[Senate Hearing 109-]
[From the U.S. Government Publishing Office]



 
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2006

                              ----------                              

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

    MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS

    [Clerk's Note.--The following agencies of the Subcommittee 
on Agriculture, Rural Development, and Related Agencies did not 
appear before the subcommittee this year. Chairman Bennett 
requested these agencies to submit testimony in support of 
their fiscal year 2006 budget request. Those statements 
submitted by the chairman follow:]

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration

     Prepared Statement of Lester M. Crawford, DVM, Ph.D., Acting 
                              Commissioner

                              INTRODUCTION

    Mr. Chairman, members of the Committee, I am honored to testify on 
FDA's fiscal year 2006 President's budget request. I'd like to begin by 
conveying my appreciation to the Subcommittee members for providing the 
Food and Drug Administration (FDA) with several key increases in the 
fiscal year 2005 appropriation. We received increases for food defense, 
medical device review, Bovine Spongiform Encephalopathy, medical 
countermeasures, and the FDA consolidation project at White Oak. These 
increases will allow FDA to continue to meet the expanding range of 
challenging public health issues that we face. I can assure you that 
FDA will continue to spend these resources wisely. I believe that the 
American people would be impressed if they really knew how much return 
on investment they get from FDA.
    I am fully aware of the difficult funding decisions you face in the 
current session, and I believe that every dollar invested in FDA's 
programs can have a major positive impact--from the consumer to the 
farmer to the drug and medical device manufacturer and beyond. FDA 
plays a lead role in protecting and advancing the public health of the 
United States.
    Our mission is to ensure that U.S. consumers continue to enjoy the 
safest food, and the most effective medical supplies in the world, and 
that we continue to foster medical product innovation. We have a good 
track record of accomplishment. Near the beginning of fiscal year 2004, 
we unveiled a comprehensive strategic action plan to ``protect and 
advance America's health'' in the 21st century. Our plan outlined a 
series of specific steps to combat the increasingly complex public 
health challenges we face as a Nation--and to capitalize on the myriad 
health innovations occurring each day--in order to help U.S. consumers 
live longer, healthier, and happier lives.

                 FDA'S 2006 PRESIDENT'S BUDGET REQUEST

    Our fiscal year 2006 Budget request maximizes the performance of 
our on-board assets--the greatest of which is our scientific staff--and 
focuses additional requests on the areas of highest risk and highest 
yield. Overall, our fiscal year 2006 request is for $1.50 billion in 
budget authority, a $50 million increase above fiscal year 2005. Total 
funding, including user fees, is $1.881 billion, $81 million above 
fiscal year 2005. Key budget authority increases include: $30.074 
million for Food Defense, $5.996 million for Medical Device Review, 
$5.0 million for the Office of Drug Safety ($6.5 million including user 
fees), $4.1 for rental costs, and $7.0 million for Buildings and 
Facilities. The proposed budget allows FDA to continue to work towards 
meeting statutory regulatory responsibilities while initiating new 
efforts to address challenges that fall within our mission. Now I'd 
like to tell you more about these proposed increase requests.

                              FOOD DEFENSE

    In the post 9/11 environment, FDA has made fundamental changes in 
how we implement our mission of protecting the food supply. We are 
doing this so that all U.S. consumers can have confidence that their 
food is not only safe, but also secure. We are requesting a $30 million 
increase for food defense, to build upon gains achieved with food 
defense funds appropriated in fiscal year 2005. Funds requested 
directly support Homeland Security Presidential Directive-9, which 
established the national policy to protect the Nation's food and 
agriculture system from terrorist attacks. FDA and the USDA, in 
conjunction with the White House Homeland Security Council, have 
continued to coordinate efforts to protect the agricultural and food 
sectors.
    FDA is responsible for ensuring the safety of approximately 80 
percent of the Nation's food supply. The possibility of food products 
being used as a vehicle for attack is a major concern. The direct 
effects on public health, adverse impacts on public confidence in the 
U.S. food supply, and economic impacts on the food industry are all 
potentially devastating. Over the past year we have implemented major 
enhancements to our food safety and security program.
    Shortly after 9/11, FDA focused its Food Security resources on 
traditional tools to bolster the security of the Nation's food supply. 
Since then, FDA has conducted classified assessments of strengths and 
vulnerabilities in the U.S. food system, and has structured its Food 
Defense plans accordingly. This risk-based strategy deals with the 
risks of contamination of both imports and domestically produced and 
processed foods. FDA has also instituted new systems that give advance 
notice of upcoming food imports, improving FDA's ability to target 
inspections.
    Implementing FDA's strategy is an Administration priority for which 
an increase of $30 million is requested. Within the $30 million 
increase, $20 million will support a national network known as the Food 
Emergency Response Network (FERN). FERN will increase our analytic 
surge capacity in the event of terrorist attack by developing adequate 
laboratory testing capacity for biological, chemical and radiological 
threats and targeted food defense research efforts. This will enable us 
to test thousands of food samples within a matter of days in the event 
of an act of terror, or other emergency, and quickly determine what 
food is safe, and what food is not. This network will be complemented 
by a strong research program to develop effective protection strategies 
to shield the food supply from terrorist threats. FDA seeks to detect 
contaminants more quickly, and, where possible, modify food processing 
in ways that would neutralize pathogens before they caused harm. An 
additional $5.6 million is requested for targeted food defense research 
on prevention technologies, methods development, determination of 
infectious dose for certain agents when ingested with food, and agent 
characteristics within specified foods. A $3.0 million increase is 
requested to improve coordination and continue integrating our food 
defense capabilities with the Department of Homeland Security's, as 
part of the government-wide Bio-Surveillance Initiative. Finally, $1.5 
million is requested to upgrade our crisis management capabilities so 
that we are prepared to minimize the impacts of potential problems with 
the food supply.

