because of foodborne illnesses, so that tells me that we are
not doing a good job if 5,000 people in this country every year
die because of food-borne illnesses.
It seems to me that either you do not have the proper
authority or it is not being exercised or you do not have the
personnel to carry it out. I am not saying this about you,
personally. I am talking about us, all of us involved in this.
Ms. Murano. All I can say to that, Mr. Hinchey, and I
welcome talking to you about this, that this is a subject that
is extremely important. There are other groups, other than CDC,
that have come up with reports.
The Center for Science in the Public Interest, for example,
came out with a report very recently where they did a fairly
good job of trying to figure out all of the outbreaks of
foodborne illness, and what foods can they ascribe the
illnesses to. When you look at meat and poultry, it is down at
the bottom of that list.
I submit to you that the 5,000 deaths, the 76 million
people that are ill, if we were to break it down, it would be
interesting to see what impact what we do at FSIS with meat and
poultry has had on reducing those illnesses that have to do
with our inspected products.
Mr. Hinchey. Thank you very much.
If I may, Mr. Chairman, just in response to that, I think
it is right on point.
Mr. Bonilla. Go ahead.
Mr. Hinchey. The Center for Science in the Public Interest,
which you just cited, also says that this court decision, and I
quote, ``Was a huge step backwards in the safety of ground beef
products,'' and it goes on to say, ``The USDA can close down a
plant for having too many cockroaches, but it cannot if there
is too much Salmonella in the meat that the plant is producing.
This clearly shows,'' says the Center for Science in the Public
Interest, ``that we need a new, modern meat inspection
statute.''
So the source that you cite is one that is being very
critical of the process that we have and the authority that the
Congress has given you to carry out your responsibilities.
Mr. Bonilla. We will be delighted to have Mr. Hinchey
pursue this further.
Ms. Murano. Okay. I cannot answer it? I would be happy to
respond, if I may, Mr. Chairman.
Mr. Bonilla. Go right ahead. We are trying to just be
courteous to the members who are waiting to ask questions.
Ms. Murano. Surely. Let me submit to you for your thoughts,
so that when you come back around, we can talk about this some
more. When we look at our enforcement actions since the
pathogen reduction HACCP rule was implemented, the vast
majority of our enforcement actions, several hundred, 400-and-
some enforcement actions (that means plant closures and
suspensions of inspection) were due to HACCP or sanitation
standard operating procedure failures, as opposed to only six
plant closures due to Salmonella failures.
Mr. Bonilla. Thank you.
Mr. Hinchey, we would be delighted to pursue this on the
next round.
FOOD SAFETY
Before I yield to Mr. Goode, I appreciate the questions,
Mr. Hinchey. We are all concerned about food safety. I eat beef
and poultry, and my kids eat beef and poultry. My mother eats
beef and poultry, and everyone's grandchildren eat beef and
poultry.
I think we need to keep our eye on the ball. I know that
there is disagreement here about how we should proceed, but the
success rate that we have in keeping our food supply safe,
while we can always stand for some improvement, is remarkable.
If you consider breakfast, snacks, lunch, dinner, late-night
snacks, there are probably a billion servings of meat and
poultry in this country a day. The ratio of success that we
have is remarkable. If you had a billion-to-one success rate in
our hospitals or schools, people would be standing up and
cheering.
Again, I want to emphasize that we all are concerned about
this. There is not a person who is not concerned about food
safety on a personal level. Sometimes I think we lose sight of
the success stories that we have to talk about in this country
and should not lose sight of that.
We will certainly be revisiting this, Mr. Hinchey, on the
second round.
Before I yield to Mr. Goode, you should know that Dr.
Murano spent some time at Florida International, Mr. Goode, at
Texas A&M, and at Iowa State, but she claims no allegiance to
either of those schools because she spent some time at Virginia
Tech and says she is a Hokie. [Laughter.]
I know you will have a great appreciation for that.
Ms. Murano. That is right.
Mr. Goode. She has allegiance to the right school, Mr.
Chairman. [Laughter.]
We certainly appreciate her hard work, and like the
chairman, I think, overall, our food safety is very good
compared to the rest of the world.
FOOD PRODUCTS ATTRIBUTED TO FOODBORNE ILLNESS
I think Mr. Hinchey stated that there were, and you
concurred, that there were 5,000 foodborne deaths last year,
but that meat and poultry were at the lower end. What is at the
top end of the causes?
Ms. Murano. Sure. Well, I started this whole thing by
citing a report titled, ``Outbreak Alert,'' by the Center for
Science in the Public Interest which is not a Government
organization. Basically when they try to break down the food
vehicles of outbreaks, from 1990 to 2001, seafood is the top
vehicle for outbreaks of food-borne illness, followed by whole
eggs, produce, fruits and vegetable, and then beef and poultry.
Mr. Goode. Did they give a breakdown on the seafood?Are raw
oysters up at the top? I want to know what to avoid.
Ms. Murano. They do not. They do not give that kind of a
breakdown. It is very hard, you know. I appreciate their effort
because it is very difficult to try to do that because it
depends on whether someone is ill and reports the illness, and
whether it can be traced to a particular food. Sometimes that
does not necessarily happen because a person may go to the
doctor, and they either do not remember what they ate, they ate
a variety of foods, or the food is no longer available for a
test to be done to see which was the cause.
That is why it is very hard to have data that is as
complete as possible. I appreciate their effort in trying to
get as much data as possible to show us some indication of
where we are.
Mr. Goode. I would take it, with regard to seafood, raw
seafood is more likely to have it than----
Ms. Murano. As a microbiologist, I would tend to agree.
STATE INSPECTION PROGRAMS
Mr. Goode. To jump to another topic, a member of the
Virginia General Assembly called me about the meat inspectors.
You have no plans, do you, to change the situation in those
States, where if they participate in the payment for meat
inspection, State inspectors can do it instead of the Federal
inspectors; is that----
Ms. Murano. You are talking about interstate shipment or
what are you talking----
Mr. Goode. No, I am just talking----
Ms. Murano. Just simply the 27 States that now have their
own inspection?
Mr. Goode. Right.
Ms. Murano. We do not plan on making changes. We are not--
--
Mr. Goode. You are not reducing the Federal participation.
Ms. Murano. No, sir.
Mr. Goode. I did not see it in the budget, but I received a
call from a member of the General Assembly.
Ms. Murano. The only thing I can think of is, and maybe
Maggie Glavin can help me with this, there might be one State
that is actually requesting to withdraw from the program. It is
a resources question--if you remember, Maggie, is that right?
Ms. Glavin. That is right. There are a number of States who
are finding it difficult to meet their share of the costs and
are considering dropping the program, but our support remains
the same. In fact, there are increases in line with the
increases for the Federal inspection, for the grants to States
in this budget.
Mr. Goode. If the States do not pay their share, what is
their share?
Ms. Glavin. We match up to 50 percent.
Mr. Goode. I think Virginia is a 50-50. If the State pays
its half, then the State inspectors can continue the beef and
other inspections too.
Ms. Glavin. Yes, sir. They must maintain a program that is
equal to the Federal program, and then we pay 50 percent of
their cost of doing that.
Mr. Goode. Now, if they can't put up their share, then the
State people are replaced by Federal inspectors; is that not
correct?
Ms. Glavin. That is right. Then the Secretary is required
to put Federal inspectors in those plants.
Mr. Goode. All right. Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Goode.
Mr. Boyd.
Mr. Boyd. Thank you, Mr. Chairman.
And, Dr. Murano, welcome.
Ms. Murano. Thank you.
HACCP-BASED INSPECTION MODELS PROJECT
Mr. Boyd. I would like to talk about HACCP and your health
inspection model pilots. I know there are some positive, but
maybe some would say mixed reviews on what is going on. I
understand there is a GAO report about the pilot, and that
report was based in part on an incomplete third-party
assessment of the performance of the model pilots. Do you have
any additional information you could bring the committee this
morning about what was contained in the GAO report and how we
are doing with the implementation?
Ms. Murano. Sure. Sure. Let me say a few words. Then I
think maybe I will turn it over to Maggie to add a few more
details. But the HACCP-based Inspection Models Project (HIMP)
system, is a pilot project. The GAO report stated that, it is a
pilot project, that needs to be tweaked and improved. Such
feedback is what we need in order to make it the best possible.
Certainly, the GAO had several recommendations that I think
were very good recommendations.
They started off by saying that this program has merit to
it. Then they started to make recommendations such as the idea
of our phasing it in, which we agree with. The GAO recommended
that the plant personnel who do the activities; looking at what
the birds are like and so forth, that they receive formal
training. I could not agree with that more, being an educator
myself. To me that is extremely important; it is the key to it
all. They also suggested that we use statistical process
control and I absolutely agree with that.
I went to a few plants to see the system for myself. I have
to tell you that if it is done correctly with people who are
trained properly that you simply have more birds verified by
the inspectors. I went to a poultry HIMP plant where the FSIS
verification inspector had the freedom then to pull more birds
off the line to do a verification than in the traditional
system, where you are only able to pull out 20 birds as opposed
to 80 birds. The statistical process control that this
particular plant had was extremely impressive in the sense that
as birds went by the line, the information was being entered on
a computer so that you had real-time data. If you had four
lines of production, you could see--and our verification
inspector, could certainly sit at the terminal and see how the
different lines are doing in terms of their defects. I
certainly saw the value of pursuing this pilot project.
But the GAO's recommendations are extremely helpful to us,
and we are absolutely planning to put them into place.
Let me turn it over to Maggie, if she can give you some
specifics on some of the data.
Ms. Glavin. As Dr. Murano indicated, the study design for
this project was established to compare the accomplishments of
our traditional inspection system with the accomplishments of
this new pilot system. Participating plants in the pilot are
required to revise their HACCP plans in order to meet stringent
food safety standards, and also todevelop process control
systems for the control of other consumer protection issues. These are
issues that we are responsible for, but that are not food safety
issues.
It is that design that we have had an independent party
gather data on, both data from the traditional system and data
from these pilot plants. We are planning, at our June Meat and
Poultry Advisory Committee Meeting to bring data from the
completed data sets from all poultry plants in this project to
the Meat and Poultry Advisory Committee, and begin a discussion
of where we go from here.
The data that we have received so far and the data that we
have gathered as part of our inspection process in these plants
indicates we can see a much superior product under HIMP
inspection than what we get from our traditional plants. We
will, at the June Advisory Committee Meeting, be in a
discussion of the data and a discussion of where the agency
will go from here with it.
COURT DECISION
Mr. Boyd. I know a lot of the problems we had in
implementation here are legal. Where are we?
Ms. Murano. That is right.
Mr. Boyd. Could you address that shortly?
Mr. Chairman, if I could be allowed to continue?
Ms. Glavin. Yes, sir. The Federal union that represents our
inspectors sued the Department on this project. In the initial
decision, the Department prevailed. On appeal, we did not
prevail. We made adjustments to how we are running the project
and how we are inspecting in those plants to meet the concerns
of the Appeals Court. On the second appeal--that was remanded
back to the trial judge. We won there, and it is back on
appeal, and we would expect a ruling in the next several
months.
Mr. Boyd. Thank you very much for that.
I just wanted to say, Mr. Chairman, to the committee, I had
the opportunity to visit some of these plants that are trying
to implement the pilots, and it is very impressive. Like you,
Dr. Murano, I am very optimistic that this is going to improve
our food safety, and it will be better for everybody when we
get it implemented, so I want to encourage you and let you know
that you have got the support of this member to implement it as
quickly as possible.
Ms. Murano. Thank you.
Mr. Bonilla. Thank you, Mr. Boyd.
Mr. Kingston.
Mr. Kingston. Thank you, Mr. Chairman.
Dr. Murano, I wanted to ask you, as a member of this
committee, when we implemented HACCP we were very excited
because we felt that that would take a lot of the subjectivity
out of meat inspection. One of the things that we heard from
our poultry and meat plants back home is that if a veterinarian
has a bad day, you could be in trouble. There is a real fear
out there that might not be expressed freely to Washington and
certainly not to the bureaucracy who is inspecting them. They
do have a fear of the subjectivity, and so we have been excited
about HACCP and the scientific standards it contains.
Also I think the court did the right thing in the Supreme
Beef case. I was shocked when the Senate--some day I am going
to quit being shocked by Senate action--but when they try to
reverse court cases, you know, I guess somebody hasn't informed
them that they are really not directly related--they don't
speak from the oracle of Apollo as they seem to think
sometimes. [Laughter.]
SUPREME BEEF COURT DECISION
Mr. Kingston. But, you know, in the Supreme Beef case, is
your authority diminished in any way? Did the court tie your
hands in any way?
Ms. Murano. It did not, Mr. Kingston, and this a point that
I am sure I will discuss some more with Mr. Hinchey when his
turn comes again. It hasn't. The last statement that I was
making to him is the fact that we have not stopped suspending
inspection in plants since Supreme Beef. If it had taken our
authority away, then you would see that we are not able to shut
down plants, but we have continued to do so. The fundamental
idea here is that HACCP and sanitation protocols are what
control the hazards. The microbial testing that is inherent in
the pathogen performance standards is an indicator, is a flag,
that would tell us to look at the HACCP plan, look at the
sanitation procedures.
