[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
AGRICULTURE, RURAL DEVELOPMENT, FOOD
AND DRUG ADMINISTRATION, AND RELATED
AGENCIES APPROPRIATIONS FOR 2004
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST 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., Washington MAURICE D. HINCHEY, New York
TOM LATHAM, Iowa SAM FARR, California
JO ANN EMERSON, Missouri ALLEN BOYD, Florida
VIRGIL H. GOODE, Jr., Virginia
RAY LaHOOD, Illinois
NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
Committee, and Mr. Obey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
Henry E. Moore, Martin P. Delgado, Maureen Holohan, and Joanne L.
Perdue, Staff Assistants
________
PART 2
DEPARTMENT OF AGRICULTURE
Page
Secretary of Agriculture......................................... 1
Departmental Administration...................................... 341
Office of the Chief Financial Officer............................ 473
Office of the Chief Information Officer.......................... 557
Office of the General Counsel.................................... 805
Office of Communications......................................... 883
Office of Chief Economist........................................ 911
National Appeals Division........................................ 939
Office of Budget and Program Analysis............................ 953
Homeland Security Staff.......................................... 973
General Provisions............................................... 981
Office of Inspector General...................................... 989
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
87-650 WASHINGTON : 2003
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
FRANK R. WOLF, Virginia MARTIN OLAV SABO, Minnesota
JIM KOLBE, Arizona STENY H. HOYER, Maryland
JAMES T. WALSH, New York ALAN B. MOLLOHAN, West Virginia
CHARLES H. TAYLOR, North Carolina MARCY KAPTUR, Ohio
DAVID L. HOBSON, Ohio PETER J. VISCLOSKY, Indiana
ERNEST J. ISTOOK, Jr., Oklahoma NITA M. LOWEY, New York
HENRY BONILLA, Texas JOSE E. SERRANO, New York
JOE KNOLLENBERG, Michigan ROSA L. DeLAURO, Connecticut
JACK KINGSTON, Georgia JAMES P. MORAN, Virginia
RODNEY P. FRELINGHUYSEN, New Jersey JOHN W. OLVER, Massachusetts
ROGER F. WICKER, Mississippi ED PASTOR, Arizona
GEORGE R. NETHERCUTT, Jr., DAVID E. PRICE, North Carolina
Washington CHET EDWARDS, Texas
RANDY ``DUKE'' CUNNINGHAM, ROBERT E. ``BUD'' CRAMER, Jr.,
California Alabama
TODD TIAHRT, Kansas PATRICK J. KENNEDY, Rhode Island
ZACH WAMP, Tennessee JAMES E. CLYBURN, South Carolina
TOM LATHAM, Iowa MAURICE D. HINCHEY, New York
ANNE M. NORTHUP, Kentucky LUCILLE ROYBAL-ALLARD, California
ROBERT B. ADERHOLT, Alabama SAM FARR, California
JO ANN EMERSON, Missouri JESSE L. JACKSON, Jr., Illinois
KAY GRANGER, Texas CAROLYN C. KILPATRICK, Michigan
JOHN E. PETERSON, Pennsylvania ALLEN BOYD, Florida
VIRGIL H. GOODE, Jr., Virginia CHAKA FATTAH, Pennsylvania
JOHN T. DOOLITTLE, California STEVEN R. ROTHMAN, New Jersey
RAY LaHOOD, Illinois SANFORD D. BISHOP, Jr., Georgia
JOHN E. SWEENEY, New York MARION BERRY, Arkansas
DAVID VITTER, Louisiana
DON SHERWOOD, Pennsylvania
DAVE WELDON, Florida
MICHAEL K. SIMPSON, Idaho
JOHN ABNEY CULBERSON, Texas
MARK STEVEN KIRK, Illinois
ANDER CRENSHAW, Florida
James W. Dyer, Clerk and Staff Director
(ii)
AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS FOR 2004
----------
THURSDAY, FEBRUARY 27, 2003
DEPARTMENT OF AGRICULTURE
WITNESSES
ANN M. VENEMAN, SECRETARY OF AGRICULTURE
JAMES R. MOSELEY, DEPUTY SECRETARY
KEITH COLLINS, CHIEF ECONOMIST
STEPHEN B. DEWHURST, BUDGET OFFICER
Opening Statement
Mr. Bonilla. The subcommittee will come to order. We are
delighted today to have before us the Secretary of Agriculture,
Ann Veneman, along with Deputy Secretary Jim Moseley; Chief
Economist Keith Collins, and our Budget Officer that is with us
at almost every hearing, and we love dealing with him on a
regular basis, Steve Dewhurst.
Before we begin, I would like to say that we just finished
a very unusual appropriations process that no one on this
subcommittee ever intended to be part of. This subcommittee has
worked very well in a bipartisan way to produce a bill that has
an overwhelming number of votes when we put the final product
on the floor, and we are proud of that. We listen very
carefully to the interests of everyone and we try to put
together a product that is a good solid appropriations bill
that everyone can walk out of the room and be proud to support.
Unfortunately, we got intercepted last year. We do not expect
that to happen this year. We are going to have timely,
aggressive hearings that will have us wrapped up by March 20 on
the hearing process, and our intent is to have this bill moved
by midsummer, and we fully intend to keep to that schedule.
We also would expect the Budget Committee to move quickly
on a resolution that will guide our appropriations actions, so
we do not anticipate a problem in that area either.
I would like to make note of one matter at the outset.
Yesterday we heard from your IG, Phyllis Fong, who did a very
good job here. We were very pleased to hear that for the first
time the Department and all of its stand-alone agencies
received unqualified opinions on their fiscal year 2002
financial statements, and we recognize this is a major
accomplishment, and we commend your hard work in bringing that
about.
Before we begin with your testimony, I yield to my ranking
member, to Congresswoman Kaptur, and then we are joined by the
ranking member on the full Committee on Appropriations, Mr.
Obey, who would like to make some remarks.
Ms. Kaptur. Thank you, Mr. Chairman. Welcome back to our
very efficiently operating subcommittee, Madam Secretary.
Mr. Chairman, as we spoke before the hearing, the Senate
has not even decided to hold their hearings yet, so
congratulations to you. As usual the House takes the lead. We
are pleased to welcome all of our guests here today, including
members of the press.
I obviously come from Ohio, and I am deeply concerned about
what is happening in rural America and I know we will get into
that during your testimony. With the drought and many of the
difficult conditions that farmers face across the country and
the bailouts that we have been required to perform here, the
continuing diminution of the condition of rural America, not
just the fact that we are largely holding up rural America
through Federal subsidy--about 75 cents of every farm dollar is
Federal subsidy--we are basically holding the farm credit
system together, and the way out does not seem clear. I am very
interested in your comments that help us find a way forward
here so our farmers are not farming their mailbox, but the
market.
I am very concerned about what is happening in the social
fabric. Yesterday Congresswoman Emerson referenced the number
of drug busts in Missouri. If we look at the closures by the
DEA in rural America, it is staggering. More labs were closed
in Iowa than New York and New Jersey combined. I view those as
symbols of a deteriorating social fabric which has really held
this country together since our existence.
So you come to us with enormous responsibilities, and we
will get into this more during the question period. My
fundamental question this morning is how do we make American
agriculture competitive in a market sense here at home and
begin to heal these communities that are being ripped apart.
This is not the world that we inherited and I am not sure that
it is the one that we want to pass on to our children and
grandchildren.
Thank you for your testimony and being here this morning.
Mr. Bonilla. I yield to Mr. Obey.
Mr. Obey. I thank the chairman.
I cannot help but note the chairman's remarks about what
happened to not just this subcommittee but a number of other
subcommittees last year. Quoting my old philosopher friend,
Archie the Cockroach, he said now and then people are mourned
who are so unlucky they run into accidents that started out to
happen to somebody else, and that is sort of what happened to
this subcommittee and a number of others last year.
Madam Secretary, ordinarily I would want to talk to you
about dairy prices. Last week, as I understand it, the price of
blocks of cheddar cheese on the Chicago Mercantile Exchange
dropped 11.5 cents below the support price, and that translates
into a price of $8.50 per hundredweight for class 3 milk. That
is not going to thrill any farmer I know, and I think it is
obvious to all but the most blind that if the purpose of dairy
policy is to help keep farmers on the farm, it is not going to
work without some substantial changes, but that is not what I
want to talk to you about this morning.
Madam Secretary, I have a serious problem that affects the
entire State of Wisconsin, and I am going to take a little time
to explain it because I have had virtually no help from your
agency in dealing with it, and I have to say the response of
your agency has led me to conclude that it is the petrified
modern-day version of Sleepy Hollow. I have great respect for
you, nothing I say is meant to be personal, nothing I say is
meant to be political. It is meant to be representational, and
let me explain what I mean.
chronic wasting disease in wisconsin
I want to talk about the absolute uselessness with which
USDA has responded to the outbreak of chronic wasting disease
in the State of Wisconsin and your agency's failure to
sufficiently expand testing capacity to provide hunters with
some assurances whether or not the deer they have killed are
infected. The rigidity of your department on this matter has
led to the use by hunters of unapproved tests for CWD being
conducted at uncertified labs who are publishing unconfirmed
results, and this I would add is exactly the result that USDA
states in its CWD position paper that it seeks to prevent in
order to avoid unnecessary public concern and costly regulatory
action.
I think people understand what chronic wasting disease is
and why it is so feared by the general public and by the
farming population. The situation was that on February 28 of
2002 it was announced that routine testing by the Wisconsin
Department of Natural Resources turned up three cases of
chronic wasting disease among the wild deer population in
Wisconsin, the first time it appeared east of the Mississippi,
and since then it has been found in other places.
Deer hunting is a major part of the culture in my State,
and it is a vital element to Wisconsin's economy. In response
to the discovery of the disease, State officials in Wisconsin,
led by the State DNR, devised a plan for greater surveillance
testing of the deer population to determine the extent of its
spread in order to try to control it and eradicate the disease.
Until recently the only approved test has been the
immunohistochemical test, which is costly, slow, and very labor
intensive.
Just before the election last year, the previous Republican
Governor of Wisconsin and the USDA jointly announced that as
many as 200,000 tests would be conducted on Wisconsin deer in
order to provide fee-for-service testing for every hunter who
wanted it. Clearly to do that you have to greatly expand
testing capacity. In preparation for that, the State of
Wisconsin, under the previous Republican Governor, approached
the Marshfield Clinic, located in my district, and asked them
to become involved in testing for CWD. The Marshfield Clinic is
one of the premier medical laboratories in the Nation, and both
the Federal Government and the State government work closely
with it. The National Cancer Institute spends more than $2
million at that institution. The National Heart, Lung and Blood
Institute spends $3.6 million at that institution. CDC is
working with them on the West Nile virus and Lyme's disease
with more than $1 million in expenditures. NIOSH is funding
$1.3 million in activities at that operation. The EPA, the
Navy, the Justice Department are all working with them. It is
good enough for all of them, but it is not good enough for
USDA.
In 2002, Federal research and development expenditures at
that institution totaled $10.7 million with an additional $1.7
million in Federal program support funding. State R&D
expenditures that same year amounted to almost a million
dollars. Marshfield has been designated the State public health
lab for the entire State of Wisconsin by the State. It is good
enough for the State of Wisconsin, but it is not good enough
for USDA.
In response to the approach from the State, Marshfield
invested more than $300,000 to construct bio safety level 2
plus labs to enable it to handle the prions in the way that
they have to be handled. It involves creating a self-contained
facility with dedicated processing equipment, dedicated waste
disposal and distillery equipment for medical and biochemical
waste, a dedicated storage facility, specific airflow and
venting.
By anybody's standards, except USDA's, Marshfield is one of
the leading labs in the Nation. If you don't believe me, ask my
predecessor, Mel Laird, who was Secretary of Defense under
Richard Nixon. Despite all of this, your agency has made clear
that they do not think Marshfield is good enough to participate
in testing on the deer population. It is good enough for human
medical research, but not good enough for the deer. That is
ludicrous.
I cannot understand why instead of utilizing the resources
at Marshfield Clinic, USDA prefers to send tens of thousands of
possibly highly infectious tissue samples thousands of miles
away to less well-equipped laboratories in California or a
number of other States rather than treating those samples in
Wisconsin. We have the ludicrous situation where you are
refusing to approve the premier medical lab in that part of the
country, a lab which is approved to do testing on human
diseases, but apparently not good enough to do testing on deer
diseases.
laboratory capacity
In correspondence with your agency, USDA has argued that
its policy is to use only public labs. My understanding is that
there are currently 14 of those public labs that have been
approved to conduct testing. I will address your rationale for
that shortly, but the fact is if the public labs you have
approved are anything like the State labs in Wisconsin, they
leave a little to be desired in contrast to Marshfield Clinic.
For example, there was a news story about the public State
lab in Madison, Wisconsin which appeared in the Wausau Daily
Herald in March 2002. The story was headed, ``Lab lacks money
to do tests for deer disease.'' The article relates the story
of the lab's 10-year-old electron microscope, essential for
diagnosing viral diseases, a microscope which was purchased at
a garage sale and needs repairing at a cost of $320,000. The
article states that the public State lab will need $1.3 million
to update its core equipment in order to do the testing.
Now, compounding your agency's mishandling of this disease
outbreak with respect to bringing on-line qualified private
labs such as Marshfield is your handling of a rapid test that
would provide hunters with testing on demand. I understand that
Colorado, where CWD originated, has been using a rapid test to
provide hunters with testing on demand for the past few years
but until last year USDA prohibited its use everywhere else.
USDA did provide the go ahead for the rapid test for deer
killed in Wisconsin, but when they did it the announcement
stated that testing could go on only at those public labs
already approved for the IHC test. Unfortunately, according to
the company that manufactures that test, none of those labs
could actually perform the test because they did not have the
necessary staffing, equipment or the funding necessary to
acquire them.
So USDA, according to my information, has created a perfect
Catch-22. It approves the rapid test only for those labs that
can't do the test, and they maintain a prohibition on labs such
as Marshfield Clinic that can do the test. I would like to know
if outside of Colorado there is currently any testing being
done using the rapid test at any of the approved labs.
Finally, in the most recent example of USDA's incompetence,
Marshfield received a blanket purchase agreement from USDA
dated January 30 indicating that the USDA would be sending
tissue samples to Marshfield for testing. Had USDA finally seen
the light? Unfortunately, no. Because when Marshfield Clinic
responded to USDA's letter, Marshfield was then told, whoops,
their letter was a mistake and subsequently it was cancelled by
USDA.
So what is the USDA rationale for this ludicrous situation
where the finest private labs that are well-equipped, staffed
and capable and eager to do the testing are prohibited from
doing so? As best I can make out, USDA's argument is as
follows: A letter from Bill Hawks, Under Secretary for
Marketing and Regulatory Programs, dated December 3, 2002,
refers to seven State labs having agreed to conduct CWD testing
on a fee-for-service basis for interested hunters and
expressing the belief that the additional testing capacity will
meet the testing needs of hunters.
I would say if that is so, how do you explain the thousands
of hunters who have purchased unapproved private testing kits
and sent samples to uncertified labs which have published
unconfirmed positive results for CWD. Clearly, if your efforts
had been sufficient those hunters would not have felt compelled
to purchase those unapproved test kits.
surveillance testing on deer
With respect to surveillance testing, in a letter to the
Marshfield Clinic dated February 11, John Clifford, Associate
Deputy Administrator in Mr. Hawks' department, said, ``Limiting
validation to Federal and State laboratories with which we have
already established relationships ensures that any necessary
regulatory actions can occur swiftly and consistently. Federal
and State labs, unlike private laboratories, have a direct
reporting relationship and are better integrated with the
Federal and State regulatory officials who have the legal
authority to institute appropriate disease control measures
such as restricting animal movement and ordering animal
depopulation.''.
He continues, ``The validation process for eligible
laboratories include several levels of inspection. Our agency's
veterinary service program requires inspection of laboratory
facilities to ensure the proper bio security protocols are in
place for receipt and handling of any restricted pathogen. We
also conduct compliance inspections after a laboratory has
received restricted pathogens.''.
I would like to point out that in July, Marshfield's
laboratory was inspected by the USDA, and it was clear from the
remarks of the inspecting veterinary medical officer, Dr. Tim
DeVoe, that Marshfield laboratories ``not only meet but exceed
the standards set by USDA for that purpose.'' yet they are not
being approved.
I would also note that the explanation suggests if you want
to eradicate a disease the first thing you do is to limit the
testing only to public labs. That seems to be counterintuitive.
It is exactly backward. Second, with respect to the validation
process, I see nothing in USDA's inspection and security
reporting protocols that cannot be as easily applied to private
labs as they are to public labs.
Furthermore, the central point in this rationale appears to
be that necessary regulatory actions can only occur swiftly and
consistently with respect to Federal and State labs because of
a ``direct reporting relationship'' with officials who have had
the legal authority to institute appropriate control measures.
My questions are: Why can this not be done with private
labs? What regulatory actions cannot occur with private labs?
What legal authorities don't you have over private labs? What
reporting relationship cannot be replicated by private labs?
Are you saying that the protocols that Marshfield Clinic has in
place for research on sophisticated research on human diseases
like cancer, heart disease, West Nile virus, Lyme's disease,
all of that work being done with NIH and CDC, are you saying
that those protocols are not adequate for testing on deer
samples under your pristine and precious agency? I mean, are
you saying that labs like Sloan-Kettering and Marshfield and
Mayo are not as qualified as some public labs to do this
testing? That is ludicrous. How goofy can your agency get?
I don't expect you to reply here because this is frankly an
ambush. I have communicated with your agency for 6 months on
this issue and gotten no response whatsoever that was anything
but gibberish, and neither has Marshfield clinic. You may not
be embarrassed by USDA's obtuse actions, but I am. I want to
know why your agency is preventing Wisconsin from doing what it
wanted to do at the onset of this outbreak, which is to go to
the best damn lab in our State for testing to make certain that
we did not get the very false positives that your agency says
that they do not want to see. Now we have those false positives
because there were no sufficient laboratory tests, so farmers
and hunters went out and they got these unapproved tests. They
developed false positives, and now you have the very public
panic that you say you were trying to avoid. I have never seen
such incompetence in my life. It is pitiful.
Thank you, Mr. Chairman.
Mr. Bonilla. Mr. Obey in advance of the hearing did ask as
a point of privilege to go beyond his normal time that we would
allow on the subcommittee. We were happy to indulge.
If the Secretary would like to respond briefly, that is
your prerogative.
Secretary Veneman. Mr. Obey, we do take your concerns very
seriously, and I appreciate the fact that you have put such
detail into the record today. I am going to go back and ask
APHIS to review your questions and the details that you have
outlined.
[The information follows:]
Upon returning to the Department, I reviewed your concerns
about USDA's policy regarding pest and disease testing by
private laboratories. Accordingly, I have directed USDA's
General Counsel to lead a group consisting of the Under
Secretary for Marketing and Regulatory Programs, the Under
Secretary for Food Safety, and the Under Secretary for
Research, Education, and Economics to review that policy and
report to me on possible changes.
Mr. Obey. Why do I have to do this in order to get you to
do what I have been asking you to do for months?
Secretary Veneman. I appreciate what you are saying. I feel
very strongly about strengthening the overall laboratory
capacity. This is an issue which has come to the forefront,
particularly since the incidents of 9/11. We need to make sure
that we have strong laboratory capacity for a whole array of
issues. We feel strongly about that. It is part of protecting
the infrastructure of agriculture, and it is something that we
take very seriously. We will look at this issue and the legal
issues that you have raised and the legal questions, and we
will get back to you.
Mr. Obey. That is what I have been asking you to do for
over 6 months. It is about time.
Mr. Bonilla. Thank you, Mr. Obey. We will proceed with the
5-minute rule on questioning, and I ask members to abide by
that. When I hit the gavel, we will recognize members in order
of seniority, and if they arrived later, we will recognize
members in that order.
I ask Members to please turn off any electronic devices,
such as pagers and cell phones. That helps us proceed. We do
not expect to be interrupted in this hearing with any votes at
all on the House floor, so we are fortunate in that regard. I
do plan on ending this hearing at noon.
Madam Secretary, you may proceed.
budget overview
Secretary Veneman. Mr. Chairman, thank you very much.
I do appreciate being here with you and the other members
of the committee. I would like to thank the subcommittee for
your ongoing relationship and your support of our Department. I
think that we have a long history of cooperation between this
committee and the Department to support American agriculture
and the other mission areas that we are involved with.
We have submitted a formal statement for the record and I
ask that it be included in the record, but before I provide
some of the budget highlights today, I wanted to just touch
upon a few issues which have been in the forefront of our
Department and on the minds of the farmers and ranchers in
recent weeks.
disaster assistance
First, as you said, we had a very unusual appropriations
process. As part of that appropriations process, as part of the
2003 omnibus package, there was additional money added in for
disaster assistance. On Thursday, the President signed the
legislation, and on that day we also established a disaster
assistance working group within USDA to work on the disaster
assistance programs. This is going to be patterned after our
Farm Bill working group that we believe has worked so
effectively as we have worked to implement the Farm Bill that
was passed last year. Their charge is very clear. We want to
make sure that implementation of the disaster assistance
program is a farmer friendly process and make sure that the
program benefits reach the producers as quickly as possible.
livestock compensation program sign-up
Sign-up for the additional benefits associated with the
Livestock Compensation Program will begin April 1. That is for
the Livestock Compensation Program, which we started last year.
Also the sign-up for tobacco crop losses will begin March 17
with sign-up dates for the other programs in the near future.
The other programs are ones that we are going to have to
design and determine exactly what the criteria are. So they
will take a bit longer.
USDA has launched a disaster assistance implementation Web
site which contains basic program information, and it has
announcements on sign-up questions and answers and is inviting
public comment onto the Web site on the implementation of the
disaster assistance provisions.
farm bill implementation
I also want to touch for a moment on the Farm Bill
implementation. I know that has been an issue that many of you
and your farmers and ranchers have been concerned about. We
continue to make good progress on implementation of the Farm
Bill. Sign-up for base and yield adjustments ends on April 1,
and our county offices are working very hard to ensure that
producers are signed up. I must say that our people out in the
field have really been doing yeoman's work to get the farm bill
implemented and to get the benefits to our farmers and
ranchers. It is not an easy process. There are lots of changes
in this Farm Bill, but they continue to do the best job that
they can to get the job done as quickly as possible.
This week we made an announcement on many of the 2003 crop
loan rates. Those are the earliest that they have been made in
recent history.
dairy export incentive program
In addition, not related to the Farm Bill, we also have
announced the third allocation this week under the Dairy Export
Incentive Program for the 2002-2003 year. This additional
allocation will help U.S. dairy farmers improve their
competitive position and build sustainable, international
markets.
If I can move on to the budget and provide a quick overview
of this Administration's proposals before taking questions.
2004 president's budget
The 2004 budget focuses on key priorities for USDA.
Ensuring a safe and wholesome food supply and safeguarding
America's homeland, continuing rapid implementation and
diligent administration of the 2002 Farm Bill, including
providing record amounts for conservation funding and
protecting natural resources, providing unprecedented funding
for a food and nutrition safety net, expanding agricultural
trade, expanding housing for rural citizens, investing in
America's rural sector, and improving USDA's program delivery
and customer service.
The 2004 budget calls for $74 billion in spending, an
increase of $1.4 billion, or about 2 percent above the level
requested for 2003. This is approximately $5.4 billion higher
than the actual level for 2001, and represents a growth of 8
percent since this Administration took office. Discretionary
outlays are estimated at $20.2 billion, about a 1 percent
change, or $300 million below the 2003 requested level. The
request before this committee for fiscal year 2004 amounts to
$15.5 billion.
food safety programs
The budget seeks record level support for USDA's Food
Safety and Inspection Service, the meat and poultry food safety
programs, as well as the increases to strengthen agricultural
protection systems. These areas of our budget have been top
priorities for this Administration since we came into office,
and particularly since the events of September 11.
FSIS funding will increase to a program level of $899
million, an increase of nearly $42 million over the fiscal year
2003 requested level. This represents $117 million, or a 15
percent increase, in these food safety programs since fiscal
year 2001, when the Bush Administration took office. The $899
million level for FSIS is comprised of $797 million in
appropriated funds and new fees for inspection services beyond
an approved inspection shift.
In addition, existing user fees are expected to generate
$102 million. This will fund 7,680 food safety inspectors, an
increase of 80 inspectors and provide specialized training for
the inspection workforce, increase microbiological testing and
sampling, strengthen foreign surveillance programs and increase
public education efforts.
homeland security
Regarding homeland security and agricultural protection
systems, the budget includes nearly $47 million in new funding
to strengthen laboratory security measures, to conduct research
on emerging animal diseases, improve biosecurity and develop
new vaccines, create new biosecurity database systems, and
continued development of the Unified Federal-State Diagnostic
Network for identifying and responding to high risk pathogens.
animal and plant health inspection service
For the Animal and Plant Health Inspection Service, we are
requesting increases of about $30 million above our 2003
request for inspection services, including expanding the
availability of foot-and-mouth disease vaccines, providing
additional protections against chronic wasting disease and
poultry diseases, and expanding diagnostic and other scientific
and technical services.
In addition, $200 million is requested for the National
Research Initiative, including funding for genomics research.
The President's budget supports the continued implementation of
the 2002 Farm Bill. As I indicated before, we have made good
progress so far, but we could not have done it without the
tremendous efforts of our staff from Washington and in the
field. Funds are provided in the budget to support continued
implementation efforts.
conservation programs
We are now in the process of implementing the largest and
most wide-reaching Farm Bill conservation title ever, which
represents an unprecedented investment in conservation that
will have significant environmental benefits. Total program
level funding for Farm Bill conservation programs increases
from about $2.2 billion in 2001, when this Administration took
office, to nearly $3.9 billion in 2004. This includes $3.5
billion for financial assistance and $432 million for
conservation technical assistance in 2004 in support of Farm
Bill implementation, which is an overall increase of $582
million over 2003.
I might add that the Department recently issued the
proposed rule for the EQIP program for public comment. We have
also issued an Advance Notice of Proposed Rulemaking regarding
the Conservation Security Program so we are making good
progress in the implementation of some of these major
conservation programs.
food and nutrition programs
The fiscal year 2004 budget reflects the Bush
Administration's continued commitment to the nutrition safety
net by including a record $42.9 billion for domestic food
assistance programs, a $1.7 billion increase over the requested
level for fiscal year 2003. The President has often said this
is a compassionate administration, and our continued support
for these programs demonstrates that continued commitment. The
budget supports an estimated 21.6 million food stamp
participants. It supports a record level of 7.8 million low
income, nutritionally at risk WIC participants. It supports an
average of 29 million school children each day in the National
School Lunch Program. Particularly with the WIC and school
lunch programs, we are reaching more Americans and helping to
educate more people about healthy eating and stressing the
importance of balanced diets. It is part of the President's
Healthier U.S. Initiative.
The budget also includes a $2 billion contingency reserve
for food stamps, and a $150 million contingency reserve for WIC
to be available to cover unanticipated increases in
participation of these programs. A high priority of the
Administration is reauthorization of the child nutrition
programs and WIC this year to ensure stable and adequate
funding for the programs and to improve the nutritional intake
of participants.
This week I unveiled some of the Administration's
principles regarding reauthorization, to include ensuring that
all eligible people have access to these important programs,
working to provide more incentives to schools to provide
healthy choices, including examining innovative approaches to
do so, and ensuring continued program integrity.
foreign market development programs
The fiscal year 2004 budget continues a strong commitment
to export promotion and foreign market development efforts by
proposing $6.2 billion in spending. Since this Administration
took office, these programs have experienced significant
growth, increasing by $957 million, or an 18 percent increase
over fiscal year 2001. Included in our trade budget is funding
for USDA's market development programs, including the market
access and cooperator programs, which are increased by $15
million over fiscal year 2003. The budget requests a new
centralized fund of $6.6 million to support the agency's work
in addressing important cross-cutting trade issues and
compliance monitoring, dispute resolution and biotechnology
activities within the Department of Agriculture.
The program level of $4.2 billion is provided for the
Commodity Credit Corporation export credit guarantee
activities. Nearly $1.6 billion is requested for U.S. foreign
food assistance activities, including $50 million for the
McGovern-Dole International Food for Education and Child
Nutrition Program, which builds upon the pilot program, the
Global Food for Education Initiative.
rural development programs
We have worked hard in this budget to provide funding to
increase rural homeownership and to enhance the economic
opportunities and the quality of life in rural America. The
Administration proposes spending $11.9 billion for rural
development programs. This budget supports the President's
Homeownership Initiative with particular emphasis on minority
family homeownership. The initiative provides more than a 40
percent increase for single family housing. Nearly $4.1 billion
is requested for direct and guaranteed section 502 single
family housing loans compared to an estimate of $2.8 billion
for fiscal year 2003.
The President's budget will provide 49,000 new
homeownership opportunities for low and moderate income
families in rural areas. In addition, the water and waste
disposal program is maintained at the requested fiscal year
2003 level of $1.5 billion.
usda strategic plan
The budget supports the Department's strategic plan and
supports several management initiatives to better integrate
computer systems and technology to provide the Department's
constituents with enhanced ability to access records, sign up
for crop benefits and other program benefits, to access USDA
studies and economic information, and to respond to USDA
surveys. These initiatives will also provide USDA employees
with the necessary tools to efficiently operate and deliver our
services.
