[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
     AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION,

              AND RELATED AGENCIES APPROPRIATIONS FOR 2004
                  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.,            MAURICE D. HINCHEY, New York
 Washington                            SAM FARR, California
 TOM LATHAM, Iowa                      ALLEN BOYD, Florida          
 JO ANN EMERSON, Missouri
 VIRGIL H. GOODE, Jr., Virginia
 RAY LaHOOD, Illinois 
                                                                        
                                                                        

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
   Henry E. Moore, Martin P. Delgado, Maureen Holohan, and Joanne L. 
                        Perdue, Staff Assistants
                                ________

                                 PART 4
                        CONSERVATION PROGRAMS AND
                    MARKETING AND REGULATORY PROGRAMS
                                                                   Page
 Natural Resources Conservation Service...........................    1
 Marketing and Regulatory Programs................................  349
     Agricultural Marketing Service...............................  493
     Animal and Plant Health Inspection Service...................  647
     Grain Inspection and Packers and Stockyards
         Administration........................................... 1049
                                ________

         Printed for the use of the Committee on Appropriations

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 87-742                     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, March 13, 2003.

                 NATURAL RESOURCES CONSERVATION SERVICE

                               WITNESSES

MARK REY, UNDER SECRETARY NATURAL RESOURCES AND ENVIRONMENT, USDA
BRUCE I. KNIGHT, CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
GERALD PATTERSON, ACTING BUDGET DIRECTOR, BUDGET PLANNING AND ANALYSIS 
    DIVISION, NATURAL RESOURCES CONSERVATION SERVICE
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                       Introduction of Witnesses

    Mr. Bonilla. The subcommittee will come to order.
    Today we have before us a fine team of people who oversee 
the Natural Resources and Environment Programs at USDA. Under 
Secretary Mark Rey, he has provided great leadership with us, 
and he is here for his second appearance before this 
subcommittee. and appearing for the first time are Bruce 
Knight, the Chief of the Natural Resources Conservation 
Service. Welcome. Gerald Patterson, the Acting Budget Officer 
at NRCS. Welcome. And of course, Steve Dewhurst is joining us 
once again this morning.

                            Opening Remarks

    Mr. Rey, I think you and your teams have performed 
admirably in what is one of the toughest jobs at USDA. You are 
under the gun every day to make the best decisions on what you 
and the administration believe is in the country's best 
interest.
    The Farm Bill added to your workload, and I think as do 
most, that conservation won big in the Farm Bill, but that 
makes your job somewhat tougher. I only wish that USDA could 
have won their case with the Office of Management and Budget 
related to conservation technical assistance, as you presented 
your apportionment request for 2002, because now we have to 
deal with a budget request for conservation technical 
assistance that this subcommittee should not have to pay for, 
because we believe, as the authorizing committee believes, that 
conservation technical assistance costs were provided through 
the Commodity Credit Corporation in the Farm Bill. So to fix 
that, Division N of the fiscal year 2002 Appropriations Act 
addressed the conservation technical assistance issue, and I 
hope that you are going to be able to tell us today that this 
issue is fixed, considering that we put that language in the 
bill, and we will all be anxious to talk about this and other 
issues this morning after we hear your opening remarks.
    But before we do that, I would like to yield to my ranking 
member, Ms. Kaptur, for any remarks that she may have at this 
time.
    Ms. Kaptur. Thank you, Mr. Chairman. And I want to support 
what you have said, and agree that the work that you do is so 
critical to our country. The whole conservation ethic had a 
greater primacy in the recent Farm Bill, and as the Chairman 
stated, I, also, this side of the aisle, do not think that 
conservation should be made a scapegoat for the disaster 
assistance problems that our Nation faces. And so all of the 
individuals associated with NRCS I think, at least on this 
subcommittee, have tremendous respect. We want to be supportive 
of your work, including, as the Chairman said, technical 
assistance to our farmers.
    And just by way of note, Congressman Nick Smith of Michigan 
and I were very involved in the major biofuels conference held 
in the Midwest, and we want to thank NRCS formally for allowing 
Mr. Merlin Bartz, Special Assistant to the Under Secretary, for 
coming to the Midwest and really helping to engage hundreds and 
hundreds of people in important discussions on the importance 
of biofuels. So we appreciate the NRCS sees this as a new 
market and is doing what it can to move this industry forward.
    I also want to say that conservation work is so important 
in terms of urban encroachment in a State like Ohio that I 
represent, and many of the other States that have members on 
this panel. We appreciate the work that you do trying to deal 
with rural urban interface, also the water quality issues and 
runoff, and helping to seed across our Nation best management 
practices to help the quality of life in both rural and urban 
America.
    So thank you so very much for being with us today, and we 
look forward to your testimony.
    Mr. Bonilla. Thank you, Ms. Kaptur.
    Mr. Rey, just for your information, the Appropriations 
hearing season is well upon us now, and we have how many 
simultaneous--six simultaneous subcommittee hearings going on 
this morning, and therefore members will be bouncing in and 
out, and those who do not make it this morning will have 
questions submitted for the record.
    Ms. Kaptur. Would the Chairman yield on that point?
    Mr. Bonilla. I will be happy to yield, Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman. I just wanted to 
mention that about 10:30 we have Foreign Operations. Secretary 
Powell is before our subcommittee there, so I will have to exit 
at that point, but hopefully we will have people from our side 
of the aisle who will remain. Thank you.
    Mr. Bonilla. Very good. Thank you, Ms. Kaptur. We have both 
your statement, Mr. Rey, and also the Chief's statement 
submitted for the record and printed. At this time we would be 
happy to yield to you for your opening remarks.

                         Statement of Mark Rey

    Mr. Rey. Thank you, and I will summarize.
    I am pleased to appear before the subcommittee here today, 
and I would like to start by thanking the subcommittee for its 
ongoing support for private lands conservation.
    I would like to introduce the new members of the NRCS 
leadership team to the subcommittee for the first time. With me 
this morning are, on my right, Mr. Bruce Knight, the Chief of 
the NRCS. Behind him is Mr. Thomas Weber, who is serving as the 
Associate Chief of NRCS, and to Mr. Knight's right is Mr. 
Gerald Patterson, who is the Agency's Acting Budget Director. 
And of course to my left is Mr. Stephen Dewhurst, who has a 
season ticket here to appear before you in many instances.
    Before I highlight our budget for 2004, I would like to 
take a moment to mention the strong efforts that NRCS has made 
in the past year under the leadership of Chief Knight on 
performance and results, as well as making NRCS more accessible 
to farmers, ranchers and the general public.

                          CLEAN AUDIT OPINION

    For fiscal year 2002 the Department of Agriculture received 
for the first time ever a clean audit opinion for all 
Department financial statements. More than one wag has already 
referred to this event as ``the Miracle on 14th Street.'' This 
clean rating was the result of our staff throughout the 
Department and within NRCS overcoming many hurdles, such as 
ascertaining by appraisals the costs of real property, cleaning 
up years of neglect in personal property, accelerating month-
end timetables in order to prepare reports, and correcting cash 
imbalances with the Department of the Treasury.

                  NRCS ORGANIZATIONAL LEADERSHIP AWARD

    Last year I was pleased to report that NRCS had received a 
superior customer satisfaction rating from the University of 
Michigan School of Business. A rating of customer satisfaction 
comparable to that achieved by the Ritz-Carlton Hotel chain and 
Mercedes Benz. This year I am also pleased to announce that the 
American Society for Public Administration's Center for 
Accountability and Performance has selected NRCS for its 
organizational leadership award. This award recognizes 
outstanding applications of a systems approach to performance 
measurement that has resulted in culture changes, sustained 
improvements, and demonstrated positive impacts on Government 
performance and accountability. I believe that NRCS can 
continue to build upon this level of excellence if they are 
given the right support and the needed resources as provided in 
the President's budget request. Now let me turn to that very 
briefly.
    Last year at this time we discussed the administration's 
views for the future of agriculture. A year later many of the 
administration's conservation principles have been advanced in 
the form of the new Farm Bill. This Farm Bill represents 
historic opportunities, but it also represents an historic 
challenge for our natural resource professionals.

                        REQUESTED FUNDING LEVELS

    The 2004 budget request for NRCS includes $1.2 billion in 
appropriated funding, and $1.4 billion in mandatory CCC funding 
for the Farm Bill conservation programs, including $850 million 
for the Environmental Quality Incentive Program.
    The 2004 budget proposes $704 million for conservation 
operations, which includes $577 million for conservation 
technical assistance. This will continue the Agency's 
activities that support locally led voluntary conservation 
through the unique partnership that has developed over the 
years with each Conservation District. This partnership 
provides the foundation on which the Department addresses many 
of the Nation's critical natural resources issues.
    Given the challenges presented in the Farm Bill, I suggest 
three areas of emphasis that we will pursue if Congress chooses 
to approve our 2004 budget request.
    First. We will endeavor to provide adequate support for 
Farm Bill implementation through a dedicated Technical 
Assistance Account, an account which we believe represents the 
best mix of expenditures to provide the maximum amount of 
support for on-the-ground conservation.
    Second. We will try to further leverage assistance for our 
conservation partners and through the new Technical Service 
Provider program.
    And lastly, we will ensure adequate support for 
conservation operations with an emphasis on developing 
technical tools and streamlining efforts to gain efficiencies 
where possible.
    We are trying to plan for a future under an atmosphere of 
increasingly austere budgets and with a multitude of unknowns 
on the domestic and international fronts. But I believe that 
the Administration's 2004 budget reflects sound policy and will 
provide a greater level of stability to the vital mission of 
conservation on private lands.
    With that, I will turn to Chief Knight, and then we will 
both be happy to answer any questions the subcommittee has.
    [The prepared statement of Mark Rey follows:]

             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
        
                       Statement of Bruce Knight

    Mr. Knight. Mr. Chairman, members of the Committee, thank 
you for the opportunity to appear before you today to discuss 
our Fiscal Year 2004 budget request.
    In less than one year, we have enacted one of the most 
important pieces of conservation legislation in history in the 
form of the 2004 Farm Bill. The legislation responds to a broad 
range of emerging conservation challenges, and places a strong 
emphasis on the conservation of working lands. We have a 
tremendous opportunity as well as a huge responsibility ahead 
of us.

                ADDRESSING THE NEEDS OF FARMERS/RANCHERS

    Meeting the expectations of farmers and ranchers and 
addressing the emerging natural resource challenges they face 
will require not only the appropriate resources, but will 
require that we change our approach. One of the core themes 
that I have stressed to our agency is the need to be lean and 
local. Throughout the year we have worked hard to provide as 
much decisionmaking flexibility to the local level as possible. 
In addition, we have worked to provide streamlined business 
processes to improve use of valuable staff resources.
    As an example, the NRCS Electronic Field Office Technical 
Guide is now available and linked to 8,000 NRCS Web pages and 
external sites. Content includes data in technical handbooks 
and manuals, scientific tools that will help generate 
conservation alternatives, our conservation practice standards 
and other tools for evaluating conservation technical 
assistance. In total EFOTG will make our information more 
accessible and supports the President's Management Agenda for 
electronic Government.
    As a core principle we need to increase the accessibility 
of NRCS to the public, not only by providing basic conservation 
data, but also making our internal processes more easily 
understood as well. This year we have taken steps to make items 
such as our allocation procedures, our backlog and program 
participation data much more transparent to the general public. 
We have worked to foster competition and reward performance in 
our internal functions and also in our contracting and our 
cooperative agreements. Throughout this process, our goal has 
been to provide the best efficient service to producers at the 
local level, and to make NRCS more farmer friendly and 
accessible. We know this process will take time, and I look 
forward to continuing this effort.

                        REQUESTED FUNDING LEVEL

    While we have come a long way in the past year, the future 
presents many emerging challenges and a bright horizon. The 
President's FY 2004 budget request for NRCS reflects our ever-
changing environment by providing appropriate resources for the 
ongoing mission of NRCS.
    The President's 2004 budget request for conservation 
operations proposes a funding level of $704 million, which 
includes $577 million for conservation technical assistance. 
This will continue the Agency's activities that support 
locally-led voluntary conservation through the unique 
partnership that has been developed over the years with each 
conservation district. This partnership provides the foundation 
on which the Department addresses many of the Nation's critical 
natural resource issues, such as maintaining agricultural 
productivity and water quality, and leverages additional 
investment through non-Federal sources.
    The CTA total will also enable NRCS to support certain 
activities as well as maintain funding for ongoing high-
priority work. For example, increases are provided in the 
budget for additional specialized staff and training to help 
address air quality problems in areas that are not in 
compliance with National Air Quality Standards. To enhance the 
customer service tool kit, which provides NRCS field staff and 
the new Technical Service Providers with the geographic data 
and technical tools that they need to adequately deliver 
conservation programs, and to establish a monitoring and 
evaluation regimen for Farm Bill conservation programs. It will 
also enable us to increase our attention to critical resource 
concerns, such as animal feeding operations and assistance to 
producers who are required to take actions under the new 
regulatory framework.

                      HEALTH OF PRIVATE RANGE LAND

    Another serious concern continues to be the health of 
private range land and pasture land. The Nation's 630 million 
acres of private grazing land are vital to the quality of the 
Nation's environment and the strength of its economy. In 
November we were successful in issuing new technical guidance 
to field staff for conservation assistance on private grazing 
lands. Our guidance will help producers meet their management 
objectives and natural resource concerns.
    I believe that we need to offer a high level of excellence 
to grazing land and I am proud of the great strides that we are 
making in this area. Sustained resources in Conservation 
Operations will mean that needed expertise can be brought to 
bear at the field level on these farms and ranches.

                   WATERSHED REHABILITATION PROJECTS

    One of the Agency's strategic goals is to reduce risks from 
drought and flooding and to protect community health and 
safety. A key tool in meeting this goal is providing financial 
and technical assistance to communities, to implement high 
priority watershed rehabilitation projects. This budget 
proposes $10 million to continue the work begun in 2002.

                 RESOURCE CONSERVATION AND DEVELOPMENT

    Another effort of great interest to many members of this 
subcommittee is the Resource Conservation and Development 
Program. The 2004 budget proposes a level of $50 million which 
will support 368 RC&D areas now authorized.
    As we look ahead, it is clear that the challenge before us 
will require the dedication of all available resources, the 
skill and expertise of the NRCS staff, the contributions of 
volunteers and continued collaboration with partners: 
Conservation Districts, Resource Conservation and Development 
Councils, and many valuable partners continue to make important 
contributions. It is this partnership at the local level that 
makes a real difference to farmers and ranchers.

                      TECHNICAL SERVICE PROVIDERS

    As we move forward we will accelerate the use of third-
party resources of technical assistance as well. We recognize 
that the workload posed by future demand for conservation will 
far outstrip our capacity to deliver and seek to complement our 
resources with an appropriate system of qualified expertise. It 
will take a single-minded focus and resolve if we are to be 
successful.
    I am proud of the tenacity that our people exhibit day in 
and day out as they go about the work of getting conservation 
on the ground, and I believe that we will be successful, but it 
will require the continued collaboration of all of us, because 
available resources will ultimately determine whether our 
people have the tools to get the job done.
    I look forward to working with you as we move ahead in this 
endeavor.
    This concludes my statement. I will be glad to answer any 
questions that members of the subcommittee might have.
    [The prepared statement of Bruce Knight follows:]

              [GRAPHIC(S)NOT AVAILABLE IN TIFF FORMAT]
    
        
               CONSERVATION TECHNICAL ASSISTANCE LANGUAGE

    Mr. Bonilla. Thank you, Chief Knight and Mr. Rey for your 
testimony this morning.
    My first question has to do with what I referenced in my 
opening remarks on the conservation technical assistance issue, 
and Section 213, Division N of the Omnibus Bill, we put some 
language in that hopefully solves this problem, specifically 
removing any constraints or limitations regarding the 
availability of CCC funds for conservation technical 
assistance.
    Secretary, in your view, does the language sufficiently 
define that conservation technical assistance costs are to be 
funded from the CCC? If you believe the language contained in 
the bill is sufficient, would you still need a conservation 
technical assistance account that is being requested in fiscal 
year 2004, and if not, what do you need to carry out this 
program for the Farm Bill programs the way that Congress 
intends for them to be carried out?
    Mr. Rey. For the purposes of the fiscal year 2003 budget I 
think the language is clear in terms of what it expects us to 
do and we are in the process of sending that recommendation 
forward. I think what we would like to do is to have an 
extended dialogue from fiscal year 2004 and beyond to see if we 
can persuade you that the Farm Bill Technical Assistance 
account, as we envision it in 2004 and beyond, is a superior 
way to assure that we deliver the maximum amount of on-the-
ground conservation. But for the purposes of 2003, you have 
overturned, for all practical effects, the Department of 
Justice Office of Legal Counsel Opinion concerning the use of 
the CCC account.

                     FY 2003 APPORTIONMENT REQUEST

    Mr. Bonilla. Has the USDA submitted a 2003 apportionment 
request to the OMB for Farm Bill conservation programs and has 
this request included funds for conservation technical 
assistance with funds provided through the CCC?
    Mr. Rey. That apportionment request is making its way 
through the Department and should make it to OMB later this 
week, early next--yes, within the next several days.

                          FUNDING OF FARM BILL

    Mr. Bonilla. Has the USDA continued to use the conservation 
operations account to fund Farm Bill technical assistance for 
fiscal year 2003, and if so, how much has been spent in fiscal 
year 2003 on Farm Bill conservation technical assistance out of 
the conservation operations account?
    Mr. Rey. As we have in past years, we have done some of 
that in 2003. I would have to get you the numbers, and 
obviously, once the apportionment is approved, we will 
reallocate funding accordingly as per the apportionment.
    Mr. Bonilla. We look forward to receiving those numbers 
then.
    At this time I will yield to Ms. Kaptur.

                     CONSERVATION SECURITY PROGRAM

    Ms. Kaptur. Thank you, Mr. Chairman.
    Mr. Rey, thank you very much for your testimony. I am very 
interested in the Conservation Security program and the 
implications of what happened in the recent appropriations bill 
relating to disaster assistance, that is, causing curbs in 
these accounts. I just want to be sure I understand the 
numbers.
    In your budget request you cap the Conservation Security 
Program at $2 billion over the next 10 years. My question 
really is, if NRCS were to fully implement the programs as 
passed by Congress, what would you need to do that, and what 
will you not be able to do if the limits created by the Farm 
Disaster Program inhibit the accounts? And I specifically have 
the following numbers. By limiting a large number of the farm 
conservation programs, over $380 million is so-called, in 
quotes, ``saved.'' The limit on the new Conservation Security 
Program itself would save $68 million. The Bioenergy Program 
under Section 9010 of the Farm Bill, $50 million. And there are 
a number of limits placed on EQIP on the ground and surface 
water program, the Klamath Basin Program, WHIP, the Farmland 
Protection Program, the Watershed Rehabilitation Program, and 
the Renewable Energy Systems and Energy Efficiency 
Improvements.
    Can you tell us a little bit about how what happened on 
disaster assistance is going to impact the operation of your 
Conservation Security Programs over the next 10 years, and 
whether I am properly indicating those programs which might be 
under funded as a result?
    Mr. Rey. I think the program that was principally affected 
by the decision Congress made with regard to disaster relief is 
the Conservation Security Program, but whether that 
reallocation will materially affect our operation of the 
program, is something that I am hard pressed to speculate on 
right now. That program is one of the newer more novel programs 
in the Farm Bill. We have just recently sent out an advance 
notice of proposed rule making to try to define the parameters 
of what the program will look like that will follow with a 
proposed rule.
    So this is a question I probably will be better able to 
address to you with more specifics in about 6 months, once we 
have a sense of what the size of the program is going to be and 
how we identify what the funding priorities should be.
    Ms. Kaptur. My follow on question was how are you 
soliciting proposals?
    Mr. Rey. We have not gotten that far yet for CSP.
    Mr. Knight. As Mr. Rey mentioned, we are out with the 
advance notice of proposed rule making. We have some 15 
questions that we are asking of the public on how to define the 
parameters and how to build CSP. Because of how innovative this 
program is in its approach to conservation there is a 
fundamental shift that needs to be done there with outlook and 
perspective. We will close the comment period in a few days and 
use those comments to build the regulation. Over the summer, we 
will go out with another proposed comment period, this summer, 
so in all likelihood the first availability for this program 
would be the end of this fiscal year, beginning of the next, in 
that general time frame.
    Mr. Rey. Probably the beginning of 2004. And you know, this 
is a program that we are taking from 0 to 60 in the 
bureaucratic equivalent of 60 seconds. So some of the questions 
about the impact of what the disaster assistance reallocation 
had on CSP is something that we are going to have to answer for 
you as we get a better sense of how the program is going to 
unfold.