As a scientist I have to be ruled by the data because it is
objective, it is not an opinion, it is data. And the data shows
me that since 1999, when I look at all the enforcement actions
we have taken prior to Supreme Beef, the vast majority, 420 or
so enforcement actions on meat and poultry plants were due to
HACCP and SSOP failures, as opposed to only 6 enforcement
actions due to failure of the salmonella performance standards.
PREVALENCE OF PATHOGENS IN MEAT AND POULTRY
Mr. Kingston. Let me regress a little bit in my own
ignorance. Salmonella, that is not necessarily an indication
that a processing plant has failed to comply with sanitary
standards. Salmonella is actually prevalent in meat and
poultry----
Ms. Murano. Salmonella is an organism that can be found in
raw products, whether it is meat or poultry or produce or
whatever it is, because it is an organism that is found in
nature. And if you have a raw product, one that you don't have
a step where you are actually cooking it or what-have-you to
eliminate it, you may find salmonella there, and this is why--
--
Mr. Kingston. As a scientist, do you think most people
understand that basic?
Ms. Murano. I think so. I think people know that you
certainly don't eat raw poultry and you don't eat ground beef
without cooking it, because people realize that this is a
product of animal origin. This comes from an animal, the same
way that you don't drink raw milk and so forth. Because of the
world we live in, you are going to have microorganisms. They
are ubiquitous. They are in this room right now. They are on
our skin. They are everywhere. So what we have to do is figure
out how can we control them by the best means possible, or
minimize them to the greatest extent possible so that we can
achieve the public health objective of improving food safety,
and minimizing foodborne illness. That is after all the goal,
minimizing foodborne illness.
Mr. Kingston. So there is an inherent risk when you eat
something. You just have to use common sense and prudence, more
than common sense, to make sure that you have dealt with it.
On foodborne illnesses, this 5,000 people who die, how much
of that is from problems that happen in the plant versus in the
kitchen?
Ms. Murano. That is an excellent question. What I can refer
to is--and I am thinking back a little bit here--there was a
report that CDC did put out some years ago where they tried to
look at exactly the factors that play into the incidence of
foodborne illness. Whether it happens in the processing
establishment or in the food preparation area, we want to know
where exactly is the cause of the illness.
And certainly, all of these elements have a role to play.
We know that you can have as clean a product as possible coming
into your kitchen, but if you have a filthy kitchen, or you
don't wash your hands, and keep filthy instruments, you know
that no matter how safe it was before, you are going to ruin it
in the kitchen.
Mr. Kingston. Well, I don't know what happens in the ladies
rooms across the great eating establishments in America, but I
can tell you, we men always wash our hands thoroughly.
[Laughter.]
But I actually did read that CDC report, and I think it
was----
Mr. Bonilla. Be careful. Your credibility is on the line
here, Mr. Kingston. [Laughter.]
FOOD CONTAMINATION IN THE KITCHEN
Mr. Kingston. I think that was extremely lopsided to the
degree that most of the foodborne illnesses do not happen in
the grocery store or the plant, but happen in the kitchen once
it is brought home.
Ms. Murano. That is correct, yes.
Mr. Kingston. And I think the number is maybe 70 to 80
percent.
Ms. Murano. I don't remember, but, yes, that is right.
Mr. Kingston. That CDC report is available to all members
of Congress, and I think the number of deaths was actually
closer to 4,000 than it was 5,000. And I also think that the
statistics that the Chairman has already said is just
absolutely remarkable.
Now, you know, 4,000 is too high for this committee. I know
it is too high for the FSIS. But at the same time, the
education level needs to get up as to exactly what we are
talking about. Let's don't use somebody's tragedy for political
hysteria and rhetoric. It is too important to the American
people. We should spend our time more productively on educating
people as to the nature of this and how you can prevent it, so
I urge you as a scientist to bring your science to the
administration and say, we are going to make sure these type
things are done methodically, non-subjective, and we are just
going to be level across the board with everybody, let the
truth prevail, not the politics.
Mr. Bonilla. Thank you, Mr. Kingston.
Ms. DeLauro.
Ms. DeLauro. Dr. Murano, welcome, welcome to all of you. I
am delighted to have the opportunity to ask some questions. I
am sorry I wasn't here for the testimony.
SUPREME BEEF COURT DECISION
To my colleague from Georgia, who I truly am very close
friends with, I say we should just blame people for this and
then maybe that is the way we would get away with it. If I
understand Supreme Beef--and my colleagues have asked this
question; USDA thought that there was something wrong here to
withdraw their inspectors. This is their enforcement tool. They
thought that it was the proper thing to do.
Now, this is a company who has repeatedly, repeatedly
violated salmonella levels. This wasn't a one-shot deal. This
was somebody over and over and over again who had done this.
Now, the fact that we don't have--or the agency has no way
in which to do what they thought was the right thing. They
started on the right track, and the court shot them down. We
have got a company who repeatedly violated salmonella
regulations. I mean, let's not sugar coat the issue. It is a
very serious issue. People can differ on where you come from on
this, but this is a very serious issue.
I was hospitalized at age 2 with salmonella, and for 12
days I was in isolation where my folks couldn't see me. Knowing
my own personality, my parents tell me that I wasn't talking to
them when I got out because I thought they had abandoned me.
But I was 12 days in isolation with salmonella. It is not just
nothing out there. It is serious.
I am going to move on to a different area now.
Mr. Kingston. Rose, I do want to say on the case of Supreme
Beef, I think they actually had extremely been very careful and
good citizens, and for the USDA to smear the name of a good
corporate citizen, who had cooperated and been forthcoming with
all the inspections. I hate to see us in Washington judge a
company in Texas that had actually been very proactive, very
involved in I would say responsible citizenship. They have a
story to tell in its own right, and I think unfortunately, it
became a political issue a lot more than a scientific issue.
Ms. DeLauro. This, for me, Jack, quite frankly has nothing
to do with politics. If this were a company in Connecticut that
had repeatedly violated the USDA regulations as it concerns
salmonella and their products just continued to exceed the
levels, I would stand in front of the plant in Connecticut,
wherever it was, and say these people ought to be shut down
till we can find out what is wrong, and that they are going
forward with what our rules and regulations are. As I said,
USDA started from the right premise, but got shot down.
Ms. Murano. May I say one thing that is very positive on
that? Here we are in March 14th of 2002, and I am committed to
utilizing HACCP and sanitation, and making sure through those
avenues, and using microbial testing as my verifier, that we
don't have situations like you just described. I believe that
if we do a good job of looking at the plant's HACCP plans and
its sanitation, we would have found problems in that plant and
we would have been able to shut them down without relying on
the microbial test.
MANDATORY RECALL AUTHORITY
Ms. DeLauro. Dr. Murano, we had a chance to talk a few
weeks ago and thoroughly enjoyed the conversation, and I think
you know where I am coming from on this issue. I truly do
believe that USDA and FDA for that matter need to have
mandatory recall authority. I would like to give you that
authority. I would like to give Tom Ridge budgetary authority
to try to see if we could get some things done. But under
current law USDA does not have the ability to initiate a
mandatory recall of meat and poultry products.
And to follow up on a couple of things that my colleague,
Mrs. Kaptur, was talking about, on the issue of what is the
total pounds recalled, and then the total pounds recovered, it
is pretty startling what is still out there.
There have been many, including the former Secretary of
USDA, Dan Glickman, that have argued that USDA should have
mandatory recall authority. Before I ask you about mandatory
recall authority, could you tell me how the current program
works? How do you track recalls? Are there specific time frames
within which the company must comply? And would you support
legislation that would give USDA mandatory recall authority? If
yes, fine. And if not, can you tell us why?
Ms. Murano. Sure. Let me start by answering the second part
of your question because the details on tracking of recalls and
so forth I will leave to Maggie Glavin.
As you know, Ms. DeLauro, we have a voluntary recall
system, but we also have the power to detain and to seize
product. In all the years that this system has been in place,
there has only been one time that my colleagues at FSIS have
told me that a company refused, when told ``You need to do a
recall.'' What happened in that particular situation, is we
detained their product, and they recalled the product.
So based on that, I have to say that I do not believe that
we need that recall authority. If we had recall authority--
let's maybe put it to you this way--if we all of a sudden had
recall authority, I believe that it would delay the time that
it would take for a product to be recalled. We would have to
provide the evidence to do that, and we would have to also bear
the burden of any recalls that would be done. If we called for
a recall and it was our mistake in calling for a recall, who
pays for that liability?
But the important point here is that I have not seen
evidence that we need to have it; or that there have been
companies refusing recalls. If there were people refusing
whenever we say to them, ``We think that you have to have a
recall,'' if we had companies refuting that and defying that,
and saying, ``No way, you have no authority, we are not doing
it,'' then I would say that there was a need for that kind of
an authority, but it is not what the evidence has shown me.
Let Maggie Glavin explain to you what the actual mechanics
of the recall process and perhaps we can talk some more if you
have some more questions.
Ms. Glavin. Okay. I can give you a real quick sketch of it,
and I can also submit something for the record that----
Ms. DeLauro. Why don't you give us a sketch, and then if
you wouldn't mind, just submit something for the record.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
RECALL DECISION
Ms. Glavin. When we become aware of a problem with a
product in commerce, and that may be because the company has
alerted us to it, it may be because of our microbial testing,
it may be for a variety of reasons. We become aware of a
problem, we get in contact with the company, and begin to
discuss with them what products are involved, where those
products are, et cetera. At a point in time when we have enough
information that we believe that in fact the product in
commerce is adulterated or whatever the particular problem is,
we request the company to make a voluntary recall, and as Dr.
Murano indicated, in all but one or two cases they have always
done so.
Ms. DeLauro. What is the time frame in which the----
Ms. Glavin. The time frame ranges from a few hours to a
day, and most of that time is involved in determining which
products are involved. Is it a complete lot? Is it a day's
production? Is it several lines? Is it one line? So there is a
lot of information gathering by FSIS and that is where most of
the time is involved.
At the time that the company begins the recall, USDA
notifies the public in two ways. One, through a press release
and two, through posting the recall on our website.
PRODUCT RETURN
The follow up is that our compliance staff does recall
effectiveness checks. In other words, they go around to
warehouses, grocery stores, et cetera, to see if the product is
indeed off the shelves. We also track how much product is
returned. It is generally a fairly small percentage because the
product is often beyond the grocery store. It is in consumers'
homes. Consumers may or may not bring it back to their grocery
store. They may just throw it in the trash. The grocery store
may or may not keep track of what they are getting back. They
may get product that isn't part of the recall, but they will
accept it for good customer relations purposes. So the
percentage that is actually returned is generally fairly small.
Ms. DeLauro. Does that concern you?
Ms. Glavin. Yes and no. If in fact the product remains in
consumers' hands and they don't know that it is unsafe, it
would be of great concern. If what is going on is consumers are
simply throwing the product out, then no. What we do know is
that when we have been involved in a foodborne illness
outbreak, that a recall of the product puts a very quick stop
to the outbreak. That would lead me to believe that we are
getting the product, and we are getting the info to consumers
not to consume the product.
Mr. Bonilla. Thank you, Ms. DeLauro.
Ms. DeLauro. May I have another second?
Mr. Bonilla. You may, Ms. DeLauro. Thank you.
Ms. DeLauro. Thank you very much.
RECALL AUTHORITY
Just a final point. I am just trying to think of the
approach of wanting to have the ability to be able to deal with
what can be a worst-case scenario orseveral worst-case
scenarios in terms of recall. Just like any other measures, this is, an
arrow in a quiver amongst many, so that you don't move with your most
difficult--the toughest piece before you try to move along the
continuum. And it would just seem to me that in terms of being able to
carry out the mandate of the agency in these instances of food safety,
of having all of the tools that are necessary, one trust leaders, as my
colleague, Mr. Hinchey, pointed out, with authority, that says you
don't overstep the authority if there is no need to do that. But you
negotiate, you work it through, but in the final analysis you have the
ability and the people you are dealing with have some understanding of
that as well. Just in terms of the process of being able to go where
you want to go more quickly and with greater safety to the public, you
don't always have to use all of the tools at your disposal, but you do
use the tools that are adequate to what the situation is. I would hope
you all would think about whether or not that kind of authority is
something that would be not so particularly beneficial to you, but
beneficial to the people of this country.
Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Ms. DeLauro.
We are now going to proceed with our second round of
questions. If any new members join us, we will yield to them in
the interim. Appropriation Committee members are juggling eight
hearings simultaneously this morning. It is the season, but we
have to get our work done. We are the only committee that
produces a minimum of 13 bills a year, and we have to do that
to keep the Government funded and operating at the end of the
fiscal year. I mention this just to give you a little bit of
the layout as to why members are coming in and out as we move
along this morning.
PERSONAL HYGIENE AND FOOD HANDLING
I am delighted that Mr. Kingston brought up the issue of
personal hygiene and the handling of food. I was going to get
into that. I want to associate myself with his comments, and
again, reemphasizing that we are all concerned about trying to
somehow reach a more perfect world in having safer food in
front of our kids every day. We are not going to take our eye
off the ball, but we just have to be realistic about what
causes some of these foodborne illnesses. I know that it is
difficult to determine the percentage of foodborne illnesses
that are a result of personal hygiene--the lack of washing that
knife after you have sliced that chicken before it is cooked,
and then using it on your hamburger meat. People do that every
day and don't understand or don't want to take an extra minute
to make sure that they take that precaution.