Our attention to financial management paid off with--as you
recognized, Mr. Chairman, and we appreciate that--the first
ever clean opinion on the Department's financial statements and
significant reductions in delinquent debt. We are proud of this
accomplishment. It has taken a tremendous amount of effort on
the part of our CFO, Mr. McPherson, and the team he has been
working with to achieve this. It was not an easy task within
USDA.
civil rights budget
We are also providing increased focus on efforts to
eliminate discrimination. The budget requests $800,000 to fund
the new Office of the Assistant Secretary for Civil Rights. We
appreciate the funding that was provided by the Congress in
2003 for this office. The President recently nominated Mr.
Vernon Parker to be the new Assistant Secretary for Civil
Rights and we are working with the Senate committee to try to
get speedy confirmation for Mr. Parker so he can officially
begin his new duties.
That completes my overview of some of the key points of
this budget as well as an update of some key priorities within
the Department. I thank you, Mr. Chairman, and all of the
members of the committee for the opportunity to be here this
morning. We look forward to working with the committee.
Our team at the USDA is available in the coming months to
provide more budget details and information on the important
issues that we are discussing. I thank you again very much, and
I will be happy to respond to the committee's questions.
[The prepared statement of Secretary Veneman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OUTSOURCING
Mr. Bonilla. Thank you, Madam Secretary. The first question
I have is about the outsourcing of microbiological and chemical
testing. The principle is related, but the function is
different, but this relates to what Mr. Obey was talking about
earlier that dealt with his particular area.
I have been working on this for a while. With the concern
that we have now for national security, we need more operations
that are available to do this kind of work. It has been done at
USDA for a long time, and we appreciate that. We are not trying
to eliminate anybody's job. Secretary Murano has been very
supportive in this area, so I am stumped on why we cannot move
forward on some outsourcing. We have been working on this for a
long time. Quite frankly, if it is not done this year
expeditiously, we will more than likely try to address it in
this bill. I would like to hear your views and why we can't
move quickly on this.
Secretary Veneman. Mr. Chairman, I appreciate your
question, and we are moving to expand our laboratory capacity
through partnerships. I must say that there has been, in the
Federal Government, or at least in our Department, a bias
towards using Federal labs only. I think 9/11 has given us the
impetus, as I mentioned in response to Mr. Obey, to look more
broadly at laboratory capacity and to look at where the
resources are in this country.
Having been in a State Department of Agriculture and
knowing the capacity of our state laboratory, which was in
conjunction with the University of California at Davis, I know
that we have tremendous capacity in laboratories outside the
Federal Government. We are continuing to look at opportunities
to partner with other laboratories, to utilize resources, and
to create the kind of overall infrastructure in this country
that we believe we need, particularly if we were to look at
some kind of very, very expanded outbreak of a disease, for
example, or one that was intentionally introduced. We need to
continually look at our lab capacity, and that is one thing
that we are working on in the Department. We look forward to
hearing from you and working with you.
Mr. Bonilla. Very good. This is not designed to take
anyone's position away. With outsourcing, you may need some
labs one year, and you may not need them the next year. This
makes it also more efficient, makes the whole process more
efficient.
I yield to Ms. Kaptur, and I remind members to adhere to
the 5-minute rule.
Ms. Kaptur. Thank you, Mr. Chairman.
NUTRITION LABELING
Two bookkeeping items. Madam Secretary, we commended the
Food Safety and Inspection Service for having proposed 2 years
ago the amendment of regulations dealing with nutrition
labeling of poultry and meat, and I have for you today a letter
signed by several Members of Congress, including members of
this subcommittee, urging OMB to promptly review the FSIS
proposal and issue the final rule this spring, and I am
requesting unanimous consent to have a copy of the letter
included in the record and invite the Secretary's cooperation
in urging OMB to move this quickly.
Mr. Bonilla. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
BIOFUELS/RENEWABLE FUELS
Ms. Kaptur. Thank you. I would ask Mr. Collins to get his
calculator out. My fundamental question of this panel this
morning is what percent of farm income today relates to Federal
subsidy as opposed to earning income from the market? You may
not have that right at the tip of your fingers, but I am going
to say to the Secretary that as I listened to your testimony, I
kept thinking back to an article that I read in the Washington
Post, the first sentence of which is, ``American oil refineries
have dramatically increased their reliance on Iraqi crude even
as the Bush Administration steps up preparations for a military
attack against Baghdad to offset a shortfall in oil imports
caused by a recent political crisis in Venezuela.''
I have to say in anticipating the numbers that Mr. Collins
is going to give us, I am extraordinarily disappointed because
we have talked about this before. In your testimony today the
whole issue of new industries for agriculture, especially
biofuels, is not even mentioned. Not only is it not mentioned,
but in the backup material that was submitted to us for the
testimony today we asked the Department to prepare for us a
budget proposal that goes across every single instrumentality
within USDA and essentially the budget you are presenting to us
today defunds some of the mandatory funding provided in the new
energy title of the farm bill. According to the budget cross-
cut we have been presented from your Department's Budget
Office, the Departmentwide effort with respect to bio-based
products is a reduction of over $70 million from last year's
level of $295.2 million, which I considered extraordinarily
inadequate to a level of $225.6 million.
When I couple this with the President's national energy
plan, which did not have one of its more than 100
recommendations being a specific charge to the U.S. Department
of Agriculture, I am of the conclusion now that the Bush
Administration does not wish to use the powerhouse of fiber and
grain in this country to produce new fuels. I find this
appalling. It makes me angry.
I would like to know, Madam Secretary, what you will do, in
spite of the budget you presented to us, to demonstrate
commitment beyond announcing a few loans and grants for
localized projects to help our country move into a new fuels
age based in the soil?
Secretary Veneman. I appreciate your question because I
want to reassure you that this Administration is absolutely
committed to renewable fuels.
As you know, the President has continued to support
renewable fuels. It was something that was clearly stated in
the President's energy plan with regard to the use of renewable
fuels. We continue to have more and more capacity for renewable
fuels. The California waiver that was requested was not granted
on the MTBE issue, which gave more opportunity for ethanol. In
addition, the Administration has supported very strongly the
renewable fuels standard which was in last year's energy bill
that would substantially increase the market for biobased
fuels. So we are very, very supportive.
In addition, I think some of the numbers are very
interesting, and I will have Dr. Collins follow up on this as
well. It is estimated that about 10 percent of our corn
production this year will go into the production of ethanol, if
I am not mistaken. We think that is a very positive sign for
ethanol, and we are going to do everything that we can to
continue to support and expand the production of biobased
fuels.
The renewable fuels standard, which as I said is in the
energy bill, is one of the most important tools that we can
have to expand the use of bio-based fuels.
Mr. Collins. Ms. Kaptur, our energy strategy takes place on
several fronts. One front is through energy legislation, and I
think the Department of Agriculture has had a strong voice
within the Administration to support many of the provisions
which have been in, for example, the Senate energy bill, which
has a renewable fuels standard.
The second aspect is our underlying basic research. In
2003, we did ask for increases in our basic research for ARS
and the Forest Service for bioproduct and bioenergy research.
There were small increases in 2003 and we maintain that level
for 2004.
The third aspect, and one where we do have some difficulty,
is in the energy title of the Farm Bill. Much of the decline
you talked about in spending on energy at USDA is captured in
section 9010 of title 9 of the Farm Bill, which is the CCC
bioenergy program. The Administration did propose $100 million
in funding for that program, as opposed to $150 million in the
previous year. So that accounts for a big part of that decline.
The 2003 appropriations bill provides us $115.5 million for
that provision so we presumably will be spending more than what
we proposed, but less than what is authorized by the Farm Bill.
There are other parts of the Farm Bill that we are fully
funding. For example, the Biomass Research and Development Act
at $14 million a year is fully funded, and is an important
program that we run jointly with the Department of Energy.
Ms. Kaptur. The President's proposal on the hydrogen fuel
cell car provides a 120 percent increase to that title in the
Department of Energy, but it comes out of the biomass program,
which is reduced by 28.5 percent. That is DOE's biomass
program.
Mr. Bonilla. Thank you. Mr. Latham.
Mr. Latham. Thank you, Mr. Chairman.
AMES, IOWA MODERNIZATION PROJECT
Welcome, Madam Secretary. I know this is going to be a real
shock to you to talk about the Ames modernization project for
the National Animal Disease Center. The conversation that we
had this morning talking about the urgent need for
modernization for labs, for capacity, I think really brings to
mind how important it is. Obviously, it is of significant
concern to me to see in the budget proposal that there is no
funding request for the continuation of the modernization.
In a report last May 2002, there is a note that says under
the master plan, construction of the animal health facility
will be delayed if less than $331 million is appropriated in
the 2004 bill. Obviously we have gotten some additional funds
since then so the entire $331 million would not be necessary. I
would like to know what the justification is, for a zero
request, and how long this project is going to be delayed. It
is absolutely critical today with the situation we are in
following 9/11 that this project be completed on time. I would
like to hear your thoughts on it.
Secretary Veneman. Congressman, I absolutely agree with you
that Ames is a priority for the U.S. Department of Agriculture.
We have put a substantial amount of money into the
modernization plan. We had about $124 million which has been
provided to the Agricultural Research Service by Congress in
fiscal year 2001 and fiscal year 2002, and we have aggressively
moved ahead. We have moved the shopping center facilities, that
have been under some scrutiny, and we also have about $14
million received by APHIS in 2002 to continue that project.
This is a budget that obviously we have to make some
difficult priority-setting decisions, and we want to continue
to work with you and with the committee to try to set those
priorities as we work through this budget process. But
certainly Ames continues to be a priority. The money which has
been allocated continues to be spent, and the projects are
underway. We believe that over time we will need to get
additional moneys in the budget to continue to fund the Ames
projects that are outlined in the master plan.
Mr. Latham. My concern outside of zero in the request is
that apparently there has only been about $10 million obligated
of all of the money appropriated. Why isn't it moving? I think
this is the largest public works project which USDA has
attempted, but it does not seem like it is moving.
Secretary Veneman. My understanding is that they are moving
as quickly as possible under the current plans. Obviously you
have seen it since I have, and I will certainly talk to our
people about whether or not there is any impediment to them
moving more quickly. As you say, there is money in the fund now
to continue some of this construction, and we will see if there
is anything that we can do to move the construction along more
quickly.
Mr. Latham. You are aware, obviously, if we do delay this
and do not go with the accelerated plan, where we are talking
about $430 million, the cost goes to a minimum probably $451
million. From there delays run the cost to $548 million,
depending upon the length of delay for this project. With the
commitments that I have had from the administration as far as
funding the project, I am surprised that there was not enough
money in the request.
Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Latham.
Mr. Hinchey.
Mr. Hinchey. Thank you, Mr. Chairman. Good morning, Madam
Secretary.
DISASTER ASSISTANCE PROGRAM
I want to ask you about the disaster assistance program.
The omnibus appropriations bill contained $3.1 billion in
disaster assistance for farmers who lost crops due to bad
weather and other conditions last year. The bill was signed by
the President in spite of the fact that he criticized that
particular portion of it. He said some things that were
critical of the disaster provisions in the bill.
Last fall, there was a decision made to compensate
livestock producers, and the compensation that was provided to
those producers was funded out of disaster provisions, but
rather out of section 32 funds. Those section 32 funds are not
designed to provide assistance for disaster relief, but they
are intended for purchases of surplus fruits and vegetables. I
am wondering what the impact of taking that money out of
section 32 is and how much money is left in that fund.
At the time the livestock assistance program was announced
last fall out in South Dakota, it was estimated that it would
cost in the neighborhood of $730 million, but the last estimate
has it closer to $1 billion. The disaster assistance provisions
in the farm bill replenished only $250 million of that.
Obviously it has been depleted by some substantial amount. I
wonder if you can tell us how much is left in the section 32
account at this moment.
Secretary Veneman. The reason this program was implemented
last year is because there had not been any congressional
action on disaster, and some of the farmers and ranchers that
were most underserved in terms of having crop insurance and
risk management tools were the livestock producers.
We looked at constructive ways to try to address some of
those needs, and that is where the Section 32 program came into
effect. The livestock compensation program has been extended in
this disaster provision. It was just added to the 2003 bill,
and we will implement that as quickly as possible with sign-up
to begin on April 1st for that particular component of the
disaster bill.
In the 2003 appropriation, $250 million was added back into
Section 32, giving us the ability to meet all of our
obligations for the feeding programs and so forth.
Particularly there was some concern about The Emergency
Food Assistance (TEFAP) program. We have increased our TEFAP
spending; for example, in this Administration, for the last 3
years funding has been close to a billion dollars. That is
compared to the previous 3 years before we came into office for
a combined 3 year total of just over $600 million.
So we have put a lot of emphasis on these programs. We have
continued to work diligently to try to provide for those in
need, and we do believe that with the $250 million, we will
have adequate resources.
Now, as far as what is in Section 32 at this very moment, I
will have Mr. Dewhurst go through the numbers.
Mr. Hinchey. The comparison is interesting, but in those
years the economy was a lot better. So it is a little bit
disingenuous to make comparisons based upon the situation that
existed then.
Secretary Veneman. But I believe these are the highest
levels that have ever been put into TEFAP.
SECTION 32 FUNDS
Mr. Dewhurst. Congressman, just for your information, for
Section 32 for the current fiscal year, with the addition of
the money in the omnibus bill, there is a total of about $1.4
billion available for surplus purchases and other uses of
Section 32; $937 million of that is set aside for the Livestock
Compensation Program that you talked about. That leaves
something in excess of $400 million available for surplus
removal. That is essentially consistent with the historic
amounts of money we have used in Section 32 for that purpose.
So with the assistance of the bill, we are able to proceed with
our business in the normal way.
Mr. Hinchey. So $400 million is available for such
purchases as, say, fruits and vegetables for school lunch
programs and things of that nature?
Mr. Dewhurst. Yes, sir.
Mr. Hinchey. You believe it is adequate?
Mr. Dewhurst. It is consistent with what we have done every
year. Yes, it is adequate.
Mr. Hinchey. The danger, of course, is that the money was
spent before we knew that it was going to be reimbursed by
Congress. That placed that program in a precarious situation,
and the way it was done, frankly, raised a whole lot of
questions about political motivation, and where it was
announced, the timing of the announcement. I want to make that
stipulation, that this is an important program.
Section 32 is important to the people that I represent. And
it is important to, I know, people in Washington State and a
number of other places across the country. So we would not like
to see that fund depleted for political purposes.
Mr. Bonilla. Thank you.
Mrs. Emerson.
Mrs. Emerson. Secretary Veneman, thanks for being here.
Well, there are several questions I have, all over a different
scope of issues.
VALUE ADDED GRANTS
But let me ask you first, the Administration has zeroed out
the budget for one of the most important rural development
programs, I think; that is, the value added development
programs. I mean, we are only in the third year of this
program. It has held a whole lot of hope for agriculture, for
the future of our very rural communities. I really would like
to get a justification for why that has been cut.
Secretary Veneman. First of all, I agree with you that
those value-added grants are a very useful tool for rural
America, for farmers and ranchers, to look at new opportunities
for marketing their products.
We have some money in the budget, in the discretionary
budget, for the value-added grants. There was a program that
was included under the 2003 Farm Bill, basically an earmark out
of the Farm Bill for a value-added grant program that is not
continued into this year.
We have several programs that were in the Farm Bill that
were funded for the 2003 fiscal year that didn't carry over in
the 2004 budget. However, we did put some money into the
discretionary side. But, of course, with just limited
discretionary resources, we weren't able to fund it at the
level that the mandatory side gave us through the Farm Bill
last year. But we do know the value of that program, and have
provided some funding for it.
Mrs. Emerson. Can I take it that if our committee would
decide that more money should be placed into that program, that
you would not be opposed to that?
Secretary Veneman. No. We support this program. We want to
work with you on setting the priorities on this budget.
Obviously, this is the budget that was developed for the
various programs, but we want to work with you.
Mrs. Emerson. I appreciate that, because I have so many
producers who need additional opportunities, and they are--all
of the programs combined still don't provide enough resources
to help our folks. At least if we are asking them to take that
big of a risk, I want to be sure there is a little bit of a
safety net there. So I appreciated that.
Now, when you were speaking, and I apologize for having to
leave for a few minutes, you mentioned that, you know, things
are progressing real well with farm bill sign-up and the like.
And I know it has just been a nightmare for everybody; not only
your employees, who, I might add, are doing on our local level
the most incredible, fantastic job I have ever seen----
Secretary Veneman. Thank you for the compliment.
FARM BILL SIGN-UP
Mrs. Emerson [continuing]. Are way overworked, and we could
use some more people to help them. But it has taken lots of my
producers, it has taken a half a day to three-quarters to a
full day to get their farms signed up in this program. And I am
worried about this April 1st deadline. Forgive me if someone
else asked that question.
Some of our offices aren't halfway done in my district. How
are you going to respond if we can't meet that April 1st
deadline?
Secretary Veneman. The April 1st deadline is very
important. It is not going to change, because we have to have
some certainty in the process. I asked my folks this yesterday,
and I am informed that the appointment books are not yet full.
So there are still appointments available in virtually every
place in this country.
Now, if it comes to a point where there are areas of the
country where there is a big crunch, and we don't have the
people signed up, we will move resources. If a particular
county has people that are pretty much finished, we will bring
those people over for a week or two to help with areas that may
be a little bit more behind the curve, but we are committed to
getting this done.
I might add that we asked for considerably more money to
implement this Farm Bill, which we were not given, and we have
still managed to implement it. As you say, our people are
spread to the limit, and I appreciate the fact that you
recognize what they have been going through.
We received another $70 million in the 2003 bill that was
just passed, but it is going to take some time to hire those
people and to train them. Right now we have a lot of temporary
staff such as retirees who have come back to help, but we will
deploy resources as we need to get the job done.
Mrs. Emerson. We only have a month left when you think
about it.
Secretary Veneman. But the pace of sign-up is continuing to
increase all of the time. So we are fairly confident that we
have got the processes in place to get it done.
Mrs. Emerson. I hope you will feel that you can ask us for
more help, temporarily even, if you need it, because I am very
concerned in spite of the fact that they are doing a terrific
job.
I will wait for the second round.
Mr. Bonilla. Thank you.
Before I yield to Mr. Farr, Ms. Kaptur asked for a very
brief comment.
Ms. Kaptur. Thank you, Mr. Chairman.
I want to say I associate myself with what Mrs. Emerson has
just said. Our office just yesterday received a call from an
Ohio producer who said he could not even get an appointment
until sometime in May, even though the program sign-up deadline
is April 1st.
So many of our States and locations are overbooked. Thank
you for bringing that up.
Mr. Bonilla. Mr. Farr.
Mr. Farr. Thank you, Mr. Chairman.
First of all, I want to say how pleased I was that the
President appointed you as Secretary of Agriculture after
serving as Secretary of Agriculture in the great State of
California, which is the biggest producer of agriculture in the
United States. And I am sure as the State director you were
aware of the myriad of bureaucracy that is in a lot of our
delivery programs.
I was impressed in your testimony that you said on page 18
that one of the goals under food and nutrition is ensuring
access to meals for all children, and I think that is really
important that we focus a little bit on that, and it seems to
me that you don't. Sixty percent of the entire USDA budget is
in the Food and Nutrition Service, yet we spend the majority of
our time talking about commodity programs and emergency
payments. We talk a lot about growing and very little on
feeding.
NUTRITION PROGRAMS--MEANS TEST
And I want to applaud you on your statement that you wanted
meals for all children, because what appalls me is that the
economy of this country has put a lot more children into the
hunger status, into the poor status, because the economy is so
rotten.
These are entitlement programs, and we doled out last year
$3.1 billion in emergency aid to farmers who weren't even
entitled to it just because they happened to live in a county.
We didn't have any means test. We didn't say, do you need the
money? Are you poor? Is this going to help you? You just got it
because you were in a certain county that was declared a
disaster.
But you go on to say on the same page, right after it, that
you are going to--the studies of national surveys suggest that
a significant number of children approved for free and reduced
price meals are from ineligible households. That may be true,
but it doesn't say anything about whether these ineligible
households feed their children. It doesn't say how the program
is administered when the children come through the school lunch
line.
I have got a task force at home called the Hunger Task
Force. We are involved in every one of the commodity programs,
the nutrition programs, and what I am learning is that it is an
incredible bureaucracy. What happens in a school is children
come to the lunch program, and you have to single them out
there as they are standing in line; say, you have to pay for
this meal, you don't have to pay, you have to pay. It is
absolutely demoralizing. It is ridiculous.
Do you know what teachers do? They take the money out of
their pocket, and they pay for the kids. We ought to be
eliminating that. If we can give farmers $3.1 billion without
even having to show that they are rich or poor, and yet we are
singling kids out in line, and your Department is going to go
on and find out that there are more accurate certifications to
help ensure that resources are targeted correctly. The
resources are targeted correctly right now. The problem is this
means test. We don't means-test those kids when they get on the
bus to go to school. We don't means-test those kids when they
go into the library to check out a book. We are going to means-
test them when they come and say, I want lunch or breakfast?
Reauthorization is up this year. I hope this Department
will come in and say, look, the U.S. Department of Agriculture
is about feeding hungry people, and we want to make sure that
we feed them from prenatal with WIC to the grave with Meals on
Wheels, and that we ought to eliminate the incredible amount of
bureaucracy that is in this program, because the people at the
local level, and you know this from being a State director, are
doing a heck of a job. But their hands are so tied that we
would get a waiver so that the kids--the school lunch program
and school breakfast program had to be qualified separately,
run separately, certified separately. And that waiver is in for
two school districts in the entire country. I hope it is lifted
for the Nation.
But my question to you is are you really going to put this
onus on kids to try to figure out--if they are eligible when we
are not means-testing farmers for bailouts?
Secretary Veneman. I appreciate your question and your
focus on these programs, because, as you say, this is a very,
very big part of our budget, and they are also up for
reauthorization this year. It is something we are beginning to
really focus on in our Department and we want to work with the
committees in both the House and the Senate to do that.
This week I made a speech which outlined some very general
principles we are looking at in terms of those programs. One is
to ensure that all eligible children benefit from the child
nutrition programs and receive program benefits, making sure
kids who are entitled aren't being left behind, and to focus on
streamlining, some of the ways that this program is
administered. We are looking at the various aspects of the
program to determine how we best do that. We haven't yet made a
determination, but, given the work you are doing in your area,
I would like to have our folks have the opportunity to visit
with the appropriate people and to benefit from the research
that you all are doing.
The second aspect is to support healthy school
environments, to make sure the children are getting healthy
school lunches. We are talking about how to possibly provide
some financial incentives for healthier eating. We have had a
pilot program that was part of the Farm Bill for putting more
fruits and vegetables in certain schools, and we have done
that, in four States, and the Zuni Pueblo in New Mexico. It has
been very, very well received, and we have heard very good
stories about the fact that children like having access to the
fruit.
In fact, a mother in California walked up to me the other
day and said, our children--she is a teacher--she said, our
children need snacks in schools. I told her about this program
that was being piloted. She was very positive about the
opportunities to put more snack fruits and vegetables into
schools for kids, and about the healthier eating.
And finally, we want to do everything we can to ensure the
program integrity, and to be sure that programs are operated
properly. So we certainly, given your interests, look forward
to working with you and your staff and the people in your
district who are working on reauthorization to get your input
as we look at the realities.
Mr. Farr. Well, the eligibility ought to be defined as
hungry, not wealthy parents.
Secretary Veneman. There are means tests now. All school
lunches are subsidized to some extent. There are some lunches
that are reduced cost, and then there are some that are free.
So there is means testing today, but the question is do those
definitions need to be changed? Do we need to change the
administration of them? No determination yet has been made on
those questions.
Mr. Bonilla. Thank you, Mr. Farr.
Mr. Goode.
Mr. Goode. Thank you, Mr. Chairman.
LIVESTOCK COMPENSATION PROGRAM
Back to the LCP program. With the April 1st deadline now,
that will cover all jurisdictions that have a primary
designation for 2002, is that correct?
Secretary Veneman. Yes.
Mr. Goode. For 2001 or just 2002? Or 2001?
Secretary Veneman. The disaster portions of the bill cover
both 2001 and 2002.
Mr. Goode. Does the LCP cover both years, too?
Secretary Veneman. It will cover the eligible counties.
Mr. Goode. The eligible counties are the primary designated
counties by the Governor of the State in 2002, correct?
Secretary Veneman. Yes.
Mr. Goode. All right. And that will cover all of those that
did not make the September 9th deadline if the Governor has
designated them as primary, correct?
Secretary Veneman. That is correct.
Mr. Goode. I understand. I think you did mighty well with
what you had to work with overall.
Secretary Veneman. Thank you.
Mr. Goode. But in Virginia I think you probably wouldn't
need additional persons. You can shift them from those counties
that made the deadline to those that didn't, if needed. Now,
that is not a statewide perspective, that is a southern
Virginia perspective.
FREE AND REDUCED LUNCH PROGRAM
Go to the free and reduced lunch program. I would make this
observation: Years ago many didn't want to sign up for it, but
you have got so many in Virginia, and I am sure the same is
true in other States. There is a push to get kids on free and
reduced lunch because the more kids you can get on free and
reduced lunch, the more aid you can get under an array of State
programs in addition to some Federal programs.
And then I read that yesterday about some investigation
that said there might be more than a billion dollars was gotten
in those programs where the parents weren't eligible. Is that--
--
Secretary Veneman. There have been studies projecting
certain amounts of money for schools with high numbers of
children certified for free meals. You are exactly right. There
are reasons that schools want to sign up children for the
school lunch program outside of the areas of eligibility.
Mr. Goode. Everyone.
Secretary Veneman. It does impact what the schools can get
under other unrelated-to-USDA programs. And that is one of the
issues we are really struggling with in terms of
reauthorization, because there is an outside incentive to sign
up people for free and reduced price school lunches, regardless
of eligibility, and that is where the debate really gets
difficult, because we know that there are these other
incentives.
Mr. Goode. I know what Mr. Farr said, but I heard from
school persons and parents that most--20 years ago, many didn't
want to take a free lunch, but now more people want to take a
free lunch than not get a free lunch. So I don't know if there
is any embarrassment or not.
Let me say one thing. He said that ``I would like to give
everybody a free lunch.'' But I looked into the thing about 4
or 5 years ago. That is a huge cost, as I recall. I don't know,
maybe if you give everyone a free lunch, how many people are
you going to get rid of that is going to determine who gets a
reduced lunch, and that it was pretty staggering.
I mean, that would be great if you could do it, but how
much does it cost?
Secretary Veneman. Let me just have Steve Dewhurst go into
that. That will probably give you some indication.
Mr. Dewhurst. We have about 29 million children who
participate in the program on average, total, and about half of
those children, something over 14 million, receive free
lunches. The rest of the lunches have some degree of subsidy in
them. The program is roughly a $10 billion program. So, if you
were to go to a universal free lunch, you would take the
remaining 14 million children and give them free lunches in
place of whatever they are buying now.
Mr. Goode. That would be 10 billion?
Mr. Dewhurst. I don't think it would be $10 billion, but $5
or $6 billion. It would be some number substantially above the
current budget.
Mr. Goode. The offset from having the situation where you
didn't have to check everybody, how much would you save on
that, tens of millions?
Mr. Dewhurst. The savings would be in administrative costs.
Secretary Veneman. Most of that is done through the
schools.
Mr. Dewhurst. We share the administrative costs with the
States. I suspect we could make an estimate of administrative
cost savings.
Mr. Goode. If you go to healthy lunches across the board,
that is the only free lunch you get, you might have a decrease
in the demand for free lunches. I fully support healthy
lunches, but I know the tastes of many in America.
Secretary Veneman. That is the dilemma of food school
service providers.
Mr. Bonilla. Thank you.
Ms. DeLauro.
Ms. DeLauro. I would like to, just make a general statement
on the school lunch program. I think it interesting to point
out in that article today, it was Eric Bost, the Under
Secretary for Food and Nutrition, who said he thinks that the
27 percent estimate of ineligibility is too high; but the
problem is significant. So I think it needs to be sifted out.
FOOD SAFETY
I want to move to several questions which have to do with
an issue that I am very, very interested in; that is, food
safety. These are questions you do not have to answer now, but
if you can please answer them, that would be helpful, because I
want to get on to some other things.
You talked about $42 million for the Department's food
safety activities. My understanding is $15.7 million goes for
pay increases, $25.6 million for other programs, including $4.2
million for aiding new inspectors. I know we need more
resources for inspectors, but is this enough; with increased
line speeds and industry growth, is this sufficient to
effectively protect our food supply? Do you need additional
resources for more inspectors? If yes, how many inspectors do
you need to do the job, and at what cost? And we will get you
that question. I don't want you to answer that now.
[The information follows:]
We have assessed our resources and believe that the fiscal
year (FY) 2004 budget request of $4.3 million for an increase
of 80 inspectors from FY 2003 will allow FSIS to effectively
ensure that meat, poultry, and egg products are safe, wholesome
and accurately labeled.
Ms. DeLauro. So I want to move to some other areas,
primarily the issue of both Nebraska Beef and Supreme Beef. A
few weeks ago, I sent a letter to you about my concerns with
the USDA settlement in the Nebraska Beef case. I understand the
response is forthcoming shortly, and I look forward to that
response. I said in the letter that the successful challenge by
Nebraska Beef to withdraw USDA's inspection services only
heightens concerns raised by USDA's defeat in the earlier
Supreme Beef case.
Further, I am concerned that despite these repeated
assaults on food safety protections, that the Department has
been unwilling to ask Congress for the authority that it needs
to protect the public health. From Supreme Beef and Nebraska
Beef at a minimum it appears that USDA's basic food safety
authority is under a cloud and that another company can easily
challenge USDA's authority.