                         MEDICAL DEVICE REVIEW

    To provide more timely and cost-effective review of new medical 
devices, we have worked to implement the 2002 Medical Device User Fee 
and Modernization Act (MDUFMA), which allows us to collect user fees 
from companies that submit medical device applications. In fiscal year 
2006, we are requesting an increase of $5.996 million to continue to 
meet the fiscal year 2006 performance and funding expectations in 
MDUFMA. In fiscal year 2006, we expect to complement the FDA-wide 
device review program with $40.3 million in medical device user fees, 
which is an increase of $6.362 million over fiscal year 2005.
    These additional funds will be used to hire more staff and to 
develop better systems to support more effective and timely review. The 
law requires us to pursue a complex and comprehensive set of review 
goals. Each year brings additional goals, and the goals become more 
aggressive. We must report on performance relative to the specified 
goals at the end of each year.
    We have also committed to two ambitious long-term goals for 
reducing average total approval time for medical device premarket 
applications, and have already achieved one of these goals, even though 
it was targeted for fiscal years 2005-2007. It is for a 30-day 
reduction in average approval time for premarket applications given 
expedited approval, which is similar to priority approval for drugs and 
biologics. We have already achieved that goal--a 33 day reduction in 
average approval time compared with the baseline of fiscal years 1999-
2001.

                         OFFICE OF DRUG SAFETY

    FDA approves medical products after a sponsor demonstrates that 
they are safe and effective. However, the full magnitude of potential 
risks does not always emerge during the clinical trials that are 
conducted to evaluate safety and effectiveness. Monitoring the safety 
of marketed products requires close collaboration between our clinical 
reviewers and safety staff to evaluate and respond to adverse events 
identified in ongoing clinical trials or reported to us by physicians 
and their patients.
    Ensuring drug product safety is a mission-critical function of 
FDA's Center for Drug Evaluation and Research (CDER), and is an 
important component of both the premarket and postmarket review 
process. FDA is requesting a $6.5 million increase to strengthen the 
drug safety functions within CDER's Office of Drug Safety (ODS), of 
which $5.0 million is in budget authority and $1.5 million increase is 
in PDUFA user fees. One of ODS' primary roles is to provide expertise 
in the review of postmarketing safety data and to maintain and 
coordinate CDER's postmarketing surveillance and risk assessment 
program. ODS plays a significant role in the CDER drug safety mission, 
however, their role is only a small subset of the total effort expended 
and resources spent by CDER on drug safety.
    This increase will allow us to hire additional staff to manage and 
lead safety reviews, provide further expertise in critical areas such 
as risk management, risk communication, epidemiology, and to increase 
access to a wide range of clinical, pharmaceutical and administrative 
databases. It will also help increase transparency by sharing drug 
safety information sooner and more broadly and strengthening FDA's 
post-market surveillance capacity, using a network of information 
sources to analyze postmarket drug safety information. The requested 
increase will also support patient safety initiatives and extend 
partnerships with the Centers for Medicare and Medicaid Services, the 
Agency for Health Research Quality and other HHS agencies.

                             WHITE OAK MOVE

    FDA is continuing the White Oak Consolidation project, which upon 
completion will house over 7,700 staff in 2.3 million square feet of 
space. By the end of fiscal year 2005, the campus will have almost 
700,000 square feet completed with 1,850 staff on site. The new 
buildings will eventually replace all 40 of the existing fragmented 
facilities in 16 locations which support the Office of the 
Commissioner, and all of our Centers and the Field headquarters, except 
the Center for Food Safety and Applied Nutrition and the National 
Center for Toxicological Research. This project will allow FDA to 
standardize and modernize document handling, provide shared use 
facilities such as libraries and conference areas, further reduce 
redundancies in administrative tasks and allow conversion to a single 
computer network. In fiscal year 2005, over 1,700 review staff are 
moving to White Oak, so a significant portion of costs are being 
financed by PDUFA fees. Fiscal year 2006 costs need to be financed 
through budget authority; as a result, FDA requests an increase of 
$4.128 million in additional budget authority, to provide the needed 
infrastructure and to move the staff to the CDRH Engineering/Physics 
Laboratory and a portion of FDA's shared use data center facilities.

                               RENT COSTS

    In prior years, FDA's rent costs were budgeted separately from the 
programs that used the space. To facilitate management improvement, 
FDA's fiscal year 2006 budget proposes to move funding for rent to the 
program lines. This will place accountability for rental and other 
associated costs within the operating programs, and eliminate the need 
to transfer funds between budget lines when program space needs change. 
The FDA program lines include increases of $6.0 million to cover 
projected increases in rent charges; of this, $4.1 million is requested 
in budget authority and $1.9 million in user fees.

                        BUILDINGS AND FACILITIES

    In fiscal year 2005, FDA did not request funding to repair and 
maintain our building and facilities in order to fund other priority 
initiatives, but we are now challenged to continue to sustain these 
buildings, some of which are over 50 years old, in poor condition, and 
have severely deferred maintenance. The requested $7 million increase 
for buildings and facilities will help cover the cost of greatly needed 
repairs and improvements to existing owned or leased facilities that 
FDA occupies in 49 States and in the District of Columbia and Puerto 
Rico.

                        MANAGEMENT EFFICIENCIES

    FDA is continually working to create a stronger, more unified 
Agency. The increasing complexity of our regulatory mission requires 
that we look for new ways to create efficiency, standardize processes, 
enhance infrastructure and improve planning. FDA has made significant 
improvements to its business practices that support the agency's 
mission-critical activities through the implementation of the 
President's Management Agenda. In fiscal year 2006, proposed management 
savings will result in a $1.554 million reduction in administrative 
costs. In the area of Information Technology (IT), we are developing a 
roadmap to better align key technologies to our policy goals and 
objectives, which will better integrate enterprise architecture, 
capital planning and investment management, and project management into 
a more comprehensive investment review and governance process. We are 
consolidating IT functions across the Agency, which allows us to 
realize our goals and objectives while reducing spending. In fiscal 
year 2006, we are expecting an IT savings of over $5.1 million.
    FDA has redesigned the way we deliver various administrative and 
information technology services using the shared services model. This 
model aligns our administrative resources into a customer focused 
organization, providing more efficient services in a cost effective 
manner without jeopardizing our mission. This model also allows us to 
provide services in a way that maintains close ties to customers 
through negotiated service level agreements that specify the level of 
service to be delivered and the costs that will be charged to the 
customer. FDA has also competed and won all six of the commercial 
activities studied for competitive sourcing in fiscal year 2003 and 
2004, generating millions of dollars in efficiencies. FDA is pleased to 
announce it just won the seventh competition for clerical support 
services functions, which when implemented will result in a major 
change in the way we conduct our clerical support service functions.
    In the area of financial management, we received our seventh 
consecutive ``unqualified'' or clean audit opinion in January 2005 on 
our financial statements from the Department's Office of Inspector 
General. This achievement reflects our ability to produce credible 
financial statements in a timely manner despite the fact that our 
existing systems are not fully compliant with today's financial 
standards. We are pleased to announce that in fiscal year 2005 we will 
implement the new Unified Financial Management System, which will 
replace our old accounting system. This system used across the 
Department, will satisfy financial requirements, and provide timely 
financial information to executives and managers for better decision 
making. We have also integrated performance information into the 
traditional budget presentation, providing better linkages between the 
resource request and its performance goals.