I want to move on to something that I wanted to ask you
about, Dr. Murano. There is a report out that I understand you
might be familiar with from IFT that is called ``The Emerging
Microbiological Food Safety Issues.'' This is a very
comprehensive report that dealt with microbiological food
safety and factors in a lot of different elements that we now
have to deal with, as well as the importance of a science-based
regulatory approach to ensure safe food.
END PRODUCT TESTING
There is one point that I wanted to draw your attention to.
It relates to microbiological testing of finished product or
end-product testing. The report says that end-product testing
can be misleading in that negative test results do not ensure
safe food. You have alluded to that and drawn the parallel
between that and a person getting a physical exam or having
their blood tested. Our law includes performance standards and
requires some end-product testing. I wonder if you would
elaborate a little bit more on that and how sometimes that is
not the most wisest road to travel down.
Ms. Murano. Sure. I think all food microbiologists, pretty
much all agree that unless you are able to test every single
unit in a production lot or what it is that you are producing,
you could never be 100 percent sure that you have found
whatever contaminant you are looking for. So we have to rely on
statistics. For raw products that is certainly the case. When
you are talking about a ready-to-eat product which should not
have particular contaminants, the microbial testing that is
done certainly is useful in that it shows us whether we have
achieved the control over the hazard that that cooking step or
processing step that would have given us.
But to more directly answer your question, the reason HACCP
was even invented was back in the late '50s, 1959 to be exact,
was that the space program wanted assurances that the food that
they were going to send up with the astronauts was safe.
Pillsbury at the time had the contract to provide the food for
the astronauts, and was doing what everybody else was doing,
which is end-product testing, producing a food product, and at
the very end doing some testing of some of the products. Since
you cannot really test all of the product, you do have to do
random testing. They realized very quickly that to assure as
best as possible that the astronauts would go up there with as
safe a food supply as possible, they needed to go to a
preventive system, not rely on that end-product testing, try to
prevent contamination. That is where they developed the concept
of HACCP, where you actually look at your process, look at
where contamination can come in, look where it can be
controlled, and establish those steps where you can control it,
what they call critical control points. That way if you control
those points, you can be assured to the greatest extent
possible that the end product will be as safe as possible. Then
you use microbial testing as a verification for each of those
critical control points.
I would be remiss if I didn't tell you, Mr. Chairman, that
my deputy under secretary, Dr. Pierson, is actually one of the
authors of that particular publication that you mentioned, so
of course I am very well aware of it. He has 50 copies that he
has been handing out to everybody and wondering if we want it
autographed. And I don't think anybody has asked for his
autograph.
Is there is anything you would like to add, Dr. Pierson,
since you were co-author of that publication?
Mr. Pierson. Thank you. You covered it very nicely. I
appreciate your making reference to the Emerging
Microbiological Food Safety Issue report. The report
represented very serious thought by a group of scientists who
were dedicated to evaluating emerging foodborne pathogens, and
the influence of environmental pressures on development of
resistance, ecology, etc. and systems for effectively managing
food safety.
I was in the academic environment for 31 years before I
took this position. Years ago we talked about testing, and its
effectiveness. However, I ended up in the area of HACCP knowing
that although testing had good points, how could food safety be
managed better? HACCP offers effective pathogen control in our
food system through critical control points where we are
assured that these points are effective in what they are
supposed to be doing, and using the testing part as a
verification role.
Basically what this report recommends, is that food
processors need those types of effective control systems.
The report goes beyond HACCP; it talks about what
Government should be doing in the risk area, how you establish
food safety objectives how you introduce then these control
systems, and food safety management systems such as HACCP.
Mr. Bonilla. Thank you very much, Doctor. Good work and I
am going to have this report entered into the record for this
hearing. We appreciate that. It is widely respected and being
reviewed as I speak.
[Clerk's note: The report is too lengthy to be printed in
the record. It will be retained in the Committee files. The
following is a press release announcing the release of the
report and where the report can be found on the Internet.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Bonilla. Before I yield for our second round to Ms.
Kaptur, I would like to thank Ms. DeLauro for presenting us
each with a jar of apple butter. Ms. DeLauro, I presume this is
from your district?
Ms. DeLauro. Yes, it is, Mr. Chairman. It is from Bishop's
Orchard, which is a wonderful place in my district, and I would
like all of you to get to know about the agricultural interests
of the Third District of Connecticut.
Ms. Murano. It is fat free.
Mr. Bonilla. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman, and we thank Rosa
DeLauro. We appreciate it very much.
CAUSE FOR FOOD POISONING
I wanted to ask Dr. Murano if you know of the deaths that
occur due to food poisoning in this country? How many of those
if it is between 4,000 and 5,000, are due to meat, poultry or
egg related poisoning.
Ms. Murano. I don't have that information with me, and that
is the kind of information, again, that CDC is trying very hard
to come to grips with--providing as accurate as possible a
breakdown of exactly that.
The thought is certainly on a proportionate basis--and we
don't know what the proportion is, but if you look at the five
product categories that I mentioned earlier, seafood, eggs,
produce, beef, and poultry, we don't know what is really the
proportion of foodborne illness, let alone deaths,
unfortunately, for each of those. We know for specific
outbreaks where the source has been identified. Certainly we
can get you that information. We can ask our colleagues at CDC
to provide information noting where the vehicle of an outbreak
infection, has been identified through the epidemiology tests
that CDC conducts during outbreak investigations.
Ms. Kaptur. May I just say, doctor, that as a non-scientist
but as a data freak, I would have to tell you that in the year
of 2002 the fact that you don't know is an amazing statement.
And when I look at the budget both for USDA--and you comprise
75 percent of the food budget that we spend as a country; FDA
about a quarter of that, so food safety funding for--this was
fiscal year 2000--was about $751 million back then. You have 75
percent of it. The fact that you don't know what percent of
these deaths and how people died related to those products
under your inspection is an astounding statement to me. And you
have 75 percent of the budget. It would have seemed to me after
all these years somebody over there would have been curious,
and we welcome your new energy and your microbiological
expertise to help us answer.
IMPORTED PRODUCT
I wanted to move on because I have several questions here.
In terms of imported product, I would like to know from Ms.
Glavin, is the imported market share going up for meat, poultry
and eggs? If one looks at total consumption in this country,
you use the figure of .4 percent in terms of what comes in from
Mexico as far as meat and poultry I took it. What is happening
to the imported meat portion, meat, poultry, egg portion, what
you regulate of overall consumption in this country?
Ms. Glavin. I believe it has risen slightly in the past few
years, but I would prefer to get that for you for the record,
exactly what it is.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
INDUSTRY GROWTH
Ms. Kaptur. All right. I would appreciate that. Data that
we have from the Economic Research Service indicates that USDA
is projecting that overall meet and poultry consumption in our
country, production will be 2.9 billion pounds higher in 2003,
this near year, than in 2000, that egg production will be 319
million dozens higher in 2003 than in 2000, and yet the number
of food safety inspectors will remain flat during this entire
period, based on your budget proposal. How can the system
possibly work?
Ms. Glavin. Well, most of the meat and poultry in this
country, the overwhelming majority of it is produced in a very
small number of plants in perhaps 300 to 400 plants, and the
number of--the overwhelming number of our inspectors--or a
large number of our inspectors are in the smaller plants which
don't produce the large proportion of the food.
In poultry and in the large poultry, beef and pork plants
an increase in production doesn't require a huge increase in
the number of inspectors. We believe that we have a large
enough inspection workforce to cover projected growth. We do
work very closely with ERS on what their projections are so
that we can pay attention to that. We believe that we have a
sufficiently large workforce to cover projected growth.
PRODUCT RECALLS
Ms. Kaptur. I may have further questions on that in the
next round, but let me just say, Ms. Glavin, in the first round
of questioning, when I asked about all of the recalled product
that we have lists of here--and there is one from Ohio--Ohio
establishment recalls chicken base products--whatever that is--
because of undeclared ingredients.
You stated to me that the fact that we have all these
recalls is a sign of HACCP's success. In other words that we
have these lists and the reason that we have more listings of
recalled product, my question to you is, recalled products are
already in the marketplace. You said the system is working. My
question to you is this is already out in the marketplace. How
can the system be working if we are recalling this much more?
Ms. Glavin. Yes. I am sorry if I misled you on that. It is
not a sign of success when we have a recall. It means that
there has been a failure. But we are, because of thingslike
increased testing, because of closer work with CDC and with State and
local health departments, better able to find out when those failures
have occurred and get the product out of the system. So I apologize if
I led you to believe that I thought that was a success because it is
not when an adulterated product gets into the marketplace.
Ms. Kaptur. I agree with you and I thank you for that
clarification.
COUNTRIES EXPORTING MEAT AND POULTRY TO THE U.S.
I just wanted to ask for the record if the agency could
provide me from which countries imported product is coming in,
and then from which firms in which countries? I would like to
know the nature of the flow, and then the prior question
regarding the percent of the marketplace. My sense is it is
growing and there is a lot of blended product. I would like to
verify my own sense of what is happening out there.
[Clerk's note: The requested information was too lengthy to
print on the record. It will be retained in the Committee
files. However, all of the information can be found on the
Internet at www.fsis.usda.gov/ofo/faim.]
And finally--and it will only take a few seconds here--let
me just say, as my final question on this round to Dr. Murano--
I take it, based on statements you have made regarding your
conversations with administrators in Mexico that they are not
paying the cost of their own inspection of these plants?
Ms. Murano. They are.
Ms. Kaptur. They are?
Ms. Murano. Yes, ma'am.
Ms. Kaptur. So all inspection that is currently being done
for Mexican product coming into the United States does not
expend a single taxpayer dollar from the people of this
country?
Ms. Murano. That is correct.
Ms. Kaptur. For any aspect of what is being done. The
only----
Ms. Murano. Is our audits.
Ms. Kaptur [continuing]. When it comes over the border, if
it is rechecked on this side?
Ms. Murano. Correct. And because of our going over there at
least once a year to audit.
Ms. Kaptur. So prior cost associated with our sending
inspectors down there and paying for all, that is finished?
Ms. Murano. Correct.
Ms. Kaptur. Thank you.
Mr. Bonilla. Thank you, Ms. Kaptur.
Mr. Hinchey.
Mr. Hinchey. Thank you very much, Mr. Chairman.
INDUSTRY GROWTH AND INSPECTION STAFFING
This has been a very interesting exchange and I want to
thank you very much for your very conscientious answers to
these questions, and I think they are difficult questions. My
inclination is that we are far too casual about our food safety
inspection regime in our country, and the numbers seem, over
and over again, to bear that out. The point has been made about
the recalls, and the point particularly that you do not have
the authority to institute a recall, that the recalls are made
voluntarily by the companies involved.
Ms. Murano. Correct.
Mr. Hinchey. And the overseeing of those recalls is also
voluntary, done by the companies involved for the most part. As
a result, we find over and over again that only a fraction of
the material that is recalled actually is returned. Your
recalls are based upon contamination primarily of bacteria, E.
coli, listeria, salmonella, some other foreign elements
sometimes, but mostly bacteria. And the result of the recalls
is very inefficient. Millions of pounds of meat remains out in
the marketplace and in people's homes of restaurants after the
recalls are made. And I was amused by the point that was made
earlier about the problem being contamination that occurs in
the kitchen. Well, yes, if the meat gets into the kitchen,
absolutely, that is where the problem is going to happen.
And we, apparently, are moving along with a situation where
millions of pounds of contaminated meat are allowed to get into
the kitchens and restaurants and homes in our country. And I
think our attitude about it is far too casual, and that I think
to some extent is born out by our budgetary approach to the
issue. The effect will be that by the end of the budget year,
given the facts of the present budget submission, we will have
had a three-year freeze on the number of food safety inspectors
at FSIS. And that is in the face of rapidly increasing
production of meat and poultry.
For example, the U.S. Department of Agriculture tells us
that 2.9 billion pounds of additional food products were
produced in this 3-year period. Between now and the end of 2003
we will see millions of pounds of meat and poultry products out
on the market, same number of inspectors; that egg production
will be 319 million dozens higher in 2003 than in 2000, same
number of inspectors. So the workload obviously is increasing
very substantially, but we are not improving our ability to
keep up. I am told that there will be 381,818 pounds of more
meat to be inspected for every inspector that we have. So the
workload for each inspector over the course of the next 3 years
is going to increase by 381,818 pounds.
I think that I was convinced last year and the year before
that we were not doing enough. It seems to me that a bad
situation is being allowed to get worse. We are told that food
safety is a major concern in our war against terrorism and is
in fact one of the weaknesses in our shield against protecting
the American people against terrorism. So I guess we are not
doing enough. And what ought we be doing to do a better job
here?
Ms. Murano. Let me see if I can address a few of your
comments, Mr. Hinchey. Certainly I can understand Secretary
Thompson making those remarks because when we compare, FDA with
what we do, we have an inspector in every one of the plants
that we regulate and FDA doesn't. They are only able to
inspect, I think the figure is 1 percent of the product that
they are supposed to regulate. Certainly with that in mind, you
would--if that was the case with us--let's put it that way--
absolutely you would see me here saying I need enough
inspectors to be there in every plant.