At worst it may be that USDA does not have the authority
that it needs to protect our food supply. Between Supreme Beef
and Nebraska Beef the Department can no longer shut down a
plant for failing salmonella standards, and with Nebraska--we
have no authority to stop production in plants with known
unsanitary conditions, so that the good work that was done a
number of years ago to put into practice safety valves on
ensuring the safety of our food supply have been, in fact,
undermined I might add, I believe with the complicity of the
USDA.
How does the consent decree and order guarantee, that the
meat produced at Nebraska Beef is safe? What steps are being
taken now to clean and improve the plant's operation? How and
when will the Food Safety and Inspection Service evaluate the
effectiveness of those steps? In light of Supreme Beef and
Nebraska Beef, do you believe that USDA still has the legal
authority to close down meat plants that repeatedly fail to
comply with USDA's food safety standards?
I might say to some of my colleagues here that a portion of
that tainted meat, in terms of the school lunch program, has
repeatedly gone to our school lunch program, putting our most
vulnerable people in grave danger and in jeopardy.
Given these challenges, do you think it is time to step
back and assess whether or not the USDA has the authority that
it needs to protect the public health? Is it time for you to
have a clear mandate and authority to protect the public
health, including pathogen standards and a strong food safety
system, and will you work with us in the Congress to give you
the authority that you need to protect our food supply?
Secretary Veneman. Congresswoman DeLauro, I want to tell
you how very, very seriously we take the issue of food safety.
Our Department declared a war on pathogens. You know we have a
very strong food safety team with Dr. Murano and Dr. McKee, the
Administrator of the Food Safety and Inspection Service.
In these cases, let me just say with the Nebraska Beef
case, we withdrew inspectors. There was a TRO granted.
Ms. DeLauro. I applaud you for removing the inspectors, by
the way. I truly do.
Secretary Veneman. I think we have been very proactive in
the move to remove inspectors out of plants where we cannot get
compliance in areas where we believe we need more compliance.
We have not hesitated to remove inspectors. There was a TRO. We
believe, and our lawyers tell us, that we would have won that
case if it had gone to hearing on the merits.
But the consent decree that was entered into, we believe,
gave us so much more control, in that plant, over what was
going on that we agreed to the consent decree so that we could
get in and make sure that the plant was operating in a way that
was efficient and safe for the American people. And we are
continuing to evaluate everything that Nebraska Beef does. We
have substantially increased the inspections in that plant and
the oversight. And so that is how that matter evolved.
I do not believe that that case, in any way, undermines our
ability to remove inspectors if we feel that that step is
warranted, and we will not hesitate to remove inspectors. I
want to make that clear.
But we will obviously, as you ask, continue to work with
the Congress on our food safety issues. We are looking at a
whole variety of issues that are impacting the food safety
system. We have had a very strong study on BSE. We have taken
several steps to protect the meat supply in that regard. We
have taken steps with regard to E-coli. We have taken steps
with regard to listeria, and we are going to continue to use
the best science, the best technology, and the best training to
improve our food safety systems.
Ms. DeLauro. I will just say to you that you can have the
best training, but if these companies can continue to go to
court and undermine what they did with salmonella, that the
best training in the world is not going to provide us with the
opportunity to be able to contain those difficulties. It is
hard to believe that the consent decree could give more power,
when, in fact, it is the fox in the chicken coop, because they
determine who the independent agency is, they select the
internal people to deal with this.
My question ultimately comes down to USDA, and then I have
to imagine from your comments, not the Department does not want
any authority to be able to deal with a safe food supply, but
is willing to go to court to be defeated and water down
procedures that many of us here on this committee worked very
hard to put into practice. And now they have been rendered
essentially ineffective because of these court cases and the
unwillingness of the Department to take it on, and to demand
from Congress the authority to be able to deal with some of
these issues.
Secretary Veneman. Congresswoman, I am not saying that we
weren't willing to look at the various authorities. We are
looking at the authorities available to us. However, I will
tell you that even if we had something like mandatory recall
authority, I don't believe that would have stopped the company
from going in and trying and doing a TRO. Companies can go in
and get some kind of TRO against the action that we have taken.
Now, as I said, I believe we still have the ability, and we
will continue to use the authority to withdraw our inspectors,
which is our most valuable tool in our oversight of the meat
and poultry plants.
Mr. Bonilla. Thank you.
Mr. Nethercutt.
Mr. Nethercutt. Welcome, Madam Secretary, and gentlemen,
and to your team, welcome. I want to comment on food safety. We
are a country of 285 million people. My sense is that the
incidence of food poisoning and food problems and lack of
safety is relatively small. I know you can have a zero
tolerance of food safety infractions, but I don't know of any
other country on the face of the Earth that has a better food
safety inspection than we do.
And I know that we can anecdotically argue about
deficiencies, and that is legitimate, but, my goodness, I think
that we have a very safe food supply in this country, and I
think it is inaccurate to say that we have a dismal food safety
record. I think that we have very high, good quality food
safety. Would you agree?
Secretary Veneman. Absolutely. I believe we have the safest
food supply in the world, but we continue to do everything that
we can to make sure that it stays that way. Our consumers have
tremendous confidence in our food supply. That is why we
haven't had some of the consumer backlash issues that we have
seen in Europe, for example, because our consumers do have
confidence in the food safety systems that we have.
Again, we are working to continually improve, because we
can never rest on our laurels. We have to look at emerging
pathogens. We have to look at it hard from every kind of
problem that we have, and that is what our commitment is to
continue to do.
Mr. Nethercutt. I appreciate that. That is a good
commitment.
EMERSON TRUST/RISK MANAGEMENT
Let me talk with you, as I mentioned a day or so ago, about
an issue on the Emerson Trust, and the problems that I have
faced in our district relative to what I think is a flawed
policy in the Department of Agriculture for the way these
Emerson Trust developments occurred. And I know the inspector
general is doing an investigation. I don't know if you have
anything to add at this point, but I know you are sensitive to
it. I am unhappy with respect to the way it unfolded, because
it hit the wheat industry in my district, in my region, and our
entire State very hard, and I think it was improper, the way it
unfolded.
So I will look forward to what the inspector general comes
forward with. I know there is an investigation in process right
now. So I just mentioned it for the record, because I am very
concerned about the way it happened as it relates to the USDA's
obligation to the farmer and producer and the rural communities
on the ground.
I want to mention to you, I saw you made a speech just
recently on the issue of risk management, and I am an advocate
of school lunch programs, and I know Mr. Farr's dedication to
this is genuine and heartfelt. But I would just hasten to add
that if we don't have a production agriculture industry in this
country that can produce food that can go to the school lunch
programs and nutrition programs, then we are in a world of hurt
in terms of being dependent on other countries of the world to
provide us safe food and fiber.
So I am here to advocate for production agriculture, and I
don't believe that there is a disproportionate benefit to
production agriculture at the expense of school lunch programs
or other nutrition programs in our government.
With respect to the social side of agriculture spending, it
is monstrous as opposed to the production side of agriculture
assistance. We got farmers that need to produce, and the risk
management, I think, is a good way to go to assist our farmers
in producing effectively and efficiently and competitively
around the world. Ross Davidson is doing a good job and has the
right idea. That it is not just crop insurance--and you as
well--it is giving farmers tools to be better managers, and I
think that is part of the equation.
So if you care to comment on the Emerson Trust and risk
management, I would be delighted to hear what your testimony
is.
Secretary Veneman. Well, thank you. And I appreciate the
opportunity to talk with you about the Emerson Trust. We are
looking at your concerns very closely, and, as you said, the IG
is looking at it as well, and conducting an audit on this
situation. But there were issues that related to proximity to
the shipping points and the type of grain that was required
that played into the decision as well. I appreciate you
recognizing the risk management initiative that we have taken
in the Department.
What I announced at my outlook speech last week is that we
are going to take an overall look at risk management from two
perspectives; first, to look at risk management tools and risks
management gaps in terms of insurance coverage. For example,
this year we felt that there was inadequate coverage for
livestock producers. That is why we acted with this livestock
compensation program. We know there are gaps like that. We know
there are gaps in some of the areas in the Northeast, in some
of the specialty crop farms, and in some of the more diverse
farming operations that involve specialty crops and so forth.
So we wanted to take a look at what are the gaps.
We are going to be doing that. And what are some of the new
kinds of risk management tools. We have some new products that
are being put out before the Risk Management Board. Keith
Collins is a member of that. He can talk more about that if we
need to. As well, we want to look at what are the operational
aspects. Do we need additional authority in terms of oversight
of the companies themselves?
We saw the biggest crop insurance company in the country
file bankruptcy last year. That is something that we are taking
very seriously. We want to make sure that we have the
appropriate authorities in place.
So that is the initiative that we have undertaken this
year, and we are going to be working on that risk management
initiative, and we will look forward to working with you on
that.
Mr. Nethercutt. Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Nethercutt.
Mr. Boyd.
Mr. Boyd. Thank you, Mr. Chairman.
And, Madam Secretary, welcome to you and your team, and
thanks for the call earlier to discuss things that might be
important to us.
I want to just start maybe with a short opening statement,
to tell you that I read your testimony, and I found a lot of
good things in it, and some that probably wouldn't surprise you
that I felt were inadequate, as I am sure that you probably
feel the same way.
I know you have a very difficult job. I am sitting here
thinking, listening to the other Members talk about the
different programs you have got to administer; the farm
program, you have got to focus on marketing, you have got to
focus on conservation, you have got to focus on rural
development. Obviously we are going through a consolidation,
have been, of our agriculture resources, and we will continue
to do that, I think. And rural development is a major issue for
some of those rural communities. Food safety, which Ms. DeLauro
talked about; nutrition, which others have talked about. It is
a monumental task. I am not sure I would want your job. And I
just want to tell you that we understand this difficult job, we
appreciate it.
FARM BILL IMPLEMENTATION
I do want to echo the words of Mr. Nethercutt and Mrs.
Emerson, that given all of those responsibilities, when you
boil it down, the wisdom of George Washington when this country
was started about never, never let the production agriculture
industry in this country die, it is appropriate today. And
given the world situation, open borders, trade, economic
situations, it is more and more difficult. And so I wanted to
focus on that.
And I want to ask you a couple of questions. Number one,
you made a statement earlier in answering a question, and you
said, we asked for considerably more money to implement the
Farm Bill than we were given. I think that is what you said.
First of all, my first question is, who did you ask?
And my second question really goes beyond that. And I would
remind you that since 1994, we have reduced the FSA employees
by 38 percent, permanent employees. We have reduced temporary
staffing levels by 41 percent since 1996. The people we have
out there are doing a great job. You know, I deal with them. I
know them. Many of them I have worked with in my area for 20
plus years, and they really do a great job. Many of us
supported the downsizing that went on here in the 1990s. I
wasn't here, but, it was something that needed to be done.
But my question is how long can we continue to do that and
effectively implement the programs that we have to have in this
country to maintain a viable agricultural industry? Are you
going to let FSA become an ineffective organization on your
watch? I would like to ask you those two questions. Number one
is about the statement, who you asked for more money; and
secondly, about the FSA employee situation.
Secretary Veneman. Thank you, Congressman. I appreciate the
question, and I also appreciate you recognizing the diversity
of the program mix that we have in the Department of
Agriculture. We didn't even cover the Forest Service in this
hearing, but that is another large part of our Department
having the bulk of the employees.
We have three hundred different programs in USDA covering
three different sections of OMB. It is the most diverse
Department in government.
On this issue of the Farm Service Agency and the money, as
the Farm Bill was negotiated last year, there was a question
about how much money USDA would need to implement this Bill,
and we gave the Congress that number, and I believe we got
about half of that money. We asked for $110 million, and we got
$50 million in the Farm Bill.
So the answer to your first question of who we asked for
more money is we asked the Congress.
Mr. Boyd. Is that one-shot money you are talking about
there?
Secretary Veneman. That was the Farm Bill implementation
money, yes. And we got $50 million in the Farm Bill, and then
we got an additional $70 million in the 2003 appropriations,
but we didn't get that until last week. And obviously we
haven't been able to hire with that money yet.
Mr. Boyd. The statement you made was regarding the one-shot
implementation of the Farm Bill?
Secretary Veneman. Right.
Now, there have been reductions in the work force in FSA
since the 1996 Bill because many of the farm programs went into
the decoupled program. It was a different kind of program. With
the new Farm Bill, the programs again require many different
decisions on the part of the farmer, requiring more workload
within our FSA offices, which is why we have been using
additional staff to get this job of implementation done.
But we are also looking at additional tools. We have put a
tremendous amount of resources into information technology to
help the farmers and ranchers. The people I have talked to
really like these calculation tools that we have been able to
develop through technology to help them calculate potential
program benefits. It will help our Farm Service Agency people
better service the farmers. It will get our forms on-line. It
will allow the system to be more efficient and will allow us to
be able to create those kinds of efficiencies. So that is a
priority as well.
But we do appreciate, and I certainly appreciate, the
comments that you have made about our employees. They are doing
yeoman's work out there. We know it has been difficult. They
are now going to have a disaster bill to administer as well. It
has not been easy but they are continuing to do a tremendous
job for the American farmer.
FARM SERVICE AGENCY OFFICE CONSOLIDATIONS
Mr. Boyd. Are we going to continue to merge offices? We
supported the merger of the offices. It is working fairly well
in most places, but I think we are a little bit thin in some
places. Are we going to continue to do that on your watch? Are
we going to be able to have adequate resources to implement the
Farm Bill, which obviously takes more staff work, than the old
bill.
Secretary Veneman. We are continuing to look at where we
can have efficiencies within the system with regard to offices.
And, I mean, we are looking at the whole range of USDA offices,
not just FSA, about where can we have efficiencies, about where
can we have collocations, where can we better integrate
technology. We are committed to providing the services in the
best way that we possibly can for the farmers and ranchers.
Mr. Bonilla. Thank you, Mr. Boyd.
I now yield to Mr. Kingston and then go directly to Mr.
LaHood to complete our first round of questioning.
Mr. Kingston. Thank you, Mr. Chairman.
And, Madam Secretary, it is great to see you again. I
appreciate all of the hard work that you guys do.
I wanted to ask you about four areas that are very
sensitive, that I would like to see your commitment to help us
broker some peace. And sometimes, generally speaking, there is
a reluctance on the administration to get involved with, you
know, maybe local turf wars. So if these fall into that
category, it would be better to say that we are going to let
Congress resolve it rather than take a role.
ORGANIC FARMING STANDARDS
One is, as you know--and these things always drag this bill
down. There are the organic farming provisions and the
definition of an organic chicken. As you know, there is a
study, and if the study says there is plenty of inexpensive
organic chickens out there, then one company's definition won't
stand up. If there is not, then what they have been calling
organic since 1997 is going to continue.
But I think you will find there are people who are pro and
con in the Congress who want to work with your office to try to
resolve that issue. And so my question to you is do you see
yourself playing a role in that, or do you want us to try to
resolve it on the Hill?
Secretary Veneman. Well, I think that certainly on this
issue of organic, there are very strong feelings, as you say.
Our position has been that it took over 10 years to implement
the organic standards law. It was passed in the 1990 Farm Bill,
and it became effective in October of 2002, almost 12 years
later. This regulation received the most public comments ever
received on any rule that USDA has ever dealt with. So it has
been a very, very difficult and long, drawn-out process, and so
there is a very strong feeling about not changing those
regulations.
Now, as far as working with people in trying to resolve the
issues, I think there are some things that we can work together
on, one of which is the study in progress. This is the one
referenced in the 2003 bill regarding Organic Livestock Farms.
We are continuing to work on that study and get it done as
quickly as possible.
The other thing that I think we can do is help the
companies that feel that they are having difficulty getting the
feed to find sources of organic feed. We have tried to be
helpful in that regard.
The third is that if it is not possible to reach the
certified organic standard, are there other labels which they
would qualify for, and, you know, something that is not the
USDA national organic certified label? And I think that some of
these companies are exploring the opportunity to use either a
hormone-free feed or something similar as an alternative to
using the labels if they can't meet the requirements.
Mr. Kingston. Your role in that, you would be willing to
sit down with us and kind of hash out some of this stuff?
Secretary Veneman. Absolutely. I directed my people to do
that.
COUNTRY OF ORIGIN LABELING
Mr. Kingston. Okay. The second one, which is equally as
sensitive to my good friend, Mr. Latham. I understand there is
a Senator named Grassley who felt similar on stockyard
ownership and packing, and, you know we have strong Members in
both Houses who feel different ways on this.
Do you see yourself wading into that?
Secretary Veneman. I think both of these issues were issues
that were debated in the Farm Bill. The country of origin
labeling is something we implemented, because it was part of
the Farm Bill that was passed as a voluntary program, and then
became a mandatory program.
There are a lot of differences of opinion within the
various agriculture communities out there. I have been to some
of the conventions. I have heard the debate. It is very split
in terms of the opinion.
We have a law, however, on country of origin labeling that
we are implementing. That is our position at this point. We did
not, as an Administration, support that provision during the
Farm Bill debate. I think that is a well-known fact.
PACKER CONCENTRATION
On packer concentration, we have had under consideration
for some period of time plans to develop a study to look at
this whole issue--the economic conditions, the trends, the
operational impacts, the economic impacts, but the funding for
that study was contained in the 2003 budget, which, of course,
was just passed a couple of weeks ago.
We had held up on doing that study, but we are now going to
initiate that comprehensive study, using both internal
resources, and resources in the private and university sectors.
Mr. Kingston. Okay. I have some more questions, Mr.
Chairman, for the second round.
Mr. Bonilla. Thank you.
Mr. LaHood.
Mr. LaHood. Thank you, Mr. Chairman.
Madam Secretary, notwithstanding what was said earlier, I
think you are doing a pretty good job. I think that you have a
hard job. I think it is a little unfortunate when a Member has
an individual problem, and they bring it to the whole committee
and take up all of the time of the committee to do that. That
is not the way I would operate. I doubt it is the way that most
Members would operate, but I guess that is the way it is.
FARM BILL SIGN UP
Let me touch on four things, and you can comment on them if
you would like; and if you don't want to, you don't have to. I
have heard a lot from my farmers about the sign-up. I have told
them that they need to do it before April 1st. But the FSA
offices need more people. I don't know if you can assign more
temporary people. I don't know what you can do about it. But if
every farmer complies with your requirement to sign up before
April 1st, there are just not going to be enough people to do
the paperwork.
I think rural development is a good, strong program. I hope
you will continue to really do all that you can do to support
that in an economy in rural America that is hurting very badly.
Rural development is a big, big asset for us, and people are
really taking advantage of it.
I have met with Secretary Moseley about my e-file bill that
we passed some time ago. I think it would go a long way to cut
down on a lot of paperwork. I would encourage the Department to
do all you can to keep the jets flaming on that, because I
think it would be very helpful.
WAREHOUSE PROVISION
And I guess if you can answer any question, it would be on
the warehouse provision, the 6-month extension that was
included in the final budget that we passed. Are you going to
weigh in on that, or are you going to ask other people to be
involved, or what is your feeling? Because, you know, obviously
that is going to be a big issue. I don't want the 6 months to
elapse and not have anything done.
And thank you for being here.
Secretary Veneman. Thank you very much.
On the warehouse extension, we have been working very
closely with the National Association of State Departments of
Agriculture (NASDA) on that, and we will continue to do so to
try to reach some accommodation. This issue involved fixing a
regulation that we were told we had to fix by the courts, and
that is what our people attempted to do. We know that it has
caused some difficulty in a few States, and so we have
continued to try to work with those States. We will continue to
try to do that during the 6-month extension period. I will
certainly commit that to you.
FARM BILL SIGN UP
On the sign-up issue, as I think I said in response to an
earlier question, the April 1st date is absolutely firm, and we
are going to reallocate resources where we can. We have some
additional money now. How many additional people we can
actually hire and train before April 1st will maybe take more
resources than it is worth. But there may be some people who
have some experience that we can hire temporarily and there may
be some smaller offices where the sign-up is complete and we
can reallocate those resources. We can possibly send some
people from Washington to assist. We will try to reallocate
resources in areas where we see there are backlogs.
But I was informed, as I said before, yesterday, that there
is no county office that we know of that has their appointment
books completely full, although I did hear Ms. Kaptur's
statement. We will go back and look at that, because she said
earlier that there was someone who said that they couldn't get
an appointment until May, which doesn't make sense to me, given
the circumstances we are under with the April 1st deadline.
But we are very committed to making sure that we get the
farmers signed up. I have to say that one of the concerns was
that we were very, very surprised at the slow rate at which
farmers came in. In other words, we didn't start to see people
come in until after the first of the year, despite the fact
that we were encouraging them to do so. They didn't really come
in until these last few months.
E-FILE TECHNOLOGY PROGRAMS
Let me also address your e-file issue, because, as I said
in response to Mr. Boyd's question, we do feel strongly about
the technology aspect of what we can do and how much easier it
will be for farmers and ranchers if we can truly get good e-
file and e-government types of programs up and running.
We have got a very good CIO who is doing an excellent job
trying to integrate some of those programs. We have got a
project looking at how do we integrate all of our maps and get
them digitized. For example, FSA has run a separate set of
maps--basically pen and ink maps, and NRCS has a separate set
of maps. Once we get all of that digitized and into computers,
imagine how much better off we will be in terms of helping our
farmers and ranchers do the right thing by enabling them to
apply and access conservation programs on-line. So we are very,
very much in agreement with you on the importance of this
initiative.
RURAL DEVELOPMENT
Finally, on the rural development issues, I had the
opportunity yesterday morning to speak to all of our State
rural development directors. I think that Under Secretary Dorr
is providing a tremendous amount of vision and leadership in
this area. We are looking at all kinds of opportunities for
rural America. We are looking at the kinds of economic
opportunities that rural America needs to sustain itself by
looking at our programs very creatively, and by looking at how
do we best measure our programs to see what are the most
effective programs in terms of rural development. So we have
had an initiative to reevaluate regard as well.
So, again, I agree with you that we have to look very
broadly at our rural development programs. We need to look at
how do we create and provide economic opportunities. We have a
broadband initiative that we announced recently that I think
holds tremendous promise, because if rural America is going to
participate in the economy of the 21st century, they have to
have the tools. So things like broadband are very important.
So we will look forward to working with you and this whole
committee on ways to strengthen rural America.
Mr. Bonilla. Thank you, Mr. LaHood.
We will now begin our second round of questions, and we do
intend, however, to go as long as we can and adjourn at noon.
In light of trying to save a little time, Madam Secretary,
I am going to submit my next question about conservation
technical assistance and the disagreement, I suppose, of what
may have been in the farm bill versus what OMB wants to do and
where to get this money--I am going to submit that for the
record. If you would get back to us on that, we would
appreciate it.
[The information follows:]
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Mr. Bonilla. Ms. Kaptur.
FARM INCOME
Ms. Kaptur. Thank you, Mr. Chairman, very much. And I
listened to what the Secretary said about the need for economic
growth in rural America. With 85 percent of farm families
having to work off farm in order to make ends meet, the most
popular program in rural America for our farm groups when they
get together is stress management.
And looking at the situation with farm income, Mr. Collins,
have you been able to locate any numbers for us?
Mr. Collins. Yes, Ms. Kaptur, I have. Let me go back and
give you 3 years of data. In fiscal year 2000, 48 percent of
net farm income came from government payments; in 2001, 45
percent; and in 2002, 40 percent.
Part of the reason for the drop was, as the Secretary
mentioned, a lot of producers didn't sign up during the end of
2002 and are signing up now. So government payments fell an
unusual amount in 2002.
Ms. Kaptur. It is close to half.
Mr. Collins. It is close to half.
Ms. Kaptur. A few years ago it was higher than that because
of the abysmal prices and what happened with the market. But
imagine most workers in our country getting a supplemental
income of half from the Government of the United States when
they are out there trying to make it in the marketplace. It is
the most difficult situation for rural America. It has been
continuing for a very long time. And that is why I am going to
go back to my original line of questioning, because as I look
at our rural development programs, our research programs,
billion-dollar rural development, $2 to $5 billion depending
upon which accounts you add up, we have to think in billions of
dollars.
We have to think in billions, not Federal subsidy, but ways
that we use Federal programs to generate billions of dollars of
private market income in rural America. Bioenergy and biofuels
is absolutely one of the pillars of that new future.
Mr. Chairman, I am going to submit, and ask unanimous
consent of the committee to submit, for the record figures on
the current budget you are submitting to us which shows that
with the Agricultural Research Service we have a decrease of
several million dollars for our new uses in that account. We
also have a decrease in the CCC in their bioenergy payments.
We have a decrease in the budget of value-added grants that
Congresswoman Emerson talked about of over $40 million; a
decrease in the renewable energy section of 9006 of the farm
bill, $23 million.
I am going to submit this for the record because I am going
to ask the Secretary, knowing her personal commitment to this,
to see if there is not a way to work with this Congress and to
change the way that USDA does business on the energy issue.
[The information follows:]
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BIOENERGY
Ms. Kaptur. I have a bill, I don't expect the
administration to support it, but they should, H.R. 130, called
the Biofuels Energy Independence Act. Here is the target. Every
year for the last several years America has imported $60
billion worth of petroleum. Our trade deficit in petroleum is
growing. It is higher now than it was 20 years ago. In spite of
all of our conservation programs, we are more and more
dependent on other countries, and we are about to go to war.
Some say it isn't for oil, but the money that oil made created
and maintains those dictatorships. All of the problems that we
are facing are tied to the politics of the oil regions of the
world. Terrorism grows out of the insurgency that just happens
to be occurring over the oil fields because there is nothing
else there. 99 percent of their economy relates to oil. There
is no more important issue to this government than to become
energy independent.
Agriculture has to be at the table. She is still not there.
I checked the budget of the Department of Energy and the
President's proposal for hydrogen fuel cell research. He only
budgeted this year $48 million of an increase, not the $1.2
billion that he talked about in the State of Union Address. He
took $31 million out of biomass at DOE.
So, Madam Secretary, the target for rural America should be
to displace the $60 billion we are importing. The bill that I
have would create, modeled on the rural telephone and the rural
electric, the kind of national system to create a financing
platform to move this industry up. We need your help to do
that. It is a political fight, but it is our watch. It is our
time. God put us here right now for our country and the world.
I am asking you to really look at this.
There are 3.3 million vehicles on the road today in our
country that are capable of using E-85. Most places in the
country do not have E-85 pumps. Your own Department has 700
vehicles that are E-85 capable. Your Department could do so
much, if you can somehow take this spaghetti of different
programs that are technically involved with energy and create a
real task force inside your agency. I think every single member
of this committee would support that. There are Republicans and
Democrats interested in this issue. We are not moving the
system to help America when she needs us. Tom Osborne of
Nebraska was on the floor about this the other night.
I would ask you if you have made any efforts which you have
not made us aware in your testimony that will help us dig
America out of this hole and move bioenergy up as one of the
major priorities at the Department.
Secretary Veneman. Again, Congresswoman Kaptur, I want to
reiterate that this is a strong priority of our Department and
of our President.
As you look at the issue of bioenergy, one of the things
that can most help this industry is the demand side, and the
thing that can most help the demand side in the immediate near
future is the renewable fuels standard that is contained in the
energy bill.
We are looking at all of the energy issues. If we look at
the dependence on oil, there are promising opportunities out
there. There is a plant that I visited called Cargill-Dow in
Nebraska. It is creating polymers out of corn that are
replacing plastics that petroleum-based products are now being
used for. The promise of agriculture in some of these
industrial-use areas is tremendous. We are continuing in our
Department to promote that.
A high amount of our corn is now being used in ethanol, I'd
say about 10 percent. And, we are seeing a tremendous increase
in the number of ethanol plants around the country. The
renewable fuels standards would be one of the biggest helps,
and we are coordinating all of our alternative fuels in energy
programs. Keith Collins has been very involved in looking at
how we can continue to better promote and enhance the
opportunities for these products.
Ms. Kaptur. My time is up on this round, but I would ask
you to send us a letter, with Mr. Collins, on how we can help
you improve the efforts in USDA in this area because I don't
believe your budget reflects that commitment.
[The information follows:]
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Mr. Bonilla. Thank you, Ms. Kaptur.
Would members like a third round of questioning?
Mr. Kingston. I would say that the Secretary wanted a third
round.
Mr. Bonilla. We want to accommodate the questions. Madam
Secretary, would you like to take a break or continue? In spite
of what I said earlier, we will probably go past the noon hour.
Secretary Veneman. I am okay for the time being.
Mr. Bonilla. I yield to Mr. Latham, and when he concludes,
I will ask Mr. Latham to take the Chair, and he will continue
the hearing. We will go to a third round.
Mr. Latham. Thank you, Mr. Chairman.
Obviously the renewable energy situation is very, very
important. I was pleased to see that as far as ethanol, I think
we hit the 1 billion gallon production mark. Estimates are that
we are adding in most areas 10 to 15 cents a bushel to the
price of corn today. The great thing is that it is value added.
Most of the plants that are coming on-line today are farmer
owned, so the money is staying in the communities rather than
going to big conglomerates. We want to continue that growth and
make sure that it happens in the future. I think we can be kind
of the agricultural Middle East here in the United States.
BUDGET REQUEST--AMES LAB
Just as a question, going back to the Ames Lab, what was
your request of OMB, do you know?
Secretary Veneman. I don't.
Mr. Latham. Can you get that, Mr. Dewhurst?
Mr. Dewhurst. At the time we were doing the budget to
finish the accelerated plan, the figure was $306 million. That
is what we sent you a year ago, and it was the same number.
Mr. Latham. That was your request to OMB to complete the
funding, okay. I appreciate that.