                           USER FEE INCREASES

    We are also requesting an increase of $31.320 million for user fees 
that support prescription drug review, medical device review, animal 
drug review, mammography inspections, export certification, and color 
certification fees. All of these requested fee increases are authorized 
under current law.

               PROTECTING THE HOMELAND--COUNTERTERRORISM

    Since September 11, 2001, public awareness of terrorist threats has 
changed and has underscored the importance of FDA's consumer protection 
mission. Because our regulatory authority and responsibility cut across 
critical elements of counterterrorism efforts, we must assess and 
respond to a broad range of terrorist related health and safety 
threats. One example of this coordinated effort is the establishment of 
the Food Emergency Response Network (FERN), which will enable us to 
test thousands of food samples within a matter of days in the event of 
an act of terror or other emergency.
    Additionally, I would like to highlight our progress in ensuring 
the safety of food imports as we continue to direct resources to where 
they are needed most. Import food field exams, along with laboratory 
analyses, were FDA's major tools to physically monitor imports prior to 
the Bioterrorism Act. One of the new approaches under the Act is the 
implementation of the risk based Prior Notice system as a basis for 
triaging and prioritizing the examination of imported food shipments 
that may pose the greatest risk to U.S. consumers. Our fiscal year 2006 
food defense request contains priorities (FERN, research, 
biosurveillance and crisis management) that Congress funded in fiscal 
year 2005. This will allow us to take advantage of new authorities 
provided in the Bioterrorism Act to further our use of risk-based 
monitoring of food imports.
    FDA is also focusing its efforts on medical countermeasures to 
strengthen our preparedness and response capabilities and to help the 
Agency remain vigilant against potential threats to the public's health 
and security. FDA regulated products, such as human and animal drugs, 
vaccines, blood, and other products, will play a crucial role in 
countering the effects of a terrorist attack. We are working with 
industry to develop medical countermeasures using state-of-the-art 
science, and collaborating with other agencies and organizations to 
identify existing products that may be useful as medical 
countermeasures.
    One example is Prussian Blue, which has been approved as 
Radiogardase for the treatment of contamination with radioactive cesium 
or non-radioactive thallium, released from a ``dirty bomb.'' The 
product has been used since the 1960s as an investigational drug to 
enhance excretion of cesium and thallium from the body. To encourage 
manufacturers to submit marketing applications for the approval of this 
important medical countermeasure, FDA carefully reviewed the available 
data and literature, determined that the product would be found safe 
and effective, and published this finding, along with draft labeling. 
In fiscal year 2004, FDA approved two other drugs, pentetate calcium 
trisodium injection and pentetate zinc trisodium injection, for 
treating certain kinds of radiation contamination. And this February, 
FDA announced the approval of Vaccinia Immune Gobulin Intravenous, the 
first intravenous human plasma derived product available to treat 
certain rare complications of the smallpox vaccination. Approval of 
these countermeasure products was facilitated by FDA guidance documents 
as part of an ongoing effort to provide the public with the best 
available protection against nuclear accidents and terrorist threats.
    We frequently collaborate with the Centers for Disease Control and 
Prevention, the Department of Homeland Security, the Department of 
Defense, and other government agencies to support the availability of 
essential products in case of a terrorist event. FDA helps to assure 
the safety and efficacy of the countermeasures held in the Strategic 
National Stockpile (SNS) that will be used in response to national 
emergencies. The SNS is a stockpile of critical medical products that 
includes antibiotics (to treat threats such as anthrax); antitoxins; 
vaccines (including enough smallpox vaccine for every person in the 
United States); medical supplies; medications; surgical items; and, 
other drugs (including treatments for radiation poisoning and chemical 
agent exposure). The Agency has also conducted vulnerability and needs 
assessments by reviewing information on available medical 
countermeasures as well as promising products under development.