As Maggie explained, and I think if she wants to add some
more comments to clarify what she said before, we monitor the
staffing situation very closely because we by law have to have
an inspector in every meat and poultry and egg processing
plant. We try to have not only enough inspectors, but highly-
trained inspectors.And I want to tell you that to me, even
though I am a scientist, I believe that field operations, where the
inspectors reside in the agency, is the most important part of the
agency. It is not the Office of Public Health and Science, even though,
obviously, that ranks right up there, but to me, it is the field
inspector force because those----
Mr. Hinchey. People out in the field doing the actual
inspections, they are the critical element.
Ms. Murano. You are absolutely right. It doesn't matter
what policies we come up with, how good and fancy they are,
those are the people who are implementing them, and they are
our eyes and ears, they are the front line of food safety for
the products that we regulate. I want to just reiterate to you
something that I absolutely have as a top priority, ensuring
that we have not only enough inspectors, but we have to have
them very well trained.
ENFORCEMENT AUTHORITY
Mr. Hinchey. Madam Secretary, I am convinced of your
intellectual ability. I am convinced of the strength of your
scientific background. I have no question about you personally.
I think you are a terrific person. But even the best person,
even someone like you cannot do the job that is required here
given the meager tools that you have at your disposal. You
cannot close down a plant. You cannot institute recall. You
have an enormously growing workload and a stable number of
inspectors. You have one inspector for each plant, but some of
these plants cover acres and acres. So I don't doubt you or
what you have going for you, but I doubt the power that you
have, the authority that you have, and the ability that you
have to carry out an important responsibility.
Ms. Murano. I appreciate your concern on this issue because
I share it. But I do want to say that I humbly disagree with
you, that I do have the power to shut down plants. I can
provide you with the plants that we have shut down since
Supreme.
Mr. Hinchey. You can't shut them down because of
salmonella. You can't shut them down for listeria. You can't
shut them down for E. coli.
Ms. Murano. Sure we can. We can shut down plants that----
Mr. Hinchey. The judge has said you can't. That is the law
in the fifth circuit, unless the Supreme Court or the
legislative body overrules the court, which hasn't done in this
case. We have to live by the law as it has been interpreted by
the court. In this particular case the court has said you don't
have the authority.
Ms. Murano. Legal counsel has explained to us that the
Supreme Beef case involved a grinding operation. Legal counsel
also explained the reason the judge ruled the way he did is
because he basically said a grinder who buys trimmings already
carrying the microorganism salmonella into his plant, cannot be
expected to bear the burden of reducing that load. Right or
indifferent, I am not going to argue that right now because I
am not a lawyer and I don't want to get into that. What I am
trying to tell you is that when we looked at our history of
closing down plants, we closed very few, only six, due to the
salmonella performance standards only.
All I am trying to tell you is that what I am going to
focus on and what I do focus on is the food safety system that
Dr. Pierson was explaining. That is really the basis for the
reduction in pathogens. Now, regarding the inspectors, believe
me, that I will be the first one over here telling you, ``Mr.
Hinchey, we need more money for more inspectors,'' if we see
that we are not going to have enough inspectors.
Let me give Maggie Glavin a chance to explain to you how
many inspectors we typically have in plants.
INSPECTION STAFFING
Ms. Glavin. The number of inspectors in a plant will be
dependent upon the volume in the plant. We inspect every
carcass in every plant every day. In a plant that has four
lines of chickens being slaughtered, we will have an inspector
on every one of those lines. It is not necessarily one
inspector per plant.
Mr. Hinchey. Well, can I just question that because FSIS
has 7,600 full-time inspectors to inspect 6,000 plants.
Ms. Glavin. Yes, sir.
Mr. Hinchey. Now, assuming these people are working 40-hour
weeks, I assume that. Is that correct?
Ms. Glavin. Yes.
Mr. Hinchey. They are working 40-hour weeks. Some of them
are on vacation. Some of them are going to be out sick. How can
you have 7,600 full-time inspectors inspecting 6,000 plants,
and expect me to believe that every single carcass in every
single plant is being inspected? It is physically impossible.
Ms. Glavin. No, sir. Every single carcass is being
inspected----
Mr. Hinchey. Well, if it is, it is a very superficial
inspection.
Ms. Glavin. No, it is actually not. Our inspectors are
trained to make decisions about every carcass as they see them,
and they do that. We also have quite a few very small
processing plants. For example, in a downtown metropolitan area
there may be a dozen or more plants in a very small area, and
we will have an inspector that covers a number of those plants
in a day. Those are not slaughter plants. Those are processing
plants where they might be cutting up or grinding, and so we
might have one inspector covering 4, 5, or 6 plants in a
several-block area. So that it is not----
Mr. Bonilla. Mr. Hinchey, we must move on. Thank you. We
will come back for another round, Mr. Hinchey, if time permits.
Mr. Hinchey. Thank you, Mr. Chairman.
Mr. Latham has just joined us. I know he has been juggling
several hearings this morning, and we appreciate his arrival.
We will now yield to him.
Mr. Latham. Thank you, Mr. Chairman. And welcome.
EMERGENCY RESPONSE
I apologize for not being here earlier, knowing everything
that has been covered. I have a meeting this afternoon with
some folks from the FBI in response to questions I had last
week with the Director about coordination and cooperation
between Federal law enforcement and the USDA food inspection
entities with respect to agroterrorism, both foreign and
domestic. There are various radical groups that have threatened
to destroy our livestock industry by bringing diseases and
other maladies into effect.
I just wonder what type of cooperation we can expect in
trying to prevent this. And in case of an incident, what type
of response.
Ms. Murano. I will be happy to at least start, and ifyou
have any more questions, we can certainly see if anybody else has
something that they can contribute.
As I said in my opening statement--and I will just give you
the gist of it. I was here September 4th as a consultant to
USDA, just a week before September 11, which of course just
threw everything into just a different state of mind. I was
always concerned about biosecurity in terms of terrorist attack
even before coming to USDA, but I thought that would be
something I would have as a lower priority, and that quickly
became a top priority.
I realized right away is that we needed to have a couple of
things, number one, a system within, or an entity, within USDA
that could handle the coordination, the rapid response, even
the prevention if possible, of those kinds of events. We also
needed an ability to better communicate and coordinate
activities with the Centers for Disease Control, with FDA, EPA,
Department of Defense, et cetera.
When I came to USDA I first thought, well, what is here
already? The agency that I oversee, FSIS, they deal with
foodborne outbreaks and recalls and emergency response type of
scenarios on a regular basis. I knew that we had the cadre of
people in the agency that could help in this effort, so we
quickly formed our Food Biosecurity Action Team (F-BAT) so that
we could focus our attention on what we need to do to prevent
and rapidly respond to intentional contamination. Then I
quickly designated F-BAT to act as the arms and legs, of our
biosecurity efforts outside of USDA.
I immediately went and met with Deputy Secretary Claude
Allen at HHS; our Deputy Jim Moseley facilitated that meeting.
We immediately began working together to form the Food
Preparedness Network or Prep Net, which is co-chaired by the
acting administrator of FSIS, Maggie Glavin, and the Director
of the Center for Food Safety and Applied Nutrition, CFSAN,
which is under FDA. When you compare that to the system that
was in place before, that was formed several years ago, a
system called Force G. Force G's interaction occurred only at
the high levels where people were not interacting as well as
you might think on a day-to-day basis. What do you do when you
have to respond quickly?
We have tabled Force G for a while and are concentrating on
F-BAT, within USDA, and having it be our liaison with Prep Net.
What we have been able to accomplish with Prep Net--through
several meetings we have done joint tabletop exercises with
FDA, is we have helped each other in developing guidelines for
our different industries in terms of what we can help them
with; in terms of information that they might need to better
protect the food supply.
It is a challenge for all of us, but certainly the fact
that we have inspectors in every plant and that we have HACCP
systems, it makes it a little bit easier for us to control
intentional contamination. Nothing is absolutely perfect,
unfortunately, and we are working very, very hard to make it be
as protective a system as possible.
But certainly FDA has its own challenges. One of the things
that we are doing with them, is trying to figure out what
laboratory capabilities, that FDA has, that CDC has, and that
we have. In the past, when there was an event dealing with meat
and poultry, we would have had to deal with it. If it was some
other product, FDA had to deal with it. That was the way it
worked.
The way we are doing it now, is if there is an intentional
contamination of the food supply and we can help FDA because
maybe we have the expertise or the ability in our labs to take
their samples and analyze them, we will do that, or vice versa.
That is the collaboration with FDA that we have developed, and
it hasn't been easy. I am not going to tell you it was easy,
but I think we are there.
The fact that FDA has a new Deputy Commissioner, Dr. Lester
Crawford, who both my deputy, Dr. Pierson, and I know very
well, it has made just a world of difference. Just yesterday we
sat and had lunch with him, and we are going to do so on a very
regular basis, and in a matter of two minutes we solved a
couple of issues just like that. That is what is needed at this
time, more than ever.
HOMELAND SECURITY SUPPLEMENTAL
Mr. Latham. You are speaking of the funding in the
supplemental for the bioterrorism issue. Is that where those
dollars are going? Or what specifically are they being used for
at this time?
Ms. Murano. The $15 million, is that----
Mr. Latham. Where the funding for the bioterrorism
initiative to expand the agency's capability.
Ms. Murano. I don't know either. We have a $15 million
biosecurity appropriation.
Mr. Latham. Okay. This is the supplemental.
Ms. Murano. Yes, the supplemental. Yes, sir.
Mr. Latham. And it says the committee recommends a total of
$9.8 million as follows: $900,000 for security measures at St.
Louis, Missouri, and Alameda, California, and $8.9 million to
finance a bioterrorism initiative in order to expand the
agency's capability to react and respond to bacterial and
chemical agents in contaminating the food supply.
Ms. Murano. Yes, I believe, Mr. Latham, that probably you
are referring to the House version versus the final version.
The final version turned out to be $15 million supplemental
appropriation.
Mr. Latham. The House version is what counts.
Ms. Murano. I know that. [Laughter.]
But they gave us more money. But basically. I could go over
it a little bit with you, if you would like.
Mr. Latham. I guess my major interest is really the
coordination. Are you working with law enforcement at all as
far as notification and coordination?
Ms. Murano. Yes, sir, we certainly are. And let me allow
Maggie Glavin to talk a little bit about this since she is our
co-Chair for the PrepNet and she can explain some of the
activities in more detail.
Mr. Latham. I am a little over my time, Mr. Chairman. Yes,
go ahead, and maybe more completely for the record.
Ms. Glavin. With other agencies, we are working with FDA,
with CDC, with APHIS at USDA, with the Department of Defense,
and with EPA, as well as with the States.
With respect to law enforcement, since September 11, we
have had a number of threats made, a number of hoaxes, et
cetera, and we work very closely both with local lawenforcement
and, through the OIG at Agriculture, with the FBI.
Mr. Latham. If there are other comments, please just submit
them for the record as I am out of time.
Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Latham.
I am going to yield next to Ms. DeLauro. I also want to
announce Mr. Kingston has been kind enough to take the Chair
for, the remainder of the hearing. I am departing now but I
want to thank you all personally for your appearance here today
and for all the hard work that you put in day in and day out.
Thank you.
Ms. Murano. Thank you, Mr. Chairman.
Mr. Bonilla. Ms. DeLauro?
Ms. DeLauro. Thank you very much, Mr. Chairman.
INSPECTOR SHORTAGES
A follow-up on my colleague Mr. Hinchey's comments about
inspection. This is a comment from an April 2001 Inspector
General report, ``We found that inspector shortages occur
because FSIS does not have a method of estimating staffing
needs based upon all meaningful criteria, including projections
of changes in attrition, industry production levels. In the
absence of a supportable prescribed staffing level, we were
unable to ascertain what the actual shortfalls were. My
suggestion on this is I think we have to take a close look at
the methodology for determining inspection staff.''
Now, even without that, a year ago, probably more than a
year ago, in this year's agricultural appropriation bill I
offered in subcommittee, in full committee and I offered on the
floor, prior to September 11th, $213 million in funds for
increased inspection. The portion for USDA FSIS was $50
million. That was defeated in this committee, it was defeated
in the full committee, and it was defeated on the floor of the
House. Again, prior to September 11th, where we now have--and
it was truly based on information coming across the table here
about the percentage of imported food coming into the country,
the ability to provide for the public health and safety of
people with regard to our food supply.
I asked you at FSIS--and we need to talk through this about
an adequate system of dealing with inspections and food
inspection in this country. It should not be a partisan issue,
but I will also indicate that when I offered those amendments
in this subcommittee and in the full committee, on a party-line
vote it was defeated, on a party-line vote.
Now, that is politics. It is not the safety. It comes back
to you. Have an adequate estimate of the number of inspectors
you need, and you will have support on this committee to help
you do your job.
SINGLE FOOD SAFETY AGENCY
This only sounds to me, in terms of other questions that
have been asked, that we need a single agency to deal with food
safety in this country. We have a fragmented system of food
safety, and within that fragmented system, we have lax rules
and regulations and no real authority to go after those--not
everyone--to those who would abuse the system. And smart
people, reasonable people, and concerned people will use the
tools at their disposal to do what is right. I believe in what
is right and wrong, and I believe in the good faith of people
to do what is right.