BIOTECHNOLOGY
One of the really important things for the future in
agriculture, and everybody talks about rural development and
economic development in farm country, we have some great
opportunities in biotechnology as far as growing pharmaceutical
proteins in corn and other agricultural commodities on a very
cost-efficient basis.
Last year the Biotechnology Regulatory Service was supposed
to release new guidelines for the 2003 crop year for
pharmaceuticals and industrial proteins; I think you are
drafting a notice of proposed rulemaking on the subject. The
importance of this is growing. There is money in the 2003
appropriation bill that was just signed for start-up of a
biologics facility. I think that is very, very important. Can
you tell me where you are on the guidelines and the protocol?
There are models for protocols out there. I think it is a
tremendous opportunity for the future.
Secretary Veneman. First, I would absolutely agree that it
is a tremendous opportunity. It provides a great promise for
our farmers.
The guidelines which you are referring to should be out, I
believe, within the next couple of weeks, 2 to 3 weeks at the
most. They are in the final stages, but I can't give you an
exact date because we cannot guarantee how long all of the
clearances will take, but they are in the final stages of
drafting at this point.
But I also talked in my outlook speech last week about the
importance of another initiative that we are undertaking, and
that is looking at all of our biotechnology authorities and
regulations to make sure that our regulatory structure is
keeping up with the technology. We have seen some things
happen, whether it was ProtoGene or others. We have to make
sure that we have a strong regulatory system so we do not
undermine the promise of this technology. We are committed to
making sure that our regulations are appropriate and that we
continue to have the kinds of controls on this industry to
allow it to grow and thrive.
GENETICALLY MODIFIED AGRICULTURAL PRODUCTS
Mr. Latham. That brings up a very important item. My
background as a farmer and also my involvement in the seed
business, I heard for 20 years before I got in this job about
what was going to happen with biotechnology, genetically
modified varieties. All of the focus then was on the production
side. I sat through hundreds of meetings talking about
genetically modified varieties and the potential and the
concerns for the future. Never once did consumer acceptance
come up. That is the reality of it.
I hope there is some initiative from USDA to bring the
public along so that they understand the value of this type of
new technology. I think one of the most exciting things in this
arena is the orphan drugs, which are expensive for a
pharmaceutical company to develop for a small population. The
protein can be grown for maybe a 20th of the cost that it would
be otherwise in a laboratory. I believe it is important to make
sure that the public is brought along with us on this and they
understand that there is a real benefit for society and it is
not just a matter of farmers wanting to get another market, but
there is a real benefit for society. I don't know if you have
any initiative like that, or what you can do to help.
Secretary Veneman. We have tried to be very proactive on
the education side. I think there are a couple of things that
have helped consumer acceptance in this country. One is
confidence in the regulatory system.
Mr. Latham. The Ames Lab would help there.
Secretary Veneman. The second thing is getting products
with consumer benefit. We have seen products like the vitamin A
enriched rice, and there is the promise of tomatoes with
increased lycopene, and some other product varieties where
there are nutritional benefits for consumers. I think the
strict pharmaceutical use of crops will be looked at somewhat
differently by the consumer because they are looking at Europe
at least at the food uses. There has been no consumer problem
with pharmaceutical biotechnology use.
So I think the challenge in some parts of the world,
particularly in Europe, is to get consumer acceptance of the
fact that this food is certainly beneficial and good for the
consumer.
The other thing that has not been well enough addressed and
promoted as a public good from this agricultural technology is
the environmental benefits. We have seen tremendous increases
in water quality benefits from use of Bt cotton, for example.
In some of these areas we are seeing very good results in terms
of water quality, but I think a lot of people do not understand
the fact that agricultural products are being grown with much
less chemical input to the betterment of the environment as a
result of some of these technologies, and that is a message
that we have tried to get out.
Mr. Latham. I would appreciate any efforts you can do to
inform the public.
Mr. Bonilla. Mr. Hinchey.
CROP INSURANCE PROGRAM
Mr. Hinchey. Madam Secretary, I would like to ask you a
question about the Crop Insurance Program. Over the course of
the last several years we have made some changes in the way
that specialty crops are addressed by the Congress and
administration in times of disasters. The members of this
committee have been very helpful in developing a response to
disasters in specialty crops on a fairly bipartisan basis. I am
wondering if there are any approaches to crop insurance being
taken by the Department which would address the peculiar needs
of specialty crops, vegetables, fruits, things of that nature?
Secretary Veneman. Absolutely. I announced an initiative
last week in which we are taking a two-pronged approach to
looking at crop insurance. One, we are looking at where the
underserved areas are and where do we need to help develop more
risk management tools. Our Crop Insurance Board is continually
looking at new products in that regard.
There is a Pennsylvania program that was just approved
looking at a whole farm approach because of the difference in
agriculture in that area.
There are some creative approaches that are being piloted
now to address the kinds of concerns you are talking about, and
we are going to be very proactive in addressing some of the
risk management needs of our farmers and ranchers in some of
the underserved areas.
The second thing that we are doing on the risk management
initiative that we have implemented is we are looking also at
the operation of the program. As I said earlier, we saw the
largest crop insurance company in the world go belly up this
year. We want to make sure that we have proper oversight over
the companies themselves.
Mr. Hinchey. I have just been handed an article from the
National Journal. It says that you announced that RMA would
make $18 million available to reduce the cost of crop insurance
by increasing subsidies in 15 States in which participation of
the Crop Insurance Program is low. They include a lot of States
in the Northeast.
Secretary Veneman. That is correct. That program, within
the Risk Management Agency, is the kind of program that we are
talking about to address some of the needs of some of the
underserved areas. The Northeast has been an area that has not
had access to as many of the tools in terms of crop insurance,
so we are looking at the Pennsylvania program and we are using
that RMA program which you just referenced to address crop
insurance needs.
Mr. Hinchey. Thank you very much.
AMERICAN HERITAGE RIVERS PROGRAM
You support two positions associated with the American
Heritage Rivers Program. Those two positions are the
Susquehanna and the Hudson River Navigators. I know these are
rather parochial programs and they may not have come to your
attention. I would appreciate if you would take a look at them
if that is the case.
The Hudson River Navigator position has remained vacant for
several months. It is an important program that works with
local communities and it is a way for the administration to
reach out to local communities and help them with their
relations with the Federal Government as it relates to
navigable waters.
I am wondering if you can tell us at some point what is the
status of this position and when we could expect to see it
filled?
Secretary Veneman. Sir, I would like to get back to you
with that answer for the record because I don't have that
information at my fingertips.
Mr. Hinchey. I didn't expect you to have it. I would
appreciate if you would get back to me on that.
[The information follows:]
For 2003, NRCS has $225,000 devoted to those two positions,
and it is our intention to fill the Hudson River position as
quickly as NRCS can get announcements out and applicants
applying.
NRCS had a nationwide hiring freeze on until the FY 2003
Appropriations Act was enacted. Now that there is an Act, NRCS
expects to be able to lift that hiring freeze and move forward
with these and several hundred other positions that have been
on hold.
USDA DAIRY POLICY
Mr. Hinchey. A question on dairy policy, in the President's
budget, the OMB expresses concern about the cost of dairy price
support programs and they lament ``lack of supply response.''
In other words, the fact that there is an oversupply of milk is
keeping prices low. We generally know that. Our producers are
just too productive.
As far as we can determine, there are basically only two
ways to reduce production if we endorse this idea. One would be
to reduce the number of producers, which means putting small
family farmers out of business; and the other is to reduce
production of farmers through supply management. I am wondering
if you would first of all agree that those are the only two
ways that this problem could be addressed, and which supply
response do we prefer? Do we want to reduce the number of
family farmers or do we want to institute a supply management
program?
Secretary Veneman. I would say that there is another way,
and that would be to increase demand for the product. There are
lots of new opportunities, and we are seeing lots of innovation
in the dairy industry. There are certainly lots of increased
consumption of some of our products, and we are even seeing
increased dairy exports. So, I wouldn't want to agree with you
on those two options you presented because I would like to see
increased demand.
Mr. Hinchey. We have been trying to do that, working with
the Department in various ways to try to get milk products into
schools; for example, to try to limit the propensity of schools
to embrace soft drinks rather than dairy products. I would love
to hear what you have in mind to promote consumption and I
would like to help you on that and I am sure other members
would as well.
Mr. Latham [presiding]. Mrs. Emerson.
FSA OFFICE CONSOLIDATION
Mrs. Emerson. Madam Secretary, I would like to go back to
something Mr. Boyd started, and it is difficult to get anything
done in 5 minutes. He spoke about consolidation of offices and
that sort of thing. I have heard through the grapevine, and
hopefully you can tell me I am wrong, hopefully I am wrong, but
I have heard that USDA was going to consolidate or close about
200 offices. If that is true, given what we have been talking
about since the beginning of this hearing, the fact that the
farm bill, trying to deliver the farm bill, deliver disaster
aid and conservation programs, how can we ever do with 200 less
offices and deliver what we already don't have the manpower to
do?
Secretary Veneman. We are looking at roughly that number,
but not in FSA alone. We are looking throughout government at
where we can consolidate offices. I worked on this project when
I was Deputy Secretary in the last Bush Administration, and
there has been a lot of work done as a result of some of the
things we were doing then to look at where all of our offices
were, and to consolidate offices for efficiency. It certainly
gives farmers a better opportunity to have one-stop shopping
for services. We have come a long way in that regard, but we
think there are still opportunities where we can consolidate
some agency offices.
Rural Development is looking at where their offices are
structured given where they are located at this point. We have
also seen some regionalization of offices in places like APHIS,
for example. So, we are looking at the whole Department in
doing this initiative. It also ties back in with more and more
of the services that we can ultimately deliver on-line.
We know that we have a herculean task with this Farm Bill
and with the disaster assistance, but the initial sign-ups are
where the real infusion of resources needs to take place. Once
the farmers make their elections under this Farm Bill, it
should not take the kind of additional resources required
currently in FSA to run the continued program.
Mrs. Emerson. But then we have the Conservation Security
Program.
Secretary Veneman. Much of this will be done out of the
NRCS program. We have a very innovative program there which
uses technical service providers and partnering with the
private sector to help us with some of the conservation
assistance.
Mrs. Emerson. By contracting with the private sector, that
brings up a question I was not going to ask, by contracting
with the private sector, do you actually save money?
Secretary Veneman. I don't know exactly how much money we
save.
Mr. Moseley. Yes. We save a little bit of money. It is
marginal.
Mrs. Emerson. Can you show me that? Can you show me where
you save money because in other agencies in other departments
of the government, not USDA related, it oftentimes is more
expensive to contract out. I would like to see some background
to back that up, if you don't mind.
Mr. Moseley. We can attempt to provide that. The issue here
is it is part of competitive sourcing. We competitively source
this. If it is less costly to use private sector, we use
private sector. You develop an experience with it as you start
to accomplish the goal.
[The information follows:]
NRCS is pursuing potential opportunities to reduce costs
and improve program delivery through the use of private-sector
Technical Service Providers and competitively sourcing other
work currently performed by NRCS employees.
Competitive Sourcing provides for a cost comparison between
government performance of an activity and private sector
performance before a decision is made to outsource. Outsourcing
will only occur when private sector performance is shown to be
more cost effective. Whether or not any activities will
actually be outsourced, and the related cost savings, will not
be known until the competitive sourcing studies are completed.
To date, no studies have been completed and no activities have
actually been outsourced.
The innovative system which is using technical service
providers and partnering with the private sector was authorized
in the Farm Security and Rural Investment Act of 2002, Public
Law 107-171, (2002 Farm Bill). It requires that USDA establish
a system for approving individuals and entities to provide
technical assistance to carry out Food Security Act
conservation programs and establish the amounts and methods for
payments for that assistance.
As advertised in FedBizOpps, NRCS is seeking to identify
sources and receive information on past and current market
prices from individuals and entities providing conservation
technical assistance. NRCS intends to use this pricing data to
establish payment rates for technical service providers.
Therefore, since NRCS is in the process of developing rules and
rates for technical service providers we currently have no
established cost savings for this activity.
Mrs. Emerson. Do you let your former employees who have
done a task to rebid and recompete themselves to do the same
task?
Mr. Moseley. Yes.
COMMODITY ASSISTANCE PROGRAM
Mrs. Emerson. With regard to the School Lunch Program or
Breakfast Program, the Commodity Program is a great assistance
to the School Lunch Program and obviously agriculture as well.
How do you feel about enacting a modest commodity program for
school breakfast, maybe 5 cents in commodities for each
breakfast served?
Secretary Veneman. Do you mean in terms of purchasing
products?
Mrs. Emerson. Yes. In other words, using the Commodity
Program for the School Breakfast Program, which we currently do
not do, maybe just 5 cents in commodities for each breakfast
served?
Secretary Veneman. That is something we might look at in
reauthorization. I have to say I have not looked at that issue.
Mrs. Emerson. I know that you all have done a really good
job around the country getting prepared for the child nutrition
reauthorization, but I would ask if you would look at that
perhaps as something that might be beneficial.
Another question that I have with regard to school lunches,
we have in my district specifically but I am sure it is
elsewhere, we have a lot of families who actually cannot afford
the 40 cents for the reduced fee or for the reduced price
school lunch. It has been suggested to me, and I want your
opinion about this whether you think it would be a doable
thing, it has been suggested to me that all children with
family income below 185 percent of poverty, which is the WIC
level, would receive a free lunch. What do you think about that
idea?
Secretary Veneman. Again, we want to make this program as
efficient as possible in terms of serving those who are
eligible to be served. We are looking at all of that in
reauthorization. I suspect that the proposal you are putting
forward would have a considerable cost associated with it, and
I think as the reauthorization takes place there are going to
be issues of whether certain kinds of changes in the program
create additional cost on the program. It may be something to
be considered, but I can't respond at this point.
Mrs. Emerson. I have a couple of families who have lots of
children and when you add 40 cents up for each child, it is
more than they can afford.
Secretary Veneman. So you are saying we should look at
families with larger numbers of children and see if there could
be some additional assistance? We will put that in the mix.
Mrs. Emerson. Thank you, and I would love to work with you
on that.
Mr. Farr. Thank you for asking those questions because that
is where I was going with my earlier questions.
I wish Mr. Nethercutt was here because he stated we are
about production agriculture and thought I was putting too much
emphasis on the feeding side. I think it all does relate to
production agriculture, but what I think is patently unfair in
the United States and the administration of the program is that
the majority of the money goes to a small number of producers
producing a very small number of crops in the total array of
crops. Almost none of it goes to those producers which are in
the fresh fruits and vegetables area. Logically you can store
the commodity programs, you can store corn, cotton, wheat and
soybeans. We have historically had an inability to ship or
store or package fresh fruits and vegetables, but that has
changed with these new atmospheric conditions. They can put in
a bag and keep lettuce on the shelf for a month.
I am interested, in light of the fact that the Federal
Government has produced these nutritional standards, we ought
to start moving some of our money where our mouth is, and I
think Congresswoman Emerson's questions about using some of
those commodities, particularly in the dairy area, might be
good for the Breakfast Program.
What we need to do is put a lot more into purchasing fresh
products. I asked this last year and I am not going to go back
into it, but it was appallingly lacking any efforts. We do a
lot of canned and meats, but it is still packaged. I am
wondering if the Department can provide for us the data,
because as you pointed out in your testimony, this is not just
a USDA purchase, but the State and local governments also
purchase.
Could we get a report on the amount of fresh fruits and
vegetables that are purchased at the Federal, State and local
level?
Secretary Veneman. We will do our best to provide you with
that kind of report.
Mr. Farr. For the School Lunch Program.
Secretary Veneman. Yes.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
NATIONAL ORGANIC STANDARDS PROGRAM
Mr. Farr. Let me move to something else, because some of
those purchases might be organic.
Mr. Kingston raised the point about the organic snafu that
went into the omnibus appropriations bill. Most of us were
appalled by it and have endorsed efforts to repeal it. Senator
Leahy introduced legislation as well as Congressman Kind and
myself here, and I was very pleased to read in today's National
Journal your statement regarding USDA standards remaining in
place, and that you are concerned that the language inserted in
the Omnibus Appropriations Act weakens the National Organic
Program.
Can you do something to make sure that that language does
not get implemented?
Secretary Veneman. No, that is your job.
Mr. Farr. Well, it is both of our jobs. I mean, as you
stated, you worked 10 years in the Department, got a record
number of responses. This is really undermining a program, and
I think in response to another question, what we have to have
is confidence in the regulatory system.
Secretary Veneman. I said that tongue-in-cheek. As my
statement I put out yesterday said, we did work long and hard
on this, and we believe we ought to maintain the organic
standards that were agreed to.
The provision that is in the fiscal year 2003 Bill requires
us to conduct a study to determine whether or not there is
available organic feed. We have been in the process of
conducting such a study for some time, so we are already
engaged in that process. But we are currently doing everything
we can. Under the current organic law, we are continuing to
implement the organic standards as they were put forward and
implemented in October of 2002.
Mr. Farr. And in that study, you can also determine whether
there is quantity versus cost, and you can take a long time on
that study, can't you, and the provision in the omnibus runs
out at the end of this fiscal year?
Secretary Veneman. Well, I don't know when the study is
going to be completed, but we are engaged in looking at the
whole feed sector, and whether or not sufficient organic feed
is available.
Mr. Farr. I want assurances that all of the hard work that
went into creating the organic standards are not going to be
undermined by this latest effort by not allowing you to enforce
the rule.
Secretary Veneman. I understand your concerns, and my
statement indicates that I have some of the same concerns.
As I said earlier to Mr. Kingston, we are also outreaching
to the people who have a concern with this, to try to give them
access to the names of feed suppliers, to address the problem
that they believe that they have in terms of access to supply
by providing information on where they can get the kind of feed
that they need.
Mr. Farr. Could you supply us with that information also?
Secretary Veneman. Certainly.
[The information follows:]
We have compiled a preliminary list of organic feed
suppliers based on information from the Organic Trade
Association, the National Sustainable Agriculture Information
Service, and others that we will post on the National Organic
Program website at www.ams.usda.gov/nop. Certifying agents are
required to send USDA a list of all operations that they
certify. As we compile this information, we will add to our
list of organic feed suppliers.
Mr. Latham. Thank you, Mr. Farr.
Ms. DeLauro.
Ms. DeLauro. Thank you, Mr. Chairman.
PRODUCT DISTRIBUTION DISCLOSURE
Madam Secretary, I would just like to continue talking
about disclosure. Last year E. coli 0157:H7 tainted ground beef
produced by a Colorado plant resulted in a recall of
approximately 19 million pounds of product. Colorado and other
State public health officials that wanted to inform their
citizens where the contaminated product was sold were not able
to get the product distribution information from USDA because
the Department only shares a plant's customer list with States
that sign a memorandum of understanding promising not to
release the information to the public. Some States have open
record laws that prevent them from signing such an MOU.
The USDA's approach to providing distribution lists seems
to be counterintuitive as consumers urgently need to know if
the meat in their refrigerator came from a contaminated or an
implicated product. These were articles that appeared in the
Denver Post in August of 2002. State health officials asked
Conagra for its list of distributors from a second 18.3 million
pound recall so State inspectors could track which restaurants
and grocery stores got the meat. Conagra said no. USDA
regulations said it is the company's choice. It said a recent
change in that rule will not help Coloradoans.
My questions to you on this issue from the Department's
perspective, explain to us the logic behind USDA's policy not
to release distribution information to States that will tell
consumers where the recalled product is sold?
Is there any legal barrier to the Department's release of
this information to State public health officials that is
responding to a recall, and what do you think we can do to
ensure that the information is passed on to consumers in a
timely manner? As I understand it, there was lag time, 8-10
days, in which this product was on the shelf being eaten and
consumers could not get the benefit of the information.
Secretary Veneman. I am not completely aware of all of the
details of what you are describing, but I am generally aware of
this disclosure issue. I know that we have looked at the
lessons learned out of this recall and the need to disclose
certain information, and we have implemented some new
procedures which I can get to you on the record to provide
better information sharing to both States and consumers. I
agree with you, people need to know what product is being
recalled.
We realized that there were some difficulties within the
system. Again, I don't know whether or not there are legal
impediments, but I can commit that we are making sure if there
is a lag in getting information out, we are trying to correct
deficiencies that we may have detected in that recall.
In every one of these situations, we always try to learn
from what happens and make the system better if there is an
issue.
Ms. DeLauro. I appreciate that information. So you are
amenable to providing distribution lists to State officials and
public health officials with these occurrences to allow
consumers to understand where the product is being sold, and
not purchase from a supplier, or at least not purchase for the
period of time when we understand that the meat is tainted or
it is being recalled. Because that information does not get to
the consumer and it is being prevented both by the industry and
the USDA.
Secretary Veneman. Again, I don't know what the impediments
are, but we will get something back to you.
[The information follows:]
There are no barriers to the Department's release of
distribution information to the States.
Ms. Kaptur. Would the gentlelady yield?
Yesterday we were informed by the Inspector General that
only 12 percent of recalls are ever recovered, which means that
88 percent of the bad stuff is still out there in the system.
Secretary Veneman. I think that is an interesting issue
that you bring up because it is different than the one that Ms.
DeLauro brought up, and that is what the definition of a recall
is. It is not that it is still in the system.
When we announce the amount of the recall, it was the
amount produced on that day. Obviously a tremendous portion has
already been consumed.
There have been some meetings with consumer and industry
groups to determine what we should be defining as a recall
because when you say that you are recalling a certain amount of
product, it is the amount that was produced that day. Obviously
not all of it is still in the system. That is where the IG gave
you that number, I believe.
Ms. DeLauro. I will follow up on that later.
Mr. Latham. Mr. Boyd.
Mr. Boyd. Madam Secretary, I want to follow up on a
question asked earlier by Ms. Kaptur related to research and
development by the United States Government Department of
Agriculture, and I want to speak in macro terms but also
specifically.
CITRUS CANKER RESEARCH AND DEVELOPMENT
It will not surprise you that I want to address citrus
canker in that question. We all realize that we would not be
where we are today if the people that went before us did not
invest a lot of money in research and development to make us
the best agricultural production country in the world. I think
a lot of our folks are worried about that now because they see
trends, like I do, that the numbers are down. I am trying to
compare apples to apples here, and maybe Mr. Dewhurst can
argue, but there is a 15 percent reduction in the ARS budget
from 2002 actual to this budget request, and about a 4 percent
in the CSREES. I know that we are in difficult times, but
farmers are not like the folks that ran Enron and Global
Crossing. They do not farm with their eye on the next quarterly
financial statement or tomorrow's stock price. They are
visionary, and they want their kids to take this farm and run
with it down the road. But with today's global economic
environment, we cannot do that unless we invest in research and
development.
I have spent my entire life farming. I still do. I could
not do it if we did not have the technological advances
provided to some extent by industry, but mostly by the United
States Government and our State governments. It is our watch,
as Ms. Kaptur said. We cannot let our research and development
capacity decline. That is like mortgaging our children's
future. That is my little lecture, and I apologize for that in
taking your time to lecture, but we need to be visionary on
this.
Let me be specific. Citrus canker, and you know that issue
well. It came into this country in 1989 through the Miami
Airport, was planted in a residential yard a quarter of a mile
from the Miami Airport. We discovered it in 1995. We have spent
hundreds of millions of dollars of this Federal Government's
money, matched by the State of Florida. In addition to the
economic loss suffered by the farmers, the industry, and I am
not sure that we are winning the battle. You have been very,
very helpful in that, and I am grateful to you. I sometimes
feel I have worn my knees out begging Mr. Bonilla, Mr. Obey,
Mr. Young and Ms. Kaptur and your office to work through this.
We have to keep the commercial industry cooperative to fight
this battle. It is a legal quagmire, and you know that.
Have you guys weighed into that or would you consider
weighing in if we continue to have legal problems on that
issue?
Secretary Veneman. I have to say I honestly do not know if
we have intervened in that case or not, and I can have my
lawyers to look at the possibility. I thought the case had
gotten to the point where it allowed us to resume the program.
Mr. Boyd. That is true, but they are appealing. Of course
what the folks are fighting, the cities and counties and some
individuals in south Florida, are challenging the 1,900-foot
rule. Actually the last ruling is a positive one, and so we are
in pretty good shape. But if we get stopped again, we
desperately need the Department to step up legally. I don't
know what the legal terms are, but present a brief to the
court.
Secretary Veneman. We will look at the feasibility of doing
that. I don't know without talking to my lawyers whether or not
we can do that. But we will certainly look at it.
Mr. Boyd. My second question goes to the macro issue, and
that is what is the administration's long-term strategy on the
research and development side for maintaining the technological
edge that the United States of America has on the agricultural
production side? That is a very simple question, and there
should be a strategy in place and if there is, I would like for
you to share it with us.
Secretary Veneman. I absolutely agree that research and
development has been critical to the food and agriculture
industry in this country and it continues to be. A lot of
people think of agriculture as a low tech business, but as you
know, it is a very high tech business and without new
technology we would not be the most efficient producers in the
world.
The interesting thing about research and development is
that it has continued to grow, and I don't have the absolute
numbers, but more and more research has been done by the
private sector. It used to be, when the Department of
Agriculture was formed over 100 years ago, that 100 percent of
agricultural research was done by the government. Today over 60
percent is done by the private sector.
One of the things that we have tried to do is to look at
where the research priorities are from a public perspective.
How do we help farmers address both the short and long-term
issues that they are facing today, be it environmental issues
or food safety issues or genomic mapping opportunities which
will give us information to determine things like food safety
strategies or strategies to fight pests and diseases. There are
tremendous new opportunities in research. We want to make sure
that our priority setting is right in this regard.
We are working closely with the Office of Science and
Technology. We are trying to leverage resources by partnering
with other research institutions. For example, when we were in
China this summer, Dr. Jen, our Under Secretary for Research
Education and Economics, had negotiated a joint partnership to
do genomics research on pigs with China and to share that work
because the underlying research of that project will be so
important in dealing with the industry itself.
I think there are new ways we can look at research. We
would love to have unlimited resources to put into some of
these projects, but we have to make priorities in the budget
and so it becomes difficult. I do think that when we look at
research we are looking at the whole range of issues. The pest
and disease issues are also ones that agriculture is
continually confronting on the research area.
Mr. Latham. Thank you, Mr. Boyd. I had one comment. Mr.
Farr brought up the fact that most of the commodity dollars go
to a few crops and few farmers, and I would just suggest that
one of the policy changes made in the new farm bill, which I
strongly disagree with, is that it very much limits the
opportunity for different crops to come in because now it is by
commodity rather than by the land. Before you had flexibility
to grow anything on that land, today you don't if you want to
get subsidies. So that policy part of the farm bill is only
going to make things worse.
Mr. Farr. That is the point, that you do not really help
all farmers in need.
Mr. Latham. Exactly. I am in total agreement with you.
PACKER CONCENTRATION
One question that I have, in the fiscal year 2004 request,
the Department would like $1 million to implement a new pilot
program to audit the top four meat packers. I just want to know
what types of things you will be reviewing with the audit and
what you intend to do with the results? Does this have to do
with mandatory price reporting?
Secretary Veneman. This is a request through our Packers
and Stockyards Administration under GIPSA. There has been a lot
of questions raised about concentration in the meat packer
industry and what impacts this is having, and so this is an
attempt to audit the largest of those packers and do a complete
audit. So we have requested money for that purpose.
Mr. Latham. Very good.
Ms. Kaptur.
FOOD SAFETY
Ms. Kaptur. Thank you, Mr. Chairman. I wanted to move to
the subject of food safety and inspection.
I would like to place in the record and ask unanimous
consent to do so the following figures relating to food safety
of the Department. First of all, the appropriated levels since
1997, which have been increasing, the fact that as of September
30 last year there were fewer inspectors on board 7,560. That
is down from 2001, 7,645.
Recalls have doubled, the amount of pounds recalled. In
fact, it has more than doubled since 1997. It was 27 million
pounds recalled in 1997. Last year it was 56 million pounds.
And finally, the recalls for class 1 violations by number,
which has had a sixfold increase since 1997. Class 1 health
violation recalls were 16 in 1997, and for the fiscal year
2002, 98. That is a sixfold increase, and it is an increase
that is very serious, and I want to emphasize sixfold, six
times more than 5 years ago.
LISTERIA RULE
I want to move to the issue of listeria, and I am only
going to pick out one piece of this and one plant, the Wampler
plant in Pennsylvania, owned by Pilgrim's Pride. I am going to
be asking the Secretary about why the listeria rule was
changed.
This particular plant's bad practices led to the deaths of
seven people and miscarriages and many hospitalizations. The
problem was tainted turkey.
Now the Department in response to that situation issued a
strong rule which the Secretary herself called aggressive, but
something happened on the way to the implementation of the rule
and that is what I want to get at. I also want to put in the
record an article from Time Magazine of this week, ``Can Cold
Cuts Kill?'' sub-headline, ``The USDA may be dragging its feet
on inspections and favoring the industry.''.
I also want to place on the record the fact that Wampler's
Pilgrim's Pride was the 18th largest agribusiness campaign
contributor to Federal elections, all on one side of the aisle.
100 percent of their campaign contributions went not to my side
of the aisle. The National Food Processors Association is
quoted in this Time Magazine article as having persuaded the
USDA to weaken the listeria rule, gave $150,000 in soft money
only to the majority party. The head of the Food Marketing
Institute, which has led the industry's effort to weaken E.
coli testing, was one of President Bush's $100,000 Club
contributors.