               PATIENT AND CONSUMER SAFETY AND PROTECTION

    We continually strive to improve our mechanisms for assuring that 
patients and consumers are protected from product risks by improving 
our post-marketing monitoring, analysis, communication and regulatory 
activities. By partnering with healthcare providers, healthcare 
institutions and other government agencies, FDA will be able to quickly 
identify and understand the risks associated with FDA regulated 
products and effectively communicate concerns and prevention 
strategies. We also collaborate with foreign government counterparts to 
share vital information, coordinate enforcement actions, and to 
leverage our resources, so we can expand FDA's protective functions 
even more broadly.
    FDA grants approval to medical products only after a sponsor 
demonstrates they are both safe and effective. Unfortunately all 
approved products pose some level of risk. Unless a new product's 
demonstrated benefit outweighs its known risk for an intended 
population, FDA will not approve the product. However, the full scope 
of risks does not always emerge during the mandatory clinical trials 
conducted before approval. Occasionally, serious adverse effects are 
identified after approval either in post-marketing clinical trials 
being conducted for unapproved indications, or through spontaneous 
reporting of adverse events. Such reactions can range from a minor, 
unpleasant reaction to a product, to an event that is life-threatening 
or deadly. An adverse reaction may also result from errors in 
prescribing, dispensing or use. The issue of how to detect and limit 
adverse reactions is challenging. How to weigh the impact of an adverse 
reaction against the benefit of a product to a patient and the public 
health is multifaceted and complex, involving scientific as well as 
public policy issues. FDA often relies on input from over thirty 
advisory committees to provide advice and guidance during and after the 
review process.
    The number of serious adverse drug events reported to the FDA grew 
more than four-fold between 1992 and 2003. About 45 percent of these 
adverse events are caused by medication errors that occur in dispensing 
or administration. These troubling statistics demonstrates why Congress 
has supported FDA in creating a post-market safety program designed to 
assess these postmarket adverse events. This complements the pre-market 
safety reviews required for approval of medical products in the United 
States.
    There is evidence that spontaneous reporting systems alone do not 
allow for adequate characterization of the true safety profile of a 
regulated product. We have been working with Federal, State and private 
organizations to identify useful sources of data using adverse event 
monitoring systems such as MedSun, which is a post-market reporting 
system that serves as an advance warning system and provides two-way 
communications to report adverse events associated medical devices. A 
primary focus involves identifying particular risks in specific 
populations such as children, elderly, and patients from particular 
demographic groups who may be associated with different risks.
    The most recent patient safety issue has involved the drug Vioxx 
(rofecoxib) which illustrates the vital importance of both the ongoing 
assessment of the safety of an approved product once it is in 
widespread use and the effective communication of newly discovered 
risks to patients and medical providers. FDA has taken a number of 
steps to improve our drug safety system and thereby better protect the 
public health. FDA is sponsoring an Institute of Medicine (IOM) study 
that will make an assessment of FDA's drug safety system and its 
effectiveness in safeguarding U.S. consumers. This study will focus on 
the postmarketing phase of FDA's oversight, and assess what additional 
steps can be taken to improve it. While this IOM process proceeds, FDA 
will institute a number of steps designed to foster greater 
independence and transparency in postmarketing safety deliberations.
    On February 15, 2005, Health and Human Services Secretary Leavitt 
and I unveiled a new emboldened vision for FDA that will promote a 
culture of openness and enhanced oversight within the Agency. As part 
of this vision, FDA will create a new, independent, Drug Safety 
Oversight Board to oversee the management of drug safety issues, and 
will provide emerging information to health providers and patients 
about the risks and benefits of medicines. This Board will oversee the 
management of important drug safety issues within CDER. The Board will 
be comprised of medical experts from FDA and other HHS agencies and 
government departments (e.g., Department of Veterans Affairs), and will 
consult with other medical experts and representatives of patient and 
consumer groups.
    FDA will also increase the transparency of our decision-making 
process by establishing new and expanding existing communication 
channels to provide targeted drug safety information to the public. 
These channels will help ensure that established and emerging drug 
safety data are quickly available in an easily accessible form. The 
increased openness will enable patients and their healthcare 
professionals to make better-informed decisions about individual 
treatment options. The Agency is also proposing a new ``Drug Watch'' 
Web page for emerging data and risk information and increased use of 
consumer-friendly information written especially for healthcare 
professionals and patients.
    As FDA develops these communications formats, we will solicit 
public input on how FDA should manage potential concerns associated 
with disseminating emerging information prior to regulatory action. The 
Agency will issue draft guidance on procedures and criteria for 
identifying drugs and information for the Drug Watch page. In addition, 
we will actively seek feedback from healthcare professionals and 
patients on how best to make this information available to them.
    As one effort to help prevent medical administration errors, FDA 
has issued a rule requiring bar codes on the labels of thousands of 
human drugs and biological products. This measure will help protect 
patients from preventable medication errors, reduce the cost of 
healthcare and harness information technology to promote higher quality 
care. Monitoring the safety of marketed products requires close 
collaboration between our clinical reviewers and safety staff to 
evaluate and respond to adverse events identified in ongoing clinical 
trials or reported to us by physicians and their patients.
    Children are a particularly vulnerable population. Until recently, 
they have not usually benefited from the knowledge that is gained by 
studying the products that are being used to treat them. Utilizing the 
tools Congress gave FDA in the Modernization Act, the Best 
Pharmaceuticals for Children Act (BPCA) and in the Pediatric Research 
Equity Act (PREA), we have made enormous progress in obtaining 
information about the safety and efficacy on over 100 products that are 
prescribed to children. Of these, 87 have new labeling information for 
children. From these studies, it was determined that almost one in four 
of the products did not work, had a pediatric safety issue or required 
a change in dose. Almost all of the information that was developed 
concerning the safety of Selective Serotonin Reuptake Inhibitors 
(SSRIs) and their use in pediatrics came from studies FDA requested 
using these new tools.
    BPCA contains important, new disclosure requirements. Under BPCA, a 
summary of FDA's medical and clinical pharmacology reviews of pediatric 
studies is publicly available regardless of the action taken on the 
application. Since 2002, FDA has posted the summaries of 41 product 
reviews on FDA's website at: http://www.fda.gov/cder/pediatric/
Summaryreview.htm. This information provides a rich source of valuable 
safety information to allow pediatricians to make more informed 
decisions about whether and how to use these drugs in their patients.
    After a year of hard work by our dedicated staff, I am pleased to 
report that we have made significant progress in achieving our goals 
for protecting and advancing America's health and safety. We have 
empowered consumers to improve their own health through better 
information about the foods they eat and the medicines they consume. 
The Agency introduced a national education campaign to give consumers 
advice on how to safely use over-the-counter pain relief products like 
non-steroidal anti-inflammatory drugs (including aspirin and ibuprofen) 
and acetaminophen. In addition, FDA, FDA is asking the manufacturers of 
all OTC non-steroidal anti-inflammatory drugs (NSAIDs) to revise their 
labels to include more specific information about potential 
cardiovascular and gastrointestinal risks as well as information to 
assist consumers in the safe use of such drugs. This effort on OTC 
NSAIDs is consistent with FDA's efforts to address similar concerns 
about prescription NSAIDs.
    I am also proud to report that one of FDA's top priorities is the 
implementation of the the Food Allergen Labeling and Consumer 
Protection Act. Beginning in 2006, the Agency plans to ensure that 
manufacturers provide improved food labeling information that will help 
the millions of consumers who suffer from food allergies. The act 
specifically requires food labels to identify in plain English if the 
product contains any of the eight major food allergens--milk, eggs, 
fish, crustacean shellfish, peanuts, tree nuts, wheat and soybeans. The 
new labeling will be especially helpful in teaching children who suffer 
from food allergies to recognize the presence of substances they need 
to avoid.
    The final rule prohibiting the sale of dietary supplements that 
contain ephedra, went into effect in April 2004, paving the way for 
greater consumer protection and removal of risky products from the 
market. FDA has developed a four-pronged approach for ensuring the 
safety of dietary supplements, including supplements promoted for 
weight loss. This approach includes guidance on assuring the safety of 
new dietary ingredients, development of good manufacturing practices 
guidelines for dietary supplements, guidance on the scientific evidence 
needed to substantiate label claims on dietary supplements, and 
diligent enforcement.
    We are also working collaboratively with Federal and other partners 
to develop the scientific evidentiary base FDA will use to make safety 
and enforcement decisions on dietary supplements that contain ephedra. 
Partners in this effort include, FDA's Center for Food Safety and 
Applied Nutrition, National Center for Toxicological Research, the 
National Institutes of Health's Office of Dietary Supplements and 
National Center for Complementary and Alternative Medicine, and the 
National Toxicology Program in the Department of Health and Human 
Services. We are also partnering with the University of Mississippi's 
National Center for Natural Products Research, as well as others, on 
dietary supplement issues.
    I am also pleased to report that a training program was also 
developed for health educators to help teach food safety to pregnant 
women and women who might become pregnant. In January of this year the 
HHS, in conjunction with USDA released the ``Dietary Guidelines for 
Americans 2005'', an update of the Federal Government's science-based 
advice to promote health and reduce risk of chronic diseases through 
nutrition and physical activity. FDA was instrumental in developing the 
Dietary Guidelines. However, FDA will continue to confront complex 
challenges in fiscal year 2006.
    As you can see, FDA is further protecting the public health by 
constantly exploring new ideas, modernizing our rules, streamlining our 
procedures and carrying out ground-breaking reforms, which began with 
the FDA Modernization Act. We are experiencing one of our greatest 
periods of innovation. The strategies we are putting to work are 
designed to deliver optimum health gains for each tax dollar while 
easing regulatory burden on industry and removing obstacles in the path 
of product innovation across all industries in the FDA's purview.
    The FDA strives to be a respected steward of the public's trust and 
ensures that benefits outweigh the risks of regulated products. We will 
keep the promise of the FDA mission by putting in place more rigorous 
oversight and by collecting and sharing important and emerging 
information about product safety and effectiveness. The 21st Century 
has brought unprecedented new challenges to patient and consumer safety 
and FDA is aggressively moving ahead on a number of important 
protections, old and new.