This is stunning, just stunning.
LISTERIA
Let me move further to a question on Listeria. In August
1998, Listeria in ready-to-eat deli meats and hot dogs produced
by Sara Lee sickened 100 and killed 21. Listeria is estimated
to cause 2,500 illnesses and 500 deaths each year. USDA has a
risk assessment demonstrating that Listeria is a public health
problem of serious concern.
It has been over a year since USDA issued its proposed rule
requiring testing for Listeria. When will the final rule be
adopted? Is anything being done to speed up the process? Will
you finalize this rule quickly and then fully enforce it?
Ms. Murano. On Listeria, if I may give you a little bit of
a time line on that, obviously February 2001 is when the
proposed rule came out with a comment period, as typically
these proposals have.
Ms. DeLauro. How long was the comment period?
Ms. Murano. This comment period had a deadline of May 29.
In May, the agency held a technical meeting, as I understand
it, and also a public meeting to discuss some of the issues
related to what do we need to do to better protect consumers
from Listeria in meat and poultry products. The comment period
was extended to June 28th because of all the comments really
that were being received, as there was a need to really
consider all the different aspects of this very complex issue.
There were so many requests to extend the comment period
that it was extended again and finally closed in September
2001. There is a requirement for us to do a cost/benefit
analysis and to do a risk assessment as we consider a final
rule. I can tell you that the risk assessment that you talk
about, of which, I happen to have a copy right here, this was a
risk assessment that was done on selected categories of ready-
to-eat foods. It is a very good document in the sense that it
certainly does give you part of a picture of the kinds of risks
that are present because of Listeria.
But this risk assessment, because it was at the retail
level, certainly doesn't give us the information that we need
in order to develop a policy, a risk management policy, to deal
with Listeria at the processing plant, which is what we are
supposed to be doing.
We needed to develop a risk assessment because of this
requirement, and to develop that risk assessment, we realized
that there were some data needs. ARS began a study that they
are going to complete in the early part of the summer,
hopefully in June, to give us information that we need to build
the model for the risk assessment at the processing line. That
is what we have to have in order to really decide what is the
right approach in putting out the final rule.
I share your concern, Ms. DeLauro, about foodborne illness
and certainly about Listeria monocytogenes, because if you look
at this draft assessment, it is the populations at the highest
risk, the susceptible populations, that we need to focus on.
Those are the people that need our help.
What we have been doing in the meantime, because these
processes obviously have taken time, is implementing the
sanitation procedures and verifying that they work by testing
product for Listeria monocytogenes. It is something that we
have been doing since 1999. The agency has collected enough
data to show that from 1999 to 2001, we have seen a 57 percent
decrease in the number of positives forListeria. It is not
perfect. We are not there yet. But it is a good sign that the
sanitation procedures that we are requiring in plants and that we are
holding them accountable for, are having some effect. It is not perfect
yet, so we are continuing this.
But in the meantime, not only do we test the product, but
we have a directive that is designed to encourage plants to do
the kinds of things that the proposed rule is talking about,
which is to test the contact surfaces, the product contact
surfaces for Listeria, and if there is contamination that is
found, then to look at the product.
As a microbiologist, I know that Listeria, which is a
ubiquitous organism, unfortunately, tends to find a niche in a
processing plant. Finding that niche is the key to eliminating
it from the processing line and ensuring that you will have a
ready-to-eat product that is free of this pathogen.
Ms. DeLauro. Dr. Murano, when will we have a final rule in
your estimation?
Mr. Kingston [presiding]. Dr. Murano, I hate to rush you,
but if you would answer quickly and move on.
Ms. Murano. I am sorry. Yes.
Ms. DeLauro. I would like to know when we can have a final
rule.
Ms. Murano. Yes, absolutely. Because of all these processes
and getting the ARS data and finalizing our risk assessment so
that we can input the data and see what are the measures that
are going to actually truly eliminate this organism, we are
thinking that 2003 is the earliest time for us to have a final
rule.
Ms. DeLauro. God help us.
Mr. Kingston. Thank you very much.
Ms. Kaptur.
Ms. Kaptur. Thanks, Mr. Chairman, very much.
FOOD SAFETY TECHNOLOGY
I wanted to continue on the questions on recalls, and, Ms.
Glavin, I was interested to hear your explanation that the
reason that we don't need more inspectors is because the added
production that will be occurring in meat and poultry and eggs
will be in the larger plants, and there are already inspectors
in those plants and so forth. In a way, that almost seems like
USDA has some prejudice toward the larger plants because they
pay for their inspectors. I don't buy my meat, if I can help
it, from large plant-produced meat. I like to buy from farmers
who raise animals in our area and I know what they eat and they
taste better, anyway.
But I am concerned about the possibility that because there
aren't enough inspectors within the system, that you may be
using technology such as washes and irradiation as a substitute
for physical inspections.
Is it true that this may be happening, because the
processing lines are moving very fast and, frankly, there
aren't enough inspectors out there? Do you see a substitute--is
there a substitution going on here of technology for
inspections?
Ms. Glavin. No, there is not. We strongly encourage meat
plants to make the maximum use of technologies that can reduce
foodborne pathogens on their products, and we certainly
encourage that. But that is the food plant making use of
technology to produce a safer product. It has no impact on our
inspection.
INSPECTION STAFFING
Ms. Kaptur. Let me ask this: Is there any prejudice by USDA
toward favoring large plants over smaller ones in the way you
operate your inspection system?
Ms. Glavin. No, there is not.
Ms. Kaptur. The costs?
Ms. Glavin. No.
Ms. Kaptur. How is that managed so it doesn't discriminate
against the smaller processors?
Ms. Glavin. We provide the inspection resources that are
needed for a plant to operate. A slaughter plant must have
sufficient inspectors for every carcass to be inspected, or
they can't operate. And we do provide that. And we also provide
for daily inspection of all processing plants. It doesn't
matter whether they are large or small.
Ms. Kaptur. Is the cost per unit produced borne equally by
the large and small plants?
Ms. Glavin. I am not sure I understand your question.
Ms. Kaptur. It is my understanding that processors have to
pay for the cost of inspection. Is that true?
Ms. Glavin. No, they do not.
Ms. Kaptur. You pay for it all.
Ms. Glavin. Yes.
Ms. Kaptur. Okay. Oh, that is good. I didn't know that.
Ms. Glavin. If a plant has the need for inspectors to work
overtime, then they pay for that. They reimburse USDA for--if
we cover from 9 to 5, for example, in a plant and on a given
day they have got a customer who has a particular need and they
need to run to 5:30 or 6 o'clock, then for that part of the
day, they reimburse the Department for the cost of that
inspection.
Ms. Kaptur. Only on overtime.
Ms. Glavin. Yes, ma'am.
Ms. Kaptur. All right. So there would be no undue burden on
the smaller firms in the way you----
Ms. Glavin. No, because it is federally funded.
Ms. Kaptur. Okay. I am going to put in the record the
recalls over the last couple years, from 2000 to the present,
which are, frankly, quite substantial. And then I am going to
put into the record the recall cases from the year of 2002.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Kaptur. And as I study these a little bit, and in the
minimum amount of time we have to deal with the issue of food
safety, which is two and a half hours--imagine that. Two and a
half hours. We are not going to see you again until next year.
Ms. Murano. I will be happy to come to visit with you and
talk about anything you would like.
Ms. Kaptur. It is nice to have an open public hearing.
Ms. Murano. Yes, it is.
Ms. Kaptur. Where people can ask questions and learn from
one another. We always learn at these meetings. It is really a
tragedy that we have 13 simultaneously scheduled subcommittee
meetings while this one is going on and some of our most
experienced and able members can't be with us this morning. It
isn't the way I would run the place, but it is the way it is
being run now. And this subject is very important to the
American people as well, so I apologize to the members of the
public who are here that we have this little discussion in
which the public can hear and participate through us.
PRODUCT RECALLS
But on this recall list from the year 2000, what amazes me
as I look through it is how much remains in the marketplace. I
mentioned earlier on Cargill--this was turkey and chicken. I
don't know what RTE is? RTE turkey, chicken?
Ms. Murano. Ready-to-eat.
Ms. Kaptur. Ready-to-eat turkey and chicken, Listeria,
16,895,000 pounds recalled but only 2 million recovered. But if
I look down this list, the figures that really jump out at me
are the ground beef, the poundage that is out there from
companies that are very well known--Omaha Steaks, 22,000 pounds
recalled, 10 pounds recovered, ground beef.
Okay. I go to Rochester Meats, again, ground beef. Ground
beef seems to stand out. E. coli, and that is really--most of
this is related to E. coli, 30,000 pounds recalled, only 10,000
recovered.
Here is something they can't figure out what the company
name was, but it came in from Canada, evidently, 73,800 pounds
of E. coli-infected material, pounds recovered only 250.
Moyer Packing, Pennsylvania, 253,000 pounds recalled, only
7,900 pounds recovered.
Packerland Packing, 196,000 pounds of ground beef out there
infected with E. coli, only 6,700 pounds recovered.
It is really--Campbell's Soup, 109,000 pounds recalled,
only 16,000 pounds recovered in vegetable beef soup.
My question to you is: Where is the stuff that wasn't
recovered? Where is it?
Ms. Murano. I think that is what Maggie had alluded to.
Some of it probably was eaten, some of it was probably thrown
out. And this, if nothing else, is what gives me the impetus to
say to myself we can do better and we have to do better, and
this is why controlling the hazards, is the key. With the
ground product that you are mentioning, that especially is a
challenge, because a product that comes into those plants in
the trimmings, that is where the burden comes in.
So the idea is: Can we put a control either at the grinding
operation itself or have those grinding operations demand that
their suppliers have a control measure? And this is where, to
be honest with you, we are going to make some strides in
reducing all of those recalls.
[Clerk's note: The following information was added
subsequent to the hearing:]
The one issue that does not depend on who has recall authority,
whether the USDA or industry, is the amount of product that is actually
recovered. This is a complex issue, and is affected by many factors. In
1997, the Centers for Disease Control conducted a survey of the
consumers who had been involved in a salmonellosis outbreak from
consumption of contaminated ice cream. The identity of consumers was
easy to obtain, since this was a case involving clients of the
Schwann's corporation, which delivers food right to their customers'
door. In short, 31% of the clients went ahead and consumed the ice
cream after hearing about the recall. This points to the fact that even
when consumers are aware of a recall, they may choose to ignore it, a
factor that contributes to the low percentage of recovered product.]
Ms. Kaptur. I was amazed at the amount of ground beef. I
don't think I will ever buy ground beef again.
I wanted to also insert in the record the summary from a
GAO study done on food safety in the year 2000 entitled
``Actions Needed by USDA and FDA to Ensure that Companies
Promptly Carry Out Recalls.''
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
GAO REPORT ON FOOD SAFETY
Ms. Kaptur. And let me read one of the conclusions, Doctor,
and ask you your opinion on this.
According to the conclusions, it says, ``According to USDA
officials, their inspectors do not attempt to determine the
cause of contamination for every recall. They believe this is
the responsibility of the recalling company. But FDA officials,
do attempt to determine the cause of contamination for every
recall. In fact, FDA guidance to its inspectors says that the
facility will be examined to determine how the food became
contaminated.''
Do you intend to follow FDA type procedures as you work
toward elimination of these pathogens in the food processing
process?
Ms. Glavin. The way we operate is we require the plant to
determine the cause. It is the plant's responsibility, and we
hold them responsible for that.
Ms. Kaptur. And if they don't--obviously, with the number
of recalls, there is a lot of non-compliance. What do you fine
them if they don't?
Ms. Glavin. We have no civil penalty authority.
Ms. Kaptur. Well, I would just urge your consideration of
the FDA procedures. Could I ask, would you be prohibited from
using them, or do you need additional legal authority in order
to do that?
Ms. Murano. I don't know. We will have to look into that.
But let me say this to you: When Maggie says that it is the
responsibility of the plant to find out the cause of it and
that we hold them responsible for that, it is not that we turn
away and say ``you find the cause, we don't care what it is.''
We hold them responsible, meaning that we demand to see what
the plant has found out.
So this is not a case where we are looking the other way at
all, because to us that is important because it gives us, if
nothing else, the information that we need to figure out what
we have to change so that this doesn't happen again.
HACCP as a preventive system, has seven principles, one of
which is corrective actions. We demand, in fact, expect by law
that these plants abide by HACCP. They have to take corrective
actions when there is a deviation, as we call it, or a failure.
And so this is something that they have to have already
prescribed in their plan--What they are going to do when there
is a failure. The corrective action plan must address not only
what they are going to do so that this doesn't happen again in
the plant, but what they are going to do with the product. It
must also address if the product is already in the market, what
they are going to do with it. When it comes back to the plant,
the plan must state what they will do about it, and how they
will find out what the cause was. All of these things are part
of the corrective actions that they write, and we review or
revise. We are the ones who oversee what they write and hold
them to it.
Ms. Kaptur. But essentially your inspectors will not be
giving guidance to examine the cause of the contamination as
FDA does?
Ms. Glavin. Our inspectors require the plant to present
corrective and preventive actions and to review that
presentation.