                       SAVINGS FOR OTHER PROGRAMS

    Ms. Kaptur. What about some of the other programs that I 
mentioned? Will they be impacted?
    Mr. Dewhurst. I think the numbers you are looking at are 
fiscal year 2004 numbers that are presented in the President's 
budget. I think it is important to understand in that respect, 
take any of these programs, take EQIP as an example. The 
Congress authorized a certain amount of total money for EQIP, 
and there is congressional history to the effect that the 
Congress thought at the time it wanted that money used both for 
financial assistance and for some of the technical assistance 
tosupport that program.
    What the President's budget does, because of the legal 
opinion that the Under Secretary talked about with respect to 
the Department of Justice, in effect split that amount of 
money, and say, we are going to use so much of it for financial 
assistance and we are going to provide so much of it through an 
appropriation for the technical assistance, so you are looking 
at these numbers and you think, ``Well, they have cut the EQIP 
program.'' They have not really done that. All they have done 
is said, we have to now divide it into two pots, one for 
technical assistance and one for financial assistance, and we 
have divided it. But in total we are still going to spend the 
amount authorized in the Farm Bill on that total program. We 
have just divided for purposes of dealing with the legal 
opinion that we have to deal with.
    Mr. Rey. For '04.
    Mr. Dewhurst. For '04, yes, and I am assuming those are the 
numbers, because I do not think the disaster bill affected 
programs. It dealt with technical assistance, but it did not 
claim those kinds of savings against those programs.

                     DEMAND FOR FARM BILL PROGRAMS

    Ms. Kaptur. Thank you, Mr. Dewhurst, very much.
    In closing, Mr. Rey, have you had interest in these 
programs expressed thus far by farmers?
    Mr. Rey. Yes. I think that there is interest in all of the 
programs, but particularly EQIP and the Conservation Security 
Program. The interest in EQIP is very specific and directed 
toward the opportunity to use EQIP money to assist farmers in 
dealing with environmental problems in the water pollution and 
air pollution areas, and in the west with respect to drought 
preparedness. So there we have some very specific proposals and 
interest.
    With the Conservation Security Program it is a little bit 
more speculative. There is a great degree of interest about the 
potential of the Conservation Security Program to be sort of 
the next generation of what the Conservation Title of the Farm 
Bill might look like six years hence when we are back 
reauthorizing it.

                    WESTERN OHIO--MANURE MANAGEMENT

    Ms. Kaptur. Thank you. One area where I would greatly 
appreciate the attention of NRCS in Ohio, a little west of 
where I represent, but it affects our watershed, is the large 
number of dairies that have come in, also lower Michigan, and 
the issue of manure management on a watershed basis as opposed 
to an individual farm, and how we might be able to turn some of 
that into methane or find some alternative use for it rather 
than just polluting the water table. We need to have kind of an 
aerial view, a spatial view of what is going on as opposed to 
just an individual farmstead. If you have some sort of effort 
under way anywhere in the country that we could replicate or 
look at, it is becoming a more and more serious problem for us 
in Western Ohio, where our water table is the highest in the 
State and we have very deep aquifers. So that is something I 
would love to talk to you about more.
    Thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Ms. Kaptur.
    Mr. Latham.

                       FUNDING WILDLIFE HABITATS

    Mr. Latham. Thank you, Mr. Chairman. Good morning, 
everyone.
    In the Farm Bill it says that enhancing habitat for all 
wildlife is a priority for EQIP. I would like to know how you 
interpret the Farm Bill provisions relating to the enhancing of 
wildlife habitat, and is a part of your interpretation that 
EQIP funding is to be used for this purpose? I raise this 
because there are a lot of folks very concerned that there is 
going to be a whole bunch of the money siphoned off, used for 
other things than what the original intent was.
    Mr. Knight. The EQIP rule comment period just closed I 
believe yesterday, and so we will be evaluating the comments in 
there. We were specifically seeking guidance on the priorities 
as it pertained to what we listed in there for water quality 
and water quantity, soil conservation, air quality and the 
habitat for critical species, and trying to solicit comments 
from the public on how we find that balance between the 
investments we make in habitat or wildlife in EQIP, and the 
program that is specifically for wildlife, in the Wildlife 
Habitat Incentives Program.
    For many years we had been making investments in habitat 
both as a primary and as a secondary issue in both of these 
programs and we were soliciting comments on how to find more of 
that balance. There is a very real need to have a vibrant 
ranking process in each of the States that ranks what is the 
most urgent and appropriate conservation need in each and every 
State, and have folks at the local level determine what are the 
priorities on those. And certainly in the instances where we 
have large concentrations of livestock, such as we were talking 
about in Ohio or in Iowa, you are going to have an overwhelming 
need, will probably be water quality as it pertains to waste 
management, and then look at wildlife as a secondary or 
ancillary support in the EQIP program.

                           ON-FARM ASSESSMENT

    Mr. Latham. Can you tell us a little about your work with 
the EPA and the On-Farm Assessment Environmental Review 
program, and what kind of benefits you are seeing for pork 
producers and other livestock folks?
    Mr. Knight. One of the more successful collaborative 
arrangements that we have invested in has been some of the work 
on providing a locally led approach such as the investment that 
the pork producers have made in their On-Farm Assessment 
Program. We are actually finding that the spinoff from that is 
that many of the things that they found in that assessment 
program, have been good experiences for the next level of 
delivery we will go to with the technical service providers. As 
a matter of fact, they are uniquely positioned to be able to 
now come in and help us deliver conservation development of the 
comprehensive nature and management plans. So that program has 
turned out to be a very resounding success for us.

                      CONSERVATION RESERVE PROGRAM

    Mr. Latham. I remember back in the last sign-up for CRP, 
when there was a major sign-up; there was real concern 
expressed by many members, myself included, about the way the 
acres were distributed. A lot of times it did not have anything 
to do with topography, with the slope of the land, but it 
seemed to follow more along political lines. You could have the 
same land basically, but the difference, whether it was 
eligible or not, was a State line. For example, in the State of 
Iowa, I represented at that time, geographically, about a third 
of the State. I got about 4 percent of the acres in CRP. 
Another member got, I think, 76 percent of the acres. I would 
just like to know if you can tell us about any changes in the 
guidelines for the sign-up on CRP or what you are doing to make 
sure that it actually is done in a way that represents the 
intent of the CRP.
    Mr. Knight. The Farm Service Agency is the lead agencyon 
delivery of CRP, so we will be pleased to get back to you with further 
details from them.
    Mr. Latham. But you write the rules, right?
    Mr. Knight. We provide technical guidance to the Farm 
Service Agency on suggested seeding standards, the erosion 
rates, those sorts of things, but they are the lead agency, and 
we will be going out with a rule in the very near future for 
the new CRP program.
    Mr. Rey. I think it is fair to say that for this particular 
sign-up, one of the factors that will be a strong consideration 
is areas in the country where we are suffering from drought 
effects and where CRP acreage can help alleviate the impact of 
the ongoing drought----
    Mr. Latham. Is that going to be in the rules, whether they 
have a drought or not?
    Mr. Rey. I think that is going to be part of the program. 
That will be something we will be looking at.
    Mr. Latham. Do you have any information, specifically, 
about how that would be stated, relative to drought versus 
something less than drought?
    Mr. Rey. Right. We can get you that information, but I know 
that is one of the things that we and FSA have talked about as 
we move into this sign-up.
    Mr. Latham. I just hope it can be done on an equitable 
basis this time.
    Anyway, thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Mr. Latham.
    Mr. Farr.

                         BEST FARMING PRACTICES

    Mr. Farr. Thank you, Mr. Chairman. I always love discussing 
this issue, and it is too bad we have to limit our discussion 
to the Natural Resources Conservation Service and not in the 
whole context of agriculture in the United States.
    The reason I love discussing it is every week I get on a 
plane and I fly across this country, and I am fond of looking 
out because I love the geography. And it strikes me that the 
USDA is much more responsible for America's land than is the 
Forest Service or the Park Service. We tend to think that those 
are the entities that preserve the American landscape. But in 
reality it is the practices of private owners that preserve the 
American landscape. We have devised a program here in the 
United States where we pay farmers, in the form of price 
supports and commodity programs, think about the billions of 
tax dollars that go out in that, $10, $12 billion a year. 
Essentially we do not really require in order to get those 
payments that those farmers have to do best management 
practices. This is one thing that I have always been struck by, 
that all the administrations do not come here--we do it in 
everything else where we give out payments. We require, in 
order to receive a payment, you got to live up to some 
standard.
    We just had a discussion about the fact that in order to 
get a free lunch you have to prove that you are poor, but in 
order to get payments for your crops, you do not have to prove 
that you are a good farmer in terms of soil conservation and 
stuff like that. I just wondered, has there been any discussion 
in the Department that when we take--you talk about the point 
of the program of the Conservation Resource Program, to quote 
you, ``The purpose of the program is to sustain agricultural 
productivity and to protect and enhance the natural 
resources.''
    It seems to me that you could say that about all of 
agriculture. Why then do we allow agriculture practices not to 
have to be a part of this program? I mean the States have to 
come along and say, look, if we are going to make sure that 
agriculture can be successful with all these tax dollars, you 
as the States ought to require that these lands be put into 
agricultural zoning, that there be easements on them, that we 
can ensure that this land, we are going to spend agricultural 
tax dollars for the landowner, and tomorrow that landowner 
says, I am not going to farm any more. I am glad you have put 
all this money in. I am now going to go build houses.
    I know that this gets into this big property issue, but in 
fact, areas where you have really strong local support systems 
and laws and zoning and so on, you also have very productive 
agriculture, and my district is that. I mean we get very little 
of these farm subsidies--other than research. And we do about 
$2.3 billion of agriculture in one little county called 
Monterey, and it grows 85 commercial crops. What makes it all 
successful? It is because it is tied to the protection of the 
land. The county zoned it all, 160-acre minimum, will not allow 
subdivision of the land and will not allow development of the 
land.
    But there is a quid pro quo, and that is what I do not see 
at the Federal level. We have this quid pro quo in California 
called the Williamson Act, where if you are a farmer you 
contract to stay in agriculture for the next 20 years, and for 
that you get a property tax reduction. There is no quid pro 
quo, and I guess I am giving you my statement, because I would 
just like to know whether you have been discussing in the 
Department--if you are going to get into these other programs, 
there should be a requirement that you abide by the provisions 
of the Natural Resources Conservation Service and all of the 
programs that you run under that service?
    Mr. Rey. You raise an important question that has I think 
been debated for some time. You address two, I think, separable 
issues. One is the quality of conservation that is practiced on 
working agricultural lands. The second is the question of the 
ease with which agricultural lands are subdivided or converted 
to some development use.
    In the latter case, the money that we spend for programs 
like the Farm and Ranch Land Protection Program, the Grassland 
Reserve Program, do require landowners to commit through the 
sale of an easement or some other price support, that they will 
not convert their land from agriculture to some other use. So 
in that sense they are not that much different than some of the 
State programs in California, except that the Federal 
Government does not purport to zone land uses at the State and 
local level.
    Mr. Farr. No, that is not my question. I appreciate that. 
My question is that for all of the commodity programs--and we 
put in over $10.5 billion into Commodity crops--do those people 
that receive the benefits of that program, you know, all the 
rice, peanuts, lentils, wool, mohair, grain, go down the list 
here, corns, barley, oats, do those farmers have to then, to 
receive that benefit, sign-up for any of the commitments of 
best farming practices that you just outlined?
    Mr. Knight. Yes. There is a provision that was put in place 
in the 1985 Farm Bill that encompasses two protections that are 
linked to the commodity programs. They are Conservation 
Compliance, known as SodBuster, and Wetlands Protections, known 
as SwampBuster rules. Each of those provisions require that 
farmers who are participating in these programs comply with 
those standards that were put in place in the 1985 Farm Bill to 
protect both highly erodible lands and to protect wetlands from 
greater conversions. So today, many farmers and ranchers have 
found the ability to comply with those standards over the last 
decade and a half. We, as a matter of fact, do spot checks on 
nearly 5 percent of the total acreage each year to review how 
producers are complying with both the wetlands and the highly 
erodible land protections that are there. So you do have those 
underlying programs that were put in place by Congress in 1985.
    Mr. Farr. My time has expired. Thank you.
    Mr. Bonilla. Thank you, Mr. Farr.
    Ms. Emerson.

                ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

    Ms. Emerson. Thanks, Mr. Chairman.
    I do have some questions that I would like to submit for 
the record on CSP, and since you all are still working it out, 
I will just save those questions for when you finish working it 
out.
    I think probably my questions will go to Mr. Knight. They 
are with regard to EQIP, or perhaps, Mr. Rey, you will be able 
to answer them.
    My district is very, very large in Missouri. It also 
includes the beautiful Ozark hills and foothills, and they run 
all across my district. It is also a very important tourism 
area for the entire State. Now, private landowners who take 
care of these forests really perform a great service to both 
the local economy and our environment. Given that private, non-
industrial forest land is eligible for EQIP, how is the NRCS 
going to ensure that Missouri State Conservationist develops an 
application ranking process that reflects the national priority 
to reduce soil erosion and sedimentation on highly erodible 
land and protect important animal habitats, priorities that 
private forest landowners can further through responsible 
forestry practices?
    Mr. Rey. The way EQIP priorities are set is with both some 
broader national priorities, but also with priorities that are 
set locally through State technical committees. Since the 
passage of the 2002 Farm Bill, we have had a number of meetings 
with private forest landowners, either individually or in 
groups or with organizations of which there are probably 6 to 8 
that represent private forest landowners nationally.
    And what we have tried to convey to them is a couple of 
things. First, work with their State forestry agencies to get 
more involved and more active on the State technical committees 
that govern the local EQIP priorities, and begin to enunciate 
the importance of private non-industrial forestry as part of 
the mix for EQIP funding.
    Second, we have told them that in addition to EQIP, the 
Farm Bill Forestry Title created a new program, the Forest Land 
Enhancement Program, that will provide assistance to forest 
landowners. The Forest Service, which is the other agency in 
our mission area at USDA, is administering that program and 
doing a significant amount of outreach to private landowners.
    And the third thing we have said is that there are some 
opportunities in CRP to include hardwood acreage when we go out 
with our CRP announcement as well.
    Ms. Emerson. Now, let me just perhaps get myself straight 
on this. The State Conservationist or the designated 
conservationist in each State is going to be responsible though 
for developing the application ranking process for those 
applying from the State; is that correct?
    Mr. Rey. With the State technical committee.
    Ms. Emerson. Right. And that ranking is supposed to reflect 
the priority of State resource concerns and national priorities 
and measures, correct?
    Mr. Rey. That is correct.
    Ms. Emerson. So that ranking then basically determines who 
is going to be awarded the EQIP contract. Now, do you think 
that this strictly--it seems like kind of a carrot approach to 
me, rewarding State compliance through increased funding. Do 
you think that is going to be enough to ensure compliance to 
national standards, one, or are there other ways to make States 
comply?
    Mr. Knight. One of the provisions that we are implementing 
this year as it pertains to the ranking process has to do with 
openness and accessibility to it. We have pledged that we will 
not have the ranking processes for each of the States, because 
they vary from State to State. We will have that ranking 
process published and available on the Web before we close the 
EQIP applications for a given State. So that for every farmer, 
rancher, private wood lot owner or private landowner, who is 
interested in applying for an EQIP contract can actually know 
the ranking process before they do that. And I think just that 
openness will help a great deal in providing that balance in 
being able to make sure that there is the accessibility of the 
data, and folks will know before the process of the 
applications close, where the ranking is for each of these 
endeavors.
    And so if the forestry folks in Missouri are concerned that 
they are not ranking well, they will have the ability to voice 
that concern long before the applications are closed and 
decisions are made.
    Ms. Emerson. Well, I will tell you that we have had at 
least in one of my counties, substantial controversy over one 
person getting the bulk of the EQIP money, and it has been I 
would say highly controversial because of relationships or 
perceived relationships and the like, and so when you have got 
40 applicants and only one person gets the bulk and two people 
get a little nibble, sometimes, you know, I just want to make 
sure that everything is being done to ensure that everybody is 
treated equally, and all applications are in before any kinds 
of decisions are made because that is I think what part of the 
problem might have been here.
    Mr. Knight. I share your concern, and I am very empathetic 
to that, and we have picked up several instances where some of 
that may have occurred with last year's sign up. I have 
conducted oversight and evaluation investigations in those 
States where it seemed most appropriate to be able to do that.
    We have proposed in the new EQIP rule several changes that 
are intended to ensure that those dollars are distributed as 
fairly and as equitably and with the appropriate ranking. The 
openness that I referred to already is one of those. The other 
thing that we are moving forward with, is we had proposed in 
the rule that any cost share that goes beyond 50 percent--and 
it is authorized in the bill to go up to 75 percent--anything 
that goes beyond 50 percentshould have the signature of the 
State Conservationist, just so that we have that check and balance 
there.
    And any contract that would exceed $100,000 in and of 
itself would in turn need the signature of that State 
Conservationist as well as the Regional Conservationist. And I 
have folks that have expressed concern that this may encumber 
or slow down the process. I think we have enough efficiencies 
that it will not do that. But I do think it is very important 
that we have put these checks and balances in on these larger 
contracts to ensure that whenever there is a decision to fund a 
larger contract, that we have anticipated the fact that there 
will be folks out there who have EQIP needs and desires that 
will be left unserved, and we have to have that carved out.
    Ms. Emerson. Well, I appreciate that, and I would also 
appreciate perhaps a little more detailed answer of what you 
plan to do when problems arise, even with a new rule, and how--
well, what measures would be taken by NRCS to rectify what 
might be a very unfair situation. So I appreciate that. Thank 
you.
    Mr. Rey. We can do that, and if separately you want to give 
us the name of the county, we will give you a sense of what the 
rationale was for the distribution in that particular county.
    Ms. Emerson. Thank you.
    Mr. Bonilla. Thank you, Ms. Emerson.
    Mr. Hinchey.

                        AMERICAN HERITAGE RIVERS

    Mr. Hinchey. Thank you, Mr. Chairman.
    Good morning, gentleman. I want to ask you about a 
parochial issue that involves New York and the Hudson Valley. 
It has to do with the Hudson River Navigator in the American 
Heritage Rivers Program. Under this program NRCS essentially 
supports two navigators, one for the Hudson and one for the 
Susquehanna. The position on the Hudson River has been vacant 
now for several months. The person who held that office left to 
take another job, and I am wondering what your intentions are 
with regard to filling that position. It was a very effective 
position. The River Navigator worked very well, and the local 
communities are very happy with it. The coordination that went 
on between the localities and the Federal Government through 
the program was very beneficial. So I am wondering what your 
intentions are with regard to that.
    Mr. Rey. For 2003 we have roughly [$205,000] $225,000 
devoted to those two positions, and it is our intention to fill 
the Hudson River position as quickly as we can get announcement 
out and applicants applying.
    Mr. Hinchey. Pardon me?
    Mr. Rey. As quickly as we can get announcement out and 
applicants applying, it is our intention to fill the position.
    Mr. Hinchey. Can you give me a rough idea when that might 
be?
    Mr. Rey. We have had a nationwide hiring freeze on until we 
get through the apportionment process. And as soon as we are 
done with that, I expect to be able to lift that hiring freeze 
and move forward with this and several hundred other positions 
that have been on hold.
    Mr. Hinchey. So we are talking about probably a couple of 
months max.
    Mr. Rey. A couple of months.
    Mr. Hinchey. So some time in the----
    Mr. Rey. June.
    Mr. Hinchey. Late spring, early summer.
    Mr. Rey. Yes. May or late June.