It is very interesting that that particular organization
also did contribute to some Democrats, but the ratio was 6 to
1. Food Marketing Institute favored the majority party 6 to 1.
I don't know if that has any relationship to the number of
class 1 violations, but 6 to 1 seems to be an interesting ratio
here.
Madam Secretary, my question is the White House denied, in
press reports at least, any role in changing the final listeria
rule. However, Under Secretary Murano acknowledged consulting
both the White House and the industry on the final rule,
claiming it was only fine-tuned.
I would like you to explain what happened with the progress
of that aggressive rule you had originally introduced; and
also, as I understand it, the final rule drops any fines for
plants that violate. No fines for companies and also limits
testing only to plants with the riskiest products and plants
that do not do their own testing. What happened?
Secretary Veneman. We do not have a listeria final rule
yet. There is a proposed listeria rule which has been out for
public comment for some time and under which a risk assessment
has been going on.
However, after the Wampler issue, I said we cannot wait for
the listeria rule to come out; what else can we do? I want to
be aggressive on this.
We issued a directive to our meat plants identifying what
we were going to require them to do on listeria. This was more
complete than was the proposed rule for listeria and more
aggressive.
We are in the process of completing the final listeria
rule. Yesterday there was a meeting with all interested
parties, including consumer groups, industry and so forth, on
the listeria rule risk assessment. Unfortunately, I didn't have
a chance to get briefed on how that meeting went, but that was
then shared with what they found out about the risk assessment,
and from these inputs the final rule will be written and we are
working on an aggressive time frame to get that rule done.
This directive was done as an interim step because we did
not want to wait for the rulemaking process to be complete. In
addition, on the E. coli issue, we have taken directives to
implement steps on reducing E. coli. We have taken steps to
implement processes to protect against Bovine Spongiform
Encephalopathy (BSE). We have been very aggressive on these
food safety issues, and we are going to continue to be.
I would be happy to have our Under Secretary Elsa Murano
and our food safety inspection people talk to you about the
steps that we have taken and the steps that we will continue to
take on these issues.
Ms. Kaptur. Will your final rule include fining companies
where violations are found?
Secretary Veneman. I cannot comment on what the final rule
will contain.
Mr. Hinchey. Madam Secretary, you are 30 minutes beyond the
allotted time. We have some tough questions now coming up.
LIVESTOCK COMPENSATION PROGRAM
In Congress, we are not allowed to put items on web sites
60 days before elections. We cannot send out mass mailings 60
days before the election, either primary or general election.
But those restrictions do not apply to the executive branch
unless they impose them upon themselves. The executive branch
behaves differently according to the administration that is in
office. I know someone in your position is asked to do some
things that you might not do on your own, but nevertheless you
are asked to do them by higher ups.
One of the things that irritated a lot of people last
September was the announcement of the livestock compensation
program, and the way it was handled. There were no Democrats
invited to the announcement when it was made at a campaign
appearance in South Dakota. There were only Republicans
present, and it was telecast via closed circuit TV to various
places around the country. One of the candidates for election
in South Dakota was given a very prominent role, and he just
coincidentally happened to be in a very tight race with an
incumbent out there. I wonder what the Department's policy is
with regard to political events how you feel about them?
Secretary Veneman. Well, again this was the announcement of
the Livestock Compensation Program. It had been a program that
had been conceived and requested by some Members. When we
finally determined that we were going to do this program, and
again, keep in mind that despite calls for disaster assistance,
Congress had not acted. The sector that was in most need
because of lack of risk management tools; i.e., crop insurance,
was the livestock sector. So we did implement this program and
include some of the Members which had requested the program
itself in the announcement.
We often bring Members of Congress to the Department for
these kinds of announcements, either on radio or TV, sometimes
it is one party, sometimes it is bipartisan. Certainly it is a
common practice that we include Members of Congress in the
things that we do and the announcements that we make, depending
on their level of interest.
Mr. Hinchey. I know that. I also know that the
appropriations process broke down completely last year. We had
a budget which could not fit the appropriations in it, and
people here who were responsible for carrying out that activity
were made very uncomfortable, and I hope that they were
embarrassed about how that process went. We did not finish it
up the funding for 2003 until just recently. The President just
signed the bill last week.
So yes--through no fault of this committee because this
subcommittee and the committee as a whole carried out its
responsibilities in a very timely fashion--there was no
appropriation for FY 2003 until recently. The leadership of the
House was not able to fit everything together and as a
consequence, as you indicate, the appropriations process just
fell apart.
Because there was this problem with livestock you had to
respond, and I think you responded in an interesting way. I
thought that funding the program from that particular source
was not a good idea because section 32 is a source that is
important to farmers where I live. Section 32 is generally
dedicated to purchases of specialty crops, and it was being
used here for livestock which was totally out of the context.
But that is really not my question at this particular point.
I know this is not a question that you want to answer, but
the fact of the matter is that particular event was held in a
political way. It was designed to benefit a political
candidate, running for public office at the time. However, it
was done in a very partisan way. It was done to benefit
specifically candidates of the Republican Party. You made a
major announcement, almost $1 billion in livestock
compensation. A lot of people would have been interested in
attending if they had been invited.
I am not saying that these things happen only while you
have been Secretary of agriculture. Other people may have done
similar things in the past, but this particular event received
a lot of attention. There was big a story in the New York Times
about it. It is the kind of thing that we hope will not happen
again. And when there are announcements like that, we hope that
Democrats will be invited as well.
Secretary Veneman. I appreciate your concern.
Mr. Latham. Mr. Farr.
Mr. Farr. Thank you, Mr. Chairman.
POLLUTED RUN-OFF
Madam Secretary, I thank you for your interest in
responding to last year's concerns raised by this committee and
addressing problems associated with polluted runoff. We brought
that up, and you pointed out in your testimony that through
NRCS, you are going to support the important activities
addressing those problems not only with polluted runoff from
animal feeding operations, but also for providing specialized
technical assistance to land users on grazing lands.
What wasn't in your budget, and I am hopeful that we can
get it in there, is some $600,000 that was appropriated for the
last two fiscal years for an NRCS study that is going on in
California in conjunction with the National Marine Sanctuaries.
Essentially NRCS is doing the work on the land, and it is a
six-county area, essentially the territory from southern San
Francisco to Santa Barbara. It has gotten all of the State
agencies involved, and what is unique about it is the
agricultural agencies, particularly the State Farm Bureau and
local farm bureaus, are very excited about it because it is not
mandatory. They are just volunteering access to their lands and
sharing information so that we can find out how to best manage
runoff. It is probably one of the largest areas of the United
States that this is being done in, and certainly one of the
most comprehensive studies. So for a very little amount of
money we are getting a big bang for the buck. It is being
written up in a lot of journals, and the Farm Bureau is very
excited about it. They said they would participate as long as
the program did not develop regulations that would make them
mandate to do practices that they would just rather incorporate
voluntarily if something was broken and needed fixing, and that
is the way it is working.
I commend you for your interest in that, and encourage you
to continue to support that effort at NRCS.
Secretary Veneman. Actually I will look at this. I know the
unique issues relating to the coast terrain and some of the
watershed areas there.
I would note with regard to animal waste issues we have a
very large increase in the EQIP program as a result of last
year's Farm Bill which will certainly help with some of these
issues. We also just had the release of the new Confined Animal
Feeding Operations (CAFO) rule which USDA and EPA worked in
strong cooperation on to make sure that we had a rule that
could be implemented by farmers and ranchers so it would
produce the kind of results that we want. We are very proud
that we were able to work so cooperatively with EPA in
developing that final rule to further protect the CAFOs.
Mr. Farr. I had hoped one of the things that we could start
doing is really develop a policy that, if we are going to help
in the process of keeping people in agriculture, that we also
get a commitment that those lands stay in agriculture, working
cooperatively with the American Farm Land Trust. We have local
farm land trusts. Because with urban sprawl going on in
California, and it is going to hit other States as well, if we
are going to take the most productive land in agriculture,
perhaps in the world, out of agriculture production, we are
killing the goose that lays the golden egg, the goose that
provides a plus side on our balance of payments, trade
payments, and for all of the reasons you know. I do think that
we need to have a bigger role by the USDA in the preservation
of ag land; not just we will help you stay in agriculture until
the day you want to convert to housing.
Secretary Veneman. We do have farmland preservation moneys
within our budget. But I absolutely agree. Some of the land
preservation trusts that have been set up, particularly in
California, which has been a leader, are the Range Land Trust,
and the Farm Land Trust, which I think have been great models
for keeping land in production and creating the kinds of long-
term investments in ag land that you are talking about.
Mr. Farr. Thank you for your help.
Mr. Latham. Ms. DeLauro.
Ms. DeLauro. Thank you, Mr. Chairman.
LISTERIA RULE
Madam Secretary, if I could, I would like to go back to
follow up on a couple of things that Ms. Kaptur talked about
with regard to listeria. Last year when Dr. Murano was here, I
asked her about the listeria rule and when we would have it
finalized. She indicated that she thought that they were going
to have a rule, and that 2003 was the earliest time for us to
have a rule.
I understand what you said about the directive in order to
try to speed up the process, but it is pretty much March of
2003 and we do not know when we are going to have a rule on
listeria. Let me quote from the article that Ms. Kaptur put
into the record because I think it is important with the
questions that Ms. Kaptur brought up.
A few days ago Time Magazine published an article that an
industry newsletter stated that a number of key USDA personnel
have bought into much of industrial proposals. Further, the
directive was averted as a result of industry efforts made at
the White House level.
Leaving that there for a second, one of the critical points
here is that the industry says or is potentially saying that
there is no need to rush a final listeria rule because the
directive is forcing plants to test for listeria. But the
directive is no substitute for a final rule because a directive
is only an instruction to FSIS inspectors telling them when and
where to test, and if we do not get the dollars to deal with
the testing, the industry has no incentive to do their own
testing.
I might add the issue of the fines that Ms. Kaptur brought
up, and I think it is important to quote your predecessor,
Secretary Glickman, ``We can fine circuses for mistreating
elephants, but we cannot fine companies that violate food
safety standards.''
We can never get to holding an industry accountable for
tainted meat in our food supply. All of these questions are
trying to figure out why, what is the reason. Your directive is
no replacement for a rule and it is now 2003. Where is the
listeria rule? We are going to watch it carefully to see
whether or not it has been watered down to continue to protect
the industry.
Secretary Veneman. Ms. DeLauro, I can only say that we did
this directive as an interim step because I did not want to
wait for the listeria rule to get done. We are going to get
this rule out as quickly as possible. The risk assessment was
presented to the interested parties yesterday. I can honestly
say that I have pushed very hard to get this rule out as
quickly as possible. We are doing simultaneous clearances on
it. We are working the rulemaking process as quickly as we can.
I am committed to getting this rule out.
Ms. DeLauro. Do you believe, as your predecessor Secretary
Glickman believed, that we ought to be able to fine these
companies? What is your personal view of this?
Secretary Veneman. I haven't looked at the legal
authorities on fines. I have to be honest, I have not looked at
those legal authorities, but I certainly think that it is
something that needs to be considered and looked at in the mix.
Ms. DeLauro. Do you believe that the fines to be applied to
these companies will be in the process?
Secretary Veneman. I don't understand what you are talking
about, elimination of fines?
Ms. DeLauro. In the first round in looking at this effort,
I understood that we were going to apply fines to companies who
were in violation.
Secretary Veneman. I am quite sure that could not have been
done in a directive.
Ms. DeLauro. I would go back and look at that as well. The
issue remains, and I go back to what Secretary Glickman pointed
out. It was his strong view that we ought to have fines. I was
asking your own personal view as the Secretary of Agriculture,
the kind of authority that you would like as it has to do with
both rulemaking and with mandatory recall and with fining
companies that violate some very fundamental rules.
Secretary Veneman. As I mentioned, one of the things that I
have asked for is a complete review of all of our authorities.
I am going to look at all of those authorities and determine
whether or not we believe we have the authorities that allow us
to do our job.
Ms. DeLauro. Thank you, Mr. Chairman.
Thank you, Madam Secretary.
Mr. Latham. Mr. Boyd.
Mr. Boyd. Madam Secretary, I am the last one so I will try
to wind this up on a more pleasant note. You have been very
diligent and kind to sit here for over 3 hours and answer our
questions.
CITRUS CANKER RESEARCH
Back to the previous point that we were talking about,
citrus canker. I did want you to know that we earmarked money
for citrus canker research. This is one of those earmark
programs that you talked about in your testimony where maybe
the needs and returns are not the greatest. However, I
certainly think that research on citrus canker is something we
have to do. Even if it takes us 5, 8, 10 years, we have to do
it. Nobody else is going to do it. I hope next year when we get
our budget request from you we will see some request for ARS
money into citrus canker research. It is a $9 billion industry
for our State, and it is really important to us.
RISK MANAGEMENT ISSUES
Now, I want to wind up with one question on the Risk
Management Agency, and I have a recommendation for a way to
save some money. Isn't that great?
From the way I understand it, the FSA compiles acreage and
production data on producers in order to calculate losses and
determine payments for crops insurance, as does the RMA
collecting data also. If there is a discrepancy, the RMA always
uses the FSA numbers; is that accurate and fair?
Secretary Veneman. Mr. Collins.
Mr. Collins. RMA only collects loss data if there is a
disaster. RMA collects loss data through loss adjustment.
Private companies hire loss adjusters to determine the size of
the losses, so they are really independent systems.
Mr. Boyd. Independent systems doing basically the same
thing?
Mr. Collins. Historically they have been independent
systems. Under an act implemented in 2000, we have been
directed to work those two systems together, and that is what
we have been doing over the last couple of years. It is not
easy because a Farm Service Agency farm, for payment purposes,
is different than a Risk Management Agency farm. When a farm
comes in to buy crop insurance, they may not buy it on the same
farm definition or same piece of land that we make program
payments on. They can elect to carve up their farm in different
ways. They can provide insurance for what is called a basic
unit. They can buy an optional unit or enterprise unit. There
is a lot of ways that they can construct their crop insurance
policy.
Mr. Boyd. I believe farmers can game that system better
than any way that you guys can dream up.
Mr. Collins. I know that for a fact.
Mr. Boyd. I deal with them every day.
I guess my question, Madam Secretary, in this day of tight
budgets and reduction in FSA staff is why are we basically
duplicating the efforts? Although they may need some fine-
tuning, and there might be some technical differences. It might
be a way to save some money. Risk crop insurance is something
that, if we are going to stay in the farming business in this
country, we have to figure out how to make it work. Honestly,
at some other point in time I want to talk with you and your
people because it is not working very well. We still have
difficulties. They are not ready to give up, but we have to
figure out how to make it work.
Secretary Veneman. We appreciate the opportunity to do
that. We are looking at where are the gaps in the system and
where are the areas where the program not working, and we want
to make new products available and make adjustments to the
program where it is not working, and that is part of the
initiative. We would be happy to work with you and our risk
management people on that issue.
We have these technical problems of different definitions
of farms, but we are working on a technology project to try to
bring these systems together in a more comprehensive way so
that the data can be compared and shared even with the
differences in farm definitions.
Mr. Boyd. I would submit that ultimately each organization
is compiling production data, loss data, yield data, and how
you format it, we ought to be able to figure that out so as not
to duplicate efforts.
Mr. Collins. I agree, and we are looking at that. We have a
big data mining effort going on between FSA and RMA.
In addition to that, related to your concern about how crop
insurance is working in Florida, we did award a contract to the
University of Florida in 2002 to look at the problems with crop
insurance in Florida. We got that report late in 2002. That is
part of the Secretary's initiative to look at the gaps in crop
insurance.
Right now we have 32 pilot programs going on for crop
insurance, many of them in specialty crops; citrus tree
insurance is an example of one of those pilots. In addition, we
awarded 40 contracts for research projects during 2002 to
improve the portfolio of products in the Risk Management
Agency. There is a lot of stuff in process, but it has got to
be brought together.
Mr. Boyd. Mr. Chairman, there was some language in the
omnibus bill about the citrus nursery relative to the risk
management and crop insurance. Are you familiar with that?
Mr. Collins. No, I am not. In fiscal year 2003?
Mr. Boyd. Yes, in the fiscal year 2003 bill.
Mr. Collins. I don't remember that.
Mr. Boyd. Because of that language, the USDA said that they
have to scrap the whole rule that we put in place 3 or 4 years
ago on the citrus canker compensation, the loss production.
Maybe it is something that we can talk about outside of this
setting. As it was represented to me it was a matter of wanting
to scrap something that we already have in place because
something was going to be added. You will endanger the whole
Canker Program if we do not continue that part of it, that crop
insurance part of it.
Mr. Latham. If you want to submit something for the record,
please feel free to do so.
Mr. Boyd. Thank you, Mr. Chairman.
[The information follows:]
The Consolidated Appropriations Resolution for fiscal year
2003 provided that the Secretary not use more than $18,200,000
of the funds of the Commodity Credit Corporation, to remain
available until expended, to compensate commercial citrus and
lime growers in the State of Florida for lost production with
respect to trees removed to control citrus canker, and with
respect to certified citrus nursery stocks within the citrus
canker quarantine areas. This language does not affect risk
management and crop insurance programs of the Department.
Indemnities paid under citrus and citrus tree insurance
policies are not affected by any compensation paid for tree
removal as a result of citrus canker.
Mr. Latham. Ms. Kaptur.
Ms. Kaptur. Thank you, Madam Secretary, for remaining
longer than you anticipated, along with all of your associates.
USDA WEBSITE
I have this comment and then I have an additional one that
I want to ask on our international food programs. In your prior
comments you referenced your Web site and I am going to be
placing on the record the Department of Agriculture Web site as
of October 30, 2002, just a few days before election. This Web
site includes photos of 21 Republicans and 3 Democrats in this
Congress. We know this institution is about equally divided,
but my question and concern goes to the fact that some Members
who were in heavily contested races, David Phelps and John
Shimkus, for example, the only photo on your Web site was of
John Shimkus. And the same was true of a Member from
Connecticut. It was obvious that there was favoritism shown on
the Web site. We have tabbed the Republicans who have photos
and the Democrats who have photos. No Democrat was pictured
alone. The Democrats were always surrounded by three or four
Republicans. I know that Republicans have a little edge on us
here, but that is quite a significant disparity.
My question is: Do you believe this to be an appropriate
use of taxpayer funds on the USDA Web site?
Secretary Veneman. Congresswoman, what the Web site has is
pictures of the activities that we participate in. I think you
mentioned Mr. Shimkus. I did a visit in his district, and we
often have photos of events when we travel around the country.
We chronicle those and make them available. They are public
events. They are events for which the press is invited, and
certainly it is only a recap of the event that we participated
in.
Ms. Kaptur. Do you think that it is appropriate to have
pictures of contested candidates a week before election on the
Government of the United States Web site and it is a 7 to 1
ratio in favor of the party which appointed you?
Secretary Veneman. I wasn't aware of the ratio. All I am
saying is that it is about chronicling the things that we are
doing. These were not events that were outlined or put on there
at that period of time. They were left on our Web site.
Ms. Kaptur. I regret that I have to place this in the
record. The photos cannot be included, but we will include the
names. If it is true that the photos represent the districts
into which you are going, then it is seriously disproportional,
and the Department receives enormous support from both sides of
the aisle in Congress. I know my comments will be taken into
consideration.
[The information follows:]
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GLOBAL FOOD AID
Ms. Kaptur. I want to move to a final question on global
food aid and to ask the help of the USDA in countering a major
enemy that the United States now faces in the form of terrorism
globally, particularly as it regards new terrorists that are
being born every day. Even if we take Iraq, we are not going to
be out of the sands there until long after I die.
One of the major ways that the terrorists are being
produced is through the madrasas, hundreds, thousands of them,
largely funded by the Saudis all over that part of the world.
The lure that they have for the boys to come in--they do not
educate the girls--is wheat and food. One of our major tasks in
securing a more stable future is to feed children in that part
of the world and displace the madrasas with schools that
educate and feed.
Thus, it is with surprise to me that I see that the Global
Food for Education Program, although you mention it in your
testimony, is one-sixth of the size that it used to be. It used
to be funded at about $300 million. It was reduced to $100
million. Your budget calls for $50 million. In addition to
that, there is no increase in funding for the PL-480 program,
and because of the lack of surplus last year the 416 program,
which is one of my very favorites, is nonexistent in terms of
your budget.
We are told by the World Food Program that needs are going
to be increasing. For instance, even with Iraq we have 24
million people we are going to have to feed there. I happened
to be at a conference the other day with the head of AID, and I
asked him if he had ever had a long meeting with you, and he
had not. I said he would never get the money in his budget. I
said the money to do feeding is through USDA and you and
Secretary Veneman have to sign an agreement. He seemed to hear
what I said to him.
My question to you is how do you intend to meet the needs
that are out there in view of the shortfalls in your own
budget?
Secretary Veneman. Well, I certainly appreciate your
concern because food aid is very important, particularly in the
world in which we now live, and I also appreciate your concern
for what is now the McGovern-Dole International Program, which
is the Global Food for Education Initiative's successor after
this Farm Bill.
The difficulty in this budgeting process is that in last
year's budget the $100 million came out of mandatory funds, and
the way the Farm Bill left it was to say that the next year's
budget; i.e., fiscal year 2004, had to come out of appropriated
or discretionary funds, which is why it was difficult to put
that amount of money into the budget. So certainly we recognize
the value of feeding children, of getting them into the
schools, of creating the exact kinds of things that you have
talked about.
We are working closely, and as you know, this is an
interagency process. The interagency meets and determines the
needs and where the resources are going to be requested and
where they are going to come from. We work closely in the
interagency process, which includes State, AID, USDA and other
agencies, to address the food aid needs and we will continue to
do that. We have money budgeted for PL-480. We have increased
substantially our PL-480 funding over the last couple of years
primarily so we are not so dependent on 416 commodities to have
them come from appropriated funds, but we continue to look
within the interagency process at the whole food aid need
around the world.
Ms. Kaptur. Do you intend to request a supplemental on this
whole international food arena?
Secretary Veneman. I cannot speak on behalf of the
Administration in that regard. If that becomes necessary, we
will work with the interagency and with the President to do
that.
Ms. Kaptur. Mr. Chairman, I am going to submit an article
that was released this week, ``Plummeting food aid: World Food
Program urges more to combat hunger,'' which gives the
international parameters and why this budget is inadequate. We
look forward to a supplemental, Madam Secretary.
Thank you for your testimony today.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latham. We will proceed with Ms. DeLauro.
Ms. DeLauro. I would like to make two final comments, one
which has to do with food safety, and I want to mention the
School Lunch Program.
FOOD SAFETY
We spent a fair amount of time talking about food safety
and meat contamination. One of the things that I would like to
work on, and will be trying to look at in the future, is how we
focus on the primary causes of meat contamination, the feed
that is being given to our cattle, the overcrowding of the feed
lots, poorly trained workers, and I will continue to look at
the lack of stringent government oversight in this area. I
think we need to put our focus on some of the primary causes
rather than what happens at the end of the process and how we
deal with it.
SCHOOL LUNCH PROGRAM
We are aware that there is data that suggest some
ineligible children may be receiving the free or reduced School
Lunch Program. All of us support efforts to make sure that the
subsidies go to those children which are eligible. I have a
cautionary approach in how the changes get made. There was
similar documentation and requirements which were evaluated in
a more rigorous demonstration project conducted by USDA in the
1980s, and that evaluation found when income documentation was
required at the time of application, five eligible students
were deterred from participating for every ineligible student
that was deterred.
The fact of the matter is we do not have a sense of how
many ineligible children are certified for free or reduced
price meals. We should not use documentation to drive away
those youngsters who are eligible. In the absence of some
tested policies which increase the accuracy of school meal
applications while harming eligible children, widespread income
verification requirements maybe should not be adopted. We want
to look at that before we make any wholesale changes and have
eligible kids who cannot get the School Lunch Program.
Thank you.
Secretary Veneman. Let me make two comments. I am familiar
with that study. Our people are familiar with that study, and
it is the kind of thing that tells us that it is not easy to
address this issue. Obviously we do not want to create a
disincentive for eligible families, but we do have the other
outside incentives which prompt schools to enroll students
regardless of eligibility, which is why this is such a hard
issue.
Also on the issue of looking at the whole food chain with
regard to food safety, I could not agree more. We want to look
at the science that relates to the whole food chain and where
are the points where we may have difficulties. We have strongly
supported a science-based system. More and more both industry
and consumer groups are coming together and saying yes, we need
this approach. We have seen in the past some not willing to
look at the whole food chain, but I see much more of a focus
now on looking at the whole food chain in determining where are
the points that we need to address.
I mean, as I often say in my speeches, the issue of food
safety is important to every part of the food chain. It is
important to the producers because if people do not buy their
product, they lose. It is important to producers and consumers.
This is a very important issue, and one that we will continue
to take very seriously.
Ms. DeLauro. Thank you, Madam Secretary.
Mr. Latham. Madam Secretary, thank you very much for your
patience here today. We have gone much longer than anticipated.
We appreciate your staff's participation, and we look forward
to working with you. Don't forget Ames, Iowa.
The committee is adjourned until 9:30 on March 5, when we
will have the Farm and Foreign Agricultural Service testify for
agriculture appropriations. With that, we are adjourned.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Wednesday, February 26, 2003.
OFFICE OF INSPECTOR GENERAL
WITNESSES
PHYLLIS K. FONG, INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL
JOYCE N. FLEISCHMAN, DEPUTY INSPECTOR GENERAL, OFFICE OF INSPECTOR
GENERAL
RICHARD D. LONG, ASSISTANT INSPECTOR GENERAL FOR AUDIT, OFFICE OF
INSPECTOR GENERAL
JON E. NOVAK, ACTING ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS,
OFFICE OF INSPECTOR GENERAL
DELMAS R. THORNSBURY, DIRECTOR, RESOURCES MANAGEMENT DIVISION, OFFICE
OF INSPECTOR GENERAL
STEPHEN B. DEWHURST, BUDGET OFFICER, UNITED STATES DEPARTMENT OF
AGRICULTURE
Opening Remarks
Mr. Bonilla. The subcommittee will come to order. Good
morning to all and welcome to our first hearing for the fiscal
year 2004 budget. I am delighted that we are going to start
today with our Inspector General. We have before us the new
Inspector General for the Department of Agriculture, Phyllis
Fong. Ms. Fong was confirmed as IG in December of last year and
was previously the IG for the Small Business Administration. We
are glad to have you with us this morning.
We also welcome everyone who has accompanied her this
morning. Some are very familiar faces to us. As we know, Mr.
Dewhurst. In particular we would like to recognize Joyce
Fleischman and to thank her for ably serving the Department as
acting Inspector General for 14 months before Ms. Fong's
confirmation. We appreciate the hard work that you have done.
From time to time, we would like to remind people that this
subcommittee had some part in creating the office that you now
hold. This was done some years ago when there were problems
involving fraud and other illegalities in some of the
Department's programs. The subcommittee suggested to the
Secretary that there should be an office that was independent
and not of the Secretary, but independent of individual agency
of the Department.
In fact, 2003 marks the 25th anniversary of the
establishment of the Office of Inspector General. And speaking
for all of us on this subcommittee, we congratulate you and
each of your employees on this milestone.
This is certainly a very challenging and exciting time to
be in the IG's office, and we hope that the next 25 years are
just as productive as the first 25 have been.
We appreciate the work you do to make sure that USDA
programs operate well and appreciate your success in catching a
lot of the bad guys, because as we all know, there is a history
of that, and when you have programs out there, a lot of folks
unfortunately choose to take advantage of the good will that
all of us are here to provide the people of this country.
We look forward to your testimony, Ms. Fong, but before we
begin, I am going to yield to Ms. Kaptur for any opening
comments that she might have.
Ms. Kaptur. Thank you, Mr. Chairman, and I think we should
all congratulate ourselves for getting here this morning. I
particularly want to welcome you, Ms. Fong, and to congratulate
you on your appointment and achievement as a member of our
senior executive service. I know to move from the Small
Business Administration to the USDA is a major leap in terms of
responsibility and jurisdiction, and I am someone who has great
respect for the Inspector General's Office and for all of your
colleagues who are with you here today, for the tremendous work
that you do.
And personally, if I could give you more dollars to recover
more dollars, I would do it, and, in fact, I am one of the
members of this committee that has long believed that the
dollars you recover should go into your budget, not the general
treasury, or at least a larger share of it, because I think it
would incentivize and provide for more inspectors and for more
attorneys and more auditors. With the amounts of money that
this Congress has appropriated to the U.S. Department of
Agriculture and all of its programs over the last several
years, my feeling is that there is probably a great deal of
fraud occurring that we are not finding, simply because we
don't have the inspectors.
We don't have the auditors out there in the field to the
extent that we should, including some of our main line farm
programs, because of the amount of increase, if one just looks
at them, is staggering.
So I look forward to your testimony, and we will have
questions during the normal rounds. Thank you so very much.
Mr. Bonilla. Ms. Fong, we will ask you to present your
testimony in just a moment. We have received your detailed
statement in writing, and it will appear in the record in its
entirety, and I would also just like to state, before we begin,
that this subcommittee, I am very proud of the way it has
worked in the last couple of years, efficiently and in a timely
manner, and I think everyone at USDA will find that we are
going to proceed that way again this year, and will appreciate
that.
This subcommittee did its work on time last year and was
ready to go. And due to forces beyond our control, we became
part of the omnibus in the end, which none of us is pleased
about. But I appreciate, Ms. Kaptur, all of the cooperation
that we have on both sides of the aisle on this subcommittee,
and we are very proud of the work that we have done. And we
were very proud frankly that we have had strong bipartisan
support for our final product the last couple of years. We do
try to work with everyone and make them part of this team on
the subcommittee as well as all of you at USDA. So we
appreciate that very much.