Ms. Kaptur. And that is in the regulations?
Ms. Glavin. Yes.
Ms. Murano. As part of a HACCP plan, they have to have
that.
Mr. Kingston. We need to move on. I wanted to say, one of
the things, that we sometimes overlook in Washington is that
you are not the last line of defense standing in between the
consumer and the producer of meat. You are not. The market is.
Any producer who consistently produces a contaminated or
inferior product is not going to last. But more importantly
than that, if that plant produces contaminated meat, there is a
plethora of people in this society called trial lawyers who
will be glad to take that battle on, on an individual or a
class-action basis in a lawsuit form. I was in the product
liability insurance business, and we handled the insurance for
poultry and meat plants. I can tell you that they worked
closely with USDA, but their biggest fear was getting sued, and
losing market share.
Now, there is also the ethics of it. Most of these people
are very good citizens and eat their own products. They give
their own product to their own family, and wouldn't dream of
putting something out that was even a little bit questionable.
However, even good people can make mistakes, and that is why we
have a tort system that keeps a sharp eye on a business that
would produce an inferior product.
But in addition to that, we have you. I think that the
dynamics of the ethics, the concerns and the good will of the
corporation, plus the tort system, plus USDA, give us a good
system. Ms. Kaptur was concerned about the amount of recalls.
How much meat is not recalled? Do you have a number? Is 10
percent of the product that is out there recalled? Or is that 1
percent?
Ms. Glavin. The amount recalled is way under 1 percent of
the amount produced, but we can get you an actual number. We
know what is produced and we know what is recalled.
Ms. Kaptur. Would the gentleman be kind enough to yield?
Mr. Kingston. Certainly, but I think that would be of
interest to know. And, again, as we have stated repeatedly on
this committee, if anything is recalled we want to try to do
whatever we can to eliminate that. But it would also be good to
know the percentage. I will be happy to----
Ms. Kaptur. I would just say, I have listened to the
gentleman's comments throughout the morning, and what startles
me a bit about your presentation so far is that you haven't
expressed any concern about those that are continuing to be
harmed, Jack. So if you have got 76 million people in the
country that are getting sick----
Mr. Kingston. Well, let me recall my time----
Ms. Kaptur [continuing]. And you have people who are
dying----
Mr. Kingston [continuing]. And say----
Ms. Kaptur [continuing]. It would seem to me that is a
pretty important----
Mr. Kingston. Recalling my time, to say that there are
those who, may want to play politics about this, but to suggest
that a member of this committee on either side isn't concerned
about people, that is--that is interesting. I would not think
anybody who is a Member of Congress, a responsible member in
either party, would come here without regard. I am saddened by
those remarks.
Ms. Kaptur. I am saddened by your lack of attention to them
in your questioning this morning.
Mr. Kingston. I will be happy to yield to Mr. Hinchey.
TORT SYSTEM
Mr. Hinchey. Thank you very much, Mr. Chairman.
I am interested in what you said a few moments ago about
the tort system, and I think that fortunately we do have a very
good tort system in our country, but we continue toundermine
it. Just yesterday, the House of Representatives passed a bill which
would undermine the tort system by forcing every class action suit
essentially into over-crowded Federal courts, taking them out of State
courts. That would hamstring a substantial portion of the tort system
in our country.
It is a shame that that bill passed, but it did, and its
effect is to weaken the ability of people to get recompense for
injustices.
But I wanted to address my questions in what I guess will
be the last opportunity to do so today--I am sure you are very
delighted to hear that. [Laughter.]
INTENTIONAL CONTAMINATION OF FOOD
Mr. Hinchey [continuing]. On an aspect of this question
which embraces the issue of national security. I am reading
from the Office of Inspector General's Semi-Annual Report. This
is for fiscal year 2001, so it reaches back into the previous
administration. And one of the issues it talks about is as
follows: A Michigan-based corporation pled guilty in Federal
court to the distribution of adulterated food products and was
fined $50,000. On April 13, 1999, FSIS deemed over 21 million
pounds of meat and poultry products produced at this plant
unfit for human consumption. The investigation of the Office of
Inspector General showed that the corporation failed to notify
FSIS of 16 positive tests for Listeria monocytogenes in 1997
and 1998.
So this, of course, brings us back to the voluntary
compliance aspect of our system here and demonstrates for us
once again the very acute weaknesses of that system.
Assisting in the investigation were FSIS compliance
officers and the Office of Special Investigations for the U.S.
Air Force. Why was the U.S. Air Force involved? Because U.S.
Air Force personnel were consumers of these meat products.
If you wanted to disable a substantial portion of the
American military, just say for example, one of the ways that
you would do it would be to buy up a few of these companies and
send out contaminated food into military operations.
Secretary Thompson said last year that he feared
intentional contamination of food more than anything else under
his jurisdiction. And the reason he said that, I believe, is
because the General Accounting Office reported on USDA's
efforts to address major management issues. GAO stated that the
inspector general--and I quote--``reported that USDA needs to
identify and halt criminal activity involved in the intentional
contamination of food products.'' GAO found that the ``FSIS
fiscal year 2002 performance plan did not have a performance
goal related to identifying and halting criminal activity
involving the intentional contamination of food products.''
So what we are seeing here is that there is a criminal
element that is involved in the food production system. I know
organized crime is involved in the food production system and
the distribution system and the restaurant business to some
extent in many places across our country. I can tell you that
from my experience in the New York State Legislature.
There has always been an element of intentional crime. But
now we are facing a new level of intentional crime, with the
international terrorism phenomenon which we are currently
confronting.
We have a brand new problem on our hands, and we are not
doing anything to deal with it. We have 381,818 additional
pounds of meat per inspector to be examined. Nobody is gearing
up for that, no additional inspectors. And in commenting on the
draft of the report from the GAO that I just read a minute ago,
FSIS stated that it was unaware that the Office of the
Inspector General considered this to be a major management
challenge and that it had enhanced its efforts to review high-
risk firms in the last few years.
How could FSIS not know that the IG thought that criminal
activity and the intentional contamination of food was a major
issue?
Ms. Murano. I will let you answer that.
Ms. Glavin. Sure. The Office of Inspector General (OIG) had
not brought this to our attention at that time, and that is why
our response to the GAO was along those lines.
Mr. Hinchey. Okay. I accept that as a fair response. What
is your response today?
Ms. Glavin. Clearly, with the events of the past year, this
is an area where we are focusing our attention. Dr. Murano
outlined earlier some of the activities that we have been
involved in to increase our ability to identify and respond to
intentional contamination of the food supply. It is a much,
much higher priority than it was.
Mr. Hinchey. What is the procedure that you employ in
dealing with incidents where you find intentional criminal
activity in the contamination of food?
Ms. Glavin. Very fortunately, sir, there has not been
intentional contamination of the meat and poultry supply. There
have been a number of----
Mr. Hinchey. Well, the Office of the Inspector General is
telling us something quite different. He is telling us that
there is intentional contamination. Secretary Thompson says
that the thing he fears most is intentional contamination of
the food supply.
Ms. Glavin. Yes, and we are also very concerned about the
possibility of----
Mr. Hinchey. You are telling me there is no intentional
contamination.
Ms. Glavin. I am telling you that there has not yet been an
incident of intentional contamination.
Mr. Hinchey. He reports on one in the 2001 report, the
second half of 2001. What are we talking about here?
Ms. Glavin. I believe the situation he was reporting on was
one where there was unintentional contamination of product that
the plant did not report to us.
Mr. Hinchey. Ms. Glavin, the Inspector General says in his
report that there were 16 or 17 intentional incidents of
contamination that he found in his investigation, and he
reported that to you.
Ms. Glavin. He found incidents where the plant should have
come to us and reported it to us, where the plant perhaps was
negligent.
Mr. Hinchey. You are playing a semantic game with me. I am
telling you what the Inspector General told you. The Inspector
General told you that you have a problem of intentional
contamination of the food supply, that some of this intentional
contamination of the food supply involvesorganized criminal
activity.
I am suggesting to you that some of this intentional
contamination of the food supply, either presently or in the
future, may very well involve active terrorist elements in our
country.
Ms. Glavin. Yes.
Mr. Hinchey. And I am wondering what your attitude is about
this and what you intend to do about it.
Ms. Murano. Let me say one thing before you answer that,
because, you know, I am a new kid on the block myself, so when
I read these reports, I, like you, want to get to the bottom of
it. I want to find out is it so? If it is, let's fix it, et
cetera.
But from what I am understanding that you read and what I
am understanding that Maggie is talking about, at this
particular plant, they were not reporting test results to us--
not that they were intentionally putting Listeria in product.
They were finding Listeria, but not telling the Government. And
that is criminal activity, no question about it. But I
understand also what you are saying, is that if someone wanted
to--which is the situation we are facing right now because of
9/11. If someone wanted to buy up these plants and
intentionally put a pathogen into the product, what are we
doing to prevent that from reaching the consumer?
Mr. Hinchey. Yes.
Ms. Murano. Is that what you are asking?
Mr. Hinchey. Yes.
Ms. Murano. And this is something that requires that we
have inspectors that are at these plants diligently looking for
these things, and these have to be inspectors that have to be
doing their job correctly. And what I am assuming is that
obviously did not happen in those plants.
Mr. Hinchey. It didn't happen in this case.
Ms. Murano. Correct.
Mr. Hinchey. It didn't happen in all of these cases in one
year either, involving literally millions of pounds of meat
products. So there are enormous gaps in this system.
Now, when you have enormous gaps in a system like this and
you have 5,000 people dying a year, I suppose you can say,
well, you know, that is the marketplace and, you know, people
die in accidents----
Mr. Kingston. Let me interrupt my friend. We have got about
3 minutes until we have to vote, Maurice, so why don't you----
Mr. Hinchey [continuing]. And they die in other ways. I
think that is rather callous myself. But I have heard people
suggest things like that. But when you are dealing with a
situation now of national security and when we have the
Inspector General telling us that you have intentional
contamination of food, criminal activity involved in the
intentional contamination of food, and one of the President's
Cabinet members telling us that he thinks that the intentional
contamination of the food supply is one of the most dangerous
aspects of our current involvement against terrorism, I think
it is time to do something.
Mr. Kingston. Mr. Hinchey, would you like to come back? We
can if you want. But we need to go ahead and vote. We have got
2 minutes left. Do you want to come back?
Mr. Hinchey. We better go. No, I think we have gone as far
as we can.
Mr. Kingston. Okay. Ms. Kaptur?
Ms. Kaptur. I have several items to submit for the record.
I did mention in prior remarks that we will have several recall
summaries along with sections of two major reports from the
General Accounting Office: one on food safety and security,
fundamental changes needed to ensure safe food; and another one
on food safety, actions needed by USDA and FDA to ensure that
companies promptly carry out recalls.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Kingston. Dr. Murano and all the panelists, we want to
thank you for being with us. As you can tell, this is something
we care deeply about. We think it is a debate worth having. We
can always do a better job at something even though we are
doing a good job now. Thank you for your time and than you for
your frank answers.
Ms. Murano. Thank you very much.