                           FARM BILL FUNDING

    Mr. Hinchey. Well, that would be very much appreciated and 
I look forward to it.
    The Farm Bill that passed most recently in the Congress 
contained a number of conservation programs and specific 
appropriations for conservation activities, and many people 
hailed the Farm Bill for that reason. It was a bill that broke 
some ground in terms of conservation and involving the 
agricultural community across the country and major 
conservation efforts. But it seems that a number of the 
conservation programs in your proposed budget are either capped 
or reduced. I am concerned about that. There is apparently a 
dispute between OMB and the Congress over how technical 
assistance, that is, the actual field work to implement the 
natural resources conservation programs is funded. These are 
labor intensive programs. They cannot be done without the 
technical assistance that you provide. And in New York, which I 
imagine is not the State most egregiously affected by this, but 
even in New York the State office is about 20 positions short 
of the level of staffing necessary to keep up with current 
demands. And the program is very effective, and in some cases 
it is critical. For example, the New York City watershed 
provides drinking water for about 9 million people. It is 
expected that that number is going to increase, maybe even 
dramatically over the course of the next several decades. And 
this program has worked very effectively in keeping farmers on 
their land at the same time that the watershed is protected and 
the quality of water in those reservoirs is protected.
    Now, if that protection does not continue, EPA is going to 
impose a requirement for a filtration system in New York City. 
That filtration system is going to cost several billions of 
dollars, and it will cost about a half a billion dollars a year 
just to operate, so there are major costs at stake here.
    So I am wondering where we are on this, and if we can look 
forward to some kind of an agreement between OMB and the 
Congress on how this money is going to be spent, and if we can 
anticipate you actually spending some money so that the 
positions in New York and other places can be filled.
    Mr. Rey. Well, taking the last part of the question first, 
once the apportionments for 2003 are approved, we will be 
hiring to fill the vacant positions, as Chief Knight indicated 
just a moment ago. So that is a function of getting the 
paperwork done subsequent to the passage of the fiscal 2003 
Omnibus Appropriations Bill.
    But as to the technical assistance requirement for the 
implementation of the Farm Bill, there is no dispute between 
the Department of Agriculture and the Office of Management and 
Budget. The issue of whether we could use CCC money to provide 
technical assistance to implement Farm Bill programs was a 
question of interpretation of the language of the 2002 Farm 
Bill that went up to the Department of Justice Office of Legal 
Counsel. The Office of Legal Counsel is the final arbiter of 
questions of statutory interpretation within the Executive 
Branch, and in a sense it fills the same function for us that 
the parliamentarian does for you. Having served in both 
branches, I can tell you that I often have not agreed with the 
parliamentarian either, but that is what it is.
    What the OLC, Office of Legal Counsel, opinion said was 
that as they read the language of the 2002 Farm Bill, CCC funds 
were not available to provide technical assistance to implement 
Farm Bill programs. The Congress took a different approach for 
fiscal year 2003 in the 2003 Omnibus Bill, and we will 
implement what you said for 2003, or what you held as what you 
wanted us to do for 2003. For 2004 we have proposed to you a 
technical assistance account that we think is a better way of 
getting on the ground conservation practices done. But it is 
not a function of capping these programs. Rather, it is a 
question of distributing between technical assistance and 
financial assistance what we think is the best proportion to 
get worked out on the ground, and that is a discussion we are 
eager to have with the Congress as we go through the 2004 
Appropriations Bill.
    Mr. Hinchey. Could I just follow up briefly?
    Mr. Bonilla. Go right ahead, Mr. Hinchey.
    Mr. Hinchey. Well, I appreciate that, and I did not mean to 
suggest there was a difference between OMB and the Agriculture 
Department. There is a difference between OMB and the 
Agriculture Department and the Congress on this issue.
    Mr. Rey. Right.
    Mr. Hinchey. And it seems that----
    Mr. Rey. For 2003 it has been resolved.
    Mr. Hinchey. But for 2004 it has not been resolved.
    Mr. Rey. We have a proposal before you that we think makes 
sense, and like many of our proposals, you may disagree.
    Mr. Hinchey. I do not think that Congress is going to 
change its mind. I do not want to speak for our chairman, but I 
do not think he will change his mind. So if we do not have an 
agreement these programs are likely to just whither away and 
die on the vine. That is my concern. We have got to come to an 
agreement here.
    Mr. Rey. And I think we can, but that is something we will 
have to talk about as we go through the 2004 bill. It is 
nobody's interest to have these programs wither on the vine. 
This is not a function of a lack of commitment for the 
Conservation Title.
    Mr. Hinchey. Yes, sir, absolutely right. Thank you.
    Mr. Bonilla. Thank you, Mr. Hinchey.
    Mr. Boyd.

                   SMALL WATERSHEDS PROGRAM--FLORIDA

    Mr. Boyd. Thank you very much, Mr. Chairman. And, Mr. 
Chairman, I apologize for being late. I was unavoidably 
delayed.
    Mr. Bonilla. Mr. Boyd, I also want to thank you for the 
nice citrus you gave us, and the peanuts. That is very 
delicious and very generous of you.
    Mr. Boyd. I wanted you to be reminded of citrus on a daily 
basis.
    Mr. Bonilla. Yes, sir. [Laughter.]
    Mr. Bonilla. Every time I look at you, Mr. Boyd. 
[Laughter.]
    Mr. Boyd. They are not from Brazil, Mr. Farr.
    Secretary Rey, it is great to see you and your team at the 
table. I know you have a great team, and this is one member 
that has a great deal of respect for you and your public 
service, and I know you have got a tough job. I just wanted--I 
know you heard me say this before, but I have spent my entire 
life in production agriculture, and I can tell you, I would not 
still be doing it if it were not for the NRCS and its 
predecessors. What you guys do in terms of providing technical 
assistance and the Federal Government providing financial 
resources to implement those conservation plans, enable our 
production agriculture to continue in existence, and I just 
wanted you to know how important I know it is. I have not 
always been satisfied with the way the Department operated, and 
I have expressed that to you and to your predecessors from time 
to time, but I can tell you it is certainly not getting any 
worse, and it is probably getting better under your leadership. 
I just wanted you to know that.
    I wanted to ask a couple questions. The first one is a 
general budget question. Last year when you brought to us, you 
had--by the way, we are very pleased that you have included 
funding for the watershed program such as PL-566 and this 
program. You did not last year. And we are very pleased about 
that.
    Mr. Rey. We have had an epiphany.
    Mr. Boyd. Okay. Well, you have answered my question. I am 
not going to ask you anything else about that. [Laughter.]
    Mr. Boyd. I just want to bring one--and this is somewhat of 
a parochial issue and sometimes we have to do that. In the PL-
566 program, there were, at least in the program that we did in 
the Suwanee River Valley area on dairy and poultry, there was a 
limit of participation by the PL-566 program, a dollar limit. 
When the Farm Bill was written, I think that limit was in the 
neighborhood of 100,000 or 150,000, I am not sure which. These 
are--is that right, 150,000?
    Mr. Rey. $100,000.
    Mr. Boyd. $100,000 okay. In the Suwanee River Valley area 
we have probably 70 dairies on the Florida side, and an equal 
number or more of poultry operations. And we had waste disposal 
pollution problems right in the Suwanee Valley area, and so we 
looked into solving that problem. You guys have been a big part 
of helping us do that. Most of those plans that went into those 
specific dairies cost anywhere from 400 to $800,000, so 
basically the farmer paid the balance out of his pocket. Under 
the Farm Bill though, those farmers that had not completed 
their required plan became eligible under the EQIP program. And 
that limit was moved to 450. I have a significant problem in my 
district with how people who enrolled under the old program, 
put up their money, got their plan in, and the new one, the 
ones that have not done it so far, who now can enroll under 
EQIP. Are you aware of that problem, and is there anything that 
your office or your staff has talked about in terms of how we 
resolve this?
    Mr. Rey. We are aware of the problem. It is unfortunately 
not unique necessarily to your district. There are other places 
where farmers made investments on their own that would now be 
cost shared or covered to a greater degree under EQIP. I think 
one of the philosophies that is the underpinning of the 
Conservation Security Program is that we would over time 
realign the Conservation Title so we are making payments to 
farmers who have exhibited a higher level of conservation on 
their land, and in essence reward investments that were 
previously made, and that will on the one hand theoretically 
resolve that sort of inequity. On the other hand, it will 
probably create other problems or inequities or complications 
as we try to implement that program.
    But there is nothing in EQIP to my knowledge that allowsus 
to retroactively reimburse investments that have already been made.
    Mr. Boyd. So what you are saying is you all have kicked 
this around and you do not know of any legal authority you have 
to help solve this problem?
    Mr. Rey. The only thing that we have that is close to it 
would be when we actually get the Conservation Security Program 
operational at the beginning of 2004, we would be able to 
entertain applications from operators who are in that 
situation.
    Mr. Boyd. The answer that you gave me is basically the 
answer I have told my farmers, that life is not always fair and 
you got caught in sort of an unfair situation. It does not make 
them happy though, I tell you, Mark, as you know, and so I 
wanted to raise the issue with you as I had with your Florida 
people.
    And I see my time is up. Thank you.
    Thank you, Mr. Chairman.

                     FARM BILL LEGISLATIVE LANGUAGE

    Mr. Bonilla. Thank you, Mr. Boyd.
    Mr. Rey, I want to get back to the conservation technical 
assistance issue and the CCC. In a previous answer you gave me 
earlier, you referenced that the Omnibus Bill language only 
referenced 2003 money and the 2003 timeline, so I am concerned 
that there is not an understanding that we fixed this 
conservatioin technical assistance issue permanently, not just 
for 2003. We thought we had fixed it. You know our position. So 
I am just asking that you provide Legislative Drafting Services 
to make it happen, and submit that for the record.
    Mr. Rey. The Omnibus Bill provisions are permanent. 
However, we believe that the language has many deficiencies. As 
such, we would like to continue working with the Subcommittee 
on another approach.
    Mr. Bonilla. Thank you. That is the only remaining question 
I have. I will yield now to Mr. Farr if he has a second round 
of questions.

                         ENDANGERED SPECIES ACT

    Mr. Farr. Thank you, Mr. Chairman.
    I was reading through the program descriptions here and I 
just was reading the Wildlife Habitat Incentives Program which 
I know is a voluntary program, but since we have enacted the 
Endangered Species Act, do you check with Interior on that? My 
recollection of having to deal with an awful lot of land use 
issues at home is that under that law, you do not have to pay 
people to protect habitat. Of course that gets into an issue of 
you never really getting into that until they want a permit for 
something. And you have to have this review, the NEPA review 
and the California Environmental Impact Review, EIR report. 
That triggers the assessment, and when there finds that it is 
an endangered or threatened species, plant or animal, therefore 
you have to mitigate it by protecting the habitat. And it does 
not really say only on condition that you can get paid for it. 
It is sort of a strict requirement.
    This program was authorized before Endangered Species Act. 
Has there been coordination or dialogue with Interior to see 
that you are not having to pay money where essentially law 
requires the landowner to mitigate.
    Mr. Rey. Well, let us start for just a moment with what the 
Endangered Species Act requires of private landowners. Absent 
the issuance of or the requirement to secure a Federal permit 
or a license, or some other Federal action, absent that 
requirement, a private landowner is only required to avoid 
taking a threatened or endangered species. The courts have gone 
back and forth on whether that prohibition against taking a 
threatened or endangered species extends to a prohibition of 
modifying the habitat that is critical for a threatened or 
endangered species if that habitat is on private land. Probably 
the clearest expression of what the Endangered Species Act 
requires was articulated in a Supreme Court case that was 
handed down in a deeply divided court in 1996.
    Mr. Farr. I am familiar with that.
    Mr. Rey. And there the court said, yes, the modification of 
habitat adverse to the interest of the species is prohibited so 
long as the Government can prove that a species has been taken. 
So it imposes on the Fish and Wildlife Service or on the U.S. 
Attorneys a fairly, sometimes--not always, but sometimes 
difficult standard of proof. This program is demonstrably 
different. In this case we are trying to provide incentives to 
private landowners to do what they might not otherwise do to 
improve habitat, not only for threatened or endangered species, 
but in other instances for wildlife generally, and we do 
coordinate on it.
    Mr. Farr. Okay. That is the question, is there any 
coordination with Interior on that.
    Mr. Rey. And where there are strict regulatory controls, 
honestly speaking, we tend not to use these funds. We tend to 
use them where the reach of the regulatory authority of the 
endangered species is either nonexistent or at best unclear.
    Mr. Farr. I think that all of my statements in the prior 
round, and this, is all about trying to get a best use of a 
limited dollar in making sure that we can encourage States and 
local governments to enact provisions in land planning and land 
usage that essentially stretch this limited dollar a lot 
further, and I just do not think we ought to be giving stuff 
without some sort of quid pro quo. Think about all the other 
programs where we give Federal money out. There is some 
requirement of the recipient to do something for that money, 
and I am so fond of this program. I think you do a marvelous 
job. And let me just for the record, compliment the Department.
    You engage in a watershed survey in my district that is 
about 2,000 square miles, and it is all done on private lands 
with the consent of the landowners who are organized through 
the Farm Bureau, and it is for very little money. And it is the 
kind of thing that this committee last year was saying is one 
of the high priorities of this country, is to look at non-point 
source runoff and figure out what gets into our streams and in 
our case back into the ocean, and see if we can do some best 
management practice upland to prevent it from happening. And 
the farmers are very keen. They are very involved in it and 
very supportive. As long as it is not just one of a big 
regulation. So this is one where that technical assistance has 
just yielded tremendous benefits, and I want to compliment you. 
And everybody every year gets together and pats each other on 
the back, and I remind them that the money came out of your 
program. So thank you. Thank you, Mr. Rey, for your leadership.
    Mr. Rey. Thank you.
    Mr. Bonilla. Thank you, Mr. Farr. Mr. Farr, did you have 
any additional questions?
    Mr. Farr. No, I just have a lot of philosophy. [Laughter.]
    Mr. Bonilla. We always appreciate that, Mr. Farr.
    We have concluded the questions from the subcommittee, Mr. 
Rey, Chief Knight, Mr. Patterson, Steve. So we appreciate your 
time today and your preparation and your excellent work, and we 
look forward to working with you as we put our bill together 
this year.
    At this time the subcommittee stands adjourned until 1:30 
this afternoon.

            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 




                                         Wednesday, March 12, 2003.

                   MARKETING AND REGULATORY PROGRAMS

                               WITNESSES

WILLIAM HAWKS, UNDER SECRETARY FOR MARKETING AND REGULATORY PROGRAMS
BOBBY R. ACORD, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION 
    SERVICE
A. J. YATES, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE
DONNA REIFSCHNEIDER, ADMINISTRATOR, GRAIN INSPECTION, PACKERS AND 
    STOCKYARDS ADMINISTRATION
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                       Introduction of Witnesses

    Mr. Bonilla. This subcommittee will come to order. We are 
delighted to have with us this afternoon the Under Secretary 
for Marketing and Regulatory Reform, Mr. Bill Hawks; also A.J. 
Yates, the Administrator of the Agriculture Marketing Service; 
Bobby Acord, the Administrator of the Animal and Plant Health 
Inspection Service; and Donna Reifschneider, Administrator of 
the Grain Inspection and Packers Stockyards Administration. 
And, of course, Mr. Dewhurst who joins us at all of our 
hearings. We are delighted to have him back as well.
    Mr. Hawks, the agencies under your jurisdiction have a 
tremendous amount of responsibility, and you are closely 
watched. But having said that, I think there is a strong record 
of bipartisan support for your effort on this subcommittee, and 
I am very proud of that.
    Before I turn it over to Ms. Kaptur for her opening 
remarks, I would like to take a minute to congratulate all of 
you at APHIS for being awarded the 2003 People of the Year 
award by Progressive Farmer Magazine. This group award was the 
first of its kind for this 100-year-old publication because the 
award typically goes to an individual. I would like to read 
from and enter into the record the article from Progressive 
Farmer that highlights this award. Quote:
    ``And now for their vigilant efforts and dedication to 
protecting U.S. crops and livestock from pests, disease, and 
now bioterrorism, the employees of APHIS are being recognized 
as the 2003 Progressive Farmer People of the Year in service to 
American agriculture.''
    I want to congratulate you on behalf of this entire 
subcommittee, Mr. Acord, Mr. Hawks, and to all of the employees 
of APHIS for this great distinction that you have.
    Mr. Hawks. Mr. Chairman.
    Mr. Bonilla. Mr. Hawks.
    Mr. Hawks. I would like to present you with a pin that 
says: USDA APHIS Progressive Farmer People of the Year.
    Mr. Bonilla. Thank you very much, Mr. Hawks. And I will 
wear this proudly.
    And I will now yield to Ms. Kaptur for her opening remarks.
    Ms. Kaptur. Thank you, Mr. Chairman. We welcome all of you, 
and thank you for your service to our country. And, Under 
Secretary Hawks, it is obvious that marketing programs will 
contribute greatly to a value-added future for our farmers, our 
producers, so they can begin to earn their money from the 
market again and not just from the government. We know that the 
regulatory programs that you operate are essential for quality 
food and the confidence of our consumers.
    In terms of invasive species--and I will be talking about 
this during the question period--of course, we have this one 
now, the emerald ash borer. I am concerned that I am still 
waiting to hear back from the Agency on this, and we have 
communicated with you and have not had a response. And I am 
concerned that your testimony today, in spite of the many good 
things in it, that the Agriculture Marketing Service does not 
even mention in your presentation farmers markets, nor does it 
talk about biofuels, which is a very important priority for us, 
certainly as we are poised for war here.
    I am very pleased that the Department is reviewing or wants 
to review GIPSA, the Packers and Stockyards Act. We have been 
trying to get enforcement authority brought in there for the 
past few years, and certainly in the poultry arena in certain 
States.
    So I wanted to say I am looking forward to your testimony, 
and also I want to thank publicly Mr. Acord for the 
responsiveness for APHIS to trying to help a firm in Ohio that 
has been trying to find alternative ways to inspect, due to how 
retirement and downsizing of inspection services have affected 
animal shippers. So we want to thank you very much for working 
with our State and with these companies in trying to find a 
reasonable solution, but we look forward to your testimony. 
Thank you all very much for being here today.
    Mr. Bonilla. Folks, I also thank you all for your patience. 
We pride ourselves on this subcommittee on starting promptly; 
however, we had our vote called right before our 1:30 scheduled 
time to begin. And thank you for waiting for us.
    And we are now pleased to hear from Mr. Hawks. All of the 
testimony that you all have submitted for the record has been 
entered into the record, and we appreciate that.
    Mr. Hawks.

                           Opening Statement

    Mr. Hawks. Thank you, Mr. Chairman. It is indeed a pleasure 
to be here before this committee today to discuss with you the 
Marketing and Regulatory Programs activities, and to present 
the 2004 budget for the Animal and Plant Health Inspection 
Service, Grain Inspection, Packers and Stockyards 
Administration, and Agricultural Marketing Service.
    Today I have with me Bobby Acord, the administrator of 
APHIS; A.J. Yates, the administrator of AMS; and Donna 
Reifschneider, the administrator of GIPSA; as well as my deputy 
sitting behind me, Dr. Chuck Lambert; and Stephen Dewhurst, the 
Department's Budget Officer.
    One of the things that I have is a motto in the Marketing 
and Regulatory Programs, and that motto is, ``Working Together 
Works.'' We have identified five goals, and I hold my people 
accountable for trying to reach those goals:
    The first goal is to build broader bridges. And we have 
increased cooperation and strategic partnerships with farmers, 
ranchers, States, Federal Government, we hope the Congress, and 
all interested parties.
    The second goal is to move more product. We have expanded 
domestic and international market opportunities for U.S. 
agriculture products including value-enhanced products and 
products about technology.
    The third is to invest in infrastructure. Agriculture that 
is healthy both biologically and economically is a marketable 
agriculture.
    Our number four goal is to grow our people. We have made a 
concerted effort to recruit, recognize, and reward people of 
accomplishment and inspire current and future leaders within 
MRP.
    Number five is to sell agriculture as a profession. We have 
creatively marketed the vital role that agriculture plays in 
every American's life to assist our efforts to recruit and 
retain the highest caliber workforce for MRP and for USDA.
    The Marketing and Regulatory Programs' activities are 
funded both by beneficiaries of the program and taxpayers. They 
carry out programs costing nearly $1.2 billion, with $382 
million funded by user fees paid by the beneficiaries of the 
services.
    On the appropriations side, APHIS is requesting $695 
million, GIPSA is requesting $41.7 million, and AMS is 
requesting $103 million.
    APHIS's primary mission is to manage issues involving 
animal and plant health, conflict with wildlife, environmental 
stewardship, and animal well-being. Together with States and 
industry, APHIS protects and promotes U.S. agricultural health, 
which preserves and expands domestic and international markets 
for U.S. agriculture products. As of March 1st, specific 
agriculture border protection activities were transferred to 
the Department of Homeland Security. However, USDA retains the 
responsibility for promulgating regulations related to the 
entry of passengers and commodities into the United States, and 
retained the agricultural inspection roles from Hawaii and 
Puerto Rico to the mainland.
    We will continue to collect user fees and periodically 
reimburse the Department of Homeland Security for the 
inspection services.
    And, again, we have been faced with numerous pest and 
disease emergencies, our responses to which can be funded 
through transfer from the Commodity Credit Corporation. Thus 
far, in 2003, OMB has released $174.8 million of CCC funds for 
avian influenza, Exotic Newcastle, disease, bovine 
tuberculosis, chronic wasting disease, glassy-wing 
sharpshooter, spring viremia of carp, and Medfly. We are 
considering requests for plum pox virus, Mexican fruit fly, 
citrus canker, and additional TB assistance and expanded Exotic 
Newcastle disease efforts.
    The Grain Inspection, Packers and Stockyards Administration 
facilitates the marketing of livestock, meat, poultry, cereals, 
oil seeds and related agricultural product, and promotes fair 
and competitive trade for the benefit of consumers and American 
farmers and ranchers. It helps move more U.S. product both 
domestically and for export by the grain, poultry, livestock, 
and meat industries. GIPSA's Packers and Stockyards Program is 
requesting an increase in funding that will allow it to conduct 
an industrywide review of the Packers and Stockyards Act and to 
develop a better understanding of the financial operations of 
the regulated industry.
    Agricultural Marketing Service activities assist the U.S. 
agricultural industry in marketing their products and in 
finding ways to improve their profitability. AMS builds 
cooperative and strategic partnerships with the agriculture 
community and the State institutions that it supports.
    Additionally, AMS oversees research and promotion programs 
that allow producers, handlers, processors, or importers to 
solve marketing problems and to increase sales domestically and 
abroad. USDA continues to believe that national commodity 
research and promotion programs offer opportunities to 
maintain, develop, and expand markets.
    AMS's request seeks funding to maintain its programs at the 
current level.
    This concludes my statement. I know that working together 
does work, and that we believe that proposed funding amounts 
and sources for the funding for 2004 are vital to provide the 
infrastructure to protect American agriculture from pests and 
disease, and for moving more product, especially for increasing 
exports to foreign markets, that will provide the level of 
services expected by our customers, the farmers and ranchers, 
and the agricultural marketing industry.
    Mr. Chairman, members, we will be happy to respond to any 
questions.
    Mr. Bonilla. Thank you, Mr. Hawks.
    [The prepared statements of William Hawkes, Bobby Acord, 
A.J. Yates, and Donna Reifschneider follow:] 

             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 


                       INSPECTION OF NATIONAL ZOO

    Mr. Bonilla. The first question I have involves the 
National Zoo here in Washington. They have had some problems 
out there with some animals dying. And as you know, because it 
is part of the Smithsonian, it doesn't fall under APHIS 
inspection measures. They had a hearing about this at the 
Government Ops, and the Smithsonian agreed to let APHIS now 
come in and conduct some inspections, as it does with other 
zoos.
    Is there anything out there legislatively or other barriers 
that would prohibit APHIS from proceeding with inspections at 
the zoo?
    Mr. Hawks. Our Office of the General Counsel is reviewing 
that question right now. But certainly any time we are 
requested to conduct an inspection, we can go. In addition to 
that, we will make certain that we send supervisory personnel 
as well as animal technicians to the facility. So we stand 
ready to assist in any way possible.
    Mr. Bonilla. And no anticipated barriers?
    Mr. Hawks. No anticipated barriers.

