[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2005

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

    [The following testimonies were received by the 
Subcommittee on Agriculture, Rural Development, and Related 
Agencies for inclusion in the record. The submitted materials 
relate to the fiscal year 2005 budget request for programs 
within the subcommittee's jurisdiction.]

               Prepared Statement of the Ad Hoc Coalition

    Mr. Chairman, Members of the Subcommittee, this statement is 
respectfully submitted on behalf of the ad hoc coalition \1\ composed 
of the organizations listed below. The coalition supports sustained 
funding for the concessional sales program under Title I of Public Law 
480 at a baseline level that will ensure the continued viability of the 
program.
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    \1\ The ad hoc coalition is composed of American Maritime Congress, 
American Soybean Association, International Organization of Masters, 
Mates & Pilots, Liberty Maritime Corporation, Marine Engineers' 
Beneficial Association, Maritime Institute for Research and Industrial 
Development, National Association of Wheat Growers, National Corn 
Growers Association, National Council of Farmer Cooperatives, Sealift, 
Inc., TECO Transport Corporation, Transportation Institute, USA Dry Pea 
& Lentil Council, USA Rice Federation, U.S. Wheat Associates, Inc., and 
Wheat Export Trade Education Committee.
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    In recent years, funding appropriated for Title I has declined 
sharply. The direct appropriation to the Title I account in fiscal year 
2003 was $118 million. In fiscal year 2004, it declined to $106 
million. In the administration's fiscal year 2005 budget, the requested 
funding is just under $90 million. According to the fiscal year 2005 
USDA Budget Summary, these appropriated amounts supported a fiscal year 
2003 program level of $163 million in commodity and (separately funded) 
freight costs, and are expected to support a Title I program level 
(with an additional $38 million in carryover funding) of $197 million 
in fiscal year 2004. The administration's request for fiscal year 2005 
establishes a program level of only $123 million.
    Mr. Chairman, our coalition has noted that funding for the Title I 
account in recent years increasingly has been used to support Food for 
Progress (FFP) grants. In fiscal year 2003, for example, Title I 
funding was used under FFP authority to ship 321,000 metric tons of 
commodities, with a value of $62.4 million, to some 13 countries. While 
FFP is an essential component of our overall food aid system, the 
coalition nonetheless believes that the Foreign Agricultural Service 
(FAS) should make a determined effort to increase participation in the 
traditional Title I concessional sales program. As discussed more fully 
below, Title I has important policy objectives that are unique and 
deserving of sustained support.
    In the statement that follows, our coalition recommends aggressive 
marketing of the Title I concessional sales program, higher funding 
levels for Title I, and sustained funding for other food aid programs 
that fulfill our humanitarian obligations and promote the long-term 
interests of recipient countries in becoming commercial customers.

                 GUIDING PRINCIPLES OF FOOD AID POLICY

    Mr. Chairman, the coalition recognizes that American food 
assistance policy is well-established and founded on certain guiding 
principles, including the following:
  --Meeting America's humanitarian obligation to sustain food 
        assistance programs, U.S. participation in which should 
        constitute more than 50 percent of all food aid worldwide.
  --Employing food assistance programs as stepping stones for economic 
        growth and development.
  --Employing food assistance programs to promote respect worldwide for 
        American values and our economic system, thereby enhancing 
        goodwill toward America among disadvantaged populations that 
        may be breeding grounds for terrorism.

          THE SHARP DECLINE IN OVERALL FOOD AID PROGRAM LEVELS

    Mr. Chairman, the programs needed to implement these principles 
have enjoyed broad, bipartisan support for many decades. The strength 
of our commitment has made the United States the world's leading food 
aid supplier. In the process, American agriculture is bolstered as food 
aid recipients strengthen and stabilize their economies, ultimately 
proving to be valuable long term customers for U.S. products.
    In recent years, however, food aid shipments have declined sharply. 
In fiscal year 2000, the United States programmed more than 6.7 million 
tons of food aid to 95 countries, consisting of 35 different 
commodities with a value of $1.4 billion. In fiscal year 2001, our food 
aid program declined to 6.36 million tons of assistance to 45 
countries, valued at $1.28 billion. In fiscal year 2002, the United 
States programmed 4.67 million tons of food aid for shipment to 84 
countries. This assistance consisted of 26 different products with a 
commodity value of $1.091 billion. In fiscal year 2003, FAS reports 
that 4.56 million tons were programmed for shipment, with a commodity 
value of $1.288 billion.
    While data for fiscal year 2004 are necessarily incomplete, the 
administration's budget estimates that food aid shipments under Public 
Law 480, Titles I and II, will decline to 3.4 million metric tons of 
grain equivalent, down from 4.3 million metric tons in fiscal year 
2003. Unfortunately, as discussed below, the administration recommends 
further overall reductions in food assistance in fiscal year 2005.

            THE ADMINISTRATION'S BUDGET FOR FISCAL YEAR 2005

    The administration proposes Title I funding that would support a 
program level of only $123 million. This is well below the 
appropriation for fiscal year 2003, which supported a program level of 
$154.7 million and is even below the fiscal year 2004 appropriation, 
designed to support a program level of $132 million. Our coalition 
regrets the continued erosion of the Title I program, and believes that 
funding should be restored to levels which will ensure the program's 
viability as a flexible and significant policy initiative.
    The baseline for the Food for Peace Title II program has been 
increased from $850 million in fiscal year 2002 (and prior years) to 
$1.185 billion. The coalition supports this increase as an essential 
component of our donated food assistance to the most needy countries 
and regions in the world. As required by the 2002 Farm Bill, the 
administration has announced that it will meet the annual minimum 
tonnage level of 400,000 metric tons for that portion of the Food for 
Progress grant program carried out with CCC funding.
    Under authority provided by Section 416(b) of the Agricultural Act 
of 1949, the administration states that surplus nonfat dry milk will be 
made available for donation in fiscal year 2005, with a commodity value 
and associated costs estimated at $147 million. This represents another 
year of diminished reliance on the 416(b) program, which is CCC-funded. 
Finally, the administration has requested $75 million for the McGovern-
Dole International Food for Education and Child Nutrition Program 
(IFEP), an increase of 50 percent over the fiscal year 2004 level, but 
less than the $100 million requested by a broad-based commodities 
coalition.
    The administration's recommendations, taken together, would lead to 
further reductions in food aid. Because of the availability of 
supplemental and carryover funding in prior years, the food aid 
programmed under Public Law 480 reached 4.3 million metric tons in 
fiscal year 2003; it is estimated to decline to 3.4 million metric tons 
in the current fiscal year; and the fiscal year 2005 budget provides 
for only 3.2 million metric tons. Increases in IFEP and FFP will not 
offset the declines in the Public Law 480 and Section 416(b) programs.

         RESTORATION OF OVERALL FOOD ASSISTANCE PROGRAM LEVELS

    Mr. Chairman, the coalition recommends that food aid be restored 
over time to sustainable levels in the range of 4.0 million to 6.0 
million metric tons of grain equivalent in each fiscal year. In fiscal 
year 2005, this would require an incremental increase in Title I 
baseline funding, enactment of the administration's request for Title 
II, an increase to $100 million for the IFEP, and greater use of 
existing authorities of the Commodity Credit Corporation. The Title I 
program must be restored if the United States is to take full advantage 
of the unique potential of this historic initiative. The special 
features of Title I remain significant elements of U.S. food aid 
policy, as discussed below.

                   ADVANTAGES OF THE TITLE I PROGRAM

    Mr. Chairman, the Title I program offers countries long-term loans 
and concessional payment terms for the purchase of U.S. agricultural 
commodities. As such, Title I has advantages over other food aid 
programs.
  --Resource Efficient.--Because Title I is a concessional sales 
        program, appropriations required to support Title I, under the 
        terms of the Federal Credit Reform Act of 1990, cover only the 
        subsidy cost, and not the full commodity value. In the 
        President's budget for fiscal year 2005, the subsidy cost of 
        the Title I program is established for the fiscal year at 86.42 
        percent. Thus, under the Title I program, Congress ensures the 
        shipment of $1.00 worth of U.S. agricultural products at an 
        appropriated cost of about 86 cents. Moreover, Title I 
        currently recovers more dollars for the U.S. Treasury in loan 
        repayments than it expends in annual outlays.
  --Bridge to Economic Independence.--The Title I program is designed 
        to operate in markets which are neither poor enough to warrant 
        donations nor rich enough to purchase commodities on commercial 
        terms. Of the top 50 consumer nations of American agricultural 
        products, 43 were once recipients of U.S. foreign aid in some 
        form. The Title I program historically has been an essential 
        component of our humanitarian food assistance program, and 
        should be retained.
    Unfortunately, Mr. Chairman, Title I concessional sales have been 
reduced to their lowest levels in half a century. According to the 
administration's budget, Title I loans in fiscal year 2003 generated 
only $81 million in commodity sales; this amount will decline to an 
estimated $38 million in fiscal year 2004. The fiscal year 2005 budget 
proposes only $30 million in concessional commodity sales. The balance 
of Title I funding supports FFP grants. Our analysis of the fiscal year 
2003 program shows that Title I-funded FFP shipments were made to 
Cambodia, Togo, Pakistan, Afghanistan, Bolivia, Eritrea, Ethiopia, 
Honduras, Kenya, Mongolia, Peru, Sri Lanka and Yemen. The total 
commodity value of these FFP grants, as stated above, was $62.4 
million. According to the administration's budget, the FAS plans to 
obligate $93 million for Title I-funded FFP grants in fiscal year 2004, 
and another $60 million from the account for FFP grants in fiscal year 
2005.
    Mr. Chairman, the potential demand for donated food will always 
exceed the supply. The coalition recognizes that recipient countries 
would prefer grants over concessional sales--even sales at extremely 
favorable terms. In order to ensure that the most desperate countries 
have sufficient donated food aid, the coalition recommends that FAS 
aggressively market the Title I concessional sales program to other 
countries that can afford the terms. Among the countries receiving 
Title I-funded FFP grants in fiscal year 2003, there are surely some 
who reasonably could afford to make the transition from grant 
assistance to concessional sales, using the direct loan authority of 
Title I.

                    CONCLUSIONS AND RECOMMENDATIONS

    Mr. Chairman, the coalition is committed to maintaining U.S. food 
assistance programs at responsible levels in order to meet humanitarian 
needs and enhance the potential for economic growth in recipient 
countries. Our recommendation is to increase over time annual food 
assistance at combined program levels of between 4.0 million and 6.0 
million metric tons of grain equivalent. This can be accomplished, as 
in the past, with a blend of programs supported by direct 
appropriations and CCC program authorities.
    The coalition recommends the following:
  --Title I program levels should be increased in fiscal year 2005, and 
        responsibly increased again in succeeding years, so that the 
        unique advantages of the program, highlighted above, are not 
        lost. The Senate Appropriations Committee should accompany such 
        increased funding with strongly-worded report language 
        directing FAS to market the Title I program aggressively to 
        those countries that reasonably can afford the terms.
  --IFEP should be increased in fiscal year 2005 to the $100 million 
        level established by Congress for the fiscal year 2003 program. 
        This action, together with full funding of the administration's 
        Title II request, will help ensure that the United States 
        fulfills its moral obligation to provide not less than one-half 
        of the world's donated food aid.
  --In committee report language, the Senate Appropriations Committee 
        should direct the FAS to make greater use of existing CCC 
        authorities to expand food aid to regions in critical need.
    Mr. Chairman, the Title I program has been a bulwark of American 
food aid policy since the days of the Marshall Plan. It deserves the 
strong support of your subcommittee, the Congress and the entire 
nation.
    The Title I program delivers more food assistance per dollar of 
investment than any other program. The Title I program, moreover, is 
fully consistent with the administration's position that aid to 
developing countries be tied to their adoption of reforms and policies 
that make development both lasting and effective. With strong 
Congressional support, the Food for Peace Title I program will continue 
to promote American humanitarian values. The funding of Title I, 
accordingly, should be increased to ensure that this historic program 
is restored to its proper place in U.S. food assistance policy.
                                 ______
                                 

       Prepared Statement of the American Farm Bureau Federation

    The American Farm Bureau Federation supports full funding for the 
Farm Security and Rural Investment Act of 2002 (FSRIA).
    Unpredictable weather conditions and markets, uncertainties 
involved with international trade, and variable input costs can produce 
turbulent and difficult times for agriculture. The FSRIA helps American 
farmers and ranchers weather financial storms and it provides 
unprecedented funds for our nation's conservation needs. Changes in 
programs would be devastating not only to farmers and ranchers, but to 
the rural economy as well.
    Full funding of commodity programs is essential. It is imperative 
that counter-cyclical payment rates, loan rates and direct payments be 
preserved as adopted in FSRIA. We are adamantly opposed to any changes 
in the current payment limitations.
    Farm Bureau has selected the following four items as our priorities 
for funding in fiscal year 2005: (1) Programs key to protecting animal 
and plant health; (2) full funding and implementation of the 
Conservation Security Program; (3) programs key to the proper 
regulation of the Food Quality Protection Act and crop protection 
regulations; and (4) programs key to expanding and protecting markets 
for agricultural products.

           PROGRAMS KEY TO PROTECTING ANIMAL AND PLANT HEALTH

    The threat of bioterroism and the discovery of Bovine Spongiform 
Encephalopathy (BSE) in the United States has prompted increased action 
by USDA and others to step up animal and pest disease surveillance and 
funding for critical programs such as animal identification. Farm 
Bureau places great priority on efforts to safeguard our food supply 
and requests increased resources be appropriated to APHIS and FSIS for 
these activities.
    Farm Bureau supports the Administration's Food and Agriculture 
Defense Initiative of $381 million. These funds will enhance food and 
agriculture defense by:
  --Providing funds for completing the consolidated BSL-3 animal 
        research and diagnostic laboratory at Ames, Iowa;
  --Establishing a National Plant Disease Recovery System that will 
        quickly coordinate with the seed industry to provide producers 
        with resistant stock before the next planting season in the 
        event of a natural or intentional catastrophic disease or pest 
        outbreak; and
  --Substantially enhancing the monitoring and surveillance of pests 
        and diseases in plants and animals, including targeted national 
        wildlife surveillance.
    BSE.--Farm Bureau supports BSE-related funding proposed by USDA 
that calls for $5 million for the Agricultural Research Service (ARS) 
to conduct advanced research and development of BSE testing 
technologies; $17 million for the Animal and Plant Health Inspection 
Service (APHIS) to continue collecting 40,000 samples, including 
sampling at rendering plants and on farms; $4 million for the Food 
Safety and Inspection Service (FSIS) to conduct monitoring and 
surveillance of compliance with the regulations regarding specified 
risk materials and advanced meat recovery; and $1 million for Grain 
Inspection, Packers and Stockyards Administration (GIPSA) to enable 
them to dispatch rapid response teams to markets experiencing BSE-
related complaints regarding contracts or lack of prompt payment.
    We do, however, have serious concerns about the Administration's 
proposal for $33 million to help implement an animal identification 
system. For over 2 years, the industry has been working to develop the 
U.S. Animal Identification Plan (USAIP). USIAP estimates an ongoing 
cost of $122 million per year to implement such a system. This is a far 
cry from a one-time $33 million appropriation. Farmers and ranchers 
simply cannot afford to bear the brunt of the cost of this program, 
especially when most of the benefit will accrue to consumers. We 
strongly encourage the Committee to significantly increase funding for 
this critical program. Implementation of the program will not only add 
to our ability to trace a diseased animal back to the source but will 
also reassure the public and our trading partners of a safe food 
supply.
    Soybean Rust (Phakopsora pachyrhizi).--Soybean Rust (SBR), a fungal 
disease that attacks the foliage of a soybean plant, is a potential 
threat to the United States. Only two fungicides are currently approved 
for use on soybean rust and manufacturers have indicated that there 
would not be enough chemical available to treat a nationwide outbreak. 
Soybean check-off and government-funded research activities are 
underway, however, approximately $2.8 million additional funds are 
urgently needed.
    Avian Influenza.--Avian flu is a respiratory virus spread among 
chickens by nasal and eye secretions and manure. Adequate funding for 
detection, control and eradication of low and high pathogen Avian 
Influenza is critical. Farm Bureau supports an additional $12 million 
above the Administration's request for $13 million ($25 million total) 
to combat this deadly poultry disease. We support USDA's development of 
a high-containment facility to study this disease.
    National Animal Health Emergency Management System.--Farm Bureau 
supports full funding for the National Animal Health Emergency 
Management System that was developed in cooperation with the states, 
industry and the veterinary profession. These funds will enhance 
APHIS's emergency preparedness and response capabilities to address 
emergency animal disease issues that threaten the U.S. food supply.
    Food Animal Residue Avoidance Databank (FARAD).--Farm Bureau 
supports funding for FARAD. Adequate funding for FARAD will allow for 
continued, fair, immediate expert consultation to livestock owners and 
veterinarians in the event of accidental drug or toxin exposure to 
livestock or poultry.
    Plant and Animal Health Monitoring, Pest Detection and Control.--
Plant and animal health monitoring and surveillance are important 
programs. We support a $48 million increase for improved plant pest 
detection, management of animal health emergencies and to increase the 
availability of animal vaccines. Expansion of Plant Protection and 
Quarantine (PPQ) personnel and facilities is necessary to protect U.S. 
agriculture from new and often-times virulent pest problems.

 FULL FUNDING AND IMPLEMENTATION OF THE CONSERVATION SECURITY PROGRAM 
                                 (CSP)

    Prompt implementation of the Conservation Security Program (CSP) is 
critical. This program recognizes the costs associated with sound 
conservation practices and provides assistance to producers who have 
historically practiced good stewardship as well as provide incentives 
to those that who want to do more. The CSP must be implemented as 
authorized by FSRIA in order to achieve the program's full potential. 
All farmers and ranchers should have the opportunity to participate is 
CSP as intended by FSRIA. No restrictions or limitations should be 
placed on this important new conservation program.
    Ongoing USDA conservation programs should be fully funded. No 
limitations should be placed on funding for the Environmental Quality 
Incentive Program (EQIP). EQIP is key to assisting agricultural 
producers in complying with environmental regulations and addressing 
important conservation issues. Maximum conservation technical 
assistance should be provided for both FSRIA conservation programs and 
for Conservation Operations to help landowners in planning for and the 
application of conservation treatments to control erosion and improve 
natural resources.

 PROGRAMS KEY TO THE PROPER REGULATION OF THE FOOD QUALITY PROTECTION 
                  ACT AND CROP PROTECTION REGULATIONS

    USDA must continue to work with EPA, agricultural producers, food 
processors and registrants to provide farm data required to ensure that 
agricultural interests are properly considered and fully represented in 
all pesticide registration, tolerance reassessment re-registration, and 
registration review processes. In order to participate effectively in 
the process of ensuring that crop protection tools are safe and remain 
available to agriculture, USDA must have all the resources necessary to 
provide economic benefit, scientific analysis and usage information to 
EPA. To this end, funding should be maintained or increased to the 
following offices and programs:
    Office of Pest Management Policy (OPMP).--OPMP has the primary 
responsibility for coordination of USDA's FQPA and crop protection 
obligations and interaction with EPA. Proper funding is vital for the 
review tolerance reassessments, particularly dietary and worker 
exposure information; to identify critical use, benefit and 
alternatives information; and to work with grower organizations to 
develop strategic pest management plans. The funding to OPMP should be 
designated under the Secretary of Agriculture's office, rather than as 
an add-on to the Agricultural Research Service budget.
    Agriculture Research Service (ARS).--Integrated Pest Management 
(IPM) research, minor use tolerance research (IR-4) and research on 
alternatives to methyl bromide must continue to receive adequate 
funding to fully address the unique concerns of these programs. 
Research is also needed to identify new biological pest control 
measures and to control pesticide migration.
    Cooperative State Research, Education and Extension Service 
(CSREES).--Full funding should be provided for Integrated Pest 
Management (IPM) research grants, IPM application work, pest management 
alternatives program, expert IPM decision support system, minor crop 
pest management project (IR-4), crops at risk from FQPA implementation, 
FQPA risk avoidance and mitigation program for major food crop systems, 
methyl bromide transition program, regional crop information and policy 
centers and the pesticide applicator training program.
    Economic Research Service (ERS).--ERS programs provide USDA and EPA 
with unique data information and they should be properly funded 
including IPM research, pesticide use analysis program and the National 
Agriculture Pesticide Impact Assessment Program (NAPIAP).
    FQPA and Crop Protection Regulation.--Additional funding for proper 
regulation of pesticides is needed in the following programs: National 
Agriculture Statistics Service (NASS) pesticide use surveys; Food 
Safety Inspection Service (FSIS) increased residue sampling and 
analysis; Agricultural Marketing Service (AMS); and the Pesticide Data 
Program (PDP).

   PROGRAMS KEY TO EXPANDING AND PROTECTING MARKETS FOR AGRICULTURAL 
                                PRODUCTS

    Creating new overseas markets and expanding existing markets is 
essential for a healthy agricultural economy. Continued funding of 
export development programs is fundamental to improving farm income. 
Farm Bureau recommends maximum funding of all export development 
programs consistent with our commitments under World Trade Organization 
(WTO) rules. USDA programs that protect U.S. agricultural exports from 
unfair trade barriers are also critical and should receive priority 
funding.
    CODEX.--The U.S. CODEX office must have sufficient funding to 
adequately represent American interests in this important body that 
develops the international food safety standards used as guidance by 
the WTO. Increasingly CODEX focuses on issues such as biotechnology, 
traceability/product tracing, and acceptable farm practices. An ongoing 
international effort is being led by the European Union to place limits 
on our ability to produce food and fiber.
    APHIS Biotech Regulatory Service (BRS).--Agricultural biotechnology 
is an extremely promising development and all reasonable efforts must 
be made to allow it to be realized. BRS plays an important role in 
overseeing the permit process for products of biotechnology. Funding 
and personnel are essential for ensuring public confidence and 
international acceptance of biotechnology products.
    APHIS Trade Issues Resolution and Management. Full funding is 
needed for APHIS trade issues resolution and management. As Federal 
negotiators and U.S. industry try to open foreign markets to U.S. 
exports, they consistently find that other countries are raising pest 
and disease concerns, real or contrived, to resist allowing American 
products to enter. Officials from other countries often attempt to 
refuse entry to American products under the guise of a technicality or 
flimsy suspicion. Only APHIS can respond effectively to these issues. 
This requires placing more APHIS officers overseas where they can 
monitor pest and disease situations, negotiate protocols with other 
countries, and intervene when foreign officials wrongfully prevent the 
entry of American imports. It is essential that APHIS be positioned to 
swiftly and forcefully respond to such issues when and where they 
arise.
    Export Development Programs.--We recommend fully funding all export 
development programs consistent with our commitments under the WTO. 
Farm Bureau supports General Sales Manager (GSM) credit guarantee 
programs. These important export credit guarantee programs can help 
make commercial financing available for imports of U.S. food and 
agricultural products via a deferred payment plan. The Market Access 
Program (MAP) and Foreign Market Development Program (FMD) are also 
worthwhile programs. The Foreign Agricultural Service (FAS) will 
require sufficient funding to expanded services to cover all existing 
and potential market posts.
    Direct export subsidies of U.S. agricultural products are 
authorized through the Export Enhancement Program (EEP) to counter 
unfair trading practices of foreign countries. Farm Bureau supports the 
funding and use of this program in all countries, and for all 
commodities, where the United States faces unfair competition. The 
Dairy Export Incentive Programs (DEIP) allows U.S. dairy producers to 
compete with foreign nations that subsidize their commodity exports. 
The International Food for Education Program (IFEP) will be an 
effective platform for delivering severely needed food aid and 
educational assistance. Finally, the Public Law 480 programs serves as 
the primary means by which the United States provides foreign food 
assistance. The Public Law 480 programs provide humanitarian and public 
relations benefits, positively impacts market prices and helps develop 
long-term commercial export markets.
                                 ______
                                 

  Prepared Statement of the American Honey Producers Association, Inc.

    I am Lyle Johnston of Rocky Ford, Colorado, President of the 
American Honey Producers Association. The American Honey Producers 
Association (``AHPA'') is a national organization of commercial 
beekeepers actively engaged in honey production throughout the country. 
I am here today to request your assistance in continuing to support 
full funding for honey bee research.
    First, we wish to thank the Subcommittee for the strong support it 
has provided in the past for agricultural research activities on behalf 
of the beekeeping industry. For example, in the fiscal year 2003 cycle, 
the Subcommittee fully restored proposed cuts in honey bee research 
that would have resulted in the elimination of three Agricultural 
Research Service (``ARS'') laboratories that are indispensable to the 
survival of our industry. Such support has enabled the ARS to meet the 
critical needs of the industry. To continue this valuable research, the 
AHPA requests that for the fiscal year 2005 cycle Congress not only 
restore proposed rescissions of add-on funding from previous years for 
the two ARS Honey Bee Research Laboratories at Baton Rouge, Louisiana 
and Weslaco, Texas, but also approve specific funding increases 
proposed in the Administration's budget both for honey bee genome 
research at the ARS laboratory in Baton Rouge (under the category of 
invasive species affecting plants), and for invasive honey bee pest 
control research at the ARS laboratory in Beltsville, Maryland. We also 
urge the Congress to maintain honey bee research funding at fiscal year 
2004 levels for the ARS laboratory in Tucson, Arizona.

                    THE PRESIDENT'S BUDGET PROPOSAL

    The American Honey Producers Association applauds the President's 
fiscal year 2005 budget proposal for recommending funding increases for 
the Honey Bee Research Laboratories located at Baton Rouge, Louisiana, 
and Beltsville, Maryland, and also for proposing a continuation of 
funding at fiscal year 2004 levels for the Honey Bee Research 
Laboratory in Tucson, Arizona. However, we are concerned that the 
President's budget also calls for significant funding decreases for the 
two Honey Bee Research Laboratories at Baton Rouge and at Weslaco. 
These cuts are proposed rescissions of funding increases included by 
Congress in previous appropriation cycles. Specifically, the 
Administration is suggesting $397,000 in cuts for the Baton Rouge 
facility and $249,000 in cuts for the Weslaco facility. These cuts to 
the ARS Honey Bee Research Laboratories would have a severe effect on 
the honey industry as well as on all pollination-dependent agriculture 
and many native plants. This seems particularly inappropriate 
considering the substantial benefits that flow from this program, which 
helps assure the vitality of the American honey bee industry and U.S. 
agriculture.
    These four ARS laboratories provide the first line of defense 
against exotic parasite mites, Africanized bees, brood diseases and 
other new pests and pathogens that pose serious threats to the 
viability and productivity of honey bees and the plants they pollinate. 
If the rescissions proposed this year by the President were to be 
enacted, scientists at the Baton Rouge and Weslaco laboratories will be 
overburdened and forced to discontinue essential research, thereby 
jeopardizing the U.S. honey bee industry and the production of 
agricultural crops that require pollination by honey bees.

            THE IMPORTANCE OF HONEY BEES TO U.S. AGRICULTURE

    Honey bees fill a unique position in contemporary U.S. agriculture. 
They pollinate more than 90 food, fiber, and seed crops. Honey bees are 
necessary for the production of such diverse crops as almonds, apples, 
oranges, melons, vegetables, alfalfa, soybeans, sunflower, and cotton, 
among others. A Cornell University study, published in 2000, estimated 
that the annual value of agriculture production attributable to honey 
bee pollination exceeds $14.6 billion. The increased value of such 
crops comes in the form of both better yields and improved quality. In 
addition, honey bees are responsible for the production of an average 
of 200 million pounds of honey annually in the United States, the sales 
of which helps sustain this nation's beekeepers.
    Since 1984, the survival of the honey bee has been threatened by 
continuing infestations of mites and pests for which appropriate 
controls are being developed by scientists at the four ARS 
laboratories. The industry is also plagued by a honey bee bacterial 
disease that has become resistant to antibiotics designed to control it 
and a honey bee fungal disease that has no known medication to control 
it. These pests and diseases, especially Varroa mites and the bacterium 
causing American foulbrood, are now resistant to chemical controls in 
many regions of the country. Such resistance is increasingly becoming a 
problem, as most of the major chemical controls are ineffective in 
treating such pests and diseases. Further, we have seen that honey bees 
are building resistance to newly-developed chemicals more quickly than 
in the past, thereby limiting the longevity of chemical controls.
    Unfortunately, there is no simple solution to these problems, and 
the honey bee industry is too small to support the cost of the needed 
research, particularly given the depressed state of the industry in 
recent years. Further, there are no funds, facilities, or personnel 
elsewhere available in the private sector for this purpose. 
Accordingly, the beekeeping industry is dependent on research from 
public sources for the scientific answers to these threats. Since the 
honey bee industry is completely comprised of small family-owned 
businesses, it relies heavily on the ARS for needed research and 
development. The key to the survival of the honey industry lies with 
the honey bee research programs conducted by ARS.
    The sequencing of the honey bee genome at Baylor University has 
opened the door to creating highly effective solutions to these 
problems via marker assisted breeding. Marker assisted breeding would 
permit the rapid screening of potential breeders for specific DNA 
sequences that underlie specific desirable honey bee traits. The 
sequenced honey bee genome is the necessary key which will allow 
scientists to discover the important DNA sequences. Because of the 
sequenced honey bee genome, it is now possible to apply molecular 
biological studies to the development of marker assisted breeding of 
honey bees. Good success can be expected in several areas: honey bee 
tracheal mite resistance, certain aspects of Varroa mite resistance 
such as grooming behavior (mite removal from the hive), bacterial and 
fungal disease resistance, and the optimization of pollination 
behavior.
    Furthermore, research on honey bees, one of five animals chosen by 
the National Institutes of Health for genome sequencing, may provide 
important insight into other areas of science. The honey bee is the 
first agricultural species to be sequenced, and such work may provide 
breakthrough advances in many areas of science. In fact, honey bees are 
being studied by the U.S. Department of Defense as sentinel species 
that could detect and locate agents of harm, such as chemical or 
biological threats. According to one researcher, it appears that honey 
bees' olfactory capabilities are at least on par with a dog, if not 
more sensitive. Thus, the scientific advances achieved by ARS will 
provide an array of benefits across many disciplines.

          THE WORK OF THE ARS HONEY BEE RESEARCH LABORATORIES

    The ARS Honey Bee Research Laboratories work together to provide 
research solutions to problems facing businesses dependent on the 
health and vitality of honey bees. The findings of these laboratories 
are used by honey producers to protect their producing colonies and by 
farmers and agribusinesses to ensure the efficient pollination of 
crops. Each of the four ARS Honey Bee Research Laboratories (which are 
different in function from the ARS Wild Bee Research Laboratory at 
Logan, Utah) focuses on different problems facing the U.S. honey 
industry and undertakes research that is vital to sustaining honey 
production in this country. Furthermore, each honey bee research 
laboratory has unique strengths and each is situated and equipped to 
support independent research programs which would be difficult, and in 
many cases impossible, to conduct elsewhere.

Research at the ARS Weslaco Laboratory
    Because the AHPA recommends that the appropriation for the Weslaco 
laboratory be approved at not less than current levels, we respectfully 
request Congress to reject the President's proposal to eliminate 
$249,000 in funding added by Congress for the ARS Honey Bee Laboratory 
at Weslaco, Texas. Retaining the current (fiscal year 2004) level of 
funding for the Weslaco laboratory will enable it to continue its work 
in finding a chemical solution to parasitic mites that are causing a 
crisis for the U.S. beekeeping and pollination industries. Varroa mites 
are causing the loss of hundreds of thousands of domestic honey bee 
colonies annually as well as devastating wild bee colonies. The only 
chemical which has received a general registration for Varroa mite 
control, fluvalinate, is being rendered ineffective by the development 
of resistant mite populations. The ARS laboratory at Weslaco has been 
developing alternative chemicals to control the Varroa mite. The 
laboratory has found a chemical, coumaphos, with the potential of being 
equally effective as fluvalinate. Unfortunately, the mites are also 
rapidly developing a resistance to this latest chemical product, 
coumaphos. Presently, there are no other chemicals available for 
controlling the Varroa mite, and the laboratory is working frantically 
to develop other means of control.
    Additionally, the laboratory is researching methods that may 
control the small hive beetle. Since its discovery in Florida in 1998, 
this pest has caused severe bee colony losses in California, Florida, 
Georgia, South Carolina, North Carolina, Pennsylvania, Ohio, and 
Minnesota. Estimates put these losses in just one season at over 30,000 
colonies. The beetles are now spreading all across the United States. 
Although it seems that coumaphos may help control this insect as well 
as the Varroa mite, it has not yet received a Section 3 registration 
for general use. The ARS honey bee research scientists at the Weslaco 
laboratory have been working overtime to find chemicals, techniques, 
pheromones, or other methods of controlling the beetle. Time is of the 
essence and a control must be found immediately, because all the bee 
colonies in the Western Hemisphere are at risk.
    This facility also focuses its research efforts on developing 
technologies to manage honey bees in the presence of Africanized honey 
bees, parasitic mites, and other pests. In order to ensure that further 
pests are not introduced into the United States, scientists at the 
Weslaco facility provide technical assistance to agriculture 
departments in foreign countries on the control of parasitic mites. The 
laboratory has worked with officials in Guatemala, Costa Rica, Mexico, 
and South Africa to protect the U.S. honey bee population from further 
devastation by infestation of foreign parasites, diseases, and other 
pests. This inter-governmental cooperation is necessary to ensure the 
continued viability of the U.S. honey bee industry.

Research at the ARS Baton Rouge Laboratory
    While we are pleased that the President has requested an increased 
funding in the amount of $250,000 for honey bee genome research at the 
ARS Baton Rouge Laboratory, we are dismayed by and opposed to the 
Administration's simultaneous request for $397,000 in cuts for this 
facility, eliminating previous Congressional increases in funding. In 
light of the importance of genome research, we hope that Congress will 
support the President's recommended increase for the ARS laboratory at 
Baton Rouge, Louisiana, while opposing the rescission proposed by the 
Administration. An increase in funding will allow the vital genome 
research conducted in Baton Rouge to achieve more quickly the 
breakthrough successes that are closer than ever to realization. The 
Baton Rouge facility is the only laboratory in the United States 
developing long-term, genetic-based solutions to the Varroa mite. 
Existing stocks of U.S. honey bees are being tested to find stocks 
which exhibit resistance to the parasitic mites.
    Research scientists with the laboratory have also been to the far 
corners of the world looking for mite resistant bees. For example, in 
eastern Russia, they found bees that have co-existed for decades with 
the mites and survived. Using these bees, the laboratory develops 
stocks of honey bees resistant to the parasites. Before these new 
stocks are distributed to American beekeepers, the laboratory ensures 
that the resistance holds up under a wide range of environmental and 
beekeeping conditions, testing attributes such as vigor, pollination, 
and honey production. We believe recent scientific breakthroughs with 
this genomic research will allow scientists in the near future to breed 
honey bees that are resistance to the Varroa mite and other parasites.
    The Baton Rouge facility also operates the only honey bee 
quarantine and mating station approved by the Animal and Plant 
Inspection Service. These stations are necessary to ensure that new 
lines of bees brought into the United States for research and 
development are free of diseases unknown in the United States. In 
addition, Baton Rouge research scientists are focused on the 
applications of new technologies of genomics. This work has the 
potential to enhance the proven value of honey bee breeding for 
producing solutions to the multiple biological problems that diminish 
the profitability of beekeeping.

Research at the ARS Tucson Laboratory
    The American Honey Producers Association supports the 
Administration's request that funding for the ARS Honey Bee Research 
Laboratory in Tucson be kept at the current level for fiscal year 2005. 
This research center is the only ARS honey bee laboratory serving the 
needs of beekeepers and farmers in the western United States. The 
facility works to improve crop pollination and honey bee colony 
productivity through quantitative ecological studies of honey bee 
behavior, physiology, pest and diseases, and feral honey bee bionomics.
    Because more than one million colonies are transported from across 
the country for pollination into crops grown in the western United 
States (primarily California), the Tucson research center addresses 
problems that arise from transporting and introducing colonies for 
pollination of crops such as almonds, plums, apricots, apples, 
cherries, citrus, alfalfa, vegetable seed, melons, and berries. This 
research center has been instrumental in disseminating information on 
technical issues associated with the transport of bee colonies across 
state lines. Additionally, in order to ensure that transported colony 
populations remain stable during transport and also during periods 
before the crop to be pollinated comes into bloom, scientists at the 
laboratory have developed an artificial diet that stimulates brood 
production in colonies. A large bee population is necessary to ensure 
that efficient pollination occurs, creating superior quality crops.

Research at the ARS Beltsville Laboratory
    Again, we support the President's proposal to increase funding at 
the ARS Honey Bee Research Laboratory in Beltsville by $100,000 to 
boost current research efforts aimed at eliminating invasive honey bee 
pests. This facility, the oldest of the federal bee research centers, 
conducts research on the biology and control of honey bee parasites, 
diseases, and pests to ensure an adequate supply of bees for 
pollination and honey production. Using biological, molecular, 
chemical, and non-chemical approaches, scientists in Beltsville are 
developing new, cost-effective strategies for controlling parasitic 
mites, bacterial diseases, and emergent pests that threaten honey bees 
and the production of honey.
    The laboratory also develops preservation techniques for honey bee 
germplasm in order to maintain genetic diversity and superior honey bee 
stock. Scientists at the facility also provide authoritative 
identification of Africanized honey bees and diagnosis of bee diseases 
and pests for Federal and State regulatory agencies and beekeepers on a 
worldwide basis. In operating this bee disease diagnosis service, the 
Beltsville facility receives over 2,000 samples annually from across 
the United States.

                               CONCLUSION

    In conclusion, we wish to thank you again for your support of honey 
bee research in the past and for your Committee's understanding of the 
importance of these laboratories. The American Honey Producers 
Association would appreciate your continued support by (1) increasing 
the level of funding for the ARS Honey Bee Research Laboratory in Baton 
Rouge, Louisiana, by $250,000, as proposed by the Administration in its 
fiscal year 2005 budget; (2) increasing the level of funding for the 
ARS Honey Bee Research Laboratory in Beltsville, Maryland, by $100,000, 
as proposed by the Administration in its fiscal year 2005 budget; (3) 
restoring the proposed rescissions from previous years of $397,000 for 
the Baton Rouge facility and $249,000 for the Weslaco, Texas, facility; 
and (4) maintaining the current level of funding for the ARS Honey Bee 
Research Laboratory in Tucson, Arizona. Only through research can we 
have a viable U.S. beekeeping industry and continue to provide stable 
and affordable supplies of bee pollinated crops which make up fully 
one-third of the U.S. diet.
    Furthermore, we urge you to reject any effort to cut the operating 
budgets of these vitally important research laboratories by 
consolidating their functions. Any proposed cuts and their resulting 
budget and staff reductions would significantly diminish the quality of 
research conducted by these laboratories, harming bee keepers as well 
as farmers who harvest pollination-dependent agriculture. Congress 
cannot allow these cuts to occur and must continue to provide 
sufficient funding for the ARS Honey Bee Research Laboratories to 
perform their vital role.
    I would be pleased to respond to any questions that you or your 
colleagues may have.
                                 ______
                                 

 Prepared Statement of the American Indian Higher Education Consortium

    Mr. Chairman and Members of the Subcommittee, on behalf of the 
American Indian Higher Education Consortium (AIHEC) and the 32 Tribal 
Colleges and Universities that comprise the list of 1994 Land Grant 
Institutions, thank you for this opportunity to share our funding 
requests for fiscal year 2005.
    This statement is presented in three parts: (a) a summary of our 
fiscal year 2005 funding request, (b) a brief background on Tribal 
Colleges and Universities, and (c) an outline of the 1994 Tribal 
College Land Grant Institutions' plan for using our land grant programs 
to fulfill the agricultural potential of American Indian communities, 
and to ensure that American Indians have the skills needed to maximize 
the economic development potential of their resources.

                          SUMMARY OF REQUESTS

    We respectfully request the following funding levels for fiscal 
year 2005 for our land grant programs established within the USDA 
Cooperative State Research, Education, and Extension Service (CSREES) 
and Rural Development mission areas. In CSREES, we specifically 
request: $12 million payment into the Native American endowment fund; 
$3.1 million for the higher education equity grants; $5 million for the 
1994 institutions' competitive extension grants program; $3 million for 
the 1994 Institutions' competitive research grants program; and in the 
Rural Development-Rural Community Advancement Program (RCAP), that $5 
million for each of the next five fiscal years be targeted for the 
tribal college community facilities grants. RCAP grants help to address 
the critical facilities and infrastructure needs at the colleges that 
impede our ability to participate fully as land grant partners. Since 
fiscal year 2001, the RCAP tribal college competitive program has 
received an annual appropriation of $4 million.

             BACKGROUND ON TRIBAL COLLEGES AND UNIVERSITIES

    The first Morrill Act was enacted in 1862 specifically to bring 
education to the people and to serve their fundamental needs. Today, 
over 140 years after enactment of the first land grant legislation, the 
1994 Land Grant Institutions, as much as any other higher education 
institutions, exemplify the original intent of the land grant 
legislation, as they are truly community-based institutions.
    The Tribal College Movement was launched in 1968 with the 
establishment of Navajo Community College, now Dine College, serving 
the Navajo Nation. Rapid growth of tribal colleges soon followed, 
primarily in the Northern Plains region. In 1972, the first six 
tribally controlled colleges established the American Indian Higher 
Education Consortium to provide a support network for member 
institutions. Today, AIHEC represents 34 Tribal Colleges and 
Universities--32 of which now comprise the list of 1994 Land Grant 
Institutions--located in 12 states created specifically to serve the 
higher education needs of American Indian students. Annually, they 
serve approximately 30,000 full- and part-time students from over 250 
Federally recognized tribes.
    Thirty-one \1\ of the 1994 Land Grant Institutions are accredited 
by independent, regional accreditation agencies and like all 
institutions, must undergo stringent performance reviews on a periodic 
basis to retain their accreditation status. Tribal colleges serve as 
community centers by providing libraries, tribal archives, career 
centers, economic development and business centers, public meeting 
places, and child care centers. Despite their many obligations, 
functions, and notable achievements, tribal colleges remain the most 
poorly funded institutions of higher education in this country. Most of 
the 1994 Land Grant Institutions are located on Federal trust 
territory. Therefore, states have no obligation and in most cases, 
provide no funding to tribal colleges. In fact, most states do not even 
fund our institutions for the non-Indian state residents attending our 
colleges, leaving the tribal colleges to absorb the per student 
operational costs for non-Indian students enrolled in our institutions, 
accounting for approximately 20 percent of our student population. 
Under these inequitable financing conditions and unlike our state land 
grant partners, our institutions do not benefit from economies of 
scale--where the cost per student to operate an institution is 
diminished by the increased size of the student body.
---------------------------------------------------------------------------
    \1\ White Earth Tribal & Community College is in the pre-candidacy 
stage of accreditation.
---------------------------------------------------------------------------
    As a result of 200 years of Federal Indian policy--including 
policies of termination, assimilation and relocation--many reservation 
residents live in abject poverty comparable to that found in Third 
World nations. Through the efforts of Tribal Colleges and Universities, 
American Indian communities are receiving services they need to 
reestablish themselves as responsible, productive, and self-reliant 
citizens. It would be regrettable not to expand the very modest 
investment in, and capitalize on, the human resources that will help 
open new avenues to economic development, specifically through 
enhancing the 1994 Institutions' land grant programs, and securing 
adequate access to information technology.

     1994 LAND GRANT PROGRAMS--AMBITIOUS EFFORTS TO REACH ECONOMIC 
                         DEVELOPMENT POTENTIAL

    Sadly, due to lack of expertise and training, millions of acres on 
our reservations lie fallow, under-used, or have been developed through 
methods that render the resources non-renewable. The Equity in 
Educational Land Grant Status Act of 1994 is our hope for rectifying 
this situation. Our current land grant programs are small, yet very 
important to us. It is essential that American Indians learn more about 
new and evolving technologies for managing our lands. We are committed 
to being productive contributors to the agricultural base of the nation 
and the world.
    Native American Endowment Fund.--Endowment installments paid into 
the 1994 Institutions' account remain with the U.S. Treasury, only the 
annual interest, less the USDA's administrative fee, is distributed to 
the colleges. The latest gross annual interest yield (fiscal year 2003) 
is $1,929,849, after the USDA's administrative fee of $77,194 is 
deducted; $1,852,655 remains to be distributed among the 31 eligible 
1994 Land Grant Institutions by statutory formula. We believe that the 
annual administration fee is excessive. Last year, the USDA's 
administrative fee of $70,863 was larger than the interest yield 
payments distributed to 74 percent of the 1994 Land Grant Institutions. 
After the distribution amounts are determined for this year's 
disbursement we fully expect similar results and therefore ask the 
Subcommittee to review the administration fee and consider reducing it. 
More critical funding can then be put to work at the 1994 Land Grant 
Institutions in order to accomplish the goals of their community based 
programs.
    Just as other land grant institutions historically received large 
grants of land or endowments in lieu of land, this endowment assists 
1994 Land Grant Institutions in establishing and strengthening our 
academic programs in such areas as curricula development, faculty 
preparation, instruction delivery, and as of fiscal year 2001, to help 
address our critical facilities and infrastructure issues. Many of the 
colleges have used the endowment funds in conjunction with the 
Education Equity Grant funds to develop and implement their academic 
programs. As earlier stated, tribal colleges often serve as primary 
community centers and although conditions at some have improved 
substantially, many of the colleges still operate under deplorable 
conditions. Most of the tribal colleges cite improved facilities as one 
of their top priorities. Several of the colleges have indicated the 
need for immediate and substantial renovations to replace construction 
materials that have long exceeded their effective life span, and to 
upgrade existing buildings due to accessibility and safety concerns.
    An increased endowment payment would enhance the size of the corpus 
and thereby increase the annual interest yield available to the 1994 
land grant colleges. This additional funding would be very helpful in 
our efforts to continue to support faculty and staff positions and 
program needs within Agriculture and Natural Resources departments, as 
well as to continue to help address the critical and very expensive 
facilities needs at our institutions. Currently, the amount that each 
college receives from this endowment is not enough to adequately 
address curricula development and instruction delivery, as well as make 
even a dent in the necessary facilities projects at the colleges. In 
order for the 1994 Institutions to become full partners in this 
nation's great land grant system, we need and frankly deserve the 
facilities and infrastructure necessary to engage in education and 
research programs vital to the future health and well being of our 
reservation communities. We respectfully request the subcommittee build 
upon this much needed base fund by increasing the fiscal year 2005 
endowment fund payment to the $12 million recommended in the 
President's Budget.
    1994 Institutions' Educational Equity Grant Program.--Closely 
linked with the endowment fund, this program currently provides 
approximately $50,000 per 1994 Institution to assist in academic 
programs. Through the modest appropriations made available since fiscal 
year 1996, the tribal colleges have been able to begin to support 
courses and plan activities specifically targeting the unique needs of 
our respective communities.
    The 1994 Institutions have developed and implemented courses and 
programs in natural resource management; environmental sciences; 
horticulture; forestry; bison production and management; and especially 
food science and nutrition to address epidemic rates of diabetes and 
cardiovascular disease on reservations. If more funds were available 
through the Educational Equity Grant Program, tribal colleges could 
channel more of their endowment yield to supplement other facilities 
funds to address their critical infrastructure issues. Authorized at 
$100,000 per eligible 1994 Institutions, in fiscal year 2004, this 
program was appropriated at just $1,679,000, or about $54,000 per 1994 
institution. We respectfully request full funding of $3.1 million to 
allow the colleges to build upon the courses and activities that the 
initial funding launched.
    Extension Programs.--The 1994 Institutions' extension programs 
strengthen communities through outreach programs designed to bolster 
economic development; community resources; family and youth 
development; natural resources development; agriculture; as well as 
health and nutrition awareness.
    In fiscal year 2004, $2,929,000 was appropriated for the 1994 
Institutions' competitive extension grants, a 13 percent decrease from 
fiscal year 2003, by far the largest percentage decrease of all Smith 
Lever programs, as the 1862 and 1890 programs received a reduction of 
just 0.59 percent. Reductions in already sparse funding will 
significantly limit the 1994 Institutions' ability to maintain existing 
programs and to respond to emerging issues such as food safety and 
homeland security especially on border reservations. Additional funds 
are needed to support these vital programs designed to address the 
inadequate extension services provided to Indian reservations by their 
respective states. It is important to note that the 1994 extension 
program is specifically designed to complement and build upon the 
Indian Reservation Extension Agent program, and is not duplicative of 
other extension activities. For the reasons outlined above, we request 
the Subcommittee support this competitive program by appropriating $5 
million to sustain the growth and further success of these essential 
community based programs.
    1994 Research Program.--As the 1994 Land Grant Institutions have 
begun to enter into partnerships with 1862/1890 land grant institutions 
through collaborative research projects, impressive efforts to address 
economic development through land use have come to light. Our research 
program illustrates an ideal combination of Federal resources and 
tribal college-state institutional expertise, with the overall impact 
being far greater than the sum of its parts. We recognize the budget 
constraints under which Congress is functioning. However, $1.1 million, 
the fiscal year 2004 appropriated level of funding, is clearly 
inadequate for a competitive pool of 31 institutions. This research 
program is vital to ensuring that tribal colleges may finally become 
full partners in the nation's land grant system. Many of our 
institutions are currently conducting agriculture-based applied 
research, yet finding the resources to conduct this research to meet 
their communities' needs is a constant challenge. This research 
authority opens the door to new funding opportunities to maintain and 
expand the research projects begun at the 1994 Institutions, but only 
if adequate funds are appropriated. The following is an example of the 
projects funded under this program:
  --Southwestern Indian Polytechnic Institute (SIPI) serves American 
        Indian/Alaska Native students from across the nation. 
        Currently, SIPI is studying the feasibility of an intensive, 
        extended production of high value crops. This research project 
        compares the economic returns from growing raspberries and 
        strawberries under high tunnels to returns from open-field 
        growing conditions, under organic management at three sites 
        that consider variations in harvest time and duration, and 
        total production.
    Other project areas include soil and water quality, amphibian 
propagation, pesticide and wildlife research, range cattle species 
enhancement, and native plant preservation for medicinal and economic 
purposes. We strongly urge the Subcommittee to fund this program at $3 
million to enable our institutions to develop and strengthen their 
research potential.
    Rural Community Advancement Program (RCAP).--Beginning in fiscal 
year 2001, each year $4 million of the RCAP funds appropriated for 
loans and grants to benefit Federally recognized Native American tribes 
have been targeted for community facility grants for improvements at 
Tribal Colleges and Universities. As stated earlier, the facilities at 
many of the 1994 Land Grant Institutions are in serious need of repair 
and in many cases replacement. We urge the Subcommittee to designate $5 
million of the Native American RCAP funds to address the critical need 
for improving the facilities at the 1994 Tribal College Land Grant 
Institutions. Additionally, we respectfully request report language 
directing the Department of Agriculture to target a minimum of $5 
million for each of the next five fiscal years to allow our 
institutions the means to aggressively address critical facilities 
needs.

                               CONCLUSION

    The 1994 Land Grant Institutions have proven to be efficient and 
effective tools for bringing educational opportunities to American 
Indians and hope for self-sufficiency to some of this nation's poorest 
regions. The modest Federal investment in the 1994 Land Grant 
Institutions has already paid great dividends in terms of increased 
employment, education, and economic development. Continuation of this 
investment makes sound moral and fiscal sense. American Indian 
reservation communities are second to none in their need for effective 
land grant programs and as earlier stated no institutions better 
exemplify the original intent of the land grant concept than the 1994 
Land Grant Institutions.
    We appreciate your support of the Tribal Colleges and Universities 
and we ask you to renew your commitment to making our communities self-
sufficient. We look forward to continuing our partnership with you, the 
U.S. Department of Agriculture, and the other members of the nation's 
land grant system--a partnership that will bring equitable educational, 
agricultural, and economic opportunities to Indian Country.
    Thank you for this opportunity to present our funding proposals to 
this Subcommittee. We respectfully request your continued support and 
full consideration of our fiscal year 2005 appropriations requests.
                                 ______
                                 

               Prepared Statement of The American Legion

National School Lunch Program
    Since 1941, The American Legion has supported programs of nutrition 
for children, including the National School Lunch Program. This 
federally-assisted meal program operates in more than 99,000 public and 
non-profit private schools and residential child care institutions, 
providing nutritionally balanced, low-cost or free lunches to more than 
25 million children each school day.
    The importance of this nutrition assistance program is underscored 
by these facts: A poor diet is a significant factor in 4 of the 10 
leading causes of death in the United States--coronary heart disease, 
cancer, hypertension, stroke and diabetes.
  --Poor nutrition and lack of physical activity account for 300,000 
        deaths per year.
  --The economic cost of poor nutrition accounts for at least $200 
        billion per year in medical costs and lost productivity.
  --Participation in school feeding programs leads to improved 
        educational outcomes.
    There continues to be expressions of concern by health authorities 
and various national organizations with an interest in the status of 
proper nutrition among young people. A USDA analysis of the 1994-1996 
Continuing Survey of Food Intakes for Individuals (CSFII) noted these 
alarming trends in children's eating patterns:
  --Only 2 percent of school-aged children meet the Food Guide Pyramid 
        serving recommendations for all five major food groups.
  --Girls, ages 14 to 18, have especially low intakes of fruits and 
        dairy products.
  --More than two-thirds of females, ages 14 to 18, exceed the 
        recommendations for intake of total fat and saturated fat, but 
        even greater percentages of children exceed these 
        recommendations among the other age/gender groups.
  --Children's diets are high in added sugars. For all children, added 
        sugars--including sugars used as ingredients in processed foods 
        or added to foods as they are consumed--contribute an average 
        of 20 percent of total food energy.
  --Children are heavy consumers of regular or diet soda. Overall, 56 
        to 85 percent of children (depending on age and gender) consume 
        soda on any given day. Teenage males are especially heavy 
        consumers of soda, with over a third consuming more than three 
        servings a day.
  --All of the age/gender groups experienced a shift from milk products 
        to soda and fruit drinks. The decrease in milk consumption 
        tended to be larger for females than for males.
  --These trends have contributed to some serious diet-related health 
        concerns.
  --The prevalence of overweight among youth ages 5-17 years in the 
        United States has more than doubled in the past 30 years; most 
        of the increase has occurred since the late 1970's.
  --Current evidence suggests that childhood overweight and obesity 
        continue into adulthood.
  --One of the most serious aspects of overweight and obesity in 
        children is Type II diabetes. Type II diabetes accounted for 2 
        to 4 percent of all childhood diabetes before 1992, but 
        skyrocketed to 16 percent by 1994. Overweight adolescents are 
        more likely to become overweight adults, with increased risk 
        for developing heart disease and stroke, gallbladder disease, 
        arthritis, and endometrial, breast, prostate and colon cancers.
  --Failure to meet calcium requirements in childhood can hinder the 
        achievement of maximal skeletal growth and bone mineralization. 
        Getting enough calcium in the diet during childhood, 
        adolescence, and young adulthood, to reduce the risk for 
        osteoporosis later in life is particularly important for 
        females.
    Nutrition clearly has a major impact on children--on their health, 
their ability to learn and on their potential for becoming healthy and 
productive adults. School meals make an important contribution to the 
nutrition of school-aged children. The School Nutrition Dietary 
Assessment Study-II indicates that reimbursable meals selected by 
students exceeds the Recommended Dietary Allowances (RDA) standards for 
key nutrients. According to the USDA analysis of the 1994-1996 CSFII 
data:
  --National School Lunch Program (NSLP) participation is associated 
        with higher average intakes of many nutrients, both at lunch 
        and over 24 hours.
  --NSLP participants have substantially lower intakes of added sugars 
        than do non-participants.
  --NSLP participants are more likely than non-participants to consume 
        vegetables, milk and milk products, and meat and other protein-
        rich foods, both at lunch and over 24 hours; they also consume 
        less soda and fruit drinks.
    Federal nutrition assistance programs have a critical role to play 
in promoting health and preventing diet-related health problems by 
ensuring access to nutritious food to those who need it, and by 
promoting better diets and physical activity through nutrition 
education and promotion to program participants. The American Legion 
urges Congress to appropriate $10.6 billion for school nutrition 
programs to reflect the increased cost of food and to provide for 
needed facilities and trained personnel for the purpose of conducting 
an adequate school lunch program.
                                 ______
                                 

      Prepared Statement of the American Public Power Association

    The American Public Power Association (APPA) is the national 
service organization representing the interests of over 2,000 municipal 
and other state and locally owned utilities throughout the United 
States (all but Hawaii). Collectively, public power utilities deliver 
electricity to one of every seven electric consumers (approximately 40 
million people), serving some of the nation's largest cities. However, 
the vast majority of APPA's members serve communities with populations 
of 10,000 people or less.
    We appreciate the opportunity to submit this statement outlining 
our fiscal year 2005 funding priorities within the jurisdiction of the 
Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Subcommittee.
Department of Agriculture: Rural Utility Service Rural Broadband Loan 
        Program
    APPA urges the Subcommittee to fully fund the Rural Utility 
Service's (RUS) Rural Broadband Loan Program at $20 million, as 
authorized in the 2002 Farm Bill, and to take all appropriate steps to 
assist the RUS in facilitating the processing of loan funds provided in 
fiscal year 2002 through fiscal year 2004. A funding level of $20 
million would produce approximately $700 million in RUS loans for 
fiscal year 2005.
    APPA believes it is important to provide incentives for the 
deployment of broadband to rural communities, many of which lack 
broadband service. Increasingly, access to advanced communications 
services is considered vital to a community's economic and educational 
development. In addition, the availability of broadband service enables 
rural communities to provide advanced health care through telemedicine 
and to promote regional competitiveness and other benefits that 
contribute to a high quality of life. Approximately one-fourth of 
APPA's members are currently providing broadband service in their 
communities. Several APPA members are planning to apply for RUS 
broadband loans to help them finance their broadband projects, and one 
member--Grant County Public Utility District in Washington--applied for 
an RUS loan last year.
                                 ______
                                 

           Prepared Statement of the American Sheep Industry

    The American Sheep Industry Association (ASI) is a federation of 
state member associations representing over 64,000 sheep producers in 
the United States. The sheep industry views numerous agencies and 
programs of the U.S. Department of Agriculture as important to lamb and 
wool production. Sheep industry priorities include rebuilding and 
strengthening our infrastructure primarily through the National Sheep 
Industry Improvement Center, critical predator control activities, 
fully funded our national animal health efforts, and expanding research 
capabilities.
    The rapid changes that have occurred in the domestic sheep industry 
and continue to take place put further emphasis on the importance of 
adequately funding the U.S. Department of Agriculture programs 
important to lamb and wool producers.
    We appreciate this opportunity to comment on those portions of the 
USDA fiscal year 2005 budget.

                           RURAL DEVELOPMENT

    The National Sheep Industry Improvement Center is critical to the 
industry and we fully support appropriations for the balance of 
authorized spending of $22 million. The Sheep Center is currently 
involved with an Intermediary Low Interest Direct Loan Program, which 
became operational in 2000 and has committed $14 million for lamb, wool 
and goat projects. Loans are being used to fund a variety of large and 
small projects in every region of the country with emphasis on 
targeting different marketing challenges through value added and niche 
marketing initiatives. The second focus area is a direct grant program 
that was started in 2002. The Center has approved a grant solicitation 
process with an increased funding amount for fiscal year 2004, which 
ought to be considered again in fiscal year 2005 with additional 
appropriations.
    We understand that loan proposals currently under consideration 
will fully use the available funds. The demand for the Center's funds 
is increasing and additional appropriations will be required to meet 
the new project requests. Furthermore the authority of the Center to 
receive Federal funds allows for another $22 million during the next 2 
fiscal years. The Center is a premier vehicle of the U.S. sheep 
industry's adjustment plan and adequate funding is critical to the 
industry.

           ANIMAL AND PLANT HEALTH INSPECTION SERVICE (APHIS)

Scrapie
    The American Sheep Industry Association is very appreciative for 
the increased appropriations approved in fiscal year 2003 and fiscal 
year 2004 of $15.47 million. USDA/APHIS, along with industry and State 
regulatory efforts, is now in the position to eradicate scrapie from 
the United States with a multi-year attack on this animal health issue. 
As the collective and aggressive efforts of Federal and State 
eradication efforts are expanding into slaughter-surveillance and other 
methods and systems, the costs are, as expected, escalating. We urge 
the subcommittee to support the President's request of $21 million for 
scrapie eradication in the 2005 budget.
    Scrapie is one of the family of transmissible spongiform 
encephalopathies (TSEs), all of which are the subject of great 
importance and interest around the globe. USDA/APHIS, along with the 
support and assistance of the livestock and allied industries, began an 
aggressive program to eradicate scrapie in sheep and goats three years 
ago. The plan USDA/APHIS is implementing will eradicate scrapie by 2010 
and with subsequent monitoring and surveillance would allow the United 
States to be declared scrapie-free by 2017. Becoming scrapie-free will 
have significant positive economic impact to the livestock, meat and 
feed industries and, of course, rid our flocks and herds of this fatal 
animal disease.
    Essential to the eradication effort being accomplished in a timely 
manner, is adequate appropriated funds. The program cannot function 
properly without additional personnel, diagnostic support and 
surveillance activities that depend upon appropriated funds. We 
strongly urge you to support the level of funding that is specified for 
scrapie in the President's budget request. Funding of $21 million will 
provide for an achievable scrapie eradication program and the eventual 
scrapie-free status for the United States. As with the other successful 
animal disease eradication programs conducted by USDA/APHIS in the 
past, strong programs at the State level are key. We therefore urge the 
subcommittee to send a clear message to USDA to budget significant 
funding toward cooperative agreements with the State animal health 
regulatory partners.
Wildlife Services
    With well over one-quarter million sheep and lambs lost to 
predators each year, the Wildlife Services (WS) program of USDA-APHIS 
is vital to the economic survival of the sheep industry. The value of 
sheep and lambs lost to predators and predator control expenses are 
second only to feed costs for sheep production. Costs associated with 
depredation currently exceed our industry's veterinary, labor and 
transportation costs.
    Wildlife Service's cooperative nature has made it the most cost 
effective and efficient program within Federal Government in the areas 
of wildlife management and public health and safety. Wildlife Services 
has more than 2,000 cooperative agreements with agriculture, forestry 
groups, private industry, state game and fish departments, departments 
of health, schools, county and local governments to mitigate the damage 
and danger that the public's wildlife can inflict on private property 
and public health and safety.
    ASI strongly supports the fiscal year 2004 appropriations for 
Wildlife Services operations and methods development programs, 
particularly as related to livestock protection. We request the 
Committee restore the funding levels that are decreased in the 
Administration's fiscal year 2005 budget. We encourage continued 
recognition in the appropriations process for fiscal year 2005 of the 
importance of aerial hunting as one of Wildlife Service's most 
efficient and cost-effective core programs and ASI supports continued 
appropriations. It is used not only to protect livestock, wildlife and 
endangered species, but is a crucial component of the Wildlife Services 
rabies control program.
    Similar to the increasing needs in the aerial hunting program we 
encourage continued emphasis in the programs to assist with management 
of wolf depredation in the states of Montana, Idaho, Wyoming, 
Minnesota, Wisconsin, Michigan, New Mexico and Arizona. Additionally, 
program expenses are expected in the states surrounding the Montana, 
Idaho and Wyoming wolf populations. It is strongly supported that 
appropriations be provided for $586,000 for additional wolf costs 
anticipated in Washington, Oregon, Nevada, Utah, Colorado and North 
Dakota. A regional helicopter proposed for use in the affected areas is 
supported at $980,000.
    The following additional appropriations are urged for consideration 
in fiscal year 2005:
  --Wildlife Services must document its operations in order to conduct 
        program analysis and comply with Federal reporting 
        requirements. The agency's current information technology 
        support system has become antiquated, which could result in 
        incomplete data collection and analysis. To update and maintain 
        the information system, an additional $700,000 is needed.
  --Research and Development is needed to improve existing techniques, 
        find new methods for capturing and/or discouraging wildlife 
        from preying on livestock or other wildlife species, and 
        explore fertility methods (i.e., sterilization and 
        immunocontraception) that are economically and socially 
        acceptable. An additional $1,150,000 is needed to meet the 
        research and personnel needs of the National Wildlife Research 
        Center Predator Research Unit.
  --Implementation of Newly Developed Methods including new 
        technologies that deal with electronic devices or 
        immunocontraception require significant funds to implement. It 
        is recommended that a fund of $2,300,000 be established to take 
        the newly developed techniques and test them in actual field 
        conditions to determine their practicability in terms of 
        effectiveness and cost.
  --Livestock protection is the major emphasis of the WS western 
        program and the agency frequently receiving requests to assist 
        other types of wildlife damage related issues. For example, 
        concerns over declining native wildlife are being expressed by 
        many state wildlife agencies. WS is being requested to provide 
        assistance to reduce impacts of predation on these species to 
        allow for recovery and to avert threatened and endangered 
        species listings. With limited resources and employees to 
        accommodate these requests, additional infrastructure and 
        equipment is needed to meet these demands. An additional 
        $6,900,000 is necessary to purchase equipment, meet personnel 
        needs to maintain and implement programs, update the data 
        collection system, develop and implement a public communication 
        plan, and meet NEPA planning requirements.

                     AGRICULTURAL MARKETING SERVICE

Lamb Market Information and Price Discovery Systems
    The sheep industry strongly supports the fiscal year 2005 budget 
for Market News of USDA-Agricultural Marketing Service. Furthermore ASI 
supports necessary increases in appropriations for the full 
implementation of the mandatory price-reporting system for livestock. 
We expect AMS to continue efforts to fully implement the price 
reporting system this fiscal year with the inclusion of the imported 
lamb meat price report.

                   FOREIGN AGRICULTURAL SERVICE (FAS)

    The sheep industry participates in FAS programs such as the Market 
Access Program (MAP), Quality Samples Program and the Foreign Market 
Development Program. ASI strongly supports appropriations at the full 
authorized level for these critical Foreign Agricultural Service 
programs. ASI is the cooperator for American wool and sheep pelts and 
has achieved solid success in increasing exports of domestic product. 
Exports of American wool have been increased dramatically with 
approximately 60 percent of U.S. production now competing overseas.

             NATURAL RESOURCES CONSERVATION SERVICE (NRCS)

    ASI urges increased appropriations for the range programs of the 
Soil Conservation Service to benefit the private range and pasture 
lands of the United States with conservation assistance. We support the 
budget item and recommend an increased level for the Grazing Lands 
Conservation Initiative, which ASI has worked with, along with other 
livestock and range management organizations, to address this important 
effort for rangelands in the United States.

                   RESEARCH, EDUCATION AND ECONOMICS

    Our industry is striving to be profitable and sustainable as a user 
of and contributor to our natural resource base. Research, both basic 
and applied, and modern educational programming is essential if we are 
to succeed. We have been disappointed in the decline in resources USDA 
has been targeting toward sheep research and outreach programs. With 
net increases in the animal systems category of the agriculture 
research budget, for example, sheep and wool research has either 
declined or remained static for the past several years. In order for 
the sheep industry to be more globally competitive in the future, we 
must invest in the discovery and adoption of new technologies for 
producing, processing and marketing lamb and wool. We urge the 
subcommittee to send a strong message to USDA supporting sheep research 
and education funding increases.

Agricultural Research Service
    We continue to vigorously support the administration's funding of 
research concerning emerging and exotic diseases. Emerging and exotic 
diseases continue to have significant impact on our industry due to 
animal health and trade issues. The animal disease portion should be 
substantial and is urgently needed to protect the U.S. livestock 
industry. We agree that BSE is an extremely important disease issue 
globally and believe that research is needed. With this in mind, we 
remind the subcommittee that scrapie is a TSE that is endemic in the 
United States and we recommend that these monies for BSE research be 
utilized in such a manner that the resultant research assists with 
scrapie eradication needs. We also respectively remind the subcommittee 
that scientists in the Animal Disease Research Unit (ADRU), ARS, 
Pullman Washington, have made significant progress in the early 
diagnosis of TSEs, in understanding genetic resistance to TSEs and in 
understanding mechanisms of TSE transmission, which are important in 
eradication of all TSEs. The programs of these scientists at ADRU 
should be enhanced and expanded to include, for instance, the 
development of further improvements in rapid and accurate TSE detection 
methods and to provide an understanding of the role of environmental 
sources of the TSE agent in the transmission of TSEs within the United 
States and world and to further understand the basis of genetic 
resistance and susceptibility to these devastating diseases.
    We appreciate and support the President's budget request of $1 
million for Animal Genomics at ARS/ADRU. Since 2001, Congress has had 
the foresight to appropriate $775,000 each year to this unit for 
``Microbial Genomics.'' Microbial genomics is the cornerstone project 
for their genomic research infrastructure and has resulted in very 
important genome projects for infectious diseases of livestock such as 
scrapie. The $250,000 enhancement of the genomics program at ADRU over 
the fiscal year 2004 would enhance the program to include defining the 
genes involved in the immune response of sheep to important emerging 
diseases such as MCF and ovine progressive pneumonia virus.
    We also urge the subcommittee to recommend the restoration of 
$496,000 for Malignant Catarrhal Fever (MCF) at the ARS/ADRU in Pullman 
for the fiscal year 2005 budget. MCF is a viral disease of ruminants 
that is of great concern to our livestock industries. The exotic 
variant of MCF is considered a high priority select agent. This funding 
is provided for collaborative research with the U.S. Sheep Experiment 
Station, Dubois ID, for vaccine development directed at preventing 
transmission of MCF.
    Research into Johne's disease has received additional funding 
through ARS over the past several years, focusing on cattle. Johne's 
disease is also endemic in the U.S. sheep population and is not well 
understood as a sheep disease. The same food safety concerns exist in 
both sheep and cattle; other countries are also very concerned about 
Johne's in sheep. We urge the subcommittee to send a strong message to 
ARS that Johne's disease in sheep should receive more attention at the 
National Animal Disease Research Center (NADC) with an emphasis on 
diagnostics.

Economic Research Service
    ASI appreciates the subcommittees' support of USDA/ERS and the 
accomplishment of publicly available retail price data on lamb as 
initiated last year. We urge continued support of funding for mandatory 
price reporting including collection and reporting of retail lamb price 
data.

 COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE (CSREES)
 
   The Minor Use Animal Drug Program is funded through a ``Special 
Research Grant'' that has had great benefit to the U.S. sheep industry. 
The research under this category and the companion ``NRSP-7'' program 
through FDA/CVM has provided research information on therapeutic drugs 
that are needed for the approval process. Without this program, 
American sheep producers would not have effective products to keep 
their sheep healthy. We appreciate the Administration's request of 
$588,000 for this program, and we urge the subcommittee to recommend 
that it be funded at least at this level to help meet the needs of our 
rapidly changing industry and increasing costs for research necessary 
to meet the requirements for approving additional therapeutics for 
sheep.
    On-going funding for the Food Animal Residue Avoidance Databank 
(FARAD) program is critically important for the livestock industry in 
general and especially for ``minor species'' industries such as sheep 
where extra-label use of therapeutic products is more the norm rather 
than the exception. FARAD provides veterinarians the ability to 
accurately prescribe products with appropriate withdrawal times 
protecting both animal and human health. We urge the subcommittee to 
restore funding for FARAD at least to the level of $800,000.
    Ongoing research in wool is critically important to the sheep and 
wool industry. ASI urges the subcommittee's support of $294,000 for 
fiscal year 2005 through the special grants program of the CSREES for 
wool research.
    Ongoing research for the Montana Sheep Institute is important to 
the sheep and wool industry. Sheep grazing is being used as an 
important tool for natural resource management to improve the 
competitiveness of lamb and wool in the marketplace. ASI encourages the 
subcommittee's support of funding at $556,360.
    The research and education programs conducted through the Joe Skeen 
Institute for Rangeland Restoration provide valuable information for 
sheep producers in the western United States. ASI urges the 
subcommittee to restore the funding to the originally proposed 
$1,000,000 in fiscal year 2003.
    The industry greatly appreciates this opportunity to discuss these 
programs and appropriations important to the sheep industry.
                                 ______
                                 

      Prepared Statement of the American Society for Microbiology

    The American Society for Microbiology (ASM), the largest single 
life science society with a membership of over 43,000, appreciates the 
opportunity to submit testimony in support of the fiscal year 2005 
budget for the Food and Drug Administration (FDA). The FDA serves as 
the science-based protector of public health by assuring the safety, 
efficacy, and security of human and veterinary drugs, biological 
products, medical devices, the food supply, consumer products and by 
responding to new challenges of bioterrorism and food defense. The FDA 
also advances health care by taking steps to improve and ensure new 
medical product development based on biomedical research. It is 
critical that FDA maintain the highest level of public trust in all of 
its activities and increased funding is vital to its success and its 
critical mission initiatives.
    The ASM supports the Administration's fiscal year 2005 budget 
request of $1.8 billion which represents an 8.8 percent increase over 
the fiscal year 2004 funding level. This increase will enhance security 
of the nation's domestic and imported food supply and support stronger 
FDA review of medical devices, better protection against bovine 
spongiform encephalopathy (BSE), and more efficient work output through 
further consolidation of FDA facilities. The increase recognizes the 
important activities of the FDA in improving patient and consumer 
safety and responding to new challenges of bioterrorism and food 
defense. The FDA is a principal partner in inter-agency homeland 
security strategies.
    Science-based decision making and a well-trained workforce make the 
FDA an effective and reliable guardian of public health. As the U.S. 
population grows and threats to public safety persist, demands on the 
FDA are multiplying in number and complexity. Changes in global trade 
and international politics affect the FDA mission as well. Last year 
for instance, the FDA conducted nearly 80,000 imported food 
examinations, up from 12,000 in 2001. The agency must remain highly 
responsive both to on-going consumer needs and to unexpected emergency 
situations. In 2003 the FDA activated its Emergency Operations Center 
to respond to the first reported United States case of BSE and to 
participate in a two-city, full-scale counterterrorism exercise of a 
simulated detonation of a nuclear device and the release of the 
pneumonic plague pathogen.

Food Defense and National Security
    Over the past three years, the FDA has worked to improve food 
security by adding more inspections of imported food, trained 
investigators, and port of entry security measures. Protecting the food 
consumed by over 290 million Americans demands major effort from the 
FDA and its staff. The agency directly oversees the safety of about 80 
percent of the nation's food supply and assists the U.S. Department of 
Agriculture (USDA) on the remainder. Nearly half of the proposed $149 
million budget increase, an amount of $65 million, would further 
broaden the FDA's capabilities to guarantee and defend the national 
food supply to an fiscal year 2005 total of $181 million.
    This allocation would support the key food defense strategies 
already being implemented by the agency: increase food security 
awareness among public and private stakeholders; develop advanced 
capacities to identify specific threats or attacks on the food supply; 
design additional protection to shield the food supply from terrorist 
attack; fine-tune rapid coordinated response capability in the event of 
a foodborne terrorist attack; and enhance the capacity for a quick 
recovery if such an attack did harm any residents of the United States.
    Of the proposed $65 million increase, $35 million would establish a 
joint FDA-USDA network of qualified investigative laboratories, the 
Food Emergency Response Network (FERN). Throughout its long history, 
the FDA has optimized consumer protection by collaborating with states, 
other Federal agencies, law enforcement, industry, academic 
institutions and others in the areas of research, information exchange, 
and emergency responses. The FERN program will continue this tradition 
by creating a nationwide network of Federal and State laboratories 
capable of testing thousands of food samples for biological, chemical, 
and radiological threat agents. It will add 15 FDA-funded state 
laboratories to the 10 labs planned for fiscal year 2004, all to 
possess advanced instrumentation and pathogen containment capabilities. 
The program also incorporates FDA research on new testing methods that 
could shorten the time needed to detect foodborne threats. The FDA will 
expand to 104 the number of state health and agricultural laboratories 
connected through its electronic network, eLEXNET, to facilitate 
exchange of lab data critical in first-alert situations.
    Basic research underlies every application applied by the FDA in 
its search for possible foodborne health hazards. Within the fiscal 
year 2005 increase, $15 million would fund intramural and extramural 
research on methods development, characteristics of specific foodborne 
pathogens, and new prevention technologies to improve food safety--
results subsequently would help shape new guidelines and performance 
standards for the food production industry. Better understanding of how 
pathogens survive in foods during processing and storage and of the 
doses of pathogens needed to cause disease will provide superior 
prevention protocols. FDA funded research also discovers new 
microbiological, chemical, and radiological methods to detect and 
identify biothreats found in food.
    Surveillance constitutes a large part of the FDA's protection of 
the food supply. In fiscal year 2005, the FDA intends to conduct nearly 
26,000 inspections of domestic food production firms, almost 11 times 
the investigations done in fiscal year 2001. FDA inspectors also will 
perform 97,000 import-food field inspections, more than 60 percent over 
last year and seven times the number in fiscal year 2001. The $7 
million within the proposed fiscal year 2005 increase earmarked for 
increased food inspections would help alleviate the burgeoning 
potential of contaminated food imports, though many thousands of 
imported food shipments would remain left unchecked. The FDA will soon 
implement its component of the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002, which among other measures will 
require the registration of food facilities and advance notice of food 
imports. In the fiscal year 2005 food defense increase, the FDA also 
would receive $5 million for its role in the new interagency 
Biosurveillance Initiative developed to improve the Federal 
Government's capability to rapidly identify and characterize 
bioterrorist attacks. When in place, the Biosurveillance Initiative 
will shorten the time needed to alert the nation to such an attack. 
Towards this goal, the FDA will coordinate existing state and Federal 
food surveillance networks to facilitate communications on outbreaks 
and other events related to foodborne illness. The remaining $3 million 
of the proposed funding increases for food defense would upgrade the 
FDA's intra-agency communication system used by personnel during 
emergencies.
    Contamination of the food supply not only threatens public health; 
the economic and political ramifications are enormous, as evidenced by 
costly export embargoes recently triggered by fear of BSE in meat 
products. More than 30 countries have banned the import of American 
beef, in response to last December's discovery of an imported BSE-
infected dairy cow. The Federal Government just announced that up to 
300,000 U.S. cattle may be tested for BSE each year, which would 
require some new, FDA-approved rapid screening test to succeed. The 
President's budget includes more than $8 million to fund new FDA 
safeguards against BSE. This would increase FDA's funding to stop BSE 
to $30 million in fiscal year 2005.
    Most of the $8 million will be used for field activities under the 
FDA's Animal Drugs and Feeds program, including an additional 920 risk-
based inspections, 600 targeted sample collections/analyses, and at 
least 2,500 state inspections of animal feed firms. Animal feed 
contaminated with the BSE agent is the only known route of BSE 
transmission. As the agency responsible for animal feeds used in food 
production, this year the FDA will inspect 100 percent of feed mills 
and renderers. The FDA's more aggressive approach to BSE also will 
involve evaluating new commercial BSE screening tests like polymerase 
chain reaction techniques and educating even more food producers on new 
and updated regulations. In January, the FDA announced additional, 
more-rigid safeguards to prevent potentially BSE-contaminated animal 
parts from entering either the food supply or health care products.

Medical Products and Public Safety
    The ASM supports the Administration's proposed fiscal year 2005 
funding levels for FDA regulation of medical-use products, including 
medical devices, human drugs, and biologics such as vaccines and gene 
therapies. The budget includes $252 million for the Medical Devices 
program, a $26 million increase over fiscal year 2004. The program 
plans to more rapidly review new products, while increasing the number 
of products reviewed in a time period. The Human Drugs program would 
receive $499 million, an increase of $23 million, and the Biologics 
program, $173 million, or $4 million more than last fiscal year. All 
medical products are evaluated by the FDA for safety and efficacy 
before entering the U.S. marketplace. In fiscal year 2003, the FDA 
approved 466 new and generic drugs and biological products, following 
extensive science-based evaluations. Agency personnel also monitor the 
10,000 drugs already on the market. FDA oversight of these products has 
both public health and national security significance, under the goal 
of more quickly reviewing new products and making them available to the 
nation's health care systems and defense agencies and to the public.
    FDA is the only government agency involved with the approval of 
products necessary to prevent or treat human exposure to terrorist 
agents. Given the unpredictability of emergencies, the FDA must be able 
to respond to product needs at any point along the product production 
pipeline. The Administration has included $5 million in the fiscal year 
2005 budget proposal to support the FDA's role in Project Bioshield, an 
inter-agency initiative to ensure medical readiness in the event of war 
or a catastrophic event. The FDA's role in Project Bioshield is the 
expedited review of specialized products and medical countermeasures 
for at-risk populations, such as the military, first responders, those 
near nuclear facilities, and others. FDA plans collaboration with the 
CDC on plague in African countries, and with the National Institute of 
Allergy and Infectious Diseases on studies to determine the lowest 
effective antibiotic dose to treat pneumonic plague. Like the other 
Federal agencies involved in Project Bioshield, the FDA must be able to 
respond quickly and correctly to emergencies, using its best science-
based capabilities.
    The ASM recommends continuing commitment and support by Congress 
for the important public health protection work of FDA. Increased 
funding will help enable FDA to perform its responsibilities to ensure 
access to safe and effective medical countermeasures against potential 
biological, chemical or radiological terrorism, consumer product 
safety, food safety, accurate product information and safe and 
effective drug and device evaluations. Additional funding will help to 
ensure that FDA can develop and maintain a highly skilled scientific 
workforce and that science based decision-making continues to be strong 
at all of FDA's research centers.
                                 ______
                                 

      Prepared Statement of the American Society for Microbiology

    The American Society for Microbiology (ASM) appreciates the 
opportunity to submit testimony on the fiscal year 2005 appropriation 
for the United States Department of Agriculture (USDA). The ASM is the 
largest single life science organization in the world, with more than 
43,000 members who work in academic, industrial, medical, and 
governmental institutions worldwide. The ASM's mission is to enhance 
the science of microbiology, to gain a better understanding of life 
processes, and to promote the application of this knowledge for 
improved health, and for economic and environmental well-being.
    The USDA sponsors research and education programs which contribute 
to solving agricultural problems of high national priority and 
sustaining safe food and a competitive agricultural economy. United 
States agriculture faces new challenges, including threats from 
emerging infectious diseases in plants and animals, climate change, and 
public concern about food safety and security. It is critical to 
increase the visibility and investment in agriculture research to 
respond to these challenges. The following testimony will focus on 
USDA's research and education programs.
    The ASM supports increases proposed for the USDA Food and 
Agriculture Defense Initiative, the Bovine Spongiform Encephalopathy 
(BSE) Initiative, and the Genomics Initiative. The ASM recommends 
greater emphasis on funding for research in these programs. 
Microbiological research in agriculture is vital to understanding and 
finding solutions to foodborne diseases, new and emerging plant and 
animal diseases, and the development of new agriculture products and 
processes. Unfortunately, Federal investment in agricultural research 
has not kept pace with the need for additional agricultural research to 
solve emerging problems. According to National Science Foundation (NSF) 
data, agriculture research makes up only 4 percent of Federal funds 
devoted to basic research. ASM urges Congress to provide increased 
funding for research programs within the USDA.

USDA National Research Initiative Competitive Grants Program
    The National Research Initiative Competitive Grants Program (NRI) 
was established in 1991 in response to recommendations outlined in 
Investing in Research: A Proposal to Strengthen the Agricultural, Food 
and Environmental System, a 1989 report by the National Research 
Council's (NRC) Board on Agriculture. This publication called for 
increased funding of high priority research, that is supported by USDA 
through a competitive peer-review process directed at:
  --Increasing the competitiveness of U.S. agriculture.
  --Improving human health and well-being through an abundant, safe, 
        and high-quality food supply.
  --Sustaining the quality and productivity of the natural resources 
        upon which agriculture depends.
    Continued interest in and support of the NRI is reflected in two 
subsequent NRC reports, Investing in the National Research Initiative: 
An Update of the Competitive Grants Program of the U.S. Department of 
Agriculture, published in 1994, and National Research Initiative: A 
Vital Competitive Grants Program in Food, Fiber, and Natural Resources 
Research, published in 2000.
    Today, the NRI, housed within USDA's Cooperative State Research, 
Education, and Extension Service (CSREES), supports research on key 
problems of national and regional importance in biological, 
environmental, physical, and social sciences relevant to agriculture, 
food, and the environment on a peer-reviewed, competitive basis. 
Additionally, NRI enables USDA to develop new partnerships with other 
Federal agencies that advance agricultural science. An example of such 
collaboration is USDA's partnership with the NSF on the Microbe 
Project.
    In fiscal year 2004, funding for NRI suffered a decrease of $2 
million from fiscal year 2003, providing just $164 million. 
Comparatively, the USDA requested $180 million for NRI in fiscal year 
2005, a decrease of $20 million from the request for fiscal year 2004, 
and a decrease of $60 million from the request for fiscal year 2003. 
NRI can fund only between 14-15 percent of the high quality research 
proposals received, while agencies such as the National Institutes of 
Health (NIH) and the NSF fund between 20-30 percent of the research 
proposals. ASM urges Congress to fund NRI at the President's requested 
level for fiscal year 2003 of $240 million in fiscal year 2005. 
Increased funding for competitive, peer reviewed grants is needed to 
increase the size and number of awards and to pursue more research 
opportunities. Additional funding for the NRI is needed to expand 
research in microbial genomics and to provide more funding for merit 
reviewed basic research with long-term potential for new discoveries. 
Without an increase in funding for NRI, the following critical research 
will be severely limited:
  --Research showing linkages between food and human diseases;
  --Research showing new ways to combat insects, weeds, plant and 
        animal disease in fields and ranches;
  --Research that helps keep pathogens and other dangers out of our 
        air, water, soil, plants, and animals;
  --Research establishing new crops, improved livestock and economic 
        opportunities;
  --Research that creates new food and processing techniques, producing 
        greater value and profitability;
  --Research on air culture to adapt to and mitigate climate change.

USDA Food and Agriculture Defense Initiative
    The Food and Agriculture Defense Initiative is an interagency 
initiative to improve the Federal Government's capability to rapidly 
identify and characterize a bioterrorist attack, by improving the 
national surveillance capabilities in human health, food, agriculture, 
and environmental monitoring. The President's request for this 
initiative within the USDA budget is $381 million for fiscal year 2005, 
an increase of $79 million over fiscal year 2004. This funding will go 
towards:
    Enhancing food defense by:
  --Increasing surveillance and monitoring of pathogens and other 
        hazards in meat, poultry and eggs and establishing connectivity 
        with the integration and analysis function at the Department of 
        Homeland Security (DHS);
  --Establishing a Food Emergency Response Network (FERN) with 
        participating laboratories including implementation of the 
        Electronic Laboratory Exchange Network (eLEXNET) and an 
        electronic methods repository; and strengthening research to 
        develop diagnostic methods for quickly identifying various 
        pathogens and contaminated foods; and
  --Developing diagnostic methods to quickly identify pathogens and 
        contaminated foods.
    Enhancing agriculture defense by:
  --Providing funds for completing the consolidated state-of-the-art 
        BSL-3 animal research and diagnostic laboratory at Ames, Iowa;
  --Establishing a National Plant Disease Recovery System that will 
        quickly coordinate with the seed industry to provide producers 
        with resistant stock before the next planting season in the 
        event of a natural or intentional catastrophic disease or pest 
        outbreak;
  --Expanding the Regional Diagnostic Network with links to the 
        National Agricultural Pest Information System;
  --Establishing a Higher Education Agrosecurity Program that will 
        provide capacity building grants to universities for 
        interdisciplinary degree programs to prepare food defense 
        professionals;
  --Substantially enhancing the monitoring and surveillance of pests 
        and diseases in plants and animals, including targeted National 
        wildlife surveillance;
  --Increasing State Cooperative Agreements to better select and 
        identify plant and animal health threats;
  --Increasing biosurveillance of pests and diseases in plants and 
        animals and establishing connectivity with the integration and 
        analysis function at DHS;
  --Establishing a system to track select disease agents of plants; and
  --Increasing the availability of vaccines through the National 
        veterinary vaccine bank.
    ASM believes there should be greater emphasis on research in the 
Food and Agriculture Defense Initiative, which provides just a small 
portion of funding, $31 million, for research of the overall $381 
million requested for this initiative. ASM recommends an increase in 
funding, both extramurally and intramurally, for research on pathogenic 
microorganisms as part of the Food and Agriculture Defense Initiative.

USDA BSE Initiative
    In the wake of the discovery of the first incident of BSE in a 
Holstein cow from Washington State, the USDA has requested an increase 
for BSE related activities of $47 million in fiscal year 2005 over 
fiscal year 2004, for a total of $60 million. USDA has allocated only 
$5 million of the total request for BSE activities related to research. 
This level of funding for research is inappropriately low. ASM urges 
Congress to increase the funding level for BSE research above the $5 
million requested. Basic research is essential in this area for the 
development of scientifically sound prevention strategies.

Food Safety
    The USDA plays a key role in the government's effort to reduce the 
incidence of foodborne illness. Continued and sustained research is 
important to safeguarding the nation's food supply and focusing on 
methods and technologies to prevent microbial foodborne disease and 
emerging pathogens. Although increases are provided for the Food and 
Agriculture Defense Initiative, for the Food Safety and Inspection 
Service, and for BSE activities, we note that funding for food safety 
is level within ARS and only a small increase is provided within 
CSREES.

Genomics Initiative
    The NRI and the ARS fund USDA collaborative efforts in the field of 
genomics. There are opportunities to leverage USDA investments with 
those of the NIH, the Department of Energy, and the NSF in projects to 
map and sequence the genomes of agriculturally important species of 
plants, animals, and microbes. USDA plays an important role in 
coordinating and participating in interagency workgroups on domestic 
animal, microbial, and plant genomics. Access to genomic information 
and the new tools to exploit it have implications for virtually all 
aspects of agriculture. In 2005, the NRI will support investments in 
functional genomics and databases. The USDA budget requests a $12 
million increase in animal and plant genomics research within the ARS, 
although the current funding levels are not specified in the budget 
request. There is no specific increase in the NRI for this initiative 
which suggests the program may have to reallocate from other under-
funded programs to support this initiative.

Emerging Infectious Diseases in Plants and Animals
    The food production and distribution system in the United States is 
vulnerable to the introduction of pathogens and toxins through natural 
processes, global commerce, and intentional means. The ASM supports 
increases in the USDA research budget for emerging diseases and 
invasive species. Nearly 200 zoonotic diseases can be naturally 
transmitted from animals to man. For emerging diseases to be 
effectively detected and controlled, the biology and ecology of the 
causal pathogens must be understood and weaknesses exploited to limit 
their spread. This research will help address the risk to humans from 
zoonotic diseases and the safety of animal products. Additionally, 
expanded research is needed to accelerate the development of 
information and technologies for the protection of United States 
livestock, poultry, wildlife and human health against zoonotic 
diseases.

Antimicrobial Resistance Research
    The USDA plays a key role in addressing the national and global 
increase in antimicrobial resistance and the complex issues surrounding 
this public health threat. The ARS Strategic Plan for 2003-2007 states 
the need to ``determine how antimicrobial resistance is acquired, 
transmitted, maintained, in food-producing animals, and develop 
technologies or altered management strategies to control its 
occurrence.'' In 1996, the Department of Health and Human Services 
(HHS) and the USDA established the National Antimicrobial Resistance 
Monitoring System (NARMS) to monitor trends in antimicrobial resistance 
in foodborne pathogens. USDA support for this project should continue. 
USDA research also has a vital role to play in controlling the 
emergence of resistance in pathogens associated with food through NRI 
funded grants. ASM urges Congress to increase support for antimicrobial 
resistance surveillance, research, prevention, and control programs.

Conclusion
    The USDA's mission and goals include leadership on food, 
agriculture, and natural resources, based on sound public policy, the 
best available science, and efficient management. With a significant 
investment in research, USDA will be better able to meet its goals. ASM 
urges Congress to provide sufficient funding for research at USDA 
increasing funding for agricultural research programs, including 
providing $240 million for NRI.
    The ASM appreciates the opportunity to provide written testimony 
and would be pleased to assist the Subcommittee as the Department of 
Agriculture bill is considered throughout the appropriations process.
                                 ______
                                 

  Prepared Statement of the American Society for Nutritional Sciences 
                                 (ASNS)

    The American Society for Nutritional Sciences (ASNS) is the 
principal professional organization of nutrition research scientists in 
the United States representing 3,000 members whose purpose is to 
develop and extend the knowledge and application of nutrition science. 
Our members include scientists involved in human as well as animal 
nutrition research. ASNS members hold positions in virtually every land 
grant, private institution, and medical school engaged in nutrition-
related research in the United States as well as industrial enterprises 
conducting nutrition and food-related research.

                 RESEARCH FUNDING MECHANISMS AND ISSUES

Competitive Grants
    The NRC report, National Research Initiative (NRI), suggests that 
inadequate funding for competitive research has ``limited its potential 
and placed the NRI program at risk.'' \1\ A competitive system for 
allocating government research funds is the most effective and 
efficient mechanism for focusing efforts on cutting edge research aimed 
at improving the health of the American people. Competitive grants 
provide the highest economic return to the public. ASNS strongly 
supports the competitive grants process as reflected in the NRI and 
believes that an open, merit and peer review process, applied as 
extensively as possible throughout the research system, is the 
preferred way to distribute research funds among qualified scientists 
and to support the most meritorious new concepts. ASNS also supports 
the finding in the National Academies Report, Frontiers in Agricultural 
Research that total competitive grants should be substantially 
increased to and sustained at 20-30 percent of the total portfolio. For 
these reasons, we strongly urge this subcommittee to consider an 
appropriation of $200 million for the NRI competitive grants program as 
an important step toward the original authorized level of $500 million.
---------------------------------------------------------------------------
    \1\ National Research Initiative: A Vital Competitive Grants 
Program in Food, Fiber, and Natural Resources Research. National 
Research Council, National Academy Press, Washington, D.C. 2000.
---------------------------------------------------------------------------
    Indirect Costs Cutting-edge research requires substantial 
investment in buildings and instrumentation. The USDA provides partial 
reimbursements for these indirect, but necessary, costs of research as 
part of grant funding. While we appreciate the efforts to raise the 
Congressionally mandated cap to 20 percent, the partial reimbursement 
for buildings and instrumentation still remains a significant 
disincentive for many university faculty to seek USDA funding. 
Furthermore, a diminutive facilities reimbursement significantly 
impairs the ability of universities to meet their fixed obligations 
such as, building and facility maintenance, and prevents them from 
further investing in needed facilities in the future. ASNS strongly 
urges that the USDA indirect costs rate be raised and made commensurate 
with the rate of other federal agencies. The best and brightest 
scientists in the United States are being deterred from agricultural 
research to the detriment of U.S. agriculture and the consumers of its 
commodities because universities discourage their researchers to apply 
for grants that when full indirect costs cannot be recovered. 
Furthermore, increasing the cap on fixed costs from 20 percent should 
not come at the expense of the overall agricultural research budget and 
its competitive grant programs.

Nutrition Monitoring
    Under an agreement between the Department of Health and Human 
Services (DHHS), the Center for Disease Control and Prevention (CDC), 
the National Center for Health Statistics (NCHS), and the USDA 
Agricultural Research Service (ARS/USDA), the ARS and NCHS has agreed 
to collaborate on a program of nutrition monitoring. This agreement 
establishes a cooperative diet and nutrition monitoring program 
integrating previously conducted Continuing Survey of Food Intakes by 
Individuals (CFSII) and the National Health and Nutrition Examination 
Survey (NHANES), which was designed to assess food consumption and 
related behavior in the U.S. population using personal interviews. The 
most recent survey was conducted in 1998. This appropriations sub-
committee has long supported USDA's role in food security, progress on 
foot and mouth disease, WIC, and prevention of diseases such as 
diabetes, cancer, and heart disease. ASNS requests your support for 
data collection via nutrition monitoring which is essential to policy 
making in all of these areas.
    The Human Nutrition section of the 2005 budget proposal includes an 
increase of $5 million for research in support of the Administration's 
Healthier U.S. Initiative. This research ``will be pursued to define 
the role of nutrients and other food components in promoting health and 
preventing obesity and related diseases.'' Additionally, we support the 
$3 million slated for the Economic Research Service (ERS) to carry out 
a Flexible Consumer Behavior Module to assess the relationship between 
individuals' knowledge and attitudes about dietary guidance and food 
safety and their food-choices. Data for this survey will be collected 
in conjunction with the National Health and Nutrition Examination 
Survey. Finally, we request $8.7 million for the Consumer Date and 
Information Initiative proposed for USDA's Economic Research Service 
(ERS). This data and analysis framework will provide information on 
diets, knowledge and information levels, and health status. Such 
information will help policymakers respond to current events, such as 
the rise in obesity which is especially troublesome in minority 
populations.

        THE NEED FOR FEDERALLY FUNDED NUTRITION-RELATED RESEARCH

    The need for increased nutrition science and research is critical 
within the USDA. As stated in the recent report of the National 
Academies, ``despite food and nutrition assistance programs, hunger and 
food insecurity persist in the United States . . . in addition, 
prevalence of overweight and obesity among U.S. adults has increased 
over the last three decades . . . and the percentage of overweight 
children and adolescents has also increased.'' We already know that 
many chronic diseases are weight-related, including diabetes, cancer, 
heart disease, stroke, and hypertension. There is an urgent need for 
increased research to ``guide and evaluate food and nutrition policies 
and interventions at multiple levels and settings, including 
individual, family, school, worksite, retail, marketing, and 
production.'' \2\
---------------------------------------------------------------------------
    \2\ Frontiers in Agricultural Research: Food, Health, Environment, 
and Communities, National Research Council of the National Academies, 
2002.
---------------------------------------------------------------------------
    Increasing populations, international economic competitiveness, 
improving the environment and minimizing healthcare costs through 
disease prevention are all areas that will continue to demand solutions 
for the future. These solutions will include advances in the 
understanding of the genetic basis of disease and the genetic basis of 
nutrient requirements for optimal health, which will require greater 
understanding of how nutrition and dietary information can be used for 
disease prevention in at-risk populations.
    The economic impact on society in healthcare costs produced by 
advances in nutrition research is significant in the number of dollars 
saved by the American taxpayer. As health costs continue to rise, it is 
imperative that our medical practices take a preventive approach. This 
requires a thorough understanding of the role of nutrients in foods in 
preventing chronic illnesses such as heart disease, cancer and 
diabetes. Most of the recent work on nutrient content and availability 
in various foods has come from USDA-National Research Initiative 
Competitive Grants Program (NRICGP) supported research.

      NUTRITION-RELATED RESEARCH OPPORTUNITIES AND ACCOMPLISHMENTS

Obesity
    Nutrition and physical activity are the two most important factors 
in the prevention of many chronic diseases such as diabetes, heart 
disease, stroke, and cancer. The United States Center for Disease 
Control (CDC) calls obesity the number one health problem in America. 
Current estimates show that half the American population will be 
clinically obese by the year 2030. The direct costs of treating 
complications of obesity, plus the indirect costs from lost 
productivity, represent a $100 billion annual burden on the U.S. 
economy. For these reasons the Federal Government needs to play a 
larger role in finding more effective treatments and ways to prevent 
this disease that is linked to so many other chronic diseases.
    NRICGP--funded obesity research that has made significant advances 
in nutrition and human health include:
  --Using mice as research models to study mechanisms of obesity; USDA 
        NRI-funded researchers are studying the compromised hormone 
        recognition in diet-induced obesity (http://www.reeusda.gov/
        nri/pubs/highlights/2001PDFs/No6.pdf).
  --NRI researchers have observed that prepregnant overweight or obese 
        women were associated with failure to initiate and sustain 
        lactation. They concluded that a reduction in the prolactin 
        response to suckling represents one biological mechanism that 
        could help to explain the early lactation failure observed in 
        overweight and obese women.
  --Food, Phytonutrients and Health
    Research in areas of bioactive food components will lead to a 
better understanding of the most promising food compounds that can 
address major health threats. Other areas offering great promise 
include improving the nutrient content of foods by modifying fats in 
plant and animal products to reduce cardiovascular disease, cancer and 
diabetes risk as well as research on how consumers select and use food 
and how food intake is linked to health.
  --The USDA was the lead U.S. agency in the International Rice Genome 
        Sequencing Project, which led to the published initial 
        sequences for two varieties of rice (Science 296:32-35 (2002)).
  --USDA-NRI supported studies in recent years have led to a new 
        understanding of folate requirements and health effects. 
        Dietary studies of nonpregnant women provided strong evidence 
        that folate intakes similar to the previously-held RDA were not 
        adequate to support metabolic needs. Other studies have shown 
        that an adequate folate intake in women of child-bearing age 
        minimizes the risk of certain birth defects should they become 
        pregnant. Ongoing studies are examining the role of an adequate 
        folate intake in maintaining health by reducing the risk of 
        cardiovascular disease and certain cancers.
  --Flavonoids are non-essential nutrients found in all plant foods and 
        plant-derived beverages. Epidemiological studies have shown 
        that these compounds are protective against various cancers. 
        USDA-funded researchers have found that a flavonoid-inducible 
        enzyme is important in inactivation of the major cooked-food 
        mutagen and colon carcinogen in cell cultures. Studies to 
        determine the bioavailability of the active flavonoids in rats 
        and humans are ongoing.
  --Soy isoflavones and vitamin E may reduce the risk of fractures in 
        osteoporotic women. Osteoporosis-related fractures are an 
        enormous public health problem. Scientists are studying the 
        effects of soy isoflavones and vitamin E on fracture healing 
        and bone quality in a rat model that mimics osteoporotic 
        fracture in postmenopausal women. They found that the 
        combination of soy isoflavones and vitamin E at 1,000 and 525 
        mg/kg diet, respectively, was effective in bringing bone 
        mineral content of the femur to levels similar to those of 
        intact, non-ovarian hormone deficient rats.
  --Dietary omega-3 fatty acids affect immune function. Omega-3 fatty 
        acids are essential for the normal development and function of 
        the neonatal brain and retina. However, the consumption of a 
        diet rich in omega-3 fatty acids may impair infectious disease 
        resistance against certain pathogens. Results can be used to 
        formulate future recommendations for dietary omega-3 fatty acid 
        intakes for human.
  --Cows that eat fish oil as part of their feed produce milk with 
        higher concentrations of conjugated linoleic acid, a compound 
        shown to help prevent cancer. USDA-funded research shows that 
        butter, yogurt, and ice cream produced from this milk also 
        contains healthful compounds and that consumers like the taste.
  --Efforts are under way to develop a corn hybrid that will synthesize 
        genistein, an isoflavone in soybeans that protects against 
        breast, prostate, and colon cancers.

Conclusion
    ASNS appreciates the proactive approach to the Subcommittee in 
supporting research at the USDA in the past and looks forward to the 
continued growth of research at and through the USDA in the critical 
areas of nutrition and disease prevention issues. Thank you for 
considering our request for the NRI and other important research 
programs within the USDA. We hope that you will call upon the expertise 
of our members as the Committee continues to deliberate these very 
important research areas.
                                 ______
                                 

 Prepared Statement of the American Society of Plant Biologists (ASPB)

    The American Society of Plant Biologists (ASPB), representing 
nearly 6,000 plant scientists, appreciates this opportunity to submit 
comments to the Subcommittee for its consideration of fiscal year 2005 
appropriations for research sponsored by the Department of Agriculture.
    ASPB supports the fiscal year 2005 budget request of the Department 
of Agriculture of $180 million for the National Research Initiative 
Competitive Grants Program (NRI). The NRI supports research into 
fundamental questions that lead to new enhanced crops, technologies and 
practices in agriculture. These research findings help address critical 
needs of the nation's farmers. NRI-sponsored plant research is needed 
to help prevent future losses of crops to pests, diseases and adverse 
weather conditions, such as drought and freezing.
    Advances in science made possible through the NRI will enable 
farmers to reduce their dependency on pesticides and antibiotics and to 
protect the water supply, soils and fragile ecosystems.
    Research sponsored by the NRI contributes to higher yields and 
safer foods. The NRI contributes to the talent pool of agricultural 
scientists in the states and nation to better serve the needs of 
producers and consumers. Without grant support from the NRI, the 
agricultural research community in our nation would be severely 
weakened.
    The National Research Council Board on Agriculture and Natural 
Resources Committee report on the NRI in 2000 strongly endorsed support 
for this competitive grants program. The NRC committee recommended that 
a major emphasis of the NRI continue to be the support of high-risk 
research with potential long-term payoffs. Much of this research would 
be classified as fundamental in the traditional use of this term.
    A major conclusion of the NRC committee was that, ``Without a 
dramatically enhanced commitment to merit-based peer-reviewed, food, 
fiber and natural resources research, the nation places itself at 
risk.''
    Continued support for a balanced research portfolio in the 
Department including intramural and extramural research is needed to 
address the many and sometimes devastating problems farmers face in 
growing crops. The Department of Agriculture's Agricultural Research 
Service (ARS) continues to address very effectively many important 
research questions for American agriculture.
    Helping America's farmers meet the food production needs of the 
nation's people and millions more overseas places huge demands on the 
research community. Researchers supported by the NRI and ARS are called 
upon to help farmers produce higher yields while farming the same or 
less acres of land. At the same time, the research community is asked 
to help make farming friendlier to the environment.
    Scientists supported by the NRI and ARS are responding to these 
needs. For example, research sponsored by the NRI and ARS is leading to 
plants engineered to tolerate higher levels of salinity. This will help 
farmers salvage more of their crops in dry seasons. Increased tolerance 
of future engineered plants to environmental stresses of cold and 
freezing will be beneficial to growers, consumers, and the environment.
    Much progress has been made in fighting plant diseases with crops 
engineered to resist pests. At the same time, the usage of harsh 
chemical pesticides has been reduced through the use of genetically 
engineered crops. Research sponsored by the NRI and ARS contributed 
knowledge leading to the development of these superior crops. Increased 
support for the NRI and ARS will lead to more varieties of enhanced 
crops resistant to devastating diseases.
    Human nutrition depends upon plants. Vitamins, minerals, and other 
important compounds such as essential amino acids come from plants 
directly or indirectly. There remain substantial questions about how 
minerals are taken up and essential compounds are made. As these 
questions are answered by basic plant research it will be possible to 
determine how plants can be used to assist in providing a healthier mix 
of nutrients in the diet both in developed and developing countries. 
Substantial progress can be made in understanding the role of plant 
products in human nutrition with additional funding for the NRI and 
ARS.
    We urge the Subcommittee to increase support for the NRI and ARS in 
fiscal year 2005. As requested by the President, ASPB urges 
appropriating $180 million to the NRI in fiscal year 2005. We urge a 
significant increase for ARS over the fiscal year 2004 appropriation.
    We deeply appreciate the Subcommittee's support for research 
sponsored by the Department of Agriculture. The Subcommittee's support 
has been essential to producing and securing the nation's food supply.
                                 ______
                                 

   Prepared Statement of the American Veterinary Medical Association

    Dear Mr. Chairman: On behalf of the 70,000 members of the American 
Veterinary Medical Association (AVMA) we thank you and the committee 
for the past support of issues and programs of importance to our 
nation's veterinarians. AVMA membership is comprised of 86 percent of 
the veterinarians in the United States. These members direct the 
activities and policies of the AVMA. These Doctors of Veterinary 
Medicine are trained scientific experts in the fields of agriculture, 
animal health, public health, food safety, medical and veterinary 
research, epidemiology, toxicology, microbiology, and a host of other 
activities necessary for the continued safety and prosperity of our 
nation.
    Policy item 8c of the Homeland Security Presidential Directive 
HSPD-9 states, ``(8) The Secretaries of the Interior, Agriculture, 
Health and Human Services, the Administrator of the Environmental 
Protection Agency, and the heads of other appropriate Federal 
departments and agencies shall build upon and expand current monitoring 
and surveillance programs to: . . . (c) develop nationwide laboratory 
networks for food, veterinary, plant health, and water quality that 
integrate existing Federal and State laboratory resources, are 
interconnected, and utilize standardized diagnostic protocols and 
procedures.'' In order for American veterinarians to successfully 
continue in their traditional roles, as well as to aid in the 
fulfillment of the HSPD-9 policy we respectfully request the following 
appropriations in fiscal year 2005 for the U.S. Department of 
Agriculture (not ranked by priority).

The National Veterinary Medical Service Act (NVMSA)
    $20 million for the funding of the NVMSA. NVMSA (Public Law 108-
161) was enacted on December 6, 2003 to correct the serious shortage of 
veterinarians in rural agricultural areas, agencies of the Federal 
Government, and certain disciplines such as public health, food safety 
and research. High student loan debt precludes veterinarians from 
accepting lower-paying positions in these areas. NVMSA authorizes the 
Secretary of Agriculture to conduct a student loan repayment program 
for veterinarians who agree to work in these shortage situations. This 
law will also repay student loan debt for those veterinarians who 
volunteer to provide services to the Federal Government in emergency 
situations as determined by the Secretary of Agriculture. NVMSA will 
improve national preparedness by placing veterinarians at locations 
where agricultural emergencies occur. $60 million is needed over a 3-
year period to allow 400 veterinarians to participate in this program. 
This would provide a net of $25,000 per year for 3 years for service in 
a shortage situation plus an additional $10,000 per year for volunteer 
service in emergency situations.

Food Animal Residue Avoidance Databank
    $1.5 million for the Food Animal Residue Avoidance Bank (FARAD). 
FARAD is a highly cost-effective, federal/multi-university extension 
program that provides assistance to veterinarians, extension agents, 
and regulatory personnel throughout the country in preventing 
contaminated milk, meat, and eggs from reaching the consumer through 
publications, continuing education, a web-site, and a toll free hot-
line. Staffed by highly trained veterinary pharmacologists/
toxicologists, FARAD provides assistance ranging from explaining which 
drugs can legally be used in food animals to creating computer models 
for cases of herds or flocks exposed to toxins such as pesticides or 
dioxins.

National Animal Health Laboratory Network
    $107 million for the National Health Laboratory Network (NAHLN). In 
June 2002, President Bush signed HR 3448 into law as the Public Health 
Security and Bioterrorism Preparedness and Response Act of 2002 (Public 
Law 107-188). This law authorized the Secretary of Agriculture to 
develop an agriculture early warning surveillance system, enhancing the 
capacity and coordination between state veterinary diagnostic 
laboratories, Federal and State facilities, and public health agencies. 
It also provided authorization for Congress to appropriate funding to 
the NAHLN. A pilot NAHLN, involving 12 state/university diagnostic 
laboratories was funded through USDA in May 2002 for a 2-year period to 
develop capacity and surveillance programs for eight high priority 
foreign animal diseases considered to be bioterrorist threats. However, 
these funds fell short of developing a true national network that will 
effectively provide surveillance for zoonotic and foreign disease, 
bioterrorist agents, and newly emergent diseases.

USDA  1433 Formula Funds for Animal Health
    $100 million for USDA  1433 Formula Funds for Animal Health. 
Animal health protection requires an effective veterinary response at 
the local level. In the event of a disease outbreak, veterinarians are 
responsible for diagnosis and risk management leading to disease 
control or elimination. The failure to accurately and rapidly diagnose 
foreign animal diseases, emerging infectious diseases and zoonotic 
agents, whether intentionally introduced or naturally occurring, can 
lead to catastrophic economic losses and loss of human and animal 
lives. Thus, new methods for rapid diagnosis, prevention and 
eradication of these diseases must be developed. The nation's 
veterinary medical colleges can develop new diagnostic methods with 
increased funding.

Foreign Animal Disease Laboratory
    $400 million for the Foreign Animal Disease Laboratory (FADL). The 
Foreign FADL was transferred to the Department of Homeland Security in 
June 2003 as directed by the Homeland Security Act of 2002 (Public Law 
107-296). The United Department of Agriculture (USDA) continues to 
perform its functions of research and diagnostics within the FADL. 
Currently, 180 employees at the FADL are helping to lead a research and 
development program to protect America's food supply against the 
intentional or natural introduction of foreign animal diseases and to 
develop improved methods to diagnose foreign animal diseases. FADL is 
in critical need of renovation and upgrades to be able to maintain its 
capabilities in foreign animal disease detection and research.
    Once again thank you for the support you and your staff have 
extended in the past.
                                 ______
                                 

                     Letter From D. Larry Anderson

                                     State of Utah,
                           Department of Natural Resources,
                                Salt Lake City, UT, March 26, 2004.
Hon. Robert Bennett,
Chairman, Subcommittee on Agriculture, Committee on Appropriations, 
        U.S. Senate,
Washington, DC.
    Chairman Bennett: As the Governor of Utah's representative on 
Colorado River Issues and the senior Utah member of the Colorado River 
Salinity Control Forum, I wish to convey Utah's support for funding the 
Salinity Title II Program, authorized in 1995 (Public Law 104-20) at 
the level of 2.5 percent of the Environmental Quality Incentives 
Program (EQIP) of the United States Department of Agriculture with EQIP 
being funded at the amount sought in the President's 2005 budget. In 
addition, Utah requests funds be provided to the Natural Resources 
Conservation Service at sufficient levels to provide the technical 
assistance necessary to efficiently spend these funds.
    This vital program has been a mainstay in improving water use 
efficiency in the Colorado River Basin of Utah. During the past 5 years 
of drought, the facilities funded by the salinity earmark of the EQIP 
program have been a significant reason for agriculture in the Uinta and 
Price/San Raphael basins maintaining productivity and stimulating these 
rural economies.
    In addition, the Salinity Control Program helped to meet the 
salinity related water quality standards for the Colorado River and 
U.S. treaty obligation with Mexico. This important program helps meet 
national and international obligations and needs to be funded at the 
aforementioned level.
            Thank you,
                                   D. Larry Anderson, P.E.,
                                                          Director.
                                 ______
                                 

  Prepared Statement of the Association of State Dam Safety Officials

    The Association of State Dam Safety Officials is pleased to offer 
this testimony on the President's proposed budget for the Department of 
Agriculture Natural Resource Conservation Service (NRCS) for fiscal 
year 2005, specifically in support of the Watershed Rehabilitation 
Program.
    The Association of State Dam Safety Officials is a national non-
profit organization of more than 2000 State, Federal and local dam 
safety professionals and private sector individuals dedicated to 
improving dam safety through research, education and communications. 
Our goal simply is to save lives, prevent damage to property and to 
maintain the benefits of dams by preventing dam failures. Several 
dramatic dam failures in the United States called attention to the 
catastrophic consequences of failures. The failure of the federally-
owned Teton Dam in 1976 caused 14 deaths and over $1 billion in 
damages, and is a constant reminder of the potential consequences 
associated with dams and the obligations to assure that dams are 
properly constructed, operated and maintained.
    The Administration's proposed budget includes only $10 million in 
discretionary appropriations to fund rehabilitation of unsafe and 
seriously deficient dams that were originally constructed under USDA 
Watershed Programs. The Association of State Dam Safety Officials 
respectfully requests that this Subcommittee increase the 
Administration's proposed appropriation to $65 million of the total 
$120 million authorized in the 2002 Farm Bill which includes 
discretionary funds and Commodity Credit Corporation (CCC) funding.

The Problem
    The United States Department of Agriculture (USDA) under 
authorities granted by Congress beginning in the 1940s provided 
technical and financial assistance to local sponsors and constructed 
small watershed dams. These dams, completed primarily under the 
authority of Public Law 534 and Public Law 566 provided important 
benefits including flood protection, municipal and rural water 
supplies, irrigation, recreation, water quality, sediment removal and 
habitat. The USDA, in partnership with these local sponsors constructed 
nearly 11,000 small watershed dams across the country in 47 states.
    Dams constructed under these USDA programs have provided local 
communities with years of critical service. They have provided flood 
protection for many homes and businesses, and the local transportation 
infrastructure. Many communities rely on watershed dams for drinking 
water and many farmers depend on the those dams for necessary 
irrigation water to grow food and fiber.
    However, these dams are aging and many are starting to reach the 
end of their design life. Many watershed dams no longer are able to 
continue to provide the benefits that the local communities have 
counted on for so many years, such as the expected level of flood 
protection. Many dams are unable to continue to provide the same 
storage volume for drinking water; and many of them are so filled with 
sediment that they cannot provide water quality and sediment removal 
functions. More alarming is the recognition that as these dams continue 
to age and deteriorate they threaten the very same local communities 
that have relied on them for protection and for quality of life 
improvements. Nearly 450 small watershed dams will reach the end of 
their expected design life by 2005; and this number will increase to 
over 1,800 by year 2010.
    The challenge is enormous, as the local sponsors cannot shoulder 
the entire burden alone. Without a fully funded Watershed 
Rehabilitation Program, the flood protection provided by these dams 
will be diminished, irrigation and drinking storage will be reduced and 
water quality will continue to decline. However, the most dramatic 
consequences from the aging and deterioration of these dams without 
their rehabilitation will undoubtedly be to increase the probability of 
a tragic failure. Dam failures cause lives to be lost, downstream 
property to be destroyed and damage to critical public infrastructure 
(roads, bridges, water treatment facilities). The cost of just one dam 
failure, measured in loss of life, property damage and clean up costs, 
could easily exceed the entire cost of the Watershed Rehabilitation 
authorization.
    Many of the small watershed dams do not have Emergency Action 
Plans, essential for saving lives in the event of a dam failure. These 
plans provide for surveillance of the dam, notification of emergency 
management officials, evacuation plans, and most importantly they 
identify the areas below the dam that would be flooded in the event of 
a dam failure. Without these plans, a local downstream community would 
have little chance of receiving adequate and timely warning in order to 
evacuate their homes and businesses. Critical to this plan is the 
completion of dam failure modeling to clearly map the downstream area 
flooded form a failure, often called the ``danger reach''. 
Rehabilitation funded under this program should include this, as part 
of the rehabilitation design and planning package. Considering the 
security threat alerts that so often include potential actions against 
dams, these plans are even more critical.
    Often, development, attracted by the benefits provided by the dam, 
has significantly altered the upstream watershed and increased runoff 
and sediment transport to the dam. In addition, it is very common to 
see major downstream development in the area below the dam, within the 
dam failure flood zone, which dramatically changes the consequences of 
a potential failure to now include loss of life. This significantly 
alters the minimum safety requirements and causes dam safety officials 
great concern. These development consequences are typically beyond the 
control of the local sponsoring organizations, yet they are responsible 
for compliance with the state dam safety standards.
    Table 1, attached to this testimony lists by state the number of 
USDA Watershed dams, the estimated number of people as risk below the 
dams, the infrastructure at risk, as well as an estimate of the number 
of watershed dam rehabilitation projects and their projected costs over 
the period fiscal year 2004 through fiscal year 2009. There have been 
118 watershed rehabilitation projects initiated in 20 states which 
include 18 completed rehabilitation projects and 100 projects either in 
the planning or design phase. It is clear from these 118 projects as 
well as the 54 projects which requested assistance but were unable to 
be funded in fiscal year 2004, just how much demand exists; and how 
successful this USDA program is. It is essential to continue this 
program funding at a level that recognizes this demand, the size of the 
problem and the importance of maintaining the Federal Government's 
leadership role.
    Mr. Chairman, in your home state of Utah, there are 25 USDA 
Watershed Dams that provide important irrigation water, critical flood 
protection and many other benefits. Ten of these watershed dams are 
expected to request assistance during the period fiscal year 2004 
through fiscal year 2009 and totaling an estimated $17,000,000 in 
rehabilitation costs.
    In Wisconsin there are 86 watershed dams built between 1956 and 
1970, with many reaching the end of their design life over the next 10 
years. Wisconsin has had several watershed rehabilitation success 
stories with 11 of the initial 118 projects. Of these 11 projects 6 are 
completed and 5 have been authorized and are in design or construction 
phases. Over the period fiscal year 2004 through fiscal year 2009 
Wisconsin expects to receive another 10 requests for rehabilitation 
assistance costing an estimated $1.5 million.

Example of Success
    Pilot rehabilitation projects in Wisconsin on Plum Creek, Alma-Mill 
Creek, Glen Hills Creek and Bad Axe Watershed repaired unsafe 
conditions, restored flood control benefits, extended the service life 
another 50 years and enhanced water quality. The Glen Hills Creek 
project highlights a very frequent problem as a home was constructed 
below the dam, threatening the home should the dam fail and requiring 
significant design modifications due to increased safety standards. The 
funding was used to relocate the home from below the dam to reduce the 
consequences of a failure and substantially lowering the repair costs 
should the home have remained.

Request
    Mr. Chairman and Members of this subcommittee, the Association of 
State Dam Safety Officials is convinced that funding of this program as 
critical to the safety of the nation's dams as well as the lives and 
property downstream. Identifying a funding source for rehabilitating 
and securing our country's dams is a major challenge. For the 11,000 
small watershed dams created through a highly successful program 
administered by the Federal Government, Congress and the Administration 
should reconfirm their commitment to the structures and the American 
people who depend on the continuing benefits provided by these dams. 
These same people need to be secure that the dams the United States 
help them build will not fail or diminish their function.
    ASDSO asks that the Subcommittee to view funding the Rehabilitation 
of Watershed Dams as a significant re-investment in the benefits of the 
program and an investment in the safety of these dams. Therefore, this 
Association respectfully requests that this Subcommittee provide 
additional appropriations beyond the Administration's request to $65 
million for fiscal year 2005.
    Thank you Mr. Chairman and members of the Subcommittee for this 
opportunity to submit this testimony. We look forward to working with 
the Subcommittee and staff in any way to advance the safety of dams in 
the United States.

                                                           TABLE 1.--USDA WATERSHED DAMS DATA
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Data from limited 2001 survey of 1500 dams \1\       Estimated rehab   Estimated project
                                           Total no. of   ---------------------------------------------------------  projects fiscal   costs fiscal year
                 STATE                    watershed dams     Population at    Infrastructure at   Annual benefits    year 2004-fiscal   2004-fiscal year
                                                                  risk         risk in dollars     in dollars \2\       year 2009             2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
AK....................................                  0  .................  .................  .................                  0                 $0
AL....................................                105              3,805        $19,380,000         $5,634,000                  6          3,425,000
AR....................................                170                245          8,655,000          2,131,743                 25         43,541,000
AZ....................................                 25             75,560        178,330,000         28,440,000                  8         31,773,000
CA....................................                  3             10,000         25,000,000          3,000,000                  1          7,070,000
CO....................................                144             55,580         70,000,000          3,743,000                  6          3,800,000
CT....................................                 31              1,000          3,000,000            150,000                  0                  0
DE....................................                  0  .................  .................  .................                  0                  0
FL....................................                 10  .................  .................  .................                  0                  0
GA....................................                357              5,931      1,583,258,241         17,465,239                107        158,200,000
HI....................................                  4  .................  .................  .................                  0                  0
IA....................................              1,325                180          3,311,000            551,000                 11          8,239,000
ID....................................                  3              5,000         10,000,000            675,000                  0                  0
IL....................................                 64                840          2,050,000            106,900                  0             80,000
IN....................................                110              1,101         38,150,000          1,344,460                  0                  0
KS....................................                809                 39          4,051,700          1,820,100                 20          9,848,000
KY....................................                200             12,100         16,700,000          2,902,800                 16          8,808,880
LA....................................                 35  .................  .................  .................                 20          3,525,000
MA....................................                 29             61,108          3,300,000         12,175,000                  8          3,160,000
MD....................................                 16  .................  .................  .................                  0                  0
ME....................................                 16  .................  .................              6,000                  0            100,000
MI....................................                 13  .................  .................  .................                  1            540,000
MN....................................                 44                 18            380,000             29,000                  3            575,000
MO....................................                770  .................          2,829,825          1,299,810                 11          1,750,000
MS....................................                578              1,953         18,355,000          3,764,600                 30         10,694,000
MT....................................                 16                365         21,000,000          2,465,900                  7          4,615,000
NC....................................                 98                688          1,337,520            717,300                  0                  0
ND....................................                 48                250          5,500,000          1,200,000                 15         14,650,000
NE....................................                723              1,401         15,937,000         10,327,691                 63         12,600,000
NH....................................                 24  .................  .................  .................                  0                  0
NJ....................................                 20                 25             60,000             21,500                  2            825,000
NM....................................                 78              2,256        154,900,000          1,333,000                 30         15,752,000
NV....................................                  8  .................  .................  .................                  0                  0
NY....................................                 55             76,428          1,747,949          2,240,455                 15          1,638,000
OH....................................                 61                720         13,250,000          2,355,000                 27          7,120,000
OK....................................              2,087              5,245         27,625,000          2,823,706                257         69,762,779
OR....................................                  5                125          1,100,000          1,400,000                  0                  0
PA....................................                 87             14,640        414,000,000         10,735,000                  6          1,143,000
PR....................................                  2  .................  .................  .................                  0             90,000
RI....................................                  0  .................  .................  .................                  0                  0
SC....................................                 86             69,335         62,868,000          1,532,700                  7          2,918,500
SD....................................                 55                  0            140,000            125,000                  0                  0
TN....................................                140  .................  .................  .................                  6            250,000
TX....................................              2,038             19,677         87,104,000         13,315,700                 40         74,711,900
UT....................................                 25  .................  .................  .................                 10         17,000,000
VA....................................                145              1,183         17,906,216            355,201                 16         11,286,000
VT....................................                  4                960         25,000,000            292,000                  4                  0
WA....................................                  3  .................  .................  .................                  0                  0
WI....................................                 86                292          1,623,100            444,500                 10          1,462,000
WV....................................                167             13,969         76,587,670          7,658,767                 80         19,800,000
WY....................................                 13  .................  .................  .................                 12         14,195,769
                                       -----------------------------------------------------------------------------------------------------------------
      TOTALS..........................             10,935            442,019      2,914,437,221        144,582,072                880        564,948,828
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ This data was collected from 1,500 watershed dams in 2001.
\2\ The total annual benefits from all of the Watershed Dams in $1.7 billion.

                                 ______
                                 

           Prepared Statement of Bernard H. Berne, M.D., Ph.D

    I am a resident of Arlington, Virginia. I serve the Food and Drug 
Administration (FDA) as a Medical Officer and as a reviewer medical 
device approval applications. I am testifying as a private individual.
    I ask your Subcommittee to deny the Administration's request to 
provide funds for costs related to the occupancy of a new FDA Human 
Drugs facility in White Oak, Maryland. These funds are included within 
the $1,820,849,000 that the President's Budget for fiscal year 2005 
requests on page 421 under the heading ``Department of Health and Human 
Services'', ``Food and Drug Administration'', ``Federal Funds, General 
and special funds'', ``Salaries and Expenses''. The Budget states on 
page 422 under this heading that ``the budget requests increased 
funding for . . . moving expenses for a new Human Drugs facility in 
White Oak, Maryland''.
    The General Services Administration (GSA) is now constructing this 
facility. Please deny these funds for the following reasons:
Economic Considerations
    FDA will need to pay rent to GSA if FDA occupies this facility. 
FDA's future budgets, which your Subcommittee would fund, would pay 
these rents. The rents would likely be higher than rents that GSA and 
FDA pay to private property owners, since GSA would not need to enter 
into competitive bidding processes.
    Congressional authorizing committees need to evaluate the current 
costs of the consolidation and compare them to the costs of maintaining 
FDA's current facilities. No Congressional committee has done this 
during the past 15 years.

Lack of Need for Relocating FDA to White Oak Facility
    All or nearly all of FDA's offices are presently located in 
satisfactory leased facilities. Some, such as my own, are in excellent 
buildings. There is no urgent need or economic reason to relocate these 
offices to White Oak.
    Despite this, the requested funds would support the relocation of a 
large number of offices in FDA's Center for Drug Evaluation and 
Research (CDER) to White Oak. There is no clear need for this 
relocation, since it would put 20 miles between this office and all 
other FDA offices, including the Office of the Commissioner. The 
relocation would clearly decrease FDA's efficiency by decreasing 
interactions between this office and related ones.
    White Oak is an unsatisfactory location for FDA's headquarters 
consolidation. The project would promote urban sprawl.
    FDA's White Oak facility would occupy 125 acres next to a golf 
course in a suburban residential neighborhood in Montgomery County, 
Maryland. The FDA site is outside of the Capital Beltway on a largely 
forested 750-acre property surrounded by heavily congested roads and 
highways. The site is three miles from the nearest Metro station, and 
has only infrequent bus service.
    An FDA consolidation at White Oak would bring 6,000 FDA employees 
to this Washington area suburb. Most would need to commute for much 
longer times and distances than they presently do. White Oak is more 
than 20 miles from most present FDA facilities.
    I and thousands of other FDA employees presently commute to work by 
Metrorail, as our workplaces are near Metro stations. This will be 
impossible at White Oak.
    FDA employees driving to White Oak will add traffic congestion and 
air pollution to the Washington Metropolitan Area. This is especially 
unfortunate because the Washington Metropolitan Area already has the 
second worst traffic congestion of all urban areas in the United 
States.
    FDA employee surveys have revealed widespread opposition to this 
relocation. Three years ago, a survey of those employees who would 
relocate first to White Oak showed that 70 percent opposed the move. 
Many stated that the relocation would impair FDA's ability to regulate 
drugs and medical devices.
    It is clear that the location of the facility will have long-
lasting adverse effects on FDA's ability to recruit and retain 
qualified employees. Further, many more FDA employees will telecommute 
than presently do. They will rarely work at the new facility. This will 
greatly diminish FDA's efficiency and will contradict a major goal of 
the FDA consolidation at White Oak.
    The Washington Metropolitan area has a number of better sites at 
which FDA can consolidate. Among these is the Southeast Federal Center 
in downtown Washington, D.C. This underutilized 50-acre federally-owned 
property is adjacent to the Navy Yard Metro Station. It is only one 
mile from the U.S. Capitol and the headquarters of the U.S. Department 
of Health and Human Services.

Legal Issues
    On February 23, 2001, I and a number of other FDA employees joined 
the Sierra Club and the Forest Conservation Council in a law suit that 
is intended to stop the White Oak project. For a number of reasons, 
FDA's occupancy of any buildings at White Oak would be illegal. The 
Federal district court for the District of Columbia is presently 
considering this suit.
    The White Oak facility would house the Office of the Commissioner 
of Food and Drugs, as well as most other FDA headquarters offices. This 
would violate 4 U.S.C  72, which states: ``All offices attached to the 
seat of government shall be exercised in the District of Columbia, and 
not elsewhere, except as otherwise expressly provided in law.'' 4 
U.S.C.  72 is derived from the 1790 Act that established the District 
of Columbia as the Nation's capital. The first Congress enacted this 
law, which President George Washington signed.
    There is no law that expressly provides that FDA's headquarters 
offices shall be exercised outside of the District of Columbia.
    The FDA Revitalization Act (Public Law 101-635; 21 U.S.C.  369b), 
authorizes the Secretary of HHS to award contracts to acquire property 
and to construct an operate a consolidated FDA headquarters facility. 
This Act does not provide the location of the consolidated facility.
    I ask Congress not to appropriate funds to support an illegal 
activity. The 1790 Act had the worthy purpose of ensuring that all 
central offices of the Federal Government would consolidate in the 
Federal capital District, and not elsewhere. The consolidated FDA 
facility would be one such office that is ``attached to the seat of 
government''.
    Article 1, Section 8, of the Constitution gives Congress exclusive 
jurisdiction over the District of Columbia. Your Committee should take 
no action to support the location of FDA's headquarters at a location 
that is outside of the District. Any such action would tend to vitiate 
this section of the Constitution, which 4 U.S.C.  72 is intended to 
support.
    Executive Order 12072, August 16, 1978, states in Section 1-1, 
Subsection 101: ``Federal facilities and Federal use of space in urban 
areas shall serve to strengthen the Nation's cities and to make them 
attractive places to live and work. Such Federal space shall conserve 
existing urban resources and encourage the development and 
redevelopment of cities.''
    White Oak is not in or near any city. An FDA consolidation at White 
Oak (which is in an ``urban area'', the Washington Metropolitan Area) 
would not strengthen any cities. The FDA facility would not encourage 
the development or redevelopment of any cities.
    Executive Order 12072, Section 1-1, Subsection 101, contains the 
word ``shall'' in several locations. FDA therefore can not legally 
locate its headquarters in suburban White Oak.
    Executive Order 12072 and several Federal statutes require that 
heads of Federal agencies consult with local city officials to obtain 
their recommendations for and objections to all proposed new Federal 
facilities. Neither GSA nor FDA officials ever consulted with officials 
of the District of Columbia or of the City of Rockville in Montgomery 
County, Maryland, concerning the White Oak facility.
    This lack of consultation violated Executive Order 12072 and 
several laws. It prevented District and Rockville officials from 
recommending alternative sites for the consolidated facility within 
their own jurisdictions and from objecting to the selection of the 
White Oak site.
    The Public Buildings Act of 1959 requires that the Committee on 
Environment and Public Works of the U.S. Senate approve prospectuses 
that describe the location and maximum costs of any large buildings 
that GSA may wish to construct before Congress can appropriate funds to 
design and construct such buildings. That Committee has never approved 
a prospectus that describes FDA's White Oak facility.
    The Consolidated Appropriations Act, 2001 (Public Law 106-544) 
appropriated funds that GSA is presently using to construct the new FDA 
Human Drugs facility at White Oak. However, Public Law 106-544 contains 
the following restrictive provision at 114 Stat. 2763A-143: ``Provided 
further, That funds available to the General Services Administration 
shall not be available for expenses of any construction, repair, 
alteration, or acquisition project for which a prospectus, if required 
by the Public Buildings Act of 1959, as amended, has not been approved, 
except that necessary funds may be expended for each project for 
required expenses for the development of a proposed prospectus.''
    The Public Buildings Act of 1959 requires a prospectus that 
describes FDA's White Oak facility. No prospectus that described this 
facility had been approved before Public Law 101-58 was enacted into 
law. Therefore, GSA may only legally use the funds appropriated in 
these Acts for ``required expenses for the development of a proposed 
prospectus''. GSA cannot legally use the funds to design and construct 
any buildings.
    Despite this prohibition, GSA is presently designing and starting 
to construct the new FDA Human Drugs facility in White Oak without an 
approved prospectus. This is illegal.
    The President's Budget is therefore asking Congress to appropriate 
funds in the Agriculture, Rural Development, and Food and Drug 
Administration Appropriations Act, 2005, that would enable FDA to 
occupy new facilities at White Oak that GSA is now constructing 
illegally. Your Committee should not initiate the appropriation of any 
such funds.
    The prospectus approval process is designed to assure that Congress 
evaluates the need, location, and maximum cost for all GSA building 
projects. Congress has never done this for any of the facilities that 
FDA would occupy at White Oak.
    The National Environmental Policy Act (NEPA) of 1969 requires that 
Federal agencies compare in an Environmental Impact Statement (EIS) 
alternative locations for any large new Federal facility. However, the 
EIS for the White Oak FDA facility did not make any such comparisons.
    The EIS only compared the environmental impacts of an FDA 
consolidation at White Oak with the ``no action'' alternative. 
Following this legally inadequate comparison, GSA and FDA officials 
selected White Oak as the location for the facility.
    GSA and FDA officials therefore violated NEPA when they selected 
the White Oak site. Congress should not appropriate funds to support 
this illegal selection.
    A Federal court may prevent FDA from consolidating its facilities 
at White Oak for one or more of the above reasons. Congress should not 
provide funds for FDA to occupy the White Oak facility until the 
Federal courts decide whether the project can proceed.
    I therefore ask that your Committee not provide the requested to 
FDA in this legislation. Thank you.
                                 ______
                                 

       Prepared Statement of the Calaveras County Water District

    Calaveras County is located on the eastside of the Central Valley 
of California and encompasses approximately 1,028 square miles of land, 
stretching across more than 50 miles of valleys, foothills, and 
mountain peaks. The topography ranges from approximately 200 feet above 
mean sea level (ft-msl) in the northwestern region of the County, to a 
peak height of 8,170 ft-msl near Alpine County.
    The communities of West Point, Wilseyville and Bummerville are 
located in the northeastern portion of the county in the sparsely 
populated higher foothills. The topography ranges from approximately 
2,500 feet in Wilseyville to 3,200 feet in Bummerville. Mild summers 
and cold winters characterize the region, with temperatures ranging 
from the low 20's to the middle 80's. Snow accounts for a large 
percentage of the precipitation in the watersheds supplying the study 
area.
    In the fall of 1946, the Calaveras County Water District (CCWD) was 
organized under the laws of the State of California as a public agency 
for the purpose of developing and administering the water resources in 
Calaveras County. Therefore, CCWD is a California Special District and 
is governed by the California Constitution and the California 
Government and Water Codes. CCWD is not a part of or under the control 
of the County of Calaveras. CCWD was formed to preserve and develop 
water resources and to provide water and wastewater service to the 
citizens of Calaveras County.
    Under state law, CCWD, through its Board of Directors, has general 
powers over the use of water within its boundaries. These powers 
include but are not limited to: the right of eminent domain, authority 
to acquire, control, distribute, store, spread, sink, treat, purify, 
reclaim, process and salvage any water for beneficial use, to provide 
sewer service, to sell treated or untreated water, to acquire or 
construct hydroelectric facilities and sell the power and energy 
produced to public agencies or public utilities engaged in the 
distribution of power, to contract with the United States, other 
political subdivisions, public utilities, or other persons, and subject 
to the California State Constitution, levy taxes and improvements.
    CCWD provides water service to over 10,000 connections throughout 
Calaveras County. CCWD operates five independent treatment facilities 
with a combined treatment capacity of over 13 million gallons per day. 
The water facilities include approximately 290 total miles of 
transmission and distribution pipelines ranging from 4 to 20 inches in 
diameter and 31 storage tanks with capacity of over 14.5 million 
gallons. CCWD provides water and/or wastewater service to 65 percent of 
the residents of Calaveras County.

         WEST POINT, WILSEYVILLE AND BUMMERVILLE SYSTEM HISTORY

    CCWD owns and operates the domestic water system in the rural 
communities of West Point, Wilseyville, Bummerville and part of Sandy 
Gulch. This water system is located in the District's West Point 
Service area, located in the Mokelumne River Watershed, Calaveras 
County, Central California, in the foothills of the Sierra Nevada 
Mountains. Population growth in the service area has generally averaged 
less than one percent annually over the last 15 years. This low growth 
rate may be attributed in part to the reduction in industry within the 
service area. Presently, the economic base of the community is 
principally related to retirement living with some of the population 
commuting to larger nearby communities for employment opportunities.
    The communities of West Point and Wilseyville developed over the 
last 150 years, initially as mining companies and later as logging 
communities. Originally, these areas were served water through a series 
of mining ditches associated with these activities. The decline of 
these industries, which were critical to the area economy, brought 
about CCWD's purchase of the water and conveyance systems.
    The West Point water system was purchased in 1954 by CCWD from the 
West Point Ditch Company. The predecessor to Sierra Pacific Logging 
Company owned and built the Wilseyville system and sold it to CCWD in 
1964. The Bummerville system was connected to the West Point system in 
1959. Between 1964 and 1974 the system was brought into compliance with 
state and Federal regulations for operation by CCWD.
    The existing water system serves 520 connections, a total 
population of 1,298, including a local Native American Reservation. The 
current facilities include two raw water reservoirs (Wilson Lake and 
the Regulating Reservoir); two raw water diversion facilities (Bear 
Creek gravity and Middle Fork Mokelumne pumped); one water treatment 
plant (West Point); two treated water pump stations (Bummerville and 
Upper Wilseyville); and the associated distribution and storage 
systems.
    The two main sources for water supply for the West Point water 
treatment plant are the Bear Creek diversion, which is a gravity 
source, and the pumped source from the Mokelumne River. Both raw 
sources are generally of good quality and are very easily treated to 
potable standards. Water rights for the West Point/Wilseyville water 
system are derived from existing water rights for diversion of flow 
from Bear Creek and from an agreement for diversion from the Middle 
Fork of the Mokelumne River. These provisions allow for adequate water 
to serve the present water customers, as well as future full buildout 
of the adjacent areas. In the case of drought, the Bear Creek supply 
can be supplemented with water from the Middle Fork of the Mokelumne 
River. In addition, the District maintains the 50 acre-foot Regulating 
Reservoir (also referred to as the West Point Reservoir), which may be 
called upon to supplement and augment supply during dry periods.
    The West Point/Wilseyville water system and related facilities were 
primarily constructed before 1960 and many system components are either 
inadequate or in need of replacement. Several changes have been made to 
the systems in response to more stringent regulations, which allowed 
the abandonment of the Wilseyville plant. In addition, the West Point 
water treatment plant and pump stations have been upgraded and an 
intertie has been installed between West Point and Wilseyville.
    Distribution system deficiencies are evident when evaluated against 
current water industry standards for publicly owned and operated 
systems. The 1996 Master Plan was completed to address these 
deficiencies. Specific recommendations were presented to bring the 
system into compliance with current and anticipated water industry 
standards. In 1998, a Master Plan Supplement provided additional 
analysis for improvements to the West Point Wilseyville, and 
Bummerville systems.
    West Point, Wilseyville and Bummerville have infrastructure 
requirements that far exceed their financial capabilities. However, the 
infrastructure is crucial to the health, safety, and existence of these 
small, rural communities. In addition, rising water and wastewater 
rates have been necessary due to new regulatory requirements and these 
rising rates have been difficult for the community to face. The closing 
of lumber mills in Calaveras and neighboring Amador County (over the 
last 10 years) has also made a difficult situation worse for those 
dependent on that industry for employment, especially in this current 
climate of high unemployment rates. In an effort to begin addressing 
these needs at the state and local level, a $500,000 feasibility study 
state grant and a $1.9 million Bear Creek state construction grant have 
recently been provided. In order to build on these state and local 
efforts and to meet the critical infrastructure needs and the needs of 
the community, we respectfully request assistance for the following 
project components:

       WATER SUPPLY INFRASTRUCTURE REHABILITATION PROJECT REQUEST

    The small rural communities of West Point, Wilseyville, and 
Bummerville are faced with unaffordable water system replacement costs 
for aging supply and distribution systems. Water pressure and fire flow 
are inadequate in much of the service area. The raw water storage and 
transmission facilities are in need of immediate repairs.
    Seven projects have been identified to provide the West Point water 
system with a safer and more reliable level of service. These projects 
include:
  --West Point Clearwell Replacement.--The upgraded West Point Water 
        Treatment Plant is operational; however, the current clearwell 
        will not provide sufficient contact time for compliance with 
        disinfection regulations. This project will demolish and 
        replace the old 500,000 gallon tank with a new 600,000 gallon 
        steel tank.
  --Bummerville Treated Water Storage Tank Replacement.--Replacement of 
        small redwood tank with a single 150,000 gallon steel tank.
  --Wilson Lake Embankment.--Assessment and reconstruction of a primary 
        storage reservoir that is no longer functional.
  --West Point-Wilseyville Distribution System.--Replace the aging 
        ``backbone'' transmission and distribution piping and provide a 
        second intertie between West Point and Wilseyville service 
        areas to improve fire flow and system reliability.
  --Bummerville Treated Water Distribution System.--Replacement of old, 
        leaking, small-diameter piping to improve flow and fire 
        protection.
  --Mokelumne River Intake and Pump Station.--Relocation of the pump 
        station out of the flood plain, replacement of the raw water 
        line to the treatment plant, and modification of the existing 
        river diversion structure.
  --Regulating Reservoir.--Remediation projects to improve water 
        quality problems at a primary storage reservoir.
    The funding we are requesting here is necessary to assist in the 
upgrade, reconstruction, and repair of water system infrastructure 
critical for basic water pressure and fire flow. The District, 
therefore, respectfully requests the Committee's support for a 
$2,000,000 appropriation in fiscal year 2005 under the U.S. Department 
of Agriculture's Rural Development Program (Rural Utility Service), so 
that efforts to initiate construction for the much-needed Downtown West 
Point Distribution System Improvements may move forward.
                                 ______
                                 

Prepared Statement of Wine America, the Wine Institute, the California 
   Association of Winegrape Growers, and Winegrape Growers of America

    Dear Chairman Bennett and Senator Kohl: Our organizations are 
pleased to provide recommendations for the funding of important 
programs that greatly impact the wine and winegrape industry in the 
United States. We are attaching a description of the contributions made 
by this great industry.