Mr. Kingston. We stand adjourned.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
PART 6 INDEX
----------
Farm Service Agency
Page
2002-Crop:
Assistance................................................... 96
Farm Bill Implementation..................................... 87
Loan Rates................................................... 86
Acquired Property:
Credit Sales................................................. 191
Inventory..................................................177, 193
ADP Spending..................................................... 121
Administrative Support:
CRP Signups.................................................. 138
Farm Bill.................................................... 61
Travel Costs................................................. 125
Agriculture, Status of........................................... 211
Appeals.......................................................... 65
Beginning Farmers................................................ 101
Biofuel...................................................110, 114, 216
Biographical Sketch, Administrator, FSA.......................... 30
Boll Weevil Eradication Loans.................................... 201
Citrus Canker Eradication........................................ 92
Commodity Credit Corporation:
Borrowing Authority.......................................... 162
Contractual Services......................................... 144
Dairy Purchases.............................................. 208
Emergency Pest Control....................................... 92
Export Credit Guarantees..................................... 145
Interest Rate on Borrowings.................................. 147
Inventory.................................................... 147
TEFAP Donations.............................................. 151
Common Computing Environment..................................... 204
Conservation Programs............................................ 126
Conservation Reserve Program:
Administrative Costs......................................... 138
Cover........................................................ 134
Enrollment............................................134, 197, 200
Estimates.................................................... 139
Farmable Wetlands Pilot Project.............................. 200
Signups and Eligibility Criteria............................. 135
Technical Assistance.......................................138, 140
Cotton........................................................... 201
County Offices................................................... 131
Employees.................................................... 155
Workload..................................................... 196
Dairy Market Loss Assistance Program............................. 220
Discrimination Lawsuit Settlement................................ 119
E-Government:
E-LDP's...................................................... 104
Program Applications......................................... 216
Emergency Conservation Program:
Allocations................................................141, 142
Needs........................................................ 200
Practices.................................................... 143
Equipment Purchases.............................................. 121
Explanatory Notes:
Commodity Credit Corporation................................. 300
Farm Service Agency.......................................... 221
Farm Bill:
Administrative Costs........................................61, 203
Funding...................................................... 213
Implementation for 2002 Crops................................ 87
Staffing Impacts............................................. 199
Farm Loans....................................................... 200
Activity..................................................... 169
Budget Request............................................... 169
Debt Write-Off............................................... 167
Delinquencies................................................ 173
Economic Assumptions......................................... 168
Loans to FSA Employees....................................... 194
Rescheduling................................................. 172
Farm Operating Loans............................................. 181
Farm Ownership Loans............................................. 182
Farm Storage Facility Loan Program............................... 197
Hazardous Waste Management Program............................... 162
Homeland Security................................................ 218
Indian Tribe Land Acquisition Loan Program....................... 194
Information Systems.............................................. 204
Loan Rates......................................................86, 207
Loan Service Fees................................................ 132
Non-Insured Crop Disaster Assistance Program Delivery............ 213
Object Classes:
25........................................................... 195
41........................................................... 126
Opening Statement, Under Secretary, FFAS......................... 2
Questions Submitted for the Record:
Chairman Bonilla............................................. 119
Mr. Latham................................................... 204
Ms. Kaptur................................................... 208
Mr. Farr..................................................... 220
Reconstitutions.................................................. 66
Salaries and Expenses......................................86, 161, 199
Senior Farmers Market Program.................................... 208
Space........................................................ 130
Specialty Crops.................................................. 89
Staffing..........................................88, 91, 104, 161, 214
County Offices............................................... 155
Employees on Detail.......................................... 199
Farm Loan Program Administration............................. 195
Levels.....................................................204, 214
State Offices................................................ 159
Training..................................................... 214
State Mediation Grants........................................... 188
Written Testimony:
Administrator, Farm Service Agency........................... 19
Under Secretary, Farm and Foreign Agricultural Services...... 5
RISK MANAGEMENT AGENCY--FEDERAL CROP INSURANCE CORPORATION
Page
Biographical Sketch of Mr. Davidson.............................. 42
Congressional Affairs............................................ 417
Crop Insurance Industry Annual Meetings.......................... 405
Crop Insurance Program:
2002--Crop Loan Rates........................................ 86
Coverage in Ohio............................................. 441
Crop Participation Rates..................................... 413
Group Risk Plan.............................................. 374
Insured Crops................................................ 409
Program Delivery............................................. 368
Program Indicators........................................... 415
Program Participation........................................ 365
Revenue Assurance............................................ 394
Risk Management Education..................................113, 417
Specialty Crops.............................................. 440
Summaries of Risk Management Education Projects.............. 421
Support for Beginning Farmers................................ 101
Dairy Options Pilot Program...................................... 373
Explanatory Notes................................................ 446
Hotline Investigations........................................... 417
Information Technology Costs..................................... 367
Introduction of Witnesses, Mr. Bonilla........................... 1
Legislation:
ARPA Status.................................................. 100
Cap on Underwriting Gains.................................... 61
Legislative Proposal..................................367, 418, 419
Statement on Crop Insurance Cap Proposal..................... 419
Underwriting Gains Versus A&O Expenses....................... 419
Object Class 25.................................................. 366
Opening Statement, Under Secretary, Farm and Foreign Agricultural
Services....................................................... 2
Questions submitted for the record:
Chairman Bonilla............................................. 364
Ms. Kaptur................................................... 440
Reinsured Companies:
Currently Active Reinsurance Company Agreements.............. 400
Delivery Expenses............................................ 405
FCIC/Reinsurance Experience.................................. 407
Payments to Companies vs. Producers.......................... 364
Profits and Losses.........................................364, 396
RMA/FCIC Financial Condition:
Administrative and Operating Obligations and FCIC Fund
Activities................................................. 403
Commercial and Assigned Risk Funds........................... 398
Total Administrative and Operating Costs..................... 401
Treasury and Commodity Credit Corporation (CCC) Borrowing.... 411
Unobligated Balance--FCIC Fund............................... 415
Staffing, Plans.................................................. 364
Testimony, Mr. Davidson, RMA Administrator....................... 31
Testimony, Under Secretary, Farm and Foreign Agricultural
Services....................................................... 5
Foreign Agriculture Service
Page
Agricultural Trade Offices.....................................472, 526
Arrearages....................................................... 507
Azores Collaborative Research and Education Group................ 562
Bill Emerson Humanitarian Trust.................................. 553
Binational Agricultural Research and Development Fund............ 529
Biography of Ellen Terpstra...................................... 60
Biotechnology Approval Regimes................................... 566
Budget Request................................................... 52
Capturing Overseas Sales......................................... 109
Cochran Fellowship Program.....................................527, 831
Codex Alimentarius............................................... 818
Continuing the Liberalization of Trade in Agriculture............ 47
Cost of Staffing Changes in Balkans and Ukraine.................. 563
Dairy Export Incentive Program.............................57, 492, 519
Emerging Markets................................................. 822
European Union Ban............................................... 552
Explanatory Notes................................................ 836
Export Credit Guarantee Program.......................56, 109, 493, 554
Export Enhancement Program............................57, 488, 492, 561
Export Incentive Program......................................... 492
Export Promotion Programs of U.S. Competitors.................... 823
Facility Guarantee Program....................................... 553
Farmer-to-Farmer Program......................................... 828
FAS Buyouts...................................................... 552
FAS Conferences.................................................. 527
FAS Management Retreats.......................................... 527
FAS Presence in Ukraine.......................................... 562
FAS Profile...................................................... 12
FAS Program Activities........................................... 43
FAS Resources.................................................... 821
FAS Technology:
Computer System Failures..................................... 559
E-gov Initiative............................................. 53
FAS Increase for Information Technology...................... 564
FAS Telecommunications....................................... 561
LANDSAT Data................................................. 526
Recent System Failures....................................... 560
Food Aid:
Countries Graduating from Food Aid Programs.................. 552
Food Aid for Afghanistan and the Region...................... 833
Food Aid Programs............................................ 824
Ocean Freight Differential Costs for Food Aid Program........ 535
Food Assistance Policy Council................................... 830
Food Security Commodity Reserve.................................. 552
Foreign Currency Accounts........................................ 554
Foreign Food Assistance.......................................... 568
Foreign Market Development Program..............................57, 536
Former Soviet Union.............................................. 487
Global Food for Education Initiative.................555, 558, 566, 825
GSA Rent......................................................... 561
High Fructose Corn Syrup......................................... 820
International Cooperation and Development Program................ 472
International Food Shows......................................... 522
J-1 Visas/Cochran Fellowship Program............................. 817
Japanese Ministry of Agriculture, Forestry, and Fisheries........ 835
Language Training................................................ 526
Maritime Administration Reimbursements........................... 561
Market Access Program (MAP):
2001 MAP Brand Companies..................................... 478
2001 MAP Participants........................................ 476
Market Access Compliance..................................... 553
Market Access Program.......................................57, 474
MAP and the Foreign Market Development Program........819, 822, 823
FY 2001 FMD and MAP Participant Contributions................ 551
Marketing Strategy............................................... 51
Monetization..................................................... 518
Opium Production in Afghanistan.................................. 97
P.L. 480:
FY 2001 P.L. 480 Commodity Mix (Approved Programs)........... 512
FY 2001 P.L. 480 Operating Year Budget (Approved Programs)... 513
P.L. 480..................................................... 58
P.L. 480 Title I Agreements.................................. 508
P.L. 480 Title I FY 2001 Country Allocations................. 509
P.L. 480 Title I Local Currency.............................. 553
P.L. 480 Title I Ocean Freight Differential.................. 510
P.L. 480 Title II............................................ 510
P.L. 480 Title II External Transportation.................... 518
P.L. 480 Title II Internal Transportation.................... 518
P.L. 480 Titles I, II, and III............................... 519
Shipping of P.L. 480 Title I Commodities..................... 555
Transfer of Funds from P.L. 480 Title II to Title III........ 555
USAID/P.L. 480 Title II...................................... 817
Priorities for 2002 and 2003................................. 46
Questions Submitted for the Record:
Chairman Bonilla............................................. 472
Mr. Latham................................................... 818
Ms. Emerson.................................................. 822
Ms. Kaptur................................................... 828
Mr. Farr..................................................... 35
Quality Samples Program........................................562, 823
Reimbursements to State Department............................... 552
Representation................................................... 527
Restriction on AID Programs...................................... 474
Retaliation Against Steel Imports Decision....................... 565
Rice:
International Activity Agreement for Rice.................... 558
Rice and USDA Export Programs................................ 563
Rice to Uzbekistan........................................... 96
Rice Trade Association....................................... 95
Russian Poultry Ban.............................................. 565
Russian Request to Inspect U.S. Poultry Plants................... 833
School Lunch Program............................................. 518
Section 416:
Section 416.................................................. 828
Section 416(b) and Food For Progress Transportation Costs.... 519
Section 416(b) Assistance for the Current Year............... 830
Section 416(b) Commodities...................................
520, 556
Statement of Ellen Terpstra, Administrator, FAS.................. 43
Strategic Planning Process....................................... 50
Supplier Credit Guarantee Program................................ 472
Trade Show Office 2002/2003 Strategic Plan....................... 522
USAID Administration............................................. 828
Value of U.S. Food Aid Commodities Programmed:
FY 1992...................................................... 570
FY 1993...................................................... 590
FY 1994...................................................... 617
FY 1995...................................................... 643
FY 1996...................................................... 660
FY 1997...................................................... 693
FY 1998...................................................... 721
FY 1999...................................................... 742
FY 2000...................................................... 766
FY 2001...................................................... 794
Value of U.S. Food Aid Commodities Programmed Summary............ 568
World Trade Organization:
China WTO Accession.......................................... 553
World Trade Organization..................................... 558
Food Safety and Inspection Service
2003 Budget Request............................................929, 963
Activities Funding..................................1,104, 1,107, 1,113
Biography:
Elsa Murano.................................................. 934
Merle D. Pierson............................................. 935
Margaret O'K. Glavin......................................... 968
BSE Risk Assessment.............................................. 949
Codex Alimentarius....................................962, 1,103, 1,113
Condemned Products............................................... 1,083
Country of Origin Labeling....................................... 981
Egg Products:
Egg Products Inspection and Salmonella Enteritidis........... 1,099
Egg Products Inspection Training............................. 1,101
Electronic Export Certificates................................... 1,103
Eligible Exporting Countries...............................1,067, 1,130
Emergency Response............................................... 1,007
Explanatory Notes................................................ 1,139
Financial and Accounting Procedures, External Review of.......... 1,105
Farm Bill Provisions............................................. 1,128
Field Automation and Information Management (FAIM).........1,101, 1,105
Food Safety:
Coordination of Activities...............................916, 1,125
Education....................................923, 958, 1,124, 1,137
Foodborne Illness..........................................981, 986
Improving the Food Safety System..................985, 1,044, 1,133
Research..................................................... 1,064
Safe Handling by Consumers................................... 996
Technology................................................... 1,012
Foreign Country Equivalency Determinations....................... 1,077
FSIS Enforcement Activities...................................... 1,093
Grants To States...........................................1,089, 1,101
HACCP:
HACCP-Based Inspection Models Project (HIMP)...............948, 987
Pathogen Reduction.......................................946, 1,112
Plants....................................................... 1,100
Review of HACCP Operations................................... 1,121
Homeland Security.............................940, 1,009, 1,046, 1,117,
1,127, 1,136
Import Inspection.............................969, 970, 971, 977, 978,
980, 1,076, 1,077, 1,118, 1,135
Industry Growth............................................1,003, 1,004
Infrastructure................................................... 937
Information Technology........................................... 943
Inspection:
Establishments............................................... 1,065
Exemptions................................................... 1,087
Frequency of Inspections..................................... 1,122
Product Inspected:
Amount of Poultry Inspected.............................. 1,095
Number of Livestock Inspected at Slaughter............... 1,097
Technology............................................... 1,022
Volume and Cost of Meat and Poultry Inspection At
Slaughter.............................................. 1,091
Interstate Shipment of State Inspected Meat...................... 1,120
Laboratory Accreditations........................................ 1,085
Licensing Fee.................................................... 1,016
Listeria......................................................... 1,011
Meat and Poultry Hotline......................................... 1,100
Ohio School Lunch Delivery Issue................................. 1,120
Opening Statement................................................ 902
Microbiological Testing, Outsourcing............................. 1,106
Overtime Inspection User Fee..................................... 1,115
Pathogens in Meat and Poultry.................................... 990
Pilot Programs................................................... 1,062
President's Management Agenda.................................... 925
Product Recall..............................992, 972, 995, 1,003, 1,037
Questions Submitted for the Record:
Chairman Bonilla............................................. 1,062
Ms. Kaptur................................................... 1,118
Ms. DeLauro.................................................. 1,133