                 INVASIVE SPECIES AT U.S./MEXICO BORDER

    Mr. Bonilla. I now have a question about the invasive 
species introduction and rates of inspection along the U.S./
Mexico border, in the counties of Webb, for example, Presidio, 
Maverick, Valverde, and Texas. I understand you have already 
transferred your border-related inspection activities and 
funding to the Homeland Security Department, but I would like 
to work with you to see what else can be done to allocate 
additional resources to inspection activities along the U.S./
Mexico border. As you know, those are incredibly large and 
important ports of entry. To help identify what those 
additional resources might be, I asked for a report, which was 
due on March 1st, detailing the feasibility and need for 
additional inspectors and facilities along the border, with 
particular emphasis on the counties that I mentioned.
    My question is: What is the status of the report I 
requested? And can you share with us anything that you have 
learned in terms of the need for additional inspectors in that 
part of the country?
    Mr. Hawks. Yes, sir. I would be happy to share with you 
that report that you are referring to is being finalized now. 
APHIS' Center for Plant Health Science and Technology conducted 
the study that the report is based on--the report will provide 
a summary of the traffic activity, by pathway, at all Mexican 
border ports and quantify the risk of quarantine material and 
pest introduction across the Mexican land border. And it is 
anticipated that we will be recommending to the Department of 
Homeland Security to add additional resources on that border.
    Mr. Bonilla. Do you have any idea what the magnitude of 
those additional resources recommendations would be?
    Mr. Hawks. Not at this time, Mr. Chairman, but we will keep 
in close contact with you as we move forward with this.
    Mr. Bonilla. Thank you, Mr. Hawks.
    Ms. Kaptur.

             INVASIVE SPECIES INTRODUCTIONS AND REMEDIATION

    Ms. Kaptur. Thank you, Mr. Chairman, very much.
    And, Mr. Hawks, on behalf of your panel today. I wanted to 
start with the area of invasive species. I know that the 
Governor of Michigan, Governor Granholm, has written you on 
this, and I referenced this in the past, that we are facing now 
the emerald ash borer. And though I can put the photos in the 
record, obviously the crowns of the trees begin to be 
destroyed, the trees eventually die, and then streetscapes in 
the Midwest look like this, with no trees.
    This is a very, very serious infestation, along with what 
we have already been dealing with the Asian longhorned beetle, 
for example. And my question last year to you talked about who 
should be responsible for paying for this. Right now, the way 
we are working the system is that we come to the taxpayers of 
the United States to pay for a problem that has not been 
generated by the majority of them. Indeed, it appears that this 
latest critter comes from somewhere over in Asia, either Taiwan 
or China, whatever.
    I am very interested in your recommendations for holding 
the parties responsible in these trade relationships for the 
damage they cause. Do you have recommendations for us on that, 
please?
    Mr. Hawks. Yes, ma'am. As we discussed last year, we do not 
have the legal authority to hold our trading partners 
responsible, nor would it be wise for us to enter into such an 
agreement because it would go the other way, too. We 
occasionally have pests that go to other countries as well.
    So I think that we should increase our vigilance; we should 
continue to analyze pathways as we have been doing--as the 
Chairman has suggested--along our southern border, and as we 
have been doing along our northern border. We continue to 
analyze the pathways and deal with them on an individual basis.
    The emerald ash borer is obviously of great concern to us 
because it was just found last year. We have already committed 
$900,000 to that project. We are working very diligently on the 
emerald ash borer problem.
    Ms. Kaptur. Under Secretary Hawks, how many U.S. insects 
have gone abroad? Can you provide a list?
    Mr. Hawks. I cannot.
    Ms. Kaptur. What is the relationship here? How could people 
probably be getting emerald ash borers from us? They couldn't 
have gotten those a year ago.
    Mr. Acord. I don't have a complete list of U.S. pests and 
diseases that have gone abroad that I can provide now. However, 
I can think of one recent example. The Exotic Newcastle disease 
got out of California and into the Philippines before we 
realized that we had it. We think the disease vector was moved 
illegally, but nevertheless it did come from the U.S. And there 
have been other examples over the years that we can probably 
demonstrate where that in fact has happened.
    Ms. Kaptur. Could I ask you, Mr. Acord, just your own 
general knowledge in this area. Would you expect that more of 
these pests and problems would be coming into the United States 
because of the volume of trade we do versus what we might be 
exporting to others?
    Mr. Acord. Well, clearly, we believe in the mitigations 
that we have put in place to prevent the entry of pests and 
diseases. And for the most part we have been very, very 
successful in keeping them out. The reality is that the 
introductions we've experienced they have all been accidental. 
They have been introductions where our mitigations have failed. 
I think for the most part we do a good job of keeping pests and 
diseases out.
    On the other hand, there is always a greater risk with the 
more you trade, because there is no zero risk. And when we 
trade with countries that have higher incidents of pests and 
diseases and the mitigations for some reason don't work, then, 
yeah, we have a potential problem. But it is an area that is 
very, very difficult to pin down. I don't think we have the 
legal authority to do that.
    Ms. Kaptur. How would you get it? Is it aninternational 
treaty right that we need?
    Mr. Acord. I would think it would be. And it certainly 
would be the State Department that would deal with something 
like that as opposed to the USDA.

                       INVASIVE SPECIES AND TRADE

    Ms. Kaptur. You know, it is interesting. We ship used 
clothing from our community to developing nations around the 
world, and we have to fumigate our used clothing, even if it is 
clean, to go abroad. Yet we can ship live plants in here and 
receive cardboard boxes from China and from the developing 
nations of the world, but they don't have to fumigate those 
before they send them in here.
    It just seems to me that the damage that is being done, our 
government is just always in the position of being behind the 
curve. We are never in front of the curve. From one of the 
charts I saw at APHIS, have we not been inundated with 
additional pests and viruses and fungi over the last several 
years? I remember seeing one chart where the line went up like 
that in terms of what we were trying to detect and remediate. 
Is my understanding correct?
    Mr. Acord. Well, there are certainly new pests found every 
year. Whether they become established or not is the major 
question. When we find a pest or disease in a very small area, 
then we are able to eradicate it before it becomes widely 
distributed. And that is what we try to focus our attention on. 
But we have more people coming into this country than do a lot 
of other countries.
    If you look at the passenger load that comes into this 
country, it is huge. And to think that we can eliminate any 
kind of movement of plant or animal pest or disease coming via 
that route, I don't think you can get that risk to zero.
    Ms. Kaptur. Well, Mr. Chairman, my time has expired. But I 
would just like to place in the record an article from U.S. 
News and World Reports indicating that, of course, APHIS 
inspects only 2 percent of shipping containers coming into the 
United States.
    [The information follows:]

         [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
        
    Ms. Kaptur. But the article discusses some 240 exotic pests 
and diseases that are preying on the Nation's trees. And 
annually we receive more than 14 million shipping containers at 
U.S. ports, and the vast majority--I mean, these insects that 
are doing all this damage we haven't caught, and the costs are 
being placed on our taxpayers. So the general public is 
absorbing the cost of business. And I think that with the 
increasing cost of that, we ought to really find a way in these 
treaties to try to get those who do the damage to help pay the 
cost.
    Thank you very much, Mr. Chairman.
    Mr. Bonilla. Thank you, Ms. Kaptur.
    Mr. Latham.

   TRANSFER OF APHIS FUNCTIONS TO THE DEPARTMENT OF HOMELAND SECURITY

    Mr. Latham. Thank you, Mr. Chairman. And welcome, everyone 
on the panel here. I have a couple questions about the APHIS 
transition to the Homeland Security Department.
    I would like to know what your experience has been so far 
in interacting with other port inspection elements at the ports 
of entry in the wake of the move to Homeland. Secondly, what 
part of it is going to be the most difficult?
    Mr. Hawks. Thank you, Mr. Latham. I would have to say that 
the transition has been extremely smooth so far. The process, 
as you well know, started after we had worked with Congress, 
with you all, to work out the law. And we immediately started 
looking at transition from all perspectives, but particularly 
from an APHIS persepctive--I worked on a policy group to help 
facilitate the transition to Homeland Security in a broader 
perspective and Bobby Acord worked on the specifics of the 
APHIS transfer. We also had an APHIS employee over there 
working every day on this transition. And it has gone as 
smoothly as anyone could have ever expected. Not to say that 
there were not some tense moments during that process, but I 
would say that the functions and the employees that were 
transferred, seem to be working extremely well.
    The functions of protecting the plant and animal health of 
this country and excluding foreign animal disease and plant 
pests are being carried out extremely well.
    Mr. Latham. How is your working relationship with Customs?
    Mr. Hawks. Well, we think we would be superior. There is 
one director there. But right now I think it is still more 
separate. Bobby, wouldn't that be? Bobby has been working more 
specifically on that.
    Mr. Acord. Mr. Latham, we have had I think a very good 
working relationship with Customs during this transition 
process. You know, during the interim I had the opportunity to 
sit on the Under Secretary for Border and Transportation 
Security Directorate's Policy Council until our employees were 
moved over. We have interim port directors now that have been 
named throughout the country.
    Mr. Latham. Have they physically moved?
    Mr. Acord. Yes. Out of all of the directors that were 
named, there were about, I believe, 14 agriculture employees 
that were named interim port directors or acting port 
directors. We have a meeting set up next week where the 
commissioner of Customs and myself will be meeting with the ag 
industries to discuss with them how we see this process 
working. Right now, I don't think anybody would notice that 
much difference at ports of entry except perhaps for the 
supervisory structure. People will, in fact, at some point be 
greeted by one uniformed inspector rather than three. But over 
the long term, I think the ultimate benefit here is that we 
will have more people looking at agricultural commodities than 
we have had in the past.

        DIVISION OF AUTHORITY AT DEPARTMENT OF HOMELAND SECURITY

    Mr. Latham. Is there any change in authority at the border? 
Right now we have a real mish-mash with the different 
jurisdictions, such as Customs functions, APHIS functions, INS, 
and so forth. Have you seen a change inauthority?
    Mr. Acord. Well, I think the intention is that one 
inspector will be able to do all of those things.
    Mr. Latham. Everything.
    Mr. Acord. But we will maintain the agriculture expertise 
at the port of entry. We will always have people there trained 
in agriculture.
    We also have retained agriculture people to work with the 
employees from Customs and Border Security to make sure that we 
can make the proper disposition of any decisions that have to 
be made about whether a product is enterable or not.

           DEPARTMENT OF HOMELAND SECURITY AND APHIS BUDGETS

    Mr. Latham. I am on the Homeland Security Subcommittee on 
Approps also, and I have a real concern about how we are going 
to sort out the '04 appropriations issues. There is an 
oversight committee, but that committee really has no 
legislative authority. You have all kinds of different 
committees. I guess that is probably mostly our problem, but--
--
    Mr. Acord. Well, as a practical matter, the appropriated 
dollars are covering the border inspections. The inspections at 
the airport and a lot of the cargo inspections are funded by 
user fees. The way the process has been set up, we will 
continue to collect the user fees. We will reimburse the Bureau 
of Customs and Border Security for that.
    Mr. Latham. So the USDA is going to collect it and transfer 
it over to the new Department of Homeland Security?
    Mr. Acord. The appropriated portion--and it is small 
relative to the user fees--is what you will have to deal with 
here.
    Mr. Latham. That is what I am afraid of. Thank you.
    Mr. Bonilla. Thank you, Mr. Latham.
    Mr. Boyd.

                      APPRECIATION OF APHIS' WORK

    Mr. Boyd. Thank you, Mr. Chairman, and Secretary Hawks. Let 
me thank you and all your team there at the table for your 
service not only to our consumers but also to our agricultural 
producers in what you do. I sincerely mean that. I have had a 
chance to work with you, and your Agency, over all of my 
professional career, and you are good. Thank you.
    Mr. Hawks. Thank you.

                       CITRUS CANKER ERADICATION

    Mr. Boyd. I guess my question probably would be for Mr. 
Acord. It probably won't surprise him or anybody else, it will 
be about citrus canker in Florida. But what I would like to do, 
if I could--this committee and this House, this Congress, the 
Federal taxpayers, very graciously committed a great deal of 
resources to help solve this problem. Could you give this 
committee an update on where you see we are in fighting the 
canker and getting it boxed in and eradicated, and any other 
problems we may have?
    Mr. Acord. Well, I think the legal issues associated with 
citrus canker have been far more difficult to deal with than 
the biology of the disease, quite frankly. But those appear to 
be behind us at this point. We are returning to cutting trees. 
We have a good working relationship with the State of Florida, 
and now we will have the opportunity to remove both the 
infected and the exposed trees.
    We have now cleared the way so that we can begin full-scale 
eradication, and I think that is achievable. We want to get as 
much of this done before the hurricane season as we possibly 
can. We are going to be starting near the northern end of the 
infected area so that we work toward the area of the State that 
is most infected and protect the Indian River area.
    I believe that we are now on the road to finally bringing 
this to a conclusion--or can be on the road, barring any future 
impediments.
    Mr. Hawks. Mr. Boyd, can I add to that?
    Mr. Boyd. Yes. Secretary Hawks.
    Mr. Hawks. I actually had the opportunity to visit with 
your delegation from Florida just yesterday. And it was very 
interesting. They said they had been doing some recent polling, 
and now the public is actually supporting our efforts there, 
since they have been completely educated regarding what we are 
doing there. That was very encouraging to me as well.

                      CITRUS NURSERY COMPENSATION

    Mr. Boyd. That is encouraging. It is too bad we couldn't 
have pulled some of those judges that have delayed us for about 
2 years. But that is another story. And that is a very 
optimistic report that you have given me. And I share that 
optimism if we can actually apply the science. As you said, the 
problem we have had is being able to apply that because of the 
legal problems we have had.
    There was a section in the Omnibus Bill that related to 
nurseries, citrus nurseries. And I know that at the outset it 
caused some confusion, or seemed to, about how we would apply 
that and what it would do to the other program that we had put 
in place for the grow-owners. Have we worked that out and 
moving forward so it won't disrupt the grow-owner program?
    Mr. Acord. I don't think it is going to interrupt grower 
compensation. I think there is still some confusion about the 
nurseries' stock and whether the nursery stock was destroyed or 
removed within the timeframe that is called for in the 
legislation. Our general counsel is looking at that as we 
speak. We are trying to resolve that. But, quite frankly, I 
expect that there is going to be enough of a need to commit the 
resources for the commercial growers that there is likely not 
going to be any left to use for the nurseries. Right now I 
think we are looking at an obligation of somewhere in the 
neighborhood of $13 to $14 million.
    Given the fact that we expect to find a few additional 
infected groves, then we may very well be at the $18 million 
mark before we get the nursery issue resolved.
    Mr. Boyd. Okay. But you won't have to go back and totally 
rewrite the rules for the grower side to deal with this nursery 
deal?
    Mr. Acord. No.
    Mr. Boyd. Okay. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Mr. Boyd.
    Mr. Farr.

                        ILLEGAL ANIMAL FIGHTING

    Mr. Farr. Thank you, Mr. Chairman.
    And thank you, for all of you, for your public service.
    I have three questions. I don't know if I will have time to 
get all three of them. But the first one is on animalwelfare; 
the other is on organics; and the third is on some rulemaking on the 
irradiated fruits.
    The animal welfare issue, as you know, there are many 
colleagues in the House and the Senate who are very concerned 
about the reports of illegal animal fighting. We certainly had 
reports last year about dog fighting and cock fighting. These 
are obviously barbaric activities and in many cases it ends up 
that there is also gambling around it, and much to the 
consternation of local communities who have to put up with 
that.
    We put some money in last year's bill to give you some more 
assets, some more force to look into it, and yet we seem to see 
that the animal fighting enterprises continue to thrive in 
States partly because of the lack of enforcement on the part of 
the Animal Welfare Act. We asked the Secretary to report back 
to the committee on March 3rd of this year--March 1st of this 
year regarding plans for an effective enforcement of animal 
fighting law, and I wonder if you could tell us what you have 
decided to do to carry out the responsibilities that have been 
given to you, the additional responsibilities.
    Mr. Acord. Well, clearly, there is a criminal element 
involved with animal fighting ventures. Our people are 
biologists, veterinarians. We have some investigators, but they 
don't carry firearms. They are not, quite frankly, prepared to 
deal with the kind of criminal element that is involved in 
animal fighting ventures. We are working with our Office of the 
Inspector General because they do criminal investigations. We 
are trying to work with them to get them engaged in this 
activity for the remainder of this year. I think this is going 
to happen. I have had no indication that we would have a lack 
of support from them.
    Mr. Farr. Can you meet the goals that the Congress 
requested in the additional funding this year?
    Mr. Acord. I believe that we can do that, yes.

                              ORGANIC FEED

    Mr. Farr. All right. Well, we will be closely monitoring 
that.
    Let me shift to another question. What plans does the 
Department have to publish a rule in the Federal Register 
regarding the section 771 of the Omnibus Appropriations Bill? 
That was the controversial organics provision. Are you 
contemplating publishing a rule to carry out that section?
    Mr. Hawks. Mr. Farr, you are referring to the language that 
was in the Omnibus Bill pertaining to organics. We are in the 
process of following two directives that we got from Congress. 
One was in the Farm Bill, where we were instructed to do a 
study on the availability of organically grown feed. We are 
attempting to carry that directive out first. We will always 
follow the direction of Congress.
    Mr. Farr. So you have no intent of publishing a rule yet 
until you finish this study?
    Mr. Hawks. No, sir.
    Mr. Farr. That is good news. Let me just throw this out, as 
you are looking at this thing. The organic rule prohibited 
production using GMOs, as I understand, as you do this report 
on the non-organic feed, would you also look into whether that 
feed has GMOs in it? Because, if so, it may meet the test of 
being cheaper than organic, but it may not meet other criteria 
put forth in the Rule.
    Mr. Hawks. Mr. Farr, my assessment is that it would be 
either organic or non-organic feed. That just seems logical to 
me.
    Mr. Farr. Well, let us make sure that you look at the GMO 
issue, too.
    Mr. Hawks. Okay.
    Mr. Farr. Also, what are you currently doing to promote and 
market organic products? You know, we put some money to 
increase marketing. Have you got a plan to do that?
    Mr. Yates. The money was appropriated for us to implement 
this program but not for marketing. As you know, it was 
initiated last October. We are busily trying to accredit all of 
these certified agents around the country, and we have about 70 
certified. Some of those agents are foreign. We are continuing 
to work diligently on getting those agents accredited so they 
can certify the farmers around the country. Cost-share money 
was given to us to help the organic farmers meet their 
certification requirement. We have had responses from some 43 
States who are working closely with us in trying to help 
organic producers fund their certification. We will pay up to 
$500 or 75 percent of the farmer's certification cost.
    Mr. Farr. But the issue goes farther than that--are you 
spending those resources on just making sure that they are 
certified, or are you also using money for the marketing of the 
products?
    Mr. Yates. Right now we are concentrating on getting these 
farmers certified by getting their agents accredited. That way, 
they can be certified organic and be in the marketplace growing 
their crops.
    Mr. Farr. And those who qualify, they don't have access to 
funds because you are spending them all on the administrative 
side of it?
    Mr. Yates. No, the cost-share money is all going to the 
farmers to help pay for their certification by the accreditor. 
That is where that money is going.
    Mr. Farr. Okay.
    Mr. Yates. It is meant to help them do all of their work in 
getting their certification completed.
    Mr. Farr. I have a follow-up question the next go-around, 
Mr. Chairman. Thank you.