Recommendations: Funding for Winegrape Research
            The Viticulture Consortium
    Our organizations strongly support increasing the funding for the 
very successful Viticulture Consortium to $2.5 million.
    Due to budgetary constraints last year the funding of the 
Viticulture Consortium by the Cooperative State Research Education 
Extension Service (CSREES) was reduced to $1.6 million from the 
previous level of $1.78 million. The Consortium was initiated in fiscal 
year 1996 and is administered by Cornell University, Pennsylvania State 
University and the University of California (Davis). The consortium 
funds grants for state researchers in about twenty states through a 
competitive process. It is a keystone of grape related research in the 
United States.
    The consortium addresses unmet national research needs important to 
our industry. As an active partnership of Federal, State, and industry 
resources, the consortium enhances research coordination, 
collaboration, improves efficiency and eliminates duplication of 
effort. Explicit matching funds from both industry and state sources 
have increased dramatically in response to growing Federal support. 
Research proposals have been received from nearly 20 states, including 
California, Pennsylvania, Michigan, Missouri, Virginia, New York, Ohio, 
Michigan, Oregon, and Washington and are funded on a competitive basis. 
Research priorities are developed by a national network of key 
industry, research and extension representatives known as AVERN 
(American Viticulture and Enology Research Network). Because the 
consortium integrates and coordinates grape research throughout the 
nation it is recognized as the most important mechanism for advancing 
knowledge and providing the capability for American grape growers to 
remain competitive in a world marketplace.
Sustainable Viticulture Scientist and Grape Genetics Research Leader
    For fiscal year 2005, we are requesting that Congress increase 
funding by $300,000 for an ARS scientist entomologist to be part of the 
sustainable viticulture group at (Davis, California). We also request 
$325,000 for an ARS grape genetics research leader at Geneva, New York.
    ARS sponsored grape research must keep pace with the needs of a 
research intensive, high value crop facing global competition based on 
product quality. Congress has been building important grape research 
capabilities for sustainable vineyard practices (Davis, California) and 
grape genetics (Geneva, New York).

            ARS Sustainable Viticulture Center
    We are requesting $10 million to begin the first phase of this 
center
    Sustainable viticulture and other work at Davis, California has 
been a major new initiative for the ARS with several new positions that 
have been added over the last decade. In order to provide laboratory 
and green house space for these personnel and to properly develop an 
appropriate interdisciplinary team approach to sustainability a new 
building is required. Engineering and architectural funds were provided 
in the fiscal year 2004 appropriation.

            ARS Center for Grape Genetics
    We respectfully request that $10 million be provided in fiscal year 
2005 to begin construction of the ARS Center for Grape Genetics in 
Geneva.
    There is a serious need to add laboratory and office space for ARS 
grape genetics research at Geneva, New York This will represent a 
critical investment to enable ARS to assume a proper role of national 
and world leadership in grape research. Engineering and architectural 
funds were provided in the fiscal year 2004 appropriation.
Recommendation: Pierce's Disease Control, Containment, and Research
    Our organizations support an increase in funding from the Animal 
and Plant Health Inspection Service for the containment and control 
program to $28.5 million--an increase of $6.25 million over funding for 
fiscal year 2004.
    We also support a continuation of CSREES funding of work on 
Pierce's disease at the University of California in the amount of 
$2.235 million (the fiscal year 2003 funding level).
    We also recommend that Congress increase Agricultural Research 
Service (ARS) funding of research on Pierce's Disease and the GWSS by 
$600,000.
    Pierce's disease, a fatal infection of grape vines by the bacterium 
Xyella fastidiosa (Xf), is being spread throughout California by the 
glassy winged sharpshooter (GWSS). GWSS was first detected in 
California in 1989. It has invaded much of Southern California and is 
established in the southern San Joaquin Valley.
    This vigorous and difficult-to-control insect vector, indigenous to 
the southeastern United States and northern Mexico, threatens 
California's entire grape and wine-producing community. Commercial 
grape varieties grown in California cannot tolerate infection by the Xf 
bacterium and are quickly killed or rendered uneconomical. There is no 
cure for Pierce's disease.
    The onslaught of the GWSS and its spread of Pierce's disease has 
triggered a massive and expensive cooperative response by Federal and 
State agencies, California nurseries, citrus and winegrape growers to 
contain, control and eventually eradicate the GWSS in California. The 
risks to California agriculture presented by the GWSS were recognized 
by a USDA declaration of emergency June 23, 2000 and subsequent 
allocation of CCC funds to conduct research, manage and fight the 
disease.
    There are many crops and commodities threatened by the agents that 
cause Pierce's disease, including almonds, citrus, stone fruits, 
alfalfa and oleander.
    Congress has appropriated money to fund GWSS and Pierce's disease 
research beginning in fiscal year 2001 and every year thereafter. To 
date in California, winegrape growers have assessed themselves 
approximately $15 million to fund research programs to combat this 
deadly disease.

Recommendation: Market Access Program
    We respectfully request that the full amount of authorized funding, 
$140 million, be provided for this program in fiscal year 2005.
    The Market Access Program (MAP) provides export assistance to over 
70 different agricultural industries, most producing specialty crops. 
This assistance is frequently the only kind of government export 
assistance given these producers to allow them to compete in world 
markets against highly subsidized European producers. The wine industry 
has made excellent use of the MAP program, increasing its exports by 
over 225 percent in the past 10 years. Yet, our industry has less than 
6 percent of the world's export market. There is still considerable 
potential to increase our share.
    Current funding for the MAP pales in comparison to the support 
given other major world producers. The Farm Bill recognized the need to 
increase MAP funding consistent with the growing exports of these 
specialty crop producers. The authorized funding of $140 million needs 
to be restored in order for momentum to be maintained.

Recommendation: Cooperative Bio-Control Program for Vine Mealy Bug
    We respectfully request that $1.2 million be provided to address 
this dangerous invasive pest before it gets more established and 
spreads widely.
    The vine mealy bug, Planococcus ficus, is an exotic pest first 
found in the Coachella Valley, Riverside County in 1994. Since then, it 
has spread to an additional 15 counties. The pest feeds on grape 
(winegrapes, table grapes, and raisins), fig, pomegranate, avocado, 
date palm, apple, quince, and certain ornamental plants. Not only does 
the pest feed on sap, it also excretes large amounts of honeydew as it 
feeds, fouling the plant. The pest's activities provide a food source 
for sooty mold, attracts ants and reduces the quality of harvested 
grapes.
    The vine mealy bug threatens over 900,000 acres of grapes and over 
$3 billion in derivative annual income in California. To meet this 
threat, a cooperative work group has been formed, including 
representatives of the grape industry, the Animal and Plant Health 
Inspection Service, the University of California, the California 
Department of Food and Agriculture, and California County Agricultural 
Commissioners. This group has developed a program that includes public 
education; detection, monitoring and mapping surveys; research; and a 
control program implementation plan.
    The California Association of Winegrape Growers was created in 1974 
to be an advocate for California winegrape growers on state, national 
and international issues. CAWG represents the growers of more than 60 
percent of the state's annual tonnage of grapes crushed for wine and 
concentrate. WineAmerica is the national trade association of American 
wine producers representing more than 750 American wineries in 48 
states. Wine Institute is the voluntary association of more than 700 
California wineries and affiliated businesses that represent 92 percent 
of California wine shipments and 80 percent of all U.S. wine shipments. 
Winegrape Growers of America is a federation of state winegrape grower 
organizations representing America's production of grapes for wine.

                               WINE FACTS

    Winegrape growing contributes to the U.S. economy in diverse ways. 
It generates jobs, exports, tax revenues, tourism and, of course, 
outstanding wines. Wine is also the center of intense global 
competition that may seriously affect the ability of American vintners 
to compete in this very global marketplace. The industry's future 
success will hinge on public and private policies that facilitate 
rather than impede responses to new competitive conditions.
    The U.S. grape crop, now grown in over 40 states, has more than 
tripled in 15 years from $955 million in 1985 to almost $3 billion in 
2000. Winegrapes have increased far faster than the overall grape crop 
and now represent almost two-thirds of the total crop. Grapes are the 
highest value fruit crop in the nation and the seventh largest crop 
overall.
    As vineyards continue to expand, so do the number of producing 
wineries. There are nearly 3,000 wineries in all fifty states. Wine 
production, which typically adds value of approximately $2-$4 for each 
$1 of farm gate value, is closely integrated with grape growing 
operations. Wineries with tasting rooms contribute another $4-$10 per 
$1 of farm gate value to the rural economy by selling their wine 
directly to consumers.
    The nation's top wine producing states are (in production order): 
California, New York, Washington, and Oregon. California produces more 
than 90 percent of the volume.
    Wineries are almost always located in rural areas, near the source 
of the grapes. The combination of vineyards and wineries provides a 
stable, year-round, and flexible base of rural employment. Winery 
tourism is very popular and contributes significantly to the rural 
economy; in many cases state tourism departments feature their wineries 
as a major tourist attraction.
    The economic activity directly generated by the wine industry in 
turn creates additional jobs, wages and economic activity as services 
are purchased and wages are spent. In aggregate, wine contributes more 
than $45 billion to the U.S. economy, along with 556,000 jobs, which 
account for $12.8 billion in wages and $3.3 billion in state and local 
tax revenues.
    Wineries and grape growers have made a major commitment to 
implement sustainable practices, which are environmentally sound, 
economically viable and socially responsible. Formal programs are being 
implemented in New York (agriculture environmental management program), 
California's Central Coast Vineyard Team and Lodi-Woodbridge Winegrape 
Commission, Oregon LIVE (Low Input Viticulture and Enology) and 
Washington's Walla Walla Valley Wine Alliance. Wine Institute and the 
California Association of Winegrape Growers have developed a California 
Code of Sustainable Winegrowing Practices with an accompanying 490-page 
self-assessment workbook of best management practices that is being 
embraced by growers and vintners throughout the state.
    Foreign competition is formidable. The U.S. accounts for 9.7 
percent of the world grape production (third after Italy, France) 
accomplished on only 5 percent of the world's vineyard acreage.
    The United States represents about 8 percent of world wine 
production (fourth after Italy, France, and Spain). Our 2003 exports of 
wine, at 94 million gallons, were about 5.6 percent of the world export 
market.
    Imports of wine into the United States (2003) represent about 170 
million gallons, an increase of more than 6 percent from 2002. Imports 
now account for 25 percent of the U.S. wine market.
                                 ______
                                 

 Prepared Statement of the California Industry and Government Central 
                    California Ozone Study Coalition

    On behalf of the California Industry and Government Central 
California Ozone Study Coalition, we are pleased to submit this 
statement for the record in support of our fiscal year 2005 funding 
request of $500,000 through the U.S. Department of Agriculture (USDA) 
Cooperative State Research, Education, and Extension Service (CSREES) 
for the Central California Ozone Study (CCOS).
    Most of central California does not attain federal health-based 
standards for ozone and particulate matter. The San Joaquin Valley has 
recently requested redesignation to extreme and is committed to 
updating their 1-hour ozone State Implementation Plan (SIP) in 2004, 
based on new technical data. In addition, the San Joaquin Valley, 
Sacramento Valley, and San Francisco Bay Area exceed the new federal 8-
hour ozone standard. SIPs for the 8-hour standard will be due in the 
2007 timeframe--and must include an evaluation of the impact of 
transported air pollution on downwind areas such as the Mountain 
Counties. Photochemical air quality modeling will be necessary to 
prepare SIPs that are approvable by the U.S. Environmental Protection 
Agency.
    The Central California Ozone Study (CCOS) is designed to enable 
central California to meet Clean Air Act requirements for ozone SIPs as 
well as advance fundamental science for use nationwide. The CCOS field 
measurement program was conducted during the summer of 2000 in 
conjunction with the California Regional PM10/
PM2.5 Air Quality Study (CRPAQS), a major study of the 
origin, nature and extent of excessive levels of fine particles in 
central California. This enabled leveraging of the efforts of the 
particulate matter study in that some equipment and personnel served 
dual functions to reduce the net cost. From a technical standpoint, 
carrying out both studies concurrently was a unique opportunity to 
address the integration of particulate matter and ozone control 
efforts. CCOS was also cost-effective since it builds on other 
successful efforts including the 1990 San Joaquin Valley Ozone Study.
    CCOS includes an ozone field study, data analysis, modeling 
performance evaluations, and a retrospective look at previous SIP 
modeling. The CCOS study area extends over central and most of northern 
California. The goal of the CCOS is to better understand the nature of 
the ozone problem across the region, providing a strong scientific 
foundation for preparing the next round of State and Federal attainment 
plans. The study includes five main components:
  --Developing the field study;
  --Conducting an intensive field monitoring study from June 1 to 
        September 30, 2000;
  --Developing an emission inventory to support modeling;
  --Developing and evaluating a photochemical model for the region; and
  --Evaluating emission control strategies for upcoming ozone 
        attainment plans.
    The CCOS is directed by Policy and Technical Committees consisting 
of representatives from Federal, State, and local governments, as well 
as private industry. These committees, which managed the San Joaquin 
Valley Ozone Study and are currently managing the California Regional 
PM10/PM2.5 Air Quality Study, are landmark 
examples of collaborative environmental management. The proven methods 
and established teamwork provide a solid foundation for CCOS. The 
sponsors of CCOS, representing state, local government, and industry, 
have contributed approximately $9.4 million for the field study. The 
Federal Government has contributed $4,874,000 to support some data 
analysis and modeling. In addition, CCOS sponsors are providing $2 
million of in-kind support. The Policy Committee is seeking federal co-
funding of an additional $2.5 million to complete the remaining data 
analysis and modeling. California is an ideal natural laboratory for 
studies that address agriculture-related issues, given the significant 
agriculture industry in the state.
    For fiscal year 2005, our Coalition is seeking funding of $500,000 
through the U.S. Department of Agriculture (USDA) Cooperative State 
Research, Education, and Extension Service (CSREES). Domestic 
agriculture is facing increasing international competition. Costs of 
production and processing are becoming increasingly more critical. With 
the current SJV PM10 SIP and the upcoming ozone and 
PM2.5 SIPs, the agricultural industry within the study area 
is facing many new requirements to manage and reduce their air quality 
impacts. The identification of scientifically validated, cost-effective 
options for reducing the environmental impacts of tilling, discing, 
cultivation, and livestock related air emissions will contribute 
significantly to the long-term health and economic stability of local 
agriculture. Funding will support livestock and crop-related research 
that will help maintain a vital agricultural industry within the state. 
Research will be focused to measure baseline emissions, and to study 
the most economical and effective approaches for reducing the impacts 
of agriculture on air quality. These studies also have nationwide 
benefits.
    The San Joaquin Valley of California is one of the few areas of the 
country to be classified as extreme in failing to meet the federal 
Clean Air Act's attainment standards. Agricultural production practices 
are considered to be a contributor to the air quality problem. Farmers 
in the San Joaquin Valley are facing, for the first time, obligations 
to obtain permits to farm from government agencies. Ongoing research is 
essential to identify scientifically validated and cost-effective 
options for reducing the environmental impacts of tilling, discing, 
cultivation, and livestock related air emissions. Research will measure 
baseline emissions and study the most economical and effective 
approaches to reducing the impacts of agriculture on air quality. While 
such research is critical to the long-term health and economic 
stability of local agriculture, it will yield state-of-the-art benefits 
derived from a unique agricultural study site that will have national 
application and benefit.
    There is a national need to address data gaps and California should 
not bear the entire cost of addressing these gaps. National data gaps 
include issues relating to the integration of particulate matter and 
ozone control strategies. Federal assistance is needed to effectively 
address these issues and CCOS provides a mechanism by which California 
pays half the cost of work that the Federal Government should pursue.
    We appreciate the Subcommittee's consideration of our request. 
Thank you very much.
                                 ______
                                 

      Prepared Statement of the California Table Grape Commission

    Mr. Chairman and Members of the Subcommittee: The California Table 
Grape Commission respectfully urges this subcommittee to fund the 
Market Access Program (MAP) at the $140 million level for fiscal year 
2005 as approved in the 2002 Farm Security and Rural Investment Act 
(FSRIA).

The Importance of Agricultural Exports
    By passing the FSRIA, Congress-recognized the importance of 
agriculture to the U.S. economy. With increased funding for the Market 
Access Program, the FSRIA also acknowledged the vital role of exports 
in the long-term growth and overall well-being of the country's 
agricultural sector. Agriculture is the only sector of the U.S. economy 
that consistently runs a trade surplus. Moreover, exports account for 
25 percent of U.S. farm cash receipts and for over $1 billion per week 
in sales to more than 100 countries. The benefit to rural U.S. 
economies across the country, in employment and revenue, is immense.

California Within the Broader Picture
    California, perhaps more than any other state, has benefited from 
the MAP program, among other Federal export assistance programs. 
California is the leading state in agricultural exports, with export 
shipments totaling over $6.5 billion annually. Exports represent 
roughly 14 percent of California's agricultural production, though for 
many commodities, including grapes, this figure is much higher. The 
importance of exports to many California commodities are growing. Last 
year alone, export shipments for California walnuts, pistachios, 
prunes, peaches, nectarines, almonds and grapes increased considerably. 
This is not to mention the long-term increases accrued over the last 10 
years. Federal export assistance programs such as MAP made these 
exports successes possible.

California Table Grapes
    The California table grape industry is just one of the 
aforementioned industries that has benefited considerably from export 
development. Over the past 10 years, California table grape exports 
increased 58 percent by volume and nearly 70 percent by value. Record 
export shipments were achieved in each of the last 4 years. These 
records coincided with the opening of new markets such as China, 
Australia, Vietnam, and India. The MAP program enabled the commission 
to pursue export development activities in each of those markets, 
thereby helping the California industry take full advantage of these 
opportunities.
    MAP funds also allow the commission to support export development 
efforts in other emerging and developing markets. As a result, the 
California table grape industry now exports significantly larger 
volumes to Mexico, Malaysia, Central America, Thailand, Indonesia, 
Vietnam and the Middle East among others. At the same time, programs 
funded in more developed export markets such as Japan, Korea, and the 
United Kingdom enable the commission to preserve California's position 
as the leading supplier of fresh grapes despite increased competition. 
The significance of exports to the California table grape industry 
cannot be overstated. Exports now account for 40 percent of production.

The Changing Export Environment
    Based on the growth figures cited above, the California table grape 
industry has clearly benefited from the MAP program, and similar export 
assistance programs. However, global developments are creating a myriad 
of new challenges and opportunities for U.S. agricultural producers. 
Bilateral and multilateral trade agreements are opening markets that 
once prohibited the import of California table grapes and other U.S. 
agricultural products. While California benefits from access to these 
new markets, the same is true for competing grape producers in Chile, 
South Africa, Israel, and China. However, growers in many of these 
countries receive government subsidies and other supports that place 
California grapes at a disadvantage. Increased competition from global 
table grape suppliers therefore threatens the export gains previously 
made by the California table grape industry and could limit new 
opportunities in emerging markets.
Conclusion
    Congress recognized the dynamic nature of global agricultural 
trade, and the growing challenges faced by U.S. agricultural producers, 
when passing the FSRIA in 2002. To meet the long-term needs of U.S. 
agricultural producers, Congress approved incremental increases in 
funding for the MAP program. Those long-term needs have not changed. If 
anything, the challenges and opportunities have intensified. For this 
reason, the commission asks Congress to again recognize the importance 
of U.S. agriculture and address its resource needs by allocating the 
full $140 million to fund the MAP program in 2004.
                                 ______
                                 

 Prepared Statement of the Coalition on Funding Agricultural Research 
                                Missions

    Dear Chairman Bennett: The Coalition on Funding Agricultural 
Research Missions (CoFARM), representing 130,000 members from 
professional scientific organizations, dedicated to assuring the safe 
and secure availability of food, feed, and fiber, is united by a 
commitment to advance and sustain investment in our nation's research 
portfolio.
    Recommendation 1.--We understand that the Agriculture 
Appropriations bill has many valuable and necessary components, and 
urge you to continue to support the National Research Initiative 
Competitive Grants Program (NRI), USDA's premier, peer-reviewed, 
competitive grants program. We request that you build on the 
President's $180 million funding request for the NRI in the fiscal year 
2005 budget cycle. A study conducted by USDA's Economic Research 
Service (http://www.ers.usda.gov/publications/aer735/) to study) 
highlights the annual rate of return to publicly fund agricultural 
research at 35 percent.
    Recommendation 2.--CoFARM requests that any new monies appropriated 
for the NRI, as in fiscal year 2004, allow the Secretary the discretion 
to apply up to 20 percent towards carrying out integrated research, 
extension and education competitive grants program as requested by the 
Administration in fiscal year 2005.
    As you lead the Congress in deliberation on funding levels for 
agricultural research, we urge you to build on the President's proposal 
of $180 million for the NRI. Please consider CoFARM as a resource for 
information in your efforts to improve the agricultural research 
capacity of our nation. The expertise of our collective membership is 
available to help in your efforts.

                        COFARM MEMBER SOCIETIES

American Dairy Science Association
American Institute For Biological Sciences
American Phytopathological Society
American Society of Agricultural Engineers
American Society of Agronomy
American Society of Animal Science
American Society for Horticultural Science
American Society for Microbiology
American Society for Nutritional Sciences
American Society of Plant Biologists
Council on Food, Agricultural and Resource Economics
Crop Science Society of America
Council of Entomology Department Administrators
Federation of Animal Science Societies
Genetics Society of America
Institute of Food Technologists
Poultry Science Association
Rural Sociological Society
Society of Nematologists
Soil Science Society of America
Weed Science Society of America
                                 ______
                                 

   Prepared Statement of the Coalition to Promote U.S. Agricultural 
                                Exports

    As members of the Coalition to Promote U.S. Agricultural Exports, 
we commend the Chairman and members of the Subcommittee for their 
interest and support of U.S. agriculture and express our appreciation 
for this opportunity to share our views.
    The Coalition to Promote U.S. Agricultural Exports is an ad hoc 
coalition of over 80 organizations, representing farmers and ranchers, 
fishermen and forest product producers, cooperatives, small businesses, 
regional trade organizations, and the State Departments of Agriculture. 
We believe the United States must continue to have in place policies 
and programs that help maintain the ability of American agriculture to 
compete effectively in a global marketplace still characterized by 
subsidized foreign competition.
    During consideration of the 2002 Farm Bill, Congress sought to 
bolster U.S. trade expansion efforts by approving an increase in 
funding for the Market Access Program (MAP) and the Foreign Market 
Development (FMD) Program, which will begin to reverse the decline in 
funding for these important export programs that occurred over the last 
decade. For fiscal year 2005, the Farm Bill authorizes funding for MAP 
at $140 million, and FMD is authorized at $34.5 million. The Coalition 
strongly urges that both programs be funded at the full authorized 
levels in order to carry out important market development activities.
    Farm income and agriculture's economic well-being depend heavily on 
exports, which account for one-third or more of domestic production, 
provide jobs for millions of Americans, and make a positive 
contribution to our Nation's overall trade balance. In fiscal year 
2004, U.S. agriculture exports are projected to reach $59 billion, 
which is still below the high of roughly $60 billion that was achieved 
in fiscal year 1996. Exports could be significantly higher if it were 
not for a combination of factors, including continued subsidized 
foreign competition and related artificial trade barriers. U.S. 
agriculture's trade surplus is also expected to be about $9.5 billion, 
down approximately 66 percent from fiscal year 1996, with imports 
continuing at record levels. In fiscal year 1999, the United States 
recorded its first agricultural trade deficit with the EU of $1 
billion. In fiscal year 2004, USDA forecasts that the trade deficit 
with the EU will grow to $4.3 billion, the largest agriculture deficit 
the United States runs with any market.
    According to recent information from USDA, the European Union (EU) 
spends more than $2 billion annually on agricultural export subsidies 
compared to less than $100 million by the United States. In other 
words, the United States is being outspent by more than 20 to 1 or more 
by the EU alone with regard to the use of export subsidies.
    In recent years, the EU, the Cairns group, and other foreign 
competitors also devoted more than $1 billion on various activities to 
promote their exports of agricultural, forestry, and fishery products. 
Information compiled by USDA also shows that such countries are 
spending over $100 million just to promote sales of their products in 
the United States. In other words, they are spending almost as much to 
promote their agricultural exports to the United States, as USDA 
budgets ($125 million in fiscal year 2004) through MAP to promote 
American-grown and produced products worldwide!
    Because market promotion is permitted under World Trade 
Organization (WTO) rules, with no limit on public or producer funding, 
it is increasingly seen as a centerpiece of a winning strategy in the 
future trade battleground. Many competitor countries have announced 
ambitious trade goals and are shaping export programs to target 
promising growth markets and bring new companies into the export arena. 
European countries are expanding their promotional activities in Asia, 
Latin America, and Eastern Europe. Canada, Australia, New Zealand, and 
Brazil have also budgeted significant investments in export promotion 
expenditures worldwide in recent years. As the EU and our other foreign 
competitors have made clear, they intend to continue to be aggressive 
in their export efforts.
    Both MAP and FMD are administered on a cost-share basis with 
farmers and other participants required to contribute up to 50 percent 
of their own resources. These programs are among the few tools 
specifically allowed under WTO rules to help American agriculture and 
American workers remain competitive in a global marketplace still 
characterized by subsidized foreign competition. The over 70 U.S. 
agricultural groups that share in the costs of the MAP and FMD programs 
fully recognize the export benefits of market development activities. 
In fact, they have sharply increased their own contributions to both 
programs over the past decade while use of USDA funds has actually 
dropped. Since 1992, MAP participants have increased their 
contributions from 30 percent (30 cents for every dollar contributed by 
USDA) to almost 175 percent ($1.75 in industry funds for every USDA 
dollar). For FMD, the contribution rate has risen from 76 percent to 
the current level of 146 percent. By any measure, such programs have 
been tremendously successful and extremely cost-effective in helping 
maintain and expand U.S. agricultural exports, protect American jobs, 
and strengthen farm income.
    Competing in the agricultural export market carries new challenges 
and opportunities for U.S. agriculture. Not only is the competition 
becoming more intense with increased funding being brought to bear, but 
we also face a world where new trade agreements are being developed 
almost daily. The United States is also negotiating trade agreements 
with the goal of opening new market opportunities for U.S. agriculture. 
In addition, the opening of the Iraq market and the markets of other 
previously sanctioned countries will offer further opportunities and 
challenges.
    For all these reasons, we want to emphasize again the need to 
strengthen the ability of U.S. agriculture to compete effectively in 
the global marketplace. American agriculture is among the most 
competitive industries in the world, but it cannot and should not be 
expected to compete alone against the treasuries of foreign 
governments. As a Nation, we can work to export our products, or we can 
export our jobs. USDA's export programs, such as MAP and FMD, are a key 
part of an overall trade strategy that is pro-growth, pro-trade and 
pro-job.
    Again, as members of the Coalition to Promote U.S. Agricultural 
Exports, we appreciate very much this opportunity to share our views 
and we ask that this statement be included in the official hearing 
record.
                                 ______
                                 

 Prepared Statement of the Colorado River Basin Salinity Control Forum

        COLORADO RIVER BASIN SALINITY CONTROL PROGRAM, TITLE II

    Forum's Recommendation Concerning: Funding for Environmental 
Quality Incentives Program
    Support funding of this nationwide program at the President(s 
requested amount of $985 million for fiscal year 2005.
    Request there be designated to the Colorado River Basin Salinity 
Control Program 2.5 percent of the EQIP Funding.
    The Congress concluded that the Colorado River Basin Salinity 
Control Program (Program) should be implemented in the most cost-
effective way and, realizing that agricultural on-farm strategies were 
some of the most cost-effective strategies, authorized a program for 
the Department of Agriculture (Department) within the Colorado River 
Basin Salinity Control Act (Act). With the enactment of the Federal 
Agriculture Improvement and Reform Act of 1996 (FAIRA), the Congress 
directed that the Program should be implemented as one of the 
components of the Environmental Quality Incentives Program (EQIP). 
Since the enactment of the Farm Security and Rural Investment Act 
(FSRIA) in 2002, there is, for the first time, an opportunity to 
adequately fund the Program within the EQIP.
    The Program, as set forth in the Act, is to benefit Lower Basin 
water users hundreds of miles downstream from salt sources in the Upper 
Basin. There are very significant economic damages caused by high salt 
levels in this water source. Agriculturalists in the Upper Basin where 
the salt must be controlled, however, don(t first look to downstream 
water quality standards but realize local benefits. They submit cost-
effective proposals to the State Conservationists in Utah, Wyoming and 
Colorado and offer to cost share. The Act provides that the seven 
Colorado River Basin States will also cost share in this effort, 
providing 30 percent of the funding. This has brought together a 
remarkable partnership.
    After longstanding urgings from the states and directives from the 
Congress, the Department has concluded that this program is different 
than small watershed enhancement efforts common to the EQIP. In this 
case, the watershed to be considered stretches more than 1,200 miles 
from the river's headwater in the Rocky Mountains to the river's 
terminus in the Gulf of California in Mexico. The Department has now 
determined that this effort should receive a special fund designation 
and has appointed a coordinator for this multi-state effort.
    The NRCS, in fiscal year 2003, earmarked $13.6 million and in 
fiscal year 2004 there was earmarked $19.8 million to be used for the 
Program. The Forum appreciates the efforts of the subcommittee in this 
regard. The plan for water quality control of the Colorado River was 
prepared by the Colorado River Basin Salinity Control Forum (Forum), 
adopted by the states, and approved by the EPA. In the water quality 
plan it is required that the USDA (Federal) portion of the effort be 
funded at a level of at least $17.5 million. In fiscal year 2004, for 
the first time, funding reached this level. State and local cost-
sharing is triggered by the Federal appropriation. In fiscal year 2004, 
it is anticipated that the states will cost share with about $8.4 
million and local agriculture producers will add another $7.6 million.
    Over the past few years, the NRCS has designated that 2.5 percent 
of the EQIP funds be allocated to Colorado River Salinity Control. The 
Forum believes this is the appropriate future level of funding as long 
as it does not drop below $17.5 million. The Basin states have cost 
sharing dollars available to participate in on-farm salinity control 
efforts. The agricultural producers in the Upper Basin are waiting for 
their applications to be considered so that they might also cost share 
in the Program.

                                OVERVIEW

    The Program was authorized by Congress in 1974. The Title I portion 
of the Act responded to commitments that the United States made, 
through a Minute of the International Boundary and Water Commission, to 
Mexico with respect to the quality of water being delivered to Mexico 
below Imperial Dam. Title II of the Act established a program to 
respond to salinity control needs of Colorado River water users in the 
United States and to comply with the mandates of the then newly enacted 
Clean Water Act. This testimony is in support of funding for the Title 
II program.
    After a decade of investigative and implementation efforts, the 
Basin states concluded that the Act needed to be amended. Congress 
agreed and revised the Act in 1984. That revision, while keeping the 
Department of the Interior as lead coordinator for Colorado River Basin 
salinity control efforts, also gave new salinity control 
responsibilities to the Department of Agriculture. Congress has charged 
the Administration with implementing the most cost-effective program 
practicable (measured in dollars per ton of salt removed). It has been 
determined that the agricultural efforts are some of the most cost-
effective opportunities.
    Since Congressional mandates of nearly three decades ago, much has 
been learned about the impact of salts in the Colorado River system. 
The Bureau of Reclamation has conducted studies on the economic impact 
of these salts. Reclamation recognizes that the damages to United 
States' water users alone are hundreds of millions of dollars per year.
    The Forum is composed of gubernatorial appointees from Arizona, 
California, Colorado, Nevada, New Mexico, Utah and Wyoming. The Forum 
has become the seven-state coordinating body for interfacing with 
Congress to support the implementation of a program necessary to 
control the salinity of the river system. In close cooperation with the 
Federal agencies and under requirements of the Clean Water Act, every 3 
years the Forum prepares a formal report analyzing the salinity of the 
Colorado River, anticipated future salinity, and the program necessary 
to keep the salinities at or below the levels measured in the river 
system in 1972 so as to control damages to downstream users.
    In setting water quality standards for the Colorado River system, 
the salinity concentrations measured at Imperial and below Parker and 
Hoover Dams in 1972 have been identified as the numeric criteria. The 
plan necessary for controlling salinity has been captioned the ``plan 
of implementation.'' The 2002 Review, Water Quality Standards for 
Salinity, Colorado River System, includes an updated plan of 
implementation. In order to eliminate the shortfall in salinity control 
resulting from inadequate Federal funding for the last several years 
for USDA, the Forum has determined that implementation of the Program 
needs to be accelerated. The level of appropriation requested in this 
testimony is in keeping with the agreed to plan. If adequate funds are 
not appropriated, state and Federal agencies involved are in agreement 
that damage from the higher salt levels in the water will be more 
widespread and very significant in the United States and Mexico.
    Although the Program thus far has been able to implement salinity 
control measures that comply with the approved plan, recent drought 
years have caused salinity levels to rise in the river. Predictions are 
that this will be the trend for the next several years. This places an 
added urgency for the acceleration of the implementation of the 
Program.

              STATE COST-SHARING AND TECHNICAL ASSISTANCE

    The authorized cost sharing by the Basin states, as provided by 
FAIRA, was at first difficult to implement as attorneys for the USDA 
concluded that the Basin states were authorized to cost share in the 
effort, but the Congress had not given USDA authority to receive the 
Basin states' funds. After almost a year of exploring every possible 
solution as to how the cost sharing was to occur, the states, in 
agreement with the Bureau of Reclamation, state officials in Utah, 
Colorado and Wyoming and with NRCS State Conservationists in Utah, 
Colorado and Wyoming, agreed upon a (parallel( salinity control program 
wherein the states' cost sharing funds are being contributed and used. 
We are now several years into that program and, at this moment in time, 
this solution to how cost sharing can be implemented appears to be 
satisfactory.
    With respect to the states' cost sharing funds, the Basin states 
felt that it was most essential that a portion of the Program be 
associated with technical assistance and education activities in the 
field. Without this necessary support, there is no advanced planning, 
proposals are not well prepared, assertions in the proposals cannot be 
verified, implementation of contracts cannot be observed, and valuable 
partnering and education efforts cannot occur. Recognizing these 
values, the ``parallel'' state cost sharing program expends 40 percent 
of the funds available on these needed support activities. Initially, 
it was acknowledged that the Federal portion of the Program funded 
through EQIP was starved with respect to needed technical assistance 
and education support. The Forum is encouraged with a recent 
Administration acknowledgment that technical assistance must be better 
funded.
                                 ______
                                 

                   Prepared Statement of Easter Seals

    Easter Seals appreciates the opportunity to report on the notable 
accomplishments of the USDA Cooperative State Research, Education, and 
Extension Service (CSREES) AgrAbility Program and request that funding 
for the AgrAbility Program be increased to $4.6 million in fiscal year 
2005.
    The AgrAbility Program is an essential, unduplicated, hands-on 
resource for farmers, ranchers, and farmworkers with disabilities and 
their families. AgrAbility is the only USDA program dedicated 
exclusively to helping agricultural producers with disabilities. It 
demonstrates the value of public-private partnership by securing 
donations of funds, talent, and materials to magnify the impact of a 
modest federal investment. The fiscal year 2004 appropriation of $4.147 
million is funding 24 state projects.

                        DISABILITY & AGRICULTURE

    Agricultural production is one of the nation's most hazardous 
occupations. According to the National Institute on Occupational Safety 
and Health, each year, approximately 182,500 agricultural workers 
sustain disabling injuries, about 5 percent of which permanently impair 
their ability to perform essential farm tasks. Tens of thousands more 
become disabled as a result of non-farm injuries, illnesses, other 
health conditions, and the aging process. Nationwide, over 13 million 
Americans living in rural areas have a chronic or permanent disability. 
Hundreds of thousands of farmers, ranchers, and agricultural workers 
who have disabilities are a vital part of rural America and the 
agricultural workforce.
    The presence of a disability jeopardizes rural and agricultural 
futures for many of these individuals. Rural isolation, a tradition of 
self-reliance, and gaps in rural service delivery systems frequently 
prevent agricultural workers with disabilities from taking advantage of 
growing expertise in modifying farm operations, adapting equipment, 
promoting farmstead accessibility, and using assistive technologies to 
safely accommodate disability in agricultural and rural settings. Yet, 
with some assistance, the majority of disabled agricultural workers can 
continue to earn their livelihoods in agriculture and participate fully 
in rural community life.

                 AGRABILITY'S ROLE AND ACCOMPLISHMENTS

    The AgrAbility Program was established under the 1990 Farm Bill in 
response to the needs of farmers, ranchers, and farmworkers with 
disabilities. The Farm Bill authorizes the Secretary of Agriculture to 
make grants to Extension Services for conducting collaborative 
education and assistance programs for farmers with disabilities through 
state projects and related national training, technical assistance, and 
information dissemination. Easter Seals is proud to be a partner with 
the University of Wisconsin-Extension Cooperative Extension to provide 
the national training and technical assistance portion of the 
AgrAbility Program. Thousands of people in states with and without 
state AgrAbility projects are aided through this initiative.
    AgrAbility combines the expertise of the Extension Service and 
disability organization staffs to provide people with disabilities 
working in agriculture the specialized services that they need to 
safely accommodate their disabilities in everyday farm and ranch 
operations. AgrAbility received strong bipartisan support during the 
2002 reauthorization of the Farm Security and Investment Act of 2002, 
and was extended through fiscal year 2007. The $6 million authorization 
level for AgrAbility was continued.
    Under the statute, state and multi-state AgrAbility projects engage 
Extension Service agents, disability experts, rural professionals, and 
volunteers to offer an array of services, including: identifying and 
referring farmers with disabilities; providing on-the-farm technical 
assistance for agricultural workers on adapting and using farm 
equipment, buildings, and tools; restructuring farm operations; 
providing agriculture-based education to prevent further injury and 
disability; and, upgrading the skills of Extension Service agents and 
other rural professionals to better promote success in agricultural 
production for people with disabilities.
    In 2004, USDA received an allocation from Congress of $4.147 
million. These funds are supporting 24 state projects serving 27 states 
(due to several projects serving multiple states), the national 
project, and USDA-CSREES administration of the Program. The state 
projects funded with fiscal 2004 money are California, Colorado, 
Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, 
Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, 
New York, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, 
Vermont, Virginia, West Virginia, and Wisconsin.
    AgrAbility provides customized assistance to farmers, ranchers, and 
farmworkers with disabilities and their families. The nature and degree 
of assistance depends on the individual's disability, needs, and 
agricultural operation.
    Between April 1991 and March 2002, AgrAbility Projects in 31 states 
along with the national project accomplished the following:
  --Provided assistance, including nearly 10,000 on-site visits, to 
        over 11,000 farmers, ranchers, farmworkers or their family 
        members affected by disability.
  --Educated over 200,000 agricultural, rehabilitation, and health 
        professionals on safely accommodating disability in 
        agriculture.
  --Recruited and trained more than 6,000 volunteers and peer 
        supporters to assist agricultural producers with disabilities 
        and their families.
  --Reached 9,500,000 people through more than 8,500 exhibits, 
        displays, and demonstrations to increase awareness of the 
        challenges affecting and resources available to people with 
        disabilities working in agriculture.
  --In 2000, the National AgrAbility technical assistance and education 
        grant was awarded to Easter Seals national headquarters and the 
        University of Wisconsin-Extension Cooperative Extension. This 
        new partnership is generating innovative and effective 
        activities at the national level that will have a significant 
        impact on the effectiveness of the state AgrAbility projects 
        and the lives of agricultural workers with disabilities.

                    IMPACT OF CURRENT FUNDING LEVELS

    A funding floor of $150,000 per state was set in the 1990 Farm Bill 
to assure that the state programs were appropriately resourced to meet 
diverse, statewide agricultural accommodation needs. In the 2002 
reauthorization of the Farm Bill, the Committee reaffirmed a commitment 
to that funding floor of $150,000 per state. Because funding had not 
approached the $6 million authorized level prior to fiscal year 2002, 
however, state projects had only received on average slightly under 
$100,000 per state. The funding increase for AgrAbility in fiscal year 
2002 provided USDA with the ability to fund projects at the $150,000 
base level. Easter Seals strongly supports full funding of state 
projects to assure that they continue to be effective for farmers with 
disabilities.
    AgrAbility projects are underfunded relative to need and objective. 
At the current funding level, only a few staff can be hired to provide 
statewide education and assistance to farmers with disabilities, 
educate rural professionals, recruit volunteers, and work with rural 
businesses on disability-related issues. Rising demand for services and 
the great distances that must be traveled to reach farmers and ranchers 
severely strains even the most dedicated of AgrAbility's outstanding 
staff. Easter Seals fears that failure to invest adequately in this 
worthwhile program will ultimately cause it to falter.
    An additional consequence of limited funding is that in every grant 
cycle some states with existing AgrAbility programs and a demonstrated 
need for services are not renewed and are forced to discontinue 
services to farmers with disabilities in that state. These states often 
have difficulty obtaining the access to the limited public and private 
funding sources that the federal seed money granted them. More than a 
dozen states have sought AgrAbility funding without success. Each of 
these states can demonstrate significant unmet needs among farm and 
ranch families affected by disability that AgrAbility could potentially 
address.
    The fiscal year 2005 request of $4.6 million would allow USDA to 
(a) continue to fund states up to the $150,000 base level and add new 
projects in states currently unserved by AgrAbility or (b) increase the 
budgets of currently funded projects to allow much-needed expansion of 
existing services.

                            FUNDING REQUEST

    The need for AgrAbility services has never been greater, and its 
accomplishments to date are remarkable by any standard. Easter Seals is 
proud to contribute to the ongoing success of the USDA-CSREES 
AgrAbility Program. Please support the allocation of at least $4.6 
million for AgrAbility in fiscal year 2005 to ensure that this valuable 
public-private partnership continues to serve rural Americans with 
disabilities and their families. Thank you for this opportunity to 
share the successes and needs of the USDA AgrAbility Program.

                            GRANT DISCLOSURE

    Easter Seals receives the following federal grants:
  --Project ACTION.--$3.0 million from the U.S. Department of 
        Transportation to help transit providers implement the 
        Americans with Disabilities Act (ADA) and to promote 
        transportation accessibility for people with disabilities;
  --AgrAbility.--$290,554 from the U.S. Department of Agriculture to 
        promote success in agriculture for people with disabilities and 
        their families; and
    Eater Seals' state and local affiliated organizations, which are 
separately incorporated, receive funding from a variety of federal and 
state agencies to support their local programs. We do not, however, 
have specific information regarding their funding sources.
                                 ______
                                 

    Prepared Statement of the Federation of American Societies for 
                          Experimental Biology

    The Federation of American Societies for Experimental Biology 
(FASEB) is a coalition of 22 scientific societies who together 
represent more than 66,000 biomedical research scientists. The mission 
of FASEB is to enhance the ability of biomedical and life scientists to 
improve, through their research, the health, well-being and 
productivity of all people. We appreciate the opportunity to submit 
testimony on the critical research and scientific training being 
conducted at the United Stated Department of Agriculture (USDA) and 
will primarily focus our remarks on the National Research Initiative 
Competitive Grants Program (NRICGP), an extramural, peer-reviewed 
program, ensuring that funds are invested in the highest quality 
research projects at universities throughout the nation.
    Basic and applied research in agriculture establishes the 
scientific foundation required to provide a safe, nutritious food 
supply in a manner that reduces environmental pollution, promotes 
sustainable yields, improves human health and promotes the competitive 
position of U.S. agriculture in the global marketplace. Agricultural 
research also plays a critical role in homeland security, providing the 
essential knowledge needed to strengthen the protections of our food 
supply from natural or bioterrorist threats. NRICGP funding levels have 
remained far below the authorized level of $500 million. This level of 
funding limits fundamental and applied research, thereby threatening 
the progress of the U.S. agricultural sector and the associated 
economic, health and security benefits to Americans.
    NRICGP peer-reviewed research focuses on increasing productivity of 
crops and livestock, enhancing human and animal health and nutrition 
and ensuring food safety. The recent discovery of a cow with Bovine 
Spongiform Encephalopathy (BSE, or ``mad cow disease'') highlights the 
importance of increased investment in agricultural research. The 
ability to rapidly identify infected animals, a better understanding of 
how BSE and related diseases affect the food supply, discovering how 
prions function in healthy animals, perhaps leading to comprehension 
and treatment of equivalent human diseases--these are all areas that 
could benefit from NRICGP funding. Basic research into plant and animal 
pathogens not only prepare us to combat naturally occurring epidemics, 
such as BSE, chronic wasting disease (CWD) and West Nile virus, but 
lead us towards powerful tools to battle bioterror agents, as well. 
Guarding the U.S. food supply against the threats of bioterrorism is 
absolutely critical to the security of the nation.
    Mad cow disease is only one of numerous areas of scientific 
opportunity and pressing public need that justify an increase in peer-
reviewed research funding at the USDA. According to the Centers for 
Disease Control and Prevention, obesity will soon become the leading 
cause of preventable death in the United States. Through its research 
programs, the USDA has historically supported human nutrition studies 
emphasizing the maintenance of good health. They have taken the lead 
as, during the past two decades, the incidence of obesity--especially 
among children and adolescents--has become a rapidly accelerating 
public health problem. This problem has been particularly striking 
among certain minority populations. The obesity epidemic has been 
directly responsible for the dramatic increase in diabetes in both 
children and adults which, if unchecked, will overwhelm our heath care 
system. Prevention of obesity is the key strategy, and requires both 
basic and applied knowledge to advance our understanding of potentially 
successful interventions. Projects funded by the NRICGP are using 
animal models to study the basic mechanisms of obesity, as well as 
investigating how school lunches and childhood eating patterns 
contribute to the prevalence of overweight children and adolescents.
    NRICGP funded research is breaking new ground in genomic and 
molecular biology. This basic research allows us to understand disease 
resistance in plants, antibiotic resistance in bacteria and to decipher 
genetic methods to augment the nutritional value of crops, thereby 
contributing to agricultural advancement and human health. Functional 
genomic initiatives directed toward agriculturally important organisms, 
including animals, plants and microbes, represent major opportunities 
as well. The International Rice Genome Sequencing Project, in which the 
USDA was the lead U.S. agency, is being completed and will soon enhance 
global human nutrition and health. Funding to link the NRICGP and the 
National Institute of Health's National Human Genome Research Institute 
is essential to a paradigm shift from gene cloning to genome scale 
biology. The challenge is to understand the genetic bases for 
biological variation responsible for desirable health and production 
traits in plant and animal agriculture. Genomic biology is the magnet 
that will attract outstanding students to the agricultural sciences 
that are the foundation of ensuring a safe and stable food supply.
    Molecular and genomic discoveries made though projects funded by 
the NRICGP stand to have major impacts on U.S. agriculture. USDA-funded 
researchers have identified genes in wheat that may significantly boost 
production yields. Key factors that promote bacterial resistance in 
cattle have been identified and can be used to develop new agents to 
control infectious diseases. Scientists have elucidated the genetics of 
wood, which will lead to substantial improvements in quality and 
quantity produced. Genetically modified soybeans have been created that 
produce more oleic acid, a critic dietary fat for improving the human 
diet. These soybeans are also resistant to bean pod mottle virus, a 
devastating crop disease. NRICGP researchers have developed viruses 
that can deliver disease resistant genes to catfish, which reduces 
dependence on medicated feeds while enhancing animal health. In a 
similar but potentially higher impact discovery, antimicrobial peptides 
have been found in pigs that may kill swine pathogens without the need 
for conventional antibiotics. This may decrease the risk of antibiotic-
resistance infections in human acquired through exposure to live 
animals or meat.
    In addition to research, the USDA plays a vital role in development 
of future researchers. Training students in the agricultural sciences 
is critical if the United States is to maintain its leadership position 
in an increasingly competitive, global food and agriculture industry. 
Unfortunately, the number of doctorates awarded in agricultural 
sciences has decreased significantly in recent years. The National 
Needs Graduate Fellowships Program trains excellent researchers who can 
interact effectively with both agricultural producers and consumers. 
This program allows institutions to recruit outstanding graduate 
students in targeted areas of research, including plant and animal 
biotechnology, agricultural engineering and food science or human 
nutrition. Despite its importance, this program is funded at low 
levels, allowing only a fraction of the qualified Ph.D. applicants to 
be supported. Additionally, the USDA supports innovation in teaching 
methods and materials through the Higher Education Challenge Grants 
program. The decreasing pool of young scientists with backgrounds in 
agriculture, and the critical need to recruit and train the next 
generation of agricultural researchers, make it imperative that these 
two programs be supported at levels sufficient to accomplish their 
goals effectively.
    The best and brightest scientists in the United States are also 
being deterred from agricultural research by the current cap on 
indirect costs, to the detriment of both producers and consumers. FASEB 
urges that the USDA indirect costs rate be raised and made commensurate 
with the rate used by other Federal agencies. Cutting-edge research 
requires substantial investment in buildings and instrumentation. The 
USDA provides partial reimbursements for these indirect, but necessary, 
costs of research as part of grant funding. Currently the 
Congressionally mandated 19 percent facilities and administrative (F&A) 
costs cap results in a significant disincentive for many university 
faculty to seek USDA funding. Additionally, an insufficient facilities 
reimbursement significantly impairs the ability of universities to meet 
their fixed obligations and prevents them from further investing in 
needed facilities in the future. However, increasing the cap on F&A 
costs from 19 percent should not come at the expense of the overall 
agricultural research budget and its competitive grant programs.
    FASEB strongly supports funding the NRICGP at the $200 million 
level recommended in the President's fiscal year 2004 budget.\1\ 
Furthermore, we are concerned that the President's fiscal year 2005 
budget requests funding below this level. The NRICGP has been 
underfunded since it was created by the 1990 Food, Agriculture, 
Conservation and Trade Act with an authorized annual expenditure of 
$500 million. This limitation in funding constrains the size and 
duration of essential research projects. As a consequence of the 
NRICGP's limited funding and constrictive indirect cost policies, FASEB 
is concerned that researchers are directing their efforts away from 
agricultural needs towards the goals of other funding programs, because 
the number of applications in several NRI areas has decreased in recent 
years. In order to achieve scientific progress in agriculture, it is 
crucial that young investigators are not discouraged from these 
critical areas of research. Greater investment in basic and applied 
agricultural research is critical, as the demand for a safe and 
nutritious food supply continues to increase.
---------------------------------------------------------------------------
    \1\ Federation of American Societies for Experimental Biology. 
2004. Federal Funding for Biological Sciences and Related Life Sciences 
Research--Fiscal Year 2005. http://www.faseb.org/opa/fund2005/
fedfund05.pdf.
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                                 ______
                                 

             Prepared Statement of Florida State University

    Mr. Chairman, I would like to thank you and the Members of the 
Subcommittee for this opportunity to present testimony before this 
Committee. I would like to take a moment to briefly acquaint you with 
Florida State University.
    Located in Tallahassee, Florida's capitol, FSU is a comprehensive 
Research I university with a rapidly growing research base. The 
University serves as a center for advanced graduate and professional 
studies, exemplary research, and top quality undergraduate programs. 
Faculty members at FSU maintain a strong commitment to quality in 
teaching, to performance of research and creative activities and have a 
strong commitment to public service. Among the current or former 
faculty are numerous recipients of national and international honors 
including Nobel laureates, Pulitzer Prize winners, and several members 
of the National Academy of Sciences. Our scientists and engineers do 
excellent research, have strong interdisciplinary interests, and often 
work closely with industrial partners in the commercialization of the 
results of their research. Florida State University had over $162 
million this past year in research awards.
    FSU recently initiated a new medical school, the first in the 
United States in over two decades. Our emphasis is on training students 
to become primary care physicians, with a particular focus on geriatric 
medicine--consistent with the demographics of our state.
    Florida State University attracts students from every county in 
Florida, every state in the nation, and more than 100 foreign 
countries. The University is committed to high admission standards that 
ensure quality in its student body, which currently includes some 345 
National Merit and National Achievement Scholars, as well as students 
with superior creative talent. We consistently rank in the top 25 among 
U.S. colleges and universities in attracting National Merit Scholars to 
our campus. At Florida State University, we are very proud of our 
successes as well as our emerging reputation as one of the nation's top 
public research universities.
    Mr. Chairman, let me tell you about a two projects we are pursuing 
this year through the U.S. Department of Agriculture.
    The first project involves the reduction of agricultural crop risk.
    The Federal Government, the entity which sets crop insurance rates, 
needs access to new cost-effective ways to reduce crop risk. In the 
S.E. United States, El Nino and La Nina climate variability are major 
factors of crop risk. By using new methods of predicting, more 
appropriate and fair pricing of premiums for crop insurance can be set. 
The Southeast Climate Research Consortium, which consists of Florida 
State University, the University of Florida, the University of Miami, 
the Universities of Georgia, Auburn University and University of 
Alabama at Huntsville has been at the forefront of this climate 
prediction work. The Consortium has worked in Florida and throughout 
the Southeastern United States, with support from NOAA, to develop new 
methods to predict the consequences of climate variability.
    In this consortium, Florida State University provides the climate 
forecasts and risk reduction methodology. The University of Florida, 
the University of Georgia, and Auburn University translate this climate 
information into risks associated with production and environmental 
impacts and work with Extension Services in each state to provide 
information to the agricultural community. The University of Miami 
provides the economic modeling of the agricultural system and evaluate 
use and impacts of the products. Each university works with farmers to 
communicate outcomes. New tasks for fiscal year 2005 include: Assessing 
climate forecasts to reduce risks of ground water contamination from 
agricultural practices in the S.E. United States; investigating how to 
better manage crops to maintain or increase profitability and 
simultaneously reduce risks of environmental damage; and evaluating 
agricultural risks associated with water policy changes.
    FSU, on behalf of the FL Climate Consortium, is seeking $4 million 
in fiscal year 2005 for this activity through the U.S. Department of 
Agriculture.
    Our second project involves the utilization of sugarcane by-
products, also know as bagasse.
    Sugarcane has been identified as an essential world food source and 
is mainly used for sugar production. The United States produces over 
seven million metric tons sugar annually--85 percent of which is grown 
in Florida and Louisiana. Bagasse, a fibrous agricultural residue that 
is a by-product of sugarcane processing, is for the most part 
overlooked at this time. Thousands of tons of sugar industry waste by-
products are generated annually in the form of bagasse. Florida State 
University, in conjunction with Louisiana State University and the 
University of Tennessee, are furthering development and production of 
industrial textile products from bagasse that will enhance the value 
and use of this potentially important agricultural commodity. Working 
with cane producers and cooperatives, this project will demonstrate 
mill-to-market bio-based value-added products. Previous work has 
demonstrated that fibers can be extracted from bagasse and formed into 
non-woven mats for significant and successful erosion control. This 
multi-state research project will scale up the previous pilot process 
to extract larger volumes of sugarcane fibers from bagasse for the 
production and evaluation of industrial textile products from the 
extracted fibers.
    Two prototype continuous reactors--one at Florida State University 
and one at Louisiana State University--will be used to process bagasse 
fibers that will be characterized and made into carded webs for 
spinning fibers. Processing parameters for carding and spinning the 
fibers will be optimized and dyeability of the fibers, yarns and mats 
will be investigated. The carded webs will also be subjected to a 
process that results in non-woven mats with enhanced strength. 
Operating conditions will be established and costs assessed. These 
products from renewable resources have industrial applications based on 
their biodegradability for environmental purposes. Additional efforts 
will focus on developing value-added products from sugarcane bagasse 
with production methods that ensure environmental compatibility. 
Results of this research and development will increase the economic 
value and potential applications for sugarcane fiber products.
    The development of new products from sugar cane bi-products can be 
a tremendous economic benefit for the farmers and the region. 
Historically, this segment of the agricultural economy has had a 
limited variety of products from the cane. This research will hopefully 
increase the marketability of cane and its enhanced bi-products in a 
wider range of commercial areas and applications.
    Florida State University, as project coordinator, is seeking $1.5 
million in fiscal year 2005 for this activity through the U.S. 
Department of Agriculture.
    Mr. Chairman, these are just of couple of the many exciting 
activities going on at Florida State University that will make 
important contributions to solving some key concerns our nation faces 
today. Your support would be appreciated, and, again, thank you for an 
opportunity to present these views for your consideration.
                                 ______
                                 

        Prepared Statement of the Forest Landowners Association

    The Forest Landowners Association (3776 Lavista Road, Suite 250, 
Tucker, Georgia, 30084; telephone 404-325-2954), an association of over 
10,000 private forest landowners throughout eighteen southern and 
eastern states, appreciates this opportunity to submit written 
testimony to the Senate Committee on Appropriations, Subcommittee for 
Agriculture, regarding appropriations for the Cooperative State 
Research, Education, and Extension Service (Department of Agriculture), 
and in particular funding for the following programs.
  --Formula Programs.--McIntire-Stennis Cooperative Forestry (proposed 
        funding by administration in fiscal year 2005 Budget: 
        $21,884,000).
  --Extension Programs.--Renewable Resources Extension Act (proposed 
        funding by administration in fiscal year 2005 Budget: 
        $4,093,000).
Formula Programs: McIntire-Stennis Cooperative Forestry
    The Cooperative Forestry Research Program (McIntire-Stennis Act) 
supports long-term research and scientist training efforts at the 
nation's public land-grant universities and colleges.\1\ The McIntire-
Stennis program increases the efficiency and productivity of private 
forestland by providing ``for cutting-edge research on productivity, 
technologies for monitoring and extending the resource base, and 
environmental quality.'' \2\ In addition, the program has assisted in 
the completion of over 7,500 masters degrees and 2,200 doctoral degrees 
in forest resources fields.\3\
---------------------------------------------------------------------------
    \1\ National Council on Private Forests (NCPF). (2001). Working 
Paper on Farm Bill Forestry Title Priorities. Unpublished manuscript, 
p. 6. See also National Coalition for Sustaining America's Nonfederal 
Forests (NCSANF). (2000). A National Investment in Sustainble Forestry: 
Addressing the Stewardship of Nonfederal Forestlands through Research, 
Education, and Extension/Outreach, p. 7.
    \2\ Brown, Dr. Perry J. (2001). Testimony submitted to the 
Subcommittee on Agriculture, Rural Development, FDA, and Related 
Agencies of the House Appropriations Committee, fiscal year 2001 CSREES 
Budget. Online: www.napfsc.org/creestest02.htm, p. 2.
    \3\ National Coalition for Sustaining America's Nonfederal Forests 
(NCSANF). (2000). A National Investment in Sustainble Forestry: 
Addressing the Stewardship of Nonfederal Forestlands through Research, 
Education, and Extension/Outreach, p. 7.
---------------------------------------------------------------------------
    The program's objectives fulfill several areas of need within the 
forestry community. The McIntire-Stennis Cooperative Forestry Research 
program:
  --``Significantly enhance[s] sustainability and productivity of 
        nonfederal forests;
  --``Increase[s] the financial contributions of nonfederal forests to 
        benefit landowners, the rural community, state and national 
        economies, and environmental values; and
  --``[Helps] conserve and sustain the nonfederal forests and other 
        natural resources for future generations.'' \4\
---------------------------------------------------------------------------
    \4\ Brown (2001), p. 2.
---------------------------------------------------------------------------
    The McIntire-Stennis program has a funding authorization of $105.0 
million per year.\5\ However, the program has never been funded at its 
authorized level; the enacted fiscal year 2004 budget only allocated 
$21,755,000 for the program (approximately one-fifth of its authorized 
level),\6\ and below the fiscal year 2001 budget of $21,932,000. This 
reduced funding is even more disturbing when viewed through the 
knowledge that McIntire-Stennis funds are matched by three dollars from 
states and universities for every Federally supplied dollar provided by 
Congress.\7\
---------------------------------------------------------------------------
    \5\ NCSANF, p. 16.
    \6\ Brown (2001), p. 1.
    \7\ Ibid., p. 2; NCPF, p. 6.
---------------------------------------------------------------------------
    FLA recommends that Congress fully fund the McIntire-Stennis 
Cooperative Forestry Research program at its authorized level of $105.0 
million per year. We believe that this funding is vital to the eventual 
sustainability of America's forests. As stated in a National Coalition 
for Sustaining America's Nonfederal Forests report, ``[These] funds 
would be used to create about 500 new campus-based faculty positions 
addressing forest resources needs.'' \8\ The needs addressed in the 
report are just as critical 4 years later. FLA is cognizant of the 
enormity of such a request; therefore, we would request a ten percent 
increase over fiscal year 2004 levels, to a fiscal year 2005 
appropriations level of $23,930,500.
---------------------------------------------------------------------------
    \8\ NCSANF, p. 16.
---------------------------------------------------------------------------
Extension Programs: Renewable Resources Extension Act
    The Renewable Resources Extension Act (RREA) is the nation's 
leading forestry extension program, tackling critical forestry and 
related natural resources extension and stewardship needs in states, 
while also addressing critical issues of forest management for 
productivity and environmental quality on non-Federal private 
forestlands.\9\ The program, administered by CREES,\10\ is the 
foundation of university outreach and extension efforts.\11\ RREA 
programs help to ``(1) solve immediate problems; (2) transfer research 
technologies and new knowledge; and (3) increase [forest landowner] 
awareness of the benefits of active [forest] management.'' \12\
---------------------------------------------------------------------------
    \9\ Ibid., p. 4.
    \10\ Brown (2001), p. 3.
    \11\ ``[RREA] funds extension efforts that are a model of 
partnership between the U.S.D.A. and State Universities and Land Grant 
Colleges.'' NCPF, p. 4.
    \12\ Brown (2001), p. 3.
---------------------------------------------------------------------------
    RREA has received consistent support from forestry organizations, 
including the National Council on Private Forests (NCPF) and the 
National Association of Professional Forestry Schools and Colleges 
(NAPFSC). However, the program is consistently funded below its 
congressional authorized level of $30.0 million per year; the enacted 
fiscal year 2004 budget only allocated $4,040,000 for the program. It 
is apparent that funding levels must be increased to fulfill the 
extension and outreach objectives of RREA. Once again, FLA is cognizant 
of the enormity of such a request; therefore, we would request a ten 
percent increase over fiscal year 2004 levels, to a fiscal year 2005 
appropriations level of $4,444,000.
    The Forest Landowners Association thanks the Appropriations 
Subcommittee for Agriculture for the opportunity to submit written 
testimony regarding fiscal year 2005 appropriations for the Cooperative 
State Research, Education, and Extension Service (Department of 
Agriculture). If the subcommittee has any questions or comments 
regarding this written testimony, it should contact Dr. Vernon R. 
Hayes, Jr., FLA's government affairs director, at his office (8204 
Foxhall Road, Clinton, Maryland, 20735; telephone 301-877-6898; fax 
301-877-6899).
                                 ______
                                 

  Prepared Statement of Friends of Agricultural Research--Beltsville, 
                                  Inc.

    Mr. Chairman, and Members of the Subcommittee, thank you for this 
opportunity to present our statement supporting funding for the 
Department of Agriculture's Agricultural Research Service (ARS), and 
especially for the Agency's flagship research facility, the Henry A. 
Wallace Beltsville Agricultural Research Center (BARC), in Maryland. 
Our organization-Friends of Agricultural Research--Beltsville--is 
dedicated to supporting and promoting the Center's agricultural 
research, outreach, and educational mission.
    Our testimony addresses four central themes.
    First, we begin with our highest recommendation for an item within 
the President's budget--Identification, Prevention, and Control of 
Invasive Species.
    Second, we turn to the urgent need to continue support for specific 
research areas mandated by the Congress in fiscal years 2001, 2002, 
2003, and 2004. These projects address critical research needs that 
have enormous impact. They have been strongly endorsed and supported by 
this Subcommittee and many others. We list them below with brief 
descriptions and our recommendations for continued funding.
    Third, we briefly discuss the BARC and the Maryland Technology 
Development Corporation (TEDCO) partnership for transferring technology 
from the laboratory to the marketplace. We fully support the goals and 
accomplishments of this special relationship.
    Last, we will address our recommendation for construction funds to 
complete Phase III of the Beltsville Human Nutrition Research Center

                           INVASIVE SPECIES

    The President's budget proposes a $2 million increase for invasive 
species research at BARC. In our view, the urgency for supporting 
invasive species research could hardly be overstated. Invasive 
species--insects, fungi, nematodes, and animal parasites--have never 
posed a greater threat to American agricultural security than they do 
today.
    What's more, the threat is growing, accelerated by rising 
international travel and immigration, expanding globalization and 
trade, and the ominous threat of international bioterrorism. 
Ironically, our nation faces this growing challenge when Federal 
support for invasive species research has reached dangerously low 
levels after decades of decline. Resources are barely adequate to keep 
up current programs, much less adequate to cover skyrocketing demands 
for new research and services. To make matters worse, universities and 
others have cut back sharply also. The net effect is to leave America 
weak and vulnerable in an area that urgently needs strengthening.
    In November 2002, BARC convened a distinguished panel of scientists 
and stakeholders, headed by Dr. Peter H. Raven, Director of the 
Missouri Botanical Garden, to address these issues. They focused 
basically on the threat of invasive species to agricultural 
biosecurity, pest management and control, and regulation/quarantine.
    The panel noted that BARC houses personnel, collections, and 
information systems that are unduplicated anywhere in the world. BARC's 
internationally recognized experts and collections underwrite the 
scientific basis for the action programs of the Animal and Plant Health 
Inspection Service, the Forest Service, and state departments of 
agriculture. BARC experts spend substantial parts of their time 
identifying alien species that action agencies have intercepted at our 
ports and borders.
    In the concluding remarks of its report, the panel foresees BARC as 
a national and global leader for protecting the security and 
productivity of American agriculture against the threat of invasive 
species. The panel sees BARC as a future center of unparalleled 
excellence providing the cohesive and responsive knowledge base for 
protecting United States and global agriculture.
    The funding increase proposed in the President's budget is a 
necessary step in the right direction.

               CONGRESSIONALLY MANDATED PROGRAMS AT BARC

    For fiscal years 2001 though 2004, Congress designated funding for 
the 14 BARC projects that we briefly describe below. Total funding for 
these projects was $7,772,585. We understand that the President's 
budget for fiscal year 2005 proposes to eliminate all 14 projects and 
replace them with new projects that would receive $7,575,000 of total 
funding. Though the net difference of total proposed funding is 
relatively small, the impact on vital research would be dramatic.
    In our view, the 14 on-going projects should be funded to 
completion before new projects are added to the BARC portfolio. We 
would also point out that there is no simple way to re-assign 
scientists from the on-going projects to the proposed new projects, 
which are considerably different in emphasis and required scientific 
skills. We strongly recommend continued funding for the projects listed 
below.
    Animal Improvement Programs Laboratory.--For many years America's 
dairy cows have steadily increased milk production at the rate of about 
45 gallons per year. Approximately two-thirds of those increases can be 
traced to genetic progress. Much of the credit for that success stems 
from the cooperative national and international genetic evaluation 
programs of BARC's Animal Improvement Programs Laboratory. The future 
of dairy industry will be greatly influenced by the research of the 
Animal Improvement Programs Laboratory. In recent years, the Laboratory 
staff has decreased because inflation and salary increases have 
consumed operating funds. We recommend continued funding support for 
the Laboratory.
    Barley Health Foods Research.--Barley contains carbohydrates called 
beta-glucans that help control blood sugar and cholesterol. We 
recommend continued support for research to determine if barley-
containing foods may affect the risks of such chronic conditions as 
cardiovascular disease, obesity, and diabetes. This research is needed 
to assess the bioavailability and efficacy of food components found in 
barley and to identify foods, health practices, and attitudes 
associated with successful maintenance of weight loss. We recommend 
continuation of this funding.
    Biomineral Soil Amendments for Nematode Control.--Losses to soil 
nematodes cost farmers billions every year. The soybean cyst nematode 
alone can cut soybean yields by 30 percent, often more. Citrus and 
vegetable crops also are vulnerable to intensive nematode damage. 
Growers are squeezed by expanding nematode infestations, nematicide 
resistance, and de-registration of traditional nematicides because of 
environmental concerns. BARC in cooperation with industry and others is 
pursuing new, more effective approaches to nematode control. Promising 
research lines include using such re-cyclable soil amendments as animal 
wastes, composts, and mineral by-products. We recommend continuing the 
increased funding for these promising approaches.
    Foundry Sand By-Products Utilization.--Municipalities and 
industries generate vast quantities of by-products. By-products, such 
as foundry sand from the metal castings industry, have potential uses 
in agricultural and horticultural production processes. The Animal 
Manure and By-Products Laboratory will use the funding to identify 
beneficial new uses and assess risks to human health, safety, or the 
environment from using foundry sand in agriculture. We recommend 
continuation of this funding.
    Poultry Diseases.--The mission of the Parasite Biology, 
Epidemiology, and Systematics Laboratory is to reduce the economic 
costs of parasites in livestock and poultry. Coccidiosis causes the 
greatest economic loss to the chicken meat industry from disease. But 
traditional chemical controls are becoming ineffective. New non-
chemical control methods are needed. Funding will be used to conduct 
functional genomics and proteomics analysis of coccidia to identify 
potential proteins that can be used in diagnostic tests and as targets 
for potential vaccine development. We recommend continuation of this 
funding.
    Biomedical Plant Materials.--There is a growing need for 
functionally active, protective molecules for human and animal 
pathogens. We need them at lower cost and without risk to humans, 
animals, or the environment. Such agents include recombinant 
antibodies, vaccines, and enzymes. Also, we need non-contaminated, 
lower-cost, more reliable diagnostic reagents.
    In recent years, scientists have produced biomedical reagents from 
plants in the laboratory. The potential benefits are huge. For one 
example, replacing costly poultry vaccine injections with edible plant-
produced vaccines would substantially lower poultry production costs. 
Beltsville is uniquely equipped to develop necessary systems and to 
test their efficacy in cooperation with other ARS facilities working on 
livestock and poultry diseases. This is a cooperative project with the 
Biotechnology Foundation, Inc., in Philadelphia. We recommend 
continuation of this funding.
    National Germplasm Resources System.--This laboratory supports the 
national database that provides data storage and retrieval systems for 
collecting and disseminating germplasm information. It provides 
accurate taxonomy, transport, geographic evaluation, inventory, and 
cooperator information for plant and animal germplasm holdings 
nationwide. This is an ARS mission-critical activity. We recommend 
continuation of funding.
    Bovine Genetics.--Somatic cell nuclear transfer (cloning) 
technology has tremendous biomedical and agricultural potential. Yet 
the frequency of successful births from cloning has been relatively 
low. Many pregnancies fail before completing gestation. Funding will 
support collaborative research by the Gene Evaluation and Mapping 
Laboratory, the University of Illinois, and the University of 
Connecticut aimed at improving cloning efficiency. We recommend 
continuation of this funding.
    IR-4: Registration of Minor Use Pesticides.--``Minor crops'' have 
great economic value, but are not among the top ten crops like corn and 
soybeans that provide huge markets for pesticide manufacturers. 
Manufacturers often do not see a large enough market to justify the 
expense of doing the research needed to register a pesticide for a 
``minor crop.'' Without the IR-4 program, growers would have fewer 
options for pest control. The Beltsville Environmental Quality 
Laboratory operates a minor crop pesticide residue laboratory. This lab 
vigorously enforces EPA-prescribed protocols for all experimental 
procedures, and prepares comprehensive final reports. New funds enhance 
the overall mission of the Agency's IR-4 program. We recommend that 
this funding be continued.
    Nutrition monitoring system.--BARC's Food Survey Research Group 
monitors food and nutrient intake for the nation in collaboration with 
HHS and the NHANES study (National Health and Nutrition Examination 
Survey). We recommend continuation of this funding.
    The approximate $500,000 of new money will enable the collection of 
a second day of dietary intake data from human subjects. This 
information is critical for increasing the statistical reliability of 
the food intake survey data. These data are important for supporting 
such public policy programs as school lunch, food stamps, WIC, senior 
meals programs, etc. They are also important when the Institute of 
Medicine's Food and Nutrition Board (part of NAS) sets recommended 
intakes for essential nutrients. We recommend continuation of this 
funding.
    Coffee and Cocoa.--These funds support research to control a range 
of fungal diseases and pests that attack coffee and cacao (chocolate). 
More profitable production systems for these crops will make them more 
attractive alternatives to some producers of coca (cocaine). We 
recommend continuation of this funding.
    Johne's Disease.--This disease is also called bovine 
paratuberculosis. It is a contagious disease that causes chronic 
wasting or debilitating enteritis and eventual death in cattle, sheep, 
goats, deer, and other wild and domestic ruminants. Infected animals 
intermittently shed the microorganism into milk and feces. The research 
at BARC will provide a better understanding of the pathogenicity of the 
organism so that better diagnostic tests and vaccines can be developed. 
We recommend continuation of this funding.
    Food Safety.--This is funding for studying transmission of 
Listeria, a human pathogen and food safety contaminant. Certain 
cheeses, including some popular French imports, are made from fresh 
unpasteurized milk, and can carry Listeria. Listeria can make anybody 
sick, but it's a particular risk for pregnant women because it can 
cause miscarriage or other problems. We recommend continuation of this 
funding.
    Weed Management.--These funds support a cooperative project with 
Rodale Institute on weed management in organic farming. Organic farming 
is a very rapidly growing sector of agriculture, and organic foods 
often command a price premium. Organic farming makes it possible for 
small farmers to make a living with high-value products from a small 
piece of land. Weeds are one of the biggest problems encountered by 
organic farmers, and a serious threat to their economic viability. 
These research funds will improve non-chemical weed control.