I also would like to say that I will recognize members, as
I have in the past. If everyone is here on time when the gavel
goes down, then we will recognize them in order of seniority.
If not, then we will go by order of those who arrive--in order
of arrival, but also taking into consideration that we are
going to alternate back and forth.
Ms. Kaptur. Thank you, Mr. Chairman. I am very thankful for
that.
Mr. Bonilla. And we also want to remind members that we do
have a 5-minute rule, and we have had very good cooperation on
that in the past so that we can have second and third rounds of
questioning if we need, and we always try to allow as much time
as possible, as many rounds as possible for every member.
I would also like to ask everyone, we have had very good
cooperation with cell phones and beepers. We would like to ask
that that continue once again this year. Ms. Fong, you may
proceed.
Opening Statement
Ms. Fong. Thank you, Mr. Chairman, and Ms. Kaptur. I
appreciate your warm welcome and the opportunity to appear
before you today. I am delighted to be here on behalf of the
Office of Inspector General and its dedicated professional
staff, and I want to convey to both of you our appreciation for
this committee's ongoing support over the years. You have truly
been friends to our office, and we appreciate that.
Introduction of Witnesses
Before I begin my remarks, I would like to introduce the
colleagues who are with me here today from my staff: Joyce
Fleischman, as you mentioned, who is the Deputy Inspector
General; Dick Long, the assistant Inspector General for Audit;
Jon Novak, our Acting Assistant Inspector General for
Investigations; and Del Thornsbury, who is the Director of our
Resources Management Division.
And I anticipate that I will be turning to them quite a bit
today to help respond to some of your questions on some of the
more detailed and complex subjects that you may raise.
While this is my first appearance before your committee as
Inspector General at USDA, as you mentioned, I have been in the
IG community for over 20 years and served as the IG at SBA.
Since I have been at USDA, I have been reviewing the Office's
activities and accomplishments, and I believe we have a very,
very strong and effective organization. There are tremendous
depths of professional knowledge in our audit and investigative
staff, and I am very excited to be working with them.
I am also looking forward to working with you. You are
among our key clients in the Congress, and we look forward to
providing you with professional oversight of the Department's
programs. And we look forward to addressing the issues that are
of concern to you. I hope to open the lines of communication
with you and your staff so that we are fully aware of the
issues that are of concern to you.
Today I want to briefly address three areas where the IG's
office has focused its efforts and where I believe we have made
a very significant impact on USDA programs. Those three areas
are homeland security, food safety, and financial management.
And then I would like to end with a brief statement about our
fiscal year 2004 budget request.
HOMELAND SECURITY
Homeland Security has been one of the most significant
issues facing the Department, as you know, and our office has
taken the lead to address this issue in a number of areas,
including border security, controls over biological agents,
USDA labs, and security over incendiary devices. One area that
I think is of great importance, where we have spent a lot of
resources and we have accomplished a lot is the area of
security at USDA-operated and -funded laboratories.
As you know, the Department operates approximately 330
laboratories throughout the country, while most of them may
store or use moderate to low-risk agents, some store or use a
number of high-risk agents. We became very concerned about this
issue after the events of September 11th and initiated a number
of audit reviews to look at how the Department was controlling
these situations. We issued an audit report in March 2002 and
recommended to the Department that it undertake a number of
actions to strengthen security at the laboratories with high
risk agents, and we also recommended that the Department
immediately implement Department-wide policies to deal with
four significant issues: Materials accountability, physical
security, personal security, and incident reporting.
I am pleased to report that the Secretary assigned a task
force to deal with these issues and to develop some policies
and procedures. Our office provided technical and expert
assistance during that process, and, in August 2002, the
Department did issue new security policies applicable to its
BSL-3 facilities. I would like to mention that the USDA
deserves credit for doing this. To the best of our knowledge,
it is the first Federal department to issue department-wide
guidance in the area of biosecurity, and so we would like to
recognize that accomplishment.
Another area in Homeland Security that we have been
spending a lot of our time on is border security. We have
recently completed a review of the Animal and Plant Health
Inspection Service's, APHIS's, policies and procedures for
identifying risk among the types of goods that enter the
country to prevent the entry of exotic pests and diseases and
APHIS's activities in conducting inspections at ports of entry.
We concluded that APHIS needs a more effective systematic
assessment of the risks involved. We also concluded that
inspection operations and staffing allocations at ports of
arrival were not always based on risk assessment. APHIS has
agreed with our recommendations, and we are working with them
to implement corrective action.
Our Investigations staff has also been active in Homeland
Security work. Some of you may know that our agents are
involved with various joint terrorism task forces throughout
the country. We had an example recently where our investigators
worked with the U.S. attorney for the district of Oregon, as
well as the Bureau of Alcohol, Tobacco, Firearms, and
Explosives to follow up on a search warrant situation that ATF
had served on the residence of a Palestinian man from Lebanon,
and we had information that indicated he trained with
Palestinian guerilla groups. He made references to a terrorist
group, and there were other indications that he might be
involved in terrorist activity.
He also became the target of investigations by several law
enforcement agencies, and this is all detailed in my written
statement. As a result of our investigation, we found that
there was a loss to the Government of approximately $65,000,
including $18,000 in the Food Stamp Program and the Special
Supplemental Nutrition Program for Women, Infants and Children.
So there was a direct tie to USDA programs. As a result of
this, the subject was convicted and sentenced, and his
naturalized citizenship has been revoked. Our investigative
staff has been very involved in significant Homeland Security
investigative efforts.
FOOD SAFETY
The next issue that I would like to address concerns IG
activities to ensure the safety of our Nation's food supply. We
believe that threats to public health and safety are among the
most significant issues that we handle. As you all know, some
of the largest recalls of meat products in the history of the
industry occurred during 2002 due to the discovery that these
products contained E.coli or Listeria. The Centers for Disease
Control reported more than 20 deaths and over 60 illnesses
originating from these situations.
Although many of the recalls occurred with the cooperation
of the industry, many of these contaminations occurred because
of unsanitary production methods which were neglected by the
food processors. We currently have work underway to review
FSIS's recall operations where meat or poultry products were
found to be adulterated. We have been focusing primarily on the
plant in Greeley, Colorado, where 19 million pounds of ground
beef were recalled because of E.coli, and the plant in
Pennsylvania where 27 million pounds of ready-to-eat poultry
product were recalled because of Listeria.
To address these threats to public safety, we are also
pursuing joint investigative activities with other Federal,
State, and local agencies to share intelligence where warranted
and to pursue whatever criminal prosecutions need to be
pursued.
FINANCIAL MANAGEMENT
On a happier note, in the area of financial management, I
am very proud to report that, for the first time since 1990,
the Department and all of its standalone agencies received
unqualified audit opinions on their fiscal year 2002 financial
statements. This achievement of an unqualified opinion is a
major accomplishment. We attribute that to the Secretary's
leadership and the commitment and hard work of the Department's
Chief Financial Officer and the standalone agencies' CFOs.
There is still work to be done, however. Continued enhancements
and improvements to the financial systems are needed so that
Department managers have access to timely information on a
daily basis, and so that they can make informed decisions in a
businesslike manner.
The Department recognizes this need. The Secretary has
emphasized to all of us that USDA will continue to work on
financial management, and we will be working with the
Department to improve its financial management accountability.
2004 BUDGET REQUEST
Finally, I would like to comment on the 2004 budget request
for the Office of Inspector General. As Ms. Fleischman
testified last year before this committee, the IG's office
initiated a business process reengineering project to improve
IG operations and to enhance our own effectiveness and
efficiency. This has resulted in a strategic plan for the
office that focuses on equipping and training our employees for
the future, primarily with an emphasis on state-of-the-art
Information Technology as the key.
The President's 2004 budget request for the Office supports
our strategic plan to obtain this critical IT equipment. It
provides for an increase of $1.7 million for pay costs and $2.3
million for essential IT equipment and software. I want to note
here that my understanding of the strategic plan for IT
investments is that it is a multi-year initiative. We had
originally requested funding in 2003 of approximately $3
million. This request for 2004 would represent a continuing
effort to fund our initiatives to fully equip and train our
personnel. We anticipate that we will be coming before you
every year to testify about the progress we have made and about
the resources that we need to continue our efforts.
So I ask your support. I appreciate your support in the
past, and I ask for your support in the coming year for this
request, because I strongly believe that our audits and
investigations save money for taxpayers. They ensure the
integrity of USDA programs and they promote Homeland Security
and the safety of the food supply.
This concludes my statement. Mr. Chairman, I appreciate the
opportunity to appear, and I am happy to take questions.
Mr. Bonilla. Thank you, Ms. Fong.
[The prepared statement of Phyllis K. Fong follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
INFORMATION TECHNOLOGY FUNDING
Mr. Bonilla. I would like to start by making a statement
just to clarify something relating to fiscal year 2003 and the
appropriation for this Office for the IG's information
technology office. In reviewing the opening statement of the
witness on page 25, there is reference to IT funding in fiscal
year 2003, which I find to be misleading.
Let me just state that the appropriated resources for the
IG's office for the current year include funding for pay costs
and funding for the requested IT increase. I should note that
we did offset several USDA program increase requests for audit
funding with corresponding decreases for the IG office. The
IG's office had been paying for those audit contracts in the
past. Basically we transferred a function and the money to
perform that function. We support the efficiencies and advances
that information technology can bring to the Office of the IG,
so I wanted to state for the record that Congress funded the
Office of Inspector General's information technology request in
2003. No need for you to respond to that. We just wanted to
make that statement for the record.
RISK ASSESSMENT AND INSPECTIONS
The first question I have this morning involves the risk
assessment and inspection operations. According to your
statement, the Office of Inspector General concluded that APHIS
needs a more effective systematic assessment of the risks
involved with various pests and pathways by which they can
enter the country and that inspection operations and staffing
allocations were not always based on risk assessments.
How are you working with APHIS to implement an effective
systematic risk assessment system, and how does an effective
systematic assessment of the risks differ from what is in place
now?
Ms. Fong. Well, as you mentioned, we have recently issued
an audit report on this topic, and our audit report made
numerous and very specific recommendations to APHIS as to how
it could improve its systems. We are working with APHIS on
this. This issue will be complicated by the fact that this
particular piece of APHIS will transfer over to the Department
of Homeland Security in March. We will be working very closely
with Homeland Security and the IG's office there, as well as
with APHIS, to make sure that there is a smooth transition and
that our recommendations are clearly understood by the IG's
office and program staff over at Homeland Security. We will
keep our hands in this to the extent that we can. This is
obviously a new area for all of us as the Department of
Homeland Security ramps up, and we will have to work very
cooperatively with that department for a period of time here to
make sure the transition is smooth.
In terms of how an effective risk assessment differs from
what is in place now, my understanding is that the current
system that was put into place by APHIS to evaluate risk
assessments has not been very effective, and so we had
recommendations to improve them. And in addition, it did not
specifically address certain issues, it was not statistically
based, there was not a consistent methodology for collecting
and analyzing data, and there were not adequate records. We
have made recommendations in this area to APHIS for corrective
action.
Mr. Bonilla. Thank you, Ms. Fong.
Before I yield to Ms. Kaptur, I would like to thank her for
a product she has given us all this morning, and I thought it
was a product that she was most proud of. But it is not. It is
the lid. Is that correct, Ms. Kaptur?
Ms. Kaptur. It is both, Mr. Chairman. Although I said as an
Italian dip from Ohio, it probably doesn't have all the
jalapeno robustness that a gentleman from Texas would require,
but that can be added to the mix.
Mr. Bonilla. Thank you, Ms. Kaptur.
BUDGETARY RESOURCES
Ms. Kaptur. Thank you. Ms. Fong, thank you very much for
your testimony. I am trying to read the numbers here. The
administration is requesting $84.2 million for this coming
fiscal year, counting both the information technology and the
regular appropriations you are seeking. Is that correct?
Ms. Fong. That is correct.
RECOVERIES
Ms. Kaptur. Let me ask you, not having been part of those
that drafted the laws to create the IG--I just voted for them.
I didn't draft them--what is the logic not to permit any part
of the dollars recovered by USDA to go directly to your budget?
What is the legal theory behind that?
Ms. Fong. Well, that is a very good question. My
understanding on this--and I am not sure that the committee
specifically addressed it when it was drafting the
legislation--is that in many instances when our audits and
investigations results in recoveries there may be punitive
fines assessed, but there may also be restitutions for the
recoveries of costs that have been expended.
In many cases, to make the government whole, the recoveries
would appropriately go to the program areas that had initially
put forth the expenditure or had lost the money, so to speak.
This would, in effect, make the program budgets available to
provide assistance to those who truly deserve or are eligible
for Federal assistance.
Ms. Kaptur. These are programs outside USDA?
Ms. Fong. They would be true Governmentwide in every
department's programs.
Ms. Kaptur. Well, I am reading from the testimony notes
that in 2002, the IG's actions at USDA produced $54 million in
fines. I am trying to compare what you are asking for in the
budget versus what you actually produced last year in terms of
fines and recoveries. There is $54 million in fines. There were
decisions to recover another $30 million. So that almost equals
what you are asking for in appropriated dollars. And then there
were decisions to redirect the use of $166 million. I don't
quite understand what that means in a budgetary sense, but,
fundamentally based on what you recover and the--you could fund
yourself based on your own activities.
Ms. Fong. Well, it does appear to be a one to one ratio.
Ms. Kaptur. I just think that there should be an incentive.
I say to my colleagues on the committee: There ought to be
some, even if it is a small one, 25 percent of the total amount
that they receive in fines that goes back into their budget.
Right now that money goes to the Treasury Department, I think,
and I have served on the Treasury Subcommittee here, too, and I
know they are happy to have the money. But these individuals
are the ones doing the work, and we are always scrounging for a
million here and there in this committee, so I think this is
something we really should look at as we move forward here. So
that was one point I wanted to make.
FOOD RECALLS
And then the other one I wanted to ask, Ms. Fong, on the
food recalls you mentioned Listeria and E.coli, and a couple of
plants like Greeley, Colorado. What percent of the recall
tonnage was actually recovered? By any statistic you want to
use for a given plant or overall if you look at the millions
and millions of tons that were in the last year. I am very
troubled by the language. I have said this several years now.
We talk about recall, which gives the impression to the public
that, oh, it has all come back. Well, no it hasn't. Most of it
is not recovered.
Ms. Fong. I think you have a very good point there. As you
know, we are doing some audit work on these two situations, and
I understand from my staff that, with respect to the ConAgra
situation, approximately 3 million pounds were returned, which
is about 16 percent. In the Pilgrim's Pride situation,
approximately 27.4 million pounds were returned, which is about
15 percent.
Ms. Kaptur. What happens to what isn't recovered?
Ms. Fong. I imagine it is either in people's freezers or
people have consumed it. There is just no way to tell what has
happened.
Ms. Kaptur. Could the IG make some recommendations to us
about what we do about that? Do we impose additional fines on
these companies? I mean, what do we do to make this system
seamless and get the bad stuff off the market? It shouldn't be
there in the first place, so I think that clean plants and
inspections are very important, but it really troubles me. I
see these press reports all the time. Is there a different type
of labeling we could do? Is your intention to make those
recommendations to us?
Ms. Fong. Yes. We are drawing to a close on our audit work.
The report is in the draft stages, and I know that there will
be some very specific recommendations as to what we found where
the breakdowns may have occurred and what we believe could be
done to address this issue.
Ms. Kaptur. I thank you. I know my time is expired, and I
just would ask as just one member of this subcommittee, when
you make your report, give us the language, give us the
linguistics of talking about this in a way that is
understandable to the public so we don't tell them we have
recalled and in their mind they think, oh, it is all back
somewhere safe, when it really isn't. The words are wrong. We
are not using the right words on this, and so I think that help
us with the language here to improve our system. Thank you.
Ms. Fong. Thank you.
Mr. Bonilla. Thank you, Ms. Kaptur.
Mr. Latham.
Mr. Latham. Thank you, Mr. Chairman. I look forward to a
very productive year here on the committee. I want to thank Ms.
Kaptur for the Italian dip. We look forward to that. And some
late evenings around here. So thank you.
LABORATORY SECURITY
Last year at the hearing, the Inspector General spoke of an
interim report to the Department that pointed out the need for
Agriculture to inventory and strengthen security controls on
biohazardous materials around the country. When was your last
review on the subject of security controls on biohazardous
materials around the country, and what remains to be done?
Ms. Fong. We have a number of initiatives going on with
respect to the labs that USDA either owns or operates. We
recently issued a report in the spring of 2002 on those labs.
We have a few more reports that are coming out, and we have a
number also that are in progress.
Mr. Long, would you like to elaborate on the specific work
that we are doing?
Mr. Long. Some of the initial work that we have done since
our first report has been to look at the issue of USDA-funded
research laboratories, at universities and at other
institutions, following the same logic that we used on the
previous review i.e., what were their controls and whether they
maintained an inventory. We currently have a draft report under
review by the Department, and will be meeting with Department
officials next week on it. In this report, we make specific
recommendations to the Department on getting information out to
the land grant institutions and the colleges and universities
that receive funding--and also to other grantees who receive
funding for research--and they have been very receptive. We
have had some interim issues with them as we perform that work,
and they have taken immediate action on individual instances
that we brought to their attention.
The Department has also issued their overall policy for
BSL-3 laboratories. They also are about to issue their policy
for BSL-2s or below. For all laboratories, these are the types
of things that you need to do in relation to security,
biosecurity issues, and the Department has pushed this through.
These two documents can be a guide for the land grant
institutions and for other grantees. The problem is that a lot
of these grantees and institutions do work for other
departments, and there is a need for a government-wide policy
on this type of research out there.
We also have additional work in progress. We are doing a
follow-up review on our March report. We have made unannounced
visits at some of these laboratories to see whether or not they
have taken corrective action as directed by the Secretary's
office, and we are in process of analyzing all of that
information. There have been improvements. They have made
change by shifting from a biosafety to a biosecurity level. So
we do see a lot of improvement being made in the area of
laboratories.
INTERAGENCY COMMUNICATION
Mr. Latham. I realize it is going to be very difficult to
integrate and to bring agencies in from outside to put in one
Homeland Security Department, but I just wonder about
information sharing about and what kind of progress we are
making in that arena, particularly with respect to APHIS and
FSIS.
Mr. Long. This has been an area of concern that we have
raised to APHIS and FSIS. We raised this issue even between the
two of them on the foot-and-mouth issue that we issued a report
on last year about how they communicate with each other and the
U.S. Customs Service. It continues to be an area of concern
that we have in that APHIS report that we talked about earlier.
It is an issue of how they relate to Customs regarding borders.
How they relate to the Food Safety and Inspection Service at
the ports is going to be a concern also. The ports may be an
even bigger concern, because the Department of Agriculture is
going to be responsible for identifying pests and other things
that should not be brought in. They will need to communicate
with the inspectors that are now going to be at DHS. Also,
those same inspectors are going to deal with the FSIS
inspectors at port areas regarding meat importation issues.
So I think it is a concern of ours, and we are informing
the program staff of the Department of Homeland Security and
also the IG at the Department of Homeland Security, that these
are issues that our Department is working on now. We just met
with APHIS the other day and they informed us that these are
issues that they are trying to work out through Memoranda of
Understanding with DHS. The Department is really going to have
to be on top of this and push to protect the interest of U.S.
agriculture.
Mr. Latham. Is there much institutional resistance? That
seems to be the biggest problem.
Mr. Long. I think in the past there has been some
resistance, but I think now we see more communication between
them.
Mr. Latham. Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Latham.
Mr. Nethercutt.
EMERSON TRUST RESERVE WHEAT RELEASE
Mr. Nethercutt. Thank you, Mr. Chairman. Ms. Fong, welcome.
Glad to have you here, and welcome to the rest of your team as
well. I want to compliment Ms. Fleischman for her work in--on
an interim basis prior to your being formally appointed, and so
I appreciate your attention to the issues involving
agriculture.
I want to raise a question today, and you may have
suspected I might, with respect to the Emerson Trust reserve
wheat release that occurred in July of 2002. Are you familiar
with this issue?
Ms. Fong. I have been briefed on it.
Mr. Nethercutt. Okay. You know how serious I am about this,
then, and my concern that what USDA has done has impacted my
constituents and other small elevator operators around the
country. And I am concerned not with the right to deal with the
wheat stocks, but the procedures that occurred at USDA, and I
know there is an ongoing investigation. So I don't expect
necessarily for you to be fully responsive today under the
circumstances, but I want to impress upon you how negative the
impact has been on my farmers, my local economies in eastern
Washington because of the procedures that were, in my opinion,
not historically followed, and perhaps there is a lack of
procedure that USDA followed. In other words, there was no
sensitivity to the standards that had theretofore been set with
respect to dealing with wheat releases.
The catalog process had been used since the 1980s to
announce CCC releases for sale. There was a reason for this and
an expectation that this was the proper approach, because it
wouldn't allow the system to be skewed and big operators to
take advantage of small operators.
I fear, and I fully believe as I sit here, that that is
what has happened in this latest go-round from July of last
year until now, and I think there has been an incredible
insensitivity at the USDA level with respect to the
consequences of its action, especially as it relates to soft
white wheat. With the action by the Federal Government, our own
USDA, soft white wheat prices have dropped 40 cents in a matter
of days, at a time when they were ascending to the point where
people in farm country were sort of able to make a little
money, and that now has--the price has hovered about $3.80 a
bushel for months. I think it is directly related to what USDA
did or didn't do in connection with the Emerson Trust.
So, you know, at the risk of being sort of hypersensitive
about this, I will take the risk, I really am. It really,
really bothers me the way this all unfolded. So I hope that you
will be aggressive in your investigation and leave no stone
unturned with respect to finding out the whys and wherefores of
what happened. Because if you don't, I am going to, and I am
really serious about this. There is legislative action at our
State Legislature that has taken steps with respect to this
whole issue, and it has really hurt people in farm country,
especially as we look at the consequences of CRP on the
negative side for production agriculture.
Positive side for conservation, negative side for
production agriculture. It takes land out of production, and
that hits the local economies dramatically. You know, the
implement store and the feed guy and the seed person, they
don't get to make any money, because there is no production
going on. So I will give you in, I guess my last minute of my
time, I would appreciate having some response and some
assurance that you are going to be vigorous and aggressive with
respect to this issue.
Ms. Fong. We understand your concern. We have been working
on this in response to your request last summer. We have
conducted a preliminary review, as you know, and came up with
some initial conclusions which we shared with the Department's
program office. After that, we decided that a more full-scale
inquiry was warranted so we have initiated field work. We are
currently in the field talking to a number of affected people,
and we are working very diligently on our audit plan to make
sure that we do address the issues that arise. I think that we
will have some results in the next few months, and we will
certainly share them with the Department and with you.
Mr. Nethercutt. Well, I appreciate that very much, and I
have been aggressive with respect to Ms. Fleischman and others,
and it is out of no disrespect for you. It is out of my concern
for what is good for American agriculture. So I appreciate the
work that you all have done, and I thank you for your response.
Mr. Bonilla. Thank you, Mr. Nethercutt.
Mr. Goode.
PESTICIDES ON IMPORTED PRODUCE
Mr. Goode. Yes, Ms. Fong, I, like Mr. Nethercutt,
appreciate your being here.
Let me ask you this with regard to APHIS. Items that come
into this country, what are we doing to determine if they have
used DDT on foreign produce?
Ms. Fong. I think we may have to get back to you on that.
We don't have a response right now.
Mr. Goode. The reason I am asking, my wife went to--and got
some tomatoes last week, and it had a sticker on them that
said, please wash for pesticides. And somebody at the store
told her that they might have DDT on them because they came
from another country.
Ms. Fong. Was there a country of origin label on it?
Mr. Goode. No.
Ms. Fong. All right. We will look into that and see if we
can provide a response to you.
[The information follows:]
USDA's Animal and Plant Health Inspection Service does not
handle residue testing on imported produce. The Environmental
Protection Agency establishes standards for pesticides on
imported produce and the Food and Drug Administration is
responsible for conducting spot checks and random testing of
incoming shipments of produce.
Mr. Goode. All right. That is my one question, Mr.
Chairman.
Mr. Bonilla. Thank you, Mr. Goode.
Mrs. Emerson.
THREATS AGAINST GOVERNMENT EMPLOYEES
Mrs. Emerson. Hi. Welcome. Thank y'all for being here
today. I have a question that might be a little bit out of the
ordinary, but it does concern a specific investigation that
your office conducted in my region involving a man who
assaulted a Forest Service law enforcement personnel during a
drug investigation.
Basically this is what happened. Forest Service agents and
some of our county enforcement people were conducting
surveillance on a methamphetamine lab operation in the Mark
Twain National Forest, and they were fired upon by one of the
suspects. And the suspects were subsequently apprehended and
charged, but this particular instance does bring to light
another more serious matter, and that is, at least in my region
of the country, meth production and distribution is really
nearing crisis levels. And our local law enforcement officials
and the Federal agents who routinely work together to stop this
problem, they are all very concerned about their own safety, as
well as the safety of people in and around the Forest Service.
I don't know if you are familiar, Ms. Fong, with the
specific case I am referring to, but can you just take a moment
to address this sort of situation and how your office may
respond to such an event?
Mr. Novak. Yes. Actually, we assisted in that
investigation. One of our agents, along with Forest Service and
local law enforcement, conducted the investigation. I think he
got 18 months in prison. Any time there is an incident of
workplace violence in the Department, our office gets called,
regardless of what agency it is. Ms. Fong's testimony mentions
various assaults and other incidents. We have even had an
employee convicted of murder. Our agency will respond to
workplace violence regardless of what it is. If somebody makes
a threat, if it is a specific threat, if it is an assault, our
agency will get involved. Now, as far as issues on drug
protection and investigations in Federal forests, I am not in a
position to respond to that.
Mrs. Emerson. Well, that is not generally your
jurisdiction, but we appreciate the fact that you came in and
helped with that investigation, but this is becoming more of a
problem as opposed to less, and we are lucky that we have some
Forest Service employees who actually have helped our local law
enforcement people try to get a handle on this. But, you know,
it is going to happen more.
Mr. Novak. We are certainly noticing more violence in all
of our programs. At this point, we have talked to the
employees, some things that they can do to prevent workplace
violence, we respond to complaints about workplace violence,
and the employees know that as well. I mean, all the employees
in the Department know that if there is an issue, if there is a
threat, if there is an actual physical assault, they will see
Office of Inspector General agents involved with the
investigation. Some cases we work with the local police.
Sometimes we work the cases alone.
Mrs. Emerson. Well, I appreciate that. I wish we could--
didn't have this problem at all, but we do appreciate your
response and hope that you will continue to monitor the
situation. That is all I have got, Mr. Chairman.
Mr. Bonilla. Thank you, Mrs. Emerson.
HOMELAND SECURITY FUNDING
Ms. Fong, related to the Homeland Security funds that have
been appropriated thus far, there have been a little over $300
million. Tell us about the time line for auditing these funds,
what you have planned ongoing in this area and what you did
with the $4 million that we put in the supplemental for you on
Homeland Security.
Ms. Fong. Absolutely. We have initiated a review of the
Department's use of the $328 million in supplemental funding.
We had an entrance conference a week ago or so. We have started
to collect documents from the Office of Planning and Budget
that would document where the money is going and what it is
being used for. Our review will focus on the basic issue of
verifying the amount of expenditures that the Department has
been incurring and determining whether the funds were obligated
and expended for authorized purposes. We anticipate it will
take us several months to finish the analysis and the field
work on this. Assuming that there are no complications, we
anticipate a report in midsummer of 2003.
Mr. Bonilla. And that is also included in the expenses that
you are using for that, is that what you are saying, what the
supplemental was for as well?
Ms. Fong. That is correct. We will be verifying the uses of
the funds to make sure that they were used for authorized
purposes, for Homeland Security purposes. I understand that
those funds were appropriated for a 2-year period, so they are
available to the Department in 2002 and 2003.
With respect to the portion of the money that was made
available to the IG's office--$3.9 million--I have a detailed
schedule that I will be happy to submit for the record. Very
briefly, we have used these funds for secured communications
devices, radios for investigative and law enforcement purposes,
security clearances for our staff so that they can access
classified and sensitive information, and personal protective
equipment gear, such as helmets.
Mr. Bonilla. Ms. Kaptur.
WASTE, FRAUD AND ABUSE
Ms. Kaptur. Yes, Mr. Chairman. I wanted to ask, Ms. Fong,
as you look at your job and the budget of USDA, billions and
billions and billions, $50 billion, $60 billion a year, and you
think about fraud and crime and deception, what percent of the
dollars expended by USDA do you think may be being diverted and
improperly spent through criminal activity?
Ms. Fong. I am not sure that there is really any way to
predict or project that. Whenever there is a Government program
that offers benefits or funding or insurance or some other kind
of assistance, there will be people looking to take advantage
of that, people who are unscrupulous. There will always be a
certain level of fraud. I saw that at SBA, and I am sure that
is true of every department and agency around town.
My guess is that certain programs may be more vulnerable to
fraud than others. Programs that have large amounts of money
where program controls are not as effective as they could be
will probably be more susceptible to fraud.
Ms. Kaptur. You recover about $200 million a year, right,
with fines and restitutions and so forth?
Ms. Fong. Yes.