                     AUDIT OF TOP FOUR MEATPACKERS

    Mr. Bonilla. Thank you, Mr. Farr.
    Mr. Hawks, maybe this question should be directed at Ms. 
Reifschneider, because it is about GIPSA and requested money--
an additional million dollars to conduct audits of the top four 
steer and heifer meatpackers. This is described as a pilot 
program that would take 2 years to complete and require hiring 
eight employees. It looks like most of the first fiscal year of 
2004 would be taken up with hiring and training. You 
investigate the financial conditions of market agencies, 
dealers, and packers as part of your mission. Has any statute 
or regulation prevented you from looking at the top four 
packers thus far?
    Ms. Reifschneider. We have never audited a packer. We have 
looked at their annual reports, and receive over 6,000 of these 
annual reports. We have never looked deeper than those annual 
reports to ask if they are correct and if we're receiving the 
information that best helps us enforce the Packers and 
Stockyards Act.
    So, we plan to look at those reports and try to get a 
better understanding of how the packers work with their 
financial information, and what their regular, normal 
recordkeeping is. We have never done that before.
    Mr. Bonilla. The budget justification talks about the 
detailed training that your employees received in 2002, and I 
am sure that is continuing in this fiscal year. Why do you need 
a specific task force of new hires for this project? I would 
think that you would have experienced accountants on your staff 
who would need less training than some of these new hires.
    Ms. Reifschneider. We have 169 employees in the Packers and 
Stockyards Administration, and we do have accountants and legal 
specialists looking at industries having an annual wholesale 
value of over $118 billion. Last year we did over 1,400 
investigations. And so they are very involved in looking at a 
lot of different issues.
    We need the additional resources to focus--have time to 
focus--directly on these issues to understand better the 
packing industry and their financial records.
    Mr. Bonilla. So what would you project this project would 
cost, and then looking ahead to 2005? And then, after that, 
would you just dismantle that or what?
    Ms. Reifschneider. It is a pilot project. We would 
certainly reassess it to see if we gained valuable information, 
if we have the resources, and if we know what is happening in 
the packing industry in order to ask the right questions. This 
issue arose after the captive supply report in 1999. We were 
asking certain questions. We thought we were asking for apples; 
and packers thought they were giving us apples when in fact 
sometimes they were giving us oranges. We might not have been 
asking the right questions. We want to make sure that we have 
an understanding of the packers' records so that when we ask 
for apples we get apples, and so that when we report back to 
one group or another what apples are, we know we're reporting 
apples. We want to know that we are asking the right questions 
and we don't know that we are doing that yet.
    Mr. Bonilla. Okay. We will be following this more closely 
on this issue, because we just will have a lot of questions, I 
am sure, about it as it develops.

                       COUNTRY OF ORIGIN LABELING

    I want to just turn briefly now to--could be--it was a part 
of the Farm Bill. Not this subcommittee's work, but the 
country-of-origin labeling, which has been debated quite a bit 
in recent weeks and months. A cost estimate of recordkeeping 
costs, all of that stuff, was supposed to be about $2 billion.
    The question I have is, what type of costs are included in 
the $2 billion estimate? Does the dollar figure refer only to 
costs associated with recordkeeping? What costs are excluded? 
And which will be included in rulemaking for the mandatory 
labeling program?
    Mr. Yates. Mr. Chairman, the number that we put forward was 
based on the required calculation under the Paperwork Reduction 
Act. It is an estimate of the cost to develop and maintain the 
records that would have to be kept throughout the system--
retailer, processor, and grower--that are not required by 
Federal law. What we hoped to do with that number was get 
comments back from the public and all three sectors. We want to 
know what records they have, because we don't know what they 
have other than those that are required by Federal law.
    I have explained this at great length as we have met around 
the country with all three of these sectors, and I think they 
are beginning to understand what that number is all about. We 
need to know what records they have. We are doing some more 
work with them and trying to give them an idea of what we are 
looking for--a list of records that would possibly meet the 
needs of the retailer. As you know, the retailer is the one who 
is responsible for the labeling of product, and they are also 
the ones who can be fined for not properly doing it.
    We want to make sure that the growers, and all the way 
through the chain, have all the records that they will need. 
That is what that number was all about.
    Mr. Bonilla. Very good. I may have some more questions when 
we have another round on this.
    Mr. Yates. Yes, Mr. Chairman.
    Mr. Bonilla. And we will get back to it.
    Mr. Hinchey.
    Mr. Hinchey. Thank you, Mr. Chairman.
    I would like to continue with the issue of country-of-
origin labeling. As I recollect, this was part of the Farm 
Bill; it has 2 years of voluntary compliance, and then you have 
to implement the mandatory requirements. Have you begun doing 
that yet?
    Mr. Yates. We are going to be starting on that soon--
probably in the next month. The comment period on voluntary 
labeling ends on the 9th of April. We are already talking to 
our people and getting prepared to assemble the comments.
    Mr. Hinchey. When do you expect that those regulations will 
be ready? I know that the implementation is supposed to be 
taking place.
    Mr. Yates. We are required by law to have them ready by the 
30th of September of 2004. We are going to begin soon because 
it takes considerable time and this is a very complex issue 
that we are dealing with.
    Mr. Hinchey. Right. So you will be on it, though, and you 
will have those regulations in place and the program ready to 
go on a mandatory basis----
    Mr. Yates. We will. That is our intention.
    Mr. Hinchey [continuing]. On September 2004.
    The estimates of the cost of compliance seem to be very 
high, particularly in light of the fact that a number of other 
States have experience with this type of program. Florida, for 
example, has had a program in place since 1979, and a number of 
other States have them with regard to meat. And the cost there 
is nothing like the estimated $20 million that you are 
anticipating. Why is that?
    Mr. Yates. Well, the Florida program did not require a 
Paperwork Reduction Act estimate, and that is what this 
discussion is all about. Florida has a very good program. I 
went down there and spent time with their Department of 
Agriculture, and went through grocery stores to see how they do 
their business.
    The requirements that they operate under versus the 
requirements of the Farm Bill are somewhat different in regards 
to an audit trail. Part of their program fits into what we 
would anticipate will be the national country-of-origin 
labeling program of the future.
    Mr. Hinchey. Do you think that your costs are too high, 
that you will be able to bring them down?
    Mr. Yates. Like I said before, there are three sectors: the 
retailer, the processor, and the farmer. We are hearing from 
the retailers that our number is too low; we are hearing from 
the processors that our number is too low; and we are hearing 
from the growers that our number is too high.We want to know 
what records you keep out there that meet the test of the laws. Let us 
take the animal industry as an example. Very clearly, under the Farm 
Bill, it said that the animal must be born, raised, and slaughtered in 
the United States to be labeled a product of the United States. And so 
we need to know what each one of those groups are going to have and how 
they are going to put their reporting in place.
    Mr. Hinchey. Okay. This is an important program.
    Mr. Yates. Yes, sir.
    Mr. Hinchey. We are interested in it. We are going to be 
watching how you move ahead on it, and we want to be helpful to 
you in whatever way we can to ensure that you are able to get 
those regulations into place by next September.
    Mr. Yates. I appreciate that very much, sir.

                    ASIAN LONGHORNED BEETLE FUNDING

    Mr. Hinchey. And thank you for the work you are doing on 
it.
    The Asian longhorned beetle continues to be of interest to 
some of us in parts of the country. I heard just yesterday that 
there is another foreign pest that is chewing up the ash trees 
in Illinois. But I wanted to talk to you now about the Asian 
longhorned beetle. In your budget justification, APHIS notes 
that the Agency spent almost $45 million in fiscal year 2002 to 
try to eradicate the beetle from New York and from Illinois. 
And, of course, that effort has not yet been successful. The 
report indicates that the infestation was even greater than was 
anticipated. And so the work continues.
    But in fiscal year 2003, you estimate that you will spend 
about $1.6 million on this program in the upcoming fiscal year, 
and you don't provide any estimates for the cost in the 
following year, fiscal 2004. And I am just curious; why such a 
dramatic drop? You spent $45 million in 2002, and you are 
budgeting $1.6 million in 2003, and not anticipating anything 
in 2004.
    Mr. Acord. Well, I think there must be a misinterpretation 
there. For the Asian longhorned beetle program, the 2004 
request is about $22 million. That includes Chicago, New 
Jersey, and New York. There is no intent to cut the program 
back that dramatically.
    Mr. Hinchey. What is the 2003 request?
    Mr. Acord. Well, the 2003 appropriation for Asian 
longhorned beetle was about $19 million, and the 2004 request 
in the President's budget was $22 million.
    Mr. Hinchey. So the number for 2003, give me that number 
again.
    Mr. Acord. The number that we had appropriated for 2003 is 
$26 million.
    Mr. Hinchey. $26 million?
    Mr. Acord. Yes. The 2004 request is $22 million because we 
are looking for the States to share the costs.
    Mr. Hinchey. I want to follow up with you on this one on 
the next round. Thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Mr. Hinchey.
    Mr. Latham.

                          MEXICO TRADE ISSUES

    Mr. Latham. Thank you again, Mr. Chairman.
    One of the real concerns we have, is the tax Mexico put on 
soft drinks that include sugar, or corn fructose. Are we making 
any progress on that issue? Can you fill us in on where we are?
    Mr. Hawks. Sure. On the sugar issue, that is obviously a 
question for A.J. again. But I will address some of the issues 
with Mexico.
    We have responsibility within APHIS for phytosanitary 
issues. I have spent quite a bit of time dealing with my 
Mexican counterparts and the Mexican Secretary of Agriculture 
to make sure we harmonize our regulations so that they look as 
much like each other as possible.
    One of the things that is very important to me, and I think 
very important to this committee, is that we trade on the same 
footing. From that perspective, I was actually in Mexico City 
just last week meeting with my counterpart. We continue to deal 
on those issues on a daily basis.

                GENETICALLY MODIFIED ORGANISMS AND TRADE

    Mr. Latham. Okay. You have a lot of multinational meetings 
such as Codex, and the International Organization for 
Standards, for example.
    Where are we on the biotech issue as far as genetically 
modified and things like that? Is there ever going to be a 
consensus on biotech issues?
    Mr. Hawks. Coming from the farm in Mississippi on this, I 
certainly appreciate the opinions that you just expressed. We 
have to continue to work in the international forum. We have to 
make sure that our friends are working with us on these issues 
as we move forward.
    From my perspective as Under Secretary of Marketing and 
Regulatory Programs, the way we continue to support 
biotechnology is to have an impeccable regulatory regime. I am 
sure you are aware that we published a Federal Register notice 
dealing with pharmaceuticals and industrials.
    We feel like we are taking the appropriate measures to 
ensure that we protect the integrity not only of that 
technology, but also the integrity of traditional crops. So 
that is the way we work towards consensus. While we are working 
in the international forum, we have to work with our regulatory 
regimes here.
    Mr. Hawks. I will refrain from making a position statement.

              FIELD TESTING GENETICALLY ENGINEERED PLANTS

    Mr. Latham. Okay. You bring up an interesting and very 
important point for the future, I think, as far as plant 
pharmaceuticals and their potential. With your publishing in 
the Register last week, what were the findings?
    Mr. Hawks. Very briefly, we are increasing the isolation of 
these crops. We are requiring a fallow time; that is, if you 
plant this kind of crop this year, you will have to fallow the 
land next year, unless it is planted with the same crop. We are 
requiring dedicated equipment, the storage to be dedicated. We 
are requiring more isolation of these crops. We are requiring 
permits for the pharmaceutical crops.
    Mr. Latham. The actual protocol is spelled out? What kind 
of model did you use?
    Mr. Hawks. I rely on my scientists to develop those models. 
I certainly believe that they have gone to the lengths they 
should have. I am thoroughly convinced that appropriate actions 
have been taken.
    Mr. Latham. Very good.
    Thank you very much, Mr. Chairman.
    Mr. Bonilla. Thank you, Mr. Latham.
    Ms. Kaptur.

                     EMERALD ASH BORER IN MICHIGAN

    Ms. Kaptur. Thank you, Mr. Chairman. I am going to place in 
the record the letter of the Governor of Michigan to the 
Secretary of Agriculture, and ask Mr. Hawks if you are 
intending to answer the Governor of Michigan in the near 
future.
    Mr. Hawks. Yes, ma'am.
    Ms. Kaptur. Could you give us any idea when that response 
may be forthcoming?
    Mr. Hawks. I have not seen the letter. I have not received 
a letter. I can assure you that the letter will be answered.
    Ms. Kaptur. It is very interesting, in looking through 
Michigan's materials, they are estimating the cost of 
remediation just in Michigan at over $53 million, just in 
Michigan. Unfortunately, I hate to show you where I come from, 
but it is right there, dead center, if you can see the red dot 
on the map. We are at ground zero of where this thing is going 
to go across our country.
    I would put the Governor's letter, along with related 
materials, in the record, Mr. Chairman, with unanimous consent.
    Mr. Bonilla. Without objection, they will be entered into 
the record.
    [The information follows:]

          [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
        
             INVASIVE SPECIES INTRODUCTIONS AND REMEDIATION

    Ms. Kaptur. Also, I wanted to ask a question about the 
recouping of costs related to invasive species, where I began 
in my first round of questioning. Some of our treaties include 
in them pest-free zones. They are designated in the treaty.
    My question is, would this increase our ability to 
establish liability for products coming in from those countries 
if we were to more effectively use those pest-free zones, and 
if something is found in violation? I wonder if you have ever 
looked at that possibility, Mr. Secretary.
    Mr. Hawks. No, ma'am. I have not.
    Ms. Kaptur. We will provide some questions for the record, 
and obviously we will appreciate any insight you might be able 
to give us there.

                        FINES AT PORTS OF ENTRY

    Your department assessed this year $508,000 for plants and 
pests and another $46,000 for animals. Could someone briefly 
discuss the sources of these violations and the average fines?
    Mr. Acord. Are you referring to fines at ports of entry?
    Ms. Kaptur. APHIS, yes.
    Mr. Acord. I don't have that information at my fingertips, 
but we would be happy to provide it for the record.
    [The information follows:]

    In Fiscal Year 2002, APHIS assessed civil penalties 
totaling $508,000 for 384 separate violations of the Plant 
Protection Act. Seventy-four percent of these violations 
involved individuals illegally importing animal and plant 
products through baggage and noncommercial mail for personal 
use. These individuals paid an average penalty of $100.00. The 
remaining penalties were assessed towards entities for the 
illegal movement of prohibited or restricted commodities for 
commercial purposes. These entities were fined approximately 
$2,250.00 per violation. The increased penalties provided for 
in the Plant Protection Act were implemented midway through FY 
2002 and are not reflected in the total penalties assessed.
    In Fiscal Year 2002, APHIS assessed civil penalties 
totaling $46,000 for 43 separate violations of the Animal 
Health Protection Act. The average penalty amount for each 
violation was $1,000. The increased penalties provided for in 
the Animal Health Protection Act were not implemented until FY 
2003.

    Ms. Kaptur. One of the questions we have is whether the 
fines are sufficient to restrict entry of some of these 
troublesome items.

                            FARMERS MARKETS

    I wanted to turn to a very different subject, Mr. Yates, 
and to ask you, in your testimony today you have not mentioned 
farmers market activities. What can you tell us now about what 
the Department is doing to improve the ability of farmers to 
use these markets? I think there are over 3,000 of them around 
the country.
    We know many farmers who are diversified farmers find this 
an important source of added income, particularly the truck 
farmers around the major cities of our country. Can you tell us 
a little bit about what you are doing to assist to improve the 
marketing opportunities for our farmers?
    Mr. Yates. Farmers markets are very important to the 
Agricultural Marketing Service. As we discussed last year, we 
work throughout the country with different farmers markets.
    As an example, we have been providing technical assistance 
on site facility design and expansion in a number of States 
such as Jackson, Mississippi; Jacksonville, Florida; Sanford, 
Florida; Montgomery, Alabama; Santa Fe, New Mexico. We worked 
with the State of New York on a program with farmers and a food 
stamp program. There is a whole variety of things we do. We are 
working with farmers in the South to see if we can help them in 
marketing their product in thenorth during the off-season.
    Naturally, with some people in the north, this is not real 
popular. They kind of look at that as their market. But we 
continue to work with them, because we want to help all farmers 
in meeting their needs.
    We are helping farmers look at how they can move their 
products into the schools, how they can move their products 
into independent grocery stores, and also into restaurants. 
There is a whole wide variety of programs where we are working 
with farmers markets to try to help them market their products.
    Ms. Kaptur. I really appreciate that. Any documentation you 
can provide for the record on how many markets there are, how 
many more farmers are participating, what difference it has 
made in their additional income by going retail.
    One of my big interests is actually in helping in Mr. 
Hinchey's State in the City of New York, where I have never 
seen higher food prices--and maybe they are as high in Los 
Angeles, I don't know, but it is unbelievable--to see if we 
can't get the farmers who ring New York to be able to bring 
their product into some of the poorest neighborhoods in New 
York. We would love to have some assistance there in any way 
that it can be given.

                          LIVESTOCK ASSISTANCE

    May I ask you very quickly, as I close out here, last year 
you used Section 32 funds in the Department for livestock 
assistance. Is there any possibility some of those unspent 
Section 32 funds could be used for the senior farmers market 
nutrition programs, so we could buck those numbers up a little 
to help seniors purchase fresh fruits and vegetables, which is 
an incredible program that needs to be expanded?
    Mr. Yates. Through the Section 32 program we help a number 
of farmers. We also help a number of consumers in the product 
that we buy.
    There are restrictions on what we can do with Section 32, 
and so within those restrictions, we will certainly do our best 
to help the consumer in the Federal feeding programs, in the 
school lunch program, as well as the farmers we are trying to 
help.
    As you well know, there are many farmers around the country 
who are having a very difficult time making ends meet. It is 
one of the strengths that the program not only benefits the 
farm, but it also benefits the young children in school, and it 
also benefits our elderly people who are needing food in some 
of these Federal feeding programs.
    Information on farmers markets is provided for the record.
    [The information follows:]

    Currently, there are more than 3,100 farmers markets (up 
from approximately 2,900 in 2000) operating around the country. 
USDA's farmers market study conducted in 2000 indicated that 
53% of all markets reported an increase in the number of 
farmers using the markets, as compared to the previous study in 
1996. These markets reported an average of 27 farmers per 
market, up from 24 farmers per market in 1996. A growing number 
of farmers are using farmers markets as their only method of 
sales--33% in the 2000 study, increased from 25% of the total 
in 1996.
    Recently, AMS began partnering with the North American Farm 
Direct Marketing Association, to aid in developing and 
implementing the new Farmers Market Coalition (FMC). This 
effort is supported by market managers, farmers market 
association leaders, and industry enthusiasts around the 
country. FMC will serve as a strong network for farmers markets 
and provide for a centralized national effort in developing, 
expanding, and supporting farmers markets. Through this type of 
organization, USDA will be able to work with interested parties 
and conduct more detailed studies of farmers markets and those 
who buy and sell at them.

    Ms. Kaptur. Thank you, sir.
    Thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Ms. Kaptur.
    Mr. Boyd.

                            COST SHARE RULE

    Mr. Boyd. Thank you, Mr. Chairman. Secretary Hawks, I know 
your job is very difficult at times. One of the difficult 
parts, it seems to me, is the allocation of Federal-State cost 
share on some of these eradication programs.
    I know there is a wide variance of Federal share across 
programs. As a matter of fact, I know some programs have a 70 
percent Federal cost share while the Boll Weevil Eradication 
Program may have as low as a 20 percent Federal share.
    I understand now that the agency is in the process of 
writing or promulgating a rule to standardize the cost share. 
Would you talk to us a little bit about that, and the authority 
for that, and where you think you are heading with that?
    Mr. Hawks. Yes, sir, I would be happy to.
    As you probably remember, our first visit had to do with 
cost sharing for the citrus canker program in Florida. At that 
time, you pointed out the wide variations in cost share 
programs.
    At the Department, we are now working on a rule to look at 
certain types of cost share programs. We will be publishing a 
rule and getting comments, and everybody will have an 
opportunity to provide input.
    Mr. Boyd. This budget that we have before us, does it 
anticipate what the outcome of that rule will be in terms of 
what amounts are in the budget for those particular eradication 
programs?
    Mr. Hawks. Yes, sir.
    Mr. Boyd. Is there any way you can share with us 
additionally?
    Mr. Chairman, I don't understand all our rights here, but 
is there any way we can have that--have that information shared 
with us?
    Mr. Hawks. Yes, sir. In the case of citrus canker, we 
anticipate a 50/50 State cost share.
    In drafting the rule, we have looked at different pest and 
disease situations and classified them--for example, foot-and-
mouth disease. An outbreak of that disease would be considered 
a class A situation, so we would look at that as a 100 percent 
cost share program. It is a matrix, if you will. We are still 
in the process of working through the rule.