                         BARC-TEDCO PARTNERSHIP

    The Maryland Technology Development Corporation (TEDCO) and BARC 
have created a partnership to speed the transfer and commercialization 
of technologies from BARC laboratories to the private sector. Goals 
include fostering new industries, creating or re-vitalizing businesses, 
stimulating economic growth, and creating new, stable jobs.
    We understand that TEDCO has approached the Congress regarding a $1 
million appropriation to support technology transfer. The funds are 
needed to continue on-going BARC-TEDCO technology transfer activities. 
Approximately one half of the appropriation would be made available to 
BARC laboratories to complete research needed to commercialize new, 
valued-added products made from poultry feathers.
    Potential economic and environmental benefits from the successful 
commercialization of products made from poultry feathers are 
substantial, not only for Maryland but well beyond. Environmentally, 
finding an economic outlet for waste poultry feathers would relieve the 
tremendous burden of disposing an unusable material. Economically, 
estimates predict that as many as 80 new poultry-feather plants, each 
generating 80-100 new jobs, could be created across the nation. The 
first such plant may appear on Maryland's Eastern Shore, where there is 
substantial commercial interest.
    FAR-B heartily endorses support for this innovative approach to 
technology transfer and commercialization.

                        BUILDINGS AND FACILITIES

    Phases I and II of the three-planned phases of construction and 
modernization for the Beltsville Human Nutrition Research Center have 
been completed. Phases I and II provided for constructing two new 
buildings for human nutrition research. The new buildings are now fully 
functional and are contributing to the research mission of the 
Beltsville Human Nutrition Research Center. They were officially opened 
last August in a dedication ceremony at BARC. With the opening of these 
buildings, BARC now has the largest capacity for free-living volunteer 
studies in the United States.
    Phase III is for renovating the original human nutrition building, 
which after almost seven decades of heavy use is in poor condition. Its 
interior badly needs modernization. Externally, the building remains 
generally sound. BARC is committed to preserving the building's 
historical exterior and appearance. Once renovated, the building will 
house the Food Composition Lab, the Nutrient Data Lab, the Food Surveys 
Research Group, and the Community Nutrition Research Group--all 
research. BARC then will have all of the BHRNC staff in one complex of 
buildings, all modern and meeting current needs and building standards.
    In fiscal year 2001, Congress provided $1.9 million to design the 
building's interior renovation. Though the design work is about 35 
percent complete, the process is on hold pending approval of $26 
million needed for construction. BARC may not begin construction before 
all of the construction funding has been approved. Should Congress 
approve partial construction funding for fiscal year 2005, BARC will 
hold the partial funding until full funding may be approved in a later 
appropriation. We commend BARC's flexibility regarding the renovation 
project, and we encourage Congress to approve funding for Phase III.
    Mr. Chairman, that concludes our statement. We again thank you for 
the opportunity to present our testimony and for your generous support.
                                 ______
                                 

    Prepared Statement of the Great Lakes Indian Fish and Wildlife 
                               Commission

    Agency Involved.--Natural Resource Conservation Service
    Summary of fiscal year 2005 Testimony.--The Commission requests 
Congress support funding for conservation programs as authorized under 
the Farm Security and Rural Investment Act of 2002 including:
  --$1 billion in for the Environmental Quality Incentives Program 
        (EQIP), and
  --$60 million for the Wildlife Habitat Incentives Program (WHIP).
    The Commission also requests Congress restore $275,000 in funding 
for the Wisconsin Tribal Conservation Advisory Council (WTCAC) 
eliminated by the Administration in fiscal year 2005.
    Disclosure of USDA Grants Contracted.--The Commission is an 
intertribal organization which, under the direction of its member 
tribes, implements federal court orders governing tribal harvests of 
off-reservation natural resources and the formation of conservation 
partnerships to protect and enhance natural resources within the 1836, 
1837, and 1842 ceded territories. Under the USDA's Environmental 
Quality Incentives Program, the Commission contracted $10,000 in fiscal 
year 1998 and an additional $40,000 in fiscal year 1999. In addition, 
the Commission also contracted EQIP Education Grants funded by USDA and 
the University of Wisconsin Extension Service for $29,940 in fiscal 
year 1998 and $20,000 in fiscal year 2001. Under the WHIP program, 
GLIFWC contracted $2,400 in fiscal year 2003.
    Mr. Chairman, Members of the Committee, my name is James H. 
Schlender. I am the Executive Administrator of the Great Lakes Indian 
Fish and Wildlife Commission (Commission). Our eleven member tribal 
governments thank you for considering our testimony regarding programs 
funded by USDA's Natural Resource Conservation Service. The 
Commission's testimony stresses three major objectives:
  --provide funding for the Environmental Quality Incentives Program 
        (EQIP) at $1 billion nationally and support intertribal and 
        tribal efforts to participate in conservation partnerships;
  --provide funding for the Wildlife Habitat Incentives Program at $60 
        million nationally to support efforts to protect and enhance 
        wildlife and fish habitats; and
  --restore funding for the Wisconsin Tribal Conservation Advisory 
        Council (WTCAC) at $275,000 annually.
    Background.--The Commission is comprised of eleven sovereign tribal 
governments located throughout Minnesota, Wisconsin, and Michigan. The 
Commission's purpose is to protect and enhance treaty-guaranteed rights 
to hunt, fish, and gather on inland territories ceded under the 
Chippewa treaties of 1836, 1837, and 1842; to protect and enhance 
treaty guaranteed fishing on the Great Lakes; and to provide 
cooperative management and protection of these resources. The 
Commission participates in a wide range of cooperative management 
activities with local, state, federal, and foreign governments. Some of 
these activities arise from court orders, while others are developed in 
general government-to-government dealings between tribes and other 
governments.
    EQIP Supports Tribal Partnerships to Control Purple Loosestrife in 
the Bad River and Chequamegon Bay watersheds.--Purple loosestrife 
(Lythrum salicaria L.) is an exotic perennial plant first recorded in 
Wisconsin in 1940. As purple loosestrife spread throughout wetland 
ecosystems, it reduced carrying capacities for muskrats, water birds, 
and mink and degraded the quality of migratory waterfowl production 
sites.
    In 1998, the Commission began a 5-year project under USDA's 
Environmental Quality Incentives Program (EQIP) to control purple 
loosestrife in the Bad River and Chequamegon Bay watersheds. Under this 
project, the Commission utilized funding from the BIA's Noxious Weed 
Program to control loosestrife on public lands located in the Chippewa 
ceded territories and utilize funding from EQIP to control loosestrife 
on private lands with land owner consent--orchards, dairy farms, etc. 
This program integration promotes conservation partnerships to protect 
critical habitat on a watershed basis including:
  --Kakagon and Bad River Sloughs--the largest, healthiest, fully 
        functioning estuarine system in the upper Great Lakes Basin and 
        is listed as a National Natural Areas Conservancy Landmark 
        (National Registry 1983)--Bad River Tribe;
  --Fish Creek Sloughs Refuge--an important area for waterfowl nesting/
        staging, and northern pike spawning; and Sioux River Refuge--
        important wetland, waterfowl staging area, and critical steel 
        head trout spawning habitat--WI DNR;
  --Whittlesey Creek--this newly established refuge possesses critical 
        habitat for salmon spawning and reintroduction of rare native 
        brook trout strains--USFWS, and
  --Apostle Islands National Park--National Park Service.
    In addition to its EQIP Purple Loosestrife Control program, the 
Commission has also completed two EQIP education grants. Under these 
grants, the Commission: (1) prepared and published educational 
materials to prevent the spread of purple loosestrife, leafy spurge, 
and other invasive plants; (2) established an Internet GIS web site 
(i.e. see www.glifwc-maps.org) to assist landowners, state and federal 
agencies, non-profit conservation organizations, and tribes in 
developing and implementing invasive plant control strategies within 
watersheds; and (3) promoted cooperative control projects through 
technical assistance and educational materials/presentations.
    The Establishment of the Wisconsin Tribal Conservation Advisory 
Council and EQIP Funding Set-asides have Increased Program 
Participation by Indian Nations in Wisconsin.--The Wisconsin Tribal 
Conservation Advisory Council (WTCAC) was established for the purposes 
of: (1) identifying tribal conservation issues, (2) advising the USDA 
Natural Resources Conservation Service on more effective ways to 
deliver USDA programs, and (3) assisting the Indian Nations of 
Wisconsin in accessing USDA resources. This Tribal Conservation 
Advisory Council was organized in March 2001 and is the first such 
council formed in the country as authorized under the 1995 Farm Bill.
    One of the responsibilities of the WTCAC, at the request of the 
NRCS State Conservationist, is to review and recommend funding for 
conservation proposals from the 11 federally recognized tribes in 
Wisconsin. In fiscal year 2003, the WTCAC was allocated $440,000 for 
this effort and recommended numerous tribal EQIP contracts including:
    Supporting Tribal Aquaculture Development.--The St. Croix Tribe 
contracted $43,162 in EQIP funding to assist the tribe in installing an 
aquaculture effluent treatment system at its St. Croix Waters 
Aquaculture facility. St. Croix also contracted $19,918 in EQIP funding 
to improve water volume and quality for the rearing of food fish and 
walleye and perch fingerlings for restocking efforts on local lakes.
    Decommissioning Abandoned Wells.--The Bad River Tribe contracted 
$5,550 and Lac du Flambeau contracted $10,026 in EQIP funding to 
decommission abandoned wells on their Reservations that are a potential 
source of groundwater contamination.
    Controlling Shoreline Erosion.--The Lac du Flambeau Tribe 
contracted $40,000 in EQIP funding to provide stream bank and shoreline 
stabilization, critical area planting, tree and shrub establishment, 
grade stabilization structure, and heavy use area protection on 
Flambeau and Pokegama Lakes. The erosion is causing sedimentation, 
adverse effects on water quality, as well as aquatic and riparian 
habitat damage.
    The St. Croix Chippewa Tribe contracted $18,750 in EQIP funding to 
install a grade stabilization structure to control soil erosion 
upstream of the confluence of the Yellow River and the St. Croix River. 
This erosion is impairing wild rice beds downstream on the St. Croix 
River.
    Stream Corridor, Wetland, and Wild Rice Restoration Project.--The 
Sokaogon Chippewa Community contracted $47,780 in EQIP funding to 
restore the natural flow that was altered in Swamp Creek, remove 
nuisance plant species, reseed wild rice, remove debris from stream 
banks and beds, and control erosion on a tribal access road.
    Forest Restoration Project.--The Bad River Tribe contracted $40,000 
in EQIP funding to plant white pine, red pine, balsam fir, and white 
spruce on 1,120 acres of tribal lands that, left untreated, would 
regenerate to aspen and increase erosion problems. This is the first 
step in promoting and restoring forest biodiversity on lands cut-over 
in the 1920's.
    Wildlife Habitat Incentives Program (WHIP).--NRCS's WHIP program 
provides a flexible funding resource to Wisconsin that enables local 
communities to form conservation partnerships between private 
landowners, local conservation districts, counties, and tribal 
governments. Again the WTCAC combined with a WHIP program set-aside of 
$33,000 in Wisconsin resulted in numerous tribal WHIP contracts in 
fiscal year 2003. Through this process NRCS was able to establish 
Tribal WHIP contracts for such diverse projects as wild rice seeding, 
walleye spawning habitat restoration, stream bank protection, and 
native grass seeding.
    Unfortunately, the success of Wisconsin Tribes in contracting 
fiscal year 2003 EQIP and WHIP funding from NRCS is not found among 
GLIFWC's member tribes in Michigan as documented by the table below.

------------------------------------------------------------------------
                                     EQIP Funding        WHIP Funding
      GLIFWC/Member Tribes         Contracted fiscal   Contracted fiscal
                                       year 2003           year 2003
------------------------------------------------------------------------
Michigan:
    Lac Vieux Desert............  None..............  None
    Keweenaw Bay................  None..............  None
    Bay Mills...................  None..............  None
                                 ---------------------------------------
      Michigan Total............  $0--contracted by   $0--contracted by
                                   3 MI GLIFWC         3 MI GLIFWC
                                   tribes              tribes
                                  $0--contracted all  $0--contracted all
                                   MI tribes           MI tribes
                                 =======================================
Wisconsin:
    Bad River...................  $40,000 forest      None
                                   restoration/
                                   erosion control
                                  $5,550
                                   decommission
                                   abandoned wells
    Red Cliff...................  Did not apply for   $1,350 stream bank
                                   fiscal year 2003    protection
                                   projects            project
    St. Croix...................  $43,162             $10,000 walleye
                                   aquaculture waste   spawning habitat
                                   storage facility    restoration
                                  $2,000 aquaculture
                                   hatchery well
                                   project
                                  $18,750 erosion
                                   control project
    Sokaogon....................  $47,780 stream      $3,000 Rice Lake
                                   corridor &          wild rice seeding
                                   wetland
                                   restoration
                                   project
    Lac Courte Oreilles.........  Did not apply for   $3,000 wild rice
                                   fiscal year 2003    seeding
                                   projects
    Lac du Flambeau.............  $40,000 to address  $3,000 Powell
                                   shoreline erosion   Marsh native
                                   concerns            grass seeding
                                  $10,026
                                   decommission
                                   abandoned wells
    GLIFWC......................  Did not apply for   $1,200 Jackson Box
                                   fiscal year 2003    Flowage wild rice
                                   projects            seeding;
                                                      $1,200 Manitowish
                                                       River wild rice
                                                       seeding
                                 ---------------------------------------
      Wisconsin Total...........  $207,268--contract  $22,750--contracte
                                   ed by GLIFWC        d by GLIFWC and 5
                                   member tribes in    member tribes
                                   Wisconsin          $33,000--allocated
                                  $440,000--allocate   for 11 tribes
                                   d to 11 Tribes      statewide
                                   statewide
------------------------------------------------------------------------

    GLIFWC takes the following lessons from these circumstances:
  --Funding for tribal projects in Wisconsin is directly attributable 
        to active outreach toward and integration of tribes into the 
        budgeting process of NRCS state offices.
  --A tribal advisory council consisting of the tribal representatives 
        and funded by NRCS can effectively link tribes with the NRCS 
        and result in more funding directed toward tribal projects.
  --Set asides for tribal projects from NRCS state office funding 
        allocations is critical to ensure that tribes are able to 
        access their fair share of those allocations.
    GLIFWC requests Congress restore funding for WTCAC at $275,000 in 
fiscal year 2005 thereby ensuring tribal communities in Wisconsin have 
the technical resources needed to address their conservation needs.
                                 ______
                                 

     Prepared Statement of The Humane Society of the United States

    As the largest animal protection organization in the country, we 
appreciate the opportunity to provide testimony to the Agriculture, 
Rural Development and Related Agencies Subcommittee on fiscal year 2005 
funding items of great importance to The Humane Society of the United 
States and its more than 8 million supporters nationwide.
    We are grateful for the Committee's outstanding support during the 
past few years for improved enforcement by the U.S. Department of 
Agriculture of key animal welfare laws, and we urge you to sustain this 
effort in fiscal year 2005. Your leadership is making a great 
difference in helping to protect the welfare of millions of animals 
across the country, including those at commercial breeding facilities, 
laboratories, zoos, circuses, airlines, and slaughterhouses. As you 
know, better enforcement will also benefit people by helping to 
prevent: (1) orchestrated dogfights and cockfights that often involve 
illegal gambling, drug traffic, and human violence, and can contribute 
to the spread of costly illnesses such as Exotic Newcastle Disease and 
bird flu; (2) injuries to slaughterhouse workers from animals 
struggling in pain; (3) the sale of unhealthy pets by commercial 
breeders, commonly referred to as ``puppy mills''; (4) laboratory 
conditions that may impair the scientific integrity of animal based 
research; (5) risks of disease transmission from, and dangerous 
encounters with, wild animals in or during public exhibition; (6) 
injuries and deaths of pets on commercial airline flights due to 
mishandling and exposure to adverse environmental conditions; and (7) 
the spread of ``mad cow'' disease and bacterial infections that people 
can get from eating contaminated meat.
    For fiscal year 2005, we want to ensure that the important work 
made possible by the fiscal year 2004 budget is continued and that 
resources will be used in the most effective ways possible to carry out 
these key laws. Specific areas of concern are as follows:

Office of Inspector General/$1.2 million for Animal Fighting 
        Enforcement
    We very much appreciate the inclusion of $800,000 in fiscal year 
2004 for USDA's Office of Inspector General to focus on animal fighting 
cases. Congress enacted provisions in 2002 (as part of the Farm Bill) 
that were overwhelmingly supported in both chambers to close loopholes 
in the Animal Welfare Act (AWA) regarding cockfighting and dogfighting. 
Since 1976, when Congress first prohibited most interstate and foreign 
commerce of animals for fighting, USDA has pursued only a handful of 
dogfighting and cockfighting cases, despite rampant activity across the 
country. USDA continues to receive frequent tips from informants and 
requests to assist with state and local prosecutions, and is beginning 
to take seriously its responsibility to enforce the portion of the AWA 
dealing with animal fighting ventures. Dogfighting and cockfighting are 
barbaric practices in which animals are drugged to heighten their 
aggression and forced to keep fighting even after they've suffered 
grievous injuries. Animal fighting is almost always associated with 
illegal gambling, and also often involves illegal drug trafficking and 
violence toward people. Dogs bred and trained to fight endanger public 
safety, and some dogfighters steal pets to use as bait for training 
their dogs. Cockfighting has been linked with the outbreak of Exotic 
Newcastle Disease in 2002-2003 that cost taxpayers more than $200 
million for containment and compensation, and with the death of at 
least two children in Asia this year who were exposed through 
cockfighting activity to avian influenza.
    Given the potential for further costly disease transmission, as 
well as the animal cruelty involved, we believe it would be a sound 
investment for the federal government to increase its efforts to combat 
illegal cockfighting and dogfighting activity, working closely with 
state and local law enforcement personnel to complement their efforts. 
We therefore respectfully request that $1.2 million be designated for 
the OIG to focus on animal fighting cases in fiscal year 2005.

Food Safety and Inspection Service/$5 million for Humane Methods of 
        Slaughter Act (HMSA) Inspectors
    We are grateful that Congress provided $5 million in fiscal year 
2003, and bill language to sustain the initiative in fiscal year 2004, 
for USDA to hire at least 50 inspectors whose sole responsibility is to 
ensure that livestock are treated humanely and rendered unconscious 
before they are killed. This initiative was undertaken following 
reports of lax enforcement of the HMSA and animals being skinned, 
dismembered, and scalded while still alive and conscious. We are 
pleased that the President's budget recommends $5 million in fiscal 
year 2005 for enforcement of this law. We are quite concerned, however, 
that these funds are not being used by USDA as Congress intended. 
Rather than hiring new inspectors, the department has apparently opted 
to apply these resources broadly across its existing personnel, 
indicating in the explanatory notes accompanying the President's fiscal 
year 2005 budget that the $5 million will cover ``an estimated 63 staff 
years annually, distributed over hundreds of employees in hundreds of 
inspected establishments.'' When Congress provided this funding, the 
goal was to establish a separate cadre of humane slaughter inspectors 
because we recognized that it was not working to have the regular food 
safety inspectors--those responsible for the important job of checking 
body parts and carcasses in order to protect consumer health--also 
responsible for compliance with humane slaughter requirements. We were 
concerned that food safety inspectors were often stationed far down the 
production line, well past where the animals were killed. In some 
cases, slaughter plants had even built barriers that made it impossible 
for food safety inspectors to see the animals while they were still 
alive.
    While we welcome any USDA efforts to ensure that every inspector 
maintains a watchful eye for humane slaughter violations, including 
this task as part of each existing inspector's routine should not 
require additional funds. We therefore respectfully request that $5 
million be designated in fiscal year 2005 bill language for USDA to 
hire an additional 50 inspectors who will work solely on enforcement of 
the Humane Methods of Slaughter Act through full-time ante-mortem 
inspection, particularly unloading, handling, stunning, and killing of 
animals at slaughter plants. We also request language re-stating that 
the mission of 17 District Veterinary Medical Specialists hired as a 
result of $1 million provided in the fiscal year 2001 Supplemental 
should be limited to HMSA enforcement.

APHIS/Animal Welfare Act (AWA) Enforcement
    We commend the Committee for responding over the past few years to 
the urgent need for increased funding for the Animal Care division to 
improve its inspections of approximately 10,000 sites, including 
laboratories, commercial breeding facilities, zoos, circuses, and 
airlines, to ensure compliance with AWA standards. Thanks to the 
Committee's strong support, Animal Care now has 106 inspectors, 
compared to 66 at the end of the 1990s. While there is certainly room 
for continued improvement, the Committee's actions have made a major 
difference. We are pleased that the President's budget contains a 
sustained level of support for this program in fiscal year 2005, 
including allowance for pay costs. We urge you to provide $16.818 
million, as recommended by the President, for Animal Welfare in fiscal 
year 2005.

APHIS/Horse Protection Act Enforcement
    Congress enacted the Horse Protection Act in 1970 to end the 
obvious cruelty of physically soring the feet and legs of show horses. 
In an effort to exaggerate the high``)stepping gate of Tennessee 
Walking Horses, unscrupulous trainers use a variety of methods to 
inflict pain on sensitive areas of the feet and legs for the effect of 
the leg-jerk reaction that is popular among many in the show-horse 
industry. This cruel practice continues unabated by the well-
intentioned but seriously understaffed APHIS inspection program. We 
appreciate the Committee's help providing modest increases to bring 
this program close to its authorized annual funding ceiling of 
$500,000. We hope you will provide the $497,000 requested by the 
President for fiscal year 2005. We also urge the Committee to oppose 
any effort to restrict USDA from enforcing this law to the maximum 
extent possible.

Downed Animals and BSE
    We are pleased that the Bush Administration proposed an interim 
final rule to ban the use of downed cattle for human food, in the wake 
of the discovery of a cow in Washington State that was infected with 
Bovine Spongiform Encephalopathy (BSE or ``mad cow'' disease). We 
greatly appreciated the Committee's help last year agreeing to 
incorporate Senator Akaka's downer ban during floor debate on the 
fiscal year 2004 bill. We hope the Committee will codify the 
Administration's ban--and extend it to other livestock besides cattle--
with language barring the Food Safety and Inspection Service from 
spending funds to certify meat from downed livestock for human 
consumption. While the science to date has only clearly indicated BSE 
transmission from infected cows to people, downer pigs and other downer 
livestock are at a significantly higher risk of transmitting other 
serious and sometimes fatal illnesses, such as E. coli and Salmonella. 
It is very difficult to determine the reason an animal is non-
ambulatory, whether illness, injury, or a combination of the two. 
Hence, it would not adequately protect public health if inspectors were 
required to distinguish downers who are injured vs. sick. As Secretary 
Veneman has testified several times before various congressional 
committees, USDA need not rely on slaughter plant testing for disease 
surveillance purposes. They can conduct a viable surveillance program 
at rendering plants and farms to track the potential progression of BSE 
in this country.
    Furthermore, a ban on use of all downers for human food provides an 
incentive for producers to treat animals humanely and prevent livestock 
from going down. Even before the administrative ban, USDA estimated 
that less than 1 percent of all cows processed annually were non-
ambulatory. The downer ban encourages producers and transporters to 
engage in responsible husbandry and handling practices, so that this 
percentage may be reduced to levels approaching zero. As Temple 
Grandin--advisor to the American Meat Institute and others in the meat 
industry--long ago explained in Meat & Poultry Magazine, ``Ninety 
percent of all downers are preventable.''
    In addition to the downer issue, we urge the Committee to provide 
adequate funding to ensure meaningful enforcement by the Food and Drug 
Administration of its ``feed ban,'' designed to prevent BSE-
contaminated animal products from being fed to other animals. We are 
concerned that inspectors visit facilities infrequently and rely on 
self-reporting by those facilities and paperwork checking rather than 
first-hand evaluation of feed content and dedicated production lines. 
We are also concerned that FDA relies a great deal on state agencies to 
conduct this oversight, when most states face severe budget constraints 
that may compromise their ability to handle this job. Preventing the 
spread of BSE is vital to the nation as a whole, for public health, the 
agricultural industry, and animal welfare. Vigorous enforcement of the 
feed ban is an essential component of this effort. We hope adequate 
federal funds will be provided in fiscal year 2005 to meet this 
challenge.
    Again, we appreciate the opportunity to share our views and 
priorities for the Agriculture, Rural Development and Related Agencies 
Appropriation Act of fiscal year 2005. We appreciate the Committee's 
past support, and hope you will be able to accommodate these modest 
requests to address some very pressing problems affecting millions of 
animals in the United States. Thank you for your consideration.
                                 ______
                                 

    Prepared Statement of the International Association of Fish and 
                           Wildlife Agencies

                        USDA-COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal Year--
                                                                 -----------------------------------------------
                        Program/Division                                               2005
                                                                   2004 Enacted     President's     2005 IAFWA
                                                                                      Budget        Recommended
----------------------------------------------------------------------------------------------------------------
Research and Education:
    Formula Programs:
        McIntire-Stennis Cooperative Forestry...................          21,755          21,844      \1\ 25,000
Special Research Grants:
    Global Change UV-B Monitoring...............................           2,000           2,500       \2\ 2,500
    National Research Initiative Competitive Grants.............         164,027         180,000     \3\ 240,000
Extension Activities:
    Formula Programs:
        Smith-Lever Formula 3(b) and (c)........................         277,742         275,940     \4\ 277,742
Other Extension Programs:
    Renewable Resources Extension Act...........................           4,040           4,093      \5\ 30,000
Section 406 Legislative Authority:
    Water Quality...............................................          11,530          12,971      \6\ 20,000
----------------------------------------------------------------------------------------------------------------
\1\ The Association strongly encourages that McIntire-Stennis Forestry Research funds be increased from the
  $21.755 million appropriated in the fiscal year 2004 budget to a level of $25 million. These funds are
  essential to the future of resource management on non-industrial private forestlands. The rapid reduction in
  timber harvests from public lands brings expanded opportunities for small private forest owners to play an
  increasingly important role in the Nation's timber supply. In some places, these added opportunities are
  creating pressures and situations where timber harvest on private ownerships exceeds timber growth.
\2\ We support the $2.5 million appropriation for global change and urge that special effort to combat
  greenhouse gases through carbon sequestration be conducted in such a way as to not adversely impact fish and
  wildlife habitat. Carbon sequestration that also results in soil, water and wildlife conservation will
  maximize public benefits and minimize the need to spend separately and additionally to achieve other
  conservation needs.
\3\ There are few truly competitive programs in wildlife science and USDA NRI has a great opportunity to make a
  unique contribution with this type of program. This program will fund creative and new ideas in ways that
  ``formula'' funding cannot. The Association supports funding at the fiscal year 2003 level of $240 million.
\4\ We are concerned that there is no budget line item specifically for education programs addressing water
  quality concerns targeted at agricultural producers. We recommend a minimum of $3.5 million be allocated for
  this purpose.
\5\ The Association strongly recommends that for fiscal year 2005 the Renewable Resources Extension Act be
  funded at $30 million as authorized in the 2002 Farm Bill. The RREA funds, which are apportioned to State
  Extension Services, effectively leverage cooperative partnerships at an average of four to one, with a focus
  on development and dissemination of information needed by private landowners (in rural and urban settings).
  The need for RREA educational programs is greater than ever today because of fragmentation of ownerships,
  urbanization, the diversity of landowners needing assistance, and increasing societal concerns about land use
  and its effect on soil, water, wildlife and other environmental factors. Even though the RREA has been proven
  to be effective in leveraging cooperative state and local funding, it has never been fully funded.
\6\ The Association appreciates the proposed increase in funding to $12.97 million in the budget for Water
  Quality Integrated Activities, but believes that this amount remains insufficient considering the growing
  public concern over water quality, particularly on agricultural landscapes. Therefore, the Association
  recommends the appropriation be increased to $20 million.


                                   USDA-NATURAL RESOURCES CONSERVATION SERVICE
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                Fiscal year--
                                                           -----------------------------------------------------
                  Appropriation/Activity                                        2005 President's    2005 IAFWA
                                                               2004 enacted          Budget         Recommended
----------------------------------------------------------------------------------------------------------------
Technical Assistance for CRP and WRP......................            ( \1\ )             92,000      \2\ 92,000
Environmental Quality Incentives Program (EQIP)...........            975,000          1,000,000   \3\ 1,200,000
Ground and Surface Water Conservation.....................             51,000             60,000          60,000
Klamath Basin.............................................             10,000              8,000           8,000
Wetlands Reserve Program (WRP)............................        \4\ 280,000        \5\ 295,000         ( \6\ )
Wildlife Habitat Incentives Program (WHIP)................             42,000             60,000      \3\ 85,000
Farm and Ranch Lands Protection Program (FRPP)............            112,000            125,000     \3\ 125,000
Grassland Reserve Program (GRP)...........................            115,000             84,000      \7\ 84,000
Conservation Security Program (CSP).......................             41,000            209,000  ..............
Technical Assistance Cost Adjustments.....................  .................  .................         ( \8\ )
EQIP......................................................            -76,000            -15,000     \9\ -23,000
G&SW......................................................             15,000             20,000           \9\ 0
Klamath Basin.............................................              2,000              3,000           \9\ 0
WRP.......................................................             18,000           ( \10\ )           \9\ 0
WHIP......................................................             -7,000             -1,000           \9\ 0
FRPP......................................................            -24,000             -5,000           \9\ 0
GRP.......................................................            -13,000             -2,000           \9\ 0
CRP.......................................................             83,000           ( \10\ )  ..............
----------------------------------------------------------------------------------------------------------------
\1\ Funding for WRP and CRP technical assistance provided from EQIP, WHIP, FRPP and GRP--see technical
  assistance cost adjustments
Specific Comments
\2\ The Association appreciates the efforts of the administration to address the problem of technical assistance
  funding for CRP and WRP by establishing a technical assistance account for these two programs.
\3\ The Association supports program funding at levels authorized by the 2002 Farm Bill.
\4\ Enrollment of 189,144 acres.
\5\ Enrollment of 200,000 acres.
\6\ The Association appreciates the continued targeting of 200,000 acres annually for enrollment in WRP.
  However, we recognize that if 200,000 acres are not enrolled every year (fiscal year 2004 limited to 189,000
  acres), enrollment must increase in future years to reach the authorized level of 2,275,000 acres. Full WRP
  enrollment is needed if the Administration intends to achieve no-net-loss of wetlands by building on the WRP
  successes of the 1990's that reduced wetland losses to 32,600 acres/year as reported in the USDA National
  Resource Inventory (NRI).
\7\ With the estimated expenditure of $115 million in fiscal year 2004, the proposed funding level of $84
  million in fiscal year 2005 will meet the authorized cap of $254 million for the GRP. GRP should focus on
  grasslands of high biodiversity that are at risk of conversion and that support grazing operations as directed
  by Congress in the Farm Bill. In addition, enrollment should increasingly focus on long-term enrollment since
  no more than 40 percent of authorized funding can be used for short-duration rental agreements and short-
  duration agreements have been emphasized to date.
\8\ CSP should not receive expanded funding at the expense of other conservation programs.
\9\ Klamath Basin and G&SW are subsets of EQIP and we recommend that all technical assistance funding for these
  two programs should come from EQIP, rather than from FRPP, WHIP and GRP.
\10\ WRP and CRP technical assistance funded from a technical assistance account on discretionary side.
General Comments
The Association recommends funding of Farm Bill conservation programs at levels authorized by the 2002 Farm
  Bill.

                       FARM SERVICE AGENCY (FSA)

    An adequately funded budget for the FSA is essential to implement 
conservation related programs and provisions under FSA administration 
and/or in cooperation with the Natural Resources Conservation Service 
(NRCS) as a result of passage of the Farm Security and Rural Investment 
Act of 2002. The Association strongly advocates that the budget include 
sufficient personnel funding to service a very active program and 
strongly believes that the past erosion of staffing levels has been 
inconsistent with the demonstrated need of agricultural producers. 
Although non-Federal temporary staffing levels have been reduced due to 
completion of some Farm Bill implementation workloads, the Association 
is concerned that the staffing level of (16,301 FTE) proposed by the 
Administration is far too low to adequately address the need.
    Conservation Reserve Program (CRP).--The continued administration 
of CRP is a very significant and valuable commitment of USDA and the 
FSA. The Association applauds FSA efforts to fund and extend CRP 
contracts for the multiple benefits that accrue to the public as well 
as the landowner. The Association provides special thanks to FSA for 
planning another CRP general sign up for 2004 and for the continuous 
CRP sign-up of high value environmental practices including the bottom 
land hardwood tree initiative. The Association recommends that FSA 
adopt additional program options such as wildlife field borders as part 
of continuous CRP to benefit bobwhite quail and other early 
successional species and incentives to ensure enrolled acres deliver 
optimum soil, water, wildlife and other natural resource benefits 
through the use of more wildlife friendly cover mixes. The required 
management for CRP should also be applied to CCRP.
    The commitment of FSA to provide high wildlife benefits in CRP 
contracts has been obvious since the advent of the Environmental 
Benefits Index (EBI) in the 15th sign-up. The Association applauds FSA 
for placing special emphasis on native grasses, endangered species and 
enlightened pine planting and management and urge that strong emphasis 
on the establishment and management of wildlife friendly cover be 
continued and where possible strengthened. Recurring management as 
provided in the 2002 Farm Bill, with cost share is essential to ensure 
continuation of soil, water and wildlife benefits throughout the life 
of the CRP contract. The Association encourages FSA to quickly develop 
necessary programmatic mechanisms as well as reimbursement for the cost 
of recurring management performed when needed to manage plant 
succession that continues wildlife benefits throughout the contract 
period.
    The new managed haying and grazing aspect of CRP is a permissive 
use that could provide an added benefit to participants while still 
achieving the natural resource purposes of the program. However, one 
size will not fit all when it comes to the wildlife purpose of CRP and 
it is important that FSA tailor managed haying and grazing to each 
state to ensure that the frequency (among years) and timing of haying 
and grazing is compatible with the wildlife needs in each state.

                                         USDA-APHIS VETERINARY SERVICES
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                                 -----------------------------------------------
                     Appropriation/Activity                                            2005            IAFWA
                                                                   2004 Enacted     President's     Recommended
                                                                                      Budget      Funding Levels
----------------------------------------------------------------------------------------------------------------
Aquaculture.....................................................             178             871             871
Brucellosis.....................................................          10,244           8,861          11,000
Chronic Wasting Disease.........................................          18,522          20,067          30,067
Import/export Invasive Species..................................          11,074          15,792          15,792
----------------------------------------------------------------------------------------------------------------

Aquaculture
    The Association supports the increased funding of Veterinary 
Services to a level of $871,000 for surveillance and eradication of 
farmed fish diseases, such as infectious salmon anemia and spring 
viremia of carp, that may threaten valuable natural resources.
Brucellosis
    The Association recommends Congress restore Brucellosis funding by 
$2,000,000 to a level of $11,000,000 in order to continue working 
collaboratively with the Greater Yellowstone Interagency Brucellosis 
Committee, including the states of Idaho, Montana, and Wyoming, as well 
as with other Federal agencies to eliminate brucellosis in bison and 
elk in the Greater Yellowstone Area.

Chronic Wasting Disease
    The Association commends APHIS-Veterinary Services' cooperation and 
funding for state wildlife management agencies for CWD surveillance and 
management in free-ranging deer and elk. Additionally, the Association 
strongly supports APHIS efforts to eliminate CWD from captive cervids 
in order to eliminate the risk of spread of the disease from these 
animals to free-ranging deer and elk. The Association supports 
increased CWD funding to a total of $20,067,000 in fiscal year 2005. 
However, this $20 Million is inadequate to effectively address 
management of CWD, and the Association urges an additional $10 million 
be appropriated to CWD, with a total of $20 Million made available to 
the states for surveillance and management of CWD in free-ranging deer 
and elk.

Import/Export Invasive Species
    The Association supports increased funding to prevent the potential 
introduction and for surveillance of exotic ticks, including the 
tropical bont tick, in the United States because these ticks and the 
microbes they carry represent a disease threat to free-ranging 
wildlife.

                                          USDA-APHIS WILDLIFE SERVICES
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                                 -----------------------------------------------
                     Appropriation/Activity                                            2005            IAFWA
                                                                   2004 Enacted     President's     Recommended
                                                                                      Budget      Funding Levels
----------------------------------------------------------------------------------------------------------------
Operations......................................................          71,313          71,684          89,284
Methods Development.............................................          16,999          13,876          16,999
Aquaculture.....................................................           1,042             776           1,042
----------------------------------------------------------------------------------------------------------------

General Comments
    The Association is concerned with the Administration's proposal to 
decrease overall funding for Wildlife Services (WS) activities. The 
Association was pleased that Congress provided a $200,000 increase in 
fiscal year 2004 to expand the Berryman Institute for Wildlife Damage 
Management at Mississippi State University, and recommends that 
Congress continue this support by maintaining adequate future funding 
levels.

Operations
    The Administration's proposes a program reduction of $5.5 million 
from fiscal year 2004 levels. This reduction is proposed to offset a 
$5.0 million increase in fiscal year 2005 for a wildlife disease 
surveillance system. The Association strongly recommends that Congress 
restore the $5.5 million reduction in order to maintain existing 
operations and cautiously provide an additional $5.0 million to 
initiate the new surveillance system. The new wildlife disease 
surveillance system must be accompanied by close coordination and 
respect for the State's management authority over resident wildlife, 
and Congress should direct that this relationship be institutionalized 
in a cooperative agreement between each state fish and wildlife agency 
and APHIS-WS. The Association also recommends that Congress provide an 
additional $4.6 million to continue the oral rabies vaccination program 
to stop the spread of rabies in coyotes, foxes, raccoons and other 
wildlife.
    The Association is pleased that Congress provided $1.2 million in 
fiscal year 2004 to address increasing wolf conflicts in Minnesota, 
Wisconsin, Michigan, Arizona and New Mexico and recommends continued 
support to provide adequate funding to manage increasing wolf damage 
complaints across the country. The Association also supports the 
continuing request in the President's Budget ($1.3 million) for wolf 
issues in Montana, Idaho, and Wyoming.

WS Methods Development
    In 1997, the United States and European Union entered into an 
Understanding (Agreed Minute and Annex) that identified a process for 
developing and evaluating more effective and humane trapping devices 
used to manage certain wildlife populations (e.g. for research, for 
mitigating wildlife damage, to reestablish species extirpated from 
prior habitats, and to protect endangered species). An active research 
program is being developed at the USDA's National Wildlife Research 
Center in Fort Collins, Colorado. The Association strongly objects to 
the proposed elimination of $3.35 million for the Methods Development 
program, and urges Congress to restore this funding.
    The Association recommends the Congress restore funding for 
research of non-lethal methods to mitigate wildlife damage and that 
Congress provide additional funding to WS to conduct research in order 
to better manage invasive species such as the brown tree snake and the 
Coqui frog that threaten local agriculture, fragile electrical systems, 
and threatened and endangered species in Guam and Hawaii.

Aquaculture
    The Association recommends that Congress restore WS funding for 
aquaculture by increasing the budget request by $275,000 in order to 
continue telemetry and population dynamics studies on depredating 
wildlife species in the Southeast without placing undue strains on WS 
Cooperators.
                                 ______
                                 

        Prepared Statement of the InterTribal Bison Cooperative

                      INTRODUCTION AND BACKGROUND

    My name is Ervin Carlson, a Tribal Council member of the Blackfeet 
Tribe of Montana and President of the InterTribal Bison Cooperative. 
Please accept my sincere appreciation for this opportunity to submit 
testimony to the honorable members of the Department of Agriculture 
Appropriations Sub-Committee. The InterTribal Bison Cooperative (ITBC) 
is a Native American non-profit organization, headquartered in Rapid 
City, South Dakota, comprised of fifty-four federally recognized Indian 
Tribes located within 16 States across the United States.
    Buffalo thrived in abundance on the plains of the United States for 
many centuries before they were hunted to near extinction in the 1800s. 
During this period of history, buffalo were critical to survival of the 
American Indian. Buffalo provided food, shelter, clothing and essential 
tools for Indian people and insured continuance of their subsistence 
way of life. Naturally, Indian people developed a strong spiritual and 
cultural respect for buffalo that has not diminished with the passage 
of time.
    Numerous tribes that were committed to preserving the sacred 
relationship between Indian people and buffalo established the ITBC as 
an effort to restore buffalo to Indian lands. ITBC focused upon raising 
buffalo on Indian Reservation lands that did not sustain other economic 
or agricultural projects. Significant portions of Indian Reservations 
consist of poor quality lands for farming or raising livestock. 
However, these wholly unproductive Reservation lands were and still are 
suitable for buffalo. ITBC began actively restoring buffalo to Indian 
lands after receiving funding in 1992 as an initiative of the Bush 
Administration.
    Upon the successful restoration of buffalo to Indian lands, 
opportunities arose for Tribes to utilize buffalo for tribal economic 
development efforts. ITBC is now focused on efforts to assure that 
tribal buffalo projects are economically sustainable. Federal 
appropriations have allowed ITBC to successfully restore buffalo the 
tribal lands, thereby preserving the sacred relationship between Indian 
people and buffalo. The respect that Indian tribes have maintained for 
buffalo has fostered a serious commitment by ITBC member Tribes for 
successful buffalo herd development. The successful promotion of 
buffalo as a healthy food source will allow Tribes to utilize a 
culturally relevant resource as a means to achieve self-sufficiency.

               AMENDED LANGUAGE REQUEST TO FOOD STAMP ACT

    The InterTribal Bison Cooperative respectfully requests an 
amendment to the Department of Agriculture's Food Stamp Act to amend 
the earmark language for purchase of buffalo from ``Native American 
producers or producer owned cooperatives'' to ``exclusively from Native 
American producers'' in the current fiscal year 2004 amount of 
$4,000,000. Specifically, ITBC requests the following amended language 
to the Food Stamp Act:

    For necessary expenses to carry out the Food Stamp Act (7 U.S.C. 
2011 et seq.), $26,289,692,000, of which $2,000,000,000 shall be placed 
in reserve for use only in such amounts and at such times as may become 
necessary to carry out program operations: Provided, That of the funds 
made available under this heading and not already appropriated to the 
Food Distribution Program on Indian Reservations (FDPIR) established 
under section 4(b) of the Food Stamp Act of 1977 (7 U.S.C. 2013 (b)), 
$4,000,000 shall be used to purchase bison and/or bison meat for the 
FDPIR and other food programs on the reservations, exclusively from 
Native American bison producers: Provided further, That all bison 
purchased shall be labeled according to origin and the quality of cuts 
in each package: Provided further, That the Secretary of Agriculture 
shall make every effort to enter into a service contract, with an 
American Indian Tribe, Tribal company, or an Inter Tribal organization, 
for the processing of the buffalo meat to be acquired from Native 
American producers: Provided further, That funds provided herein shall 
be expended in accordance with section 16 of the Food Stamp Act: 
Provided further, That this appropriation shall be subject to any work 
registration or workfare requirements as may be required by law: 
Provided further, That funds made available for Employment and Training 
under this heading shall remain available until expended, as authorized 
by section 16(h)(1) of the Food Stamp Act.

                  PREVENTATIVE HEALTH CARE INITIATIVE

    The Native American Indian population currently suffers from the 
highest rates of Type 2 diabetes. The Indian population further suffers 
from high rates of cardio vascular disease and various other diet 
related diseases. Studies indicate that Type 2 diabetes commonly 
emerges when a population undergoes radical diet changes. Native 
Americans have been forced to abandon traditional diets rich in wild 
game, buffalo and plants and now have diets similar in composition to 
average American diets. More studies are needed on the traditional 
diets of Native Americans versus their modern day diets in relation to 
diabetes rates. However, based upon the current data available, it is 
safe to assume that disease rates of Native Americans are directly 
impacted by a genetic inability to effectively metabolize modern foods. 
More specifically, it is well accepted that the changing diet of 
Indians is a major factor in the diabetes epidemic in Indian Country.
    Approximately 65-70 percent of Indians living on Indian 
Reservations receive foods provided by the USDA Food Distribution 
Program on Indian Reservations (FDPIR) or from the USDA Food Stamp 
Program. The FDPIR food package is composed of approximately 58 percent 
carbohydrates, 14 percent proteins and 28 percent fats. Indians 
utilizing Food Stamps generally select a grain-based diet and poorer 
quality protein sources such as high fat meats based upon economic 
reasons and the unavailability of higher quality protein sources.
    Buffalo meat is low in fat and cholesterol and is compatible to the 
genetics of Indian people. ITBC intends to promote buffalo meat on 
Indian Reservations as a healthy source of protein. First, ITBC is 
developing a preventative health care initiative to educate Indian 
families of the health benefits of buffalo meat. ITBC believes that 
incorporating buffalo meat into the FDPIR program will provide a 
significant positive impact on the diets of Indian people living on 
Indian Reservations. Further, ITBC is exploring methods to make small 
quantities of buffalo meat available for purchase in Reservation 
grocery stores. A healthy diet for Indian people that results in a 
lower incidence of diabetes will reduce Indian Reservation health care 
costs and result in a savings for taxpayers.

                       ITBC GOALS AND INITIATIVES

    In addition to developing a preventative health care initiative, 
ITBC intends to continue with its buffalo restoration efforts and its 
Tribal buffalo marketing initiative.
    In 1991, seven Indian Tribes had small buffalo herds, with a 
combined total of 1,500 animals. The herds were not utilized for 
economic development but were often maintained as wildlife only. During 
ITBC's relatively short 10-year tenure, it has been highly successful 
at developing existing buffalo herds and restoring buffalo to Indian 
lands that had no buffalo prior to 1991. Today, through the efforts of 
ITBC, over 35 Indian Tribes are engaged in raising over 15,000 buffalo. 
All buffalo operations are owned and managed by Tribes and many 
programs are close to achieving self-sufficiency. ITBC's technical 
assistance is critical to ensure that the current Tribal buffalo 
projects are sustainable within their Tribal communities. Further, 
ITBC's assistance is critical to those Tribes seeking to start a 
buffalo restoration effort.
    Through the efforts of ITBC, a new industry has developed on Indian 
reservations utilizing a culturally relevant resource. Hundreds of new 
jobs directly and indirectly revolving around the buffalo industry have 
been created. Tribal economies have benefited from the thousands of 
dollars generated and circulated on Indian Reservations.
    ITBC has also been strategizing to overcome marketing obstacles for 
Tribally raised buffalo. ITBC is presently assisting the Assiniboine 
and Gros Ventre Tribes of the Fort Belknap Reservation, who recently 
purchased a U.S.D.A. approved meat-processing plant, with a 
coordination scheme to accommodate the processing of range-fed Tribally 
raised buffalo.

                               CONCLUSION

    ITBC has proven highly successful since its establishment to 
restore buffalo to Indian Reservation lands to revive and protect the 
sacred relationship between buffalo and Indian Tribes. Further, ITBC 
has successfully promoted the utilization of a culturally significant 
resource for viable economic development.
    ITBC has assisted Tribes with the creation of new jobs, on-the-job 
training and job growth in the buffalo industry resulting in the 
generation of new money for Tribal economies. ITBC is actively 
developing strategies for sustainable Tribal buffalo operations. 
Finally, and most critically for Tribal populations, ITBC is developing 
a preventive health care initiative to utilize buffalo meat as a 
healthy addition to Tribal family diets.
    ITBC strongly urges you to support its request for the amended 
language as specifically provided above to the Food Stamp Act to allow 
$4,000,000 for the purchase of Native American produced buffalo and 
buffalo meat, to improve the diet of Tribal members.
                                 ______
                                 

            Prepared Statement of the Oklahoma Farmers Union

  INVASIVE SPECIES AFFECTING ANIMALS AND PLANTS IMPORTED RED FIRE ANT 
                              ARS-RESEARCH

    Mr. Chairman and members of the Subcommittee, I appreciate the 
opportunity to submit testimony with respect to the increasing invasive 
species of the red imported fire ant. I am an agriculture producer in 
southern Oklahoma, employed with the Oklahoma Farmers Union and a 19-
year advocate for research initiatives to combat this growing problem 
impacting both agriculture and the daily lives of citizens in impacted 
states and counties. Oklahoma Farmers Union is a general farm 
organization representing over 100,000 families in the State of 
Oklahoma.
    My work on the issues goes back to the 1980's as the red imported 
fire ant as a House Agriculture Appropriations Subcommittee associate 
staff member, later as an agriculture producer/research cooperator and 
now as an association representative and participant in numerous 
committees and fire ant conferences and meetings.

The Red Imported Fire Ant Problem
    The imported fire ants now inhabit more than 320 million acres in 
the southern United States and Puerto Rico. The average densities of 
fire ant populations in the United States are more than 5 times higher 
than in their native South America, where natural enemies keep the fire 
ant population under control. Imported fire ants destroy many other 
ground-inhabiting arthropods and other small animals, reducing the 
biological diversity in many areas. Fire ants cause a multitude of 
problems for humans, domestic animals, and agriculture. Between 30 
percent and 60 percent of the people in the infested areas are stung 
each year. More than 200,000 persons per year may require a physician's 
aid for fire ant stings. Anaphylaxis occurs in 1 percent or more of 
those people as a result of bites.
    The fire ant impact on the American economy is approximately $5.5 
billion dollars per year. Agriculture producers are economically hurt 
with the loss of animals due to stings, shorting of electrical 
equipment due to ant buildup in switch boxes, damage to farm equipment 
from ant mounds in pastures and fields and personal discomfort and risk 
to life from frequent exposure and contact with the ants in the normal 
course of working on the farm or ranch. According to data from Dr. Curt 
Lard with Texas A&M University, the estimated impact of fire ants on 
different states is: $1.3 billion in Florida, $1.2 billion in Texas, 
$210 million in South Carolina, $164 million in Mississippi and $18 
million in Oklahoma.
    This past year in the State of Oklahoma we saw the spread of fire 
ants during research surveys in counties where citizens had reported 
possible fire ant mounds. Surveys and sampling was done and fire ants 
were found for the first time in five additional counties for a total 
of 13 counties of which 8 counties are completely infested. Future 
surveys to determine expansion will be hampered this year given the 
fiscal year 2004 APHIS budget reduced funding to the states for this 
purpose. The focus will now shift to educational outreach only on a 
requested basis.

The Research Solution
    The lead research agency on the national level for this issue is 
the USDA-Agricultural Research Service with most work centered at the 
Center for Medical, Agricultural and Veterinary Entomology in 
Gainesville, Florida. I have the highest respect and admiration for the 
scientists, the administration and the methods of basic and applied 
research utilized by this agency and this research location.
    I and others have advocated for many years the need to increase 
funding for the site where key research for red imported fire ants is 
conducted and from where field activities across the United States is 
directed. We are delighted to see that the President's fiscal year 2005 
budget request includes $5 million for Invasive Species Affecting 
Animals and Plants. As ARS Acting Administrator Dr. Edward B. Knipling 
indicated in his testimony to the committee, the red imported fire ant 
is a growing problem that ``has steadily spread through all the Gulf 
States and is now reported in Southern California and New Mexico.
    The proposed increase will allow ARS to target its research with 
respect to the fire ant by studying its genomics and developing more 
effective pesticides and biological control agents. Additionally, this 
will allow ARS to continue in concert with the aforementioned to 
continue to develop biologically-based integrated pest management 
components. The latter has shown a marked impact on fire ant research 
locations but more work must be continued in this area to identify more 
cold-hardy species that can be utilized in more northern environments 
where the advancing fire ant line continues to spread.
    To date, the researchers in the USDA-ARS Imported Fire Ant Research 
Unit in Gainesville, FL, have continued to search for new biological 
control agents that could be used as self-sustaining bio-control agents 
against the imported fire ants. Biological control agents are the only 
long-term and self-sustaining solution for the fire ant problem in the 
United States.
    Self-sustaining biological control agents cause direct mortality 
and/or stress, reducing the ecological dominance of fire ants and can 
be useful in natural habitats where pesticide use is not tolerated. The 
successful establishment of biological control agents of fire ants 
would be a major benefit throughout the southern United States. 
Biological control has the potential to offer long-term suppression of 
fire ants over large areas in the United States and save millions of 
dollars annually by reducing the use of pesticides.
    Biological control agents could also help slow the spread of these 
pests into other susceptible states, such as Kentucky, Maryland, 
Virginia, Delaware, New Mexico, Arizona, Nevada, other parts of 
California, and up the Pacific Coast.
    For long-term success, investment in genomics research to develop 
more effective pesticides and pathogens is crucial if biological 
controls are to be fully effective.

New developments in fire ant biological control
    I'm excited about new developments In fire ant biological control. 
The protozoan Vairimorpha invictae, a specific pathogen of fire ants in 
South America, is being tested in quarantine in Gainesville, FL. This 
disease should be released in the field in the coming years.
    A new isolate of the fire ant pathogen Thelohania solenopsae is 
being tested in quarantine in Gainesville, FL. This isolate may be 
better adapted to black and hybrid fire ants, than the present isolate 
found in the United States. It may also have a more detrimental effect 
on the ants than the United States isolate. Scientists hope to have 
this new isolate released in the field in the coming years.
    Viruses have been identified from fire ant populations in Florida. 
Molecular biology studies may reveal opportunities for the use of these 
viruses as biological agents against fire ants. Besides the viruses, 
during the past 3 years, three other new diseases of fire ants have 
been identified from ants in Florida. These discoveries serve as 
indications that new diseases can be identified in the South American 
range of the fire ants, and developed for use in the biological control 
of U.S. fire ants.
    Three different species of the fire ant decapitating flies have 
been released so far in the United States. Two species are established 
in Florida and South Carolina. One species is established in other 
southeastern states. New decapitating fly species are being tested in 
quarantine in Gainesville, FL, and should be ready for field release in 
the coming months. Other species will be collected in South America, 
tested in quarantine.
    Area-wide suppression of fire ants research programs are being 
conducted at locations In Florida, Texas, Mississippi, Oklahoma, and 
South Carolina. These research efforts combine both biological and 
chemical methods to achieve an integrated pest management approach.
Conclusion and Request for Funding
    Much progress has been made but to continue this aggressive, 
results-oriented research at the same or perhaps excelled pace, it is 
imperative that additional funding be directed--preferably in permanent 
base funding to the Gainesville, FL location. On behalf of the 
producers and consumers who make up the membership of the Oklahoma 
Farmers Union, we support the Administration's $5 million research 
initiative contained in the ARS budget for further targeted research 
for Invasive Species Affecting Animals and Plants.
    Thank you for this opportunity. I would appreciate the 
Subcommittee's consideration of this most important issue.
                                 ______
                                 

Prepared Statement of the Mid-America International Agri-Trade Council 
                (MIATCO) and Food Export USA--Northeast

    As Executive Director of MIATCO (Mid-America International Agri-
Trade Council) and Food Export USA--Northeast, I am pleased to offer 
this written testimony as to how Market Access Program funds are being 
optimized to help Midwest and Northeast U.S. food and agricultural 
exporters extend their reach and penetration of foreign markets 
resulting in incremental business, enhanced export sales, and new jobs 
here in the United States.
    Secretary Veneman has outlined that expanding trade is the 
Administration's top priority for U.S. agriculture. Continued support 
for the trade promotion through the Market Access Program is critical 
part of that effort.
    The MAP is designed to focus on these high-value products. There 
are approximately 70 non-profit industry groups across this country 
representing all sectors of agriculture that participate in this 
program.
    The 50 state departments of agriculture participate in MAP through 
four State Regional Trade Groups (MIATCO, Food Export USA--Northeast, 
SUSTA and WUSATA). These groups coordinate the export promotion efforts 
of the states, and focus on assisting smaller food and agricultural 
processor.
    While remaining separate trade non-profit trade associations, 
MIATCO and Food Export USA--Northeast are strategically and 
operationally aligned in order optimize cost efficiencies while 
leveraging cross-regional opportunities abroad.
    MIATCO and Food Export USA--Northeast contract with 14 overseas in-
market representatives to provide promotional support and to help local 
importers and buyers more fully leverage all of our resources
    In combination with significant state and private investment, MAP 
funding allows MIATCO and Food Export USA--Northeast to focus on three 
key areas of exporter assistance:
  --Education & Outreach
  --Market Entry
  --In-Market Promotion

Education & Outreach
    MIATCO and Food Export USA reach out to both existing and potential 
exporters of food and agriculture products through numerous 
communications vehicles including a bi-monthly newsletter, The Global 
Food Marketertm, monthly email updates and periodic broadcast faxes. 
Our current combined database includes 12,000 U.S. food and 
agricultural suppliers.
    Another key Education & Outreach initiative is our Food Export 
Helplinetm, a free service that helps companies in secondary market 
research and in achieving export readiness by addressing regulations 
and pricing challenges inherent in selling to foreign buyers.

Market Entry
    Once an export company has decided to pursue a specific foreign 
market, MIATCO and Food Export USA--Northeast provide assistance in a 
number of ways, including:
  --Distributor Development Service.--Providing assistance with primary 
        market research specific to a market (country) and a United 
        States supplier particular product's.
  --Food Show PLUS!TM.--Enhancing specific tradeshow 
        participation with translation of their promotional material, 
        interpreters, publicity, buyer introductions, guided retail 
        tours, etc.
  --Buyers Missions.--Bringing foreign buyers to the United States to 
        meet with suppliers in the Midwest and Northeast.
  --Trade Missions.--Facilitating export company visits with potential 
        foreign market buyers through organized trips, tours etc.
  --Trade Lead Service.--A new initiative which provides to U.S. 
        suppliers pre-qualified, product-specific leads in foreign 
        markets.

In-Market Promotion
    Helping exporters successfully promote and sell their agricultural 
products once they've penetrated a foreign market is a key component to 
our overall support. Through participation in our Branded Program, 
qualified small companies can receive reimbursements of up to 50 
percent of eligible international marketing expenses such as trade show 
participation, advertising, public relations, promotions, marketing and 
point-of-sale material and label modifications (as necessary by local 
regulations).
    The MAP focuses on value-added agricultural products, including 
branded foods. Overseas consumers, like those here in the United States 
tend to buy product based on brand names. By promoting brand names that 
contain American agricultural ingredients, we build long-term demand 
for our products. These value-added product support jobs and encourage 
investment in our own processing industries.
    Following are examples of testimonials of our current participants:
  --``Our ability to build solid foundations for long-term export 
        growth is greatly dependent on the funding we receive from 
        MIATCO's Branded Program. It goes a long way towards helping us 
        set up effective marketing campaigns in many of our overseas 
        markets''. Garrett Smith, Vice President of Sales, American 
        Popcorn Company.
  --``Food Export USA--Northeast has done a great job helping us export 
        and exposing us to international markets. We used funds from 
        the Branded Program to hold products demos in other countries 
        and to attend food shows. The product sampling has helped us 
        facilitate a great deal of business in Singapore.'' Marty 
        Margherio, President, M&V Global Foods.
    The MAP also stimulates private investment. While the MAP requires 
that companies match all federal dollars on a one-for-one basis, in 
fact most companies spend much more than that. Last year, participants 
in our programs contributed an additional $2.58 for each MAP dollar 
invested in our programs.
    As foreign market opportunities shift and change, MIATCO and Food 
Export USA's programs and services have never been more important to 
midwestern and northeastern food, agricultural, and wood exporters.
    American products are seen worldwide as high quality and safe 
products. Selling higher quality products requires promotion. The MAP 
is an investment in promotion that pays off. It is for this reason that 
we support funding for MAP in fiscal year 2005 at the $140 million 
level legislated in the Farm Security and Rural Investment Act (FSRIA) 
of 2002. We also urge the subcommittee to support a strong USDA Foreign 
Agricultural Service (FAS), our partner in promoting increased U.S. 
agricultural exports.
    Following are our results for the fiscal year from October 2002 
through the end of September 2003.
    Thank you.

------------------------------------------------------------------------
                                                            Food Export
                                              MIATCO      USA--Northeast
------------------------------------------------------------------------
Total Number of U.S. Export Companies                632             360
 Participating in Programs..............
Number of New Distributor Relationships            1,000             274
 Established............................
Number of Companies with Resulting                   153              85
 ``First-Time'' Export Sales in a Market
Actual Reported Increases in Export          $84,630,356     $41,394,170
 Sales As Result of Program
 Participation..........................
Total Private Investment Generated           $19,754,462      $8,482,566
 Through Program Participation..........
------------------------------------------------------------------------

                                 ______
                                 

Prepared Statement of the National Association of Professional Forestry 
                     Schools and Colleges (NAPFSC)

The Growing Importance of NonFederal Forest Lands
    Society continues to place diverse and increasing demands on the 
nation's 740 million acres of forest (nearly one-third of the U.S. land 
base). This acreage includes the public lands and the more than 400 
million acres of private forest lands now providing most of the 
nation's forest-based products. However, forest ownerships face many 
pressures including fires, floods, insect and disease losses, 
urbanization, fragmentation, and missed employment and economic 
opportunities. Countering the threats and achieving the full promise of 
these forests will require an enhanced effort from the combined 
research and outreach activities of the USDA Forest Service and our 
nation's public universities. Ten million landowners, their families, 
their communities, forest based industries, more than a million primary 
forest products industry employees, and many millions of resource users 
and consumers have a major stake in the promise of these lands. 
Fortunately, the full promise CAN be achieved with well-planned and 
carefully executed investments in research and education. This message 
from the National Association of Professional Forestry Schools and 
Colleges (NAPFSC) describes key parts of such a plan including 
recommendations for the fiscal year 2005 budget.

Investing in USDA Cooperative State Research, Education, and Extension 
        Service (CSREES) Programs
    Priority 1: The Cooperative Forestry Research (McIntire-Stennis) 
Program.--Is the foundation of forest resources research and scientist 
education efforts at universities. The program provides cutting-edge 
research on productivity, technologies for monitoring and extending the 
resource base, and environmental quality--efforts that are critically 
important since universities provide a large share of the nation's 
research. Program funding is currently at $21.755 million and matched 
more than three times by universities with state and nonFederal funds. 
NAPFSC recommends $25 million for fiscal year 2005 with the increase 
targeted at:
  --Sustainable and productive forest management systems.--For private 
        lands to address issues of global change, international 
        competition and economic growth;
  --Forest health and risk.--To address fire, pest species, and other 
        disturbances affecting domestic resource security, downstream 
        impacts, and restoration of complex systems;
  --Assessing social values and tradeoffs.--To identify realistic 
        policy options, economic impacts, and to inform decisions, at 
        all levels of government, with effective science; and
  --New biobased products, improved processing technologies, and 
        utilization of small trees.--To extend the forest resource and 
        enhance environmental quality;
    In the long run, it is important to advance this program to its 
full authorization--50 percent of the funding for USDA Forest Service 
R&D. NAPFSC requests this support with direction to focus on new or 
existing approved projects to achieve rapid progress on one or more of 
these research targets in each school's state, region, or nationally. 
Portions of this funding will also be used to educate critically needed 
new scientists.
    Priority 2: The National Research Initiative Competitive Grants 
Program (NRI).--Is a significant source of funding for basic and 
applied research on forest resources including their management and 
utilization. This program is currently funded at $164 million of which 
approximately 10 percent goes to successful forestry research 
proposals. NAPFSC supports the Administration's efforts to increase the 
funding for the NRI to $180 million providing at least an additional 
$10 million is directed to research on:
  --Woody plant systems.--Including genetic improvement and increased 
        tree growth rates and yields, and improved utilization;
  --Managed forest ecosystems.--Including issues of forest health, 
        productivity, economic sustainability, and restoration; and
  --Assessing alternative management systems.--With emphasis on risk 
        analysis, geospatial analysis including landscape implications, 
        and associated decision support systems.
    Priority 3: The Renewable Resources Extension Program (RREA).--Is 
the foundation of outreach and extension efforts at universities. This 
program is critically important today since universities provide a 
large share of the nations outreach and extension. Audiences for the 
products of outreach and extension are as diverse as the stakeholders. 
The highest priority are the owners of nonFederal forest lands and 
those involved in implementing forest management. After cuts in 2004, 
the program is currently funded at $4.04 million. We urge restoration 
of funding to the fiscal year 2003 level of $4.516 million. NAPFSC 
further recommends focusing this program on:
  --Best management practices.--Together with information on programs, 
        services, and benefits of natural resources management and 
        planning to integrate water, wildlife, timber, fish, 
        recreation, and other products and services;
  --Risk management/forest health.--Approaches addressing management of 
        fire, insects and diseases, invasive species, fragmentation, 
        and other disturbances at local to larger scales for working 
        forests and landscapes;
  --Opportunities for economic development.--For individuals and 
        communities including landowner cooperatives and other 
        organizations linked to professional services and marketing, 
        and conservation strategies to address local issues within the 
        framework of landowner's objectives.
    In the long run, it is important to advance this program to its 
full $30 authorization. NAPFSC further recommends focusing this funding 
to achieve rapid progress on one or more of these extension targets in 
each school's state, region, or nationally.

Partner Programs
    USDA Forest Service R&D.--NAPFSC recommends strengthening Forest 
Service research to address the full complexity of forest systems and 
their importance to society including issues of global change and the 
domestic security. At the same time, we see the most direct routes to 
this strengthening being through increased ties to university forestry 
research programs, for example through the funding of cooperative 
agreements and competitive grant programs. Forest Service R&D funding 
of Cooperative agreements with universities has become a very effective 
way to engage university science capability. Additionally, this vehicle 
is critically important to the training 3 of eventual agency scientists 
and in achieving the necessary critical mass for major research 
problems. Funding to schools through such mechanisms also improves 
agency linkages to stakeholders and the technology transfer capability 
within universities. Competitive grants are a means of improving 
targeted basic and multidisciplinary research. However, cooperative 
agreement funding has fallen from near 20 percent of the R&D budget to 
less than 10 percent today. Consequently, NAPFSC urges Forest Service 
R&D to:
  --Increase cooperative agreement opportunities, incrementally over 
        the next 5 years, to attain a percentage of the total research 
        budget that returns to historic levels of approximately 20 
        percent. In the fiscal year 2005 budget we recommend an 
        increase of $5 million in the share of Forest Service research 
        dollars committed by the Forest Service for cooperative 
        agreements. This increase would reverse the downward trend in 
        the percentage of funds utilized for cooperative agreements and 
        would move toward a better balance between internal Forest 
        Service research and external collaboration with research 
        universities.
  --Establish a major external competitive grant program in forest and 
        natural resources research to engage the broader research 
        community in addressing critical research and outreach needs. 
        In the fiscal year 2005 budget we recommend designation of $10 
        million for this purpose, eventually building to $40 million. 
        Recommended target areas of research are those noted above for 
        the NRI in the USDA CSREES.
  --Additionally, we see it important to elevate research university 
        linkages by assigning staff responsibility for advocacy and 
        oversight of this key partnership and associated funding.
    USDA Forest Service State & Private Forestry (S&PF).--Has strong 
formal linkages to state forestry agencies. However, there is no formal 
link between S&PF and the forestry school based research, extension, 
and technology transfer capabilities in states. NAPFSC believes such a 
link would greatly strengthen cooperation among S&PF, state forestry 
agencies, forestry schools, industry, and landowners in states. Also, 
such a link would greatly improve the targeting, timeliness, and 
effectiveness of technology transfer focused on state needs relating to 
stewardship. Consequently, NAPFSC proposes the creation of a technology 
transfer line under Cooperative Forestry Programs in the agency's 
budget. We further urge this line be funded at $5 million and suggest 
staff be directed to establish criteria for grant and cooperative 
programs by consulting with university forestry and related natural 
resources schools and other educational or technology transfer 
entities. Criteria may include linkage to state forestry agency 
efforts, ties to basic and applied research, addressing critical state 
needs, and multi-school or multi-state cooperation. Suggested themes 
for this new line include productivity improvement, critical forest 
management information and analysis, and forest fire.
    The National Fire Plan (USDA and USDI).--Has become a major area of 
activity for Federal agencies and partners. This billion-dollar program 
also has significant research and technology transfer needs. NAPFSC 
believes important elements of these needs can best be accomplished 
through the existing research, extension and technology transfer 
capabilities of forestry schools. Consequently NAPFSC urges the 
addition of a science, education, and technology transfer line under 
Wildland Fire Management to effect this role.
    USDI Cooperative Ecosystem Studies Units (CESUs).--The seventeen 
new CESUs are proving to be a cost-effective means of engaging 
university science and training capabilities regionally to achieve 
Federal agency goals. However, schools cannot carry the cost of 
partnering and information sharing activities themselves. Consequently, 
NAPFSC recommends $1.275 million in support of the CESU program in the 
U.S. Department of Interior. We suggest this funding under the 
Department's CESU cooperative/joint venture agreements with CESU host 
universities to provide research, technical assistance, and education 
consistent with the mission of these units. This would provide $75,000 
annually to each host institution and $75,000 for the national office 
for the purposes of partnering activities to support essential 
conservation and information sharing through websites and other 
technologies. This funding could be placed within the National Park 
Service under external programs on behalf of all the Federal agencies 
involved with the CESU program. Annual work plans would be developed by 
the host universities and participating Federal agencies per guidelines 
established by the CESU Council.
    Other Competitive Grant Programs (NASA, NSF, DOE, & EPA).--
Competitive grant programs in non-USDA science agencies have been very 
important to the progress of forest resources research efforts in 
universities. We urge the Administration and Congress to recognize the 
importance and effectiveness of these programs in efforts to address 
the issues of nonFederal forests. Specifically we urge programs, 
subprograms, and funding that can compliment and supplement USDA 
research programs, notably in the areas of remote sensing and 
information technologies, basic tree biology, ecosystem structure and 
function, climate change, water resources management, and the social 
sciences underpinning natural resources and environmental management.
    Agenda 2020.--The American Forest and Paper Association has 
proposed a program of research to address our nation's needs for wood 
and fiber products and issues of industry and national competitiveness. 
Scientists from NAPFSC schools have played a key role in research 
addressing this agenda. We seek support for the base programs, 
cooperative agreements and competitive grants noted above to make this 
agenda a continued success story.
    Workforce Needs.--The changing makeup of our society and a looming 
shortage in forest science research capacity also argue for including 
the full range of partners as stakeholders, and notably including 1890 
and 1994 institutions and others serving minorities.
    Summary.--The plan and investments outlined here are substantial, 
but the potential savings and returns are far greater. NAPFSC urges 
cooperation at Federal, State, and university levels to make this 
investment and its promise a reality.
                                 ______
                                 

Prepared Statement of the National Association of State Departments of 
                              Agriculture

    My name is Gene Hugoson, Commissioner of the Minnesota Department 
of Agriculture and President of the National Association of State 
Departments of Agriculture (NASDA). I present my statement on behalf of 
my fellow commissioners, secretaries and directors from the 50 states 
and four U.S. territories.