                 USING RISK BASED MANAGEMENT PRACTICES

    Our mission has become much more complicated as public health 
protection continues to entail a wide range of unprecedented challenges 
and threats. The number of medical products that we regulate now 
exceeds 150,000, and the products are becoming increasingly more 
complex. Access to this rapidly growing range of products offers 
opportunities for improving health, improving lives, and enhancing 
lifestyles, but it also creates new kinds of vulnerabilities and risks 
to the public health.
    FDA has identified efficient risk management as the primary way to 
make the most effective use of resources to address the growing number 
of FDA regulated products on the market and the increased complexity of 
many of these products. The Agency has initiated a critical, 
comprehensive review of its practices related to planning and 
prioritizing its inspections, conducting inspections as effectively and 
efficiently as possible, and, achieving compliance with the Federal 
Food, Drug and Cosmetics Act.
    FDA accomplishes these goals through rigorous analysis to 
consistently identify the most important risks and the use of a quality 
system approach to designing and conducting our core business 
processes. Another integral component in the risk-based management 
strategy is the use of risk-based Current Good Manufacturing Practices 
(cGMP), to provide a greater focus on product quality. This was 
initiated under FDA's Good Manufacturing Practices for the 21st Century 
initiative. The objectives of risk-based GMPs will encourage industry 
to adopt new technological advances early in the process; to facilitate 
application of modern quality management techniques, including 
implementation of quality systems approaches, to all aspects of 
pharmaceutical production and quality assurance; and, to implement 
risk-based approaches that focus industry and Agency attention on 
critical areas. This new approach will also ensure that regulatory 
review and inspection policies are based on state-of-the-art 
pharmaceutical science and will also enhance the consistency and 
coordination of FDA's drug quality regulatory programs, in part, by 
integrating enhanced quality systems approaches into our business 
processes and regulatory policies concerning review and inspection 
activities.
    These strategies have resulted in an inspection and enforcement 
program that provides the foundation for a strong, robust Agency 
centered on the protection of public health. An example of an 
innovation stemming from the FDA's recent GMP initiative is the 
Pharmaceutical Inspectorate, which created a cadre of highly-trained 
field investigators that focuses on conducting inspections of highly 
complex or high-risk drug products and processes. Given the environment 
of fiscal restraint, the Agency must make informed decisions on how the 
workload can be best accomplished, while still safely monitoring 
regulated products. This is being accomplished by covering the highest 
risks in regulated products.
    An example of efficient and effective use of risk management in our 
operations is the Prior-Notice Import Security Reviews conducted at the 
Prior Notice Center. These reviews are just one example of the expanded 
targeting and follow through on potentially high risk import entries 
that FDA is developing to complement the import field exam. Nearly 20 
percent of all imports into the United States are food and food 
products consumed daily by the public, making imported foods potential 
vehicles to carry out terrorist attacks in the United States by 
contamination of our food supply. The Prior-Notice system requires food 
importers to provide the FDA with advance notice of human and animal 
food shipments imported or offered for import into the United States.
    By requiring advance notice for imported foods, we gain critical 
new tools that could help identify shipments containing potentially 
dangerous foods and prevent them from entering the country. For example 
FDA would know in advance, when and where specific food shipments will 
enter the United States, what those shipments will contain, from where 
and from whom they are imported, and the facility where the food was 
manufactured. This advance information, along with other information 
from the intelligence community, allows FDA to more effectively target 
inspections and ensure the safety of imported foods.
    FDA receives on average, 27,000 notifications about incoming food 
shipments each day, and works closely with the Customs and Border 
Protection (CBP) at the prior-notice Center which is co-located with 
CBP's National Targeting Center to ensure that the Prior-Notice 
regulations promote a coordinated strategy for border protection. Using 
the electronic data required under those regulations, the science-based 
knowledge of the Agency, and a sophisticated automated targeting 
system, FDA works side-by-side with CBP while making decisions about 
food shipments that could pose a potential threat to the United States. 
Those identified as potential threats will be subject to thorough 
inspections upon arrival at our ports. This integrated risk-management 
process increases our security and facilitates the movement of 
legitimate commerce.
    FDA is also helping vaccine manufacturers overcome challenges such 
as the problems Chiron is experiencing. Under the Good Manufacturing 
Practices for the 21st Century Initiative, we are working with industry 
to encourage use of advanced technologies as well as quality systems 
and risk-based approaches that build quality into the manufacturing 
process. We are also increasing our surveillance of influenza vaccine 
manufacturers and have expanded our ability to communicate with our 
foreign regulatory counterparts on critical public health issues.