Residue Tests (SOS, STOP, CAST, FAST)............................ 1,087
Regulations, Revision of......................................... 1,105
Salmonella:
Performance Standards................................... 971, 1,110
Sentinel Sites................................................... 1,100
Single Food Safety Agency........................................ 1,134
Staffing:
Attrition for FSIS Inspectors................................ 1,104
Inspection Staffing......................................954, 1,004
State Inspection of Programs.................................986, 1,082
Supreme Court Beef Decision......................989, 991, 1,006, 1,133
Translating Science into Policy.................................. 1,137
Voluntary Inspection............................................. 1,089
Witnesses......................................................901, 902
Written Testimony of Elsa Murano, Ph.D........................... 906
Written Testimony of Margaret O'K. Glavin........................ 936
PART 7 INDEX
----------
Food, Nutrition and Consumer Services
Page
Application Simplification....................................... 336
Budget Request, Food and Nutrition Service....................... 269
Child and Adult Care Food Program:
Enforcement.................................................. 104
Reimbursement Rates.......................................... 110
Child Nutrition.............................................60, 73, 112
Competing Food Enforcement................................... 43
Dietary Guidelines........................................... 40
Purchasing Power............................................. 39
Student Choice...............................................41, 71
Colonias......................................................... 240
Commodity Assistance Program..................................... 173
Commodity Purchases:
Farmer Impact................................................61, 66
Fresh Produce................................................ 52
Commodity Purchases and Distribution, Department of Defense...... 62-63
Commodity Supplemental Food Program..................175, 283, 300, 307
Bonus Items.................................................. 302
Commodity Surplus................................................ 301
Competitive Foods................................................ 326
Coordinated Review Effort........................................ 79
Diabetes......................................................... 36
Economic Research Service Evaluations..........................243, 319
Elderly Feeding Program.......................................... 239
Electronic Benefit Transfer...........................57, 195, 274, 281
Emergency Food Assistance Program..........................176-177, 304
Employment and Training Funds.................................... 231
Explanatory Notes................................................ 347
Farm Bill........................................................ 303
Farmers Market Nutrition Program........................36, 38, 44, 287
Ohio......................................................... 290
Seniors............................................29, 56, 285, 288
Farmers Markets:
Alternatives.................................................31, 37
Virginia..................................................... 59
Vouchers..................................................... 152
Five-A-Day Campaign.............................................. 295
Food Banks......................................................77, 304
Food Distribution on Indian Reservations:
Fresh Fruit and Vegetables................................... 183
Participation Levels......................................... 238
Food Program Administration, Funding Levels...................... 244
Food Programs:
Nutrition Goals.............................................. 297
Operations................................................... 306
Participation................................................ 345
Food Safety...................................................... 47
Food Safety Training, Ohio................................... 323
Food Stamp Program:
Benefit Reserve............................................189, 279
Block Grant Program.......................................... 231
Direct Farmer Benefit........................................ 58
Enforcement.................................................. 28
Error Rate................................................... 27
Fraud Reduction Efforts...................................... 275
Ohio......................................................... 327
Over-Issuance................................................ 181
Participation..............................................237, 327
Proposed Legislation.......................................241, 280
Retailer Integrity........................................... 182
Trafficking.................................................. 278
Fruit and Vegetable:
Bars......................................................... 323
Consumption.................................................. 54
Infant Formula, Cost............................................. 152
Meat Inspection Requirements, Ohio............................... 323
Milk Program, Special............................................ 108
Nutrition Education............................................270, 316
Child Nutrition.............................................. 69
Food Stamp Program........................................... 180
WIC.......................................................... 156
Nutrition Monitoring............................................. 344
Obesity, Child and Adolescent.................................... 312
Packaging, Commodity Purchases................................... 66
Program Funding Definitions...................................... 123
Program Integrity................................................ 338
Questions Submitted For the Record:
Chairman Bonilla............................................. 79
Ms. Kaptur................................................... 285
Ms. DeLauro.................................................. 343
Rebates:
Infant Formula............................................... 148
Other Than Infant Formula.................................... 149
Regulation and Reporting......................................... 305
School Breakfast Program, Pilot Program........................100, 109
School Lunch Program.........................................42, 46, 67
Eligibility.................................................. 339
Fresh Produce................................................ 55
Participation................................................ 102
Plate Waste.............................................68, 70, 320
Program Control.............................................. 71
State Reimbursements......................................... 74
School Meals Initiative.......................................... 105
Snack Programs.................................................103, 109
State Administrative Expenses.................................... 107
Studies and Evaluations...................................245, 265, 268
Summer Food Service Program...................................... 283
Wage Incentive Program, Special.................................. 230
WIC Program:
Breastfeeding Promotions..................................... 178
Carryover...................................................32, 157
Caseload Management.......................................... 51
Contingency Fund............................................56, 284
Eligibility.................................................33, 124
Food Package................................................. 278
Funding Definitions.......................................... 158
Funding...................................................... 343
Income Eligibility.........................................151, 153
Infant Participation.......................................167, 171
Obligations................................................110, 166
Participant Study............................................ 125
Participation.....................................32, 111, 274, 282
Program Violations........................................... 141
Reauthorization Act of 1998.................................. 143
Spend-forward Funding......................................139, 158
Vendors...................................................... 145
Waiting Lists.............................................146, 284
RURAL DEVELOPMENT
Page
Farm Bill, Additional Costs for.................................. 632
Administrative Funding and FTE's................................. 600
Alternative Energy Development................................... 627
Application and Grant Process.................................... 606
Appropriation History............................................ 603
Automated System Projects........................................ 653
Applications, Backlog of.......................................603, 610
Bio-Energy Production............................................ 632
Biofuels.......................................................627, 673
Biographical Sketch of Michael E. Neruda......................... 587
Business and Industry Programs:
Appropriations............................................... 778
Direct....................................................... 579
Guaranteed............................................578, 610, 629
Transfer Authority........................................... 665
Carryover for Rural Development Programs......................... 643
Centralized Servicing Center..................................... 653
Circuit Rider.................................................... 664
Conference Agreements............................................ 664
Goodfellow Facility, Consolidation of the........................ 662
Contract Support................................................. 661
Centers for Excellence, Designation of........................... 630
Empowerment Zones, Enterprise Communities, and Colonias........625, 640
Explanatory Notes................................................ 677
GSA Rental Costs................................................. 659
High Energy Cost Grants.......................................... 657
Information Technology........................................... 659
Introduction of Witnesses........................................ 535
J-1 Visas......................................................591, 666
Fact Sheet.................................................598, 671
Letters from Deputy Secretary Mosley........594, 596, 599, 667, 669
Loan Approvals................................................... 611
National Food and Agricultural Council........................... 637
Native Alaska Villages........................................... 663
Notice of Funds Availability..................................... 636
Opening Statement................................................ 536
Overall Funding.................................................. 602
Pre-Development Costs............................................ 605
Questions Submitted for the Record:
Mr. Bonilla................................................592, 640
Ms. Kaptur................................................... 673
Rural Areas Dominated by Non-Farming Activities.................. 673
Rural Community Advancement Program.............................. 656
Rural Community Assistance Programs.............................. 664
Rural Community Development Initiative.........................655, 663
Rural Development:
Councils..................................................... 646
E-Gov Multi Year Plan........................................ 661
Salaries and Expense......................................... 656
State Offices................................................ 658
Rural Development Budget Request...............................536, 541
Administrative Expenses....................................538, 546
Rural Business--Cooperative Service........................537, 543
Rural Housing Service......................................538, 544
Rural Utilities Service....................................537, 542
Rural Economic Area Partnership.................................. 630
Rural Television Satellite Loans Program.......................663, 747
Service Contract, FY 2001........................................ 651
Southwest Border Initiative...................................... 637
State Participation.............................................. 626
Statement of Michael E. Neruda................................... 540
Water and Waste Disposal Program................................. 663
Water and Sewer Grants and Loans................................. 665
Witnesses........................................................ 535
Write-Offs and Losses............................................ 646
RURAL UTILITIES SERVICE
Page
Application and Grant Process.................................... 606
Applications on Hand......................................613, 635, 734
Backlog of Applications.......................................... 604
Bio-Energy Production............................................ 633
Biofuels......................................................... 750
Biographical Sketch of Hilda Gay Legg............................ 588
Broadband Loans and Grants....................................... 556
Budget that Leads................................................ 550
Circuit Rider Programs........................................... 743
Colonias......................................................... 744
Deferments....................................................... 736
Distance Learning and Telemedicine Program................556, 734, 747
Electric and Telecommunications Loans............................ 736
Electric Program................................................. 550
Electric Utility Loan Debt Restructuring......................... 745
Emergency Community Water Assistance Grants...................... 744
Explanatory Notes..........................................Part 6, 1202
Farm Bill........................................................ 750
Foreign Travel................................................... 739
Investing Where Resources are Most Limited....................... 553
Local Network Television Service...............................621, 628
Modern Telecommunications in Rural America....................... 554
New Energy Sources............................................... 620
Pre-Development Costs............................................ 605
Questions Submitted for the Record:
Mr. Bonilla.................................................. 731
Ms. Kaptur................................................... 750
Rural Telephone Bank Program Liquidating Account................. 746
Rural Television Satellite Loan Program........................663, 747
Rural Utilities Service Troubled Electric Borrowers.............. 747
Statement of Hilda Gay Legg...................................... 549
Subsidy Rates.................................................... 733
Technical Assistance............................................. 744
Three Program Areas, Working Together............................ 557
Treasury Rate, Guaranteed, and Hardship Loans.................... 555
Water and Environmental Programs................................. 551
Water and Sewer Grants and Loans...............................665, 745
Water and Waste:
Disposal Program...........................................663, 740
Grant Applications on Hand................................... 635
Improvements................................................. 747
Loan Program................................................. 634
Water:
Debt to Texas................................................ 636
Needs........................................................ 751
Treaty with Mexico........................................... 639
RURAL HOUSING SERVICE
Page
Applications on Hand............................................. 615
Backlog.......................................................... 611
Bio-Energy Production............................................ 633
Biographical Sketch of James C. Alsop............................ 589
Borrower Privacy................................................. 773
Community Facilities Loans.....................................615, 761
Contracting Out.................................................. 775
Explanatory Notes..........................................Part 6, 1226
Farm Bill........................................................ 776
Farm Labor Housing.............................................616, 772
Inventory Property............................................... 756
Multi-Family Housing...........................................615, 767
Native Americans Benefit From RHS Assistance..................... 570
Questions Submitted for the Record:
Mr. Bonilla.................................................. 753
Ms. Kaptur................................................... 773
Rural Housing Service:
Homeownership Programs Reach the Underserved................. 560
Private and Nonprofit Organizations, Partnerships............ 562
Programs..................................................... 633
Farmworkers, Programs........................................ 569
Facilities for Distressed Rural Communities.................. 566
Community Facilities, Elderly................................ 568
Rental Programs Serve the Most Vulnerable Rural Americans.... 564
Rural America and Local Community Needs...................... 572
Rural Home Ownership............................................. 631
Rural Housing and Economic Development Program................... 772
Rural Housing Preservation Grants................................ 758
Rural Rental Assistance Program:
Cost of Providing............................................ 771
Expiring Contracts........................................... 754
Housing and Urban Development..............................764, 776
Projections.................................................. 767
Section 515.................................................. 607
Wage Matching................................................ 754
Section 502:
Backlog...................................................... 768
Low-Income Families Served................................... 634
Pending Requests............................................. 754
Qualification Criteria....................................... 764
Subsidy Rates................................................ 767
Section 504...................................................... 765
Section 514...................................................... 767
Section 515:
Backlog...................................................... 753
Occupancy Surcharge.......................................... 765
Rural Rental Housing.......................................607, 770
Subsidy Rates................................................ 767
Self-Help:
Grants....................................................... 758
Housing Land Development..................................... 761
Single Family Housing............................................ 617
Statement of Mr. James C. Alsop.................................. 559
Subsidy Rates..................................................753, 767
Very-Low Income Housing Repair Grants............................ 758
Very-Low and Low Income Loans.................................... 765
RURAL BUSINESS-COOPERATIVE SERVICE
Page
Agricultural Marketing Research Center........................... 793
Agricultural Production Market Development Grants................ 792
Allocations to States............................................ 795
Alternative Agricultural Research and Commercialization
Corporation....................................................
789, 791
Application Backlog.............................................. 610
Applications on Hand............................................. 619
Technology Transfer for Rural Areas, Appropriate................. 584
Bio-Energy Production............................................ 633
Biofuels......................................................... 627
Biographical Sketch of John Rosso................................ 590
Business and Industry Programs:
Appropriations............................................... 778
Direct....................................................... 579
Guaranteed............................................578, 610, 629
Transfer Authority........................................... 665
Cooperative Research Agreements................................791, 794
Cooperative Service Technical Assistance......................... 787
Cooperative Stocks Purchase Program.............................. 789
Centers for Excellence, Designation of........................... 630
Electric and Telephone Liquidating Account.....................786, 794
Explanatory Notes..........................................Part 6, 1257
Farm Bill........................................................ 801
Intermediary Relending Program............................580, 782, 797
Loan Approvals................................................... 611
National Food and Agricultural Council........................... 637
National Sheep Industry Improvement Center.....................585, 788
New Energy Sources............................................... 620
Questions Submitted for the Record:
Mr. Bonilla.................................................. 778
Ms. Kaptur................................................... 796
Rural Cooperative Development Grant Program....................584, 785
Rural Business Enterprise Grant Program........................581, 784
Rural Business Opportunity Grant Program.......................583, 784
Rural Economic Area Partnership.................................. 630
Rural Economic Development Programs.......................583, 786, 799
Salaries and Expenses............................................ 586
Statement of John Rosso.......................................... 574
Status of Cooperatives........................................... 796
Subsidy Rates.................................................... 778
Value-Added Agricultural Product Market Development Grant........ 585