Fund Specialty Crop Block Grant Program
    We respectfully ask that the Senate provide funding for a block 
grant program in the fiscal year 2005 Agricultural Appropriations Bill. 
Congress first approved a specialty crop block grant program in 2001 
(H.R. 2213, Public Law 107-25). Congress chose States to administer the 
$159.4 million block grant program which was directed at the specialty 
crop industry to address difficult circumstances caused by disease, low 
prices, and lack of funding in several areas including: research, 
promotion, and inspection. NASDA members believe that this block grant 
program has improved the specialty crop industry's ability to sustain, 
expand and enhance their production systems.
    The program provided state block grants to assist the specialty 
crop industry, not in the traditional manner of farm assistance 
programs, but through a focus on projects to improve the industry's 
competitiveness. The demands for the grant funds were overwhelming; 
more than 3,900 requests for grant funding were made totaling $1.52 
billion.
    State Departments of Agriculture took advice from their local 
constituency groups and ultimately made investments in more than 1,400 
projects in significant issue areas including marketing, nutrition, 
education, research, pest and disease programs, and food safety. We 
would like to point out that an important factor in many states' grant 
funding criteria was commitment to matching funds. Together, states and 
grant recipients contributed more than $45 million in matching funds.
    Knowing that Congress would have a keen interest in the success of 
the 2001 block grant program, we surveyed the states and compiled a 
progress report. It is available on NASDA's website at www.nasda.org or 
copies can be requested from NASDA's office. Each member of the 
subcommittee will be provided their own copy of the report.
    We would like to bring to your attention that current legislation 
in the U.S. House of Representatives, H.R. 3242, ``The Specialty Crop 
Competitiveness Act of 2003,'' provides $470 million for a specialty 
crop block grant program. NASDA supports the passage of this 
legislation.

Changing Times
    As you know, times are changing in the agriculture industry. No 
longer are bulk commodities the only crops that come to mind when 
people think about American agriculture. In the early 1900's, bulk 
commodities like wheat, corn, and cotton were the dominant crops grown 
on the majority of America's farms. While bulk commodities will always 
remain essential components of America's agricultural industry, today 
specialty crops have grown significantly in economic importance. During 
the last century, farmers and ranchers have become much more 
diversified and more involved with marketing their products from the 
farmgate to the consumer.

Specialty Crops--A Strong Economic Engine
    The contribution of the specialty crop industry to the economic 
health of the United States and to our agricultural economy becomes 
clear when you consider the cash receipts the industry generates. For 
the year 2002, the United States Department of Agriculture's Economic 
Research Service (ERS) reported that, ``Vegetables, Fruit and Nuts, All 
other Crops, and Hay'' generated $57.7 billion in cash receipts. This 
figure is important as it outpaces the cash receipts generated by the 
remaining plant crops. In 2002, ``Oil Crops, Tobacco, Cotton, Feed 
Crops, and Food Grains'' generated $45.7 billion in cash receipts.

The Challenges--Low Income & Trade Deficit
    As times have changed, so have the needs of farmers and ranchers in 
our country. Specialty crop growers are faced with a variety of 
challenges--many of them brought about by the diversity of the 
specialty crop industry. Just like any farmer or rancher, specialty 
crop growers face the risk of their crop being destroyed by a pest, 
disease or natural disaster. But they also carry additional risk due to 
compliance with ever changing regulatory requirements, high labor 
costs, high fuel costs and exotic pest pressures while competing on a 
non-level playing field against imports from outside the United States.
    The USDA ERS reported in ``Agriculture Economy Improves in 2003'' 
that specialty crop producers should expect lower than average income: 
``Producers of specialty crops (vegetables, fruits, nursery products) 
are especially susceptible to higher energy and labor costs (the 
fastest rising expense categories in 2003). Lower average income is 
expected for these farms, since modest gains in receipts will not be 
enough to compensate for higher expenses.''
    However, not all growers in other sectors are experiencing the same 
challenges. The report stated, ``The financial condition of U.S. 
farmers and other agricultural stakeholders is expected to improve in 
2003. Net farm income, a measure of the sector's profitability, is 
forecast to be up $17 billion (49 percent) from the $35.6 billion 
earned in 2002 and about 10 percent above the 10-year average.''
    While we recognize the importance of global trade in agricultural 
commodities and recognize the complexity of the global economy, we are 
alarmed at the disparity between the explosive growth in importation of 
specialty crops into the United States versus the relatively flat 
growth in the exportation of our products to other countries. The 
USDA's Foreign Agricultural Service's ``Foreign Agricultural Trade of 
the United States'' reports that for the period 1997-2002 that:
  --Imports--increased 39 percent to a total of $14.7 billion in 2002; 
        while,
  --Exports--increased 6.5 percent to a total of $11.7 billion in 2002.
    While these trends certainly raise questions regarding ``fair 
trade'', it's also important to emphasize the issue of ``safe trade.'' 
Can our industry remain competitive when they are asked to absorb the 
cumulative risk of introduction of unwanted foreign pests and diseases 
imported on foreign commodities that are deemed to be ``safe?''

Block Grants--An Investment in Critical Infrastructure
    It's time for the public sector to realize the value of specialty 
crops and make long term investments in the competitiveness of the 
industry. Public investment in critical infrastructure will benefit not 
only the economy but public health and the environment. This investment 
can be used to support on-going research that is furthering the 
development of new varieties of specialty crops and contributing to 
advances in fighting foreign pests and diseases brought in by imports. 
It will help continue statewide marketing and promotion campaigns that 
are increasing the consumption of fruits and vegetables across the 
nation. It will help maintain competitive prices, both domestically and 
internationally. And more importantly, Federal resources will support 
nutritional education programs in our schools which will give our 
children the tools to make healthy eating choices ? helping us all 
battle the obesity epidemic that is affecting each and every one of our 
states.
    Farmers and ranchers need government policies that make it possible 
for them to remain competitive. When farmers earn a profit, they are 
better equipped to adapt to change. These changes bring better results 
for the environment, for workers, for consumers and for the economy. 
Everyone benefits from the support of specialty crops. I ask you to 
please take a minute to think about what you want agriculture to look 
like in the next 5, 10 or even 25 years. We can shape that vision today 
by committing to a long-term investment in our specialty crop producers 
and ensuring they continue to feed the nation and the world.
    The State Departments of Agriculture are ready to continue this 
important dialog and be a part of the solution in keeping specialty 
crops producers competitive and viable. Thank you for the opportunity 
to express NASDA's strong support for the Specialty Crop Block Grant 
Program.
                                 ______
                                 

   Prepared Statement of the National Association of State Foresters

                              INTRODUCTION

    The National Association of State Foresters (NASF) is pleased to 
provide testimony on the U.S. Department of Agriculture (USDA) budget 
request for fiscal year 2005. Representing the directors of state 
forestry agencies from all fifty states, eight U.S. territories, and 
the District of Columbia, our testimony centers around those Deputy 
Areas most relevant to the long term forestry operations of our 
constituents: Natural Resources and Environment and Research, 
Education, and Economics. We believe the USDA budget for fiscal year 
2005, which offers opportunities for advancing the sustainable 
management of private forestland nationwide, can be strengthened 
through our recommendations.

                    FARM BILL CONSERVATION PROGRAMS

    NASF believes that the conservation programs enacted in the 2002 
Farm Bill are integral for protecting water quality, erodible soils, 
wildlife habitat, and wetlands associated with agricultural and 
forestry operations. Trees and forestry practices are often the best 
solution to many of the conservation challenges arising from these 
operations. We support the continued funding and development of the 
Environmental Quality Incentives Program (EQIP) by providing $1.2 
billion for fiscal year 2005, full funding for the Conservation Reserve 
Program (CRP), $85 million for the Wildlife Habitat Improvement Program 
(WHIP), targeting of 250,000 acres under the Wetlands Reserve Program 
(WRP), $150 million for the Emergency Watershed Program (EWP), and $26 
million for the Conservation Security Program (CSP). These programs are 
important for landowners with both forest and agricultural land, as 
well as farmers who wish to plant trees for conservation purposes on 
their agricultural lands. Nearly two-thirds of the land in the United 
States is forested, the majority of which is privately owned. NASF 
recommends that the Subcommittee encourage the Secretary of Agriculture 
and the NRCS to reinforce the importance of including and expanding 
forestry practices in EQIP and the other Farm Bill Conservation 
Programs.

                  USDA RESEARCH AND EXTENSION PROGRAMS

    NASF recommends funding the Cooperative Forestry Research 
(McIntire-Stennis) Program (CFR) at $25 million, the National Research 
Initiative Competitive Grants Program (NRI) at $180 million, and the 
Renewable Resources Extension Program (RREA) at $4.5 million. The 
proposed increase in CFR will help the program continue to serve as the 
cornerstone of forest research in universities, providing knowledge 
central to sound management from environmental, economic, and social 
perspectives. NASF supports the funding provided in the 
Administration's fiscal year 2005 budget for NRI and encourages more 
funds be targeted to forestry research. A small increase in RREA 
funding will improve the program's ability to address critical 
extension and stewardship needs.

                               CONCLUSION

    The National Association of State Foresters seeks the 
Subcommittee's support for a USDA fiscal year 2005 budget that will 
make sure the conservation needs of private landowners--both forest and 
agriculture--are met. Thank you for the opportunity to provide our 
testimony.
                                 ______
                                 

Prepared Statement of the National Association of University Fisheries 
                         and Wildlife Programs

    The National Association of University Fisheries and Wildlife 
Programs (NAUFWP) appreciates the opportunity to submit testimony 
concerning the fiscal year 2005 budgets for the U.S. Department of 
Agriculture. NAUFWP represents approximately 55 university programs and 
their 440 faculty members, scientists, and extension specialists and 
over 9,200 undergraduates and graduate students working to enhance the 
science and management of fisheries and wildlife resources. NAUFWP is 
interested in strengthening fisheries and wildlife education, research, 
extension, and international programs to benefit wildlife and their 
habitats on agricultural and other private land.
    The following table summarizes NAUFWP's recommendations:

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                                 -----------------------------------------------
                       USDA Agency/Program                                             2005
                                                                   2004 Enacted     President's     2005 NAUFWP
                                                                                      Budget        Recommended
----------------------------------------------------------------------------------------------------------------
Coop. St. Research, Education, and Extension Serv.:
    Hatch Act...................................................         179,085         180,148         180,148
    Renewable Resources Extension Act...........................           4,040           4,093          15,000
    McIntire-Stennis Cooperative Forestry.......................          21,755          21,844          30,000
    Natural Resources Inventory.................................         164,027         180,000         180,000
Natural Resources Conservation Service:
    Forest Land Enhancement Program.............................          10,000  ..............          80,000
    Technical Service Provider training.........................  ..............  ..............             100
    Conservation Program Monitoring and Evaluation..............  ..............  ..............           1,000
----------------------------------------------------------------------------------------------------------------

Cooperative State Research, Education and Extension Services
    Hatch Act.--The Hatch Act supports agricultural research in the 
states at college and university agriculture experiment stations. 
Experiment stations conduct research, investigations, and experiments 
that relate directly to the establishment and maintenance of an 
effective agricultural industry and promote a sound and prosperous 
agricultural and rural life. These stations are essential for their 
work on food and fiber systems, environmental impacts of these systems, 
and resource issues relating to the future of agriculture in each state 
and the nation. We support the administration's request for this base 
program in fiscal year 2005.
    Renewable Resources Extension Act.--We strongly recommend that the 
Renewable Resources Extension Act be funded at $15 million in fiscal 
year 2005. RREA funds, which are apportioned to State Extension 
Services, leverage (at an average of 4:1) cooperative partnerships with 
a focus on development and dissemination of information needed by 
private landowners. The need for RREA educational programs is greater 
than ever today due to fragmentation of ownerships, urbanization, and 
increasing societal concerns about land use and its impact on soil, 
water, air, and wildlife. Though RREA has been proven to be effective 
in leveraging cooperative state and local funding, it has never been 
fully funded.
    McIntire-Stennis.--We encourage Congress to increase McIntire-
Stennis Cooperative Forestry funds to $30 million. These funds are 
essential to the future of resource management on non-industrial 
private forestlands, supporting state efforts in forestry research to 
increase the efficiency of forestry practices and to extend the 
benefits that come from forest and related rangelands. McIntire-Stennis 
calls for close coordination between state colleges and universities 
and the Federal Government, and is essential for providing research 
background for other Acts, such as RREA.
    National Research Initiative.--National Research Initiative 
Competitive Grants (NRI) are open to academic institutions, federal 
agencies, and private organizations to fund research on improving 
agricultural practices, particularly production systems that are 
sustainable both environmentally and economically, and to develop 
methods for protecting natural resources and wildlife. Innovative grant 
programs such as NRI help broaden approaches to land management, such 
as integrating timber and wildlife management on private lands. We 
request $180 million for National Research Initiative Competitive 
Grants in fiscal year 2005.

Natural Resources Conservation Service
    Forest Land Enhancement Program (FLEP).--The Forest Land 
Enhancement Program was created through the 2002 Farm Bill to provide 
financial, technical, educational, and related assistance to promote 
sustainable management of non-industrial private forestlands. The 
program is authorized at $100 million for 2002-2007, to be distributed 
through state forestry agencies. We request restoration of the full 
funding balance, $80 million, for this program in fiscal year 2005.
    Technical Service Provider Training.--NRCS is building a Technical 
Service Provider program of certified professionals who can assist the 
agency in delivering conservation services to agricultural producers. 
Training will be needed to effectively prepare Technical Service 
Providers to assist these producers. NAUFWP recommends that Congress 
direct NRCS to appropriate $100,000 for a pilot training program at a 
university in cooperation with professional societies (Society for 
Range Management, The Wildlife Society, American Fisheries Society) and 
the USDA Cooperative State Research, Education, and Extension Service 
that subsequently can be used at land grant universities and colleges 
across the country to train Technical Service Providers. This program 
is critical to the effective delivery of Farm Bill Conservation 
Programs.
    Conservation Program Monitoring and Evaluation.--Monitoring Farm 
Bill conservation programs and evaluating their progress toward 
achieving Congressionally established objectives for soil, water, and 
wildlife will enable NRCS to ensure successful program implementation 
and effective use of appropriated funds. Thus far, limited monitoring 
efforts have been focused on soil and water achievements, and NRCS and 
the Agricultural Research Service have done all the evaluations. It is 
important for assessments to address wildlife and habitat impacts, and 
for external parties to be included to ensure credibility and 
objectivity. We recommend Congress direct $1 million toward a pilot 
watershed-based monitoring and evaluation project that can serve as a 
model for conservation program assessment nationwide.
    Thank you for considering the views of university fisheries and 
wildlife scientists. We look forward to working with you and your staff 
to ensure adequate funding for wildlife conservation.
                                 ______
                                 

Prepared Statement of the National Coalition for Food and Agricultural 
                                Research

    Dear Chairman Bennett, Ranking Member Kohl and Members of the 
Subcommittee: On behalf of the National Coalition for Food and 
Agricultural Research (National C-FAR), we are pleased to submit 
comments in strong support of enhanced public investment in food and 
agricultural research, extension and education as a critical component 
of Federal appropriations for fiscal year 2005 and beyond.

                       INTEREST OF NATIONAL C-FAR

    National C-FAR serves as a forum and a unified voice in support of 
sustaining and increasing public investment at the national level in 
food and agricultural research, extension and education. National C-FAR 
is a nonprofit, nonpartisan, consensus-based and customer-led coalition 
established in 2001 that brings food, agriculture, nutrition, 
conservation and natural resource organizations together with the food 
and agriculture research community. A list of current members is 
provided as Exhibit 1. More information about National C-FAR is 
available at http://www.ncfar.org.\1\
---------------------------------------------------------------------------
    \1\ National C-FAR seeks to increase awareness about the value of, 
and support for, food and agricultural research. For example, National 
C-FAR circulates a series of one-page Research Success Profiles 
highlighting some of the many benefits already provided by public 
investment in food and agricultural research. Each provides a contact 
for more information. Profiles released to date are titled ``Anthrax,'' 
``Mastitis,'' ``Penicillin,'' ``Witchweed,'' and ``Making Wine.'' The 
Profiles can be accessed at http://www.ncfar.org/research.asp.
---------------------------------------------------------------------------
   DEMONSTRATED VALUE OF PUBLIC INVESTMENTS IN FOOD AND AGRICULTURAL 
                   RESEARCH, EXTENSION AND EDUCATION

    Public and private investments in U.S. agricultural research have 
paid huge dividends to the United States and the world, especially in 
the latter part of the 20th century. However, these dividends are the 
result of past investments in agricultural research.
    If similar research dividends are to be realized in the future, 
then the nation must commit to a continuing investment that reflects 
the long-term benefits of food and agricultural research.
    Food and agricultural research to date has helped provide the 
United States with an agricultural system that consistently produces 
high quality, affordable food and natural fiber, while at the same 
time:
  --Creating Jobs and Income.--The food and agricultural sector and 
        related industries provide over 20 million jobs, about 17 
        percent of U.S. jobs, and account for nearly $1 trillion or 13 
        percent of GDP.
  --Helping Reduce the Trade Deficit.--Agricultural exports average 
        more than $50 billion annually compared to $38 billion of 
        imports, contributing some $12 billion to reducing the $350 
        billion trade deficit in the nonagricultural sector.
  --Providing many Valuable Aesthetic and Environmental Amenities to 
        the Public.--The proximity to open space enhances the value of 
        nearby residential property. Farmland is a natural wastewater 
        treatment system. Unpaved land allows the recharge of the 
        ground water that urban residents need. Farms are stopovers for 
        migratory birds. Farmers are stewards for 65 percent of non-
        Federal lands and provide habitat for 75 percent of wildlife.
  --Sustaining Important Strategic Resources.--This nation's abundant 
        food supply bolsters national security and eases world tension 
        and turmoil. Science-based improvements in agriculture have 
        saved over a billion people from starvation and countless 
        millions more from the ravages of disease and malnutrition.
    Publicly financed research is a necessary complement to private 
sector research, focusing in areas where the private sector does not 
have an incentive to invest, when (1) the pay-off is over a long term, 
(2) the potential market is more speculative, (3) the effort is during 
the pre-technology stage; and (4) where the benefits are widely 
diffused. Public research also helps provide oversight and measure 
long-term progress. Public research also acts as a means to detect and 
resolve problems in an early stage, thus saving American taxpayer 
dollars in remedial and corrective actions.
    By any standard, the contribution of publicly supported 
agricultural research to advances in food production and productivity 
and the resulting public benefits are well documented. For example, an 
analysis by the International Food Policy Research Institute of 292 
studies of the impacts of agricultural research and extension published 
since 1953 (Julian M. Austin, et al, A Meta-Analysis of Rates of Return 
to Agricultural Research, 2000) showed an average annual rate of return 
on public investments in agricultural research and extension of 81 
percent!

NATIONAL C-FAR URGES ENHANCED FEDERAL FUNDING FOR FOOD AND AGRICULTURAL 
                   RESEARCH, EXTENSION AND EDUCATION

    National C-FAR appreciates the longstanding support this 
Subcommittee and the full Committee have demonstrated through funding 
food and agricultural research, extension and education programs over 
the years that have helped the U.S. food and agricultural sector be a 
world leader and provide unprecedented value to U.S. citizens, and 
indeed the world community.
    National C-FAR is deeply concerned that shortfalls in food and 
agricultural research funding in recent years jeopardize the food and 
agricultural community's continued ability to maintain its leadership 
role and more importantly respond to the multiple, demanding challenges 
that lie ahead. Federal funding of food and agricultural research, 
extension and education has been flat for over 20 years, while support 
for other Federal research has increased substantially. At the same 
time, public funding of agricultural research in the rest of the world 
during the same time period has reportedly increased at a nearly 30 
percent faster pace. This reduced public investment in food and 
agricultural research may be the result of the U.S. food and 
agricultural system working so well that the sector is a victim of its 
own success. However, societal demands and expectations placed upon the 
food and agricultural system are ever-changing and growing. Simply 
stated, Federal funding has not kept pace with identified priority 
needs.
    National C-FAR is deeply concerned that shortfalls in food and 
agricultural research funding in recent years jeopardize the food and 
agricultural community's continued ability to maintain its leadership 
role and more importantly respond to the multiple, demanding challenges 
that lie ahead.
    National C-FAR believes it is imperative to lay the groundwork now 
to respond to the many challenges and promising opportunities ahead 
through Federal policies and programs needed to promote the long-term 
health and vitality of food and agriculture for the benefit of both 
consumers and producers. Stronger public investment in food and 
agricultural research, extension and education is essential in 
producing research outcomes needed to help bring about beneficial and 
timely solutions to multiple challenges. Multiple examples, such as 
those listed below, serve to illustrate current and future needs that 
arguably merit enhanced public investment in research:
  --Strengthened bio-security is a pressing national priority. There is 
        a compelling need for improved bio-security and bio-safety 
        tools and policies to protect against bio-terrorism and dreaded 
        problems such as foot-and-mouth and ``mad cow'' diseases and 
        other exotic plant and animal pests, and protection of range 
        lands from invasive species.
  --Food-linked health costs are high. Some $100 billion of annual U.S. 
        health costs are linked to poor diets, obesity, food borne 
        pathogens and allergens. Opportunities exist to create 
        healthier diets through fortification and enrichment.
  --Research holds the key to solutions to environmental issues related 
        to global warming, limited water resources, enhanced wildlife 
        habitat, and competing demands for land and other agricultural 
        resources.
  --There was considerable debate during the last farm bill 
        reauthorization about how expanded food and agricultural 
        research could enhance farm income and rural revitalization by 
        improving competitiveness and value-added opportunities.
  --Energy costs are escalating, dependence on petroleum imports is 
        growing and concerns about greenhouse gases are rising. 
        Research can enhance agriculture's ability to provide renewable 
        sources of energy and cleaner burning fuels, sequester carbon, 
        and provide other environmental benefits to help address these 
        challenges, and indeed generate value-added income for 
        producers and stimulate rural economic development.
  --Population and income growth are expanding the world demand for 
        food and improved diets. World food demand is projected to 
        double in 25 years. Most of this growth will occur in the 
        developing nations where yields are low, land is scarce, and 
        diets are inadequate. Without a vigorous response demand will 
        only be met at a great global ecological cost.
  --Regardless of one's views about biotechnology and genetic 
        resources, an effective publicly funded research role is needed 
        for oversight and to ensure public benefits.
    Finally, there is a continuing need to build the human capacity of 
expertise to conduct quality food and agricultural research and 
education, and to implement research outcomes in the field and 
laboratory where such outcomes benefit consumers and others who need 
the research results. The food and agricultural sciences face the same 
daunting task of supplying the nation with the next generation of 
scientists and educators that many of the scientific disciplines face 
today. If these basic needs are not met, then the nation will face a 
shortage of trained and qualified individuals.
    Public investment in food and agricultural research, extension and 
education of today and the future must simultaneously satisfies needs 
for food quality and quantity, resource preservation, producer 
profitability and social acceptability. National C-FAR supports the 
public funding needed to help assure that these needs are met.
    A Sense of the Congress resolution endorsed by National C-FAR to 
double research funding within 5 years was incorporated into the 2002 
Farm Bill that was enacted into law. However, the major commitment to 
expanded research has not yet materialized. National C-FAR urges the 
Subcommittee and Committee to fund the Administration's request for 
food and agricultural research for fiscal year 2005, and to augment 
this funding level to the maximum extent practicable, as an important 
first step toward building the funding levels needed to meet identified 
food and agricultural research needs.

                               CONCLUSION

    In conclusion, National C-FAR restfully submits that--
  --The food and agricultural sector merits Federal attention and 
        support;
  --Food and agricultural research, extension and education have paid 
        huge dividends in the past, not only to farmers, but to the 
        entire nation and the world;
  --There is an appropriate and recognized role for Federal support of 
        research and education;
  --Recent funding levels for food and agricultural research, extension 
        and education have been inadequate to meet pressing needs; and
  --Federal investments in food and agricultural research should be 
        enhanced in fiscal year 2005 and beyond.
    National C-FAR appreciates the opportunity to share its views and 
stands ready to work with the Chair and members of this Committee in 
support of these important funding objectives.
                                 ______
                                 

Prepared Statement of the National Commodity Supplemental Food Program 
                           (CSFP) Association

    Mr. Chairman and subcommittee members, I am Kathleen Devlin, 
President of the National Commodity Supplemental Food Program (CSFP) 
Association. Our Association of state and local CSFP operators works 
diligently with the Department of Agriculture Food, Nutrition and 
Consumer Service to provide a quality nutritionally balanced commodity 
food package to low income persons aged sixty and older, and low income 
mothers, infants, and children. The program, which was authorized in 
1969, serves approximately 536,000 individuals every month in 32 
states, 2 Tribal Organizations and the District of Columbia.
  --Within the last 5 years, CSFP has added 10 new States to the 
        Program serving 113,792 new program participants, the vast 
        majority being low-income seniors.
  --Of special note is the unprecedented growth of this program in 
        fiscal year 2003, during which an additional 84,160 people were 
        served.
  --This unprecedented growth was the direct result of the fiscal year 
        2003 Conference Report that said: ``The conferees expect the 
        Department to make the full amount of these budgetary resources 
        available to support participation and caseload. The intention 
        of the conferees is to ensure at a minimum that the final 
        caseload in September 2003 can be maintained in 2004, while 
        meeting the requirements to protect the states that joined the 
        program in 2003.''
  --The fiscal year 2005 President's Budget has proposed $98 million 
        for the CSFP. This is a 13 percent cut to the program and will 
        require 69,941 low-income seniors be removed from receiving 
        much needed nutritious commodities. This follows a 19 percent 
        increase in participation among existing CSFP states provided 
        last year as a direct result of Congressional Directives set 
        forth by Conferees in the Conference Report.
    The CSFP's 35 years of service stands as testimony to the power of 
partnerships between community and faith-based organizations, private 
industry and government agencies. The CSFP offers a unique combination 
of advantages unparalleled by any other food assistance program:
  The CSFP specifically targets our nation's most nutritionally 
        vulnerable populations: the young children and the low-income 
        seniors.
  The CSFP provides a monthly selection of food packages specifically 
        tailored to the nutritional needs of the population we serve. 
        Each eligible participant in the program is guaranteed [by law] 
        a certain level of nutritional assistance every month in 
        addition to life-changing nutrition education.
  The CSFP purchases foods at wholesale prices, which directly supports 
        the farming community. The average food package for fiscal year 
        2004 is $13.20, and the retail cost would be approximately 
        $50.00.
  The CSFP involves the entire community in the problems of hunger and 
        poverty. Thousands of volunteers as well as many private 
        companies donate money, equipment, and most importantly time to 
        deliver food to homebound seniors. These volunteers not only 
        bring food but companionship and other assistance to seniors 
        who might have no other source of support.
    The Senate Agriculture Appropriations Sub-Committee has 
consistently been supportive of CSFP, acknowledging it as a cost-
effective way of providing nutritional supplemental food packages to 
low income eligible seniors, mothers and children. This year, your 
support is needed urgently to prevent unprecedented 69,941 low-income 
participants from being removed from this vital nutrition program.

                  COMMODITY SUPPLEMENTAL FOOD PROGRAM
  NATIONAL CSFP ASSOCIATION CASELOAD & BUDGET REQUEST FOR FISCAL YEAR 
                                  2005

                         $134 million requested
    Fiscal year 2005 Caseload Slots, Including Seven New States.--
660,599 Slots
    Fiscal year 2005 Funding Request.--$134.0 million
    Base Caseload Requirements Existing States.--535,756 Slots
    Total Cost Per Caseload Slot.--$158.40 ($13.20 blended monthly food 
            package cost  12 months) + $53.53 = $211.93 per 
            slot = $113.5 million
    Expansion in Current States.--100,343 Slots
     $118.80 ($13.20 blended monthly food package cost  9 
            months) + $40.14 ($158.40 prorated for 9 months) = $158.94 
            per slot = $15.9 million
    New States.--24,500 Slots
    Arkansas--5000; Delaware--2500; Oklahoma--5000; Maine--3000; 
            Virginia--3000; Utah--3000; Wyoming--3000 and this would 
            equal an additional $118.80 ($13.20 blended monthly food 
            package cost  9 months) + $40.14 ($158.40 prorated 
            for 9 months) = $158.94 per slot = $3.9 million
    Estimated USDA Costs for Procuring Commodities.--$.8 million
    Note: The National CSFP Association would like to bring to your 
attention a comparison between the CSFP FFY 2004 Appropriation & FFY 
2005 Proposed Appropriation.
  --FFY 2004.--$98.9 million Appropriation + (approximately) $11.295 
        million cash carryover + (estimated) $6 million Commodity 
        Inventory = Total Program Resources fiscal year 2004 of $116 
        Million
  --FFY 2005.--President's Proposed $98 Million (loss of 85,728 or 16 
        percent of the national caseload)
  --Total Program Resources in fiscal year 2005 of $104.8 million (loss 
        of 69,941 senior slots or 13 percent national caseload)
       restore senior income guidelines to 185 percent of poverty
    Current income eligibility for senior clients is 130 percent of the 
poverty income guidelines, as opposed to 185 percent of poverty as 
originally established in 1981. We proposed that they be re-established 
to 185 percent of poverty to be consistent with CSFP women, infants and 
children and other Federal nutrition programs. Many seniors are 
struggling with high housing, medical, and utility costs, and at the 
lower poverty guideline, the slightest inflation increase in Social 
Security income renders many seniors ineligible for CSFP.


   Prepared Statement of the National Council of Farmer Cooperatives

    Thank you, Mr. Chairman, and members of the Subcommittee. The 
National Council of Farmer Cooperatives (NCFC) appreciates this 
opportunity to submit its views regarding the fiscal year 2005 
agriculture appropriations bill, and respectfully requests this 
statement be made part of the official hearing record.

                     AMERICA'S FARMER COOPERATIVES

    NCFC is the national trade association representing America's 
farmer cooperatives. There are nearly 3,000 farmer cooperatives across 
the United States whose members include a majority of our Nation's more 
than 2 million farmers. They exist for the mutual benefit of their 
farmer members and provide them with increased opportunity to improve 
their income from the marketplace and compete more effectively in the 
global marketplace.
    These farmer owned businesses handle, process and market virtually 
every type of agricultural commodity grown and produced, along with 
many related products; manufacture, distribute and sell a variety of 
farm inputs; and provide credit and related financial services, 
including export financing. Earnings derived from these activities are 
returned by farmer cooperatives to their farmer members on a patronage 
basis thereby enhancing their overall income.
    America's farmer cooperatives also provide jobs for nearly 300,000 
Americans with a combined payroll over $8 billion, further contributing 
to our Nation's economic wellbeing. Many of these jobs are in rural 
areas where employment opportunities are sometimes limited.

          FISCAL YEAR 2005 BUDGET PROPOSAL AND RECOMMENDATIONS

    The administration's fiscal year 2005 budget proposal with regard 
to USDA recommends maintaining support and funding for basic farm and 
commodity programs as contained in the 2002 Farm Bill. We commend the 
administration for its recommendation as these programs represent an 
important safety net for producers and should continue to be fully 
funded. There are also a number of other important programs within USDA 
that should be given a high priority as summarized below.
USDA Farmer Cooperative Programs
    There is a long history of congressional support for public policy 
to enhance the ability of farmers to join together in cooperative self-
help efforts to improve their overall income from the marketplace, 
capitalize on new market opportunities, and to compete more effectively 
in the global marketplace.
    USDA's Rural Business-Cooperative Service (RB-CS) mission area 
includes responsibility for carrying out a variety of programs to help 
achieve such objectives, including research, education and technical 
assistance for farmers and cooperatives. Since the elimination of a 
separate agency with responsibility for such programs, it is our 
understanding that funding for such purposes has generally been 
provided through the salary and expense budget relating to rural 
development.
    For fiscal year 2005, the administration's budget proposal provides 
$666 million in both budget authority and program level for salaries 
and expenses for the rural development mission area, compared to $627 
million for fiscal year 2004. Since there is no separate line item 
relating to programs in support of cooperative self-help efforts by 
farmers and their cooperatives, we believe Congress should include as 
it has in the past specific language directing that funding and 
resources to carry out such programs be given a high priority.

Value-Added Agricultural Product Market Development Grants
    USDA's Value-Added Agricultural Product Market Development Grants 
Program is aimed at encouraging and enhancing farmer participation in 
value-added businesses, including through farmer cooperatives, to help 
them capture a larger share of the value of their production and 
improve their overall income from the marketplace. It also helps 
promote economic development and create needed jobs in rural areas.
    The program is administered on a matching basis, thereby doubling 
the impact of such grants and helping encourage needed investment. As a 
cost-share program, it has served as an excellent example of an 
effective public-private partnership that has been extremely successful 
by any measure.
    The 2002 Farm Bill significantly expanded this important program to 
a level of $40 million. In fiscal year 2004, the program was reduced to 
$15 million. For fiscal year 2005, the administration's budget proposal 
recommends the program be maintained with a slight increase to $16 
million. While this represents a significant change from last year's 
budget proposal, which we are pleased to see, we continue to believe 
this important program should be fully funded at $40 million.

Commodity Purchase Programs
    USDA annually purchases a variety of commodities for use in 
domestic and international feeding programs, including the school lunch 
program. NCFC strongly supports such programs to: (1) meet the food and 
nutrition needs of eligible consumers and (2) help strengthen farm 
income by encouraging orderly marketing and providing farmers with an 
important market outlet, especially during periods of surplus 
production.
    In addition to providing needed funding for such programs, it is 
important to ensure that farmers who choose to cooperatively market 
their production and related products, as well as their cooperatives, 
are not limited or excluded, but remain fully eligible under such 
programs. This is consistent with USDA's historical mission in support 
of such cooperative efforts and essential to ensure the continued 
availability of high quality products on a competitive basis.

B&I Loan Guarantee Program and Farmer Cooperatives
    One of the major challenges facing farmer cooperatives in helping 
farmers capture more of the value of what they produce beyond the farm 
gate is access to equity capital. In approving the 2002 Farm Bill, 
Congress made a number of changes to USDA's Business and Industry (B&I) 
guaranteed loan program to better meet the needs of farmer cooperatives 
and their farmer members. These included changes to allow farmers to 
qualify for guaranteed loans for the purchase of stock in both new and 
existing cooperatives to provide the equity capital needed to encourage 
more involvement and participation in value-added activities.
    For fiscal year 2005, the administration's budget proposal provides 
an overall program level of $738 million, which represents a slight 
increase over fiscal year 2004. Accordingly, we recommend that funding 
be not less than this level.

Rural Business Investment Program
    The Rural Business Investment Program was authorized under the 2002 
Farm Bill to help foster rural economic development by encouraging and 
facilitating equity investments in rural business enterprises, 
including farmer cooperatives.
    In fiscal year 2004, program funding was limited to $4 million for 
the development of regulations and review of applications. We 
understand, however, that such regulations remain pending. While the 
fiscal year 2005 budget proposal would provide an increase to $11 
million, this is still well below the level authorized in the 2002 Farm 
Bill. Again, providing improved access to equity capital is essential 
if farmers are going to be able to capitalize on value-added business 
opportunities through cooperative self-help efforts. For these reasons, 
we urge that the program be fully funded as authorized and that USDA be 
encouraged to complete the rulemaking process in order for it to be 
fully implemented as Congress intended.

International and Export Programs
    USDA's export programs are vital to helping maintain and expand 
U.S. agricultural exports, counter subsidized foreign competition, meet 
humanitarian needs, protect American jobs, and strengthen farm income. 
We believe such programs should be fully funded and aggressively 
implemented to achieve these important objectives.
    The administration's fiscal year 2005 budget proposal would provide 
an overall increase in U.S. international and export programs. At the 
same time, however, it would reduce or freeze several key programs.
    In particular, we are very concerned over the proposal to freeze 
USDA's Market Access Program (MAP) at $125 million instead of allowing 
it to increase to $140 million as provided under the 2002 Farm Bill. 
The program, which is administered on a cost-share basis, continues to 
be tremendously effective in encouraging and promoting U.S. 
agricultural exports. At a time when our foreign competitors are 
spending nearly as much to promote their products in just the U.S. 
domestic market as the United States is spending world-wide, clearly 
now is not the time to engage in any unilateral reduction in our export 
programs. As a member of the Coalition to Promote U.S. Agricultural 
Exports, we urge that funding be provided at $140 million as 
authorized, together with $34.5 million for the Foreign Market 
Development program as recommended.
    Again, it is extremely important that USDA's export programs 
continue to be fully funded, including the Export Credit Guarantee 
Programs, the Export Enhancement Program, Dairy Export Incentive 
Program, Technical Assistance for Specialty Crops, Food for Progress, 
as well as Public Law 480 and other food assistance programs, including 
McGovern-Dole.
    Finally, we also want to take this opportunity to urge support to 
ensure there is adequate funding and resources for USDA's Foreign 
Agricultural Service to continue to effectively carry-out such programs 
and to provide the technical assistance and support needed to help 
maintain and expand U.S. agricultural exports.

Agricultural Research
    Another important area of emphasis when it comes to enhancing the 
global competitiveness of farmer cooperatives and American agriculture 
is research. NCFC endorses the recommendations of the National 
Coalition for Food and Agricultural Research, which has set an 
objective of doubling Federal funding over the next 5 years.

Conservation Programs
    The administration's fiscal year 2005 budget proposal includes 
funding for a variety of conservation and related programs administered 
by USDA's Natural Resources Conservation Service (NRCS). Many of these 
programs were significantly expanded under the 2002 Farm Bill and 
provide financial and technical assistance to help farmers and others 
who are eligible to develop and carry out conservation and related 
activities to achieve important environmental goals.
    NRCS is also the lead technical agency within USDA offering ``on-
farm'' technical and financial assistance. We strongly support such 
programs, including technical assistance activities that may be carried 
out in partnership with the private sector involving farmer 
cooperatives. Farmer cooperatives have invested heavily in developing 
the technical skills of their employees to help their farmer members 
address environmental concerns. It is estimated that 90 percent of all 
members of the Certified Crop Advisor (CCA) program, for example, are 
employed by the private sector and majority of those are employed by 
farmer cooperatives.

Conclusion
    Thank you again, Mr. Chairman and members of the Subcommittee, for 
the opportunity to share our views. We appreciate this statement being 
included in the official hearing record.
                                 ______
                                 

           Prepared Statement of the National Potato Council

    My name is Dwight Horsch. I am a potato farmer from Idaho and 
current Vice President, Legislative/Government Affairs for the National 
Potato Council (NPC). On behalf of the NPC, we thank you for your 
attention to the needs of our potato growers.
    The NPC is the only trade association representing commercial 
growers in 50 states. Our growers produce both seed potatoes and 
potatoes for consumption in a variety of forms. Annual production is 
estimated at 437,888,000 cwt. with a farm value of $3.2 billion. Total 
value is substantially increased through processing. The potato crop 
clearly has a positive impact on the U.S. economy.
    The potato is the most popular of all vegetables grown and consumed 
in the United States and one of the most popular in the world. Annual 
per capita consumption was 136.5 pounds in 2003, up from 104 pounds in 
1962 and is increasing due to the advent of new products and heightened 
public awareness of the potato's excellent nutritional value. Potatoes 
are considered a nutritious consumer commodity and an integral, 
delicious component of the American diet.
    The NPC's fiscal year 2005 appropriations priorities are as 
follows:
    The NPC recognizes the difficult budget situation that the Congress 
is facing and has carefully targeted its fiscal year 2005 priorities.

Potato Research
            Cooperative State Research Education and Extension Service 
                    (CSREES)
    The NPC supports an appropriation of $1.75 million for the Special 
Potato Grant program for fiscal year 2005. The Congress appropriated 
$1.417 million in fiscal year 2004, a decrease from the fiscal year 
2003 level of $1.584 million. This has been a highly successful program 
and the number of funding requests from various potato-producing 
regions is increasing.
  --The NPC also urges that the Congress, once again, include Committee 
        report language as follows:
  --``Potato research.--The Committee expects the Department to ensure 
        that funds provided to CSREES for potato research are utilized 
        for varietal development testing. Further, these funds are to 
        be awarded competitively after review by the Potato Industry 
        Working Group.''

Agricultural Research Service (ARS) Report Language
    The NPC urges that the Congress once again add Committee report 
language urging the ARS to work with the NPC on how overall research 
funds can best be utilized for grower priorities.
            ARS-CSREES Overall Funding
            Congressionally Mandated Potato Research
    The NPC urges that the Congress reject the Administration's budget 
request to rescind all fiscal year 2004 Congressional increases for 
research projects.

Foreign Market Development
            Market Access Program (MAP)
    The NPC also urges that the Congress maintain the spending level 
for the Market Access Program (MAP) at its authorized level of $140 
million for fiscal year 2005 and not support the Administration's 
budget request to cap this valuable export program at the fiscal year 
2004 level of $125 million.

Food Aid Programs
            McGovern Dole
    The Administration has requested $75 million for the McGovern-Dole 
Food International Food Aid Program. The Administration requested and 
the Congress provided $50 million in fiscal year 2004. The NPC supports 
an appropriation of at least $100 million in fiscal year 2005.

Pest and Disease Management
            Animal and Plant Health Inspection Service (APHIS)
    Golden Nematode Quarantine.--The NPC supports $985,000 which is the 
Administration's fiscal year 2005 budget request. The Congress 
appropriated $792,000 in fiscal year 2004.
    Pest Detection.--The NPC supports $45 million in fiscal year 2005, 
which is the Administration's budget request. The Congress appropriated 
$24 million in fiscal year 2004. Now that the Agriculture Quarantine 
Inspection (AQI) program is within the new Homeland Security Agency, 
this increase is essential for the Plant Protection and Quarantine 
Service's (PPQ) efforts against potato pests and diseases such as 
Ralstonia.
    Trade Issues Resolution and Management.--The NPC supports $16 
million for this program which is the Administration's budget request. 
The Congress appropriated $12.4 million in fiscal year 2004. However, 
language must be included that designates all or a part of such 
increase for plant protection and quarantine activities. As new trade 
agreements are negotiated, the agency must have the necessary staff and 
technology to detect and to deal with the threat of pests and diseases. 
The NPC relies heavily on APHIS-PPQ resources to resolve phytosanitary 
trade barriers.
    Funding Pest Eradication Programs.--The NPC supports having the 
Congress once again include language to prohibit the issuance of a 
final rule that shifts the costs of pest and disease eradication and 
control to the states and cooperators.

Agricultural Statistics
            National Agricultural Statistics Service (NASS)
    The NPC supports sufficient funds and guiding language to assure 
that the potato objective yield and grade and size surveys are 
continued. The fiscal year 2004 Omnibus Bill included the following 
language:--``The conferees also expect that both the potato objective 
yield survey and the potato size and grade survey will be continued.''
                                 ______
                                 

       Prepared Statement of the National Rural Housing Coalition

    Mr. Chairman and members of the House Subcommittee on Agriculture, 
my name is Robert Rapoza and I am the executive secretary of the 
National Rural Housing Coalition.
    The National Rural Housing Coalition (the Coalition) has been a 
national voice for rural low-income housing and community development 
programs since 1969. Through direct advocacy and policy research, the 
Coalition has worked with Congress and the Department of Agriculture to 
design new programs and improve existing programs serving the rural 
poor. The Coalition also promotes a non-profit delivery system for 
these programs, encouraging support for rural community assistance 
programs, farm labor housing grants, self-help housing grants, and 
rural capacity building funding. The Coalition is comprised of 
approximately 300 members nationwide. We hope to work with you to 
assure that the voices of rural America are heard and its needs met. 
Our concerns are focused on rural housing and rural water and sewer 
systems.
    A disproportionate amount of the Nation's substandard housing is in 
rural areas. Rural households are poorer than urban households, pay 
more of their income for housing that their urban counterparts, and are 
less likely to receive government-assisted mortgages. They also have 
limited access to mortgage credit and the secondary mortgage market, 
making them prime targets for predatory lending. Rural America needs 
programs that focus on the issues facing it. The Rural Housing Service 
of Rural Development provides many of these needed programs.
    According to the 2000 Census, there are 106 million housing units 
in the United States. Of that, 23 million, or 23 percent, are located 
in non-metro areas. Many non-metro households lack the income for 
affordable housing. The 2000 Census reveals that 7.8 million of the 
non-metro population is poor, 5.5 million, or one-quarter of the non-
metro population, face cost overburden, and 1.6 million of non-metro 
housing units are either moderately or severely substandard.
    Renters in rural areas are the worst housed individuals and 
families in the country. Thirty-five percent of rural renters are cost-
burdened, paying more than 30 percent of their income for housing 
costs. Almost one million rural renter households suffer from multiple 
housing problems, 60 percent of whom pay more than 70 percent of their 
income for housing. The Section 515 rural rental housing loan program 
at USDA serves low and very-low income families with safe affordable 
housing.
    Although issues around rental housing are of vital concern, 
homeownership is the principal form of housing in rural America. 
However, there are a number of obstacles to improving homeownership in 
rural areas including high rates of poverty and poor quality of 
housing. According to a 1999 Economic Research Service report, the 
poverty rate in rural America was 15.9 percent, compared to 13.2 
percent in urban areas.
    Rural residents also have limited access to mortgage credit. The 
consolidation of the banking industry that accelerated throughout the 
1990s has had a significant impact on rural communities. Mergers among 
lending institutions have replaced local community lenders with large 
centralized institutions located in urban areas. Aside from shifting 
the locus of loan making, this has resulted in the diminishment of a 
competitive environment that, in the past, encouraged rural lenders to 
offer terms and conditions that were attractive to borrowers.

                         RURAL HOUSING SERVICE

Rural Rental Housing Program
    Although we often talk about the surge in homeownership and all of 
its benefits, not all us are or are prepared to be homeowners. USDA's 
Rural Housing Service Section 515 rural rental housing program is 
invaluable to low-income residents in rural areas. The portfolio 
contains 450,000 rented apartments in Section 515 developments. The 
delinquency rate is a low 1.6 percent. The average tenant income is 
little more than $9,000, which is equal to only 30 percent of the 
Nation's rural median household income. Sixty percent of the tenants 
are elderly or disabled and one-quarter are minority.
    The Federal Government's current investment in rural rental housing 
is at its lowest level in more than 25 years. In fact, last year and 
this year the Administration's budget included no funding for rural 
rental housing production. Over the last 15 years, Congress and 
Administrations of both parties have engaged in unwise budget cutting 
of rural rental housing. Lending has declined from over $500 million a 
year in 1994 to $114 million in fiscal year 2003 and 2004. As a result, 
there is little production of new rental housing in rural areas.
    As Congress considers future policy for rural housing, it faces two 
challenges regarding rural rental housing. The first is to maintain the 
existing stock of Section 515 units. The second is to increase the 
production of affordable rental housing units in rural communities. The 
current portfolio of Section 515 units represents an important resource 
to low-income families in rural America. At a time of declining Federal 
resources for rental housing, it is hard to envision a time in which 
Federal policy will finance the development of a large number of rental 
housing developments. It is important to preserve the existing stock.
    RHS is facing an aging Section 515 portfolio. Of the 17,000 
developments across the country, close to 10,000 are more than 20 years 
old. To maintain those projects, it will take an investment of Federal 
funds for restoration. That appears to be the focus of the 
Administration's request for $60 million for servicing the existing 
portfolio.
    The Housing Act of 1987 regulated rural rental housing principally 
financed under Section 515. This legislation placed a low-income use 
restriction on Section 515 and also established financial incentives to 
owners to maintain their properties for low-income housing. In general, 
at the end of the initial 20-year use restriction, an owner could seek 
an incentive to extend long-term low-income use, or sell the project to 
a nonprofit organization or public body that would operate the housing 
for low-income use.
    A principal source of financing for incentives was the Section 515 
and the use of these funds for equity loans authorized under Section 
515. Roughly two-thirds of the Section 515 portfolio is regulated under 
the 1987 Act. The lack of adequate funding for incentives has raised a 
great concern among the owners. For the most part, the law limits their 
options of seeking incentives or selling to a nonprofit organization or 
public body. The demand for incentives is estimated at approximately 
$100 million for equity loans alone. But cuts in Section 515 have 
limited the ability of the USDA to implement a good preservation 
program. However, as Congress and the Administration reduced funding 
for Section 515, USDA reduced preservation funding to only about $5 
million per year.
    Section 521 rental assistance is used in conjunction with Section 
515 to help families who cannot afford even their reduced rent. In 
recent years, mostly in response to an escalating number of expiring 
contracts, appropriations for rental assistance have gone up.
    In the fiscal year 2004 appropriations conference report and the 
fiscal year 2005 budget Congress and the Administration have reduced 
the term on expiring rental assistance contracts from 5 years to 4 
years. One possible result of this is to pile larger appropriations for 
rental assistance to the out years.
    This policy may solve a short term budget need but does not address 
the need for rental assistance for the 90,000 low income households 
living in section 515 units paying more than 30 percent of income for 
rent. It also does not provide any assistance for the few newly 
constructed units financed under section 515.
    We urge the Committee to provide at least $250 million for section 
515 loans and allocate at least $100 million of that amount for 
preservation and rehabilitation of rural rental housing. We also urge 
the Committee to restore rental assistance contracts to 5 years and 
restore funding that is adequate to meet the needs of preservation and 
new construction commitments contained in the appropriation of $250 
million for section 515.

Section 502 Single Family Direct Loan Program
    In recent years, the major trend in rural housing has been to 
guarantee home ownership loans. The fiscal year 2005 level for 
guarantees is approximately $2.75 billion. This program serves families 
with incomes at 125 percent of median, substantially higher than that 
of direct loans.
    To qualify for the direct loan program, borrowers must have very 
low or low incomes but be able to afford mortgage payments. Also, 
applicants must be unable to obtain credit elsewhere, yet have 
reasonable credit histories. The average income of households assisted 
under Section 502 is $18,500. About 3 percent of households have annual 
incomes of less than $10,000. Since its inception, Section 502 has 
provided loans to almost 2 million families.
    Under Section 502 home ownership, the current loan level totals 
$1.367 billion. This will provide subsidized, direct loan financing for 
about 15,000 units. Under this program, families receive a subsidized 
loan for a period of 33 years. There is unprecedented demand for 
section 502 direct loans in 2003; RHS closed 13,222 loans totaling 
$1.037 billion. However, at the end of the fiscal year the agency had 
on hand over 33,000 applications from qualified families totaling over 
$2.5 billion.
    The fiscal year 2004 lending level for Section 502 direct loans is 
$1.366 billion, the largest in several years. These additional funds 
are important in the Administration effort to improve minority home 
ownership. However, this higher level will only address about 50 
percent of the demand on hand in RHS offices across the country.
    The fiscal year 2005 request reduces section 502 lending to $1.1 
billion, a reduction of over $250 million. This cut is due to an 
increase in subsidy rates without a corresponding increase in section 
502 direct budget authority.
    The section 502 program is an extremely low cost program. For 
Direct 502, USDA will finance about 15,300 for a budget authority cost 
of $8,170 per unit.
    We urge the Committee to restore section 502 to loans to the 
current rate $1.367 million.

Non-Profit Organizations
    With dramatic program reductions and continued strength in the 
Nation's real estate market, the private sector delivery system is no 
longer dominant as it was when funding levels were higher, and in many 
rural communities does not even exist. In some rural areas, non-profits 
have picked up the slack and pursued a multiple funding strategy. 
Skilled local organizations meld Federal, State, local and private 
resources together to provide affordable financing packages to low-
income families. But there is not a dedicated source of Federal support 
to promote a non-profit delivery system for rural housing.
    As one way to improve its programs, USDA has expanded its 
cooperation with non-profit housing and community development 
organizations. Two successful programs are Mutual and Self-Help Housing 
and the Rural Community Development Initiative.
    Under Mutual and Self-Help Housing, with the assistance of local 
housing agencies, groups of families eligible for Section 502 loans 
perform approximately 65 percent of the construction labor on each 
other's homes under qualified supervision. This program, which has 
received growing support because of its proven model, has existed since 
1961. The average number of homes built in each year over the past 3 
years has been approximately 1,500. The budget request is for $34 
million. We support this request.
    The Rural Community Development Initiative (RCDI) program enhances 
the capacity of rural organizations to develop and manage low-income 
housing, community facilities, and economic development projects. These 
funds are designated to provide technical support, enhance staffing 
capacity, and provide pre-development assistance--including site 
acquisition and development. RCDI provides rural community development 
organizations with some of the resources necessary to plan, develop, 
and manage community development projects. Using dollar-for-dollar 
matching funds and technical assistance from 19 intermediary 
organizations, some $12 million in capacity building funds were 
distributed to 240 communities. This valuable program is also at risk 
in the budget request this year--it has been eliminated. For fiscal 
year 2005, we recommend $6 million for the Rural Community Development 
Initiative to continue level funding for fiscal year 2002.

Farm Labor Housing
    Two additional rental housing programs specifically address the 
needs of farm laborers. Migrant and seasonal farmworkers are some of 
the Nation's most poorly housed populations. The last documented 
national study indicated a shortage of some 800,000 units of affordable 
housing for farmworkers.
    Farmworker households are also some of the least assisted 
households in the Nation. Some 52 percent of farmworker households' 
incomes are below the poverty threshold, four times the national 
household poverty rate, and 75 percent of migrant farmworkers have 
incomes below the poverty line. Yet little more than 20 percent of 
farmworker households receive public assistance; most commonly food 
stamps, rarely public or subsidized housing.
    There are only two Federal housing programs that specifically 
target farmworkers and their housing needs: Sections 514 and 516 of the 
Housing Act of 1949 (as amended). Borrowers and grantees under Rural 
Housing Service Sections 514 and 516 receive financing to develop 
housing for farmworkers. Section 514 authorizes the Rural Housing 
Service to make loans with terms of up to 33 years and interest rates 
as low as 1 percent. Section 516 authorizes RHS to provide grant 
funding when the applicant will provide at least 10 percent of the 
total development cost from its own resources or through a 514 loan.
    Non-profit housing organizations and public bodies use the loan and 
grant funds, along with RHS rural rental assistance, to provide units 
affordable to eligible farmworkers. These funds are used to plan and 
develop housing and related facilities for migrant and seasonal 
farmworkers.

Rural Utility Service
    Hundreds of rural communities nationwide do not have access to 
clean drinking water and safe waste disposal systems. According to the 
2000 Census, approximately 1.9 million people lack indoor plumbing and 
basic sanitation services, including potable water and sewer. According 
to 1999 EPA Safe Drinking Water Needs Survey, $48 billion will be 
required over the next 20 years to ensure that communities under 10,000 
have safe drinking water supplies. According to EPA's 2000 Clean Water 
Needs Survey $16 billion is required over the next 20 years to provide 
wastewater treatment facilities communities under 10,000, and over 
19,000 wastewater facilities will be needed for these communities. In 
all, small communities will need to identify some $64 billion in order 
to meet their water and wastewater needs.
    Many projects that the Rural Utilities Service funds are under 
consent order from the state EPA office for immediate action. The 
problems that the agency deals with range from communities and systems 
that are out of compliance with health and pollution standards, to 
communities without sewer systems where raw sewage runs in ditches 
after a heavy rainfall. Because so much time and money are spent on 
critical needs, the state offices spend less time on prevention. The 
programs and communities do not have enough resources to address issues 
before they become larger problems.
    The issue of affordability moves to the forefront with waste 
disposal systems, which are generally more expensive than water 
systems. Waste systems naturally succeed water systems--with central 
water comes indoor plumbing, washing machines, dishwashers, etc., all 
of which eventually require an efficient wastewater disposal system. 
Low-income communities often already pay as much as they can afford for 
water service alone and are unable to manage the combined user fees for 
water and waste. According to EPA data, ratepayers of small rural 
systems are charged up to four times as much per household as 
ratepayers of larger systems. In some extreme situations, some 
households are being forced out of homeownership because they cannot 
afford rising user costs.
    Small water and wastewater systems lack the economies of scale 
needed to reduce costs on their own. In order for communities to cut 
back on project costs and have affordable rates, operation and 
maintenance are typically underestimated in the budgets for many new 
systems. This often results in limited or no capital improvement 
accounts for future upgrades and expansions needed for community 
development including stabilization of local small business, affordable 
housing development, and other needed industrial development.
    USDA's Rural Utilities Service (RUS) is the primary Federal force 
in rural water and waste development, providing loans and grants to 
low-income communities in rural areas. The agency assists low-income 
rural communities that would not otherwise be able to afford such 
services. Nearly all the communities RUS served last year had median 
household income below that state non-metro median household income.
    In providing these important services, the program also protects 
public health and promotes community stabilization and development. 
Aging municipal sewage systems alone are responsible for 40,000 
overflows of raw sewage each year. The overflows cause health hazards 
including gastrointestinal problems and nausea, as well as long-term 
damage to the environment. Businesses and industries are unable or 
reluctant to locate in areas without functioning water and sewer 
systems. But with the assistance of RUS, communities are able to have 
the services they need so that their health and economies may benefit.
    Through Federal and State initiatives, RUS is working to confront 
the challenges faced by rural communities. With increasingly restricted 
time and money, state offices are using other resources such as 
leveraged funds and technical assistance from the Rural Community 
Assistance Program (RCAP). Funds are being leveraged through HUD's 
Community Development Block Grant program and the EPA's State Revolving 
Loan Funds, as well as some private lenders. RCAP provided services to 
over 2000 communities last year in 50 States, including Puerto Rico and 
leveraged over $200,000,000 in additional funding for water and 
wastewater infrastructure projects in the communities served. The RCAP 
program has proven to be an effective and efficient way of ensuring 
that small rural communities receive the information, technical 
assistance, and training needed to provide for the water and waste 
disposal needs of their residents.
    We urge the Committee to restore funding to the fiscal year 2004 
rate.

Other Federal Agencies
    Other Federal agencies have not picked up the slack in providing 
assistance for rural areas. Rural households have limited access to 
mortgage credit and the secondary mortgage market. Rural households are 
less likely to receive government-assisted mortgages than their urban 
counterparts. According to the 1995 American Housing Survey, only 14.6 
percent of non-metro residents versus 24 percent of metro residents 
receive Federal assistance. Moreover, poor rural renters do not fair as 
well as poor urban renters in accessing existing programs. Only 17 
percent of very low-income rural renters receive housing subsidies, 
and, overall, only 12 percent of HUD Section 8 assistance goes to rural 
areas. Only 7 percent of Federal Housing Administration (FHA) 
assistance goes to non-metro areas. On a per-capita basis, rural 
counties fared worse with FHA, receiving only $25 per capita versus 
$264 per capita in metro areas. Programs such as HOME, CDBG and FHA may 
have the intention of serving rural areas, but fail to do so to the 
appropriate extent. One of the few programs at HUD targeted to rural 
areas is the Rural Housing and Economic Development (RHED) program. The 
budget proposes to eliminate the program.
    Mr. Chairman and members of the Committee, we look to you for 
continued support of the efforts of Rural Development. These programs 
are vital to the survival of our small communities nationwide. They 
address the most basic needs of affordable housing and clean water that 
still exist all over the country.
    We appreciate your past support and your attention to this matter.
                                 ______
                                 

      Prepared Statement of the National Rural Telecom Association

                     SUMMARY OF TESTIMONY REQUESTS

    Project involved: Telecommunications lending programs administered 
by the Rural Utilities Service of the U.S. Department of Agriculture
    Actions proposed:
  --Supporting loan levels for fiscal year 2005 in the amounts 
        requested in the President's budget for 5 percent direct, cost 
        of-money and guaranteed loans and the associated subsidy, if 
        required, to fund those programs at the requested levels. 
        Supporting Rural Telephone Bank loans in the same amount, as 
        contained in the fiscal year 2004 Agriculture Appropriations 
        Act. Opposing the budget recommendation to not fund new Rural 
        Telephone Bank loans in fiscal year 2005.
  --Supporting continued funding, as requested in the President's 
        budget, in the amount of $25 million in grant authority 
        designated for distance learning and medical link purposes.
  --Supporting the budget request for $331 million in direct loans for 
        broadband facilities and internet service access provided 
        through discretionary funding.
  --Supporting elimination of the restriction on retirement of Rural 
        Telephone Bank Class A stock, as requested in the President's 
        budget. Supporting an extension of the prohibition against the 
        transfer of Rural Telephone Bank excess funds to the general 
        fund as well as the requirement that Treasury pay interest on 
        all Bank funds deposited with it. Opposing the proposal 
        contained in the budget to transfer funds from the unobligated 
        balances of the liquidating account of the Rural Telephone Bank 
        for the bank's administrative expenses.
    Mr. Chairman, Members of the Committee: My name is John F. O'Neal. 
I am General Counsel of the National Rural Telecom Association. NRTA is 
comprised of commercial telephone companies that borrow their capital 
needs from the Rural Utilities Service of the U.S. Department of 
Agriculture (RUS) to furnish and improve telephone service in rural 
areas. Approximately 1000, or 71 percent of the nation's local 
telephone systems borrow from RUS. About three-fourths of these are 
commercial telephone companies. RUS borrowers serve almost 6 million 
subscribers in 46 states and employ over 22,000 people. In accepting 
loan funds, borrowers assume an obligation under the act to serve the 
widest practical number of rural users within their service area.
Program Background
    Rural telephone systems have an ongoing need for long-term, fixed 
rate capital at affordable interest rates. Since 1949, that capital has 
been provided through telecommunications lending programs administered 
by the Rural Utilities Service and its predecessor, the Rural 
Electrification Agency (REA).
    RUS loans are made exclusively for capital improvements and loan 
funds are segregated from borrower operating revenues. Loans are not 
made to fund operating revenues or profits of the borrower system. 
There is a proscription in the Act against loans duplicating existing 
facilities that provide adequate service and state authority to 
regulate telephone service is expressly preserved under the Rural 
Electrification Act.
    Rural telephone systems operate at a severe geographical handicap 
when compared with other telephone companies. While almost 6 million 
rural telephone subscribers receive telephone service from RUS borrower 
systems, they account for only four percent of total U.S. subscribers. 
On the other hand, borrower service territories total 37 percent of the 
land area--nearly 1.5 million square miles. RUS borrowers average about 
6 subscribers per mile of telephone line and have an average of more 
than 1,000 route miles of lines in their systems.
    Because of low-density and the inherent high cost of serving these 
areas, Congress made longterm, fixed rate loans available at reasonable 
rates of interest to assure that rural telephone subscribers, the 
ultimate beneficiaries of these programs, have comparable telephone 
service with their urban counterparts at affordable subscriber rates. 
This principle is especially valid today as the United States endeavors 
to deploy broadband technology and as customers and regulators 
constantly demand improved and enhanced services. At the same time, the 
underlying statutory authority governing the current program has 
undergone significant change. In 1993, telecommunications lending was 
refocused toward facilities modernization. Much of the subsidy cost has 
been eliminated from the program. In fact, most telecommunications 
lending programs now generate revenue for the government. The subsidy 
that remains has been targeted to the highest cost, lowest density 
systems in accordance with this administration's stated objectives.
    We are proud to state once again for the record that there has 
never been a default in the RUS/REA telephone program! All loans have 
been repaid in accordance with their terms, over $11 billion in 
principal and interest at the end of the last fiscal year.

Need for RUS Telecommunications Lending Continues
    The need for rural telecommunications lending is great today, 
possibly even greater than in the past. Technological advances make it 
imperative that rural telephone companies upgrade their systems to keep 
pace with improvements and provide the latest available technology to 
their subscribers. And 2 years ago, Congress established a national 
policy initiative mandating access to broadband for rural areas. But 
rapid technological changes and the inherently higher costs to serve 
rural areas have not abated, and targeted support remains essential.
    Competition among telephone systems and other technological 
platforms has increased pressures to shift more costs onto rural 
ratepayers. These shifts led to increases in both interstate subscriber 
line charges and universal service surcharges on end users to recover 
the costs of interstate providers' assessments to fund the Federal 
mechanisms. Pressures to recover more of the higher costs of rural 
service from rural customers to compete in urban markets will further 
burden rural consumers. There is a growing funding crisis for the 
statutory safeguards adopted in 1996 to ensure that rates, services and 
network development in rural America will be reasonably comparable to 
urban telecommunications opportunities.
    The FCC and the states have yet to honor the balance Congress 
achieved in the 1996 policy, as regulators (a) radically revise the 
mechanisms for preserving and advancing universal service, (b) 
interpret the Act's different urban and rural rules for how incumbent 
universal service providers and their competitors connect their 
networks and compensate each other (c) respond to pressures to 
deregulate. Regulators continue to give new entrants advantages at the 
expense of statutory universal service provisions. The FCC appears to 
remain committed to further extending its wholly inadequate way to 
measure the costs of modern, nationwide access to telecommunications 
and information. The FCC needs to reorder its priorities to ensure that 
rural Americans are not denied the ongoing network development and new 
services the Act requires.

Expanded Congressional Mandates for Rural Telecommunications
    Considerable loan demand is being generated because of additional 
mandates for enhanced rural telecommunications standards contained in 
the authorizing legislation. We are, therefore, recommending the 
following loan levels for fiscal year 2005 and the appropriation of the 
associated subsidy costs, if required, to support these levels:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
5 percent Direct Loans..................................    $145,000,000
Cost-of-Money Loans.....................................     250,000,000
Guaranteed Loans........................................     100,000,000
Rural Telephone Bank Loans..............................     175,000,000
                                                         ---------------
      Total.............................................     670,000,000
------------------------------------------------------------------------

    These are essentially the same levels established in the fiscal 
year 2004 appropriations act for the 5 percent direct, cost-of-money 
and Rural Telephone Bank loan programs and the same amounts for 5 
percent direct, cost-of-money and guaranteed loans as requested in the 
President's budget for fiscal year 2005. The authorized levels of loans 
in each of these programs were substantially obligated in fiscal year 
2003 and the administration estimates that authorized program levels 
will be fully met in fiscal year 2004. We believe that the needs of 
this program balanced with the minimal cost to the taxpayer make the 
case for its continuation at the stated levels.

Rural Telephone Bank Loans
    The administration again proposes to not fund new Rural Telephone 
Bank (RTB) loans in fiscal year 2005.
    The Rural Telephone Bank was established by Congress in 1971 to 
provide supplemental financing for rural telephone systems with the 
objective that the bank ultimately would be owned and operated by its 
private shareholders. Privatization of the RTB began in 1995 under the 
current law and the retirement of Class A government stock is 
proceeding annually at the rate of approximately $25 million per year. 
The Bank has now retired over 32 percent of the government's $592 
million investment, leaving a current balance of $400 million. As 
pointed out in our testimony in previous years, not funding new loans 
in the next fiscal year could actually impede privatization of the Bank 
since the law requires that the Bank annually retire government stock 
at the rate of at least 5 percent of the amount of Class B stock sold 
in connection with new loans. If no new loans were made, there would be 
no minimum requirement for retirement of additional government stock. 
We are supporting the administration request to eliminate the 5 percent 
annual restriction on the retirement of government stock giving it 
additional flexibility to accelerate privatization of the bank. No 
additional incentives are necessary. In the meantime, while the 
administration develops a comprehensive plan for bank privatization, we 
believe the direct loan program should continue, at existing levels, 
without disruption.
    The current loan level of $175 million has remained the same for 
many years. As a matter of fact, after factoring in the eroding effect 
of inflation, loan levels over the years have actually been reduced 
systematically. Despite this fact, we believe that the $175 million 
level is adequate to meet current program needs and strikes a cost 
effective balance for the taxpayer. If no bank loans were made in 
fiscal year 2005, the budgetary outlay savings would be minimal because 
RTB loans are funded over a multi-year period. Moreover, if 
administration interest rate predictions are accurate, RTB loans will 
generate revenue for the government because of the minimum statutory 
interest rate of 5 percent!

Broadband Loans Under the 2002 Farm Act (Public Law 101-171)
    The administration is recommending again this year that the 
mandatory funding of loans for the deployment of broadband technology 
in rural areas provided in the recent farm act in the amount of $20 
million (new section 601(j)(1)(A) of the Rural Electrification Act of 
1936) be rescinded in fiscal year 2005 and in its place the budget 
requests $9.9 million in new discretionary authority for these 
purposes. Given the fact that the program is operating in fiscal year 
2004 with carry over balances from mandatory authority of $38.8 million 
and discretionary authority of $13 million, providing $2.2 billion in 
loan levels in fiscal year 2004, we do not object to this reduction for 
next year. We are, therefore, supporting the administration's budget 
request of $9.9 million for this program that will provide 
approximately $331 million in loan levels for fiscal year 2005.