                                CLOSING

    We at the Food and Drug Administration are working hard to address 
key challenges in fulfilling our public health mission. Our goal is to 
maximize the benefits and minimize the risks from the products we 
regulate. We work to provide high quality and consistent oversight in 
an environment of changing public health risks, new technologies and 
global market dynamics. We recognize that our responsibilities are 
growing in scope and complexity, and we are responding by focusing on 
our core public health mission, by making high-yield investments and by 
seeking effective collaborations and partnerships.
    Our vision for the future of FDA is one of transformation, 
requiring the broad use of new technology and new ways of thinking, 
developed in collaboration with a broad network of partners--public and 
private, United States and international. By capitalizing on 21st 
century information technology and regulatory process innovation, we 
will leverage public investment in FDA to yield an even greater level 
of public health protection, and lower barriers on the critical path to 
medical innovation. This will allow us to further implement a quality 
systems approach in all of our operations, improving regulatory 
business processes, increasing productivity, and promoting better 
health outcomes. We are committed to fostering increased predictability 
and transparency in every aspect of what we do.
    We would like to thank you for your continued support of the agency 
and its public health mission. This year is expected to be another 
exciting one for the Agency and we look forward to working with you 
throughout the 109th Congress.
                                 ______
                                 

                       DEPARTMENT OF AGRICULTURE

                    Office of the Inspector General

        Prepared Statement of Phyllis K. Fong, Inspector General

    Good morning, Mr. Chairman and Members of the Subcommittee. Thank 
you for inviting me to testify before you today to discuss the 
activities of the Office of Inspector General (OIG) and to provide you 
information from our work pertaining to the programs and operations of 
the U.S. Department of Agriculture (USDA).
    I would like to introduce the members of my senior management team 
who are here with me today: Joyce Fleischman, Deputy Inspector General; 
Robert Young, Assistant Inspector General for Audit; Mark Woods, 
Assistant Inspector General for Investigations; and Walt Kowal, 
Director of our Business Management and Procurement Division.
    I am pleased with the opportunity to provide the Subcommittee with 
some of the highlights of our audit and investigative activities over 
the past year, inform you about the results we achieved, and give you a 
preview of projects of interest that are pending or are planned for 
fiscal year 2005.
    To ensure that our audit and investigative resources are directed 
at the most important challenges facing USDA, we have begun planning, 
organizing, and budgeting our work according to three major objectives 
that define our priorities.
    My testimony today will be focused on our work directed towards the 
major challenges facing the Department in the areas of safety, security 
and public health, program integrity, and management of public 
resources.

                  SAFETY, SECURITY, AND PUBLIC HEALTH

    The highest priority for our audit and investigative work is to 
support USDA in the enhancement of effective safety and security 
measures to protect USDA and our Nation's agricultural resources.
Food Safety: Improving USDA Oversight and Inspection Systems
    Ensuring a safe domestic food supply and providing an effective and 
reliable system of import safeguards for foreign-produced food products 
is a vital responsibility of the Department. Public and congressional 
concerns continue regarding the ramifications of Bovine Spongiform 
Encepholopathy (BSE) in Canada's cattle herd and its impact on the U.S. 
cattle market. We are continuing our work on the Department's 
surveillance efforts to detect and estimate the prevalence of BSE in 
the U.S. cattle herd. We are focusing our efforts on whether USDA has 
established effective management control processes over inspection-
related activities, including animal disease surveillance programs. OIG 
will devote significant audit and investigative resources to BSE and 
other food safety issues in fiscal year 2005 to assist the Department 
as it addresses the challenging questions that have arisen.
Investigating the USDA Response When BSE-Suspect Cattle Are Identified
    Last year, I advised the Subcommittee that OIG was investigating 
allegations surrounding the health status of the BSE-positive cow found 
in Washington State in December 2003. Allegations were raised in the 
media pertaining to the potential falsification of USDA inspection 
records that described the cow's condition before its BSE status was 
confirmed. OIG investigated whether any USDA personnel or private 
parties provided false information or engaged in any intentional 
misconduct. We also examined whether USDA personnel and employees of 
the beef processing facility followed proper procedures during the 
inspection of the BSE-positive cow and during their collection, 
handling, and delivery of tissue samples from the infected cow.
    In July 2004 testimony before a joint hearing of the House 
Agriculture and Government Reform Committees on BSE issues, I reported 
that we found no instances where USDA personnel knowingly conveyed 
false information or engaged in intentional misconduct. APHIS and the 
Canadian Food Inspection Agency (CFIA) concluded that they accurately 
identified the BSE-positive cow. We examined their work and agreed with 
their conclusion. OIG discovered no evidence that USDA personnel 
falsified any records pertaining to the condition of the BSE cow at the 
time of inspection. Our investigation also found that the former 
employee of the facility, who alleged that the BSE-positive cow was 
ambulatory and healthy when it arrived at the facility, described a 
different animal from the one that arrived in the same trailer and 
later tested BSE-positive.
    A second OIG investigation into the handling of a BSE-suspect cow 
by Department officials resulted from the premature condemnation of a 
cow in San Angelo, Texas. On May 4, 2004, the FSIS Acting Regional 
Director in Dallas, Texas, reported that a cow identified as having 
Central Nervous System (CNS) symptoms by an FSIS veterinarian at a beef 
processing facility in San Angelo, Texas, was not tested for BSE after 
it had been slaughtered. The initial decision by the FSIS Veterinary 
Medical Officer (VMO) on-site at the facility to test the cow for BSE 
was overturned by a senior APHIS official, and the cow's carcass was 
subsequently sent to a rendering plant.
    OIG investigated whether an APHIS official in Austin, Texas, 
provided a false statement to USDA/FSIS investigators during their 
inquiry into his decision not to test the animal at the facility. The 
OIG investigation found no evidence that any of the USDA officials 
responsible for the decision not to take brain tissue samples from the 
cow for BSE testing, or any other USDA personnel, provided false 
information or engaged in intentional misconduct. The cow did not enter 
the food supply; its carcass was disposed of at a local landfill in 
accordance with applicable environmental standards.
    After the incident, FSIS and APHIS Veterinary Services announced a 
new joint policy regarding BSE sampling of condemned cattle at 
slaughter plants. The policy establishes protocols for the agencies' 
responsibilities to obtain samples from condemned cattle exhibiting 
signs of CNS disorders, regardless of age.