Ms. Kaptur. Out of $60 billion. I just would say that that
is a very meager amount, and I hope that the funding that we
will provide this year and your new energy will help to ferret
out more wrongdoing, because the rate of growth of programs, if
one looks at the expenditure and different accounts, is an
absolute indicator that there is probably lots of bad stuff
going on out there, and I don't see the dollars recovered
commensurate with the increase in spending. So something
isn't--I would hypothetically propose, that a lot more could be
done.
Ms. Fong. Well, we certainly appreciate your support and
your interest in our activities. The IG staff is working very
hard. People put in many hours on these investigations and
audits, and there is much more work than any one office can
handle.
FOOD PRODUCT RECALLS
Ms. Kaptur. I wanted to ask you in the area of food safety,
you mentioned the large recalls in 2002, and to be precise, 56
million pounds of products were recalled. That doesn't mean
recovered. More than 2\1/2\ times the amount in prior years.
And I guess one could say if you are at least trying to recall
that much more, the system isn't working. What do you think?
Ms. Fong. Well, that is exactly the issue that one of our
audits is focused on--those two situations in 2002. What we are
looking at is the system itself, what could have gone wrong,
was there something in FSIS's oversight that could be tightened
up? Is there a situation in the plants themselves? How
effective is the Hazard Analysis and Critical Control Points
process? That is precisely what we are trying to pinpoint in
our review: what went wrong, what could be done about it, how
we can prevent this in the future, and what systemic measures
we can take to fix this.
Ms. Kaptur. With respect to the recall at the Wampler plant
in Pennsylvania, I am very concerned about news reports that
appear to indicate that a USDA official has publicly disparaged
a Federal inspector at that particular plant who filed numerous
reports about unsanitary conditions. Are you looking at this
situation, and what is your view of USDA officials attacking a
whistleblower in the press?
Ms. Fong. I am not familiar with that particular news
report. I haven't seen it. I haven't heard about it. We are
pursuing allegations that have come to us. I believe we do have
a complaint from a whistleblower that has been referred to us,
and FSIS has been cooperating with us in that investigation. We
take whistleblower complaints very, very seriously, and we want
to protect whistleblowers to the full extent of the law.
FOOD SAFETY
Ms. Kaptur. What is the single most important action you
think this subcommittee could take to help USDA improve its
dismal performance on food safety issues?
Ms. Fong. We have issued a number of audit reports in this
area. We have another one coming out on ConAgra and Pilgrim's
Pride. The simple answer would be for the Department to take
corrective action on our recommendations.
Ms. Kaptur. You say in your testimony that many of the
contaminations occurred from unsanitary production methods
neglected by the processor. That really is an incredible
statement. Why do you think this is happening, and what should
USDA and your office be doing about it besides issuing reports?
Mr. Long. This is a very important area that we have been
working with FSIS, and particularly Dr. McKee, the new
administrator of FSIS, on attacking these particular issues.
The General Accounting Office had a report that dealt with the
issue of how processors respond to these unsanitary conditions
that are noted in plants and why corrective action isn't taken.
We recommended in our 2000 audit report that APHIS establish an
internal review group to visit the plants unannounced and
perform spot-check and see what was going on.
FSIS has recently started the process of having teams go
out and look at why these conditions haven't been cleaned up,
FSIS has an automated system to track compliance efforts. When
an inspector issues what they call noncompliance reports, they
are supposed to be entered into the automated system so they
can be cleared out. And why aren't they? We found a bunch of
them at ConAgra and a bunch of them at Wampler. In some
instances, the inspectors may not even be putting them into the
system. They may just be discussing the problems with producers
instead of entering them in the system to establish a trail to
track to see, what has been done to clean up the situation.
I see some movement on the part of FSIS in this area. They
have started these teams, and recently FSIS has also issued
some notices of their intent in this area. So I do see movement
in that area, but it is a very key that immediate action is
taken the in-plant inspectors should take immediate action.
Ms. Fleischman. If I could add to that, please. You have
asked a number of questions, actually, about the quantity of
recall----
Ms. Kaptur. Yes.
Ms. Fleischman [continuing]. And what comes back. The key
to this issue that you raise is early intervention by FSIS. Our
auditors have repeatedly recommended to FSIS that FSIS have
some mechanism by which it can review patterns of activity,
patterns of noncompliance notices filed in individual plants by
the inspectors there, to look at this on a regular basis. If
FSIS sees an early pattern developing, such as a particular
sanitation problem, if you will, whether it is on the line, in
the drains, wherever--then FSIS could go to early intervention
with that particular plant.
Early intervention would hopefully prevent being 6 months
down the road and having a 19 million-pound recall, as at
ConAgra in Greeley, or 27 million pounds at Pilgrim's Pride,
the Wampler plant in Pennsylvania. If there was early
intervention, you would have smaller recalls or, hopefully, no
recalls at all, because you would correct the problem quickly.
As Mr. Long stated, in response to the latest
recommendation that the auditors made in that regard in our
2000 report on FSIS's implementation of HACCP, FSIS has begun a
process to do that. As part of our audit work that is directed
at the ConAgra situation in Greeley, Colorado, and at the
Pilgrim's Pride situation in Pennsylvania, we are looking at
how those two situations occurred, following up on the previous
audit recommendation to determine whether or not FSIS's efforts
so far are bearing fruit. If they are, that will be great. That
is one of the things that we are looking at. The answer to
those questions is that the recommendations that we may make to
FSIS will go a long way towards responding to the issues that
you have raised with respect to recalls, quantity returned--as
well as to prevent this sort of situation from occurring in the
first place.
Ms. Kaptur. Thank you. Mr. Chairman, thank you for your
indulgence, because, I kind of am bowled over by the fact that
if people are reporting to FSIS, you would think that there
would be some type of collation of this information and an
immediate dispatch of personnel or whatever it is. Does it go
into a black hole? How disorganized is this system? You know,
we have all sorts of professional people that come up here and
testify before us, and they have all these titles. Well, what
is going on? What is happening inside the bureaucracy that
prevents the information from being registered and responded
to? When you talk about preventive action, where do those
reports go? I mean, do they just go into a drawer?
Mr. Bonilla. We can save that for the third round if we
need. We have a couple other members, Ms. Kaptur, who would
like to proceed.
Ms. Kaptur. All right, Mr. Chairman. Thank you very much.
Mr. Bonilla. Mr. Latham.
FOOD STAMP FRAUD
Mr. Latham. Thank you, Mr. Chairman. You have uncovered
various Food Stamp and other frauds in which the monies from
the frauds were transferred to accounts benefiting or suspected
of benefiting terrorist operatives, and I would just like to
know how you assess your efforts in Food Stamp fraud
investigations, in particular as far as funding of terrorism is
concerned.
Ms. Fong. Let me just make a few remarks, and then Mr.
Novak might want to say a few words. We have had a number of
cases on that, and I think Mr. Novak can address the details of
them better than I can.
We do have a certain level of resources invested in Food
Stamp fraud on our Investigations side. It is a program that is
very important to the Department and to us. We know that there
are attempts to use that program for improper purposes, and so
we do have a number of very significant investigative efforts
going on. I believe that we will continue to do so. That will
be a priority for our office.
Clearly, any time there is an allegation that department
monies are being funneled to terrorist organizations, that that
is a very serious allegation. We must look into it. Mr. Novak,
do you want to address some of the specifics?
Mr. Novak. Yes. As was stated earlier, we have several
agents assigned to Joint Terrorism Task Forces. If we receive
any allegations regarding funds from fraud in our programs that
appear to be going over to the Middle East or Pakistan, then we
set those cases up, and we work them. We work them with the
Joint Terrorism Task Forces and if they have connections
overseas, we may consult with the Central Intelligence Agency.
We have met with them to discuss cases where we have had funds
going overseas.
I don't know whether I can talk in an open hearing
regarding cases where we have a connection, where we believe
funds are actually going to associates of terrorists, but those
are few. There are few cases.
We can get back on the specifics and the numbers of cases,
where those funds are actually going, where we have traced them
overseas, and in those cases where we believe the funds have
been used.
Mr. Latham. Maybe we can visit sometime outside of a public
forum.
I guess my concern is whether or not you are getting
substantive cooperation and assistance from other agencies.
Mr. Novak. All indications are we are getting full
cooperation from the intelligence agencies where we ask for
information. The Department is in the process of setting
access, so we are one part of the intelligence network
involving the CIA and others. The members of the Joint
Terrorism Task Forces began to share information as soon as we
got security clearances. That is what some of the Supplemental
Homeland Security funding was used for. They share the
information that we need to get.
Mr. Latham. So communication and cooperation have not been
a problem?
Mr. Novak. No.
Mr. Latham. Thank you.
Ms. Fleischman. An interesting aspect of this is that the
Joint Terrorism Task Forces have come to us and asked
specifically for OIG Special Agent participation and work.
The Joint Terrorism Task Forces cover a lot of territory.
We would be happy to talk to you privately because much of this
information is sensitive, obviously, and some of it is
classified.
I think overall the level of cooperation amongst the law
enforcement agencies, as well as the agencies within USDA whose
programs might be involved--the cooperation both within USDA
and without--has been quite good. Communication is going as
well as it can go given the restrictions on information
sharing.
Mr. Latham. That is good to hear. I appreciate that very
much.
Thank you, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Latham.
Mr. Goode.
Mr. Goode. Thank you, Mr. Chairman.
Mr. Latham, in a previous question touched on this topic.
You recovered last year $200 million. Out of that $200 million,
what portion of it was related to food stamp fraud?
Ms. Fong. That is a good question.
Mr. Novak. I have a figure on the Food and Nutrition
Service fraud which includes food stamp as well as child care,
and the total figure for fiscal year 2002 was $22,970,000.
Mr. Goode. What was the biggest area of fraud?
Mr. Novak. Generally, it is food stamp trafficking.
Mr. Goode. Out of the recovery, in the entire USDA, is food
stamp the biggest area for fraud?
Mr. Novak. Yes, it is just ahead of the Farm Service Agency
FSA, farm programs. Farm programs is $19 million.
Mr. Goode. Well, more is spent on food stamps than FSA, so
is it the same percentage of fraud that you recover?
Mr. Novak. Are you talking about what we recover or the
actual spending in the entire program?
Mr. Goode. Right, the entire program.
Mr. Novak. I don't know what the entire spending of the
program is.
Mr. Goode. On food stamps, you recover about 1 percent of
the total amount spent on food stamps?
Ms. Fleischman. That is correct.
Mr. Goode. And FSA, that is 1 percent, too?
Ms. Fleischman. It may be, but right now I don't think
either Mr. Novak or I have the total dollar value for farm
programs in mind.
The answer to your question would be more accurate from us
if we could submit that for the record, because off the top of
my head I don't know what the total value is for farm programs.
We would have to supply that.
[The information follows:]
The Farm Service Agency had $2.713 billion in total outlays
for the farm programs in fiscal year 2002, excluding outlays
for the commodity programs and most of the outlays for the
Conservation Reserve Program which are funded through the
Commodity Credit Corporation. The $19 million in recoveries for
2002 equates to approximately 0.7 percent of that year's
program.
Mr. Goode. Utilizing the card instead of food stamps, has
that decreased fraud? Just a ball-park, how much do you think
that has decreased fraud?
Mr. Novak. I don't think that we can give you a value, but
we can certainly state that the amount of criminal activity has
decreased, because we do not have substantial street
trafficking, and that is the buying and selling of food stamps
for drugs or whatever else. Now the trafficking takes place in
the stores. Certainly the number of people involved in criminal
activity has decreased substantially.
Mr. Goode. What do they do, buy something with the card
that is valid and trade it for cigarettes or beer?
Mr. Novak. Our folks get involved in criminal aspects where
they are looking for prosecution, but we do have instances
where they will take their benefits, go into the store, and use
the funds to purchase drugs.
Mr. Goode. But you cannot take the card and get cash on the
card?
Mr. Novak. That is the criminal activity that we
investigate. It is a criminal violation. That is what we
investigate.
Mr. Goode. You cannot cash out the card, can you?
Mr. Novak. Not legally.
Mr. Goode. That is what I meant, legally.
Ms. Fleischman. The pattern of crime has changed somewhat.
Typically, we do not see as much street trafficking, the
exchange, literally, of the stamps for a discounted value on
the stamps in cash.
Now what we see is--for example, somebody will have a card
and they may sell the card to the owner of the store. The owner
will pick a time in the late night because the machines run 24/
7, will pick a time in the late night, and you will see swipe
after swipe on the card and the total amount of money maybe is
$400. Each transaction is worth $50. You automatically know
something is peculiar here, and it is occurring at 2 a.m. It is
highly unlikely that somebody is buying $50 increments of
groceries up to $400 at 2:00 in the morning.
We have computer programs that watch for these sorts of
patterns of activity in the overall computer system. When we
see these types of patterns, we open the case and we start to
look at that store's pattern of activity and its records. Then
we start to look at how much in the way of actual groceries,
for lack of a better term, does the store have, and what is its
total volume of traffic. Frequently, what we will find is the
actual amount of inventory of groceries is significantly less
than the amount of transactions on Electronic Benefit Transfer
cards in that location. What we have then is essentially a
conspiracy to commit fraud.
It is a much bigger operation in the sense of criminal
activity, but it all occurs in the stores, it does not occur in
the streets. What we have done is essentially make it a little
bit harder for individuals to commit the crime, to traffic in
food stamps.
Mr. Goode. For the individual recipient of the card, the
easiest way for them is to sell the card at a discount?
Ms. Fleischman. They can do that or allow the card to be
used for money.
Mr. Goode. There is no requirement that the store owner
have a photo, because if they are crooked, it will not matter
anyway.
Ms. Fleischman. I don't believe it is a requirement now.
Mr. Goode. How effective would that be? My time has
expired, but in the area of underage purchase of alcohol, it
slows it some. I don't know whether that would slow the fraud.
Ms. Fleischman. Some years ago, as EBT was being brought
online, and the food stamp program was the first of the EBT
type of transaction for Federal benefits, one of the things
that this Office of Inspector General did was to try to put
security measures in the program, particularly for
identification of users of cards, such as photographs; that are
embedded in the cards as a security feature. The one measure
that we actually got was a PIN number, but, of course, people
can circumvent the PIN number.
But you have raised a very good way to make sure that when
the transaction occurs, there is a matchup of a photograph that
is embedded on that chip in the card by the person and the
machine that are recording the transaction. That is a safety
control measure which has not been adopted yet.
Mr. Goode. Thank you, Mr. Chairman.
Mr. Bonilla. Mr. Boyd.
Mr. Boyd. Mr. Chairman, I apologize for being late today.
And also apologize to Ms. Fong for being late; I would like
to congratulate you on your new appointment. Many of the
veterans at your table have heard me sing this song before, and
some of the committee members have, but I am sure you have not
heard it, so you are going to be forced to listen to my bad
tune.
INVASIVE SPECIES
I specifically want to address your written testimony and
remarks on the APHIS section. I want you to help me understand,
with the organizational changes, exactly where APHIS is and
what your responsibility is as it relates to it. My concern is
the citrus canker issue in Florida which you may not be aware
of.
In the 1990s, we had a citrus tree brought into the Miami
airport by a tourist, and it was infected with a canker, and it
has cost this Government tens of millions of dollars to fight
that citrus canker outbreak. It slipped by our APHIS inspection
controls. It has also cost taxpayers in the State of Florida a
considerable amount of money in addition to what it has cost
the industry and it is threatening the very viability of our $9
billion citrus industry in Florida.
I notice that you spoke to APHIS in your remarks and you
talked about APHIS needing a more effective, systematic
assessment of the various pests and pathways by which they can
enter the country. You also concluded that the inspection
operations and staffing allocations at ports of arrival were
not always based on risk assessment.
My question is, can you tell me what steps you recommend
for the service to prevent things like the citrus canker issue
from happening; and because of the transfer, your assessment of
how these techniques are being implemented?
Ms. Fong. I understand we did some work on the citrus
canker issue, and I will ask Mr. Long to address that
specifically.
In terms of the transfer of the functions to the Department
of Homeland Security, the border inspection function of APHIS
is supposed to go over in March. We do not know specifically
how that is going to work. We are in constant communication
with the IG's office at the Department of Homeland Security,
and we have been providing them copies of reports that we have
issued on the functions of Agriculture that are going to go
over there, as well as the investigative and audit work that we
have ongoing.
I believe there will be a fairly smooth transition in the
oversight of that APHIS function between our office and the
Department of Homeland Security and its IG office, and we will
continue to work with Homeland Security to make sure that they
understand our concerns and the kinds of problems we've
identified are.
In response to your specific question regarding citrus
canker . . . do you have any comments, Mr. Long?
Mr. Long. The audit that we issued on citrus canker dealt
more with how APHIS was dealing with the State of Florida and
the flow-of-funds issue. Your particular question dealt with
how they might have caught that or how they might have shown
that as a particular risk that they should be looking for.
We are addressing some of those issues in the report that
we are going to release, in how they target the pathways and
how they identify the pathways through which invasive species
can come into the country, and how they target those.
We found some major problems with how APHIS goes about
identifying the risk assessment. They tend to only target the
traditional pathways, such as the large airports, the large
terminals and large border crossings, instead of perhaps rail
facilities and things of that nature.
How they collect the data is also a major problem with the
system. They have a system in place, but it was not working.
Some port areas were not even entering data into the system, so
we could not determine if we have the right people and the
right numbers at the right place.
That is what we are recommending, and APHIS agreed that the
current system was not working, and that they needed to do more
in identifying all pathways through which invasive species come
into this country. Now that the APHIS function it is going to
Homeland Security, it will still be incumbent upon APHIS to
work with Homeland Security at that level to ensure that these
things are being identified to prevent them from coming into
this country.
Mr. Boyd. So you do not have a good handle on how they may
be addressing these recommendations that you made, because of
the transfer?
Mr. Long. They have basically agreed with the
recommendations. We met with them earlier this week, and we are
waiting for their written response to the report. They need to
address our recommendations.
What we would be looking for is how they are going to be
working with the Department of Homeland Security on those areas
to make those improvements. Also, even though that inspections
functions going to be taken over by DHS, it is still up to the
Department of Agriculture as to what can and can't come into
this country.
There is going to have to be a relationship there between
Agriculture and DHS. They say they are addressing this process
through MOUs as to how they anticipate that will work.
Mr. Boyd. Mr. Chairman, our border States continue to be
extremely vulnerable. I guess we are more susceptible because
of our location.
Mr. Bonilla. Mr. Boyd, we have had a second round of
questioning already. Did you have an additional round?
Mr. Boyd. Not at this time, Mr. Chairman.
Mr. Bonilla. Thank you, Mr. Boyd.
FOOD AND NUTRITION SERVICE
Relating to what Mr. Goode brought up, in the last current
budget year, FNS has received funding increases for program
integrity studies and a WIC vendor study.
My question is, how, if at all, is your office working with
FNS to be sure that these studies are thorough and appropriate;
and has FNS consulted with your office on the design or
implementation of any of these integrity studies?
Ms. Fong. My understanding--and Mr. Long can certainly jump
in if I am wrong--is that, historically, we have done a number
of audits in the Food Stamp arena, and we have come up with a
number of recommendations. I believe our staff is in continual
consultation with FNS on these issues.
Is there anything specific you want to add to that?
Mr. Long. WIC has been the program monitored, and we have
had a number of audit reports on that in the past, and FNS is
doing these additional studies. They consulted with us during
the implementation of those studies and we will be looking at
the results.
They got some money from Congress also to look at school
lunches and eligibility for free or reduced-price lunches. We
have been working with them on some pilot projects and how they
have designed them, and we have given specific recommendations
on a particular one where we felt it was not focused or
collecting the right type of information.
Mr. Bonilla. I want to make sure that we do not discover in
the future that we have two different types of operations that
are not consulting with each other.
I am glad that they are consulting with your office.
Ms. Kaptur.
RECOVERIES FROM FOREIGN NATIONALS
Ms. Kaptur. I asked several questions about APHIS last
year, and particularly the international architecture that
prevents the United States of America from recovering losses
incurred as a result of the illegal or otherwise import of
invasive species. When we are dealing with countries that do
not have tort systems, and insects or fungus or whatever comes
in here, we find what has been happening--and I have spoken
with several Secretaries of Agriculture now about this
problem--the people that end up paying for the damage that Mr.
Boyd referenced are the taxpayers of the United States. I am
fed up with it.
On the citrus canker issue alone, we have spent close to a
billion dollars, Federal, the State of Florida, the farmers
that have been harmed. It is a phenomenal figure.
In my part of the country, we have the issue of the Asian
longhorn beetle. We have maple sugar growers in Ohio that are
just waiting for that thing to crawl across the State lines. We
know that did not come from the United States. We actually know
what country it came from; we know how it got in here. And yet
I am being asked, as a Member of Congress, to appropriate
dollars to pay for the remediation of something that was not
caused by the people of my community or this country.
My question to you is, in the report, the APHIS report that
you are going to complete, what recommendations do you have for
us from a legal standpoint of how, under the World Trade
Organization, we recover, we can basically take to court these
countries that are sending in this stuff, in spite of the fact
that we have no tort system to relate to in those respective
nations?
We have all these attorneys at USDA. Can't you tell us what
we can do in order to place the responsibility where it belongs
in paying for the remediation of this?
Ms. Fong. I am not familiar with this issue in great
detail. I share your concern. It sounds like it is a tremendous
burden on the American taxpayer.
Ms. Kaptur. The dollars are going up, and we have to take
funding out of programs important to the American people to pay
for damages that are not our fault. There is something
seriously wrong with the international legal systems that
permit this to happen, and we cannot recover.
My question is, can you or any of your colleagues suggest
to us, or in the report you are going to give us, how do we
recover internationally? I asked the Secretary to inquire about
this at a WTO conference she went to. I didn't get a report
back on that.
Ms. Fong. I do not know that our report addresses that. It
strikes me as potentially a treaty issue or a question of
international law. We can talk to the Office of General Counsel
and see if there is anything that they can do to further the
discussion and flesh it out.
Ms. Kaptur. West Nile virus came in in tires at a port. We
know the origin. We know it was not domestic, and yet we cannot
get at it. We need to have a forum for that, and it strikes me,
there must be a set of people over there at USDA that can take
the burden off the Government and the American taxpayer. There
is no forum that exists right now that I am aware of. I would
be appreciative of recommendations along that line.
FOOD STAMP PROGRAM
I wanted to make a comment about food stamps. I support all
of the rooting out of fraud not just in food stamps, but
wherever you can find it; and I know that you are just
scratching the surface.
On food stamps, as a result of welfare reform, is it true
that our food stamp usage has gone down considerably as a
country?
Ms. Fong. Yes.
Ms. Kaptur. Do you have any ongoing studies of the numbers
of Americans who are eligible for food stamps and are not
applying because law, the laws which have been passed, make it
much more difficult?
Some States have 14-page application forms. In Ohio, the
food bank lines are longer than we have ever seen. In fact, we
have been talking about an exchange from northern to southern
Ohio because the numbers of people coming to food banks is
phenomenal.
If you do not have such a study ongoing, how can we get it,
so we can get a sense of how many people are eligible that are
not being caught in the safety net?
Ms. Fong. It sounds like your concern is whether the
application process is acting as a deterrent to people
participating?
Ms. Kaptur. That could be a problem. I do not know what all
the problems are. I know, as a Member of Congress, I have been
asked to participate in food bank programs to encourage our
community to donate more. My home county is not the fastest
growing in Ohio, Mr. Strickland's is, and it is vast. So there
is something wrong.
For those people who are hungry, why are they not on the
rolls?
Ms. Fong. FNS may have some studies under way which we can
look into and provide information if that is the case. We would
be very happy to talk with your staff about this issue to make
sure that we understand your concerns.
Ms. Kaptur. I would like to make Ohio a test case of what
is wrong. Why are these lines so long. I know a lot of these
people qualify, but they are not on the program. So what has
gone wrong?
I am over my time. Thank you.
Mr. Bonilla. Mr. Boyd.
PIGFORD V. GLICKMAN
Mr. Boyd. Briefly, and I don't know if this has been
covered. The consent decree in Pigford v. Glickman, which is
the African American farmer lawsuit. There were audits run from
1997 to 2000, and 2000 is the last audit. That last audit
showed some serious problems, maybe 50 or 60 problems, which
you specifically identified.
I notice we have not had an audit since then. What is the
plan on that? Are we going to bring that in for a good landing?
Mr. Long. Even though we have not issued any new audits, we
have continued to work with the Department on resolving the
prior seven reports which we issued. We meet with the Office of
Civil Rights quarterly, and we are continuing to try to seek
resolution of some of the recommendations and implementation of
those recommendations.
I can provide you a status report on the status of those
recommendations and where we are. The Department has appointed
an Assistant Secretary for Civil Rights, but I don't think he
has been confirmed yet.
Mr. Boyd. Do you routinely monitor the case backlog?
Mr. Long. Yes.
Mr. Boyd. If we can get an update, maybe that would answer
the question.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
BUDGETARY RESOURCES
Secondly--Mr. Chairman, this is a budget question. It has
to do with your own budget. I notice that $2.3 million is being
requested for new computer equipment. Reviewing the budget
information submitted by USDA, it appears that $2 million of
that amount is coming out of the office's equipment budget.
That does not leave anything for any other equipment needs for
the fiscal year. That just leaves a few thousand dollars.
How many people do you have, 400 or 500?
Ms. Fong. We have over 600. I belive we are asking for $2.7
million for a new initiative to address our IT equipment needs
right now. The $2 million is just for normal replacement. So
this is an additional request.
Mr. Thornsbury. In the overall equipment budget under
object class 31 for equipment, the agency has not spent a lot
of money, and we do not have a lot of extra money. Most of the
funding you see in the object class breakout is primarily for
the new increase.
Mr. Boyd. Just a couple hundred thousand dollars is left
for all other things?
Mr. Thornsbury. Unless we make some savings in some other
areas, then we will make some adjustments.
Mr. Boyd. So you do have a budget problem?
Mr. Thornsbury. We have a tight budget; that is correct.
Mr. Bonilla. Thank you, Mr. Boyd.
I yield to Ms. Kaptur. Also, we had a couple members who
had to go to other hearings, and they are submitting questions
for the record.
HOMELAND SECURITY
Ms. Kaptur. Mr. Chairman, I would make a request at some
point, when it is convenient. I would appreciate a private
briefing and update on the USDA programs and diversion of funds
and terrorism. I have not had one of those in about a year, and
it would be very interesting to hear additional information.
Ms. Fong. We would be happy to do that.
Ms. Kaptur. Thank you.
On the issue of homeland security, several press reports
indicate that USDA's performance on two different homeland
security exercises held a few months ago was very dismal. My
sense, from your testimony, is that this is not an issue that
concerns you as the IG; and I am just wondering whether these
issues that relate to homeland security and various exercises
of the USDA, if you see a role for the IG in tightening up what
the Department is doing?
Ms. Fong. I believe you are referring to the Crimson series
of exercises dealing with APHIS and FSIS. We have participated
in those exercises because there is a role for the IG's office
in these kinds of situations where there is a possibility that
there may be a bioterrorist incident occurring. Our role would
be to provide the law enforcement expertise to address the
causes and, if there are bioterrorists functioning, to detect
and find them and prosecute them. We are interested and
involved, and we participate in the Department's Homeland
Security Council.
I was not there for the first two exercises, but I have
been advised that they have been tremendous learning
experiences for everybody at USDA. This is a new area as we
attempt to prepare ourselves for that kind of situation.
I participated in one exercise recently, and learned a
tremendous amount. As the process moves on, we would hope to
see the Department getting more comfortable and better at
responding to these kinds of situations.
Ms. Kaptur. Wasn't there something stolen from one of the
Michigan labs?
Ms. Fong. There is an allegation that there was a swine
virus that was stolen. Mr. Novak's staff ran the investigation
on that.
Mr. Novak. We are expecting a plea soon on the case, so I
can only give you limited information. It was reported in the
media that at Michigan State University there was a break-in
and an altered swine flu virus, which had been created at
Michigan State, was stolen. So the Michigan State University
police and the FBI initially got involved.
What I can tell you at this point is that there was no
theft. There was no genetically engineered virus, so the case
turned into a USDA grant fraud investigation, and that is what
the prosecution of the case is going to involve. There was no
break-in and no theft of anything at all.
There had been falsified research. We had funded $700,000
in research to Michigan State University for what we thought
was going to be a vaccine for the influenza. However, we found
out that the research had not been conducted and this was a
cover-up for the fact that there was no research.
Ms. Kaptur. Thank you for that clarification.
I wanted to ask, on a related note, the New York Times
reported last November that a worker hired by USDA to replace
striking workers at Plum Island had an arrest record. He also
reported that he failed to show up for work for several days,
and took a laptop computer with him that contained information
on the computer system at Plum Island.
Would you comment on this episode and what it says about
USDA's personnel security?
Mr. Novak. I can address the information on the laptop.
As soon as we heard about this, both the FBI and our office
responded, and we talked to the security personnel at the site.
This individual was a computer person, and the information on
the computer was the work that he was working on for Plum
Island. It did not involve security at the facility. There was
nothing criminal. We were concerned that we had someone
stealing computer information, and that is not what it appeared
to be.
Ms. Kaptur. Did he take a laptop off premises?
Mr. Novak. I will have to get back to you on that specific
issue. It may have been his own computer, but I will have to
get back to you on that specifically.
[The information follows:]
The contractor was in possession of a Government-issued
laptop computer when he was terminated from his employment at
Plum Island due to prolonged unexcused absence from work.
During his tenure at Plum Island, the contractor was considered
to be a good employee, and his possession of the laptop was not
a security risk. The laptop did not contain any secret or
specialized information. After his departure, the contractor
was contacted by Plum Island officials about the return of the
laptop computer, which was handled immediately and without any
difficulty or incident.