Specific Additional Requests
  --Eliminate the Restriction on Retirement of Class A Government Stock 
        in the Rural Telephone Bank (RTB) but Continue the Prohibition 
        Against Transfer of RTB Funds to the General Fund and Require 
        the Payment of Interest by Treasury
    The Administration has recommended in the budget that the 5 percent 
annual statutory restriction on the retirement of Class A government 
stock in the Rural Telephone Bank be eliminated. The association 
supports that proposal. However, we urge the Committee in the general 
provisions of the bill to continue the prohibition against the transfer 
of any unobligated balance in the bank's liquidating account, in excess 
of current requirements, to the general fund of the Treasury along with 
the requirement that the bank receive interest on those deposited 
funds. The private Class B and C stockholders of the Rural Telephone 
Bank have a vested ownership interest in all assets of the bank 
including its funds and Congress should assure that their rights are 
protected. Previous appropriations acts (fiscal years 1997 through 
2004) have recognized the ownership rights of the private Class B and C 
stockholders of the bank by prohibiting a similar transfer of the 
bank's excess unobligated balances which otherwise would have been 
required under the Federal credit reform act.
    The current statutory provision, also contained in previous years' 
appropriations acts, that requires Treasury to pay interest on bank 
funds deposited with it should be continued in fiscal year 2005 in the 
same general provision of the bill.
  --Reject Budget Proposal to Transfer Funds from RTB Liquidating 
        Account for Administrative Costs
    The President's budget proposes that the bank assume responsibility 
for its administrative costs by a transfer of funds from the 
unobligated balances of the bank's liquidating account rather than 
through an appropriation from the general fund of the Treasury. This 
recommendation is contrary to the specific language of Sec. 403(b) of 
the RTB enabling act and would require enactment of new authorizing 
legislation as a prerequisite to an appropriation. It would not result 
in budgetary savings and has been specifically rejected by this 
Committee in previous years. No new justification is contained in this 
year's budget and once again we request its rejection.
  --Loans and Grants for Telemedicine, Distance Learning and Internet 
        Access
    We support the continuation in fiscal year 2005 of the $25 million 
in grant authority provided in the President's budget for medical link 
and distance learning purposes. The purpose of these grants is to 
accelerate deployment of telemedicine and distance learning 
technologies in rural areas through the use of telecommunications, 
computer networks, and related advanced technologies by students, 
teachers, medical professionals, and rural residents.
Conclusion
    Thank you for the opportunity to present the association's views 
concerning this vital program. The telecommunications lending programs 
of RUS continue to work effectively and accomplish the objectives 
established by Congress at a minimal cost to the taxpayer.
                                 ______
                                 

   Prepared Statement of the National Telecommunications Cooperative 
                              Association

                                SUMMARY

    NTCA makes the following fiscal year 2005 funding recommendations 
with regard to the Rural Utilities Service Telecommunications Loan 
Program and related programs.
  --Support the provisions of the President's budget proposal calling 
        for the required subsidy to fully fund the RUS 
        Telecommunications Loan Program's Hardship Account at a $145 
        million level, Cost of Money Account at a $250 million level, 
        and the Guaranteed Account at a $120 million level.
  --Reject the provisions of the President's budget proposal calling 
        for zero funding for the Rural Telephone Bank (RTB). Instead, 
        provide the required subsidy to fully fund the bank at last 
        fiscal year's $175 million level.
  --Support an extension of language that temporarily sets aside the 7 
        percent interest rate cap on loans made through the RUS Cost of 
        Money fund.
  --Support an extension of the restriction against RTB Liquidating 
        Account funds from being transferred into the general Treasury.
  --Support an extension of language prohibiting the expenditure of RTB 
        Liquidating Account funds to provide for the subsidy or 
        operational expenses of the bank.
  --Reject the provisions of the President's budget proposal calling 
        for funding the Rural Broadband Access Loan and Loan Guarantee 
        Program to be funded through discretionary funding and instead 
        funded at a level consistent with authorizing language and 
        reject efforts to sweep carryover balances.
  --Support the provision of the President's budget funding Distance 
        Learning and Telemedicine Grants.
  --Preserve RBCS Rural Development Grant and Loan Programs as well as 
        the Rural Economic Development Loan and Grant Program.

                               BACKGROUND

    NTCA is a national association representing more than 560 small, 
rural, cooperative and commercial, community-based local exchange 
carriers (LECS) located throughout the Nation. These locally owned and 
operated LECS provide local exchange service to more than 2.5 million 
rural Americans. While serving close to 40 percent of the geographic 
United States, NTCA members serve only 4 percent of the country's 
access lines. Since the creation of the RUS Telecommunications Loan 
Program, more than 80 percent of NTCA's member systems have been able 
to utilize the Federal program to one degree or another.
    NTCA's members, like most of the country's independent LECS, 
evolved to serve high-cost rural areas of the Nation that were 
overlooked by the industry's giants as unprofitable. On average, NTCA 
members have approximately 6 subscribers per mile of infrastructure 
line, compared with 130 for the larger urban-oriented LECs. This 
results in an average plant investment per subscriber that is 38 
percent higher for NTCA members compared to most other systems.
    Congress recognized the unique financing dilemma confronting 
America's small rural LECS as early as 1949, when Congress amended the 
Rural Electrification Act (REA) to create the Rural Electrification 
Administration Telephone Loan Program. Today, this program is known as 
the RUS Telecommunications Loan Program. Through the years Congress has 
periodically amended the REA to ensure that original mission--to 
furnish and improve rural telephone service--was met. In 1971, the 
Rural Telephone Bank (RTB) was created to as a supplemental source of 
direct loan financing. In 1973, the RUS was provided with the ability 
to guarantee Federal Financing Bank (FFB) and private lender notes. In 
1993, Congress established a fourth lending program--the Treasury Cost 
of Money account. In 2002, Congress again met the changing demands of 
the telecommunications industry with the establishment of the Rural 
Broadband Access Loan and Loan Guarantee Program.

                 RUS HELPS MEET INFRASTRUCTURE DEMANDS

    While the RUS has helped the subscribers of NTCA's member systems 
receive service that is comparable or superior to that available 
anywhere in the Nation, their work is far from complete. As the 
Telecommunications Act of 1996 and other Federal policies continue to 
evolve, and as policymakers and the public alike continue to clamor for 
the deployment of advanced telecommunications services, the high costs 
associated with providing modern telecommunications services in rural 
areas will not diminish.
    RUS telecommunications lending has stimulated billions of dollars 
in private capital investment in rural communications infrastructure. 
In recent years, on average, less than a few million in Federal subsidy 
has effectively generated $690 million in Federal loans and guarantees. 
For every $1 Federal funds that was invested in rural communications 
infrastructure, $4.50 in private funds was invested.
    In addition, two other RUS-related programs are making a difference 
in rural America. Formerly known as the Zero Interest Loan and Grant 
Program, the Rural Economic Development Grants Programs, and the Rural 
Economic Development Loans Programs are now managed by the Rural 
Business Cooperative Service. The two programs provide funds for the 
purpose of promoting rural economic development and job creation 
projects, including for feasibility studies, start-up costs, incubator 
projects and other expenses tied to rural development.

         NTCA'S FISCAL YEAR 2005 APPROPRIATIONS RECOMMENDATIONS

Fully Fund The Entire RUS Telecommunications Loan Program
    It is imperative that the entire RUS Telecommunications Loan 
Program be funded at the following levels:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hardship Account........................................    $145,000,000
Cost of Money/Treasury Account..........................     250,000,000
Guaranteed Account......................................     120,000,000
Rural Telephone Bank Account............................     175,000,000
------------------------------------------------------------------------

    Included in the Farm Bill (Public Law 107-171) was authorization of 
the Rural Broadband Access Loan and Loan Guarantee program. Built upon 
a record of strong demand during its pilot status, congressional 
language was explicit in its intent to assist in broadband deployment 
in the smallest and most rural communities in the United States. In 
2003, USDA and RUS officials unveiled the regulations and were able 
make available $1.4 billion in loans (fiscal year 2002 and 2003 funds). 
An appropriate level of funding must be maintained in this program to 
meet the continually growing needs of advanced telecommunications 
services across the United States.
    Additionally, to support the operations of the RUS, it is critical 
that Congress provide at least $41.562 million in administrative 
appropriations the president's budget proposal envisions.

Reject the President's Proposal To Provide Zero RTB Funding
    The president's budget contains a proposal recommending the Rural 
Telephone Bank should not be funded in fiscal year 2005. In presenting 
last year's budget, the administration stated that the RTB had outgrown 
its need and usefulness. NTCA adamantly disagrees as the demand for 
advanced telecommunications services continues to grow and our members 
continue to meet this demand. To this end, we believe the president's 
decision to zero out funding for the RTB is without merit.
    NTCA remains committed to privatization and this transition to a 
private entity will require legislative changes to the Rural 
Electrification Act. NTCA believes this should occur with minimal 
disruptions to existing capital markets. In light of this fact, as well 
Congress' decision to reject the president's previous proposal to zero 
out RTB funding, we urge Congress to again reject this ill-conceived 
proposal and instead fully fund the bank at its regular $175 million 
annual level.

Extend Removal Of the Interest Rate Cap On Treasury-Rate Loans.
    NTCA is also requesting that Congress again include language 
removing the 7 percent interest rate cap on Treasury-rate loans. This 
provision has been included in recent appropriations measures to 
prevent the potential disruption of the program in the case where 
interest rates exceed 7 percent and insufficient subsidy cannot support 
authorized lending levels.

Prohibit The Transfer Of Unobligated RTB Liquidating Account Balances
    NTCA also recommends that Congress continue the prohibition against 
the transfer of any unobligated balances of the Rural Telephone Bank 
liquidating account to the general fund of the Treasury. This language 
has routinely been included in annual appropriations measures since the 
enactment of the Federal Credit Reform Act (FCRA, Public Law 101-508) 
that allows such transfers to potentially occur. Restatement of this 
language will ensure that the RTB's private class B & class C 
stockholders are not stripped of the value of their statutorily 
mandated investment in the Bank.
    While USDA has worked with the industry to ensure an RTB 
privatization that does not harm the rural telecommunications sector, 
NTCA remains concerned about the Office of Management and Budget and 
the Department of Treasury. The industry is well aware of the 
difficulties that have occurred as part of the joint USDA-OMB-Treasury 
Privatization Task Force. NTCA remains extremely skeptical of OMB and 
Treasury's good faith efforts and has worked very closely with the RTB 
Directors and the RUS Administrator through the privatization process. 
We believe that OMB and Treasury have yet to fully engage on the issue 
of privatization and work with USDA. For these reasons, we believe 
language extending the prohibition of more than 5 percent of Class A 
stock to be retired, must be included.

Prohibit RTB From Self Funding Subsidy and Administrative Costs
    NTCA urges Congress to maintain its prohibition against unobligated 
RTB Liquidating Account Balances being used to cover the bank's 
administrative and operational expenses for the following reasons: (1) 
such action would require amending the REA, (2) the proposal appears to 
be in conflict with the intent of the FCRA, (3) the proposal will not 
result in Federal budgetary savings, (4) it is unnecessary to the 
determination of whether the bank could operate independently, and thus 

would amount to wasting the resources of the bank which could be put to 
better use upon its complete privatization.
Reject the President's Proposal to fund the Rural Broadband Access Loan 
        and Loan Guarantee Program through discretionary funding and 
        reject efforts to sweep carryover balances
    Acting on the tremendous demand for advanced rural 
telecommunications, the Congress authorized the Rural Broadband program 
as part of the 2002 Farm Bill and provided for $100 million for the 
program until 2007. The mandate from Congress was to provide loans to 
the most underserved areas of rural America. Since enactment, RUS has 
received over $1 billion in loan applications and has struggled to 
approve loans and meet the demand. Accordingly, we believe the 
President's proposal to sweep carryover balances do not recognize the 
current demand for funding and is NTCA believes the President's budget 
request to cancel the $20 million in mandatory funding, and instead 
fund through discretionary spending, should be rejected and the Rural 
Broadband Access Loan and Loan Guarantee Program should be funded 
consistent with congressional authorization.
    NTCA's annual member survey shows our members are offering 
broadband (200 kbps) to 70 percent of their customer base, members have 
expressed interest in using the Broadband program to augment broadband 
availability to their ``last mile'' customers. While we are concerned 
about the number of loans approved by RUS, NTCA believes that calls for 
statutory or regulatory changes are extremely premature.

Support the President's request for Distance Learning and Telemedicine 
        grants
    The DLT grant program has had tremendous success in rural America 
and NTCA believes such grants add to NTCA members long standing efforts 
to their local communities. For NTCA's 50 years, our members have 
utilized the Rural Utilities Service to provide basic telephone 
service, advanced telecommunications services, and economic development 
to rural America. Our members have also been prudent stewards of the 
taxpayer funds and are extremely concerned about the loan defaults 
within the DLT Loan program. While extremely well-intended, the DLT 
Loan program has yet to live up to the high level of expectations 
envisioned by Congress. Consistently, DLT Loan levels falling 
significantly short of authorized loan levels. NTCA believes that 
overwhelmingly those entities interested in the DLT program, lack the 
legal authority to secure loans and are dependant upon grants. NTCA 
believes such taxpayer's funds could be better spent in rural America.

Preserve RBCS Rural Development Grant and Loan Programs as well as the 
        Rural Economic Development Loan and Grant Program
    These loans and grants, which are administered at the local level 
by rural telephone and electric systems, help fund economic and 
community development--business expansion and start-up, community 
facilities, schools and hospitals, emergency vehicles, etc.--in some of 
the most rural areas of the country. Our member companies have used a 
variety of these programs to further their economic commitment to the 
community and we are extremely supportive of these programs and 
Congress to ensure adequate funding is at levels that meets the 
expandingdemand for the programs.

                               CONCLUSION

    The RUS Telecommunications Loan Program bears a proud record of 
commitment, service and achievement to rural America. Never in its 
entire history has the program lost a dollar to abuse or default--
unparalleled feat for any government-sponsored lending program. Cleary 
such a successful program should remain in place to continue ensuring 
rural Americans have the opportunity to play a leading role in the 
information age in which we live. After all, an operational and 
advanced rural segment of the Nation's telecommunications 
infrastructure is critical to truly ensuring that the national 
objective of universal telecommunications service is fulfilled. We look 
forward to working with you to accomplish this objective.
                                 ______
                                 

      Prepared Statement of the National Treasury Employees Union

    Mr. Chairman, Senator Byrd, and Members of the Subcommittee, I am 
pleased to present the testimony of the National Treasury Employees 
Union (NTEU) concerning the fiscal year 2005 appropriation for the Food 
and Drug Administration (FDA).
    NTEU represents more than 150,000 Federal employees across the 
Federal Government, including the employees who work at the Food and 
Drug Administration. I want to thank you for giving me the opportunity 
to present testimony on behalf of these dedicated men and women who 
work to ensure the safety of our food, drugs, cosmetics, and medical 
devices. It has been the FDA employees, day in and day out, who have 
responded to the call of the American people to ensure that our food 
supply is safe and that more effective drugs and medical products are 
brought to consumers quickly. In fact, the FDA regulates more than $1 
trillion worth of products that account for about 25 cents out of every 
dollar of American consumer spending. The FDA is staffed with experts 
in an extraordinary range of fields. Microbiologists, chemists, 
consumer safety officers, and others are working around the clock 
testing, approving, and regulating new drugs, robotics, and other 
medical devices, that will not only improve the health conditions for 
millions of Americans, but in many cases actually save lives. They are 
working to ensure that the food we eat is safe and free of disease-
causing contaminants, and working to ensure that new food products, 
food additives, and dietary supplements pose no threat to our health.
    And the FDA employees who work in the field offices and 
laboratories located throughout the country have developed valuable 
working relationships with top scientists, health officials, and local 
industries. These employees help protect consumers from mislabeled 
foods, food borne diseases, defective medical devices, or unsafe 
cosmetics or drugs. And they work very closely with Customs, USDA, and 
others at our borders and ports, to inspect and test imported foods and 
drugs.
    FDA would be one of the last parts of government where one would 
want to hire employees on the cheap. When I talk with our NTEU members 
at FDA, I am amazed not only at the professionalism and extraordinary 
talent and quality of these employees, but their commitment to public 
service. Scientists, chemists, and professionals of every sort tell me 
that they prefer working in public service. However, they also tell me 
that if forced to choose between public service or, for example, being 
able to send their children to college, they would reluctantly feel 
forced to accept a position in the private sector in order to obtain 
such legitimate desires. I know this Subcommittee has the wisdom to see 
that FDA remain the employer of choice for dedicated, trustworthy 
professionals interested in working in public service.
    Employees at the FDA, both professionals and administrative staff, 
lag behind their private sector peers in compensation. In fiscal year 
2004, the Administration proposed a 2.0 percent pay raise for Federal 
employees on the GS scale. Congress rejected this miserly pay 
adjustment and legislated a 4.1 percent increase. It would have been 
wiser fof the Administration to have included the assumption of a fair 
pay raise in their fiscal year 2004 budgeting. However, better late 
than never, they have included funding in this year's FDA budget to 
fund the fiscal year 2004 4.1 percent pay raise. Yet, once again, the 
FDA budget submitted to Congress assumes only a 1.5 percent pay 
adjustment for fiscal year 2005. NTEU has called upon Congress to 
provide Federal employees with a 3.5 percent pay raise, reflecting the 
historic parity between civilian and military pay. We will be working 
for this parity in Congress and believe that the FDA budget should 
reflect this more appropriate amount.
    The Administration's Budget proposal also provides funding for 
relocation costs to the White Oak facility. During fiscal year 2005, 
1,700 drug review personnel will be relocated to the White Oak 
facility. The Administration has asked for $20.6 in new budget 
authority and $10 million in PDUFA user fees for relocation expenses. 
NTEU strongly supports this request. Consolidation of the various FDA 
facilities in the Washington metropolitan area is sensible and will add 
obvious improvements to FDA operations. However, NTEU opposes any plans 
to consolidate certain out of region field laboratories, particularly 
the St. Louis laboratory, with the White Oak facility. As the President 
of NTEU, I can tell you that these highly skilled employees will not 
relocate to White Oak. The result of such out of region consolidation 
will be the loss of these prized professionals. This is not in the 
public interest. In past years, the Congress has included a provision 
directing FDA management not to to close these field laboratories. NTEU 
would ask that Congress again do so this year.
    I want to mention, Mr. Chairman, that while on the above matter we 
have a disagreement with management at FDA, on a host of other issues, 
labor and management at FDA have been successful in working together to 
find win-win solutions and to jointly address very real problems FDA 
faces. NTEU and FDA management have negotiated a number of innovative 
and cutting edge initiatives to make sure the agency has the best and 
brightest employees available. It would be a shame if after such 
collaboration, these initiatives suffered from inadequate funding. NTEU 
and FDA have negotiated a Student Loan Repayment Program. This has been 
designed to aid FDA's recruitment and retention. Permanent and term 
employees with at least 3 years remaining on their appointment are 
eligible. Employees must remain at FDA for 3 years to receive this 
benefit. It allows FDA to repay part or all of a federally insured 
student loan.
    NTEU has also negotiated with FDA management a program of Quality 
Step Increases (QSIs) which provide incentives and recognition for 
excellence and has reformed several other awards and special pay 
provisions so to better achieve agency goals and retain quality 
employees. All of these initiatives need sufficient and improved 
funding.
    Thank you for giving NTEU the opportunity to share our views on the 
FDA budget for fiscal year 2005. We thank this subcommittee for its 
support of FDA programs in the past, and we urge you to work with the 
Administration to provide FDA with the staffing and resources necessary 
to protect and improve the health of the American public.
                                 ______
                                 
    Prepared Statement of the National Turfgrass Evaluation Program

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
National Turfgrass Evaluation Program (NTEP), I appreciate the 
opportunity to provide the Subcommittee with the turfgrass industry's 
perspective in support of the continuation of the $55,000 appropriation 
for the National Turfgrass Evaluation Program (NTEP), included in ARS's 
baseline within the President's fiscal year 2005 budget request for the 
Agricultural Research Service (ARS). Also, I appreciate the opportunity 
to present to you the turfgrass industry's need and justification for 
continuation of the $490,000 appropriated in the fiscal year 2004 
budget for the full-time turfgrass scientist position within ARS. In 
addition, I appreciate the consideration of an additional appropriation 
of $5,400,000 for the first installment on the $32.4 million National 
Turfgrass Research Initiative developed by ARS and the turfgrass 
industry with twelve new research scientist positions at ARS stations 
across the country.

Justification of $55,000 Appropriation Request for Program Support
    Once again, NTEP and the turfgrass industry come to the 
appropriations process to request continuation of the $55,000 basic 
program support in the ARS budget for NTEP's activities at Beltsville. 
We appreciate the Subcommittee's continuation of this amount as in 
previous fiscal years, and hope that you will agree with us that this 
request is justified for the ensuing fiscal year.
    The National Turfgrass Evaluation Program (NTEP) is unique in that 
it provides a working partnership that links the Federal Government, 
turfgrass industry and land grant universities together in their common 
interest of turfgrass cultivar development, improvement and evaluation. 
NTEP provides unbiased information on turfgrass cultivar adaptations, 
disease and insect resistance and environmental stress tolerance to 
home owners, sod producers, sports turf and parks managers, golf course 
superintendents and highway vegetation managers.
    Turfgrass provides multiple benefits to society including child 
safety on athletic fields, environmental protection of groundwater, 
reduction of silt and other contaminants in runoff, and green space in 
home lawns, parks and golf courses. Therefore, by cooperating with 
NTEP, USDA has a unique opportunity to take positive action in support 
of the turfgrass industry. While the vast majority of the USDA's funds 
have been and will continue to be directed toward traditional ``food 
and fiber'' segments of U.S. agriculture, it is important to note that 
turfgrasses (e.g., sod production) are defined as agriculture in the 
Farm Bill and by many other departments and agencies. It should also be 
noted that the turfgrass industry is the fastest growing segment of 
U.S. agriculture, while it receives essentially no Federal support. 
There are no subsidy programs for turfgrass, nor are any desired.
    For the past 75 years, the USDA's support for the turfgrass 
industry has been modest at best. The turfgrass industry's rapid 
growth, importance to our urban environments, and impact on our daily 
lives warrant more commitment and support from USDA. USDA's support of 
NTEP at the $55,000 level does not cover all costs. In fact, NTEP 
represents an ideal partnership of the public and private sectors in 
terms of program cost sharing. Therefore, it is essential that the USDA 
maintain its modest financial support of NTEP.

Justification of $490,000 Appropriation Request for the existing ARS 
        Scientist Position and related support activities
    NTEP and the turfgrass industry are requesting the Subcommittee's 
support for $490,000 to continue funding for the full-time scientist 
staff position at ARS, focusing on turfgrass research, that was 
appropriated in the fiscal year 2004 budget, and in the two previous 
budget cycles.
    A new turfgrass research scientist position within USDA/ARS was 
created by Congress in the fiscal year 2001 budget. Additional funding 
was added in fiscal year 2002 with the total at $490,000. A research 
scientist was hired, and is now working at the ARS, Beltsville, MD 
center. A research plan was developed and approved by ARS. This 
scientist has used the funding for a full-time technician, equipment 
and supplies to initiate the research plan and for collaborative 
research with universities. We have an excellent scientist in place and 
he is making good progress in establishing a solid program. At this 
point, losing the funding for the position would be devastating to the 
turf industry as significant research has begun.

Justification of $5,400,000 Appropriation Request for the first 
        installment on the National Turfgrass Research Initiative: 12 
        ARS scientist positions at ARS installations around the United 
        States
    The turfgrass industry also requests that the Subcommittee 
appropriate an additional $5,400,000 for the first installment on the 
$32.4 million National Turfgrass Research Initiative. This Initiative 
has been developed by USDA/ARS in partnership with the turfgrass 
industry. We are asking for twelve priority research positions at nine 
locations across the United States. These twelve positions address the 
most pressing research needs, namely water use/efficiency and 
environmental issues.
    The USDA needs to initiate and maintain ongoing research on 
turfgrass development and improvement for the following reasons:
  --The value of the turfgrass industry in the United States is $40 
        billion annually. There are an estimated 50,000,000 acres of 
        turfgrass in the U.S. Turfgrass is the number one or two 
        agricultural crop in value and acreage in many states (e.g., 
        MD, PA, FL, NJ, NC).
  --As our society becomes and more urbanized, the acreage of turfgrass 
        will increase significantly. In addition, state and local 
        municipalities are requiring the reduction of water, pesticides 
        and fertilizers on turfgrass. However, demand on recreational 
        facilities will increase while these facilities will still be 
        required to provide safe turfgrass surfaces.
  --Currently, the industry spends about $10 million annually on 
        turfgrass research. However, private and university research 
        programs do not have the time nor resources to identify 
        completely new sources of beneficial genes for stress 
        tolerance. ARS turfgrass scientists will enhance the ongoing 
        research currently underway in the public and private sectors.
  --Water management is a key component of healthy turf and has direct 
        impact on nutrient and pesticide losses into the environment. 
        Increasing demands and competition for potable water make it 
        necessary to use water more efficiently. Also, drought 
        situations in many regions have limited the water available and 
        therefore, have severely impacted the turf industry as well as 
        homeowners and young athletes. Therefore, new and improved 
        technologies are needed to monitor turf stresses and to 
        schedule irrigation to achieve the desired quality. 
        Technologies are also needed to more efficiently and uniformly 
        irrigate turfgrasses. Drought tolerant grasses need to be 
        developed. In addition, to increase water available for 
        irrigation, waste water (treated and untreated) must be 
        utilized. Some of these waste waters contain contaminants such 
        as pathogens, heavy metals, and organic compounds. The movement 
        and accumulation of these contaminants in the environment must 
        be determined.
  --USDA conducted significant turfgrass research from 1920-1988. 
        However, since 1988, no full-time scientist has been employed 
        by USDA, Agricultural Research Service (ARS) to conduct 
        turfgrass research specifically.
    The turfgrass industry has met on several occasions with USDA/ARS 
officials to discuss the new turfgrass scientist position, necessary 
facilities, and future research opportunities. In January 2002, ARS 
held a customer workshop to gain valuable input from turfgrass 
researchers, golf course superintendents, sod producers, lawn care 
operators, athletic field managers and others on the research needs of 
the turfgrass industry. As a result of the workshop, ARS and the 
turfgrass industry have developed, the National Turfgrass Research 
Initiative. The highlights of this strategy are below:

              NATIONAL STRATEGY FOR ARS TURFGRASS RESEARCH

    Research Objectives.--Conduct long-term basic and applied research 
to provide knowledge, decision-support tools and plant materials to aid 
in designing, implementing, monitoring and managing economically and 
environmentally sustainable turfgrass systems including providing sound 
scientifically based information for use in the regulatory process.
    Research Focus.--To make a significant contribution in developing 
and evaluating sustainable turfgrass systems, ARS proposes developing 
research programs in six major areas:

Component I. Water Management Strategies and Practices
    Rationale.--New and improved technologies are needed to monitor 
turf stresses and to schedule irrigation to achieve desired turf 
quality but with greater efficiency or using other water sources.

Component II. Germplasm: Collection, Enhancement and Preservation
    Rationale.--Grasses that better resist diseases, insects, drought, 
traffic, etc. are desperately needed. Also, a better understanding of 
the basic biology of turfgrass species is essential.

Component III. Improvement of Pest Management Practices
    Rationale.--New tools and management practices are needed to 
adequately control weeds, diseases, insects and vertebrate pests while 
reducing input costs and pesticide use.

Component IV. The Environment: Understanding and Improvement of 
        Turfgrass' Role
    Rationale.--The need is great to quantify the contribution of turf 
systems to water quality and quantify of vital importance in addressing 
the potential role of turf systems in environmental issues.

Component V. Enhancement of Soil and Soil Management Practices
    Rationale.--Research is needed to characterize limitations to turf 
growth and development in lessthan optimum soils and to develop cost-
effective management practices to overcome these limitations.

Component VI. Integrated Turf Management
    Rationale.--To develop needed tools for turf managers to select the 
best management practices for economic sustainability as well as 
environmental protection.

    ARS, as the lead agency at USDA for this initiative, has graciously 
devoted a significant amount of time to the effort. Like the industry, 
ARS is in this research endeavor for the long-term. To ARS's credit, 
the agency has committed staff, planning and technical resources to 
this effort. However, despite ARS's effort to include a budget request 
in the overall USDA budget request, USDA--at higher levels--has not 
seen fit to include this research as a priority. Thus, the industry is 
left with no alternative but to come directly to Congress for 
assistance through the appropriations process.
    The role and leadership of the Federal Government and USDA in this 
research are justifiable and grounded in solid public policy rationale. 
ARS is poised and prepared to work with the turfgrass industry in this 
major research initiative. However, ARS needs additional resources to 
undertake this mission.
    The turfgrass industry is very excited about this new proposal and 
wholeheartedly supports the efforts of ARS. Since the customers at the 
workshop identified turfgrass genetics/germplasm and water quality/use 
as their top priority areas for ARS research, for fiscal year 2005, the 
turfgrass industry requests that the following positions be established 
within USDA/ARS:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Position 1: Component I: Water: Agricultural Engineer--         $450,000
 Irrigation Southwest--Phoenix, AZ......................
Position 2: Component II: Germplasm: Molecular Biologist         450,000
 Southwest--Lubbock, TX.................................
Position 3: Component IV: Environment: Agricultural              450,000
 Engineer--Fate & Transport Southwest--Phoenix, AZ......
Position 4: Component I: Water: Stress Physiologist--            450,000
 Salinity Southwest--Riverside, CA......................
Position 5: Component II: Germplasm: Geneticist--Stress          450,000
 Transition Zone--Beltsville, MD........................
Position 6: Component I: Water: Agricultural Engineer--          450,000
 Irrigation Transition Zone--Florence, SC...............
Position 7. Component IV: Environment: Agricultural              450,000
 Engineer--Fate & Transport Northeast--University Park,
 PA.....................................................
Position 8: Component III: Pest Management: Weed                 450,000
 Scientist Northeast--University Park, PA...............
Position 9: Component IV: Environment: Agricultural              450,000
 Engineer--Fate & Transport North Central--Ames,  IA....
Position 10: Component III: Pest Management: Pathologist         450,000
 Transition Zone--Beltsville, MD........................
Position 11: Component II: Germplasm: Geneticist--               450,000
 Biodiversity Upper West--Logan, UT.....................
Position 12: Component III: Pest Management:                     450,000
 Entomologist North Central--Wooster, OH................
                                                         ---------------
      TOTAL.............................................       5,400,000
------------------------------------------------------------------------

    For this research we propose an ARS-University partnership, with 
funding allocated to ARS for in-house research as well as in 
cooperation with university partners. We are asking for $300,000 for 
each ARS scientist position with an additional $150,000 attached to 
each position to be distributed to university partners. We are also 
asking that the funding be given to ARS and then distributed by ARS to 
those university partners selected by ARS and industry representatives.

                        [In millions of dollars]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FUNDING BREAKDOWN:
    ARS Scientist Positions ($300,000 ea.  12).       3,600,000
    University Cooperative Research Agreements ($150,000       1,800,000
     ea.  12) (administered by ARS)............
                                                         ---------------
      TOTAL REQUEST.....................................       5,400,000
------------------------------------------------------------------------

    In conclusion, on behalf of the National Turfgrass Evaluation 
Program and the turfgrass industry across America, I respectfully 
request that the Subcommittee continue the vital $55,000 appropriation 
for the National Turfgrass Evaluation Program (NTEP) as well as the 
$490,000 appropriated in fiscal year 2004 for the new turfgrass 
scientist position within the Agricultural Research Service. I also 
request that the Subcommittee appropriate an additional $5,400,000 for 
twelve new turfgrass scientist positions within ARS.
    Thank you very much for your assistance and support.
                                 ______
                                 

   Prepared Statement of the New Mexico Interstate Stream Commission

                                SUMMARY

    This Statement is submitted in support of appropriations for the 
Department of Agriculture's Colorado River Basin salinity control 
program. Until last year, the salinity control program had not been 
funded in recent years at the level necessary to control salinity with 
respect to water quality standards. Also, inadequate funding of the 
salinity control program negatively impacts the quality of water 
delivered to Mexico pursuant to Minute 242 of the International 
Boundary and Water Commission. Adequate funding for the Environmental 
Quality Incentives Program (EQIP), from which the Department of 
Agriculture funds the salinity program, is needed to implement salinity 
control measures. The Farm Security and Rural Investment Act (FSRIA) of 
2002 authorized a funding level of at least $1 billion for EQIP in 
fiscal year 2005. I urge the Subcommittee to support funding from 
Commodity Credit Corporation (CCC) of $1 billion to be appropriated for 
EQIP. I request that the Subcommittee designate 2.5 percent of the EQIP 
appropriation, but at least $17.5 million, for the Colorado River Basin 
salinity control program. I request that adequate funds be appropriated 
for technical assistance and education activities directed to salinity 
control program participants.

                               STATEMENT

    The seven Colorado River Basin states, in response to the salinity 
issues addressed by Clean Water Act of 1972, formed the Colorado River 
Basin Salinity Control Forum (Forum). Comprised of gubernatorial 
appointees from the seven Basin states, the Forum was created to 
provide for interstate cooperation in response to the Clean Water Act, 
and to provide the states with information to comply with Sections 303 
(a) and (b) of the Act. The Forum has become the primary means for the 
seven Basin states to coordinate with Federal agencies and Congress to 
support the implementation of the salinity control program.
    The Colorado River Basin salinity control program was authorized by 
Congress in the Colorado River Basin Salinity Control Act of 1974. 
Congress amended the Act in 1984 to give new responsibilities to the 
Department of Agriculture. While retaining the Department of the 
Interior as the lead coordinator for the salinity control program, the 
amended Act recognized the importance of the Department of Agriculture 
operating under its authorities to meet the objectives of the salinity 
control program. Many of the most cost-effective projects undertaken by 
the salinity control program to date have occurred since implementation 
of the Department of Agriculture's authorization for the program.
    Bureau of Reclamation studies show that damages from the Colorado 
River to United States water users are about $300,000,000 per year. 
Damages are estimated at $75,000,000 per year for every additional 
increase of 30 milligrams per liter in salinity of the Colorado River. 
It is essential to the cost-effectiveness of the salinity control 
program that Department of Agriculture salinity control projects be 
funded for timely implementation to protect the quality of Colorado 
River Basin water delivered to the Lower Basin States and Mexico.
    Congress concluded, with the enactment of the Federal Agriculture 
Improvement and Reform Act of 1996 (FAIRA), that the salinity control 
program could be most effectively implemented as a component of the 
Environmental Quality Incentives Program (EQIP). The salinity control 
program, since the enactment of FAIRA, has not been funded at an 
adequate level to protect the Basin State-adopted and Environmental 
Protection Agency approved water quality standards for salinity in the 
Colorado River until fiscal year 2004. Appropriations for EQIP have 
been insufficient to adequately control salt loading impacts on water 
delivered to the downstream states, and to Mexico pursuant to Minute 
No. 242 of the International Boundary and Water Commission, United 
States and Mexico.
    EQIP subsumed the salinity control program without giving adequate 
recognition to the responsibilities of the Department of Agriculture to 
implement salinity control measures per Section 202(c) of the Colorado 
River Basin Salinity Control Act. The EQIP evaluation and project 
ranking criteria target small watershed improvements that do not 
recognize that water users hundreds of miles downstream are significant 
beneficiaries of the salinity control program. Proposals for EQIP 
funding are ranked in the states of Utah, Wyoming and Colorado under 
the direction of the respective State Conservationists without 
consideration of those downstream, particularly out-of-state, benefits.
    Following recommendations of the Basin States, the Department of 
Agriculture's Natural Resources Conservation Service (NRCS) designated 
the Colorado River Basin an ``area of special interest'' including 
earmarked funds for the salinity control program. The NRCS concluded 
that the salinity control program is different from the small watershed 
approach of the EQIP program. The watershed for the salinity control 
program stretches almost 1,200 miles, from the headwaters of the river 
through the salt-laden soils of the Upper Basin to the river's 
termination at the Gulf of California in Mexico. NRCS is to be 
commended for its efforts to comply with the Department of 
Agriculture's responsibilities under the Colorado River Basin Salinity 
Control Act of 1974. Irrigated agriculture in the Upper Basin realizes 
significant local benefits of the salinity control program and 
agricultural producers have succeeded in submitting cost-effective 
proposals to NRCS.
    However, the Basin States, including New Mexico, were very dismayed 
that funding for EQIP has been inadequate since the enactment of FAIRA 
in 1996. Several years of inadequate Federal funding for the Department 
of Agriculture resulted in the Forum finding that the salinity control 
program needs acceleration to maintain the water quality criteria of 
the Colorado River water quality standards for salinity. Since the 
enactment of FSRIA in 2002, an opportunity to adequately fund the 
salinity control program exists for the first time since the enactment 
of FAIRA.
    State and local cost sharing is triggered by and indexed to the 
Federal appropriation. The requested funding of at least $17.5 million 
for fiscal year 2005 will continue to be needed each year for at least 
the next few fiscal years.
    The Department of Agriculture projects have proven to be the most 
cost-effective component of the salinity control program. The 
Department of Agriculture has indicated that a more adequately funded 
EQIP program would result in more funds being allocated to the salinity 
program. The Basin States have cost sharing dollars available to 
participate in on-farm salinity control efforts. The agricultural 
producers in the Upper Basin are willing to cost-share their portion 
and waiting for adequate funding for their applications to be 
considered.
    I urge the Congress to appropriate at least $1 billion from the CCC 
in fiscal year 2005 for EQIP. Also, I request that Congress designate 
2.5 percent of the EQIP appropriation, but at least $17.5 million, for 
the Colorado River Basin salinity control program.
    Finally, I request that adequate funds be appropriated to NRCS 
technical assistance and education activities for the salinity control 
program participants, rather than requiring the NRCS to borrow funds 
from CCC for these direly needed and under funded support functions. 
Recent history has shown that inadequate funding for NRCS technical 
assistance and education activities has been a severe impediment to 
successful implementation of the salinity control program. The Basin 
States parallel funding program, implemented as a means of cost sharing 
with NRCS, expends 40 percent of the states' funds available to meet 
the needs of NRCS for technical assistance and education activities. I 
urge the appropriation of adequate funds for these essential 
activities.
                                 ______
                                 

               Prepared Statement of the Nez Perce Tribe

    The Nez Perce Tribe requests the following funding amounts for 
fiscal year 2005, which are specific to the Nez Perce Tribe:
  --$253,000 through the United States Department of the Agriculture, 
        Animal Plant, Health Inspection Service, Plant Protection and 
        Quarantine Program to support its efforts to combat noxious 
        weed infestations using biological control technologies. 
        Biological control of weeds utilizes the weeds' natural enemies 
        to reduce the target weeds' ability to compete with desired 
        vegetation. Use of biological control of weeds in the western 
        United States has been employed since the 1940s to reduce weed 
        densities on range and wildlands where cultural and chemical 
        control methods are not economically practical or feasible. 
        Although biological control has been utilized for many years, 
        there are limited agents available for widespread distribution. 
        As a result, the transfer of biological control technology to 
        the users has been slow.
    Through this appropriation, the Nez Perce Bio-Control Center will 
continue to manage and establish nurseries to increase biological 
control organisms, mainly insects, for distribution throughout the 
Pacific Northwest. In addition, this funding will assist in identifying 
weed infestations, monitor the impacts of biocontrol, and provide 
annual technology transfer workshops to our partners in Federal and 
State agencies and other private landowners/managers regionally. The 
program will continue ongoing research efforts developed through 
collaborative partnerships with USDA staffs, local universities and 
regional experts.
    The Nez Perce Tribe's strong cultural tie to natural resources 
creates a good foundation from which to build such a program. 
Biological control offers long-term management of invasive weeds that 
cannot be controlled by other means. As biological control organisms 
reduce the weeds' competitive edge over desirable and native 
vegetation, both Tribal and non-tribal users of the region's wild land 
resources will benefit. The problems created by noxious weeds cannot be 
fixed quickly. The Nez Perce Tribe is viewing solutions to this problem 
from a long-term perspective and are asking for a similar commitment 
from Congress and the Department of Agriculture.
                                 ______
                                 

    Prepared Statement of the Northwest Indian Fisheries Commission

    Mr. Chairman and Members of the Committee, I am Billy Frank, Jr., 
Chairman of the Northwest Indian Fisheries Commission (NWIFC), and on 
behalf of the twenty-Western Washington member Tribes, I submit this 
request for appropriations to support the research, sanitation and 
marketing of Tribal shellfish products. We request the following:
  --$500,000 to support seafood marketing costs which will assist the 
        Tribes in fulfilling the commercial demands for their shellfish 
        products both domestically and abroad;
  --$1,000,000 to support water and pollution sampling, sampling and 
        research for paralytic shellfish poisoning and coordination of 
        research projects with State agencies; and,
  --$1,000,000 to support data gathering at the reservation level for 
        the conduct of shellfish population surveys and estimates.
Treaty Shellfish Rights
    As with salmon, the Tribes' guarantees to harvest shellfish lie 
within a series of treaties signed with representatives of the Federal 
Government in the mid-1850s. In exchange for the peaceful settlement of 
what is today most of Western Washington, the Tribes reserved the right 
to continue to harvest finfish and shellfish at their usual and 
accustomed grounds and stations. The Tribes were specifically excluded 
from harvesting shellfish from areas ``staked or cultivated'' by non-
Indian citizens. Soon after they were signed, the treaties were 
forgotten or ignored.
    The declining salmon resource in the Pacific Northwest negates the 
legacy Indian people in Western Washington have lived by for thousands 
of years. We were taught to care for the land and take from it only 
what we needed and to use all that we took.
    We depended on the gifts of nature for food, trade, culture and 
survival. We knew when the tide was out, it was time to set the table 
because we live in the land of plenty; a paradise complete. Yet, 
because of the loss of salmon habitat, which is attributable to 
overwhelming growth in the human population, a major pacific coastal 
salmon recovery effort ensues. Our shellfish resource is our major 
remaining fishery.
    At least ninety types of shellfish have been traditionally 
harvested by the Tribes in Western Washington and across the continent 
Indian people have called us the fishing Tribes because of our rich 
history of harvesting and caring for finfish and shellfish. Our 
shellfish was abundant and constituted a principal resource of export, 
as well as provided food to the Indians and the settlers, which greatly 
reduced the living expenses.
    Shellfish remain important for subsistence, economic, and 
ceremonial purposes. With the rapid decline of many salmon stocks, due 
to habitat loss from western Washington's unrelenting populous growth, 
shellfish harvesting has become a major factor in Tribal economies.
    The Tribes have used shellfish in trade with the non-Indian 
population since the first white settlers came into the region a 
century and a half ago. Newspaper accounts from the earliest days of 
the Washington Territory tell of Indians selling or trading fresh 
shellfish with settlers. Shellfish harvested by members of western 
Washington's Indian Tribes is highly sought after throughout the United 
States and the Far East. Tribal representatives have gone on trade 
missions to China and other Pacific Rim nations where Pacific Northwest 
shellfish--particularly geoduck--is in great demand. Trade with the Far 
East is growing in importance as the Tribes struggle to achieve 
financial security through a natural resources-based economy.
    Treaty language pertaining to Tribal shellfish harvesting included 
this section:

    ``The right of taking fish at usual and accustomed grounds and 
stations is further secured to said Indians, in common with all 
citizens of the United States; and of erecting temporary houses for the 
purposes of curing; together with the privilege of hunting and 
gathering roots and berries on open and unclaimed lands. Provided, 
however, that they not take shell-fish from any beds staked or 
cultivated by citizens.''

Treaty with the S'Klallam, January 26, 1855
    In exchange for the peaceful settlement of what is today most of 
western Washington, the Tribes reserved the right to continue to 
harvest finfish and shellfish at all of their usual and accustomed 
grounds and stations. The Tribes were specifically excluded from 
harvesting shellfish from areas ``staked or cultivated'' by non-Indian 
citizens.
    Tribal efforts to have the Federal Government's treaty promises 
kept began in the first years of the 20th Century when the United 
States Supreme Court ruled in United States v. Winans, reaffirming that 
where a treaty reserves the right to fish at all usual and accustomed 
places, a state may not preclude Tribal access to those places.
    Sixty years later, the Tribes were again preparing for battle in 
court. After many years of harassment, beatings and arrests for 
exercising their treaty-reserved rights, western Washington Tribes took 
the State of Washington to Federal court to have their rights legally 
re-affirmed. In 1974, U.S. District Court Judge George Boldt ruled that 
the Tribes had reserved the right to half of the harvestable salmon and 
steelhead in western Washington.
    The ``Boldt Decision,'' which was upheld by the U.S. Supreme Court, 
also re-established the Tribes as co-managers of the salmon and 
steelhead resources in western Washington. As a result of this ruling, 
the Tribes became responsible for establishing fishing seasons, setting 
harvest limits, and enforcing Tribal fishing regulations. Professional 
biological staffs, enforcement officers, and managerial staff were 
assembled to ensure orderly, biologically-sound fisheries.
    Beginning in the late 1970s, Tribal and state staff worked together 
to develop comprehensive fisheries that ensured harvest opportunities 
for Indians and non-Indians alike, and also preserved the resource for 
generations to come.
    It was within this new atmosphere of cooperative management that 
the Tribes sought to restore their treaty-reserved rights to manage and 
harvest shellfish from all usual and accustomed areas. Talks with their 
state counterparts began in the mid-1980s, but were unsuccessful. The 
Tribes filed suit in Federal court in May 1989 to have their shellfish 
harvest rights restored.
    The filing of the lawsuit brought about years of additional 
negotiations between the Tribes and the state. Despite many serious 
attempts at reaching a negotiated settlement, the issue went to trial 
in May 1994.
    In 1994, District Court Judge Edward Rafeedie upheld the right of 
the treaty Tribes to harvest 50 percent of all shellfish species in 
their usual and accustomed fishing areas. Judge Rafeedie also ordered a 
shellfish Management Implementation Plan that governs Tribal/state co-
management activities. After a number of appeals, the U.S. 9th Circuit 
Court of Appeals let stand Rafeedie's ruling in 1998. Finally, in June 
1999, the U.S. Supreme Court denied review of the District court 
ruling, effectively confirming the treaty shellfish harvest right.

Assist the Tribes in Marketing Efforts to Fulfill the Demands for their 
        Shellfish Products, $500,000
    Shellfish harvested by members of Western Washington Indian Tribes 
are of extreme quality and are highly sought after throughout the 
United States, Europe and the Far East. Unfortunately, because Tribes 
are not centrally organized and it is the individual Tribal fisher who 
harvests the resource, such markets have never fully materialized.
    We request $500,000, which will assist the Tribes in promoting our 
shellfish products, both in domestic and international markets. Tribes 
anticipate the need to provide necessary health training to harvesters, 
possibly develop cooperative seafood ventures, develop marketing 
materials and engage in actual marketing operations. Specific earmarked 
funding from the Committee can jump start Tribal efforts in these 
areas. We also anticipate participating in intertribal consortiums that 
generally promote Tribal products, and urge the Committee to support 
necessary funding for those efforts. Funding from the Committee will 
allow the Tribes to realize the fair value for their product, help 
employ more Tribal members, and allow the Tribes to fulfill their 
treaty rights.

Water and Pollution Sampling, Sampling and Research for Paralytic 
        Shellfish Poisoning and Coordination of Research Projects with 
        State and Federal Agencies, $1,000,000
    Shellfish growing areas are routinely surveyed for current or 
potential pollution impacts and are classified based on the results of 
frequent survey information. No shellfish harvest is conducted on 
beaches that have not been certified by the Tribes and the Washington 
Department of Health. Growing areas are regularly monitored for water 
quality status and naturally-occurring biotoxins to protect the public 
health.
    However, both Tribal and non-Indian fisheries have been threatened 
due to the lack of understanding about the nature of biotoxins, 
especially in subtidal geoduck clams. Research targeted to better 
understand the nature of biotoxins could prevent unnecessary illness 
and death that may result from consuming toxic shellfish, and could 
prevent unnecessary closure of Tribal and non-Indian fisheries.

Data Gathering at the Reservation Level for the Conduct of Shellfish 
        Population Surveys and Estimates, $1,000,000
    Very little current data and technical information exists for many 
of the shellfish fisheries now being jointly managed by state and 
Tribal managers. This is particularly true for many free-swimming and 
deep-water species. This lack of information can not only impact 
fisheries and the resource as a whole, but makes it difficult to assess 
50/50 treaty sharing arrangements. Additionally, intertidal assessment 
methodologies differ between state and Tribal programs, and can lead to 
conflicts in management planning.
    Existing data systems must be enhanced for catch reporting, 
population assessment and to assist enhancement efforts. Research on 
methodology for population assessment and techniques also is critical 
to effective management.
    Onsite beach surveys are required to identify harvestable 
populations of shellfish. Regular monitoring of beaches is also 
necessary to ensure that the beaches remain safe for harvest. 
Additional and more accurate population survey and health certification 
data is needed to maintain these fisheries and open new harvest areas. 
This information will help protect current and future resources and 
provide additional harvest opportunities.

Conclusion
    We ask that you give serious consideration to our needs. We are 
available to discuss these requests with committee members or staff at 
your convenience. Thank you.
                                 ______
                                 

                   Letter From the Oceanic Institute

                         Waimanalo, Hawaii, March 24, 2004.
Hon. Robert Bennett,
Chairman, Subcommittee on Agriculture, Committee on Appropriations, 
        U.S. Senate, Washington, DC.
    Dear Mr. Chairman: We would like to bring to your attention the 
success of the U.S. Marine Shrimp Farming Consortium and the value to 
the nation in increasing the current funding level from $3.746 million 
to $6 million.
    The Consortium consists of institutions from seven states: 
University of Southern Mississippi/Gulf Coast Research Laboratory, 
Mississippi; The Oceanic Institute, Hawaii; Tufts University, 
Massachusetts; Texas Agricultural Experiment Station, Texas; Waddell 
Mariculture Center, South Carolina; University of Arizona, Arizona; and 
Nicholls State University, Louisiana. These institutions have made 
major advances in technology to support the U.S. shrimp farming 
industry, and the program's excellent performance has been recognized 
by the USDA in its recent program reviews. The Consortium is at a point 
of opportunity to make significant contributions to building the U.S. 
industry, reducing the trade deficit, and satisfying increasing 
consumer demand for shrimp. Seafood imports constitute the second 
largest trade deficit item for the United States at $7.1 billion and 
shrimp represents half of this deficit.
    The Consortium, in cooperation with private industry, industry 
associations and government agencies, has generated new technologies 
for producing premium quality marine shrimp at competitive prices. To 
date, the program has: (1) established the world's first and currently 
most advanced breeding and genetic selection program for marine shrimp; 
(2) completed pioneering research and development of advanced 
diagnostic tools for disease screening and control; (3) described the 
etiology of shrimp diseases associated with viral pathogens; (4) 
fostered shrimp production at near-shore, desert, and inland/rural farm 
sites; (5) played a lead role in the Joint Subcommittee on 
Aquaculture's efforts to assess the threat of foreign and viral 
pathogens; (6) supplied the U.S. industry with genetically improved and 
disease-resistant shrimp stocks; (7) developed advanced technology 
biosecure shrimp production systems to protect both cultured and native 
wild stocks from disease; and (8) developed new feed formulations to 
minimize waste generation.
    While exceptional progress has been made, the emerging industry is 
immature and continually confronted with new challenges. It depends on 
the U.S. Marine Shrimp Farming Program for high-health and genetically 
improved stocks, disease diagnosis and production technologies. There 
is a growing realization that our advanced biosecure shrimp production 
systems will allow the expansion of shrimp farming away from the 
environmentally sensitive coastal zone and into near-shore, inland/
rural, and desert sites.
    As a result of these efforts, investor confidence is increasing--
notably, within the last 3 years, new shrimp farm startups have begun 
in Mississippi, Hawaii, Texas, Arizona and South Carolina, and are 
being considered in other states. Importantly, these new production 
technologies produce the highest quality shrimp at world competitive 
prices, consume U.S. grains as feed, and pose no threat to the 
environment.
    Shrimp farming is the newest agricultural industry for the United 
States. Allocation of $6 million per year for the next few years to 
work in cooperation with the private sector to support and build this 
new industry, with its associated jobs and economic benefits, is in the 
best interests of the nation.
            Sincerely,
                                   Thomas E. Farewell,
                          President and CEO, The Oceanic Institute.
                                   William E. Hawkins,
Executive Director, University of Southern Mississippi, Gulf Coast 
                                               Research Laboratory.
                                   Colin Kaltenbach,
Vice Dean and Director, Agricultural Experiment Station, University 
                                                        of Arizona.
                                   Bobby R. Eddleman,
 Resident Director of Research, Texas A&M University, Agricultural 
                                       Research & Extension Center.
                                   Joseph McManus,
                       Associate Dean of Finance, Tufts University.
                                   Craig L. Browdy,
      Marine Scientist, Marine Resources Research Institute, South 
                          Carolina Department of Natural Resources.
                                   Marilyn B. Kilgen,
Head, Department of Biological Sciences, Nicholls State University.
                                 ______
                                 

 Prepared Statement of the U.S. Marine Shrimp Farming Consortium, The 
 Oceanic Institute, Gulf Coast Research Laboratory, Tufts University, 
  Waddell Mariculture Center, Texas Agricultural Experiment Station, 
          University of Arizona, and Nicholls State University

    Mr. Chairman, we greatly appreciate the opportunity to provide 
testimony to you and the Subcommittee, to thank you for your past 
support, and to discuss the achievements and opportunities of the U.S. 
Marine Shrimp Farming Program (USMSFP), funded under the Federal 
initiative, Shrimp Aquaculture.
    We bring to your attention the success of the U.S. Marine Shrimp 
Farming Consortium and its value to the nation. The Consortium consists 
of institutions from seven states: the University of Southern 
Mississippi/Gulf Coast Marine Laboratory, Mississippi; The Oceanic 
Institute, Hawaii; Tufts University, Massachusetts; Texas Agricultural 
Experiment Station, Texas A&M University, Texas; Waddell Mariculture 
Center, South Carolina; the University of Arizona, Arizona; and 
Nicholls State University, Louisiana. These institutions, which oversee 
the USMSFP, have made major advances in technology development and 
services to support the U.S. shrimp farming industry. The USDA in its 
program reviews has recognized the program's excellent scientific 
performance, output, and multi-state collaborative efforts. The 
Consortium is at the crossroads of contributing to major growth of the 
U.S. industry, consolidating its competitive advantages, and satisfying 
consumers' demands for safe and wholesome seafood products. Shrimp is 
the number one consumed seafood product in the United States, yet 
contributes to a $3.2 billion trade deficit, second only to the import 
of oil for the deficit contributed by natural resource products.

Accomplishments
    The Consortium, in cooperation with private industry, industry 
associations and government agencies, has generated new technologies 
for producing safe and premium quality marine shrimp at competitive 
prices. To date, the program has: (1) established the world's first and 
currently most advanced breeding and genetic selection program for 
marine shrimp; (2) completed pioneering research and development of 
advanced diagnostic tools for disease screening and control; (3) 
described the etiology of shrimp diseases associated with viral 
pathogens; (4) fostered shrimp production at near-shore, inland/rural 
farm, and even desert sites; (5) served a lead role in the Joint 
Subcommittee on Aquaculture's efforts to assess the threat of globally 
transported shrimp pathogens; (6) served on the Office of International 
Epizootics, recommending country-of-origin labeling of imported shrimp 
products to combat the spread of exotic disease pathogens, subsequently 
adopted by the USDA in its 2002 Farm Bill; (7) supplied the U.S. 
industry with selectively bred and disease-resistant shrimp stocks; (8) 
developed advanced technology for biosecure shrimp production systems 
to protect both cultured and native wild stocks from disease; and (9) 
developed new feed formulations to minimize waste generation and 
enhance the use of domestic grains and oilseed products. These 
substantial accomplishments advance the continued growth of the 
domestic industry, place an important emphasis on environmental 
sustainability, address concerns for the safety and quality of our 
seafood supply, and increase market competitiveness.
    Judging from the state of the industry today, USMSFP efforts 
continue to have measurable positive effect. Coastal farming continues 
to lead in the production of cultured shrimp in the United States, and 
inland farming has added new dimensions and growth to the industry. 
Improvements in farm management practices, coupled with the widespread 
use of disease-resistant stocks, have resulted in bumper crops for the 
industry over the last several years. The year 2003 resulted in the 
largest harvest ever for U.S. farmers of near 13 million pounds. This 
represents over a three-fold increase in domestic production with the 
last 5 years, averaging over 25 percent growth of the industry per 
annum.

Industry Vulnerability
    While exceptional progress has been made, this emerging industry is 
continually confronted with new challenges. The industry depends on the 
USMSFP for leadership and innovative technology development. As a 
result of development of high-health and improved stocks, disease 
diagnosis, new feeds, and new production technologies and farming 
approaches, the domestic industry has maintained relative stability, 
while other countries have had major losses in their production due to 
diseases and environmental problems. Disease losses due to exotic 
viruses in Asia and Latin America during the past 5 years have 
approached $6 billion USD. There have been no outbreaks of notifiable 
viruses in the United States over the last 4 years, with a commensurate 
increase in shrimp production over the same period. With reliable 
production in place, we have also seen a commensurate geographic 
expansion of the industry within the United States from three to seven 
states in the last 10 years. A broader industry base, while increasing 
production through the addition of new farms, also provides additional 
protection to the industry by geographically isolating different 
regional sectors in the event of disease outbreaks or natural disaster. 
Significant amounts of shrimp are now being produced in Texas, South 
Carolina, Florida, Hawaii, Arizona, Alabama, and Arkansas. Several 
other states are now beginning to explore production with the newer 
technologies being developed.
    While significant progress has been made in risk assessment and 
risk management with visible success, the industry and the USMSFP must 
remain constantly vigilant and proactive to further improve global 
competitiveness. In addition to providing significant input on the 
development of national and international regulatory standards for 
shrimp farmers, important service work for governmental agencies and 
NGOs keeps us continuously apprised of new developments pertaining to 
emerging regulations so that USMSFP research plans can be kept 
proactively responsive to dynamic shifts in industry needs.
    The overwhelming threat facing the U.S. marine shrimp farming 
industry today is in the surge of foreign imports that have severely 
lowered market prices for shrimp. Average U.S. farm gate prices have 
fallen over 25 percent within the last 2 years, constraining 
profitability and plans for industry expansion. Domestic production 
estimates for 2005 are decidedly lower, as farmers have already opted 
not to stock as many ponds and acreage as previously projected. 
Inquiries into unfair trading practices impacting the U.S. shrimp 
industry have begun. Concerns also have been heightened over food 
safety issues associated with unregulated use of antibiotics and fecal-
borne contaminants due to questionable production practices in certain 
countries. Further, due to disease outbreaks worldwide, several foreign 
countries have switched production to the dominant species in the 
United States, eroding a previous competitive advantage. While it is 
important that a level playing field be created through reexamination 
of trade and food safety issues, more technologically advanced and 
innovative approaches are now critically needed to leverage U.S. 
industry gains, create competitive advantage, and improve 
profitability. Innovative ways need to be sought to offset low prices 
and to distinguish and add value to the domestic product to provide a 
competitive edge in the marketplace and to ensure the safety of the 
domestic seafood supply.

Industry Independence
    As a result of the work of the Consortium, investor confidence is 
increasing despite recent price trends. In addition to supporting 
today's industry, our advanced biosecure shrimp production systems are 
now developed to the point for further expansion of shrimp farming into 
near-shore, inland/rural and desert sites away from the environmentally 
sensitive coastal zone. We now have in place the economic models that 
will appropriately direct research to ensure economic viability taking 
in consideration all associated biological, regional, and economic risk 
factors. Importantly, these new production technologies produce the 
highest quality and safest shrimp, utilize U.S. grain and oilseed 
products for feed production, and do not pose any threat to the 
environment. There is hidden value in the domestic industry that can be 
exploited to gain competitive edge, offset declining prices, and ensure 
the quality and safety of shrimp for the consumer. Clearly, the U.S. 
shrimp farming industry has emerged solid from near collapse in the 
early 1990s, and appears well poised for a new phase of growth provided 
the technologies and innovations are in place to support a larger, more 
diverse, and more competitive domestic industry for the new millennium.
    To support existing efforts and technology transfer and plans for 
new dimensions to the research to address recent profitability issues, 
an increase in the current funding level from $3.746 million to $6 
million is requested. The increase will support an enhanced profile 
for: application of molecular biotechnologies to maintain the United 
States lead in disease monitoring and genetic selection efforts; 
development and application of sophisticated techniques for genetic 
selection of advanced and specialized lines of shrimp for U.S. 
exploitation; expansion of work to determine the mechanisms of disease 
immunity in shrimp for protection of both farmed and wild shrimp 
stocks; demonstration, validation, and commercialization of high 
density, biosecure farming systems to provide advanced, competitive 
production technologies particularly applicable to the United States; 
and determination of market and product quality issues for food safety 
assurances, and development of U.S. label to leverage existing 
standards for high quality production. In addition to these needed 
technological innovations, increased funding will support new efforts 
to promote institutional innovations that will enable expansion and 
vertical integration of the domestic industry, including examination of 
regulatory impediments to shrimp aquaculture; the effect of farm 
insurance; development of cooperatives; and the socioeconomics of 
existing and advanced, high density production systems.
    Mr. Chairman, the U.S. shrimp farming industry and our Consortium 
deeply appreciate the support of the Committee and respectfully ask for 
a favorable consideration of this request.
                                 ______
                                 
                                          Ceatech USA, Inc,
                                Honolulu, Hawaii, February 2, 2004.
Dr. Anthony Ostrowski,
Director, U.S. Marine Shrimp Farming Consortium, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Tony: We appreciate the past provision of a broodstock line 
from OI for evaluation under commercial scale. Those animals were used 
to produce seed that were stocked into two production ponds for the 
assessment of growth performance during this year.
    The outcome of these production trials have been discussed between 
James Sweeney and Shaun Moss, manager of OI's shrimp research program. 
Both individuals see benefit from additional evaluations.
    We continue to look forward to a site visit to Ceatech's farm by 
you and your scientists to discuss further collaborative research 
activities. We strongly support such technical exchange, and look 
forward to making arrangements to accomplish it.
    Thank you for your support.
            Sincerely,
                                       Paul Bienfang, Ph.D,
                                             Senior Vice President.
                                 ______
                                 
                                        Darden Restaurants,
                               Orlando, Florida, February 23, 2004.
Dr. Anthony C. Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, Hawaii.
    Dear Dr. Ostrowski: I am writing this letter in support of the U.S. 
Marine Shrimp Farming Program and Oceanic Institute's continued efforts 
in the development of a United States based shrimp farming industry.
    Shrimp farming has become a large and growing global business. In 
2003, shrimp consumption in the United States hit and all time high of 
3.7 pounds per capita, surpassing Tuna as the number one seafood 
consumed in the United States. This is directly the result of 
technological advances made in shrimp aquaculture, and lays a solid 
foundation for the future of the shrimp business.
    However, there is much work to be done. It will be challenging for 
the U.S. industry to compete based on current technology with many 
foreign producers of shrimp which have land, labor and construction 
costs much lower than the United States. The opportunity in shrimp 
farming in the United States is huge, but will require further research 
to make it practical and sustainable.
    The U.S. shrimp farming industry will need to compete based on 
advanced technology which allows it to overcome some of the land and 
labor cost disadvantages. The U.S. industry can also differentiate 
itself in quality and freshness. This means that systems to grow shrimp 
year round which offer rapid delivery of fresh, never frozen shrimp are 
also key to the future of this business in the United States.
    Oceanic Institute recognizes these two needs and opportunities and 
is already working on the science to achieve them. Stock enhancement 
programs are also an area that Oceanic Institute. Is expert in 
developing and can be part of the solution faced by our Gulf and 
Atlantic shrimp fishing industry.
    We at Darden Restaurants, support the research being done by the 
U.S. Marine Shrimp Farming Program and Oceanic Institute, and believe 
that new and exciting business opportunities for United States based 
aquaculture operations will evolve from your continued research.
            Sincerely,
                                               Bill Herzig,
   Vice President Seafood, Regional & Capital Equipment Purchasing.
                                 ______
                                 
                              Harlingen Shrimp Farms, Ltd.,
                                Los Fresnos, TX, February 13, 2004.
Dr. Tony Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Dr. Ostrowski: At your request I am writing a letter of 
support for the U.S. Marine Shrimp Farming Program (USMSFP) so that our 
U.S. government can renew funding for this valuable program I am proud 
to note that Texas had a record production year in 2003, with 
approximately nine million pounds of farmed shrimp produced. 
Unfortunately, our good production was offset by the lowest shrimp 
prices the United States has seen in decades, resulting in financial 
losses for some producers and marginal profits for the rest. U.S. 
shrimp farmers have had an especially tough time competing with imports 
from foreign producers. Many of the costs for labor, insurance and 
taxes as well as costs associated with permitting and compliance with 
regulations on discharge water quality are greatly reduced or not 
encountered in other countries. The U.S. shrimp farmers need innovative 
research from the USMSFP, which will allow our industry to stay 
competitive.
    I believe that the good production of farmed shrimp in Texas last 
year was, to a great extent, a direct result of benefits received over 
the years through the USMSFP. The use of domesticated, specific 
pathogen free (SPF) brood lines as well as the diagnostic services, 
required to monitor and maintain pathogen free production practices 
have been a major advantage for U.S. producers. Research on shrimp 
disease continues and information regarding the occurrence and 
characteristics of these diseases can be utilized to increase and 
maintain biosecure production practices on U.S. farms.
    It is especially important that research objectives, which directly 
benefit and bolster the profitability of existing, open pond production 
systems, which are the mainstay of U.S. marine shrimp farming must be 
prioritized at this time. I encourage the U.S. government to continue 
to support the USMSFP and am hopeful that the resulting research can 
benefit the profitability of U.S. shrimp farming, which can help to 
reduce the huge shrimp trade deficit.
            Sincerely,
                                             Fritz Jaenike,
                                                   General Manager.
                                 ______
                                 
                             High Health Aquaculture, Inc.,
                                                  February 6, 2004.
Dr. Anthony C. Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Tony: I am writing to express my support for the U.S. Marine 
Shrimp Farming Program. Its efforts in shrimp science have contributed 
to the expansion of the U.S. shrimp farming industry.
    The global shrimp industry is facing difficult times. The U.S. 
industry is poised to lead the way through the Consortium's top-flight 
science.
    Let me know if you need any further information.
            Best regards,
                                          Jim Wyban, Ph.D.,
                                                         President.
                                 ______
                                 
                           Kona Bay Marine Resources, Inc.,
                                      Honolulu, HI, March 10, 2004.
Dr. Anthony C. Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Dr. Ostrowski: I am writing in support of the U.S. Marine 
Shrimp Farming Program (USMSFP). The program is essential to the 
continued growth and health of a domestic shrimp industry. The USMSFP 
has been instrumental in the development of SPF shrimp, the development 
of disease control strategies and helping shrimp farmers to improve 
their farming practices.
    Continued full funding from the U.S. government is critical to 
maintaining and building upon the good work done thus far by USMSFP.
            Best regards,
                                           Brian Goldstein,
                                                         President.
                                 ______
                                 
                                  Lowcountry Seafarms, LLC,
                                      Beaufort, SC, March 10, 2004.
Dr. Anthony C. Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Dr. Ostrowski: This letter is in support of the efforts of the 
U.S. Marine Shrimp Farming Program. I have followed the research work 
done by the USMSFP over the years. The results of that work, and that 
of the Waddell Mariculture Research and Development Center in Bluffton, 
SC, were instrumental in my planning our project to be located here in 
SC.
    As our project is to entail the use of super-intensive closed-loop 
raceway production systems, the development of lines of SPF shrimp and 
work in disease control methods and water management techniques by the 
USMSFP are especially valuable. We will be following new developments 
as they occur.
    We hope to see your continued support to the shrimp farming 
industry in the United States.
    Regards,
                                               Mills Rooks,
                                                               CEO.
                                 ______
                                 
                                       Southern Star, Inc.,
                                Rio Hondo, Texas, February 6, 2004.
Dr. Anthony C. Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Tony: Thanks for your thinking of my opinion. Basically, I 
still think American shrimp farmers are working fine. The government 
regulation did not bother us too much. The system we used is good 
enough. American shrimp farmers only produce 0.5 percent of market 
needs. That is the reason we are affected by the market so much when 
overseas shrimps flood in with cheaper price.
    The reason overseas has lower cost is because of their facilities 
full utilized. In Texas valley, we may have chance to grow two crops. 
Anywhere else is one crop only. Under this weather condition, we are 
not compatible.
    There are three things you can help us:
  --Find another species that can grow faster and last longer which 
        will be accepted by government agents.
  --Find a new line of P. Vannamei which can tolerate the water 
        temperature colder.
  --Ask government to buy P/L from private hatcheries for releasing 
        into gulf which will help shrimpers.
    Should you have any question, please feel free to call me.
            Truly yours,
                                                  Felix Fu,
                                                    Vice President.
                                 ______
                                 
                         Swimming RockFish and Shrimp Farm,
                                       Meggett, SC, March 23, 2004.
Dr. Antony C. Ostrowski,
Waimanalo, HI.
    Dear Ostrowski: I write today in support of the U.S. Marine Shrimp 
Farming Program. I do so as a consumer, stakeholder, and surviving 
member of North American entrepreneurs still engaged in shrimp farming. 
I say surviving because the numbers of shrimp farmers, at least in 
South Carolina, has drastically declined. The decline, I believe, is 
because of the USMSFP and its past good works. I understand that 
statement, supporting the organization that has caused the decline in 
my industry, is confusing and seemingly contradictory . . . so please 
read on and allow me to explain.
    American shrimp farmers, as well as harvesters of wild stocks, are 
in financial trouble today primarily because of the low price of shrimp 
worldwide. In great measure, this is due to the advances in pond 
culture attributable to the research conducted by USMSFP partner 
organizations and to the dissemination and subsequent use of the 
information gained to the world. In other words, the USMSFP programs 
have been so extraordinarily successful that shrimp has moved from a 
high dollar luxury status to nearly a commodity staple item.
    My current support for the USMSFP stems from the fact that the 
program is now moving toward hyper-intensive production technology with 
concomitant genetics research that ultimately will enable surviving and 
new American entrepreneurs to be competitive again at home. It is my 
hope that future work will marry native species, particularly east 
coast white shrimp production, with the developing extreme density 
production systems. This seems to me to be the least environmentally 
risky and best marketing strategy for coastal production.
    With my best wishes for your continuing achievements, I offer my 
support for your continued funding.
            Sincerely,
                                                  Richard B. Eager.
                                 ______
                                 
                                       Zeigler Bros., Inc.,
                                    Gardnes, PA, February 23, 2004.
Dr. Anthony C. Ostrowski,
Director, U.S. Marine Shrimp Farming Program, The Oceanic Institute, 
        Waimanalo, HI.
    Dear Dr. Ostrowski: We are most pleased, again this year, to write 
a letter of support for the U.S. Marine Shrimp Farming Program. By this 
letter, we are asking Congress to continue expanded support for this 
important program for U.S. Aquaculture.
    In my letter last year, which is attached, we indicated many 
reasons why this program is important to U.S. aquaculture and to 
businesses like ourselves. We recommend that you attach these two 
letters.
    For the past 2 years, we have received additional benefits from the 
U.S. Marine Shrimp Farming Program through its contribution of 
technical knowledge to intensive shrimp farming. This is especially 
important to our company for as you know, we are one of four members of 
a consortium which received a very large ATP grant for the development 
of very high intensive re-cycle shrimp farming, known as the BioZest 
System. Scientific and technical information available through your 
program has allowed us to proceed with feeds development at a more 
rapid rate bringing intensive shrimp farming closer to economic 
feasibility for the United States.
    If we can provide additional support in any way for this most 
important program, please advise.
            Very truly yours,
                                  Thomas R. Zeigler, Ph.D.,
                                                   President & CEO.
                                 ______
                                 

     Prepared Statement of the Organization for the Promotion and 
      Advancement of Small Telecommunications Companies (OPASTCO)

Summary of Request
    The Organization for the Promotion and Advancement of Small 
Telecommunications Companies (OPASTCO) seeks the Subcommittee's support 
for fiscal year 2005 loan levels for the telecommunications loans 
program and Rural Telephone Bank (RTB) program administered by the 
Rural Utilities Service (RUS) in the following amounts:

                          [Millions of dollars]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
5 percent hardship loans................................             145
Treasury rate loans.....................................             250
Guaranteed loans........................................             100
RTB loans...............................................             175
------------------------------------------------------------------------

    In addition, OPASTCO requests the following action by the 
Subcommittee: (1) a prohibition on the transfer of unobligated RTB 
funds to the general fund of the Treasury and a requirement that 
interest be paid on these funds; and (2) funding of the distance 
learning, telemedicine, and broadband grant and loan programs at 
sufficient levels.