The USDA BSE Surveillance Plan and BSE Enforcement Issues
    The Department's testing of cattle for BSE had centered on high-
risk cattle--those that exhibit a CNS disorder or died from unclear 
causes. After the discovery of a BSE-infected animal in Washington 
State in December 2003, APHIS expanded its surveillance program 
beginning June 1, 2004.
    As I testified last year, we initiated an audit to assess whether 
the surveillance program in place in December 2003 had been adequately 
implemented and whether the expanded program would accomplish its 
stated goal to determine if ``. . . BSE is actually present in the 
population and, if so, at what level.'' We concluded that several 
limitations inherent in the expanded sampling plan needed to be 
clarified to convey what the results of the testing actually imply. 
Among the major issues we identified were: sampling was not truly 
random because participation in the program is voluntary; APHIS could 
not obtain a statistically appropriate geographical representation of 
the U.S. cattle population, so the chances of detecting BSE, if it 
exists, would be reduced; and the projected maximum BSE prevalence rate 
may be unreliable.
    Our review also determined that cattle condemned at slaughter 
plants for CNS disorders were not always tested for BSE. The Department 
needed to increase testing of rabies-negative brain samples from 
animals that exhibit clinical signs not inconsistent with BSE. At the 
time of our review, a process for obtaining samples from cattle that 
``died on the farm'' had not been developed. USDA also needed to 
standardize the age requirement for BSE testing.
    Based on our audit findings, we recommended that APHIS fully 
disclose the assumptions behind its sampling plan, clarify the 
limitations, and ensure that all high-risk animals are sampled and 
tested in accordance with USDA policy and the 2004 Surveillance Plan. 
We also recommended that APHIS expedite development of a new system to 
track and report accomplishments and implement performance measures and 
a continuous risk assessment. APHIS agreed with all of our 
recommendations and advised OIG it is moving to correct the weaknesses 
we identified.
    Currently, OIG has four audits in progress pertaining to BSE. In 
our BSE Surveillance Program--Phase II audit, OIG is monitoring the 
Department's implementation of its BSE-Expanded Surveillance Program, 
involving both APHIS and FSIS. This audit will evaluate the 
effectiveness of APHIS' expanded BSE Surveillance program; whether BSE 
laboratories are meeting their objectives and are in compliance with 
program policies and procedures for conducting tests on submitted BSE 
samples and reporting test results to APHIS and stakeholders; and if 
APHIS and FSIS took prompt and proper corrective actions in response to 
recommendations in the BSE Surveillance Program--Phase I audit report 
previously cited.
    In our Phase III review, we will evaluate whether the USDA 
enforcement of the ban on specified risk materials (SRMs) in meat 
products and controls to prevent central nervous system (CNS) tissue in 
advanced meat recovery (AMR) product have been effectively implemented. 
The review will also cover FSIS ante mortem condemnation procedures and 
procedures for obtaining brain tissue samples from condemned cattle for 
BSE testing. Our target date for completing these two efforts is early 
summer, 2005. This week, we released our audit of the Department's 
(APHIS, FSIS) Oversight of the Importation of Beef Products from 
Canada. In May 2003, USDA halted imports of live cattle, ruminants, and 
ruminant products from Canada after a Canadian cow tested positive for 
BSE. In August 2003, the Department announced that it would allow the 
importation of low-risk beef and other ruminant products from Canada. 
In response to congressional concerns, we evaluated APHIS' oversight of 
Canadian beef imports and whether proper controls were established to 
ensure that only low-risk product entered the United States. Among our 
key objectives were determining whether APHIS met existing regulatory 
and policy requirements regarding permits that allowed the importation 
of some Canadian beef products and whether APHIS properly considered 
and implemented risk-mitigation measures for animal and public health. 
We found that while APHIS allowed the import of beef products they 
considered low risk in an attempt to further trade, they did not 
publicly communicate or explain their actions to all interested 
parties. APHIS changed its policies relating to required risk 
mitigation measures to allow the import of low-risk product produced at 
facilities that also handled higher risk product, thereby increasing 
the potential risk for cross-contamination. OIG made a number of 
recommendations that would strengthen the USDA process for 
communicating such changes in policy and improve controls over Canadian 
beef product imports. The Department has generally agreed with our 
recommendations and has identified a number of positive actions to 
address these concerns. Finally, we are completing an audit to evaluate 
the adequacy of a recall of ineligible product from Canada and will be 
reporting our results to you.

Food Contamination and Recall Activities
    In my testimony before the Subcommittee for the last 2 years, I 
discussed OIG work regarding FSIS recall operations that involved the 
adulteration of ground beef products by Escherichia coli (E. coli) in a 
Colorado plant. Our audit of the Colorado facility determined that the 
facility and FSIS had not fulfilled their responsibilities under the 
Hazard Analysis and Critical Control Point (HACCP) system. OIG made 
extensive recommendations to improve their inspection processes and 
recall procedures in this audit. As a result, FSIS directed plants to 
reassess their HACCP plans for raw ground beef products and issued a 
directive requiring inspectors to obtain processing plants' pathogen 
test results at least on a weekly basis. FSIS issued a second directive 
that clarified when trace-back' samples should be taken and that 
suppliers shall be notified of test results.
    At the time of my testimony last year, two audits on Listeria 
adulteration recalls were still underway. In two audit reports issued 
in June 2004, we determined that similar to the Colorado recall 
incident, weaknesses in FSIS' management control and oversight of the 
recall process were again evident. In response to our recommendations, 
FSIS issued a new directive on recall procedures, which implemented a 
process for selecting customers for effectiveness checks, and enhanced 
instructions to agency personnel for performing effectiveness checks on 
products distributed to the National School Lunch Program. We are still 
working with FSIS to address the development of a supportable 
methodology for determining the success, or failure, of a recall.
    Regarding our investigative work on incidents of food adulteration, 
we investigated the owner of a California food service management 
storage and distribution business for supplying 47 California school 
districts with poultry products containing rodent hair, feces, and 
signs of being gnawed by rodents. The owner and plant manager were 
convicted, placed on probation, and fined over $10,000.