                            COST SHARE RULE

    Mr. Boyd. Does your rule leave you with room for 
flexibility? For instance, if you had a situation where the 
State legislature was not meeting, and they could not meet 
their obligations, we would not shut down a program because of 
that under this new rule, would we?
    Mr. Hawks. I would certainly hope that we would not. There 
is some discretion left in the rule as it is being drafted. 
Everybody will have ample opportunity to give their input as we 
move forward with this rule.
    Mr. Boyd. So we can get some----
    Mr. Hawks. Yes, sir. It will be just like any other 
rulemaking process, and we will be receiving comments.
    Mr. Boyd. One of the things, Secretary Hawks, that our 
folks have fussed about a little bit is the obvious sharing in 
the APHIS administrative costs associated--administrative costs 
associated with our eradication program. I have tried to 
encourage the State to step up to a 50/50 share, but they buck 
a little bit when Mr. Acord wants them to pay part of his 
overhead costs of people sitting in Washington.
    I would like your comment on that. We would certainly hope 
you could work with us a little on that.
    Mr. Hawks. I think the whole issue of cost sharing is on 
the table--what part of the cost is applicable, and what is 
not. I have actually entered into these conversations with 
Charlie Bronson, your Commissioner of Agriculture, at great 
length. We will continue to discuss this issue with you.
    Mr. Boyd. One final question: When will the rule be issued?
    Mr. Hawks. It is in the process of being issued now.
    Stephen, is it still in your shop?
    Mr. Dewhurst. I think it has left.
    Mr. Hawks. Somewhere between Stephen's shop and the next 
stop. Bobby just said it is at OMB.
    Mr. Boyd. Yes, sir. We know how that works.
    Thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Mr. Boyd.
    Mr. Farr.

                              ORGANIC FEED

    Mr. Farr. Thank you, Mr. Chairman.
    Let me go back to this issue of Section 771 in the Omnibus 
Appropriations Act. As you know, that Act expires at the end of 
this fiscal year, which will be October 1.
    The Act said that none of the funds in the Act can be used 
to require that a farm satisfy section so and so of the Organic 
Food Production Act in order to be certified under this Act as 
an organic farm with respect to livestock produced on the farm 
``unless the report prepared by the Secretary of Agriculture 
pursuant to recommendations contained in the joint explanatory 
statement of the managers on the part of the House of 
Representatives,'' which was the reference to another bill, 
``confirms that commercial availability of organic produce feed 
at not more than twice the cost of conventionally produced feed 
to meet current market demands.''
    To clarify for me, does that mean that these animal 
producers can label their product as organic for the time being 
and not feed them organic food, organically certified grains?
    Mr. Hawks. Mr. Farr, the way I interpret that, it just 
restricts us, being the Agricultural Marketing Service, from 
enforcing that provision. These producers are certified by the 
agents, and then if the agent refused to certify them and they 
appealed it to us, that would be the point in time that we 
would be expending dollars.
    To answer your question, I can't see any change right now 
until there is an appeal.
    Mr. Farr. So it is effective now?
    Mr. Hawks. Yes, sir.
    Mr. Farr. Okay. And it does expire in 1 year?
    Mr. Hawks. At the end of this fiscal year.
    Mr. Farr. Can GMOs be fed to livestock and still called 
organic?
    Mr. Hawks. It is not my interpretation. The amendment 
applies to organic feed, and is pursuant to us doing this 
study, which we hope to have done real quick.
    Mr. Farr. So all you are prohibited from is enforcing the 
labeling on the use of conventionally grown feed stock?
    Mr. Hawks. Correct.
    Mr. Farr. If somebody indeed claims there is a violation of 
that rule?
    Mr. Hawks. That is my interpretation.
    Mr. Farr. Do you know that anybody is intending to violate 
it right now?
    Mr. Hawks. I do not.
    Mr. Farr. Will you notify us, even though you cannot 
enforce it, if you hear that?
    Mr. Hawks. Yes, sir, we could. If there is an appeal filed 
we certainly could do that.
    Mr. Farr. I would like the notification right away. What 
you may not be able to enforce, Congress can bring attention 
to.
    Mr. Hawks. Okay.
    Mr. Farr. Let me ask another question--and by the way, I 
hope the Department will support the bill that Senator Leahy 
and myself and others, including members of this committee, 
have put in to repeal that provision that I just read to you.

                   RESEARCH AND PROMOTION ASSESSMENTS

    How are you implementing Sections 106-07 of the 2002 Farm 
Bill which exempts those who produce and market only 100 
percent certified organic products from the Federal assessments 
under your commodity promotion law?
    That is, as I understand the rule--it allows them--if a 
grower is 100 percent organic, you don't have to pay your 
assessments to that process. Have you implemented that?
    Mr. Hawks. No, sir, it has not actually been implemented, 
but we are working on that procedure now.
    Mr. Farr. As Mr. Boyd indicated, do you have any time frame 
of when that might be?
    Mr. Yates. We are required to have it by May 14. For a 
farmer that pays an assessment on product that is 100 percent 
organic, we are working on exempting him from the assessments.
    Mr. Farr. Being exempt from the assessment?
    Mr. Yates. Yes.

               IRRADIATED FRUIT AND MEDFLY INTRODUCTIONS

    Mr. Farr. We may have to come back in another series, Mr. 
Chairman.
    As you know, I represent a State that is very, very worried 
about Medflies. You have come up with a rule that allows 
unirradiated fruits and vegetables into 33 of the contiguous 48 
States. The reason for your rule is that you say, well, in 
those States, if the Medfly came in, it would not survive the 
winter.
    The problem is that they don't stick around for the winter. 
These fruits and vegetables can go from these 33 States to the 
States that are highly at risk.
    I am wondering what risk assessment did you do in adapting 
the justification for that exemption?
    Mr. Hawks. Mr. Farr, I don't know what you are referring to 
there, but I can assure you that we are not allowing any 
products coming in from a Medfly-infested area on a Medfly host 
into this country.
    Mr. Farr. Is that including the 11 species of fruitflies?
    Mr. Hawks. No, sir. I can assure you we are not allowing 
any Medfly-infested products into this country.
    Mr. Farr. Including the mango seed weevil? You have 11 
infestation species of fruit flies, including the Medfly, the 
Oriental and South American fruit flies, and the mango seed 
weevil, among others. So that those States that import 
nonirradiated fruits and vegetables--you can assure us that 
none of those States importing that--that any of the 
infestations on those nonirradiated can get to the at-risk 
States, Florida, Texas, and California, which are very well 
represented on this committee?
    Mr. Hawks. No, sir, I cannot assure you that if a Medfly 
gets in to Michigan that it cannot get to California, but what 
I can assure you is that we will not allow any product to come 
into this country from a Medfly-infested area.
    Mr. Farr. Why would we even allow any product to come in 
that has not been irradiated?
    Mr. Hawks. There are other control measures: cold 
treatments, fumigation, and other. There are a number of 
protocols that can be used to mitigate pest risk.
    Mr. Bonilla. Thank you, Mr. Farr.
    Mr. Hinchey?

                  ASIAN LONGHORNED BEETLE ERADICATION

    Mr. Hinchey. Thank you, Mr. Chairman. I would like to go 
back to the Asian longhorned beetle for a moment.
    As I understand the program, you believe that eradication 
can be accomplished, but not before 2011, is that correct?
    Mr. Hawks. Yes.
    Mr. Hinchey. Last year you spent $45 million, next year it 
is something like $26 million, and then it drops down to $16 
million or something of that nature.
    So far, the quarantine area is restricted, I believe, to 
the New York metropolitan area, is that correct?
    Mr. Hawks. Not exactly. We have found some outside of the 
quarantine area, in New Jersey.
    Mr. Hinchey. Some in New Jersey? Have any been found north 
of New York City?
    Mr. Hawks. Not that I know of.
    Mr. Hinchey. I am wondering why 2011? What would we have to 
do to achieve the eradication earlier than that? Because if we 
are not going to get it done by 2011, obviously as each year 
goes by there is a possibility that the infestation could 
spread, and it could spread into areas where it could do a lot 
more damage economically.
    If it got into upstate New York, for example, it could be 
very damaging to the maple sugar industry, to tree fruit, and 
to forest products of various kinds.
    What do we need to do to achieve an eradication date that 
would be substantially earlier than 2011?
    Mr. Hawks. Actually, my numbers show in Illinois we will 
have it eradicated in 2008, and in New York, 2012 is our actual 
number. We could certainly go back and have the scientists look 
at and evaluate an accelerated program. I don't know. That is a 
technical question.
    I will share with you that I had the opportunity to be in 
Central Park with the Mayor to participate in an awareness 
program for the Asian longhorned beetle, so I am very aware of 
the problem.
    Mr. Hinchey. Did you have a magnifying glass in his hand? 
He is becoming very good at this.
    Mr. Hawks. He actually had a full-scale replica of an Asian 
longhorned beetle. We did not have to have a magnifying glass.
    Mr. Hinchey. So you will go back and take another look at 
this? If you would kindly supply us with what it would take to 
get an eradication accomplished--.
    Mr. Hawks. My experts have just passed me a note that says 
we have to have 3 consecutive years with no detections before 
we can officially declare the Asian longhorned beetle 
eradicated. In light of that, it should be gone earlier than 
the dates I just told you.
    Mr. Hinchey. In the case of New York, you are saying 2009?
    Mr . Hawks. Yes, sir.
    Mr. Hinchey. If you would let us know how it can be done 
more quickly and thoroughly and effectively, I would appreciate 
it.
    Mr. Hawks. Yes, sir.
    [The information follows:]

    To achieve Asian longhorned beetle (ALB) eradication before 
2012 in New York State (NYS), we would need to conduct 
immediate intensive surveys of all host trees within 1.5 miles 
of an infested tree. This represents protocol-level surveys. We 
would remove all positive trees, greatly suppressing the 
overall ALB populaton and reducing the likelihood of further 
spread. The results of these surveys would help us determine 
where tree removal and chemical treatment should be conducted 
in later years.
    Currently available funding through appropriated and 
carryover sources enables, us to conduct regulatory, tree 
removal, restoration, and ground survey activities in NYS. 
These ground surveys, however, do not use the most effective 
survey methodology and are far from protocol-level surveys. In 
addition, this funding level does not allow for treatments in 
NYS to subdue ALB populations. As a result, the program would 
need additional funds in FY 2003 to conduct a complete survey 
and treatment program at protocol levels in NYS. This type 
program would lead to timely detections and treatments of any 
infestations. We expect these surveys to reveal additional 
infested areas requiring treatment. ALB funds in the FY 2004 
President's Budget would allow protocol-level survey and 
treatment activities in Manhattan and Islip, but not in any 
other locations in NYS.
    Even with additional funding in FY 2003, though, we would 
not significantly alter our eradication timeline. This is 
because research and expertise from USDA scientists and program 
managers indicate at least three years of treatment after the 
detection of an infested area. An additional four years of 
post-treatment surveys is then needed to verify that we have 
successfully eradicated the pest. If we do not find a newly 
infested area in NYS after FY 2003, we could possible declare 
eradication by FY 2010. However, this prospect is doubtful 
given that we were not able to conduct a complete survey and 
treatment program in NYS in FY 2002 and that some areas in the 
quarantined areas in New York City and Long Island have not 
been surveyed at all.

              NATIONWIDE ANIMAL DISEASE DIAGNOSTIC SYSTEM

    Mr. Hinchey. I would just like to ask a question about the 
foreign-American disease nationwide diagnostic laboratory 
system.
    We focused on this last year because of the foot-and-mouth 
disease and bovine spongiform encephalopathy, outbreaks that 
swept through Great Britain.
    We are told that the cost of the foot-and-mouth disease 
outbreak in Great Britain was about $24 billion, $6 billion to 
the agricultural industry specifically, and on a larger scale, 
the overall cost was about $24 billion. So this is something 
that obviously is very serious.
    There is currently an outbreak of exotic Newcastle disease 
in poultry in California. We don't know where that is going to 
lead or what it is going to cost to eradicate it; but 30 years 
ago, there was a similar outbreak that ended up costing $56 
million in 1973 dollars, so it is a very substantial amount.
    I know you are trying to deal with this in a comprehensive 
way. I know this is something that you are taking very 
seriously.
    There are 28 schools of veterinary medicine with diagnostic 
laboratory capabilities located in 26 States around the 
country. There was a significant amount of money, I think about 
$20 million or $20.6 million, in the homeland security 
supplemental bill for these Labs.
    To what extent are you working with these facilities at the 
28 veterinary schools, to try to incorporate them into the plan 
and use their expertise?
    Mr. Acord. We have tried to develop a laboratory network so 
that we have the surge capacity to address diagnostic needs 
during an animal disease outbreak. We have tried to deal with 
these laboratories on the State level. Some of them are State 
laboratories, and some are State laboratories but also part of 
Colleges of veterinary medicine.
    We view these laboratories as being a very, very important 
part of our strategy to increase our diagnostic capacity. We 
expect that we will continue to work with these laboratories, 
keeping their personnel trained and helping ensure that they 
are there whenever we need the surge capacity in the event of 
an outbreak, such as Newcastle disease. We are using the 
laboratories in California to address the exotic Newcastle 
disease outbreak now.
    Mr. Hinchey. One last question, Mr. Chairman. Are you 
spending any money at those veterinary schools, to equip them, 
to staff them, to train people in the diagnostic techniques 
that are going to be required to deal with this problem in the 
future? Are you doing that presently?
    Mr. Acord. As part of the money that we received in the 
Homeland Security Supplemental, 2 years ago, we had an initial 
outlay of funds for those laboratories for that purpose. We 
don't have anything in the 2004 request, nor did we have 
anything in the 2003 request that would address additional 
equipment needs.
    Mr. Hinchey. Okay. Thank you very much.
    Mr. Bonilla. Thank you, Mr. Hinchey.

                       COUNTRY OF ORIGIN LABELING

    Mr. Hawks, I want to get back to the labeling issue and the 
estimate of the $2 billion. This does not include--that is all 
for recordkeeping, but it does not include any potential costs 
for changes in physical structures, personnel, or other aspects 
of business operations to segregate and maintain the identity 
of products.
    So we are talking about--recordkeeping is just one part of 
this. This is a big deal. What is the projection for something 
like that?
    Mr. Hawks. Well, we were charged to just estimate costs 
under the Paperwork Reduction Act. That is the part that we did 
to develop the $1.9 billion estimate. Obviously there are other 
costs associated with all of the program requirements.
    These costs will better understood as we continue to go 
around the country. The Secretary announced that we would be 
having listening sessions around the country--going out and 
hearing everybody's concerns. We will be looking at that as we 
move forward.
    Mr. Bonilla. Is it your expectation--I know that, again, it 
is a little outside of your jurisdiction, but this could be a 
monumental cost. Is that not a reasonable speculation?
    Mr. Hawks. There are people on both sides of this issue. I 
will have to share with you, Mr. Chairman, one day about 2 
weeks ago I had a group in and they were really hammering on me 
hard telling me that this cost is entirely too high. Then that 
afternoon I had a group come in and tell me that the cost was 
entirely too low.
    So obviously, we have to try to sort all of this out.
    Mr. Bonilla. I understand that there are forces pulling 
both ways on this issue every day.
    Mr. Hawks. There sure are. I think it is our responsibility 
to stay in the middle and try to hear all sides.
    Mr. Bonilla. The complexities in the way this law was 
written--again, I ask just for your view on this, if you would 
care to express it, that it would be perhaps wiser to start 
from scratch in this country on the labeling law, because it is 
just too complicated. It is too hard to get a grasp of this, 
the way it is written now.
    Mr. Hawks. Mr. Chairman, it is my responsibility to carry 
out the laws as you write them here. I would not care to 
suggest to you how you do your work.
    Mr. Bonilla. You are very good, Mr. Hawks. I have always 
been impressed with you.
    Ms. Kaptur.

                 RATE OF INVASIVE SPECIES INTRODUCTIONS

    Ms. Kaptur. Thank you, Mr. Chairman.
    Mr. Acord, if I were to say to you, when we do the trade 
accounts of the government of the United States on an annual 
basis, we track the difference between imports and exports, and 
we show a trade deficit. We can show imports coming in, we can 
show exports going out.
    If I were to ask you in APHIS to document by decade the 
number of pests and critters coming over our border and how you 
label them and add them up, what would the last 30 years show? 
Is it a flat set of bar graphs, is it increasing? Do you divide 
it by insect versus fungi?
    How do you tell me, as a Member of Congress, what has been 
happening at the border, and in terms of our security from 
invasion by these invasive species from the outside? Give us a 
little historical context here.
    Mr. Hawks. Ms. Kaptur, I would answer this, but since you 
said it was 30 years, I should let the elder statesman.
    Mr. Acord. Thank you. It feels like it is 30 sometimes in 1 
year.
    Well, I don't know that we have looked at this in a 
historical context. We know that certain introductions came 
from packing material or from a traveler bringing something in.
    That is the common belief, for example, as to the way in 
which citrus canker was introduced into Florida. We know that 
we have the Asian longhorned beetle and the Emerald Ash Borer 
from solid wood packing material. We know that we have 
incursions of Medfly in California that usually come from 
Hawaii or Mexico; they have in the past.
    Almost everything that we have addressed in terms of these 
kinds of pests or diseases over the last 30 years, have been 
accidental introductions.
    Frankly, there have not been that many of them compared to 
the number of exports coming into this country.
    Ms. Kaptur. But what I am saying is that my sense, even for 
the region I come from, is that there is an acceleratingrate of 
introduction of invasive species. Now, maybe it is only in the Midwest. 
We used to only have to worry about gypsy moths. We have the Asian 
longhorned beetle now, and we have this new Emerald Ash Borer.
    With this West Nile virus--I represent the Toledo Zoo, and 
it has to be one of the maybe six finest zoos in this country. 
We have animals die at the zoo from this West Nile virus. This 
has never happened before.
    I am asking you for a judgment about what is going on in 
this country, how do you measure it. I can ask an oil executive 
how his profits are. What about APHIS? Is it all just kind of 
fuzzy and not clear?
    Let us look at 1970 and what came over the border. Let us 
look at 1975, and decade by decade. What is happening to us?
    Mr. Acord. We could easily go back and document the 
introductions of any particular pest or disease we have had in 
any particular year. I think you will find the number to be, in 
terms of agricultural pests or diseases, relatively small.
    West Nile, we believe, came into New York through an 
infected human. When you put that in the context of 
agriculture, any time people move, you have a chance of some 
pest or disease moving with that person. Whether it is a public 
health concern or agriculture concern, there is always a risk 
of some movement taking place every time a person moves from 
one country to another. We do not get to a zero risk game here.
    We would be able to go back and document for the last 20 
years, at least, or I can do that from memory; maybe 30, I have 
been here that long.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
    Ms. Kaptur. I know we had Karnal Bunt a couple of years 
ago. Can you also document the cost of remediation?
    Mr. Acord. I think we can do that.
    Ms. Kaptur. All right. I would appreciate that very much. 
My gut tells me that it is going up, and the costs are going up 
beyond anything that we have seen before.
    Maybe that is an incorrect assumption. Maybe I don't have 
all the facts. But I have never had Governors coming to me from 
these different Midwestern States. It has never happened 
before.
    Mr. Acord. I think if you were to chart it in relation to 
our exports of agricultural commodities, you would find it to 
be a very, very small percentage, if you are just looking at 
the trade issue.
    Ms. Kaptur. That is not the question I am asking. I am 
asking, on the invasive species themselves, what are their 
names and what are the biological categories in which they fit. 
In other words, is it an insect, is it a virus, is it a fungus. 
However the scientists over there arrange them by category, 
that is how I would like to receive them.
    If you send a probe of something over to Davis, California, 
obviously you have a way that you figure out what to call this 
thing.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
        
    Mr. Acord. We can do that.
    Ms. Kaptur. Mr. Hawks, did you have a comment on that in 
this round?
    Mr. Hawks. No.
    Ms. Kaptur. All right. My time is up. I will save 
additional questions for later.
    Mr. Bonilla. Mr. Boyd.