General
    OPASTCO is a national trade association of more than 550 small 
telecommunications carriers serving primarily rural areas of the United 
States. Its members, which include both commercial companies and 
cooperatives, together serve over 3.5 million customers in 47 states. 
Approximately half of OPASTCO's members are RUS or RTB borrowers.
    Perhaps at no time since the inception of the RUS (formerly the 
REA) has the telecommunications loans and RTB programs been so vital to 
the future of rural America. The telecommunications industry is at a 
crossroads, both in terms of technology and public policy. Rapid 
advances in telecommunications technology in recent years have begun to 
deliver on the promise of a new ``information age.'' Both Federal and 
State policymakers have made deployment of advanced telecommunications 
services a top priority. However, without continued support of the 
telecommunications loans and RTB programs, rural telephone companies 
will be hard pressed to build the infrastructure necessary to bring 
their communities into this new age, creating a bifurcated society of 
information ``haves'' and ``have-nots.''
    Contrary to the belief of some critics, RUS's job is not finished. 
Actually, in a sense, it has just begun. We have entered a time when 
advanced services and technology--such as broadband, fiber-to-the-home, 
high-speed packet and digital switching equipment, and digital 
subscriber line technology--are expected by customers in all areas of 
the country, both urban and rural. Unfortunately, the inherently higher 
costs of upgrading the rural wireline network, both for voice and data 
communications, has not abated.
    Rural telecommunications continues to be more capital intensive and 
involves fewer paying customers than its urban counterpart. Nationally, 
the average population density in areas served by rural carriers is 
only about 13 persons per square mile. This compares to a national 
average population density of 105 persons per square mile in areas 
served by non-rural carriers. The FCC's February 2002 report on the 
deployment of advanced telecommunications capability noted that a 
positive correlation persists between population density and the 
presence of subscribers to high-speed services. The report stated that 
there are high-speed subscribers in 97 percent of the most densely 
populated zip codes but in only 49 percent of the zip codes with the 
lowest population densities. In order for rural telephone companies to 
modernize their networks and provide consumers with advanced services 
at reasonable rates, they must have access to reliable low-cost 
financing.
    The relative isolation of rural areas increases the value of 
telecommunications services for these citizens. Telecommunications 
enables applications such as high-speed Internet connectivity, distance 
learning, and telemedicine that can alleviate or eliminate some rural 
disadvantages. A modern telecommunications infrastructure can also make 
rural areas attractive for some businesses and result in revitalization 
of the rural economy. For example, businesses such as telemarketing and 
tourism can thrive in rural areas, and telecommuting can become a 
realistic employment option.
    While it has been said many times before, it bears repeating that 
RUS's telecommunications loans and RTB programs are not grant programs. 
The funds loaned by RUS are used to leverage substantial private 
capital, creating public/private partnerships. For a very small cost, 
the government is encouraging tremendous amounts of private investment 
in rural telecommunications infrastructure.
    Most importantly, the programs are tremendously successful. 
Borrowers actually build the infrastructure and the government is 
reimbursed with interest. There has never been a default in the history 
of the telecommunications lending programs.

The Telecommunications Act of 1996 has Heightened the need for the RUS 
        and RTB Loan Programs
    The Telecommunications Act of 1996 only increases rural 
telecommunications carriers' need for RUS assistance in the future. The 
forward-looking Act defines universal service as an evolving level of 
telecommunications services that the FCC must establish periodically, 
taking into account advances in telecommunications and information 
technologies and services. RUS has an essential role to play in the 
implementation of the law, as it will compliment high-cost support 
mechanisms established by the FCC, thus enabling rural America to 
achieve the federally mandated goal of rural/urban service and rate 
comparability.

1A $175 Million Loan Level should be maintained for the RTB Program
    As previously discussed, the RTB's mission has not been completed 
as rural carriers continue to rely on this important source of 
supplemental financing in order to provide their communities with 
access to the next generation of telecommunications services. Pursuant 
to Section 305(d)(2)(B) of the Rural Electrification (RE) Act, Treasury 
rate loans are to be made concurrently with RTB loans. Thus, if lending 
is not authorized for the RTB, the overall telecommunications loans 
program will be significantly reduced, to the detriment of rural 
Americans. The ongoing need for the RTB program makes it essential to 
establish a $175 million loan level for fiscal year 2005.

The Prohibition on the Transfer of any Unobligated Balance of the RTB 
        Liquidating Account to the Treasury and requiring the Payment 
        of Interest on these Funds should be Continued
    OPASTCO urges the Subcommittee to reinstate language prohibiting 
the transfer of any unobligated balance of the RTB liquidating account 
to the Treasury or the Federal Financing Bank which is in excess of 
current requirements and requiring the payment of interest on these 
funds. As a condition of borrowing, the statutory language establishing 
the RTB requires telephone companies to purchase Class B stock in the 
bank. Borrowers may convert Class B stock into Class C stock on an 
annual basis up to the principal amount repaid. Thus, all current and 
former borrowers maintain an ownership interest in the RTB. As with 
stockholders of any concern, these owners have rights which may not be 
abrogated. The Subcommittee's inclusion of the aforementioned language 
into the fiscal year 2005 appropriations bill will ensure that RTB 
borrowers are not stripped of the value of this required investment.

The Distance Learning, Telemedicine, and Broadband Programs should 
        Continue to be Funded at Adequate Levels
    In addition to RUS's telecommunications loans and RTB programs, 
OPASTCO supports adequate funding of the distance learning, 
telemedicine, and broadband grant and loan programs. Through distance 
learning, rural students gain access to advanced classes which will 
help them prepare for college and jobs of the future. Telemedicine 
provides rural residents with access to quality health care services 
without traveling great distances to urban hospitals. In addition, the 
broadband program will allow more rural communities to gain high-speed 
access to the Internet and receive other advanced services. In light of 
the Telecommunications Act's purpose of encouraging deployment of 
advanced technologies and services to all Americans--including schools 
and health care providers--sufficient targeted funding for these 
purposes is essential in fiscal year 2005.

Conclusion
    The development of the nationwide telecommunications network into 
an information superhighway, as envisioned by policymakers, will help 
rural America survive and prosper in any market--whether local, 
regional, national, or global. However, without the availability of 
low-cost RUS funds, building the information superhighway in 
communities that are isolated and thinly populated will be untenable. 
By supporting the RUS telecommunications programs at the requested 
levels, the Subcommittee will be making a significant contribution to 
the future of rural America.
                                 ______
                                 

   Prepared Statement of People for the Ethical Treatment of Animals 
                                 (PETA)

    Dear Chairman Bennett, Ranking Member Kohl, and Members of the 
Subcommittee: People for the Ethical Treatment of Animals (PETA) is the 
world's largest animal rights organization, with 800,000 members and 
supporters. We greatly appreciate this opportunity to submit testimony 
regarding the fiscal year 2005 appropriations for the Food and Drug 
Administration (FDA). Our testimony will focus on four chemical tests 
allowed or required by the FDA to be conducted on animals.
    As you may know, the FDA requires substances such as drugs, 
medicated skin creams, and others to be tested for their rates of skin 
absorption, skin irritation, phototoxicity, and/or pyrogenicity 
(potential to cause fever). Traditionally, these tests involve smearing 
chemicals on animals' shaved backs (often causing painful lesions), or 
injecting a substance into an animal's bloodstream (often causing 
breathing problems, organ failure, or fatal shock).
    Fortunately, there are non-animal test methods that are just as 
effective, if not more so. Various tissue-based methods have been 
accepted in Europe as total replacements for skin absorption studies in 
living animals. Government regulators in Canada accept the use of a 
skin-patch test in human volunteers as a replacement for animal-based 
skin irritation studies (for non-corrosive substances free of other 
harmful properties). The Organization for Economic Cooperation and 
Development (OECD), of which the United States is a key member, has 
accepted a cell culture test for light-induced (``photo'') toxicity, 
and a test using donated human blood has been validated in Europe as a 
total replacement for animal-based fever, or pyrogenicity, studies.
    However, the FDA continues to require the use of animals for all 
four of these endpoints, despite the availability of non-animal tests.
    We respectfully request that the subcommittee include the following 
report language: ``The Commissioner of the FDA is required to report to 
Congress no later than December 1, 2004, regarding the use of in vitro 
methods using skin from a variety of sources (e.g. human cadavers) for 
skin absorption studies, human volunteer clinical skin-patch tests (for 
chemicals first determined to be non-corrosive and free of other 
harmful properties) for skin irritation studies, the 3T3 Neutral Red 
Uptake Phototoxicity Test for phototoxicity studies, and the in vitro 
Human Pyrogen Test for pyrogenicity studies. The Commissioner should 
describe the reasons for which the agency has delayed accepting the 
aforementioned methods for regulatory use as total replacements for 
their animal-based counterparts, exactly what steps the agency is 
taking to overcome those delays, and a target date by which the agency 
intends to accept these methods for regulatory use.''
Animal tests cause immense suffering
    Traditionally, the rate at which a chemical is able to penetrate 
the skin has been measured by shaving the backs of rats and smearing 
the substance on them for an exposure period of up to 24 hours. They 
are eventually killed, and their skin, blood, and excrement are 
analyzed. A similar method is used to test for skin irritation, except 
it usually done to rabbits, who are locked in full-body restraints. A 
test chemical is applied to their shaved backs, and the wound site is 
then covered with a gauze patch for normally four hours. A chemical is 
considered to be an irritant if it causes reversible skin lesions or 
other clinical signs, which heal partially or totally by the end of a 
14-day period. Phototoxic chemicals cause inflammation of the skin when 
applied to skin that is subsequently exposed to sunlight or ultraviolet 
radiation. To test for phototoxicity, a similar body-restraint, shaved-
back procedure is used, but this time it is mice and guinea pigs who 
are the subjects, and they are kept restrained for several days while 
enduring the pain, swelling, and sores that develop on their skin. 
Pyrogenicity is the potential of a substance to cause fever and 
inflammation. Once again, the traditional pyrogenicity test method 
involves locking rabbits in full-body restraints. After having a test 
substance injected into their bloodstream, the rabbits can suffer 
fever, breathing problems, circulatory and organ failure, and fatal 
shock. Animals used in the above tests are not given any painkillers.
These tests have never been proven to be relevant to humans
    None of the animal tests currently used for skin absorption, 
irritation, phototoxicity, or pyrogenicity has ever been scientifically 
validated for its reliability or relevance to human health effects. 
Animal studies yield highly variable data and are often poor predictors 
of human reactions. For example, one study, which compared the results 
of rabbit skin irritation tests with real-world human exposure 
information for 65 chemicals, found that the animal test was wrong 
nearly half (45 percent) of the time in its prediction of a chemical's 
skin damaging potential (Food & Chemical Toxicology, Vol. 40, pp. 573-
92, 2002). For phototoxicity, the animal-based tests have never even 
been codified into a standardized test guideline, meaning that the 
protocols can vary widely from laboratory to laboratory, rendering the 
results virtually uninterpretable. There are well-documented drawbacks 
to the rabbit pyrogen test, including marked differences in sensitivity 
between species and strains of rabbits.

Validated methods exist which do not harm animals
    Fortunately, test methods have been found to accurately predict 
skin absorption, irritation, phototoxicity and pyrogenicity without 
harming animals.
    The absorption rate of a chemical through the skin can be measured 
using skin from a variety of sources (e.g. human cadavers). The 
reliability and relevance of these in vitro methods have been 
thoroughly established through a number of international expert 
reviews, and have been codified and accepted as an official test 
guideline of the OECD.
    Instead of animal-based skin irritation studies, government 
regulators in Canada accept the use of a skin-patch test using human 
volunteers. (The chemical is first determined to be non-corrosive and 
free of other harmful properties before being considered for human 
studies.)
    A cell culture test has been validated in Europe and accepted at 
the international level as a total replacement for animal-based 
phototoxicity studies. The 3T3 Neutral Red Uptake Phototoxicity Test 
involves exposing cells to a test chemical in the presence and absence 
of light, and cell viability is measured by the degree to which they 
are able to absorb the dye, neutral red. This method is the only test 
for phototoxicity that has been accepted as an official test guideline 
of the OECD, yet the FDA continues to use thousands of animals to test 
for phototoxicity.
    Using human blood donated by healthy volunteers, an in vitro 
pyrogen test has been validated in Europe as a total replacement for 
animal-based pyrogenicity studies.

Non-animal test methods can save time, money, and yield more useful 
        results
    Tissue culture methods to test for skin absorption allow 
researchers to study a broader range of doses, including those at the 
actual level of exposure that occurs in the occupational or ambient 
environment, which is not possible with the animal-based method. 
According to the European Centre for the Validation of Alternative 
Methods, the in vitro Human Pyrogen Test out-performs the rabbit-based 
test, and does so at one-fifth of the labor cost and less than one-
tenth of the labor cost.
    Many non-animal methods can yield results with greater sensitivity 
and at a lower cost than animal-based methods. Protocols are more 
easily standardized, and the variations among strains and species are 
no longer a factor.

The FDA continues to require the use of animals
    Despite the ethical, financial, efficiency, and scientific 
advantages of the above non-animal methods, the FDA continues to 
require and accept the unnecessary use of animals in tests for skin 
absorption, irritation, phototoxicity, and pyrogenicity.

Summary
    Non-animal methods are available now to replace animal-based 
methods to test substances for skin absorption, irritation, 
phototoxicity, and pyrogenicity. There simply is no excuse for 
continuing to cause animals to suffer when non-animal tests are 
available.
    We therefore hereby request, on behalf of all Americans who care 
about the suffering of animals in toxicity tests, that you please 
include language in the report accompanying the fiscal year 2005 
Agriculture, Rural Development, Food and Drug Administration and 
Related Agencies bill stating that:

    ``The Commissioner of the FDA is required to report to Congress no 
later than December 1, 2004, regarding the use of in vitro methods 
using skin from a variety of sources (e.g. human cadavers) for skin 
absorption studies, human volunteer clinical skin-patch tests (for 
chemicals first determined to be non-corrosive and free of other 
harmful properties) for skin irritation studies, the 3T3 Neutral Red 
Uptake Phototoxicity Test for phototoxicity studies, and the in vitro 
Human Pyrogen Test for pyrogenicity studies. The Commissioner should 
describe the reasons for which the agency has delayed accepting the 
aforementioned methods for regulatory use as total replacements for 
their animal-based counterparts, exactly what steps the agency is 
taking to overcome those delays, and a target date by which the agency 
intends to accept these methods for regulatory use.''
                                 ______
                                 

     Prepared Statements of the Pickle Packers International, Inc.

    The pickled vegetable industry strongly supports and encourages 
your committee in its work of maintaining and guiding the Agricultural 
Research Service. To accomplish the goal of improved health and quality 
of life for the American people, the health action agencies of this 
country continue to encourage increased consumption of fruits and 
vegetables in our diets. Accumulating evidence from the epidemiology 
and biochemistry of heart disease, cancer and diabetes supports this 
policy. Vitamins (particularly A, C, and folic acid) and a variety of 
antioxidant phytochemicals in plant foods are thought to be the basis 
for correlation's between high fruit and vegetable consumption and 
reduced incidence of these debilitating and deadly diseases. The 
problem is that many Americans choose not to consume the variety and 
quantities of fruits and vegetables that are needed for better health.
    As an association representing processors that produce over 87 
percent of the tonnage of pickled vegetables in North America, it is 
our goal to produce new products that increase the competitiveness of 
U.S. agriculture as well as meet the demands of an increasingly diverse 
U.S. population. The profit margins of growers continue to be narrowed 
by foreign competition. Likewise, the people of this country represent 
an ever-broadening array of expectations, tastes and preferences 
derived from many cultural backgrounds. Everyone, however, faces the 
common dilemma that food costs should remain stable and preparation 
time continues to be squeezed by the other demands of life. This 
industry can grow by meeting these expectations and demands with 
reasonably priced products of good texture and flavor that are high in 
nutritional value, low in negative environmental impacts, and produced 
with assured safety from pathogenic microorganisms and from those who 
would use food as a vehicle for terror. With strong research to back us 
up, we believe our industry can make a greater contribution to better 
product cost, diets and better health.
    Many small to medium sized growers and processing operations are 
involved in the pickled vegetable industry. We grow and process a group 
of vegetable crops, including cucumbers, peppers, carrots, onions, 
garlic, cauliflower, cabbage (Sauerkraut) and Brussels sprouts, that 
are referred to as minor' crops. None of these crops is in any 
``commodity program'' and as such, do not rely upon taxpayer subsidies. 
However, current farm value for just cucumbers, onions and garlic is 
$2.3 billion with an estimated processed value of $5.8 billion. These 
crops represent important sources of income to farmers, and the 
processing operations are important employers in rural communities 
around the United States. Growers, processing plant employees and 
employees of suppliers to this industry reside in all 50 states. To 
realize its potential in the rapidly changing American economy, this 
industry will rely upon a growing stream of appropriately directed 
basic and applied research from four important research programs within 
the Agricultural Research Service. With strong research to back us up, 
we believe our industry can make a greater contribution to better diets 
and better health.

        VEGETABLE CROPS RESEARCH LABORATORY, MADISON, WISCONSIN

    First, I would like to thank the Committee for $200,000 additional 
funding it provided the fiscal year 2002 budget to carry out field and 
processing research vital to the membership of PPI. However, to 
continue this important work it is necessary for the Congress restore 
this funding in fiscal year 2005, since the funds were not included in 
the budget sent to the Congress. The USDA/ARS Vegetable Crops Research 
Unit at the University of Wisconsin is the only USDA research unit 
dedicated to the genetic improvement of cucumbers, carrots, onions and 
garlic. Three scientists in this unit account for approximately half of 
the total U.S. public breeding and genetics research on these crops. 
Their past efforts have yielded cucumber, carrot and onion cultivars 
and breeding stocks that are widely used by the U.S. vegetable industry 
(i.e., growers, processors, and seed companies). These varieties 
account for over half of the farm yield produced by these crops today. 
All U.S. seed companies rely upon this program for developing new 
varieties, because ARS programs seek to introduce economically 
important traits (e.g., virus and nematode resistance) not available in 
commercial varieties using long-term high risk research efforts. The 
U.S. vegetable seed industry develops new varieties of cucumbers, 
carrots, onions, and garlic and over twenty other vegetables used by 
thousands of vegetable growers. The U.S. vegetable seed, grower, and 
processing industry, relies upon the USDA/ARS Vegetable Crops Research 
Unit for unique genetic stocks to improve varieties in the same way the 
U.S. health care and pharmaceutical industries depend on fundamental 
research from the National Institutes of Health. Their innovations meet 
long-term needs and bring innovations in these crops for the United 
States and export markets, for which the United States has successfully 
competed. Past accomplishments by this USDA group have been 
cornerstones for the U.S. vegetable industry that have resulted in 
increased profitability, and improved product nutrition and quality.
    Both consumers and the vegetable production and processing industry 
would like to see fewer pesticides applied to food and into the 
environment in a cost-effective manner. Scientists in this unit have 
developed a genetic resistance for many major vegetable diseases. 
Perhaps the most important limiting factor in the production of 
cucumbers has been its susceptibility to disease. New research progress 
initiated in the 1990s and continuing today in Madison has resulted in 
cucumbers with improved pickling quality and suitability for machine 
harvesting. Viral and fungal diseases threaten much of the U.S. 
cucumber production. New sources of genetic resistance to these 
diseases have recently been mapped on cucumber chromosomes to provide a 
ready tool for our seed industry to significantly accelerate the 
development of resistant cultivars for U.S. growers. Likewise, new 
cultivar resistances to environmental stress like cold, heat and salt 
stress discovered by these scientists will help cucumber growers 
produce a profitable crop where these stressful conditions occur. The 
development of DNA markers that are associated with traits for 
tolerance of biological stress will help public and private breeders 
more efficiently develop stress-resistant varieties because selection 
for improved varieties can be done in the laboratory as well as in the 
field saving time and the costly expenses associated with field 
testing. Nematodes in the soil deform carrot roots to reduce yield from 
10 percent to over 70 percent in major production areas. A new genetic 
resistance to nematode attack was recently discovered and found to 
almost completely protect the carrot crop from one major nematode. This 
genetic resistance assures sustainable crop production for growers and 
reduces pesticide residues in our food and environment. Value of this 
genetic resistance developed by the vegetable crops unit is estimated 
at $650 million per year in increased crop production, not to mention 
environmental benefits due to reduction in pesticide use. This group 
improved both consumer quality and processing quality of vegetables 
with a resulting increase in production efficiency and consumer appeal. 
This product was founded on carrot germplasm developed in Madison, 
Wisconsin. Carrots provide approximately 30 percent of the U.S. dietary 
vitamin A. With new carrots that have been developed, nutritional value 
of this crop has tripled, including the development of nutrient-rich 
cucumbers with increased levels of provitamin A. Using new 
biotechnological methods, a system for rapidly and simply identifying 
seed production ability in onions has been developed that reduces the 
breeding process up to 6 years. A genetic map of onion flavor and 
nutrition will be used to develop onions that are more appealing and 
healthy for consumers. Garlic is a crop familiar to all consumers, but 
it has not been possible to breed new garlic varieties until a new 
technique for garlic seed production was recently developed and is now 
being bred like other crops.
    There are still serious vegetable production problems, which need 
attention. For example, losses of cucumbers, onions, and carrots in the 
field due to attack by pathogens and pests remains high, nutritional 
quality needs to be significantly improved and U.S. production value 
and export markets could certainly be enhanced. Genetic improvement of 
all the attributes of these valuable crops are at hand through the 
unique USDA lines and populations (i.e., germplasm) that are available 
and the new biotechnological methodologies that are being developed by 
the group. The achievement of these goals will involve the utilization 
of a wide range of biological diversity available in the germplasm 
collections for these crops. Classical plant breeding methods combined 
with bio-technological tools such as DNA marker-assisted selection and 
genome maps of cucumber, carrot and onion will be the methods to 
implement these genetic improvements. With this, new high-value 
vegetable products based upon genetic improvements developed by our 
USDA laboratories can offer vegetable processors and growers expanded 
economic opportunities for United States and export markets.

       U.S. FOOD FERMENTATION LABORATORY, RALEIGH, NORTH CAROLINA

    The USDA/ARS Food Fermentation Laboratory in Raleigh, NC is the 
major public laboratory that this industry looks to as a source for new 
scientific information and development of new processing concepts 
related to fermented and acidified vegetables. This industry has a 
critical need for an increased level of food safety research do to the 
recognition that there are acid tolerant food pathogens, including E. 
coli, listeria and salmonella, that can survive and cause illness in 
acid foods like apple and orange juice. We need to determine the extent 
to which the acidified foods we produce are vulnerable to these 
pathogens. If vulnerabilities are found to exist, practical means must 
be found to assure that these pathogens are killed, while maintaining 
the quality of our products that our customers expect. The Food 
Fermentation Laboratory has unique capabilities in this area because 
the scientists are very knowledgeable with the processing operations 
used in this industry and the practical problems processors must deal 
with in making high quality products from cucumbers, peppers, cabbage 
and other vegetables. Scientists from this laboratory have been working 
cooperatively with the industry and with FDA to develop new guidelines 
for filing safe processes to assure that acid tolerant pathogens are 
killed in current products. These new guidelines are currently being 
implemented. The scientists are actively engaged in research projects 
to develop improved approaches to eliminate these food pathogens from 
fermented and acidified vegetable products. However, success will 
require sustained effort as we learn more about the ways in which these 
pathogens can enter our food supply and discover new approaches to 
eliminating them from our products. PPI thanks the Congress for 
$270,000 additional funding it provided in the fiscal year 2004 budget 
so that a microbial physiologist can be hired into this unit to carry 
out this research, which is critical for the membership of PPI. 
However, to continue this important work it is necessary for the 
Congress restore this funding in fiscal year 2005, since the funds were 
not included in the budget sent to the Congress.
    The competitive environment from world markets in which our 
processors operate today requires that research on new processing 
techniques and product quality issues must also be maintained and 
enhanced. Over the years this laboratory has been a source for 
innovations in this industry, which have helped us remain competitive 
in the current global trade environment. We expect the research done in 
this laboratory to lead to new processing and product ideas that will 
increase the economic value of this industry and provide consumers with 
high quality, more healthful vegetable products. In addition to the 
newer challenges, this industry needs better technology for waste 
minimization related to salt and organic waste generated in our 
processing plants.
    This laboratory is conducting research on cucumbers, peppers, 
cabbage, sweetpotatoes, and other produce. A restructuring technology 
has been developed that offers a potential for development of 
convenient to use sweetpotato products that are high in nutritional 
value. Minimal processing techniques for refrigerated products from 
cucumbers and sweetpotatoes are also under development. Continued 
technological advancement must occur so that U.S. farmers and 
processors can meet competition from emerging countries that often have 
less strict environmental standards and lower labor costs. To enhance 
the processing and waste minimization research of this unit we request 
creation of a new position for a Food Process Engineer to work with the 
Food Technologists and Microbiologists in the unit to design and 
improve processes and packaging systems that are used for acidified, 
fermented, and minimally processed vegetables.

        SUGARBEET AND BEAN RESEARCH UNIT, EAST LANSING, MICHIGAN

    USDA/ARS Cucumber Sanitation and Vegetable Post Harvest Quality and 
Food Safety Engineering Research is a component of the Sugarbeet and 
Bean Research Unit, East Lansing, Michigan. The Vegetable Post Harvest 
Quality Research Program is the only Federally funded research program 
that uses engineering principles and technology to address post harvest 
sanitation and food quality of vegetable concerns on a sustained and 
programmatic basis. The goals of this research are reflected in the 
Mission Statement of the CRIS, which is to apply engineering solutions 
to ameliorate post harvest losses of pickling cucumbers from soil borne 
plant pathogens and develop new wash water systems for ensuring the 
sanitation of cucumbers from rot type pathogens.
    The Vegetable Post Harvest Quality Research CRIS is severely under 
funded and because of the shortage of base funds no full time scientist 
(SY) is working on the critical problems facing the industry. In fiscal 
year 2000, a postdoctoral research associate worked to address the 
chlorine dioxide problem and initiated the dump tank treatment 
experiments. However, the postdoctoral resigned to take another 
position. In 2003, the Vegetable Post Harvest Quality Research CRIS 
hired another postdoctoral research associate to explore alternative 
methodologies via genetics and genomics to maintain long-term food 
safety and sustainable production of pickling cucumbers. Goals of this 
2-year project are to: (1) Develop genomic infrastructure for pickling 
and other cucumbers by developing genomic and cDNA libraries; (2) 
Determine the nucleotide sequence code for as many pickling cucumber 
genes to be represented as Expressed Sequence Tags as practical; (3) 
Examine changes in gene expression during fruit development and in 
response to attack by fruit rotting pathogens; and (4) Develop genetic 
intervention strategies to combat fruit rot caused by Phytophthora 
capsici. These goals dovetail with recent infrastructure and equipment 
investments in both breeding and genomic responsibilities of the 
Sugarbeet CRIS. Phytophthora fruit rot is the most serious threat to 
Michigan growers since symptoms are not generally evident until after 
harvest, Phytophthora fruit rot can render entire lots of pickling 
cucumbers worthless during the 3 days of transport and handling just 
before to processing. Effective disease management is currently 
unavailable, and the disease is spreading rapidly throughout Michigan 
cucumber and snap bean growing regions.
    Post harvest rotting is a major concern to the pickled vegetable 
industry. Growers and processors go to great lengths to sanitize the 
surface of vegetable produce through a variety of methods including 
washing, spraying, brushing, chemical treatments, etc. These sanitizing 
systems may be losing effectiveness, and they can also be costly to 
implement and maintain and may be environmentally hazardous. New 
equipment and systems need to be developed, tested, and evaluated in 
order to ensure produce safety for all growers, retailers, and 
consumers. New pickling cucumber germplasm that is resistant to its 
major post-harvest pathogens is urgently needed. Such germplasm is 
currently unavailable, and understanding the basic biology of the 
infection processes is needed to transfer information from model plant 
genomes for practical application in limiting post-harvest loss of 
pickling cucumbers.
    This CRIS urgently needs an additional $100,000 in Federal 
appropriations to conduct the critical research at the scope expected 
for a permanent scientist to solve basic problems and make an impact on 
the cucumber industry.

         U.S. VEGETABLE LABORATORY, CHARLESTON, SOUTH CAROLINA

    The research program at the USDA/ARS, U.S. Vegetable Laboratory in 
Charleston, SC addresses established national problems in vegetable 
crop production and protection with emphasis on the southeastern United 
States. This research program is internationally recognized for its 
accomplishments, which have resulted in development of over 150 new 
vegetable varieties and lines along with the development of many new 
and improved disease and pest management practices. This laboratory's 
program currently addresses 14 vegetable crops including those in the 
cabbage, cucumber, and pepper families, which are of major importance 
to the pickling industry. The mission of the laboratory is to (a) 
develop disease and pest resistant vegetable crops and (b) develop new, 
reliable, environmentally sound disease and pest management programs 
that do not rely on conventional pesticides.
    Continued expansion of the Charleston program is crucial. Vegetable 
growers must depend heavily on synthetic pesticides to control diseases 
and pests. Cancellation and/or restrictions on the use of many 
effective pesticide compounds are having a considerable influence on 
the future of vegetable crop production. Without the use of certain 
pesticides, growers will experience crop failures unless other 
effective, non-pesticidal control methods are found quickly. The 
research on improved, more efficient and environmentally compatible 
vegetable production practices and genetically resistant varieties at 
the U.S. Vegetable Laboratory continues to be absolutely essential. 
This gives U.S. growers the competitive edge they must have to sustain 
and keep this important industry and allow it to expand in the face of 
increasing foreign competition.

                      FUNDING NEEDS FOR THE FUTURE

    It remains critical that funding continue to maintain the forward 
momentum in pickled vegetable research the United States now enjoys and 
to increase funding levels as warranted by planned expansion of 
research projects to maintain United States competitiveness. We also 
understand that discretionary funds are now used to meet the rising 
fixed costs associated with each location. Additional funding is needed 
at the Wisconsin and South Carolina programs for genetic improvement of 
crops essential to the pickled vegetable industry, and at North 
Carolina and Michigan for development of environmentally-sensitive 
technologies for improved safety and value to the consumer of our 
products. The fermented and acidified vegetable industry is receptive 
to capital investment in order to remain competitive, but only if that 
investment is economically justified. The research needed to justify 
such capital investment involves both short term (6-24 months) and long 
term (2-10 years or longer) commitments. The diverse array of companies 
making up our industry assumes responsibility for short-term research, 
but the expense and risk are too great for individual companies to 
commit to the long-term research needed to insure future 
competitiveness. The pickled vegetable industry currently supports 
research efforts at Wisconsin and North Carolina and anticipates 
funding work at South Carolina and Michigan as scientists are put in 
place. Donations of supplies and processing equipment from processors 
and affiliated industries have continued for many years.

U.S. Vegetable Laboratory, Charleston, South Carolina
    The newly constructed laboratory-office building at the U.S. 
Vegetable Laboratory was occupied in April 2003. Design of the 
accompanying greenhouse and headhouse research space is underway using 
the funds appropriated for this purpose in fiscal year 2003. In fiscal 
year 2004, construction of the headhouse component was funded, but 
$10.9 million is still needed to construct the greenhouses. This new 
facility replaces and consolidates outmoded laboratory areas that were 
housed in 1930s-era buildings and trailers. Completion of the total 
research complex will provide for the effective continuation and 
expansion of the excellent vegetable crops research program that has 
been conducted by the Agricultural Research Service at Charleston for 
over 60 years. It is most critical to the mission of the U.S. Vegetable 
Laboratory that the fiscal year 2003 and fiscal year 2004 appropriated 
funds for expansion of the Charleston research staff be maintained in 
fiscal year 2005. In addition, new funds are still needed to hire 
additional scientists to expand the research program. An Entomologist 
is needed to facilitate development of host resistance and new 
management approaches to a wider range of established insect pests of 
vegetable crops; a Molecular Biologist is needed to develop and utilize 
molecular techniques for pathogen and pest population studies necessary 
to development of new management approaches and resistant genetic 
stocks. Both of these new scientific positions will greatly contribute 
to the accomplishment of research that will provide for the effective 
protection of vegetable crops from disease and pests without the use of 
conventional pesticides. Each of these positions requires a funding 
level of $330,000 for their establishment.

------------------------------------------------------------------------
                                     Current status from     New funds
   Appropriations to restore new    fiscal year 2003 and      needed
      scientific staff needed               2004            $770,000.00
------------------------------------------------------------------------
Entomologist......................  Needed..............        $330,000
Molecular Biologist...............  Needed..............         330,000
                                                         ---------------
      Total new funds.............  ....................         660,000
------------------------------------------------------------------------

Food Fermentation Laboratory, Raleigh, North Carolina
    With the additional funds provided in the fiscal year 2004 budget, 
current base funding for four scientists at the laboratory is 
$1,183,000. However, the $270,000 increase that raised fiscal year 2004 
funds to this level are not in the fiscal year 2005 budget submitted to 
congress. Thus, restoration of the $270,000 is urgently requested. An 
additional $317,000 is needed to create a new position for a Food 
Process Engineer, and to fully fund the unit scientists, clerical and 
technical help, including graduate and post-doctorate students.

------------------------------------------------------------------------
        Scientific Staff             Current Status       Funds Needed
------------------------------------------------------------------------
Microbiologist..................  Active.............           $300,000
Chemist.........................  Active.............            300,000
Food Technologist/Biochemist....  Active.............            300,000
Microbial Physiologist..........  Hiring process                 270,000
                                   initiated.
Food Process Engineer...........  Needed.............            300,000
                                                      ------------------
      Total funding required....  ...................          1,500,000
                                                      ==================
      Current funding...........  ...................         -1,183,000
                                                      ==================
      Proposed reduction........  ...................            270,000
                                                      ------------------
      Additional funding needed.  ...................            621,000
------------------------------------------------------------------------

Vegetable Crops Research Laboratory Unit, Madison, Wisconsin
    Current base funding for three scientists is $832,400, of which 
$200,000 was added in fiscal year 2002. An additional $245,400 is 
needed to fully fund the scientists and support staff, including 
graduate students and post-doctorates.

------------------------------------------------------------------------
            Scientific                 Current status      Funds needed
------------------------------------------------------------------------
Geneticist........................  Active..............        $300,000
Horticulturist....................  Active..............         300,000
Geneticist........................  Active..............         300,000
                                                         ---------------
      Total required..............  ....................         900,000
                                                         ===============
      Current funding.............  ....................        -832,400
                                                         ===============
      Proposed reduction..........  ....................         200,000
                                                         ---------------
      Additional funding needed...  ....................         267,600
------------------------------------------------------------------------

    A temporary addition of $200,000 was provided to enhance the 
research effort of this program in fiscal year 2002, and we greatly 
appreciate that additional support, but that addition is being proposed 
for reduction in fiscal year 2004. Thus, the restoration of the funds 
proposed for reduction, is urgently requested. We request a $267,600 
permanent addition this year to sustain the long-term research of this 
group.
Sugarbeet And Bean Research Unit, East Lansing, Michigan
    A $100,000 increase in the current base funding level of the CRIS 
would permit ARS to recruit a full-time scientist (SY) to 
programmatically investigate the complex nature cucumber sanitation and 
vegetable post harvest quality.

------------------------------------------------------------------------
          Scientifc staff              Current status      Funds needed
------------------------------------------------------------------------
Post Doctorate to full SY.........  Active..............        $200,000
Total Required....................  ....................         300,000
Additional funding needed.........  ....................         100,000
------------------------------------------------------------------------

    Thank you for your consideration of these needs and your expression 
of support for the USDA/ARS.
                                 ______
                                 

         Prepared Statement of the Red River Valley Association

    Mr. Chairman and members of the Committee, I am Wayne Dowd, and I 
am pleased to represent the Red River Valley Association as its 
President. Our organization was founded in 1925 with the express 
purpose of uniting the citizens of Arkansas, Louisiana, Oklahoma and 
Texas to develop the land and water resources of the Red River Basin.
    The Resolutions contained herein were adopted by the Association 
during its 79th Annual Meeting in Bossier City, Louisiana on February 
19, 2004, and represent the combined concerns of the citizens of the 
Red River Basin Area as they pertain to the goals of the Association.
    As an organization that knows the value of our precious water 
resources we support the most beneficial water and land conservation 
programs administered through the Natural Resources Conservation 
Service (NRCS). We understand that attention and resources must be 
given to our national security; however, we cannot sacrifice what has 
been accomplished on our Nation's lands. NRCS programs are a model of 
how conservation programs should be administered and our testimony will 
address the needs of the Nation as well as our region.
    The President's fiscal year 2005 budget for NRCS indicates a 
decrease of $216 million from what Congress appropriated in fiscal year 
2004. In reality, NRCS is taking a major decrease in program funding 
and staff years. Inadequate Technical Assistance (TA) funding for 
mandatory support to CCC Farm Bill programs compounds this reduction of 
direct funding. The fiscal year 2005 budget reflects a serious 
shortfall in services for landowner assistance that will not be 
available in fiscal year 2005. This is also reflected in the fact that 
NRCS manpower for fiscal year 2005 would have to decrease by 1,450 
staff years if the President's budget is implemented. This is 
unacceptable.
    This means that NRCS assistance to landowners will not be 
adequately funded, to the detriment of the Nation and our natural 
resources. We would like to address several of the programs 
administered by NRCS. Failure to adequately fund these initiatives 
would reduce assistance to those who want it and the resources that 
need protection.
    Conservation Operations.--This has been in steady decline, in real 
dollars, over the past several years. It has occurred partly as a 
result of funds being reduced from Conservation Operations to balance 
increases in technical assistance for mandatory conservation financial 
assistance programs.
    The President's budget included $710.4 million, which is a decrease 
of $142.6 million from fiscal year 2004. This is the largest 1 year cut 
made by any administration in recent memory.
    We request a total of $930 million be appropriated for Conservation 
Operations for NRCS to meet the demands it faces today.
    Conservation Technical Assistance is the foundation of technical 
support and a sound, scientific delivery system for voluntary 
conservation to the private users and owners of lands in the United 
States. It is imperative that we provide assistance to all working 
lands' not just those fortunate few who are able to enroll in a Federal 
program. Working lands are not just crops and pasture (commodity 
staples) but includes forests, wildlife habitat and coastal marshes. 
The problem is that NRCS personnel funded from mandatory programs' can 
only provide technical assistance to those enrolled in these programs, 
leaving the majority of the agricultural community without technical 
assistance. We recommend that adequate funding, for technical 
assistance, be placed in ``Conservation Technical Assistance'', and 
allow NRCS to provide assistance to everyone.
    We do not support the use of third party vendors for technical 
assistance as a replacement of career NRCS public servants, but they 
may be utilized ``in addition to''. We have to address the question of 
quality assurance and administration for these programs. Why establish 
a new process that will ultimately cost more than using the in-house 
expertise that now exists and has proven to be successful? We believe 
third party vendors can be made available only after NRCS staffing is 
brought up to levels commensurate with the increase in workload caused 
by the Farm Bill, not to replace NRCS staffing.
    Watershed and Flood Prevention Operations (Public Laws 566 & 
534).--We are greatly disappointed that the President's Budget provided 
only $40.2 million for watershed operations. There is no doubt that 
this is a Federal responsibility, in conjunction with a local sponsor. 
We ask our legislators to support the local sponsors in this national 
issue. This funding level is too low to support a national program, as 
important as this one.
    We are very appreciative for the funding level of $87 million 
enacted in the fiscal year 2004 appropriations bill. It is reassuring 
to know that both the House and Senate realize the importance of this 
program to the agricultural community.
    There are many new projects, which are awaiting funds for 
construction under this program. We strongly recommend that a funding 
level of $200 million be appropriated for Watershed Operations 
Programs, Public Law 534 ($20 million) and Public Law 566 ($180 
million).
    The Red River has proven, through studies and existing irrigation, 
to be a great water source for ``supplemental'' irrigation. The two 
projects mentioned below, will use existing, natural bayous to deliver 
water for landowners to draw from. The majority of expense will be for 
the pump system to take water from the Red River to the bayous. This 
project will provide the ability to move from ground water dependency 
to surface water, an effort encouraged throughout the Nation. Both will 
enhance the environmental quality and economic vitality of the small 
communities adjacent to the projects.
  --Walnut Bayou Irrigation Project, AR.--This project received 
        $300,000 in the fiscal year 2004 appropriations. Plans and 
        specifications have been completed and it is ready to proceed 
        into the construction phase. An irrigation district has been 
        formed and they are prepared to take on the responsibility to 
        generate the income for the O&M required to support this 
        project. We request that $4,000,000 be appropriated for this 
        specific project in fiscal year 2005.
  --Red Bayou Irrigation Project, LA.--The plans and specifications 
        will be completed in fiscal year 2004 making this project ready 
        for construction in fiscal year 2005. An irrigation district 
        has been formed and is prepared to collect funds to support the 
        O&M for this proposed system. We request that $2,500,000 be 
        specifically appropriated to begin construction in fiscal year 
        2005.
    Watershed Rehabilitation.--More than 10,400 individual watershed 
structures have been installed nationally. They have contributed 
greatly to conservation, environmental protection and enhancement, 
economic development and the social well being of our communities. More 
than half of these structures are over 30 years old and several hundred 
are approaching their 50-year life expectancy. Today you hear a lot 
about the watershed approach to resource management. These programs 
offer a complete watershed management approach and should continue for 
the following reasons:
  --They protect more people and communities from flooding now than 
        when they were first constructed.
  --Their objectives and functions sustain our Nation's natural 
        resources for future operations.
  --They are required to have local partners and be cost shared.
  --The communities and NRCS share initiatives and decisions.
  --They follow NEPA guidelines and enhance the environment.
  --They often address the need of low income and minority communities.
  --The benefit to cost ratio for this program has been evaluated to be 
        2.2:1.
    What other Federal program can claim such success?
    There is no questioning the value of this program. The cost of 
losing this infrastructure exceeds the cost to reinvest in our existing 
watersheds. Without repairing and upgrading the safety of existing 
structures, we miss the opportunity to keep our communities alive and 
prosperous. It would be irresponsible to dismantle a program that has 
demonstrated such great return and is supported by our citizens. We 
cannot wait for a catastrophe to occur where life is lost to decide to 
take on this important work.
    A 1999 survey, conducted in 22 states, showed that 2,200 structures 
are in need of immediate rehabilitation at an estimated cost of $543 
million. The President's budget neglects the safety and well being of 
our community needs by placing only $10.1 million for this program. 
This is drastically lower than the levels authorized in the 2002 Farm 
Bill. We request that $65 million be appropriated to provide financial 
and technical assistance to those watershed projects where sponsors are 
prepared to commence rehabilitation measures, as directed in the 2002 
Farm Bill.
    Watershed Survey and Planning.--In fiscal year 2004 $10.6 million 
was appropriated to support this extremely important community program. 
NRCS has become a facilitator for the different community interest 
groups, state and Federal agencies. In our states such studies are 
helping identify resource needs and solutions where populations are 
encroaching into rural areas. The Administration decided to fund this 
program with only $5.1 million. We strongly disagree with this low 
level and ask Congress to fund his important program at the appropriate 
level. As our municipalities expand, the water resource issue tends to 
be neglected until a serious problem occurs. Proper planning and 
cooperative efforts can prevent problems and insure that water resource 
issues are addressed. We request this program be funded at a level of 
$35 million.
    We request that the following two studies be specifically 
identified and funded in the fiscal year 2005 appropriations bill.
  --Maniece Bayou Irrigation Project, AR.--This is a project in its 
        initial stage of planning. An irrigation district is being 
        farmed to be the local sponsor. This project transfers water 
        from the Red River into Maniece Bayou where landowners would 
        draw water for supplemental irrigation. We request that 
        $200,000 be appropriated to initiate the plans and 
        specifications.
  --Lower Cane River Irrigation Project, LA.--The transfer of water 
        from the Red River to the Lower Cane River will provide 
        opportunities for irrigation and economic development. Funds 
        are needed to initiate a Cooperative River Basin Study. We 
        request that $350,000 be appropriated for this study.
    Emergency Watershed Protection Program.--This program has 
traditionally been funded through Emergency Supplemental Appropriations 
and administered by NRCS through its Watershed and Flood Prevention 
Operations. It has traditionally been a zero budget line item, because 
it relies on a supplemental appropriation.
    As our populations expand and shift, land use changes and 
intensifies. Impacts of severe weather events are becoming more intense 
on our communities, rivers and related eco-systems. These major weather 
events will have an adverse impact requiring urgent NRCS assistance. It 
is important that NRCS is prepared for a rapid response, not waiting 
for legislative action to provide funds for emergency work. With some 
funds available, they would be able respond immediately to an emergency 
when it occurs and not have to wait for an emergency supplemental to be 
passed.
    We request that $20 million be appropriated as ``seed'' funding to 
allow NRCS to react to an emergency while the full need is determined 
and added through a supplemental appropriation.
    Resource Conservation and Development (RC&D).--This has always been 
a well-received program by the Administration. Their budget proposal of 
$50.8 million is adequate to accomplish the needs of the Nation and we 
support this level of funding.
    Mandatory Accounts (CCC) Technical Assistance (TA).--Request for 
assistance through the CCC programs has been overwhelming. Requests far 
exceed the available funds and place an additional workload on NRCS's 
delivery system. Adequate funding for TA must be provided at the full 
cost for program delivery. This includes program administration, 
conservation planning and contracting with each applicant. Congress, in 
the 2002 Bill, wisely increased conservation programs each year. This 
increased investment with the multi-year CCC programs will increase the 
NRCS workload; therefore, NRCS must receive the TA funds to administer 
these programs.
    The mandatory CCC programs for fiscal year 2005 have been 
appropriated at a level of $3.9 billion. Only $465 million (12 percent) 
has been allocated in TA for NRCS. Historically 19 percent of total 
program cost has been required. NRCS will have to fund this TA 
requirement at a level of $741 million. The short fall will no doubt 
leave program monies unexpended because NRCS will not have enough funds 
to service the multiyear contracts written to date under this and the 
previous farm bill plus service the fiscal year 2005 program 
applicants. This makes landowners the real losers.
    We request that the CCC Program budget TA in the fiscal year 2005 
Appropriations Bill at the full cost of technical assistance, for each 
program, which must be at least $741 million (19 percent).
    Over 70 percent of our land is privately owned. This is important 
in order to understand the need for NRCS programs and technical 
assistance. Their presence is vital to ensuring sound technical 
standards are met in conservation. These programs not only address 
agricultural production, but sound natural resource management. Without 
these programs and NRCS properly staffed to implement them, many 
private landowners will not be served adequately to apply conservation 
measures needed to sustain our natural resources for future 
generations.
    There have been new clean water initiatives, but why do we ignore 
the agency that has a proven record for implementing watershed 
conservation programs? Congress must decide; will NRCS continue to 
provide the leadership within our communities to build upon the 
partnerships already established? It is up to Congress to insure NRCS 
is properly funded and staffed to provide the needed assistance to our 
taxpayers for conservation programs.
    All these programs apply to the citizens in the Red River Valley 
and their future is our concern. The RRVA is dedicated to work toward 
the programs that will benefit our citizens and provide for high 
quality of life standards. We therefore request that you appropriate 
the requested funding within these individual programs, to insure our 
Nation's conservation needs are met.
    I thank you for the opportunity to present this testimony on behalf 
of the members of the Red River Valley Association and we pledge our 
support to assist you in the appropriation process. Please direct your 
comments and questions to our Executive Director, Richard Brontoli, 
P.O. Box 709, Shreveport, LA 71162, (318) 221-5233, E-mail: 
[email protected].
    Grant Disclosure.--The Red River Valley Association has not 
received any Federal grant, sub-grant or contract during the current 
fiscal year or either of the two previous fiscal years.
                                 ______
                                 

        Prepared Statement of the Society of American Foresters

    The Society of American Foresters (SAF) represents approximately 
17,000 forestry professionals in all sectors of the profession. SAF 
members pledge to use their conservation ethic to ensure the continued 
health and use of forest ecosystems and the present and future 
availability of forest resources to benefit society. The programs of 
the Natural Resource Conservation Service (NRCS), the U.S. Department 
of Agriculture (USDA) research budget, and the Cooperative State 
Research, Education and Extension Service (CSREES) contribute to the 
achievement of these ideals by supporting education, research, and 
technology associated with the practice of forestry and the stewardship 
and sustainability of this country's forest resources. Through these 
Agencies, partnerships are built with other government entities, 
universities, and private organizations to advance forest management 
objectives on both public and private forest land to improve the 
management of these valuable resources. Federal appropriations 
facilitate these collaborative partnerships.
Renewable Resources Extension Act Program (RREA)
    Forest resource management is increasingly complex, as we place 
increasing demands on our forest resources, the number of family forest 
landowners grow while the total acreage these families own decreases, 
urban sprawl and development pressures persist, and forest health 
issues persist on both public and private forest lands. Family forest 
owners need information and assistance to be able to address these 
problems.
    Current budget deficits demand we leverage the most value from 
every dollar invested. Research funding is no exception. Outreach and 
extension, which assists in the translation of research findings to 
solve real world problems, greatly increases the value of our research 
investment. Through the RREA program, much needed outreach and 
extension is provided at universities around the country. These efforts 
utilize research findings, making investments in research increasingly 
important.
    When Congress reauthorized the RREA program in the 2002 Farm Bill, 
legislation was included to create a new Sustainable Forestry Outreach 
Initiative (SFOI). SFOI would capitalize on and coordinate private 
sector initiatives aimed at achieving sustainable forestry. The program 
will assist landowners in understanding the broad array of choices 
before them, and facilitate their use of one or more of these programs 
designed to improve forest management.
    SAF strongly supports increased funding for the Renewable Resources 
Extension Act program and the Sustainable Forestry Outreach Initiative 
for fiscal year 2005. We would like to see the program funded at the 
recently authorized level of $30 million. Though we are asking for a 
modest increase, we believe there is great potential for success with 
the RREA and SFOI programs.
The Natural Resource Conservation Service (NRCS)
    Through NRCS, family forestland owners can receive assistance for a 
variety of conservation practices, influencing the stewardship of these 
valuable resources. Several programs administered by NRCS are key to 
assisting family forest owners, including the Environmental Quality 
Incentives Program, the Wildlife Habitat Incentives Program, the 
Conservation Reserve Program, and the Wetlands Reserve Program. We 
strongly support full funding for these programs and will continue to 
work with NRCS to address family forest owner needs through these 
programs.
    With the passage of the 2002 Farm Bill, NRCS responsibilities have 
greatly increased. However, the proposed budget for fiscal year 2005 
does not reflect these increases, and instead decreases funding for 
Conservation Operations to $710 million. We recommend increasing this 
funding to at least that of the fiscal year 2004 enacted level, $848 
million. This will better enable the Agency to meet the increasing 
demands for the technical expertise and address critical resource 
concerns on private lands.
    The proposed budget creates a separate account to fund conservation 
technical assistance for two Farm Bill programs, the Conservation 
Reserve Program and the Wetlands Reserve Program. We hope this solution 
will resolve the issues associated with technical assistance and allow 
implementation of all the 2002 Farm Bill programs at authorized levels 
without compromising the delivery of these important programs to 
millions of private landowners in need of assistance.
Forestry Research
    As populations grow, the demands we place on our forest resources, 
both tangible and intangible, continue to increase. Forestry Research 
is crucial to enable forest managers to make decisions and continue to 
sustainably meet the demands on our forest resources. This research 
provides new and innovative ways to manage forests and address the 
environmental, social, and economic concerns that forest managers are 
faced with. The SAF believes forestry research should be funded through 
both public and private investments. Two programs within the USDA 
budget provide public funding for forestry research: The Cooperative 
Forestry Research (McIntire Stennis) Program and the National Research 
Initiative.
    The Cooperative Forestry (McIntire-Stennis) Research Program 
supports university-based research on critical forestry issues and is 
an important part of the collaborative forestry research effort among 
Federal, state, and private sector scientists. The SAF supports 
increasing funding for this program to $30 million. The research 
accomplished with this funding is critical to the development of new 
information and technologies that increase not only the efficiency and 
productivity of forest management on all forest ownerships for the full 
range of forest benefits, but also provide information for developing 
natural resource management policy. McIntire-Stennis research funds are 
granted directly to public colleges and universities on a matching 
basis, leveraging more than three state and university dollars for 
every Federal dollar. This program has provided funding for research 
demands that have not been met through other private and public sector 
programs. We believe at least $30 million is justified to meet these 
needs.
    The National Research Initiative (NRI), a competitive grant 
program, provides funding for research on various issues in the 
biological and environmental sciences arena. Through this program, 
grants are awarded on a matching basis to university researchers in 
biological, environmental, and engineering sciences to address critical 
problems in agriculture and forestry. The SAF strongly supports the 
increase in funding proposed in the fiscal year 2005 budget, and 
recommends this funding be allocated with an increased focus on 
renewable natural resource areas. We strongly believe this combination 
of formula-based and competitive-based research funding to be 
appropriate if we are to maintain the long-term stability and focus 
required in forestry research, and to foster new and innovative 
thinking characteristic of competitive grants.
    Thank you for your consideration.
                                 ______
                                 

 Prepared Statement of the U.S. Agricultural Export Development Council

    U.S. agricultural exporters want to compete on a level playing 
field. However, foreign governments continue to manipulate markets and 
production which means U.S. agricultural exporters need Washington's 
support to overcome this inequity. The record shows that U.S. 
agriculture takes this public-private partnership very seriously and 
contributes significant amounts of its own resources to the effort.
    Further, U.S. agriculture and the U.S. Department of Agriculture 
(USDA) are using strategic planning, program evaluation, quantifiable 
goals, and a competitive award process to ensure that taxpayer's money 
is being used in a way which generates the biggest returns for the U.S. 
economy and its 850,000 citizens who depend on a healthy agricultural 
export sector for their livelihood.
    The U.S. Agricultural Export Development Council (USAEDC) 
respectfully urges this subcommittee to fully support fiscal year 2005 
export promotional efforts at the level legislated in the Farm Security 
and Rural Investment Act (FSRIA) of 2002: the Foreign Market 
Development (FMD) Program at a level of $34.5 million and the Market 
Access Program (MAP) at a level of $140 million. We also urge the 
subcommittee to support a strong USDA Foreign Agricultural Service 
(FAS), our partner in promoting increased U.S. agricultural exports.
    First and foremost, it is important to revisit the role 
agricultural exports play in the health of our national economy and the 
well being of our citizenry. Every $1 billion in agricultural exports 
supports approximately 15,000 United States direct and indirect jobs. 
With our $56.2 billion in agricultural exports in 2003, this means a 
successful U.S. agriculture export effort was responsible for 850,000 
jobs. (These figures do not include forestry or fishery products which 
increase export sales by an additional $7.9 billion or 120,000 jobs.) 
Agricultural exports play an important role in every region of the 
country, including the South (117,000 jobs), the Pacific Northwest 
(53,000 jobs), and the Midwest (305,000 jobs). Ninety percent of 
America's agricultural operations are still run by individuals or 
families and most are still small farms.\1\
---------------------------------------------------------------------------
    \1\ ``Preliminary Census Results Give First Look at Changing Face 
of Agriculture''. USDA Release No. 0063.04
---------------------------------------------------------------------------
    These jobs not only ensure family incomes, but also help grow the 
national tax base, increasing revenue to the Treasury and contributing 
in no small way to the reduction of our rising national debt. At a time 
when job creation is at a minimum, everything that can be done to 
maintain this sector is vital. Without a healthy agricultural export 
sector, we all lose.
    Ensuring the long-term vitality of U.S. agricultural exports is one 
of the missions of the U.S. Agricultural Export Development Council 
(USAEDC). A national, non-profit, private sector trade association 
funded solely by its members, USAEDC's 75 members are U.S. farmer 
cooperatives, agricultural trade associations and state regional trade 
groups that in turn represent the interests of farmers, agribusinesses 
and manufacturers in every state of the Union. Our members represent 
producers of both bulk and high-value processed products, including 
grains, fruits and vegetables, cotton, livestock, dairy products, 
seeds, fish, wood products, wine, poultry, nuts, and rendered products, 
among others.
    Our members continually strive to ensure the United States remains 
one of the most active agricultural exporting countries in the world. 
We proudly produce among the world's highest quality and valued 
products as evidenced by our ability to be one of the few sectors of 
the U.S. economy to consistently run a positive balance of trade. In 
2003, U.S. agriculture racked up a record year in exports: over $1 
billion per week in sales to more than 100 countries. Put another way, 
every 60 minutes, nearly $6.5 million of U.S. agricultural products 
were consigned for export.

Why Trade is Important to U.S. Agriculture
    Demand.--96 percent of the world's food consumers live outside of 
the United States.
    Supply.--Farm production far exceeds United States demand/
consumption.
    Capacity.--United States productivity is increasing due to 
improvements in technology and science.
    Market.--Two-thirds of the world's purchasing power is outside of 
the United States.
    Sales.--Export market sales are growing at twice the rate of 
domestic sales.
    Export market sales account for over $1 billion per week to over 
100 countries.
    Jobs.--Trade supports 850,000 badly needed jobs, 60 percent of 
which are in urban areas.
    Farm Income.--Trade generates 25 percent of farm cash receipts.
    Dependency.--Trade is one of the most export-dependent industries 
in the United States as domestic consumption levels off.
    Business.--Trade supports small businesses that employ three of 
four workers.
    Local Impact.--$1 of exports creates $1.50 in economic activity
    Production.--One of every three cropland acres is grown for export.
    Economy.--Agriculture is the only sector that posts a trade surplus 
year after year.

The Potential for Future Growth
    U.S. agricultural exports reached $56.2 billion in 2003. The 
largest single markets were Canada and Japan, followed closely by 
Mexico. Trade with Canada has grown 186 percent in the past 10 years 
and with Mexico by 200 percent for the same period. While China 
represents only 3 percent of exports today, trade has grown 700 percent 
in 10 years and likely to continue apace.
    Projections show that the vast majority of world population growth 
will take place in developing countries. The middle class in key 
emerging markets is expected to grow by 600 million by 2006. This 
transition from a subsistence existence to ``middle class'' creates 
increased demand for quantity, quality and diversity of food. United 
States trade in high value products has increased sharply, another 
indicator of the growing buying power of our customers. China and India 
have been identified as the two nations that will grow the most 
exponentially and outstrip all others. The potential value to U.S. 
agricultural exports and the overall economy is clear and the means to 
access these markets with changing consumer tastes and preferences must 
be supported. As trade liberalization occurs, greater market 
development and marketing activities must be undertaken by U.S. 
agricultural groups to capture these new market opportunities and 
consumer demands. U.S. agriculture needs to be poised to take advantage 
of these opportunities.

But Some Things Stand in Our Way
    U.S. agriculture has done well in a climate where international 
conditions remain extremely competitive. Foreign governments still 
bolster agricultural production, to the competitive disadvantage of the 
United States in foreign markets. The European Union alone currently 
spends more than $2 billion annually on agricultural export subsidies 
compared to less than $100 million by the United States, outspending 
the United States by more than 20 to 1. With the accession of 
additional countries into the EU, more and more countries will turn 
their attention to support for agricultural production for both their 
domestic and export markets. Through their spending and production 
decisions, foreign governments continue to strengthen traditional, and 
create new, competitors for U.S. exports.
    United States exporters also face ongoing unreasonably high tariffs 
in those markets that have been identified as the ``growth'' markets of 
the future. Regionally, South Asia's tariffs are at 118 percent and the 
average agricultural tariff worldwide is 62 percent. The WTO and 
Regional Trade Agreements are working to break down these ``classic'' 
barriers but even when success is achieved, new non-tariff barriers are 
often substituted, impeding what could be significantly higher exports.
    Many countries have turned to sanitary and phytosanitary (S/PS) 
requirements as market entry barriers to U.S. agricultural products. 
Although said by their proponents to be based on sound science and thus 
objective, many of these S/PS barriers are in actuality an attempt to 
use practices that are not universally accepted to establish import 
regimes which effectively halt or severely restrict U.S. imports. The 
recent BSE (beef) and AI (poultry) incidents are cases in point.
    A myriad of other types of non-tariff barriers exist which prevent 
U.S. agriculture from reaching the exports levels of which it is 
capable. FAS, the ally of agricultural exports, and its overseas 
offices have compiled information on numerous cases of foreign 
assistance for agricultural production as well as barriers to trade. 
The National Trade Estimate of the Office of the U.S. Trade 
Representative catalogues this loss to U.S. agricultural exports from 
unfair foreign competition. Despite a significant commitment of their 
own resources, the United States private sector cannot overcome such 
extensive barriers alone.

A U.S. Public-Private Partnership is Necessary and Appropriate
    American agriculture is 2\1/2\ times more reliant on trade than the 
general economy; every effort should be made to insure its access to 
the world marketplace.
    Given the magnitude of the challenge, it would be unrealistic to 
expect either the United States private sector or the United States 
public sector to be able solely to overcome the barriers to foreign 
trade that U.S. agriculture faces. Since 1954, U.S. agriculture has 
worked successfully with the U.S. Government to remedy instances of 
foreign unfair competition and overcome market access barriers that 
have prevented U.S. exports from realizing their potential. To those 
who say there is no appropriate role for Washington in this fight, 
former U.S. Under Secretary of Commerce Jeffrey Garten, now dean of the 
Yale School of Management, sums up the situation quite well: ``In the 
best of worlds, governments ought to get out of this business [of 
export promotion] altogether. But the marketplace is corrupted by the 
presence of government. So do you sit on the side and pontificate about 
Adam Smith, or do you enter the fray?'' \2\ Mr. Garten argues that 
Washington must enter into the battle or risk losing more U.S. jobs.
---------------------------------------------------------------------------
    \2\ ``Don't Be Salesmen'', The Economist, Jan. 2, 1997.
---------------------------------------------------------------------------
    USDA proposes funding a number of programs for U.S. agriculture 
which help the sector overcome these foreign trade barriers and market 
distortions. USAEDC commends the actions of this subcommittee in the 
past to fund these programs. We strongly support efforts by this 
Congress, as provided for in the Food Security and Rural Investment Act 
of 2002, to again provide a dynamic arsenal of programs to boost the 
efforts of U.S. agricultural producers to maintain current, and 
establish new, markets around the world. It is essential that the full 
range of USDA's export programs be fully funded and aggressively 
implemented this coming year, including the Foreign Market Development 
(FMD) program at $34.5 million and the Market Access Program (MAP) at 
$140 million.
    Nowhere is the record of success of the public-private partnership 
more evident than in the FMD and MAP programs. USAEDC members consider 
these programs the ``heavy artillery'' in the USDA arsenal. These 
complementary programs have been instrumental in our record export 
performance. The Foreign Market Development Program is aimed at long-
term marketing efforts, i.e., making infrastructural changes to foreign 
markets through training and educational efforts among members of the 
foreign trade and developing long-standing relationships with the 
trade. Successful efforts result in a modification of the foreign 
market structure so that U.S. products become an available, attractive, 
well understood alternative to other sources of competing products. FMD 
activities help the foreign importer, processor, and retailer to 
understand not only how to properly store, handle, process, and market 
the U.S. product, but also to appreciate its unique characteristics, 
high quality, and reliability of supply.
    The Market Access Program (MAP) complements the FMD program. Where 
FMD is aimed at building market relations, MAP is aimed at building 
market access and presence. Where FMD targets the importers/processors/
retailers, MAP targets the end-user--the consumer. Through activities 
such as nutrition seminars, in-store promotions, contests, advertising, 
cooking demonstrations and the like, MAP participants create or 
capitalize on new trends in foreign consumption and increase the 
consumers' awareness and level of comfort with the imported U.S. 
product. MAP provides the small United States branded companies and the 
United States specialty crops with the necessary funds to assist them 
in their efforts to gain their fair share in the global marketplace.
    The FMD program helps create new markets for U.S. agricultural 
exports.--For example, the American Soybean Association (ASA) has 
convinced three Malaysian companies to produce full fat soybean meal 
(FFSBM) from imported U.S. soybeans for the local swine and poultry 
diets. Using FMD funds, ASA provided technical data, carried out team 
visits to other FFSBM facilities and conducted seminars on FFSBM 
benefits at feedmill and farm level, creating awareness and demand for 
FFSBM. As a result of ASA's work, the three companies purchased 20,000 
metric tons of U.S. soybeans valued at $6 million. The potential market 
for FFSBM in Malaysia is estimated at 200,000 MT, valued at $79 million 
per year. In a similar vein, the U.S. Wheat Associates (USWA) used FMD 
funds to demonstrate to Brazilian bakers potential wheat blends and 
end-use qualities of U.S. wheat. Through a special education and 
training program, USWA brought new baking techniques to a miller who 
grinds one million metric tons of wheat per year and has 15 percent of 
the flour market in Brazil. This company saw that using 40 percent of 
United States hard winter wheat in the flour blend--instead of 100 
percent Argentine--would improve the final product. An initial sale of 
25,000 MT of U.S. wheat is expected to lead to even more sales as more 
Brazilian bakers take part in the education and training sessions.
    The MAP program helps build market penetration for U.S. 
agricultural exports.--One example of this is the California Tree Fruit 
Agreement (CTFA). Faced with the required perennial renegotiations of 
the California growers' access agreement with Mexico, CTFA used grower 
assessments and MAP funds to craft an aggressive advertising and in-
store promotion campaign that was ready to launch as soon as the 
agreement was inked. This resulted in a record 2.3 million cartons 
(26,422 metric tons) of peaches, plums and nectarines, valued at $19 
million in just a 4 month period. Similarly, a Missouri-based firm has 
partnered with the Mid-America International Agri-Trade Council 
(MIATCO) to export feed additives for livestock. Through a technically-
oriented promotional campaign to educate and attract new customers, 
sales to Korea and Japan recently jumped 212 percent and 270 percent 
respectively. The company has a fermentation processing plant in Iowa, 
feed plants in Indiana and Nebraska, sources its yeast from Illinois, 
and purchases soymeal from farms throughout the Midwest, providing jobs 
to countless individuals.
    Numerous examples of other FMD and MAP program ``success stories'' 
are available on-line at www.usaedc.org. Therefore, USAEDC strongly 
supports an FSRIA 2002 funding level of $34.5 million for FMD and $140 
million for MAP for fiscal year 2005. These amounts represent the 
levels that the House and Senate Agriculture Committees believed to be 
essential to the growth and maintenance of U.S. agricultural export 
markets.
    It is important to realize that the program participants contribute 
their industry's money and manpower to participate in these programs. 
Contributions are requirements of both the FMD and MAP programs; no one 
is getting a ``free ride.'' Thus, the program participants have just as 
much, if not more, impetus to conduct responsible and effective FMD and 
MAP marketing programs. In fiscal year 2002, MAP participant 
contributions were 176 percent of total MAP dollars spent and FMD 
cooperator contributions were 146 percent of total FMD dollars spent. 
Another way to view this is that U.S. agriculture contributed $1.76 for 
every MAP program dollar spent and $1.46 for every FMD dollar expended. 
These numbers clearly illustrate the private sector's strong belief in 
and commitment to the essential nature of the FMD and MAP programs, and 
that the public-private partnership approach is effective.
    U.S. agriculture is also active on other fronts to maximize 
opportunities for export increases, working with Washington in the 
trade policy arena. U.S. trade policy efforts have met with success in 
opening new markets to U.S. agricultural products. However, trade 
policy alone is not enough. Bringing down barriers to trade is only 
truly effective at increasing U.S. agricultural exports when followed 
by intensive marketing efforts. The FMD and MAP programs help U.S. 
agriculture do just that.

Fine Tuning of the FMD and MAP Programs has Enhanced Effectiveness
    USAEDC members are as concerned as everyone in America about the 
ballooning federal budget deficit and the long-term fiscal health of 
this country. The public-private partnership in the FMD and MAP 
programs allows us to be proactive, increasing U.S. agricultural 
exports beyond that which U.S. agricultural interests would be able to 
do on their own. Increased exports generate increased tax revenues 
throughout the system and reduce farm payments as producers rely 
increasingly on the marketplace for their revenue.
    Annual independent evaluations are required by USDA to determine 
the past impact and future direction of their marketing programs. This 
evaluation is in addition to that conducted independently by many of 
the associations themselves as part of their own strategic planning. 
Program evaluations are reviewed jointly by USDA and program 
participants to determine the appropriate promotional programs for 
particular markets in the future and to demonstrate that program 
participants are serious about getting the best possible return on FMD 
and MAP funds.
    The programs have gone through a series of reforms that have 
resulted in application and allocation criteria being much more widely 
known and transparent for all potential applicants. Other changes in 
response to General Accounting Office and Office of Management and 
Budget recommendations to ensure the best possible return to the U.S. 
taxpayer and the U.S. Treasury have been executed. FAS is to be 
commended for its work in implementing these changes as well as its 
continuing efforts to support efforts by U.S. agriculture to expand our 
exports. A continued strong and well-funded FAS is an important part of 
our successful public-private partnership. Without a strong overseas 
presence that is supported in Washington by sufficient staff with 
access to adequate technology, success in the global marketplace will 
be much more difficult to achieve. USAEDC supports the fiscal year 2005 
request of the President for full FAS funding at $148 million.
    The U.S. Agricultural Export Development Council (USAEDC) 
appreciates this opportunity to submit written testimony in support of 
an aggressive United States effort in fiscal year 2005 to increase U.S. 
agricultural exports, specifically with an FMD program funded at $34.5 
million, and an MAP program funded at $140 million.
  members of the u.s. agricultural export development council (usaedc)
Alaska Seafood Marketing Institute
Almond Board of California
American Forest & Paper Association
American Peanut Council
American Seafood Institute
American Seed Trade Association
American Sheep Industry Association
American Soybean Association
Blue Diamond Growers
California Agricultural Export Council
California Asparagus Commission
California Cherry Advisory Board
California Cling Peach Growers Advisory Board
California Dried Plum Board
California Kiwifruit Commission
California Pistachio Commission
California Strawberry Commission
California Table Grape Commission
California Tomato Commission
California Tree Fruit Agreement
California Walnut Commission
Catfish Institute
Cherry Marketing Institute
Chocolate Manufacturers Association
Cotton Council International
Cranberry Marketing Committee
Florida Department of Citrus
Florida Tomato Committee
Food Export USA--Northeast
Ginseng Board of Wisconsin
Hop Growers of America
Intertribal Agriculture Council
Leather Industries of America
Mid-America International Agri-Trade Council
Mohair Council of America
National Association of State Departments of Agriculture
National Dry Bean Council
National Hay Association
National Honey Board
National Renderers Association
National Sunflower Association
National Watermelon Promotion Board
New York Wine & Grape Foundation
North American Export Grain Association, Inc.
North American Millers' Association
Northwest Horticultural Council
Northwest Wine Coalition
Oregon Seed Council
Organic Trade Association
Pear Bureau Northwest
Pet Food Institute
Popcorn Board
Produce Marketing Association
Raisin Administrative Committee
Southern U.S. Trade Association
Texas Produce Export Association
U.S. Apple Export Council
U.S. Dairy Export Council
U.S. Grains Council
U.S. Hide, Skin & Leather Association
U.S. Highbush Blueberry Council
U.S. Livestock Genetics Export, Inc.
U.S. Meat Export Federation
U.S. Rice Producers Association
U.S. Wheat Associates United Fresh Fruit & Vegetable Association
United States Potato Board
USA Dry Pea & Lentil Council
USA Poultry & Egg Export Council
USA Rice Federation
Washington Apple Commission
Washington State Fruit Commission
Western United States Agricultural Trade Association Wine Institute
                                 ______
                                 

            Prepared Statement of the U.S. Apple Association

    The U.S. Apple Association (U.S. Apple) appreciates the opportunity 
to provide this testimony on behalf of our nation's apple industry.
    Our testimony will focus on the following three areas: the Market 
Access Program (MAP); Food Quality Protection Act (FQPA) 
implementation; Cooperative State Research, Extension and Education 
Service (CSREES) and Agricultural Research Service (ARS) funding.
    U.S. Apple is the national trade association representing all 
segments of the apple industry. Members include 36 state and regional 
apple associations representing the 7,500 apple growers throughout the 
country as well as more than 500 individual firms involved in the apple 
business. Our mission is to provide the means for all segments of the 
U.S. apple industry to join in appropriate collective efforts to 
profitably produce and market apples and apple products.