Ms. Kaptur. My general question relates to security at USDA
and any of the facilities that USDA owns. Or what about labs
that receive funds from USDA that are not under your
jurisdiction and are not Federally owned? Do you see a role for
the IG in this new world in which we are living to ensure that
the research that goes on there may be of a lesser nature than
that which may occur within USDA-owned facilities? Are you
taking a look at what is out there, and do you see a role for
the IG in this?
Ms. Fong. Absolutely. The security at USDA-funded labs had
not been a priority until September 11, when we began to
realize that perhaps there are some vulnerabilities. That had
never been the focus before.
We have an audit that looks at the physical security of
those labs, and who can gain entry and has access to the
samples.
Ms. Kaptur. I remember when I visited Ames, Iowa, and I was
in a lab shortly before 9/11 and after 9/11, and the story hit
about anthrax. I remember how confusing the press reports were.
If I go to the Ames lab today, compared to 2 years ago, what
would the difference be?
Mr. Long. You should see a difference today based upon the
reviews of the Department. We have been to Ames twice as part
of our work. Sandia also looked at Ames. There have been
recommendations and improvements made. I think you would see
something very different than before.
Ms. Kaptur. The anthrax reports, purportedly it might have
come from Ames, and then they denied that. Nothing came from
Ames, correct?
Mr. Long. Nothing has come to our attention that would
indicate anything came from Ames.
Ms. Fleischman. Based upon what we know about the form of
the anthrax that was used in the letters in the attack in
October/November of 2001, as far as we can tell--and it is one
of the things that we have looked at when we visited Ames and
other laboratories in the USDA system--as far as we can tell,
there is no quantity of anthrax in any of those laboratories or
facilities that would be in the same physical form as those
anthrax spores used in the attacks in 2001.
It is a totally different type or form. It could not be
used. The samples that the Department has could not be used in
a similar sort of attack. It seems it is highly unlikely that
the anthrax used in those attacks came from USDA labs.
Ms. Kaptur. I just wanted to reinforce, I think my own
personal interest in these security issues at USDA, and if
there is anything that you can do to tighten up consciousness
and regimen, I think the American people would want that.
EMPLOYEE MISCONDUCT
Moving to one other line of questioning, this relates to
some political activities that USDA may be engaged in by
political appointees. I am curious whether the IG ever reviews
political activities by administration appointments to ensure
that they are within the law and that the Department is
properly reimbursed for any expenses incurred?
Ms. Fong. I don't believe we have any allegations of that
pending right now.
My sense is that the Department's ethics officials would
play the front-line defense there in terms of providing advice,
appropriate advice, as to the guidelines political appointees
should follow.
Now, if there is a situation where someone believes that
something may have been done improperly, certainly we would be
happy to look at that and to evaluate that. But, as far as I
know, we have not received any complaints or allegations at
this point.
Ms. Kaptur. Do you think it is appropriate for the
Department to hold official events close to Election Day with
only members of the political party of the President, such as
the event on September 19 with Representative John Thune, who
was running for the Senate, and that event was kept on the Web
site of USDA through the election? Do you believe that is
appropriate for the Department?
Ms. Fong. I am not familiar with that situation. That was
before I came to USDA, and I would be happy to look into that.
Ms. Kaptur. Thank you.
[The information follows:]
OIG will look into the allegation of inappropriate
political activity by the Department. The Agency will aim to
have preliminary results of its investigation regarding whether
or not wrongdoing occurred by the early part of September 2003.
Ms. Kaptur. Will the IG be reviewing the rewarding of any
bonuses to political appointees, which White House Chief of
Staff Card recently authorized?
Ms. Fong. It is not the normal policy or procedure for the
Department to run the bonus decisions through our office.
Again, if there is a particular concern that someone has or an
allegation that something may have been improper, we would be
happy to evaluate that.
Ms. Kaptur. Thank you.
COMMODITY CREDIT CORPORATION
Ms. Kaptur. My final request is one for information. If I
were interested, going back to the 1980s, in the activities of
the Commodity Credit Corporation and transactions that it had
undertaken relative to Iraq, could you help prepare that
information?
Ms. Fong. My staff tells me we would be happy to render
whatever assistance we can.
Ms. Kaptur. I will submit a formal request.
Mr. Chairman, thank you.
Mr. Bonilla. I would like to thank all of you for being
here today.
I would like to make an announcement that we have the
Secretary scheduled for tomorrow at the same time, and we do
expect to proceed on schedule in spite of the weather. I hope
we can all make appropriate plans to leave earlier in order to
attend the hearing.
With that, the subcommittee stands adjourned until tomorrow
morning.
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W I T N E S S E S
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Page
Collins, Keith................................................... 1
Dewhurst, S. B...................................................1, 989
Fleischman, J. N................................................. 989
Fong, P. K....................................................... 989
Long, R. D....................................................... 989
Moseley, J. R.................................................... 1
Novak, J. E...................................................... 989
Thornsbury, D. R................................................. 989
Veneman, Hon. A. M............................................... 1
I N D E X
----------
Secretary of Agriculture
Page
Animal and Plant Health Inspection Service....................... 9
American Heritage Rivers Program................................. 83
Ames Iowa:
Ames Iowa, Modernization Project............................. 50
Budget Request Ames Lab...................................... 80
Bioenergy........................................................ 76
Biofuels/Renewable Fuels......................................... 49
BioTechnology.................................................... 80
Budget Overview.................................................. 6
Chronic Wasting Disease in Wisconsin............................. 3
Conservation Programs............................................ 10
Conservation Technical Assistance................................70, 71
Commodity Assistance Program..................................... 85
Country of Origin Labeling....................................... 66
Civil Rights Budget.............................................. 11
Citrus Canker Research and Development..........................94, 103
Crop Insurance Program........................................... 82
Disaster Assistance Program...................................... 8, 51
E-File Technology Programs....................................... 68
Emerson Trust/Risk Management.................................... 62
Explanatory Notes:
Office of the Secretary FY 2004 President's Budget..........328-340
Revised Office of the Secretary Explanatory Notes--Enacted FY
2003......................................................324-327
Farm Bill:
Farm Bill Implementation..................................... 8, 64
Farm Bill Sign-up........................................54, 67, 68
Farm Income...................................................... 72
Farm Service Agency Office Consolidation.........................65, 84
Food and Nutrition:
Food and Nutrition Programs.................................. 10
Free and Reduced Lunch Program............................... 58
Nutrition Programs--Means Test............................... 55
School Lunch Program......................................... 142
Food Safety:
Food Safety Program..................................9, 59, 97, 142
Nutrition Labeling........................................... 43-48
Foreign Market Development Programs.............................. 11
Genetically Modified Agricultural Products....................... 81
Global Food Aid.................................................. 138
Homeland Security................................................ 9
Laboratory Capacity.............................................. 4
Livestock Compensation Program Sign-up........................8, 57, 98
Listeria Rule...................................................97, 101
Opening Statement................................................ 1
Organic Standards:
National Organics Standards Program.......................... 92
Organic Farming Standards.................................... 66
Outsourcing...................................................... 43
Packer Concentration............................................. 96
Polluted Runoff.................................................. 100
2004 President's Budget.......................................... 9
Product Distribution Disclosure..................................67, 93
Risk Management Issues........................................... 103
Questions for the Record Submitted by Chairman Bonilla:
Advisory Committees, Panels, Task Forces, and Commissions...180-182
Agricultural Credit Insurance Fund........................... 200
APHIS and Farm Service Agency Compensation Payments by Fiscal
Year....................................................... 186
Ames, Iowa Biocontainment Facilities......................... 203
Asset Sales.................................................. 256
Biobased Product Studies..................................... 203
Bioterrorism and Biosafety:
Biosecurity.............................................. 226
Biotechnology Risk Assessment............................ 203
Bioterrorism...........................................207, 225
Cartagena Protocol on Bioterrorism......................213-238
Captive Supply Study........................................252-253
CCC:
CCC Section 11 Allocations..............................194-196
CCC Section 11 Activities................................ 196
CCC Funding of Emergency Pest and Disease Programs....... 227
Codex Alimentarius........................................... 190
Corporate Systems Investments...............................227-229
Congressional Earmarks....................................... 208
Congressional Relations Activities..........................147-150
Congressional Relations Transfers............................ 229
Conservation Reserve:
Conservation Reserve Program............................. 185
Conservation Reserve Program Acreage Enrollment.......... 192
Conservation Reserve Program Technical Assistance........ 197
CRP Continuous Signup Program............................ 209
Conservation Technical Assistance............................ 259
Common Computing Environment...........................200, 215-222
Corporate Systems Development................................ 258
Cost-Sharing Regulation...................................... 250
Country of Origin Labeling................................... 251
Dairy Options Pilot Program.................................. 189
Delinquent Loans............................................. 151
Department-wide Nutrition Education Funding.................. 223
Disaster Recovery/Business Continuance....................... 232
Electronic Program Delivery.................................240-247
Emergency Pest and Disease Programs.......................... 223
Expanding International Trade................................ 223
Farm Bill Implementation Costs............................... 260
Farm Income.................................................. 236
Farm Loans................................................... 201
Field Office Restructuring................................... 252
Food and Nutrition:
Average WIC Participation in FY 2003..................... 213
Electronic Benefits Transfer and WIC Eligibles.....165, 174-177
Estimates of Eligible Non-participants in the Food Stamp
Program................................................ 210
Facilitating Access to the Food Stamp Program...........210-212
Food Stamp Error Rates................................... 212
Food Stamp Program Participation......................... 210
National School Lunch Program Certification Procedures... 255
WIC Carryover............................................ 208
WIC EBT Implementation................................... 213
WIC Program--2004 Budget Initiatives..................... 254
WIC Program Reauthorization.............................. 254
WIC Protected Participation............................178, 179
Food for Education and Child Nutrition Program............... 249
Fund for Rural America....................................... 187
Funding for Government-wide E-Government Initiatives......... 248
Funding for Trade Enhancement................................ 225
Funding for Trade Agreement Negotiations..................... 240
FSA Administrative Funding................................... 200
Government Payments.......................................... 236
Government Spending for Fiscal Years 2002-2004............... 247
Homeland Security:
Homeland Security Supplemental........................... 234
Memorandum of Agreement.................................. 233
Transfers to Department of Homeland Security................. 233
Human Nutrition Initiative Studies.........................204, 207
Loans.......................................................152-154
Mandatory Price Reporting.................................... 214
Montreal Protocol Multilateral Fund.......................... 236
National Finance Center Data Recovery.......................230-232
National Organic Standards................................... 214
Outreach for Socially Disadvantaged Farmers.................. 222
Outside Legal Counsel........................................ 183
OSEC Staffing......................................157-165, 166-174
Outsourcing.................................................. 258
Outsourcing Testing.......................................... 263
Proposal To Reduce Administrative Expense Reimbursements..... 249
Public Affairs Activities...................................114-117
Section 32 Fund.............................................261-262
Senior Executive Service..................................... 263
Service Center Modernization................................197-200
Staff Year Reductions........................................ 189
Subsidy Costs for USDA Loan Programs........................190-192
Subsidy Costs for Broadband Loans............................ 252
Sugar........................................................ 209
Technical Assistance Costs for CRP and WRP................... 193
Tobacco Program.............................................154-156
Trade Related and Biotechnology Activities................... 263
Unauthorized Appropriations.................................. 222
USDA Homeland Security Council............................... 227
USDA Office Closures......................................... 271
USDA Strategic Goals......................................... 257
Universal Telecommunications Network......................... 248
User Fee Legislation......................................... 251
User Fees for Meat, Poultry, and Egg Products Inspection..... 253
Water and Wastewater Disposal Grants......................... 252
Web-based Supply Chain Management System..................... 256
Wetlands Reserve Program Acreage Enrollment.................. 193
Questions for the Record Submitted by Mr. Kingston:
Adequate Funding for FSA Employee Training................... 276
Consent Decree............................................... 281
E-File Requirements and Re-engineering....................... 277
FSA Salaries and Expenses.................................... 278
FSA Staff..................................................273, 279
FSA Workload................................................. 279
H2A Non-immigrant Visa Program............................... 282
Listeria Risk Assessment..................................... 275
Montreal Protocol/Methyl Bromide............................. 272
Organic Egg Standards........................................ 274
Organic Feed Provision......................................283-287
Salaries and Expenses Funding................................ 276
Service Center Agencies and Homeland Security................ 276
Service Center Workload Measurement.......................... 280
State Office Restructuring................................... 282
Tobacco Assistance........................................... 275
Questions for the Record Submitted by Mr. Latham:
Ames, IA Modernization Project............................... 288
Bioenergy.................................................... 289
Forward Contracting on Dairy Products........................ 291
FSA County Offices........................................... 289
Meat Packers Study........................................... 291
Questions for the Record Submitted by Mrs. Emerson:
Child Nutrition Reauthorization.............................. 295
Childhood Obesity Epidemic................................... 295
Conservation Security Program................................ 294
Food Stamp Program........................................... 293
McGovern-Dole International Food for Education and Child
Nutrition Program.......................................... 296
Questions for the Record Submitted by Ms. Kaptur:
BioFuels....................................................298-300
Commodity Supplemental Food Program for Seniors.............. 303
Food Aid..................................................... 300
Freight Forwarder Contract................................... 301
Fruits and Vegetable Consumption Among Young People.......... 304
FSA Staff.................................................... 303
Global Food for Education Program............................ 303
Linking Nutrition Programs With Production Agriculture....... 306
Over-Issuance of Benefits.................................... 305
Program Sign-Up.............................................. 302
Senior Farmers' Market Nutrition Programs.................... 300
Questions for the Record Submitted by Ms. DeLauro:
After School Supper Program.................................. 314
Listeria..................................................... 308
Listeria Directive........................................... 314
Listeria Recall at Wampler Foods............................. 315
Mandatory Recall Authority................................... 311
Nebraska Beef/Supreme Beef................................... 307
Recall Distribution Lists.................................... 309
Revision of WIC Food Package Rules........................... 312
Single Food Safety Agency.................................... 310
Summer Food Program.......................................... 313
USDA Food Safety Budget...................................... 307
WIC--Strategic Information Systems........................... 313
Questions for the Record Submitted by Mr. Berry:
Beginning Farm Program......................................319-321
Farm Bill Sign-Up............................................ 322
Inventory of Farm Property................................... 317
Russian Inspections of U.S. Poultry Plants................... 321
Rural Development Program........................................11, 69
Section 32 Funds................................................. 52
Surveillance Testing on Deer..................................... 5
Statement by Anne Veneman, Secretary of Agriculture.............. 13-42
USDA Dairy Policy................................................ 83
USDA Strategic Plan.............................................. 11
USDA Website....................................................105-137
Value Added Grants............................................... 53
Warehouse Provision.............................................. 68
Departmental Administration
FY 2004 Hearing Questions
Advisory Committees:
Advisory Committee Staff Costs............................... 365
Advisory Committees Funded From Other Sources................ 365
Explanatory Notes FY 2004...................................455-470
Agriculture Buildings and Facilities and Rental Payments:
Carryover From Fiscal Year 2002.............................. 364
Explanatory Notes:
FY 2004 President's Budget..............................438-445
Revised Explanatory Notes Enacted FY 2003...............407-408
Headquarters Complex Rental Charges.......................... 361
Increase in Agriculture Buildings and Facilities and Rental
Payments................................................... 364
Rental Payments and GSA Repair Costs......................... 363
South Building Renovation.................................... 359
Celebration of Excellence Ceremony............................... 350
Cost of Settlements.............................................. 341
Departmental Administration Explanatory Notes:
FY 2004 President's Budget..................................411-437
Revised Explanatory Notes Enacted FY 2003...................402-406
Distribution of Aircraft......................................... 352
Distribution of Motor Vehicles................................... 352
Early Out and Buyout Options..................................... 350
Equal Employment Opportunity Complaints.......................... 344
Foreclosures..................................................... 341
Funding New Field Service Centers................................ 345
Hazardous Materials Management:
Agency Support............................................... 375
Agencies Comprising the Hazardous Materials Working Group.... 400
CCC Grain Storage Site Status................................ 377
Compliance Docket............................................ 376
Compliance With State Law...................................370-373
Explanatory Notes:
FY 2004 President's Budget..............................446-454
Revised Enacted FY 2003.................................409-410
Foreclosures Requiring Cleanup............................... 376
Funding for CERCLA, RCRA, and Pollution Prevention........... 369
Funding for Sites...........................................382-399
Forest Funding for Cleanup Forest Service Sites.............. 399
Forest Service Reimbursement................................. 400
Forest Service Sites Cleanup Costs........................... 399
Performance Goals............................................ 368
Salaries and Benefits........................................ 374
Salaries/Benefits Cleanup Costs.............................. 374
Typical Cleanup Efforts and Associated Costs................379-381
Historically Black Colleges and Universities....................353-356
Number of Complaints............................................. 344
Number of Credit Cards Issued.................................... 350
On-Site Reviews.................................................. 341
Processing Complaints............................................ 345
Procurement Reform............................................... 346
Procurement Paperless Personnel Request System................... 350
Savings Through Credit Cards..................................... 351
Section 921, Federal Agriculture Improvement and Reform (FAIR)
Act............................................................ 357
Targeted Disabilities............................................ 351
USDA Streamlining................................................ 346
USDA/1890 National Scholars Program.............................. 346
Office of the Chief Information Officer/Working Capital Fund
FY 2004 Hearing Questions
A-76 FAIR Act.................................................... 497
Accounting Systems..............................................504-506
Audits........................................................... 506
Computer Security...............................................500-503
Corporate Systems................................................ 504
Cost Accounting and User Fee Reviews............................. 500
Debt and Credit Management....................................... 495
Explanatory Notes:
OCFO FY 2004 President's Budget.............................515-527
OCFO Revised Enacted FY 2003................................510-514
WCF FY 2004 President's Budget..............................528-555
FFIS Staffing Levels............................................. 503
Financial Statements............................................498-500
Foundation Financial Information System.........................479-484
GAO and OIG Reports.............................................486-492
National Finance Center........................................485, 486
NFC Emergency Recovery........................................... 506
Payroll System..................................................492-495
Remote Mirroring Backup Technology............................... 508
Unobligated Balances...........................................496, 497
USDA Travel...................................................... 478
Working Capital Fund............................................473-478
Working Capital Fund Unobligated Balances........................ 507
Office of the Chief Information Officer
FY 2004 Hearing Questions
Approved FY 2004 Business Cases................................757, 758
Breakout of Object Class 25.0, Other Services.................... 668
Breakout of CCE Procurement...................................... 679
Breakout of Service Center Employees............................. 610
Budget Preparation Materials..................................... 685
CCE Acquisition of Equipment, Software..........................755-757
CCE Procurement Strategy......................................... 685
CCE Implementation Schedule....................................684, 755
CCE Return on Investment......................................... 754
CCE Unobligated Balance.......................................... 756
CCE Web Applications supported................................... 755
Cyber Security Program Implementation...........................680-682
Contractor Support Services...........................558-601, 667, 668
Delivering Programs Through the InterNet........................656-665
Department-wide Information and Technical Infrastructure......... 745
Disaster Recovery Plans for USDA Mission-Critical Systems........ 752
Expected CCE Return on Investment................................ 678
Explanatory Notes:
CCE FY 2004 President's Budget..............................787-803
OCIO FY 2004 President's Budget.............................771-786
CCE Revised Enacted FY 2003.................................. 769
OCIO Revised Enacted FY 2003................................. 767
Filling IT Vacancies............................................. 684
FSA Legacy Application, GIS...................................... 758
FY 2002 and FY 2003 IRM Support Services Contracts............... 558
FY 2002 LAN/WAN Voice Installation Funds......................... 610
FY 2003 Homeland Security Spending on IT......................... 759
FY 2003 Spending on EAMS......................................... 760
FY 2004 Budget Request Increase.................................748-750
Freedom To E-File Implementation................................697-699
GAO and OIG Audit Findings......................................611-622
Government Paperwork Elimination Act Implementation.............752-753
Information Security and Privacy...............................699, 700
Interoperability Lab Costs....................................... 755
Improving Departmentwide IT Management and CIO Accountability..744, 745
IT Staff Convergence Initiative.................................. 753
Latest CCC Quarterly Report.....................................602-609
New Positions Funded in FY 2004.................................. 747
Object Class 31.0, Equipment Breakdown.........................669, 670
Object Class Table for CCE....................................... 678
OCIO Contracts/Subcontracts....................................747, 748
OMB Approval of USDA IT Spending................................. 757
OMB Exhibit 42..................................................622-653
Other Training Plans............................................. 677
Moratorium Waivers.............................................746, 747
Plans To Support Electronic Program Delivery...................666, 667
Purchase of Workstations Completed............................... 670
Risk Management Agency........................................... 761
RMA Infrastructure Modernization...............................762, 763
RMA Hot Site Backup............................................763, 764
Rural Development Web Farm Operations............................ 764
SCIT Contracts Approved.........................................670-677
SCIT Modernization Plan Milestones, Progress....................692-697
Securing E-Business Transactions and Mission Critical Systems..665, 666
Service Center Modernization Initiatives.......................760, 761
Status and FY 2004 Plans for USDA's Enterprise Architecture...... 751
Status of Common Computer Systems................................ 677
Status of Business Process Re-engineering.......................687-692
Status of Cross-Training.......................................677, 678
Status of USDA's Corporate Systems Initiatives.................750, 751
Strengthening Information Risk Management......................682, 683
Strengthening IT Management.....................................654-656
Strengthening Management Controls................................ 679
Support for USDA's Websites...................................... 679
Telecommunications Security Architecture.......................683, 684
USDA E-Gov Initiatives Implementation............................ 750
USDA's FY 2004 IT Budget........................................685-687
USDA FY 2004 Spending on Contractor Support Services............. 744
USDA Information Technology Budget............................... 557
USDA's IT Moratorium............................................. 747
USDA's IT Workforce Analysis..................................... 746
USDA Reliance on Contractor Assistance..........................700-743
USDA Service Center LAN/WAN/Voice Installations.................. 610
USDA Total FY 2004 IT Expenditures............................... 654
Working Capital Fund Cost Increases.............................. 762
Workstations by Agency........................................... 670
Office of Communications
FY 2004 Hearing Questions
Explanatory Notes:
OC FY 2004 President's Budget...............................895-910
OC Revised Enacted FY 2003................................... 893
Media Services................................................... 887
Office of Communications Budget Request.......................... 888
Office of Communications Program Increases.....................890, 891
Press Releases Issued..........................................887, 888
Public Affairs Activities.......................................883-885
Reimbursement From Other USDA Agencies.........................888, 889
Resources and Staff Levels................................883, 886, 887
Office of the Chief Economist
FY 2004 Hearing Questions
Activities in Stoneville, Mississippi..........................915, 916
Explanatory Notes:
OCE FY 2004 President's Budget..............................922-938
OCE Revised Enacted FY 2003.................................919-921
Food and Agricultural Research Policy Institute.................. 918
Impacts of Welfare Reform and Farm Labor.......................914, 915
Market for U.S. Exports to Asia and Latin America................ 915
Potential Increases in Prices and Farm Income From Biomass.....916, 917
Risk Assessment Rule Making....................................913, 914
Risk Assessment Staff Time....................................... 914
USDA Activities Associated With Sustainable Agriculture........911, 912
USDA Food Safety Initiative Funds Budgeted....................... 916
National Appeals Division
FY 2004 Hearing Questions
Active Appeals................................................... 939
Director Appeals................................................. 939
Performance Goals and Indicators................................. 939
Vacant Positions...............................................939, 940
Explanatory Notes:
Explanatory Notes--Increases................................. 940
Explanatory Notes--Significant Decreases..................... 940
NAD FY 2004 President's Budget..............................943-950
NAD Revised Enacted FY 2003................................941, 942
Office of Budget and Program Analysis
FY 2004 Hearing Questions
Breakout of Resources for OBPA's Responsibility.................. 952
Budget Related Legislative Proposals............................. 953
Code of Federal Regulations...................................... 953
Increase for Information Technology.............................. 954
Explanatory Notes:
OBPA FY 2004 President's Budget.............................958-970
OBPA Revised Enacted FY 2003................................955-957
Legislative Proposals............................................ 852
USDA Budget Summary............................................953, 954
Homeland Security Staff
Explanatory Notes:
Homeland Security Staff FY 2004 President's Budget..........972-977
Homeland Security Staff Revised Enacted FY 2003.............. 971
Office of the General Counsel
Attorney:
Hours by Agency.............................................. 808
Hours Worked................................................. 807
Locations.................................................... 808
Cases:
EEO Commission............................................... 846
Civil and Criminal........................................... 809
Conservation Operations.......................................... 849
Debt Collections................................................. 809
Examples of Recent Progress...................................... 811
Explanatory Notes................................................ 852
FY 2004 Budget Request Breakout.................................. 810
Law Library...................................................... 810
Object Class Breakout............................................ 847
OGC Priorities................................................... 845
Private Counsel.................................................. 808
Public Law 108-7................................................. 848
Revision to Explanatory Notes.................................... 850
Staff Years...................................................... 806
User Fee:
Hours by Agency.............................................. 805
Programs..................................................... 805
Office of Inspector General
Adequacy of HACCP Implementation................................. 1074
Agency Staffing Levels........................................... 1052
Agriculture Risk Protection Act of 2000.......................... 1057
Animal Cruelty................................................... 1058
Asset Forfeiture Transfers....................................... 1050
Biographical Sketch:
Phyllis K. Fong.............................................. 1016
Bioterrorism Initiative.......................................... 1067
Budget Request, FY 2004.......................................... 990
Budgetary Resources....................................1018, 1037, 1048
Business Process Re-engineering..............................1052, 1055
Commodity Credit Corporation..................................... 1040
Confidential Funds............................................... 1045
Emerson Trust Reserve Wheat Release.............................. 1021
Employee and Public Misconduct................................... 1046
Employee Misconduct.............................................. 1039
Employee Pay Scales.............................................. 1051
Explanatory Notes................................................ 1078
Farm Legislation Audit Work...................................... 1058
Farm Service Agency.............................................. 1070
FFIS Enforcement Operations...................................... 1074
Financial Management............................................. 989
Financial Statement Audits....................................... 1042
Financial Statements............................................. 1051
Firearms......................................................... 1048
Food and Nutrition Service....................................... 1033
Food and Nutrition Service Programs.............................. 1060
Food Product Recalls............................................. 1025
Food Recalls..................................................... 1019
Food Safety.............................................989, 1026, 1070
Food Safety FSIS................................................. 1064
Food Stamp Fraud................................................. 1028
Food Stamp Program...........................................1034, 1041
Forest Service................................................... 1056
FSIS Enforcement Operations...................................... 1074
FSIS Recall Operations........................................... 1053
Genetically Modified Materials................................... 1069
Homeland Security.................................988, 1037, 1054, 1063
Homeland Security Funding........................................ 1024
Hotline Complaint Summary........................................ 1046
Indictments, Convictions, and Suits, FY 2002..................... 1047
Information Technology........................................... 1059
Information Technology Funding................................... 1017
Interagency Communication........................................ 1021
Invasive Species.............................................1031, 1071
Investigation into New York Plant................................ 1076
Joint Terrorism Taskforce........................................ 1056
Laboratory Security.............................................. 1020
OIG Homeland Security Funding.................................... 1057
OIG Priority Settings............................................ 1065
Opening Remarks (Mr. Bonilla, Ms. Kaptur)........................ 985
Opening Statements (Ms. Fong).................................... 987
Outside Public Accountants....................................... 1045
Outsourcing of USDA Functions.................................... 1063
Peanut Quota Buyout Program...................................... 1067
Pesticides on Imported Produce................................... 1023
Pigford v. Glickman.............................................. 1035
Recall Operations................................................ 1075
Recoveries....................................................... 1018
Recoveries from Foreign Nationals................................ 1033
Risk Assessment and Inspections.................................. 1017
Risk Management Agency........................................... 1062
Security of Research Facilities.................................. 1071
State Mediation Program.......................................... 1042
Status of Program:
Accomplishments in Fiscal Years 2002......................... 1095
Audit Accomplishments........................................ 1102
Investigations Accomplishments............................... 1096
Threats Against Government Employees............................. 1023
Unqualified Audit Opinion........................................ 1066
Waste, Fraud, and Abuse.......................................... 1025
Whistleblowers................................................... 1053
Witnesses, Introduction of....................................... 987
Written Statement (Ms. Fong):
2002 Farm Bill............................................... 1001
Border Security.............................................. 996
Budget Request, FY 2004...................................... 1014
Commodity Distribution Programs.............................. 1012
Counterterrorism Efforts..................................... 998
Employee Integrity........................................... 1013
Farm and Foreign Agriculture Services........................ 1002
Farm Programs................................................ 1001
Financial Integrity.......................................... 1004
Food and Nutrition Service................................... 1009
Food Safety.................................................. 999
Food Stamp Program (FSP)..................................... 1010
Food, Nutrition, and Consumer Services....................... 1009
Homeland Security............................................ 993
Information Technology........................................... 1003
Introduction and Overview........................................ 991
Marketing and Inspection Programs................................ 1005
Natural Resources and Environment................................ 1007
Rural Business-Cooperative Service (RBS)......................... 1008
Rural Development................................................ 1008
Rural Housing Service (RHS)...................................... 1009
Security at USDA-Operated and -Funded Facilities................. 994
Special Supplemental Nutrition Program for Women, Infants and
Children (WIC)................................................. 1011
Statement of Nancy S. Bryson, General Counsel.................... 1114