                            COST SHARE RULE

    Mr. Boyd. Thank you, Mr. Chairman.
    Secretary Hawks, I want to make sure that I understood. You 
said you could provide this committee with the information on 
the percentages that you are assuming that will be in the rule 
that you have used to develop this budget?
    Mr. Hawks. Yes, sir, we can provide you with the 
percentages used in this budget.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
        MEDITERRANEAN FRUIT FLY COST SHARING

    Mr. Boyd. Okay. Thank you, sir.
    My next question really goes to that, to some extent. That 
is, that I noticed that you are seeking much greater matching 
funds for the Mediterranean fruit fly program. I know that some 
of the States--and my State is developing its budget as we 
speak, are very hard pressed financially.
    Have you had conversations with the States? They willnot be 
caught off guard here, will they?
    Mr. Hawks. No, sir, I don't think the States will be caught 
off guard.
    Mr. Boyd. You have had conversations with their 
agricultural folks?
    Mr. Hawks. Yes. I will add this to the agenda. I have a 
conference call tomorrow with the California, Florida, and 
Texas agriculture commissioners, so I will address that with 
them.
    Mr. Boyd. Thank you.
    Thank you, Mr. Chairman.
    Mr. Bonilla. Thank you, Mr. Boyd.
    Mr. Farr.

                            ORGANIC LABELING

    Mr. Farr. Thank you, Mr. Chairman. I would comment on that 
organic label. I was involved with this in the legislature. I 
have found that the growers of fresh fruits and vegetables are 
very interested in seeing that label.
    Before you look at the costs where people are saying it 
cannot be implemented, you ought to also converse with people 
like Whole Foods that are implementing it----
    Mr. Hawks. I would----
    Mr. Farr. To see how they are able to do it without having 
it be so expensive.
    My question goes back to, again, the Rule 771. You have 
clarified that if a livestock producer does not--can come to 
you not using organic feeds and still claim that the meat is 
organic--but you have another tool in your toolbox. That is 
that you can also ban that situation, because that feed may 
have GMOs. Congress did not speak to that issue, they only 
spoke to the issue of cost. The rule still stands as far as no 
GMOs.
    So I want you to make sure that you look into the feed, as 
to whether they have GMOs in there. If so, you can stop what I 
think is the irresponsible labeling or irrational or illegal 
labeling as to organic. I would hope you would use that.

              IRRADIATED FRUIT AND FRUIT FLY INTRODUCTIONS

    Lastly, on this question I have asked about allowing these 
33 States to have fresh fruits and vegetables come in that are 
not irradiated, I understand that it has been requested on 
several occasions that APHIS produce the infestation risk 
assessments. So far, only four out of the 11 species are 
covered in the rule: the Med, the Mexican, the Spokay, and the 
South American fruit flies.
    I understand that the risk assessments for these fruit 
flies say there is a medium risk for infestation in Oklahoma 
and Arkansas, a medium risk for just four, and we don't know 
what the others say. Those are two States that can bring in 
unirradiated fruits and vegetables.
    So you see, therein is the kind of questioning. Are the 
right hand and left hand here in sync? Are we adopting 
exceptions to the rule that are going to put neighboring States 
at high risk?
    Mr. Hawks. Mr. Farr, I will have to confess that we cannot 
figure out which rule you are referring to. I would be happy to 
respond in writing to questions and concerns that you have. We 
are not aware of any situation like that.
    Mr. Farr. I will give it all to you. It is right here.
    Mr. Hawks. Okay.
    Mr. Farr. Can you respond to us?
    Mr. Hawks. Yes, sir.
    Mr. Bonilla. Go right ahead.
    Mr. Farr. I am finished.
    Mr. Bonilla. That is worth noting.
    Mr. Hinchey.

                         PESTICIDE DATA PROGRAM

    Mr. Hinchey. I wanted to ask you a question or two about 
the pesticide data program.
    This is important because people are concerned about 
residues of pesticides on fruits and vegetables. There is a 
substantial amount of evidence to indicate that overexposure to 
these pesticides can cause various kinds of illness. There is a 
big controversy in New York with regard to high rates of breast 
cancer and concern that exposure to pesticides in certain areas 
might be a cause.
    The pesticide data program is very important, and you are 
apparently doing this testing in a fairly comprehensive way. 
You are doing a lot of sampling, and even indicating that the 
sampling is increasing.
    Your data show that while only a tiny percentage of the 
inspections that were carried out indicated the presence of 
pesticides that exceeded the standards, pesticide residues were 
found on 56 percent of the fruits and vegetables that were 
sampled.
    Mr. Yates. That is correct.
    Mr. Hinchey. How do you determine what the acceptable level 
is?
    Mr. Yates. Those numbers are set by EPA. The purpose of 
this program in the first place was to aid in the registration 
of minor-use pesticides for those crops that are not the big 
crops we are familiar with, such as cotton, rice, feed grains--
these other crops need tools to control pests just like the 
major crops do.
    When this program was put in place in 1991, it enabled USDA 
and EPA to see exactly what the exposure was based on the tests 
that we do on the fruits and vegetables available to consumers. 
It is shown throughout this program that those levels are far 
below what had been estimated in the past. We are sampling and 
testing in 10 States. Those 10 States are designed to represent 
50 percent of the population of the Nation, so it should 
represent 50 percent of the consumers.
    When you are testing in parts per billion, against the 
allowable rates set by EPA, we are falling far, far below those 
rates. There is an occasion where there might be drift from one 
crop to another--where a pesticide that is not allowed on a 
certain crop could end up there--those things are caught by 
this testing program.
    I farm in California, so I fully understand the importance 
of this program. This is a model program. They are looking at 
this program around the world as to how successful it has been 
here in the United States in assuring the consumer as to what 
levels agriculture actually uses in their crop care. Like I 
said before, we found out that they are doing a tremendous job 
in applying the crop care they need to protect the crops for 
the food of this country.
    Mr. Hinchey. I expect that everyone is doing that. I am 
concerned about how these decisions are arrived at, and how we 
have determined what level of protection is sufficient.
    Mr. Yates. It is a complicated process where EPA has 
figured the risk cup, as they call it. They look at 
theaccumulative exposures, and if a pesticide overflows that risk cup, 
then they begin to pull back the registrations on how it can be used.
    This is a question really that you could follow up with EPA 
as to how they have figured that allowable level.
    Mr. Hinchey. I will do that.
    Mr. Yates. Cumulative risk is what they are looking at on 
the total exposure to the public population.
    Mr. Hinchey. You are also doing inspections on drinking 
water supplies?
    Mr. Yates. That is correct.
    Mr. Hinchey. Can you tell me a little bit about that, what 
you are doing and what you are finding?
    Mr. Yates. We really have not found anything. We have been 
working in California, New York, Colorado, Kansas, and Texas. 
We are going to expand that testing program. It is critically 
important as we move through the times that we are in today.
    I think we have been very fortunate to find that our 
drinking water is fairly safe.
    Mr. Hinchey. From pesticides, in this particular case?
    Mr. Yates. Yes.
    Mr. Hinchey. You are asking for a reduction in your budget 
for the pesticide data program, something like $87,000. Why is 
that? Isn't this a program that ought to be expanding? In fact, 
you are expanding it. How are you going to do that with less 
money than you had?
    Mr. Yates. That is really a bookkeeping issue. We are 
proposing to fund the program at the President's FY2003 request 
level. It is not a major issue.
    Mr. Hinchey. I appreciate it may not be a major issue, but 
it just strikes me as curious how this program, which is being 
expanded to be more comprehensive, can be accomplished with 
less money next year than you had last year.
    Mr. Yates. Additional money was put into our fiscal year 
2003 budget, above the 2003 President's budget request. We 
support the President's budget for 2004.
    Mr. Hinchey. I'm sorry, sir?
    Mr. Yates. Additional water testing money was put into our 
budget last year. For fiscal year 2004, we are proposing the 
President's 2003 budget level.
    Mr. Hinchey. Right, of course. Okay. But we are here to try 
to understand how much money is needed for specific programs 
and how that is working, and I would like to continue this 
conversation with you.
    I still don't understand how we are going to do more of 
what we are doing, and to do it more comprehensively and more 
effectively, with less money. Maybe after you have had some 
time to think about it----
    Mr. Yates. We would be glad to respond to you.
    Mr. Hinchey. Give me another answer. Thank you.
    [The information follows:]

    The funding requested for fiscal year 2004 will enable AMS 
to continue to collect and analyze pesticide data. The enacted 
appropriations bill for fiscal year 2003 provided an additional 
$1 million to the Pesticide Data Program for water testing. The 
Department is proposing the funding level for this program 
return to the President's fiscal year 2003 budget request 
level.

    Mr. Bonilla. Mr. Hinchey, do you have additional questions? 
Because I am going to yield to Ms. Kaptur and let her wrap it 
up, unless you have something.
    Mr. Hinchey. I do not.
    Mr. Bonilla. Thank you.
    Ms. Kaptur, I will let you conclude the hearing.
    Ms. Kaptur. Thank you. I have a few questions here.

                            FARMERS MARKETS

    Mr. Yates, last year we talked about equipping the 
Department of Agriculture's farmers market with the EBT. Are 
you moving along on that?
    Mr. Yates. We have not done that yet. The 7 years of the 
farmers markets at USDA have been very successful. We will be 
launching that farmer's market here again very soon. A lot of 
people actively purchase products there, and we have farmers 
come from all over the country and all over the area to market 
their products. It is quite a jovial and happy atmosphere that 
takes place in that marketplace. We are happy to have it there.
    Ms. Kaptur. Do you have any efforts underway to make that 
technology available there? Would you need any authority from 
us to do it?
    Mr. Yates. I don't know that we have begun to look at that. 
Let me get back to you on that, Ms. Kaptur. I would be glad to.
    Ms. Kaptur. Thank you.
    [The information follows:]

    AMS has already begun to explore the feasibility of using 
EBT at the USDA Farmers Market. EBT equipment representatives 
have been contacted regarding types of hand-held equipment and 
requirements to effectively operate at the USDA Farmers Market 
such as landline telephone lines, wireless telephone lines, 
electricity, and so forth.
    AMS is also exploring the most cost-effective method to 
implement EBT technology at the USDA market. The market was 
started for educational purposes--to demonstrate an effective 
direct marketing opportunity for small farmers. For this 
reason, it would be appropriate to demonstrate EBT for food 
stamp purchases at the market. However, we are continuing to 
evaluate the cost/benefit of implementing this technology. 
Customers are predominately employees from USDA and neighboring 
federal agencies, private corporations, and tourists, at an 
average of 2,500 per week. In the seven years since the market 
has been in operation, there has only been one report from 
farmers that a customer asked about a form of payment other 
than cash. That customer was interested in WIC coupon 
redemption and the farmer, who was certified, accepted the 
customer's coupons. The customer was reportedly visiting her 
mother who worked at the Department of Energy.
    Given this current customer base, and as AMS explores 
options for implementing EBT technology, we plan to go beyond 
food stamp redemption and offer expanded services for credit 
and debit card purchases. Electronic payment is widely popular 
for both farmers/vendors and customers. It is a welcomed 
convenience for customers and generally contributes to a higher 
sales-per-transaction rate for farmers. Many existing market 
farmers/vendors already accept credit/debit card purchases at 
other markets, including Internet sales, and have orally 
expressed support for this service at the USDA market.
    Research continues on the best strategies in terms of cost, 
applicability/demonstration, and convenience. As many customers 
would most likely use electronic payments, and most farmers 
operate with minimal staff, they will likely encounter some 
difficulties if this equipment is not available at each 
vendor's stall. We will assess costs/feasibility and make a 
decision on implementation by the opening of the 2003 market 
season. We will not need any additional authority from Congress 
to implement the technology.

                               BIOENERGY

    Let me ask all of you, in the area of biofuels or 
bioenergy, what efforts have been going on at the Department 
under your jurisdiction to help to market new fuels made off 
the farm; and Ms. Reifschneider, even the use of manure and the 
methane that comes off of it for power.
    I am very interested in whether you participate in 
departmental discussions regarding America's energy future. We 
had many witnesses before us, and Mr. Dewhurst knows this, your 
secretary and the under secretary recently, where the 
Department is actually cutting its support of biofuels over $70 
million from major accounts, including research and value added 
accounts.
    Then, at the Department of Energy, the accounts that relate 
to the hydrogen fuel cell development that the President talked 
about are not fully funded, as he discussed when he came up 
here at the State of the Union, but they take the money for 
what they are doing out of the biomass accounts at the 
Department of Energy.
    So this is problematic. I support biofuels very strongly, 
and it is probably my top priority. I am just curious as to 
what you are doing at the Department from a marketing 
standpoint to help these farmers move product to market.
    Mr. Hawks. Ms. Kaptur, we actually are not involved in the 
biofuels, but Steve Dewhurst can tell you exactly who is at the 
Department.
    Ms. Kaptur. Marketing is not even involved in this?
    Mr. Hawks. No, ma'am.
    Ms. Kaptur. May I ask you, Mr. Under Secretary, isn't that 
sort of strange?
    Mr. Hawks. It may be strange, but the funds appropriated to 
this mission area are for programs to help improve the 
efficiency of marketing agricultural products. We do not 
receive funds to market any agricultural products directly.
    Mr. Dewhurst. The Congresswoman has the crosscut we do on 
the biofuels budget, and this mission area is not included in 
that crosscut. Whether it could be or not in the future, I 
don't know.
    Ms. Kaptur. Just to ask a very basic question, we have an 
industry that is being born across this country. The other day 
I picked up a magazine from John Deere, a beautiful magazine. I 
don't know if there is a Deere representative in the audience. 
If so, go back to your CEO and tell him, great job.
    It was about farm fresh energy. On the cover was a whole 
set of windmills for wind power, and then you open it up and 
there is a great shot of someone holding up the nozzle from a 
gas pump, which is actually a soybean--soy diesel pump, and 
these little soybeans are shooting out of the nozzle.
    I said, boy, what a great picture. I love that picture. I 
am going to put it up here some day.
    So the private sector is doing its share. What would we 
have to do to get the marketing division of USDA to help our 
farmers bring this product to market, and even letting the 
public know it is available?
    Mr. Hawks. Actually, from a governmental marketing 
perspective we are not involved; but we are involved in the 
oversight of market promotion and research programs. The United 
Soybean Board is actually involved in biofuel promotion. Their 
program is under our purview. The promotion is actually funded 
by producers. Those programs are involved.
    Ms. Kaptur. Mr. Under Secretary, I am going to send you 
some questions on this because I think you should be in there. 
I think the people that work with you all around the country 
should be helping you with this.
    We have to give birth to a new industry. We have 250,000 
troops sitting out in the middle of the Persian Gulf now, and 
we are going to go into a country with the second largest oil 
reserve, and we have a $60 billion trade deficit in bio-
petroleum. It gets worse every year. We import more than we 
manufacture or produce here at home.
    Every part of this government has to be involved in the 
solution to that problem. No department could be more ideally 
suited than the Department of Agriculture. So I think AMS has a 
really important role, and you particularly as Under Secretary.
    Do you have any knowledge of the national E-85 Vehicle 
Coalition that is being put together by General Motors, and are 
you participating in that?
    Mr. Hawks. I do not have any direct knowledge, but I am 
aware of it.
    Ms. Kaptur. I think it would be very important. Here we 
have a major automotive company that is in a competitive fight, 
obviously, globally, and it would be great to have USDA engaged 
with this effort. We will send you some questions along those 
lines.
    Mr. Chairman, I have a couple of other questions. Do you 
want to call on someone else or do you want me to wind down?
    Mr. Bonilla. Everyone else has concluded their questions, 
Ms. Kaptur. You may continue.
    Ms. Kaptur. On the use of surplus commodities, last year we 
had nearly a 2-year supply of dry milk in storage. Has that 
situation changed?
    Mr. Hawks. Actually, that is handled out of the Farm 
Service Agency. I think the answer to that is we still have a 
very similar amount in storage now.
    Ms. Kaptur. All right. And then finally for Ms. 
Reifschneider, I wanted to ask you if the Department is 
favorably inclined toward a bill that we introduced last year, 
which was numbered H.R. 231, and this year 582, to expand your 
authority in dealing with the poultry industry.
    Ms. Reifschneider. I am familiar with the bill, and 
historically the Department has supported it.
    Ms. Kaptur. Could you tell me how your authority for issues 
involving unfair and deceptive practices in the beef and pork 
production differ from your authority in matters dealing with 
poultry?
    Ms. Reifschneider. In poultry, we don't have the same 
coverage in different areas of violation. We oversee poultry in 
competition and in financial practices, but we don't in the 
area of trade practices. That means that all these violations 
go to the Department of Justice for prosecution, and not to our 
administrative law judges.
    The sanctions in poultry are limited to cease and desist 
orders. There are no civil penalties included in that. Your 
bill would expand our authorities under the Packers and 
Stockyards Act, to cover the poultry industry.

                            PORK REFERENDUM

    Ms. Kaptur. Thank you.
    Mr. Yates, I wanted to go back to two very quick questions. 
If pork producers are interested in the referendum that the 
Department will be conducting on the pork check-off program, 
where can they go for information about it, and how will the 
survey be conducted?
    Mr. Yates. They can go to our Web site, AMS, to get the 
information [www.usda.ams.gov].
    Ms. Kaptur. The AMS Web site?
    Mr. Yates. Yes.
    Ms. Kaptur. When will that occur?
    Mr. Yates. We are going to be putting out a regulation 
rather shortly to determine what the universe is--in the 
industry prior--to going to a vote.
    Ms. Kaptur. All right.
    Mr. Yates. Identifying the universe of pork producers that 
has paid assessments per the settlement agreement with the 
National Pork Producers Council.

                        DIRECT SALES TO SCHOOLS

    Ms. Kaptur. In one of the prior rounds, we talked about the 
efforts that AMS was making to help farmers sell into our 
school nutrition programs. Could you go into a little more 
detail on that, please? We will submit all other questions for 
the record. Thank you all for your testimony today.
    Mr. Yates. Yes. We have been working with a number of farm 
groups, and most of these are small farmers. Some sell through 
farmers markets and many sell through cooperatives.
    We are helping them to determine how schools buy their 
product. They need to promote their product locally within the 
school district. You have to realize that the school district 
ends up with a fairly large block of money each year that comes 
out of food and nutrition services. They have the money locally 
to buy products that they want, so they have the choice.
    What we are trying to do is teach the farmers markets, the 
small farmers, that if they can talk to the schools and develop 
a program with them to where they can meet the needs of the 
school, then they probably could be successful in marketing 
their products to the local school districts.
    Ms. Kaptur. All right. Thank you very much, Mr. Chairman, 
and ladies and gentlemen.
    Mr. Bonilla. Thank you, Ms. Kaptur.
    This concludes our hearing today. We appreciate you all 
being here and all the hard work that you have put into the 
preparation to do this hearing. We look forward to working with 
you as we craft our appropriations bill this year.
    The subcommittee will stand adjourned until 9:30 tomorrow.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
    

                           W I T N E S S E S

                              ----------                              
                                                                   Page
Acord, B. R......................................................   349
Dewhurst, S. B...................................................1, 349
Hawks, William...................................................   349
Knight, B.I......................................................     1
Patterson, Gerald................................................     1
Reifschneider, Donna.............................................   349
Rey, Mark........................................................     1
Yates. A. J......................................................   349