Market Access Program (MAP)
    U.S. Apple encourages Congress to appropriate $140 million in MAP 
funds, the level authorized in the farm bill for fiscal 2005.
    The apple industry receives $3.2 million annually in export 
development funds from the U.S. Department of Agriculture's (USDA) 
Market Access Program (MAP). These funds are matched by grower dollars 
to promote apples in more than 20 countries throughout the world. Since 
this program's inception in 1986, the U.S apple industry has expanded 
fresh apple exports by nearly 150 percent, due in large part to the 
foreign promotions made possible by MAP. One-quarter of U.S. fresh 
apple production is exported, with an annual value of approximately 
$370 million.
    Strong MAP funding is critical to the U.S. apple industry's efforts 
to maintain and expand exports, and to increase grower profitability. 
Congress recognized the importance of MAP by authorizing increased 
funding in the 2002 farm bill. Over the past 2 years, congressional 
appropriations have kept pace with the farm bill's authorized level.
Food Quality Protection Act (FQPA) Implementation
    U.S. Apple urges full funding for the following U.S. Department of 
Agriculture (USDA) administered programs to mitigate the negative 
impact of FQPA implementation on apple growers.
  --$16 million for the Pesticide Data Program, administered by the 
        Agricultural Marketing Service (AMS);
  --$8.0 million for the National Agricultural Statistics Service 
        (NASS) pesticide-usage surveys;
  --$2.0 million for the Office of Pest Management Policy administered 
        by the Agricultural Research Service (ARS);
  --$3.7 million for minor-use registration of crop protection tools 
        (IR-4) administered by ARS;
  --$7.2 million for area-wide IPM research administered by ARS;
  --$13.5 million for the Integrated Pest Management Research Grant 
        Program administered by the Cooperative State Research, 
        Extension and Education Service (CSREES);
  --$10.8 million for minor-use registration of crop protection tools 
        (IR-4) administered by CSREES; and
  --$12.5 million for the Pest Management Alternatives Program, 
        Regional Pest Management Centers, Crops at Risk and Risk 
        Avoidance and Mitigation Program also administered by CSREES.

National Tree Fruit Technology Roadmap
    U.S. Apple urges the Committee to support the apple industry's 
efforts to improve its competitiveness by providing increased federal 
funding for the development and application of new technologies as 
outlined below.
    Dramatic change in the global apple market over the past decade is 
threatening the livelihood of U.S. apple growers and the viability of 
the U.S. apple industry. Low cost producers of apples in the People's 
Republic of China, South Africa and Eastern Europe are displacing our 
domestic industry worldwide. A race to survive is now underway among 
global apple competitors, and for the first time in its history, U.S. 
industry success is not guaranteed. In response to this competitive 
threat, the apple industry is seeking federal support of a National 
Tree Fruit Technology Roadmap that invests in development of new 
technologies to automate orchards and fruit handling operations, 
optimize fruit quality, nutritional value and safety.
    Each of the following research positions is part of an integrated 
approach to solving critical research problems that will help make the 
industry more competitive. The broad-based need to solve these problems 
requires systematic work across a number of problem areas 
simultaneously in different locations. Therefore, it is critically 
important that each of these programs is fully funded.
    Postharvest Quality Research--East Lansing, Mich.--U.S. Apple 
proposes increasing USDA, Agricultural Research Service (ARS) funding 
at the East Lansing, Mich. postharvest fruit quality research 
laboratory by $350,000 for fruit postharvest technology research to 
better evaluate internal fruit quality characteristics, such as sugar 
content and fruit firmness. While this research is already underway in 
a limited capacity, the increase is needed to expand the capability of 
the lab to make faster progress in solving complex research issues.
    National Research Initiative--Sensor And Automation Research.--U.S. 
Apple proposes increasing funding in the National Research Initiative 
program in USDA CSREES by $1,000,000 for automation and sensor 
research, and establishment of $2,000,000 special grants program for 
fruit quality instrumentation. This research will develop sensors that 
help growers sense and respond to insect and disease pests and 
temperature extremes that reduce the value of apple production. It will 
have additional applications in processing and packing operations to 
improve fruit quality and food safety.
    Apple Rootstock Breeding Program--Geneva, N.Y.--U.S. Apple proposes 
increasing funding for the USDA, ARS apple rootstock breeding program 
in Geneva, N.Y. by $350,000. This research will focus on rootstock 
improvements that make apple trees more resistant to diseases or pests 
that may reduce pesticide use and lead to development of more 
productive and efficient apple trees.
    Genetics Of Fruit Quality Program--Wenatchee, Wash.--U.S. Apple 
proposes increasing funding at the USDA, ARS Wenatchee, Wash. facility 
by $350,000 for new genetics of fruit quality research. This research 
will provide the fundamental scientific knowledge that will allow 
development of new apple varieties that are juicier, sweeter and more 
nutritious and attractive to consumers.
    National Research Initiative--Genomics, Genetics And Plant 
Breeding.--U.S. Apple proposes increasing funding in the CSREES 
National Research Initiative program in the area of apple, cherry and 
peach genomics by $2,500,000. This research will provide essential 
genomics and genetics research that will help solve production problems 
that result in lower profitability and help develop better apple 
varieties for consumers.
    Other Research Requests:
Temperate Fruit Fly Research Position--Yakima, Wash.
    U.S. Apple requests continued funding of $300,000 to conduct 
critical research at the USDA ARS laboratory in Yakima, Wash. on 
temperate fruit flies, a major pest of apples.
    The Yakima, Wash., USDA ARS facility is conducting research 
critical to the crop protection needs of the apple industry. FQPA 
implementation has reduced the number of pesticides currently available 
to growers for the control of pests, such as cherry fruit fly and apple 
maggot. Left unchecked, these temperate fruit flies can be devastating. 
Thus, research is needed to develop alternative crop protection methods 
as growers struggle to cope with the loss of existing tools. While 
Congress appropriated $300,000 last fiscal year for this critical 
research, the administration's proposed budget for fiscal 2005 rescinds 
this funding.
Post Harvest Quality Research Position--East Lansing, Mich.
    U.S. Apple urges Congress to maintain baseline funding of $309,600 
in the USDA ARS fiscal year 2005 budget for the postharvest quality 
research position in East Lansing, Mich., and to increase funding for 
this program by $350,000 to make faster progress in solving complex 
research problems. This increase is a specific request as part of the 
industry's National Tree Fruit Technology Roadmap initiative.
    The East Lansing, Mich., USDA ARS facility is conducting research 
critical to the future survival of the apple industry. Using a series 
of new sensing technologies, researchers at this facility are 
developing techniques that would allow apple packers to measure the 
sugar content and firmness of each apple before it is offered to 
consumers. Research indicates consumer purchases will increase when 
products consistently meet their expectations, suggesting consumers 
will eat more apples once this technology is fully developed and 
employed by our industry. While Congress appropriated $309,600 last 
fiscal year for this critical research, the administration's proposed 
budget for fiscal 2005 rescinds this funding. This is a request not 
only to preserve funding for this program, but also to expand it by 
appropriating an additional $350,000 in research funding.
    The U.S. Apple Association thanks the committee for this 
opportunity to present testimony in support of the U.S. apple 
industry's federal agricultural funding requests.
                                 ______
                                 

      Prepared Statement of the United States Telecom Association

Summary of Request
    Project Involved.--Telecommunications Loan Programs Administered by 
the Rural Utilities Service of the U.S. Department of Agriculture.
    Actions Proposed.--Supporting RUS loan levels and the associated 
funding subsidy, if required, for the hardship program, cost of money 
and loan guarantee programs in fiscal year 2005 in amounts requested in 
the President's budget. Opposing the Administration's proposal to not 
fund Rural Telephone Bank loans in fiscal year 2005. Supporting Rural 
Telephone Bank loans in the same amount as contained in the fiscal year 
2004 Appropriations Act. Also supporting an extension of the language 
removing the 7 percent interest rate cap on cost of money loans. Also 
supporting an extension of the prohibition against the transfer of 
Rural Telephone Bank funds to the general fund as well as the 
requirement that Treasury pay interest on all Bank funds deposited with 
it. Opposing the proposal contained in the budget to transfer funds 
from the unobligated balances of the liquidating account of the Rural 
Telephone Bank for the Bank's administrative expenses. Supporting 
continued funding, as requested in the President's budget, in the 
amount of $25 million for distance learning and telemedicine loan and 
grant authority. Supporting $20 million in mandatory funding for direct 
loans for broadband deployment.
    I am Walter B. McCormick, Jr., President and CEO of the United 
States Telecom Association (USTA), the Nation's oldest trade 
organization for the local exchange carrier industry. USTA's carrier 
members provide a full array of voice, data and video services over 
wire and wireless networks. I submit this testimony in the interests of 
the members of USTA and their subscribers.
    USTA members firmly believe that the targeted assistance offered by 
a strong RUS telecommunications loan program remains essential to a 
healthy and growing rural telecommunications industry that contributes 
to the provision of universal telecommunications service. We appreciate 
the strong support this Committee has provided for the 
telecommunications program since its inception in 1949 and look forward 
to a vigorous program for the future.

A Changing Industry
    We are now more than 8 years out from passage of the 
Telecommunications Act of 1996, a landmark piece of legislation in its 
time, and calls are multiplying for the Act to be revisited to address 
today's reality of intermodal competition. The current system of 
government-managed competition in the telecom industry is a tremendous 
obstacle to investment, economic growth and jobs creation which are 
important to all Americans, but particularly for those living in 
telecom-dependent rural America. The financial markets recognize that 
the current system of inequitable government-managed competition cannot 
stand. That recognition is reflected in the availability and pricing of 
capital to telecommunications entities. Dramatic changes in technology, 
such as Voice Over Internet Protocol (VOIP), and the wide use of 
wireless service to the point of market parity, have caused great 
uncertainty for carriers serving the most challenging areas of our 
Nation. During these changing times, access to a reliable source of 
capital such as the RUS loan programs is key to the system upgrades 
which will enable rural areas to experience the economic growth and job 
creation that a freely competitive market with ready access to fairly 
priced capital can provide.
    The need for modernization of the telecommunications technology 
employed by RUS borrower rural telecommunications companies has never 
been greater. In addition to upgrading to next generation networks to 
allow new services to be extended to rural subscribers, it is 
critically important that rural areas be included in the nationwide 
drive for greater bandwidth capacity. In order to provide higher speed 
data services, such as Digital Subscriber Line (DSL) connections to the 
Internet, outside plant must be modernized and new electronics must be 
placed in switching offices. With current technology, DSL services 
cannot be provided to customers located on lines more than a few miles 
from the switching office. Rural areas have a significant percentage of 
relatively long loops and are therefore particularly difficult to serve 
with higher speed connections. Rural telecommunications companies are 
doing their best to restructure their networks to shorten loops so that 
DSL may be provided, but this is an expensive proposition and may not 
be totally justified by market conditions. However, these services are 
important for rural economic development, distance learning and 
telemedicine. RUS-provided financial incentives for additional 
investment encourage rural telecommunications companies to build 
facilities which allow advanced services to be provided. The 
externalities measured in terms of economic development and human 
development more than justify this investment in the future by the 
Federal Government.
    Greater bandwidth and switching capabilities are crucial 
infrastructure elements which will allow rural businesses, schools and 
health care facilities to take advantage of the other programs 
available to them as end users. The money spent on having the most 
modern and sophisticated equipment available at the premises of 
businesses, schools or clinics is wasted if the local 
telecommunications company cannot afford to build facilities that 
quickly transport and switch the large amounts of data that these 
entities generate. RUS funding enhances the synergies among the FCC and 
RUS programs targeted at improving rural education and health care 
through telecommunications.
    The RUS program helps to offset regulatory uncertainties related to 
universal service support, interstate access revenues and 
interconnection rules with a reliable source of fairly priced, fixed-
rate long term capital. After all, RUS is a voluntary program designed 
to provide incentives for local telecommunications companies to build 
the facilities essential to economic growth.
    RUS endures because it is a brilliantly conceived public-private 
partnership in which the borrowers are the conduits for the Federal 
Government benefits that flow to rural telephone customers, the true 
beneficiaries of the RUS program. The government's contribution is 
leveraged by the equity, technical expertise and dedication of local 
telecommunications companies. The small amount of government capital 
involved is more than paid back through a historically perfect 
repayment record by telecommunications borrowers, as well as the 
additional tax revenues generated by the jobs and economic development 
resulting from the provision and upgrading of telecommunications 
infrastructure. RUS is the ideal government program--it generates more 
revenues than it costs, it provides incentives where the market does 
not for private companies to invest in infrastructure promoting needed 
rural economic development, it allows citizens to have access to 
services which can mean the difference between life and death, and it 
has never lost a nickel of taxpayer money.

Recommendations
    For fiscal year 2005, this Committee should set the loan levels and 
necessary associated subsidy amounts for the hardship, RUS cost of 
money and guaranteed telecommunications loan programs consistent with 
the levels recommended in the President's budget. These levels would 
maintain our members' ability to serve the Nation's telecommunications 
needs, maintain universal service and bring advanced telecommunications 
services to rural America.
    USTA strenuously objects to the recommendation in the 
Administration's budget to not fund Rural Telephone Bank loans in 
fiscal year 2005. The proposal is fundamentally flawed. The RTB's 
mission is far from complete. Loans made today are to provide state of 
the art telecommunications technology in rural areas. If no bank loans 
were made in fiscal year 2005, the budgetary outlay savings would be 
minimal, because RTB loans are funded over a multiyear period. 
Moreover, because of the minimum statutory interest rate of 5 percent, 
the RTB stands an excellent opportunity of actually generating a profit 
for the government!
    The Administration budget proposes that funds be transferred from 
the unobligated balances of the Bank's liquidating account to fund the 
Bank's administrative expenses, instead of those expenses being funded 
through an appropriation from the general fund of the Treasury. This 
proposal would not result in budgetary savings. As it has in previous 
years, this Committee should specifically reject this recommendation.
    For a number of years, through the appropriations process, Congress 
has eliminated the 7 percent ``cap'' placed on the insured cost-of-
money loan program. The elimination of the cap should continue. 
Although the prospects for this happening in fiscal year 2005 seem 
remote at this time, if long term Treasury interest rates exceeded the 
7 percent ceiling contained in the authorizing act, the subsidy would 
not be adequate to support the program at the authorized level. This 
would be extremely disruptive and hinder the program from accomplishing 
its statutory goals. Accordingly, USTA supports continuation of the 
elimination of the seven percent cap on cost-of-money insured loans in 
fiscal year 2005. The Committee should also continue to protect the 
legitimate ownership interests of the Class B and C stockholders in the 
Bank's assets by continuing to prohibit a ``sweep'' of any unobligated 
balance in the bank's liquidating account that is in excess of current 
requirements funds into the general fund.
            Recommended Loan Levels
    USTA recommends that the telephone loan program loan levels for 
fiscal year 2005 be set as follows:

                          [Millions of dollars]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
RUS Insured Hardship Loans (5 percent)..................             145
U.S. Insured Cost-of-Money Loans........................             250
Rural Telephone Bank (RTB) Loans........................             175
Loan Guarantees.........................................             100
                                                         ---------------
      Total.............................................             670
------------------------------------------------------------------------

            Loans and Grants for Telemedicine and Distance Learning

    USTA supports the continuation of $25 million for distance learning 
and telemedicine, as provided in the President's budget. As we move 
into the Information Age with the tremendous potential of the Internet 
to increase productivity, economic development, education and medicine, 
such funds can help continue the historic mission of RUS to support the 
extension of vital new services to rural America.
Broadband Loans Under the 2002 Farm Act (Public Law 101-171)
    Congress has recognized the tremendous potential of broadband 
technology to enhance human and economic development in rural areas by 
providing mandatory funding of loans for the deployment of such 
technology in rural areas. This funding was included in the 2002 Farm 
Act in the amount of $20 million. USTA urges the provision of full 
funding for this program as authorized in the Farm Act. The capital 
intensive nature of the telecommunications industry, particularly with 
respect to implementation of broadband, requires a stable and 
predictable source of capital.

Conclusion
    Our members take pleasure and pride in reminding the Committee that 
the RUS telecommunications program continues its perfect record of no 
defaults in over a half century of existence. RUS telecommunications 
borrowers take seriously their obligations to their government, their 
Nation and their subscribers. They will continue to invest in our rural 
communities, use government loan funds carefully and judiciously, and 
do their best to assure the continued affordability of 
telecommunications services in rural America. Our members have 
confidence that the Committee will continue to recognize the importance 
of assuring a strong and effective RUS Telecommunications Program 
through authorization of sufficient loan levels.
                                 ______
                                 

 Prepared Statement of the University of Southern Mississippi and the 
                     Mississippi Polymer Institute

    Mr. Chairman, distinguished Members of the Subcommittee, I would 
like to thank you for this opportunity to provide testimony describing 
ongoing research and commercializing efforts of The University of 
Southern Mississippi (USM) and the Mississippi Polymer Institute. I am 
very grateful to the Subcommittee for its leadership and the continued 
support of the Institute and its work. This testimony will include an 
update on the progress of the Institute since my testimony of 
approximately 1 year ago. During the past year, our efforts have 
focused principally on two commercialization thrusts. One effort 
involves our novel, agricultural-based inventions in emulsion 
polymerizations, and the other is to produce a commercial quality, 
formaldehyde-free, soybean derived adhesive for composite board 
materials, i.e., particleboard. During the past year, we have continued 
to refine the adhesive and have prepared lab scale particleboards that 
meet commercial specifications. It is my strong belief that additional 
research can expand the commercial use of the products and technology 
this project has produced. However, much more needs to be done in order 
to exploit the many uses of our novel technology. I will discuss the 
progress made with the two inventions separately in order to offer more 
clarity.
    In the case of castor and soy oils, we have designed and 
synthesized novel vegetable oil macromonomers (VOMM) or polymer 
building blocks that offer state-of-the-art technology. The success of 
the technology depends on the use of agricultural materials as a 
building block of emulsion-derived polymers and offers opportunities 
for using ag-derived materials as a raw material in the polymer 
industry. The process technology for synthesizing VOMMs has been 
revised to produce more than 95 percent conversion of the oil to VOMM. 
Thus, the revised, and now accepted, synthetic procedure affords an 
acceptable and useful polymerizable VOMM. Our previous synthetic 
efforts to prepare emulsion or latex polymers containing significant 
amounts of VOMM monomers (>20 percent by weight) were complicated by 
synthetic and stability issues. However, during the past year, we have 
been successful in developing latexes with VOMM content as high as 30 
percent by weight by modifying the emulsion recipe and process 
parameters. Currently, these high VOMM latexes are being evaluated for 
a variety of applications, but particularly in coating formulations. 
Furthermore, significant progress has been made in the synthesis of 
novel VOMMs that copolymerize more readily with commercial monomers. 
The new VOMMs provide latexes with improved stability and reduced 
yellowing on aging. The fundamental scientific principles regarding its 
mode of action have been confirmed, yet additional data must be 
collected as more of these novel monomers, or polymer building blocks, 
are being designed and synthesized.
    Our sustained efforts to patent the technology developed in this 
project has resulted in a total of eight patents, including one 
international patent. Seven patent applications are pending with the 
U.S. Patent Office and more applications will certainly be submitted 
during the coming year.
    Another novel application for vegetable oils is the development of 
derivatives for use in ultraviolet (UV) curable coatings using thiol-
ene chemistry. Castor and soybean oil derivatives were synthesized and 
crosslinked with commercial thiols in UV curable formulations. The 
coatings produced showed excellent flexibility but lower hardness 
values than the controls. Research efforts are in progress to 
synthesize derivatives that will improve product hardness while 
retaining other coating properties.
    Commercial nail polishes contain very high amount of solvents which 
constitute volatile organic compounds (VOCs) and negatively impact the 
environment. Novel VOMM-based latexes have been designed for use in 
nail polishes. Previous latexes prepared for this application gave poor 
adhesion to the fingernail and were easily chipped during use. Nail 
polishes formulated with the new and improved latex emulsions have 
given consistent adhesion to the fingernail even after one week of 
application. Rheology studies are in progress to achieve optimum flow 
and leveling properties of the finished product. Nail polishes 
constitute a low-volume, high-profit niche market. Presently, there are 
no low-VOC waterborne products with sufficient adhesion to fingernails.
    VOMM-based emulsions have been formulated as coatings for paper 
coating applications and show promising results in screening tests. At 
this writing, additional paper coating testing equipment has been 
ordered for more definitive performance testing.
    We have successfully synthesized a soybean oil acrylate monomer 
(SAM) for incorporation into a permanent press treatment to replace the 
castor oil acrylate monomer (CAM). Warmkraft, a Mississippi-based 
company, has tested the new latex and will begin using the soy-based 
latex this year in their permanent press treatment for use on the U.S. 
Marines military uniforms. The U.S. Air Force has received 7,500 
permanent pressed uniforms for field tests by military personnel. This 
novel product increases military uniform durability by 30+ percent and 
minimizes laundry costs creating a significant savings for service 
personnel and the DOD. Research efforts are now being directed to 
providing antimicrobial properties to the military uniform treatment 
formulation to add protection for combat forces.
    In summary, commercialization efforts have continued over the past 
year with waterborne architectural coatings and polymer for textile 
treatments. Patents have been approved; new patent applications have 
been submitted; several toll manufacturing runs have been completed; 
new coatings have been designed, manufactured, formulated, and tested; 
and formulation efforts have been directed toward the generation of 
high performance, low odor, and low VOC coatings. We are optimistic 
that commercialization and sales of these ag-derived products will 
expand over the next year.
    In yet another of our novel ag based technologies, we have 
developed formaldehyde-free adhesives for use in particleboard 
composites. The developmental adhesive is composed of 80+ percent soy 
protein isolate (SPI) and lab produced particleboards made with this 
formaldehyde-free adhesive meet or exceed industry performance 
requirements as defined by ANSI standards for M-S grade boards. Efforts 
are underway to reduce the water content of the current adhesive to 
decrease dry time and increase line speeds. The new adhesive is 
scheduled for scale-up to quantities required for commercial scale 
testing. A leading particleboard manufacturer has requested a 
commercial trial of the adhesive and we plan to complete the trial in 
the 2nd quarter of 2004. Kenaf and wood flour are being investigated as 
alternative sources of wood furnish in our composites. Additional novel 
soybean oil-based derivatives are also being investigated in an effort 
to continue to improve the performance properties of the composite 
particleboards even further. These developments represent major 
technical advancements during the past year.
    A vegetable oil based waterborne, waterproofer polymer has been 
developed and formulated into wood stain and coating systems. The 
weathering characteristics of this product are currently being 
evaluated. The material functions as a waterproofer yet is carried in 
water. However, after application to the intended substrate, typically 
wood or cementitious products, the material becomes hydrophobic and 
highly water resistant. VOC emission regulations need to be tightened 
to facilitate the movement towards new, environmentally friendly, 
products. We will continue our efforts to promote the use of ag-based 
products offering improved environmental attributes, i.e., high 
performance accompanied by low odor and low VOCs.
    In 1983, the Mississippi Legislature authorized the Polymer 
Institute at USM to work closely with emerging industries and other 
existing polymer-related industries to assist with research, problem 
solving, and commercializing efforts. The institute has maintained that 
thrust during the past year with much success. In fact, while 
manufacturing jobs alone in Mississippi have declined over the past 10 
years, manufacturing jobs in the plastics sector have risen 45 percent 
and continue to rise.
    The Institute provides industry and government with applied or 
focused research, development support, and other commercializing 
assistance. This effort complements existing strong ties with industry 
and government involving exchange of information and improved 
employment opportunities for USM graduates. Most importantly, through 
basic and applied research coupled with developmental and 
commercializing efforts of the Institute, the School of Polymers and 
High Performance Materials continues to address national needs of high 
priority.
    The focus of our work has been the development of a technology 
platform that will lead to the commercialization of alternative 
agricultural crops in the polymer industry. The polymer industry is the 
single largest consumer of petroleum chemical intermediates in the 
world. However, petroleum resources are in finite supply, are non-
biodegradable in many cases, and therefore do not represent a 
sustainable economic development alternative for the polymer industry. 
The theme of our work is to develop high performance, and 
environmentally friendly technology utilizing agriculturally produced 
intermediates. In this way, we as a Nation can improve our environment, 
reduce our dependence on imported petroleum, and keep America's 
farmlands in production. As farm products meet the industrial needs of 
the American society, rural America is the benefactor. Heretofore, this 
movement to utilize alternative agricultural products as industrial raw 
materials has received some attention but much less than opportunities 
warrant. Your decisions are crucial to the accomplishment of these 
goals as funding from this Subcommittee has enabled us to implement and 
maintain an active group of university-based polymer scientists whose 
energies are devoted to commercializing alternative crops. We are most 
grateful to you for this support, and ask for your continued 
commitment.
    The faculty, the University, and the State of Mississippi are 
strongly supportive of the Mississippi Polymer Institute and its close 
ties with industry. Most faculty maintain at least one industrial 
contract as an important part of extramural research efforts.
    Polymers, which include fibers, plastics, composites, coatings, 
adhesives, inks, and elastomers, play a key role in the materials 
industry. They are used in a wide range of industries including 
textiles, aerospace, automotive, packaging, construction, medical 
prosthesis, and health care. In the aerospace and automotive 
applications, reduced weight and high strength make them increasingly 
important as fuel savers. Their non-metallic character and design 
potentials support their use for many national defense purposes. 
Moreover, select polymers are possible substitutes for so-called 
strategic materials, some of which come from potentially unreliable 
sources.
    As a polymer scientist, I am intrigued by the vast opportunities 
offered by American agriculture. As a professor, however, I continue to 
be disappointed that few of our science and business students receive 
training in the polymer-agricultural discipline as it offers enormous 
potential. The University of Southern Mississippi, the School of 
Polymers and High Performance Materials, and the Mississippi Polymer 
Institute are attempting to make a difference by showing others what 
can be accomplished if appropriate time, energy, and resources are 
devoted to the understanding of ag-based products.
    I became involved in the polymer field 40 years ago and since that 
time, have watched its evolution where almost each new product 
utilization offered the opportunity for many more. Although polymer 
science as a discipline has experienced expansion and a degree of 
public acceptance, alternative agricultural materials continue to be an 
underutilized national treasure for the polymer industry. There is less 
acceptance of petroleum-derived materials today than ever before, and 
consequently the timing is ideal for agricultural materials to make 
significant inroads as environmentally friendly, biodegradable, and 
renewable raw materials. These agricultural materials have always been 
available for our use, yet society for many reasons has not recognized 
their potential.
    U.S. agriculture has made the transition from the farm fields to 
the kitchen tables, but America's industrial community continues to be 
frightfully slow in adopting ag-based industrial materials. The prior 
sentence was included in my last three testimonies but continues to 
ring true, even as I write this report. However, we are making progress 
and we must persist. We must aggressively pursue this opportunity and 
in doing so:
  --Intensify United States efforts to commercialize alternative crops 
        and dramatically reduce atmospheric VOC emissions and odor. The 
        result will be much cleaner and less noxious air for all 
        Americans.
  --Reduce United States reliance on imported petroleum.
  --Maintain a healthy and prosperous farm economy.
  --Foster new cooperative opportunities between American farmers and 
        American industry.
  --Create advanced polymer technology-based manufacturing jobs that 
        can not be easily exported to other countries.
    Mr. Chairman, your leadership and support are deeply appreciated by 
the entire University of Southern Mississippi community. While I can 
greatly appreciate the financial restraints facing your Subcommittee, I 
feel confident that further support of the Mississippi Polymer 
Institute will continue dividends of increasing commercialization 
opportunities of agricultural materials in American industry. Advances 
in polymer research are crucial to food, transportation, housing, and 
defense industries. Our work has clearly established the value of ag 
products as industrial raw materials and we must move it from the 
laboratories to the industrial manufacturing sector. Only then can the 
United States enjoy a cleaner and safer environment which these 
technologies offer, as well as new jobs, and expanded opportunities for 
the U.S. farmer. We are most grateful for the support you have provided 
in the past. The funding you have provided has allowed laboratory work 
to be conducted, pilot commercial manufacturing to be completed, and 
limited sales of products derived from this technology. However, 
additional funds are needed to make these technologies cost effective 
while maintaining the high performance standards of which we are 
accustomed. Pilot scale processes are necessary to move this technology 
into the market place and this will be the principal focus of our 
upcoming work. Of course, while working to achieve commercialization, 
continued technology advancement will be in effect, as will basic 
research on those topic areas where knowledge is required.
    Since our testimony last year we have reached new levels of 
commercializing efforts in that we have manufactured final and finished 
products for sale. Indeed, the technology has matured and marketing and 
sales must move parallel with continued commercial development of new 
products. Thus, we are in need of additional resources to take these 
technologies to the market place and to continue our developments of 
other exciting technologies. We therefore respectfully request $1.5 
million in Federal funding to more fully exploit the potentials of 
commercializing the technologies described herein. We have shown that 
we can be successful, yet we need additional resources in order to 
optimize the potential of this technology. Our efforts will be 
recognized as instrumental in developing a ``process'' for 
commercialization of new ag-based products. That is, we will have taken 
a technology from the ``idea'' stage to commercialization in several 
market areas. The development of this process, and to show it 
successful, is extremely important to all entrepreneurs who believe in 
ag-based products. Thank you Mr. Chairman and Members of the 
Subcommittee for your support and consideration.
                                 ______
                                 

  Prepared Statement of the Upper Mississippi River Basin Association

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created in 1981 by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
the five States' river-related programs and policies and for 
collaborating with Federal agencies on regional water resource issues. 
As such, the UMRBA has an interest in the budget for the U.S. 
Department of Agriculture's conservation programs and technical 
assistance.
    Prior to enactment of the Farm Security and Rural Investment Act of 
2002, conservation spending was lower in constant dollars than during 
the depths of the Great Depression. In passing the 2002 Farm Bill, 
Congress made a bold, multi-year commitment to reinvigorate 
agricultural conservation in this country. In particular, the Farm Bill 
recognized the importance of providing adequate funding levels and 
balancing programs that remove land from production with those that 
support sound practices on working lands. There was also explicit 
recognition that the USDA's conservation programs and technical 
assistance are crucial alternatives to a totally regulatory approach to 
addressing agriculture-related water quality impairments. Now, as the 
Nation faces an increasingly difficult budget climate, it is essential 
that Congress maintain its commitment to the vision for agricultural 
conservation articulated in the Farm Bill. This will involve not only 
providing adequate funding, but also ensuring effective administration 
and geographic distribution of those resources.
    Of particular importance to the UMRBA is funding for the 
Conservation Reserve Program (CRP), Wetlands Reserve Program (WRP), 
Environmental Quality Incentives Program (EQIP), and Conservation 
Security Program (CSP). Taken together, these four Commodity Credit 
Corporation-funded programs provide an invaluable means for the USDA to 
work with landowners, local conservation districts, and the States to 
maintain agricultural productivity while protecting the Nation's soil 
and water resources. Moreover, they do this in a voluntary, non-
regulatory fashion. CRP, WRP, EQIP, and CSP will be key non-regulatory 
elements in the States' efforts to address agricultural sources of 
water quality impairment through the Total Maximum Daily Load program. 
Successful application of conservation programs to this region's water 
quality problems will also help address the growing national concern 
with hypoxia in the Gulf of Mexico, which has been linked to nutrient 
loads from agriculture and other sources. As stewards of some of the 
Nation's most productive agricultural lands and important water 
resources, the five States of the Upper Mississippi River Basin believe 
these programs are vital. Strong farmer interest and state support 
demonstrate the region's commitment to the objectives of these 
programs. In fiscal year 2003, non-NRCS sources contributed $88.3 
million in financial assistance and $27.9 million in technical 
assistance to help plan and implement natural resource conservation 
systems in the five basin States, with almost 94 percent of this money 
coming from state government.

Conservation Reserve Program
    Under President Bush's fiscal year 2005 budget request, funding for 
the CRP would increase modestly to $1.96 billion. While this increase 
is certainly welcome, it is not adequate to fund the expanded CRP 
provided for in the 2002 Farm Bill. The CRP acreage cap is now 39.2 
million acres. Yet, as of January 2004, only 34.6 million acres were 
enrolled in the program, below even the program's previous cap. In the 
most recently completed general sign-up, USDA was able to accept less 
than half of the acreage offered for enrollment.
    Since its inception, enhancements to the CRP have increased its 
effectiveness in improving water quality, soil conservation, and 
habitat. These same enhancements, which include noncompetitive 
enrollment for filter strips, riparian buffers, and similar measures, 
as well as establishment of the Conservation Reserve Enhancement 
Program (CREP), have made the program more flexible and thus more 
attractive to farmers. Most recently, USDA announced a new continuous 
sign-up for 500,000 acres of bottomland hardwood trees. Targeted toward 
the Mississippi, Missouri, and Ohio Rivers, this initiative offers a 
valuable tool in floodplain restoration efforts on some of this 
Nation's most important rivers.
    In Illinois, Iowa, Minnesota, Missouri, and Wisconsin, CRP general 
sign-up enrollment currently totals 5.5 million acres, or approximately 
17 percent of the national total. All five States also have active CREP 
programs tailored to meet their priority conservation needs. Current 
CREP enrollment in the UMRB States is approximately 233,000 acres, or 
42 percent of the national total. These rates of participation clearly 
demonstrate the importance of the CRP and CREP in the Nation's 
agricultural heartland and reflect the compatibility of these programs 
with agricultural productivity.

Wetlands Reserve Program
    Equally pressing is the need to provide sufficient resources for 
the WRP. The 2002 Farm Bill more than doubled the WRP acreage cap to 
almost 2.3 million acres, with a goal of enrolling 250,000 acres 
annually. Yet the President's fiscal year 2005 budget proposes $295 
million for the WRP. While a slight increase from fiscal year 2004, 
this would be enough to enroll only about 200,000 acres, or 80 percent 
of the authorized enrollment rate. Since the WRP's establishment in 
1996, its easements have proven to be important tools for restoring and 
protecting wetlands in agricultural areas. This is clearly evident from 
the overwhelming landowner response and the resulting improvements to 
water quality and habitat. At the end of fiscal year 2003, WRP 
enrollment in Illinois, Iowa, Minnesota, Missouri, and Wisconsin 
totaled more than 273,000 acres, or 18 percent of the national total. 
In fiscal year 2003 alone, landowners in the five States enrolled more 
than 43,000 acres in the WRP. However, there were eligible, but 
unfunded, applications to enroll another 147,000 acres from the five 
States in fiscal year 2003. This represents 20 percent of the national 
backlog of applications for that year. As with the CRP and CREP, the 
WRP is a vital tool in the agricultural conservation toolbox. The UMRBA 
continues to support funding the WRP at a level sufficient to fully 
enroll the program as authorized.

Environmental Quality Incentives Program
    The CRP and WRP have been extremely effective in helping Midwest 
farmers to protect land and water resources by curtailing production on 
some of their most sensitive land. And there are certainly many more 
opportunities to make good use of the CRP and WRP in the region. 
However, it is also essential to support sound conservation practices 
on the far greater amount of land that remains in production. EQIP is 
the USDA's largest and most effective means of assisting farmers and 
ranchers to implement conservation practices on land currently in 
production. EQIP assistance can, for example, help operators balance 
the new dynamics of livestock production with the need to protect soil 
and water resources.
    Like many other conservation programs, EQIP funding has not kept 
pace with demand. In fiscal year 2003, the backlog of unmet requests 
for EQIP assistance in Illinois, Iowa, Minnesota, Missouri, and 
Wisconsin alone was estimated at $249.1 million. This is more than 3 
times the $74.1 million in EQIP funding actually allocated to the five 
States in fiscal year 2003, and is 8 percent of the Nation's total 
unfunded EQIP applications. While this is a slight decrease from the 
level of unmet need in fiscal year 2002, it is not clear whether there 
is modest progress in addressing the backlog or whether farmers are 
simply increasingly disinclined to submit applications to an over-
subscribed program. The 2002 Farm Bill authorizes EQIP at $1.2 billion 
for fiscal year 2005, but the President is proposing to fund the 
program at only $1.0 billion. The UMRBA urges Congress to maintain EQIP 
at its full authorized level, while recognizing that, even at full 
funding, there will likely be significant numbers of unfunded EQIP 
applications.

Conservation Security Program
    Newly authorized in the 2002 Farm Bill, the CSP also focuses 
conservation efforts on working lands. A tiered program, it encourages 
landowners to implement advanced, cost-effective measures. The States 
are concerned that several early developments may limit the CSP's 
ultimate effectiveness. First, USDA still has yet to finalize its 
implementation rule for the program. As a result, little, if any, CSP 
enrollment will be possible in fiscal year 2004. Of greater long term 
significance, the fiscal year 2003 omnibus spending measure capped the 
CSP at $3.77 billion over 10 years. Congress has since lifted that 
restriction. However, in his fiscal year 2005 budget, the President 
assumes that the program will be limited to $4.4 billion in financial 
and technical assistance through 2010. This approach would represent a 
substantial shift in a program that Congress and the Administration 
agreed in the 2002 Farm Bill to fund without a fixed cap through the 
Commodity Credit Corporation. It remains to be seen what the ultimate 
level of landowner interest will be in the CSP, but the States are 
reluctant to have the program reduced so dramatically prior to its 
implementation.

Conservation Technical Assistance
    The UMRBA has consistently expressed the States' concern with the 
adequacy of funding and staffing levels for conservation technical 
assistance. With the expansion of conservation programs under the 2002 
Farm Bill, the issue has become both more complicated and more 
important. For fiscal year 2005, the President is proposing a $138 
million, or almost 19 percent, decrease in the Conservation Operations 
Technical Assistance account. This is the funding that supports NRCS's 
voluntary conservation planning with landowners. It addresses critical 
concerns including nutrient management and other water quality issues.
    The President's budget also includes a revised version of his 
previous proposal for a new Farm Bill Technical Assistance account. 
Under the new proposal, this account would fund technical assistance 
for the Conservation Reserve Program and the Wetlands Reserve Program. 
In fiscal year 2005, the President is requesting $92 million for this 
new account, which would be subject to annual appropriations. The 
States certainly recognize that adequate technical assistance is 
absolutely essential to the success of the USDA's conservation 
programs, and believe that it is important to address the strain that 
funding CRP and WRP technical assistance from other conservation 
programs has placed on those programs. However, the States do not 
believe that the President's proposal reflects Congressional intent in 
the 2002 Farm Bill. Instead, the States share the perspective of many 
Members that the intent was to fund the necessary technical assistance 
for the various conservation programs separately, through mandatory 
funding rather than annual appropriations. The UMRBA urges that 
sufficient resources for technical assistance be provided using an 
approach consistent with this intent.

Watershed Programs
    The UMRBA is pleased that the President has once again budgeted for 
three critical watershed programs--i.e., Watershed and Flood Prevention 
Operations, Watershed Surveys and Planning, and the Watershed 
Rehabilitation Program--for which he did not request any funds in 
fiscal year 2003. However, the President's requests still fall far 
below recent funding levels for these programs. The three programs all 
provide significant local, regional, and national benefits in the areas 
of erosion, sediment, and flood damage reduction; conservation; water 
supply; and development. They are soundly within USDA's tradition of 
working with States and local communities to enhance rural America. 
Specifically, the budget proposal includes only $40.2 million for 
Watershed and Flood Prevention Operations, an important proactive 
program for which Congress approved $86.3 million in fiscal year 2004. 
Even at the more generous appropriated levels from recent years, the 
Watershed and Flood Prevention Operations program falls far short of 
meeting demand. In fiscal year 2004, there are $191.2 million in Public 
Law 534 and Public Law 566 flood control projects ready for 
construction, and the total project backlog is estimated at $1.557 
billion. The 2002 Farm Bill authorized significant new funding for the 
Watershed Rehabilitation Program, through which the NRCS assists local 
sponsors in rehabilitating aging Public Law 534 and Public Law 566 
structures. Of the more than 11,000 such structures nationwide, more 
than 1,800 will reach the end of their design life by 2010. A 1999 
estimate put national rehabilitation needs at $543 million, with needs 
in Illinois, Iowa, Minnesota, Missouri, and Wisconsin accounting for 
more than 10 percent of the total. These are very real needs, with very 
real potential public health and safety implications. This important 
program received $29.8 million in fiscal year 2004, but would be funded 
at only $10.1 million in fiscal year 2005 under the President's plan. 
Also of concern, the Watershed Surveys and Planning account would be 
reduced by more than half under the President's budget. The President's 
fiscal year 2005 request of $5.1 million for Watershed Surveys and 
Planning compares with pending projects totaling $18.8 million in 
fiscal year 2004. The States urge Congress to provide adequate funding 
for these three important watershed programs.
                                 ______
                                 
             Prepared Statement of the USA Rice Federation

    This is to convey the rice industry's request for fiscal year 2005 
funding for selected programs under the jurisdiction of your respective 
subcommittees. The USA Rice Federation appreciates your assistance in 
making this a part of the hearing record.
    The USA Rice Federation is a federation of U.S. rice producers, 
millers and allied businesses working together to address common 
challenges, advocate collective interests, and create opportunities to 
strengthen the long-term economic viability of the U.S. rice industry. 
USA Rice members are active in all major rice-producing states: 
Arkansas, California, Florida, Louisiana, Mississippi, Missouri, and 
Texas. The U.S.A. Rice Producers' Group, the USA Rice Council, and the 
U.S.A. Rice Millers' Association are charter members of the USA Rice 
Federation.
    USA Rice understands the budget constraints the committee faces 
when developing the fiscal year 2005 appropriations bill. We appreciate 
your past support for initiatives that are critical to the rice 
industry and look forward to working with you to meet the continued 
needs of research, food aid and market development in the future.
    A healthy U.S. rice industry is also dependent on the program 
benefits offered by the 2002 Farm Security and Rural Investment Act of 
2002. We oppose any attempts to modify the support levels provided by 
this vital legislation through more restrictive payment limitations or 
other means and encourage the committee to resist such efforts during 
the appropriations process.
    USA Rice's top priority for 2004 is to regain market access in our 
former number one export market, Iraq. We realize the Committee's 
limitations on this issue but encourage you to seek opportunities to 
increase U.S. agricultural exports to the Iraqi people. Whether through 
increased MAP and FMD funds for market development or other means, we 
seek U.S. rice sales to Iraq and urge all options be exhausted.
    A list of the programs the USA Rice Federation supports for 
Appropriations in fiscal year 2005 are as follows:

Funding Priorities
            Research and APHIS
    The Dale Bumpers National Rice Research Center should receive 
continued funding at the fiscal year 2004 approved level. This center 
conducts research to help keep the U.S. rice industry competitive in 
the global marketplace by assuring high yields, superior grain quality, 
pest resistance, and stress tolerance.
    The Western Regional Research Center should receive continued 
funding at fiscal year 2004 levels for operating funds. In addition, we 
support $3.4 million in construction funds for Phase 3 of the 
modernization project. The center has already completed 25 percent of 
the modernization project and we feel it is vitally important to 
complete the remaining updates to this facility.
    For APHIS-Wildlife Services, we encourage the committee to fund the 
Louisiana blackbird control project at $333,000. This program annually 
saves rice farmers in southwest Louisiana over $4,000 per farm, or $2.9 
million total. No increases have been provided to the program since 
1994 and inflation is reducing the overall impact. A slight increase 
from the $150,000 baseline is justified.
            Market Access
    Exports are critical to the U.S. rice industry. Historically, 40-60 
percent of annual U.S. rice production has been shipped overseas. Thus, 
building healthy export demand for U.S. rice is a high priority.
    The Foreign Market Development program allows USA Rice to focus on 
importer, food service, and other non-retail promotion activities 
around the world. For fiscal year 2005, FMD should be fully funded at 
$34.5 million, consistent with the President's Budget request.
    The Market Access Program allows USA Rice to concentrate on 
consumer promotion and other activities for market expansion around the 
world. For fiscal year 2005, MAP should be funded at $140 million as 
authorized by the 2002 Farm Security and Rural Investment Act of 2002. 
This is $15 million above the President's Budget request.
    In addition, the Foreign Agricultural Service should be funded to 
the fullest degree possible to ensure adequate support for trade policy 
initiatives and oversight of export programs. These programs are 
critical for the economic health of the U.S. rice industry.
            Food Aid
    We encourage the committee to fund Public Law 480 Title I at fiscal 
year 2004 levels. This program is our top food aid priority and we 
support continued funding in order to meet international demand.
    For Public Law 480 Title II we support a slight increase in the 
program over fiscal year 2004 levels due to increased freight costs and 
higher commodity prices. We encourage the committee to fund Title II at 
$1.2 billion in order to ensure consistent tonnage amounts for the rice 
industry.
    USA Rice supports continued funding at fiscal year 2004 levels for 
Food for Progress. Funding for this program is important to improve 
food security for food deficit nations.
    The Global Food for Education Initiative is a proven success and it 
is important to provide steady, reliable funding for multi year 
programming. USA Rice supports $100 million for this education 
initiative because it efficiently delivers food to its targeted group, 
children, while also encouraging education, a primary stepping-stone 
for populations to improve economic conditions.
            Other
    Farm Service Agency.--We encourage the Committee to provide 
adequate funding so the agency can deliver essential programs and 
services. The Agency has been hard hit by staff reductions and our 
members fear a reduction in service if sufficient funds are not 
allocated.
    Please feel free to contact us if you would like additional 
information about the programs we have listed. Significant background 
information is available for all of the programs we have referenced, 
however, we understand the volume of requests the committee receives 
and have restricted our comments accordingly.
    Thank you for consideration of our recommendations.
                                 ______
                                 

                 Prepared Statement of VeriPrime, Inc.

    Mr. Chairman and Members of the Committee, it is a tremendous 
pleasure and a privilege to provide testimony on this important topic 
on behalf of VeriPrime, a member-owned and member-operated cooperative. 
I would like to offer the insights of our members, which may be helpful 
as Congress and the USDA address these issues.
    As a practicing veterinarian I work closely with feedyards and 
ranchers. I see about a million head of cattle each year in my 
practice. As a businessman I helped develop and organize an animal 
tracking company listed on the NASDAQ exchange. My experience relates 
both to the pragmatic concerns of the animal producer as well as to the 
bottom-line concerns of business, and consumer concerns about food 
safety.
    My comments are in no way intended as criticism of the U.S. 
Department of Agriculture or the Congressional Committees of 
jurisdiction. I believe the government has done a responsible job of 
BSE surveillance. When the infected animal was found in Washington 
State, the government responded quickly and efficiently to address 
industry concerns and to safeguard consumer confidence.
    As we move from this point forward, I am hopeful we can do so in a 
coordinated government-industry effort. VeriPrime is a member-owned and 
member-operated cooperative created two and one-half years ago to 
address situations exactly like this. Membership presently consists of 
two-thirds of the nation's fed cattle supply. We are also a partner 
with PigCHAMP, a division of farms.com, which gives us access to 75 
percent of the pork supply. Having secured a majority of the beef and 
pork supplies as partners, we are moving forward to recruit members 
from the packing industry and food retailers. Swift & Co. has joined as 
a founding member in the packer sector, and Burger King is our founding 
retailer.
    Needless to say, this amalgamation of producers, packers and 
retailers is watching closely as government ponders what to do next to 
ensure food safety, consumer confidence, foreign trade, and the 
economic well being of the $75 billion beef industry.
    USDA's call for a national animal identification system, its 
decision to evaluate rapid BSE screening methods and, its willingness 
to reexamine the complicity of Suspected Risk Material, are important 
and relevant steps. However, speaking from the perspective of the 
private sector, I respectfully suggest these initiatives and others 
could more efficiently, effectively, and economically be accomplished 
by the industry itself.
    Overlaying all these issues and solutions is the ever-present 
question of cost. Both the USDA and Congress are concerned, and rightly 
so, about adopting costly programs that will increase tax burdens. But 
an industry-financed alternative, regulated by the USDA, should be 
considered a viable option. Animal ID and traceability are the backbone 
of any reliable, responsible food safety system, and we believe the 
private sector can add value to this discussion as well as self-finance 
any number of solutions.
    At VeriPrime, for example, we employ a licensing strategy in which 
a fee paid by retailers reimburses the cattle production side for the 
cost of compliance with an animal identification program. The system 
would be, and should be technology neutral and have the flexibility to 
accommodate virtually all vendors. Once established, the revenue stream 
will make possible evolution to electronic ID and the economies and 
efficiencies those systems can offer. Moreover, because we are member-
directed, we can guarantee adoption of the least-cost, highest-
efficiency systems. A competitive marketplace will encourage innovation 
and as new, better, and cheaper systems evolve, the membership will 
naturally move to adopt them.
    The issue of BSE testing is particularly worrisome to us. No 
rational view can suppose there was only one BSE-infected animal in 
this country and we were lucky enough to find it through our very 
limited test protocols. If in response to the discovery of BSE, the 
USDA now decides to require increased testing--as has been suggested--
the consequences could be severe. The more we test, the more likely we 
are to discover additional cases. And without a safety net, the 
economic consequences to the U.S. beef industry would surely be 
calamitous. After the Washington incident, even though the USDA's 
response was quick and efficient, cattle prices quickly dropped by 20 
percent. We need only look at the economic consequences of BSE in 
Canada, Japan, and Europe to imagine the catastrophic effect we could 
anticipate in this country.
    Our industry objective must be this: When a consumer prepares to 
bite into a burger, if a news flash reports another BSE discovery, the 
announcement should be accompanied by the statement, ``the affected 
meat has been quarantined, and all meat now in the marketplace has 
passed BSE testing.''
    Rapid test-hold-release programs have shown excellent results in 
Asia and in Europe, restoring consumer confidence and economic 
stability to those beef industries. Our consumers and our marketplace 
need similar protections. It has been widely stated that testing 100 
percent of the beef supply would be prohibitively expensive. From the 
government's perspective, that is probably true. But the tremendous 
power of the American economic marketplace could easily support such a 
program.
    A number of models can be employed. At VeriPrime, we would propose 
to use our licensing system to finance such an endeavor, giving 
retailers the opportunity to market BSE-screened beef products in 
response to consumer preferences. We would regard this function as 
screening only. Suspected test samples would be referred to the USDA 
for its ``gold standard'' testing while the source product is withheld 
from the food supply.
    Some will no doubt argue that the United States does not have a BSE 
problem. Let's assume they are correct, and that rapid testing as I 
have discussed is not a food safety issue. I would then suggest that 
rapid testing is important to the private sector as a marketing 
attribute. Surveys uniformly show that consumers would prefer the 
safety margin this screening provides, and are willing to pay much more 
than the two-pennies-per-burger cost of screening. And to the beef 
industry, from the cattle rancher all the way through the supply chain, 
the economic protections BSE screening offers are very attractive and 
highly desirable.
    Mr. Chairman, this is a time of great uncertainty. The threats to 
our food supply from natural, inadvertent, and malicious sources are of 
great concern to us. And we face an uncertain future. Ten years ago, 
none of us had heard of ``Mad Cow'' disease. What will it be 10 years 
from now? We need a system that provides responsive, flexible, cost-
effective consumer protections. The U.S. Congress, in its rightful role 
of oversight; the U.S. Department of Agriculture, in its rightful role 
as regulator; and the U.S. food industry in its rightful role as 
purveyor of safe, fresh, nutritious products, can form a powerful 
partnership. We look forward to working together to achieve a balance 
of responsibility that properly serves our constituents, our customers, 
and our industry.
                                 ______
                                 

        Prepared Statement of the Wildlife Management Institute

    The Wildlife Management Institute (WMI) is pleased to submit this 
testimony for your consideration in determining the fiscal year 2005 
budgets for the United States Department of Agriculture (Natural 
Resources Conservation Service, Farm Services Agency, and Animal and 
Plant Health Inspection Service). Established in 1911, the Institute is 
staffed by professional wildlife managers and scientists. Its purpose 
is to promote the restoration and improvement of wildlife in 
populations and their habitats throughout North America.

             NATURAL RESOURCES CONSERVATION SERVICE (NRCS)

    General comments.--The USDA's 2005 Budget Summary states the 
following: ``The Department's 2005 budget supports achievement of the 
five USDA strategic goals and the commitment to provide first-class 
service, state-of the art science, and consistent management excellence 
across the board responsibilities of USDA. The Department promotes . . 
., protection of natural resources . . .'' Out of the 5 listed goals, 
two of them reflect budget decreases. Ironically both deal with Natural 
Resources and Environmental issues (quality of life in rural America 
and protecting and enhancing the nation's natural resource base and 
environment). As we review this budget, we continue to see a 
deterioration in funding and manpower necessary to address this 
nation's natural resource needs, in particular, programs concerning and 
fish and wildlife. If we are to meet goals and objectives of the 2002 
Farm Bill Conservation Title (as set by Congress), we will need to 
ensure adequate funding for these programs.
    Conservation Operations/Conservation Technical Assistance.--WMI 
recognizes that there has been a decrease in the number of positions 
within NRCS over the past several years. Our concern continues to be 
for the resource and the ability to deliver quality technical 
assistance (TA) to private landowners across this nation. We observe 
that TA will decrease by $138 million in fiscal year 2005 under the 
Administration's proposed budget. In a briefing to the conservation 
community on the agency's budget on February 19, 2004, it was stated 
``there is a policy shift in the Administration'' towards TA. This 
shift will result in creating a further backlog in the delivery of the 
conservation programs. This ultimately will lead to further confusion 
among the very constituents (private landowners) we desire to serve, 
thereby preventing us from contributing to the goals set by Congress 
when it approved the Farm Bill in May, 2002.
    Farm Bill Technical Assistance.--Compared to the fiscal year 2004 
estimate there is a decrease of $28 million. The Administration's 
proposed fiscal year 2005 budget allocates $92 million to Wetland 
Reserve Program and Conservation Reserve Program for TA. WMI requests 
TA funding for these programs to be supported by the Commodity Credit 
Corporation oppose to annual appropriations.
    The Technical Services Provider (TSP) program also needs attention. 
Level of allocations to Conservation Districts, State fish and wildlife 
agencies and Conservation organization's is good, but there is a need 
to evaluate effectiveness of TSP funds when achieving conservation 
goals for soil, water and wildlife enhancements. Therefore, $2 million 
additional dollars should be allocated to do just that. In fiscal year 
2003 and 2004, NRCS respectively received $30 million and $40 million 
to implement TSP. According to the Administration's fiscal year 2005 
proposed budget request no money is set aside for TSP; at least $40 
million should be allocated.
    Performance measures on page 9 of a February 2, 2004 budget 
briefing book listed targets for 2004 and 2005. These targets are 
activities and will not contribute to the Administration's and OMB's 
Performance Control Standards. They are not RESULT oriented and will 
NOT enable NRCS to communicate achievements specifically on soil, water 
and wildlife enhancements. WMI recommends that Congress require such 
standards as part of the NRCS budgetary process. WMI also recommends 
that $10 million specifically be targeted to conduct comprehensive 
monitoring and evaluation studies on all Farm Bill Conservation 
programs. Results of such studies will help the USDA and Congress 
identify future spending priorities under the Farm Bill.
    Wildlife Habitat Incentives Program (WHIP).--WMI supports the $25 
million increase in funding. This funding greatly needed to address 
over subscriptions in the program, especially in the country's 
Northeast and Northwest regions.
    Grassland Reserve Program (GRP).--The Administration has requested 
a $31 million decrease for this program in fiscal year 2005. WMI 
suggests that with a backlog of private landowners involved in this 
program, it is unwise to decrease funding for GRP. Because this is a 
new program, its financial growth curve should extend beyond its first 
2 years of implementation.

                       FARM SERVICE AGENCY (FSA)

    Staff Years: FSA is slatted to lose 967 positions by fiscal year 
2005. These are primarily temporary positions and the Administration 
has justified these losses as the result of completed Farm Bill 
activities. The next scheduled sign up of 800,000 acres in the 
Conservation Reserve Program (CRP) is slated for the spring of 2004. It 
is expected a similar effort in 2005 will occur. Thus, there is a need 
to have sufficient staff to process these additional contracts for the 
CRP program, as well as the expected increase for the Conservation 
Reserve Enhancement Program (CREP) agreements. WMI is concerned about 
the delivery of CRP to private landowners and seeks Congressional 
support for retention of FSA's 967 positions.
 wildlife services, animal and plant health inspection services (aphis)
    Wildlife Services Methods Development: In 1997, the United States 
and the European Union (EU) entered into a Memorandum of Understanding 
that identified a process for developing and evaluating more effective 
and humane trapping devices used to manage certain wildlife populations 
(e.g. for research and mitigating wildlife damage, to reestablish 
species extirpated from prior habitats, and to protect endangered 
species). An active research program is being developed at the USDA's 
National Wildlife Research Center in Fort Collins, CO. WMI strongly 
objects to the proposed elimination of $3.35 million for the Methods 
Development program, and urges Congress to restore this funding.
    WMI also recommends Congress restore funding for research of non-
lethal methods to mitigate wildlife damage and that Congress provide 
additional funding to Wildlife Services (WS) to conduct research for 
improved management of invasive species (such as the brown tree snake 
and the Coqui frog that threatens local agriculture, fragile 
ecosystems, and threatened and endangered species in Guam and Hawaii).
                                 ______
                                 

               Prepared Statement of The Wildlife Society

    The Wildlife Society (TWS) appreciates the opportunity to submit 
testimony concerning the fiscal year 2005 budgets U.S. Department of 
Agriculture agencies. The Wildlife Society is the association of almost 
9,000 professional wildlife biologists and managers dedicated to sound 
wildlife stewardship through science and education. The Wildlife 
Society is committed to strengthening all federal programs that benefit 
wildlife and their habitats on agricultural and other private land.
    The following table summarizes The Wildlife Society's 
recommendations for USDA, compared with fiscal year 2004 enacted and 
the President's fiscal year 2005 request:

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                                 -----------------------------------------------
                       USDA Agency/Program                                             2005
                                                                   2004 Enacted     President's      2005 TWS
                                                                                      Budget        Recommended
----------------------------------------------------------------------------------------------------------------
Natural Resources Conservation Service:
    Wildlife Habitat Incentives Program.........................          42,000          60,000         100,000
    Grassland Reserve Program...................................         115,000          84,000          84,000
    Wetlands Reserve Program....................................         280,000         295,000         295,000
    Forest Land Enhancement Program.............................          10,000  ..............          80,000
    Technical Service Provider training.........................  ..............  ..............             100
    Conservation Program Monitoring and Evaluation..............  ..............  ..............           1,000
Animal & Plant Health Inspection Service:
    Wildlife Services--Operations...............................          71,313          71,684          77,184
    Wildlife Services--Methods Development......................          16,999          13,876          17,266
    Veterinary Services--Chronic Wasting Disease................          18,522          20,067          30,067
Coop. St. Research, Education, and Extension Serv.:
    Renewable Resources Extension Act...........................           4,040           4,093          15,000
    McIntire-Stennis Cooperative Forestry.......................          21,755          21,844          30,000
    Natural Resources Inventory.................................         164,027         180,000         180,000
----------------------------------------------------------------------------------------------------------------

Natural Resources Conservation Service
    Wildlife Habitat Incentives Program (WHIP).--The 2002 Farm Bill 
included landmark increases for conservation, but annual appropriations 
have not been commensurate the 80 percent increase passed in the bill. 
The authorized level for WHIP cost-share payments and technical 
assistance in fiscal year 2005 is $325 million. Given the important 
impacts of WHIP in providing technical and financial support to farmers 
and ranchers to create high quality wildlife habitat, we request a 
minimum of $100 million.
    Grassland Reserve Program (GRP).--With estimated expenditure of 
$115 million in fiscal year 2004, the proposed funding level of $84 
million in fiscal year 2005 will meet the Farm Bill-authorized cap of 
$254 million for GRP. GRP should focus on grasslands of high 
biodiversity that are at risk of conversion and support grazing 
operations. In addition, enrollment must increasingly focus on long-
term enrollment, since no more than 40 percent of authorized funding 
can be used for short-duration rental agreements, which have been 
emphasized to date.
    Wetland Reserve Program (WRP).--The continued target of enrolling 
200,000 acres annually in WRP is essential; if 200,000 acres are not 
enrolled every year (fiscal year 2004 was limited to 189,000 acres), 
enrollment must increase in future years to reach the authorized level 
of 2,275,000 acres. Full WRP enrollment is necessary for the 
Administration to achieve no-net-loss of wetlands by building on the 
WRP successes of the 1990's that reduced wetland losses to 32,600 
acres/year (as reported in the USDA National Resource Inventory).
    Forest Land Enhancement Program (FLEP).--The Forest Land 
Enhancement Program was created through the 2002 Farm Bill to provide 
financial, technical, educational, and related assistance to promote 
sustainable management of non-industrial private forestlands. The 
program is authorized at $100 million for 2002-2007, to be distributed 
through state forestry agencies. We request restoration of the full 
funding balance, $80 million, for this program in fiscal year 2005.
    Technical Service Provider Training.--NRCS is building a Technical 
Service Provider program of certified professionals who can assist the 
agency in delivering conservation services to agricultural producers. 
Training will be needed to effectively prepare Technical Service 
Providers to assist these producers. TWS recommends that Congress 
direct NRCS to appropriate $100,000 for a pilot training program at a 
university in cooperation with professional societies (Society for 
Range Management, The Wildlife Society, American Fisheries Society) and 
the USDA Cooperative State Research, Education, and Extension Service 
that subsequently can be repeated at land grant universities and 
colleges across the country to train Technical Service Providers. This 
program is critical to the effective delivery of Farm Bill Conservation 
Programs.
    Conservation Program Monitoring and Evaluation.--Monitoring Farm 
Bill conservation programs and evaluating their progress toward 
achieving Congressionally established objectives for soil, water, and 
wildlife will ensure successful program implementation and effective 
use of appropriated funds. Thus far, limited monitoring efforts have 
been focused on soil and water achievements, and NRCS and the 
Agricultural Research Service have done all the evaluations. It is 
important for assessments to address wildlife and habitat impacts, and 
for external parties to be included to ensure credibility and 
objectivity. We recommend Congress direct $1 million toward a pilot 
watershed-based monitoring and evaluation project, which would include 
participation by state conservation and agriculture agencies and the 
state land-grant university, that can serve as a model for conservation 
program assessment nationwide.

Animal and Plant Health Inspection Service
    Wildlife Services.--The Wildlife Services Unit is responsible for 
controlling wildlife damage to agriculture, aquaculture, forest, range 
and other natural resources, for controlling wildlife-borne diseases, 
and for controlling wildlife at airports. The Administration proposes a 
program reduction of $5.5 million from fiscal year 2004 levels to 
offset a $5 million increase in fiscal year 2005 for a wildlife disease 
surveillance system. We recommend Congress restore the $5.5 million 
reduction to maintain existing operations. We also recommend that 
Congress restore the $3.35 million (need $17,266) decrease in the 
Methods Development program, which provides the credible means to 
identify and improve publicly acceptable methods of wildlife control.
    Veterinary Services.--We commend APHIS-Veterinary Services for 
working with the state wildlife management agencies on Chronic Wasting 
Disease (CWD) surveillance and management in free-ranging deer and elk. 
Additionally, we support APHIS efforts to eliminate CWD from captive 
cervids to eliminate the risk of spread of the disease from these 
animals to free-ranging deer and elk. We recommend increasing CWD 
funding to a total of $30.067 million in fiscal year 2005 to fully 
address management of CWD in the states, with emphasis on preventing 
the spread of CWD from captive cervid operations.

Cooperative State Research, Education and Extension Services
    Renewable Resources Extension Act.--We strongly recommend that the 
Renewable Resources Extension Act be funded at $15 million in fiscal 
year 2005. RREA funds, which are apportioned to State Extension 
Services, leverage (at an average of 4:1) cooperative partnerships with 
a focus on development and dissemination of information needed by 
private landowners. The need for RREA educational programs is greater 
than ever today due to fragmentation of ownerships, urbanization, and 
increasing societal concerns about land use and its impact on soil, 
water, air, and wildlife. Though RREA has been proven to be effective 
in leveraging cooperative state and local funding, it has never been 
fully funded.
    McIntire-Stennis.--We encourage Congress to increase McIntire-
Stennis Cooperative Forestry funds to $30 million. These funds are 
essential to the future of resource management on non-industrial 
private forestlands, supporting state efforts in forestry research to 
increase the efficiency and sustainability of forestry practices and to 
extend the benefits that come from forest and related rangelands. 
McIntire-Stennis calls for close coordination between state colleges 
and universities and the Federal Government, and is essential for 
providing research background for other Acts, such as RREA.
    National Research Initiative.--National Research Initiative 
Competitive Grants (NRI) are open to academic institutions, federal 
agencies, and private organizations to fund research on improving 
agricultural practices, particularly production systems that are 
sustainable both environmentally and economically, and to develop 
methods for protecting natural resources and wildlife. Innovative grant 
programs such as NRI help broaden approaches to land management, such 
as integrating timber and wildlife management on private lands. The 
Wildlife Society requests $180 million for National Research Initiative 
Competitive Grants in fiscal year 2005.
    Thank you for your past support of conservation funding and for 
considering the views of wildlife professionals. We look forward to 
working with you and your staff to ensure adequate funding for wildlife 
conservation.
                                 ______
                                 

                Prepared Statement of the Wine Institute

    This statement is in support of the Market Access Program and the 
need to fully fund it for fiscal year 2005 at $140 million, the level 
established in the Food Security and Rural Investment Act of 2002.
    The California wine industry has benefited significantly from the 
MAP, and previous USDA export promotion programs since 1986. At that 
time our exports were only $34.9 million. Last year, we exported over 
$633 million. Despite this growth, we have a huge potential remaining 
as our international market share is only about 5 percent. Wine imports 
to the United States still outweigh exports by a factor of 4-1 but we 
are determined to level this balance of payments in the next few years. 
We need the full amount authorized by the 2002 Farm Bill in order to 
maintain our growth and accomplish our objectives.
    The MAP allows our industry to counter the significant trade 
barriers we face in all foreign markets. In Europe, our major market, 
we face high tariffs, expensive certification procedures, and 
restrictions to our winemaking practices. In addition, we face 
competition from the European wine industry which is heavily subsidized 
and backed with export credits and other significant government support 
programs. In Asia, our industry faces high tariffs in all countries and 
protective systems that allow preference for local bottlers and wine 
products.
    International wine marketing requires substantial costs of 
additional labeling requirements, testing and certification procedures. 
To be competitive, companies must attend major trade shows, conduct 
educational programs and produce expensive promotional materials. Every 
competitive wine industry relies on a government program to back its 
export efforts. Small U.S. wineries simply do not have the resources to 
compete in this arena without the support of the MAP.
    The increase in funding authorized by 2002 Farm Bill for the MAP is 
necessary for new market entry and expansion into current markets. The 
Administration's active international trade agenda has allowed for 
opportunities that all exporters need to address as quickly as 
possible. Creating opportunities without providing resources is 
ineffective policy. Our wine industry needs to expand its efforts into 
China, South America, Eastern Europe, and Russia. We need additional 
resources to fuel this expansion.
    The MAP is a cost share program. Our industry's annual contribution 
has increased from 50 percent to its current level of 150 percent. We 
are more than willing to pay our share. However, we also need the 
resources and support that our competitors enjoy. Therefore, we 
strongly support the authorized, full funding for the MAP at $140 
million for fiscal year 2005.
                                 ______
                                 

       Prepared Statement of the Wyoming State Engineer's Office

    This statement is sent in support of the designation of 2.5 percent 
of the fiscal year 2005 Environmental Quality Incentive Program (EQIP) 
funding for the Department of Agriculture's Colorado River Salinity 
Control (CRSC) Program. Pursuant to Public Law 104-127, the USDA's CRSC 
Program is a component program within EQIP. Wyoming views the inclusion 
of the CRSC Program in EQIP as a direct recognition on the part of 
Congress of the Federal commitment to maintenance of the water quality 
standards for salinity in the Colorado River--and that the Secretary of 
Agriculture has a vital role in meeting that commitment.
    The State of Wyoming is a member state of the seven-state Colorado 
River Basin Salinity Control Forum. Established in 1973 to coordinate 
with the Federal Government on the maintenance of the basin-wide Water 
Quality Standards for Salinity in the Colorado River System, the Forum 
is composed of gubernatorial representatives and serves as a liaison 
between the seven States and the Secretaries of the Interior and 
Agriculture and the Administrator of the Environmental Protection 
Agency. The Forum advises the Federal agencies on the progress of 
efforts to control the salinity of the Colorado River and annually 
makes funding recommendations, including the amount believed necessary 
to be expended by the USDA for its on-farm CRSC Program. Overall, the 
combined efforts of the Basin States, the Bureau of Reclamation and the 
Department of Agriculture have resulted in one of the nation's most 
successful non-point source control programs.
    The Colorado River provides municipal and industrial water for 27 
million people and irrigation water to nearly four million acres of 
land in the United States. The River is also the water source for some 
2.3 million people and 500,000 acres in Mexico. Limitations on users' 
abilities to make the greatest use of that water supply due to the 
River's high concentration of total dissolved solids (hereafter 
referred to as the salinity of the water) are a major concern in both 
the United States and Mexico. Salinity in the water source especially 
affects agricultural, municipal, and industrial water users. While 
economic detriments and damages in Mexico are unquantified, the Bureau 
of Reclamation presently estimates salinity-related damages in the 
United States to amount to $330 million per year. The River's high salt 
content is in almost equal part due to naturally occurring geologic 
features that include subsurface salt formations and discharging saline 
springs; and the resultant concentrating effects of our users man's 
storage, use and reuse of the waters of the River system. Over-
application of irrigation water by agriculture is a large contributor 
of salt to the Colorado River as irrigation water moves below the crop 
root zone, seeps through saline soils and then returns to the river 
system. The Department of Agriculture's CRSC Program is an important 
proven and cost-effective tool in improving irrigation water 
application and thus reducing salt loading into the Colorado River 
system.
    For the past 20 years, the seven-state Colorado River Basin 
Salinity Control Forum has actively assisted the U.S. Department of 
Agriculture in implementing its unique, collaborative and important 
program. At its recent October 2003 meeting, the Forum recommended that 
the USDA CRSC Program should expend 2.5 percent of the Environmental 
Quality Incentive Program funding. In the Forum's judgment, this amount 
of funding is necessary to implement the needed program. ``Catch-up'' 
funding in the future will require expending greater sums of money, 
increase the likelihood that the numeric salinity criteria are 
exceeded, and create undue burdens and difficulties for one of the most 
successful Federal/State cooperative non-point source pollution control 
programs in the United States.
    The State of Wyoming greatly appreciates the Subcommittee's support 
of the Colorado River Salinity Control Program in past years. We 
continue to believe this important basin-wide water quality improvement 
program merits support by your Subcommittee. We request that your 
Subcommittee direct the allocation of 2.5 percent of the Environmental 
Quality Incentives Program funding for the USDA's CRSC Program during 
fiscal year 2005. Thank you in advance for your consideration of this 
statement and its inclusion in the formal record for fiscal year 2005 
appropriations.
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