                               I N D E X

                              ----------                              

                 Natural Resources Conservation Service

                                                                   Page
Accountability and Results Management, Status....................   124
Agency Financial and Program Accountability, Investigations of...   142
American Heritage Rivers.........................................39, 85
Animal Agriculture and Production................................    86
Animal Feeding Operations (AFO):                                     86
    Technical Assistance........................................90, 112
    Unified Strategy.............................................   148
Best Farming Practices...........................................    35
Biofuels.........................................................   163
Biofuels and Bioproducts, Use of.................................   151
Biographies: Mark Rey, Under Secretary, Natural Resources & 
  Environment....................................................    11
Budget for Under Secretaries.....................................    11
Colleges and Universities Agreements.............................   102
Concentrated Animal Feeding Operations, GAO Review...............   149
Conservation Compliance..........................................    47
Conservation Operations (CO):
    Allocations of Funds.........................................   100
    Funding Request..............................................   123
    Headquarters Funding.........................................   121
    Increased Funding............................................   121
Conservation Reserve Program (CRP):
    Costs-Share Policy...........................................
    Funding.....................................................34, 121
    Pilot Acreage................................................   101
Conservation Security Program...................................30, 146
Emergency Watershed Program (EWP):
    Emergency Watershed Program..................................    66
    Flood Plain Easements........................................    99
Endangered Species Act...........................................    43
Environmental Quality Incentive Program (EQIP):
    Allocation...................................................80, 88
    Apportionment, Current Status................................   142
    Eligible Acreage.............................................    89
    Improved Features............................................   141
    Priority/Non Priority Area Funding...........................    84
Explanatory Notes..............................................165, 182
Farm Bill:
    Conservation Programs........................................    32
    Funding by State for Conservation Programs...................   125
    Impact.......................................................   161
    Legislative Language.........................................    43
    Technical Assistance Funding............................30, 40, 146
Farmland Protection Program (FPP): Financial Resource Targeting..    72
Flood Plain Easements............................................    60
Foreign Assignments..............................................    82
Forest Service Promotion of Biofuels.............................   152
Forestry Practices, Missouri.....................................    37
GIS Activities...................................................    51
Grazing Lands:
    Funding......................................................78, 80
    Specialists..................................................    78
    Technical Assistance Staff Years.............................    78
Grazing Lands Conservation Initiative (GLCI), Funding...........86, 110
Headquarters Staff...............................................    47
Hypoxia in the Gulf of Mexico....................................    77
Incentive Program................................................   149
Information Technology...........................................   114
International Work...............................................   163
Land Resources, Stewardship......................................   153
Manure Management................................................    33
National Grazing Land Technology Institute Funding...............    79
National Grazing Lands...........................................    79
National Soil Information System.................................    52
Northwest Salmon Recovery Initiative.............................    84
NRCS:
    Office Closures..............................................   115
    Personnel Actions............................................   108
    Staff Year Table.............................................48, 88
    Vehicle Fleet and Alternative Fuels..........................   152
Object Class Breakdowns..........................................    91
On-Farm Assessments..............................................    34
Opening Remarks by Mr. Bonilla...................................     1
Outsourcing, Competitive.........................................   143
Outsourcing Status...............................................   124
Performance Goal Pilot Project...................................   114
Plant Materials Centers (PMC):
    Funding......................................................    53
    New Releases.................................................    54
    Royalty Collection...........................................    59
Program Evaluation Studies.......................................    61
Project Implementation:
    Conservation Operations......................................   143
    Watershed and Flood Prevention Operations....................   144
Resource Conservation & Development (RC&D):
    Administrative Costs.........................................   137
    Applicant Areas..............................................   112
    Applications Pending Approval...............................83, 111
    Areas Funded.................................................   121
    Council Funding............................................109, 111
    Council's Role...............................................   109
    Federal and Non-Federal Assistance...........................    69
    Full Support.................................................   138
    Funding New RC&D Areas.......................................   139
    Funding Request........................................83, 114, 123
    Nationwide Coverage..........................................   140
    Offices and Closures.........................................   137
    Resource Conservation & Development....................70, 154, 164
Reimbursements for Soil Surveys..................................    53
Reprogramming:
    Savings, Other Programs......................................    32
    Small Watersheds, Florida and Virginia.......................    41
Soil Surveys:
    Completed and Published......................................    51
    Funding and Staffing.........................................    83
    State Listing................................................   115
Staffing Enhancements............................................   150
State and Local Funding......................................49, 60, 91
Sustainable Agriculture..........................................   161
Technical Assistance for all Conservation Programs...............    50
Technical Centers................................................    48
Texas Pilot Program..............................................   122
Tipton Creek Watershed...........................................   149
Urban Encroachment...............................................   154
Water Quality:
    Funding......................................................    73
    Incentives...................................................    72
    Regional Projects............................................74, 76
Watershed and Flood Prevention Operations (W&FPO):
    Geographic Breakdown.........................................    62
    Unobligated Balance..........................................    64
Watersheds:
    Allocation to Headquarters...................................
    Current Status of PL-534 Projects............................    62
    Watershed Projects Backlog..................................69, 110
    Watershed Rehabilitation....................................67, 122
Wetlands Reserve Program (WRP):
    Acres.......................................................46, 102
    Staffing and Costs..........................................47, 102
Wildlife Habitats................................................    33
Written Testimony:
    Statement of Mark Rey........................................  3, 5
    Statement of Bruce I. Knight.................................12, 15

               Animal and Plant Health Inspection Service

Agricultural Quarantine Inspection:
    Airport Resources Data......................................699-707
    Automatic Targeting System...................................   709
    Funding......................................................   841
    Overtime Pay.................................................   739
    Program Staff Years/Staff Years........................698, 840-841
    Safeguarding.................................................   708
    User Fees/User Fees Schedule...........699, 708, 709, 742, 906, 907
Ames Facility....................................................   849
Animal and Plant Health Regulatory Enforcement...................   733
Animal Health Safeguarding System...............................849-850
Animal Import Centers............................................   730
Animal Surveillance.............................................853-854
Animal Welfare/Animal Care:
    Exhibitors and Transportation Guide..........................   648
    Illegal Animal Fighting......................................   453
    Inspection Activities......................................648, 650
    Number of Care Facilities and Number of Staff Years, by Stat647-648
    Regulatory Enforcement......................................648-649
    Animal Welfare Report, Fiscal Year 2001.....................651-690
    Staff years.................................................647-649
Appreciation of APHIS' Work.....................................451-452
Argentine Citrus................................................741-742
Asian Longhorned Betle (ALB):
    Eradication.......................................472-474, 739, 854
    Funding.....................................................457-458
Automated Targeting System (see also, Information Technology)....   709
Avian Influenza..................................................   894
Aviation Operations and Safety.............................742-743, 857
Bioenergy.......................................................488-490
Biographical Sketches:
    William T. Hawks, Under Secretary of Agriculture, Marketing 
      and Regulatory Programs...................................374-375
    Selection of Bobby R. Acord as the Animal and Plant Health 
      Inspection Service Administrator...........................   410
Biosecurity......................................................   893
Biotechnology (see also, Genetic Engineering):
    Animal Biotechnology/Animal-related Biotechnology............   863
    Biotechnology-derived Products...............................   863
    Staffing and Funding.........................................   731
Biotechnology Regulatory Services:
    Inspection and Compliance Activities........................863-864
    Staffing and Funding.........................................   731
Boll Weevil:
    Eradication Program....................................697, 747-748
    Funding......................................................   696
    Loan Program.................................................   697
    Referenda....................................................   696
Border Stations..................................................   737
Bovine Tuberculosis (see also, Tuberculosis....................697, 857
    High Risk Dairy Herds........................................   698
    Importation of Feedlot Animals...............................   697
Brown Citrus Aphid...............................................   732
Brown Tree Snake.................................................   714
Brucellosis......................................................   691
Cattle Ticks:
    Eradication Program........................................743, 850
    Medicated Bait...............................................   710
Chronic Wasting Disease:
    Contract Laboratories (see also, Contracts with Private 
      Laboratories)........................................839, 895-896
    Correspondence, from Marshfield Clinic regarding CWD........902-905
    Disease Testing.............................................838-839
    Eradication Program.........................................850-852
    Marshfield Clinic...........................................900-901
    Publication Compliance.....................................897, 899
    Public Laboratory Testing for CWD...........................897-900
    Wildlife Services Role......................................860-861
Citrus Canker:
    Citrus Nursery Compensation.................................452-453
    Cooperative Funding.........................................854-855
    Eradication..................................................   452
    Funding......................................................   832
Classical Swine Fever (see also, FAD).....................852, 889, 892
Commodity Credit Corporation (see also, Emergency Fund Transfers/
  Funding):
    Emergency Fund Transfe693, 719-724, 744, 748, 847-848, 853, 884-885
    Transmittal Letter on 2002 Transfers........................841-846
Congressional Directives...................................832-838, 864
Contingency Funds (see also, Emergency Fund Transfers/Fundi720-724, 729
Contracts with Private Laboratories (see also, CWD)....895-896, 897-900
Cormorants in the Great Lakes Area..............................889-891
Cost Share:
    Cost Share Rule....................................469-470, 482-483
    Invasive Species............................................886-887
    Mediterranean Fruit Fly Cost Sharing.........................   484
    Wildlife Services (WS) (see also, WS)........................   910
Direct Sales to Schools.........................................490-491
Emerald Ash Borer (EAB):
    Correspondence from Governor Jennifer Granholm (see also, 
      Exhibits..................................................461-462
    Executive Summary, EAB National Eradication Strategy........463-466
    Homeowner Concerns...........................................   885
    In Michigan/Ohio............................................459-460
Emergency Fund Transfers (see a693, 719-724, 744, 748, 847-848, 884-885
Exotic Newcastle Disease........................................852-853
Experimental Use Permit..........................................   749
Explanatory Notes..............................................911-1047
Fines:
    At Ports of Entry............................................   467
    In Violation of the Plant Protection Act and the Animal 
      Health Protection Act.....................................865-866
Federal/Non-Federal Dollars.....................................727-728
Federal Noxious Weeds (see also, Noxious Weeds).................869-870
Fire Ants (see also, Imported Fire Ants).........................   737
Foot-and-Mouth Disease (FMD):
    Cost Share Eradication Program...............................   692
    FMD Vaccine Bank.............................................   853
Foreign Animal Diseases (FAD):
    FAD Diagnosis Training......................................733-735
    FAD Funding Requests/Program Requests.......................748-749
    FAD--Classical Swine Fever on the Island of Hispanola........   852
Fruit Fly (see also, Mediterranean Fruit Fly):
    Irradiated Fruit and Medfly/Fruit Fly Introductions....472, 484-485
    Mediterranean Fruit Fly Cost Sharing.........................   484
Genetic Engineering (see also, Biotechnology):
    Field Testing Genetically Engineered Plants..................   459
    Genetically Modified Organisms and Trade.....................   459
Germplasm Quarantine Center......................................   713
Glassy-winged Sharpshooter (see also, Pierce's Disease)....747, 855-856
Homeland Security:
    Biological Agents and Toxins................................870-871
    Bioterrorism Threats to Crops and Animals...................839-840
    Department of Homeland Security and APHIS Budgets............   451
    Division of Authority........................................   451
    National Plant Pest Pathogens List...........................   869
    National Priority Pest List.................................868-869
    Regulated Plant Pest List...................................872-882
    Transfer of APHIS Functions to the DHS....450-451, 840-841, 906-908
Import/Export:
    Trust Fund Agreements.......................................740-741
    User Fees...................................................730-731
Imported Fire Ants (see also, Fire Ants).........................   737
Information Technology:
    Animal and Animal Product Tracking (see also, Tracking 
      Animals and Animal Products)..............................892-893
    Automatic Targeting System...................................   709
    Information Systems Acquisition Project.....................697-698
    Procurement Efficiencies.....................................   838
International Programs:
    Overseas Locations...........................................   726
    Spending by Country..........................................   731
Integrated Systems Acquisition Project...........................   697
Invasive Species:
    Cost Share (see also, Cost Share)...........................886-887
    Introductions and Remediation.................446-447, 467, 865-884
    Invasive Species and Trade..................................447-450
    Invasive Species at U.S./Mexico Border.......................   445
    Managing Conflicts with Invasive Species....................857-858
    Rate of Invasive Species Introductions......................475-482
    U.S. News and World Report Article, Science and Technology: 
      ``A long, slow Autumn''...................................448-449
Institute for International Cooperation in Animal Biologics.....735-737
Irradiated Fruit and Medfly/Fruit Fly Introductions........472, 484-485
Karnal Bunt.....................................................712-713
Kudzu............................................................   738
Mediterranean Fruit Fly (see also, Fruit Fly):
    Funding......................................................   693
    Irradiated Fruit and Medfly/Fruit Fly Introductions....472, 484-485
    Mediterranean Fruit Fly Cost Sharing.........................   484
Mexican Avocado.................................................848-849
Mexico Trade Issues..............................................   458
National Animal Health Monitoring System Program.................   713
National Monitoring and Residue Analysis Laboratory..............   733
National Wildlife Research Center................................   860
National Zoo Inspection..........................................   445
Nationwide Animal Disease Diagnostic System.....................474-475
Nonlethal Methods...............................................887-888
Noxious Weeds (see Also Federal Noxious Weeds).............696, 869-870
Palmer Alaska Facility (See also, Seed Laboratory)...............   747
Pests and Diseases Outbreaks in 2002............................714-719
Phytosanitry/Sanitary Trade Issues (see also Sanitary/
  Phytosanitary Trade Issues and Trade Issues)...................   848
Pierce's Disease (see also Glassy-winged Sharpshooter).....747, 855-856
Pinks Bollworm..................................................729-730
Plant Pests......................................................   867
Plum Island Animal Disease Center...............................889-908
Post Entry Plant Quarantine Facility.............................   747
Poultry Shipments to the Ukraine and Russia.....................888-889
Predator Control.................................................   861
Pseudorabies....................................................693-695
Questions Submitted for the Record:
    Chairman Bonilla............................................647-864
    Ms. Kaptur..................................................865-891
    Ms. DeLauro..................................................   894
    Mr. Goodlatte...............................................906-908
    Mr. Latham..................................................892-893
    Mr. Moran...................................................909-910
    Mr. Obey....................................................895-905
Rabies:
    Funding.....................................................746-747
    National Rabies Management Plan...........732-733, 745-746, 859-860
Sanitary/Phytosanitary Trade Issues (see also, Phytosanitary/
  Sanitary Trade Issues and Trade Issues)........................   848
Scrapie:
    Eradication.................................................856-857
    Funding.....................................................709-710
Screwworm........................................................   841
Seed Laboratory (see also, Palmer Alaska Facility)...............   747
Silverleaf Whitefly:
    Activities...................................................   730
    Funding......................................................   738
Supplemental Appropriations Act 2001.............................   862
Swine Brucellosis (see also, Brucellosis)........................   691
Tracking Animals and Animal Products(see also, Animal and Animal 
  Product Tracking).............................................892-893
Trade Issues:
    Mexico Trade Issues..........................................   458
    Sanitary/Phytosanitary.......................................   848
Training........................................................733-735
Trap Testing.....................................................   738
Travel, Fiscal Year 2002........................................749-832
Tropical Bont Tick:
    Control Efforts..............................................   889
    Funding......................................................   725
    Status of Joint Project......................................   724
Tuberculosis (see also, Bovine Tuberculosis....................697, 857
    High Risk Dairy Herds........................................   697
    Importation of Feedlot Animals...............................   697
VAC-TRAC Verification System.....................................   742
Veterinary Diagnostics:
    Training....................................................733-735
    User Fees...................................................730-731
User Fees:
    Agricultural Quarantine Inspection......699, 708, 709, 742, 906-907
    Import/Export...............................................730-731
    Veterinary Diagnostic.......................................730-731
West Nile Virus.................................................861-862
Wildlife Predation..............................................744-745
Wildlife Services:
    Aerial Operations Safety Initiative..........................   857
    Cooperative Agreements.............................701-711, 909-910
    Funding (see also, Cost Share)..............................909-910
    Managing Conflicts with Invasive Species....................857-859
    Rabies......................................................859-860
    Role in Chronic Wasting Disease.............................860-861
    Role in West Nile Virus.....................................861-862
Wolf Control.....................................................   861
Written Statements:
    Bobby R. Acord, Administrator, Animal and Plant Health 
      Inspection Service........................................376-409
    William T. Hawks, Under Secretary of Agriculture, Marketing 
      and Regulatory Programs...................................353-373

                     Agricultural Marketing Service

Administrative Expenses..........................................   524
ADP Purchases....................................................   528
Appropriations, Fiscal Year 2003.................................   542
Biography of Administrator A.J. Yates............................   424
Biotechnology:
    International Forums.........................................   552
    Program Status...............................................   553
Country of Origin Labeling
    Costs........................................................   545
    Implementation.............................................456, 475
    Verification.................................................   548
Direct Marketing and Food Assistance Programs....................   555
Direct Sales to Schools..........................................   490
Ethanol Fueled Vehicles..........................................   555
Explanatory Notes:
    Original.....................................................   572
    Revised......................................................   562
Farmers Markets...........................................467, 487, 555
Federal Milk Order Program.......................................   541
Federal Seed Act.................................................   514
Federal-State Marketing Improvement Program/Payments to States 
  and Possessions..............................................498, 515
Grading:
    Cotton and Tobacco.........................................504, 527
    Employees....................................................   504
    Equipment Certification......................................   534
    Fee Increases................................................   504
    Qualified through Verification Program.......................   529
Livestock Mandatory Price Reporting:
    Cost.........................................................   541
    Implementation...............................................   534
    Program Status...............................................   548
    Staffing.....................................................   498
Market News:
    International Trade Reporting................................   533
    Reports......................................................   505
Microbiological Data Program.....................................   559
OGC Services.....................................................   513
OIG Report Findings..............................................   530
Organic:
    Certification..............................................494, 559
    Feed.......................................................454, 470
    Funding......................................................   551
    Labeling.....................................................   484
    Standards....................................................   545
Other Fees.......................................................   504
Perishable Agricultural Commodities Act..........................   522
Pesticide Data:
    Costs........................................................   538
    Program....................................................485, 493
    Rapid Response...............................................   533
    Re-registrations.............................................   526
    Update.......................................................   535
Pesticide Recordkeeping Program..................................   526
Plant Variety Protection Program.................................   528
Questions Submitted for the Record:
    Chairman Bonilla.............................................   493
    Ms. Kaptur...................................................   555
    Mr. Kingston.................................................   550
    Ms. DeLauro..................................................   551
    Mr. Latham...................................................   552
    Mr. Farr.....................................................   559
Referenda........................................................   514
    Pork Referendum..............................................   490
Research and Promotion:
    Assessments..................................................   471
    Funding from FAS.............................................   513
    New Programs.................................................   530
    Port Check-off...............................................   557
    Recommendations..............................................   538
Research Cooperative Agreements..................................   531
Section 32:
    Commodity Purchases..........................................   518
    Commodity Purchases and Farmer Cooperatives..................   534
    Direct Payment Program.......................................   540
    Egg and Poultry..............................................   550
    Emergency Surplus Removal..................................516, 540
    Export Purchases.............................................   518
    Funding for Purchases......................................544, 560
    Livestock Assistance.........................................   468
    Livestock Disaster Assistance................................   555
    September Purchases..........................................   539
    Spending.....................................................   540
    State Option Contracts.......................................   538
    Summary of Pork Purchases....................................   532
    Surplus Removal..............................................   517
    Unobligated Balances.........................................   539
Standardization..................................................   502
    International Organizations..................................   552
Tobacco Spending.................................................   503
Transportation:
    Regulatory Actions...........................................   527
    Waterway.....................................................   553
Wholesale Market Development Projects............................   505
Written Statement of A.J. Yates..................................   412

        Grain Inspection, Packers and Stockyards Administration

Absorbing Pay Cost Increase...................................... 1,076
ADP Hardware/Software Purchases.............................1,063-1,064
Biography of Administrator Donna Reifschneider...................   444
Biotechnology Issues........................................1,080-1,081
Carcass:
    Measures of Quality.....................................1,068-1,069
    Merit Purchasing Technologies...........................1,066-1,067
Cartagena Protocol..........................................1,070-1,071
Competition, Fair Trade Practices, Financial Protection.......... 1,060
Corn Growers Association......................................... 1,073
Custodial Account Compliance Audits.........................1,059-1,060
Economic/Statistical Analysis.................................... 1,060
Explanatory Notes:
    Original................................................1,085-1,126
    Revised.................................................1,082-1,084
Feed Weighing, Proposed Regulation for........................... 1,064
Fees, User and Licensing......................................... 1,070
Financial Failures:
    Dealer Failures in Livestock Marketing Chain................. 1,060
    Dealer/Order Buyer........................................... 1,056
    Unrecovered Losses........................................... 1,061
Grain:
    Aflatoxin Inspections........................................ 1,054
    Exported Grain Complaints.................................... 1,054
    Facilities..............................................1,049-1,050
    Grain Dust Explosions........................................ 1,054
    Inspected and/or Weighed................................1,050-1,053
    Select Elements.............................................. 1,061
    Violation Cases.............................................. 1,062
International Monitoring Program:
    Travel..................................................1,062-1,063
Livestock:
    Anti-Competitive Behavior.................................... 1,064
    Auction Market Failures...................................... 1,057
    Complaints from Livestock Producers.......................... 1,049
    Purchased Based on Live Weight............................... 1,066
    Slaughter...............................................1,057-1,058
Mandatory Price Reporting System................................. 1,077
Meatpackers:
    Audit of Top Four...........................................455-456
    Four Firm Concentration.................................1,056-1,057
    Meatpacking Concentration.................................... 1,075
    Packer Ownership...........................1,071-1,072, 1,076-1,077
    Pilot Audit Program..............................1,069, 1,072-1,073
Meat Protein Segment of the Economy, Study on.................... 1,074
Opening Statement by Donna Reifschneider........................425-443
Packers and Stockyards Act:
    Review of the Act............................................ 1,070
    Slaughters/Processors Subject to the Act................1,058-1,059
Pesticide Data Program......................................1,061-1,062
Poultry:
    Competitive Structure of the Poultry Industry...........1,064-1,065
    Compliance Complaints...................................1,055-1,056
    Contract Authority......................................1,079-1,080
Questions Submitted for the Record:
    Chairman Bonilla............................................. 1,049
    Ms. Kaptur................................................... 1,079
    Mr. Kingston................................................. 1,074
Rapid Response Teams............................................. 1,065
Violation Report Calls........................................... 1,055
Written Statement from Donna Reifschneider......................425-443

                                  