Controls Over Germplasm Storage Material and Genetically Engineered 
        Organism Field Testing
    USDA plays a major role in regulating and monitoring genetically 
engineered organisms (GEOs), ranging from the storing of germplasm used 
to produce seeds for such crops, to approving field tests of 
genetically engineered crops, to monitoring the movement and import of 
GEO crops. In March 2004, we issued a report on the adequacy of USDA 
controls over the identification, accountability, and security of plant 
germplasm at USDA facilities. We found that guidance and policies were 
lacking and that inventory accountability and physical security needed 
improvement. The agencies responsible for storing germplasm and 
controlling its movement (ARS and APHIS) agreed to take action on our 
recommendations.
    Because of the sensitivity and potential impact biotechnology has 
on U.S. trade, we are continuing our work in this area. We have an 
audit that is nearing completion that will report our evaluation of 
USDA controls over field tests and movements of GEOs. We are examining 
APHIS' procedures for approving, controlling, and monitoring field 
tests of genetically engineered crops to prevent the inadvertent 
release of GEOs in the environment. Uncontrolled and inadvertent 
release of GEOs, particularly high-risk GEOs such as those containing 
pharmaceutical and industrial compounds, cannot only seriously impact 
the safety of the food supply, but adversely impact trade. Further, the 
genetic diversity of plant life can be compromised. We expect to issue 
a final report on our work by late spring.

Homeland Security and Program Implementation
    We place a high priority on work that will assist USDA officials in 
strengthening the Department's defenses against threats to our Nation's 
food supply, production agriculture, and Federal facilities.
    We reviewed the Department's progress in addressing the specific 
security, inventory, and access deficiencies identified in a previous 
OIG report on USDA research laboratories and examined its 
implementation of new policies to improve controls on inventories and 
biosecurity. To do so, OIG made unannounced visits to 16 laboratories 
previously identified as having deficiencies. We found that while 
agency officials had made great progress to implement biosecurity 
measures, particularly for BSL-3 laboratories, further improvement is 
needed with respect to accountable records, internal reviews, and 
cybersecurity.
    Our work has shown that subjects of OIG investigations are also of 
interest to other members of the Federal Bureau of Investigation (FBI) 
Joint Terrorism Task Forces. This has led to several recent cases. OIG 
participated in the FBI's JTTF in Columbus, Ohio, and we assisted in 
the investigation of an individual for providing material support to 
the al Qaeda terrorist network. The individual pled guilty in the 
Eastern District of Virginia to one count of conspiracy to provide 
material support and resources to al Qaeda and one count of Providing 
Material Support and Resources to al Qaeda. He was sentenced to 20 
years in prison.
    OIG created a nationwide task force in order to coordinate with 
Federal, State, and local law enforcement agencies in identifying and 
prosecuting violators who steal infant formula from large chain stores. 
Stolen infant formula is a nationwide problem due to the resale value 
of the merchandise on the black market and the potential for overseas 
transfers of the illegal proceeds. OIG is particularly concerned with 
the health and wholesomeness of the stolen infant formula because 
previous investigation indicates it is often relabeled and resold in 
smaller grocery stores--often through the Women, Infants, and Children 
(WIC) program. We have found that expired, stolen infant formula is 
often relabeled with new expiration dates, and some of the relabeled 
formula does not contain the nutrients/ingredients listed on the label. 
Currently, we have 14 open investigations involving stolen infant 
formula. We are working with JTTFs in order to assist other Federal and 
local law enforcement agencies and to insure that this issue remains an 
investigative priority.

Evaluation of the Implementation of the Listed Agent or Toxin 
        Regulations
    Select agents or toxins are those biological agents listed by APHIS 
as having the potential to pose a severe threat to animal and plant 
health or to animal and plant products. APHIS is required by the Public 
Health Security and Bioterrorism Preparedness and Response Act to 
ensure that anyone possessing, using, or transferring these agents is 
registered with the Government.
    We are examining whether adequate controls are in place at APHIS 
headquarters to ensure that entities known to use or store listed 
agents or toxins are registered, that laboratory reported security 
measures are assessed, and that movement of select agents between 
scientists and laboratories can be documented and tracked. We are also 
participating in an Interagency Working Group reviewing the export 
licensing process for biological and chemical commodities. The 
Interagency Working Group is interested in the responsibilities and 
actions of APHIS concerning the possession, use, and transfer of 
biological agents and toxins and their relationship to export 
licensing.

Homeland Security-Related Audit Work Planned in Fiscal Year 2005
    We have several security-related audits that we expect to begin 
work on in fiscal year 2005. OIG will conduct an audit on the 
Department's implementation of the Bioterrorism Act of 2002. This Act 
requires, in part, that warehouses and elevators that are used to store 
Government-owned commodities register with the Food and Drug 
Administration (FDA) and establish and maintain records that can be 
used to identify producers. We will assess whether USDA has properly 
verified or required FDA registration and compliance prior to entering 
into storage agreements with warehouse and elevator firms. We will also 
follow up on our prior audit of Forest Service (FS) security over 
explosives/munitions magazines located within the National Forest 
System (NFS). We will assess FS' action to implement our prior 
recommendations and determine if explosives/munitions magazines are 
adequately secured.

Protecting the Safety of USDA Employees
    A fundamental duty of OIG is to expeditiously investigate any 
incidents of violence or threats of violence against USDA employees. 
USDA employees must be protected against harassment or intimidation as 
they discharge their duties, whether they are engaged in protecting 
public safety as food inspectors, or serving as law enforcement 
personnel in our national forests. Last fall, OIG helped secure a 
conviction for a crime that took the lives of two dedicated FSIS 
employees. In October 2004, after a 6-month jury trial in Alameda 
County, California, the owner of a sausage factory was convicted of 
homicide with special circumstances (first degree murder) for the 
murder of two FSIS Compliance Officers and one California Department of 
Food and Agriculture Investigator while they were on official business 
at his facility in June 2000. In January, the jury recommended that the 
owner be sentenced to death for this crime. An OIG Special Agent played 
a primary role in investigating the murders and assisting the 
prosecution's case. Sentencing by the judge is imminent.
    Last week, OIG submitted our statutorily mandated investigative 
report to Congress pertaining to the deaths of two FS employees who 
died fighting the Cramer Fire in the Salmon-Challis National Forest 
(Idaho). OIG found that certain FS personnel at the fire, primarily the 
Incident Commander, failed to comply with established FS firefighting 
policies and tactics. Our investigation found that the contract 
firefighting teams, who were brought in to assist FS firefighters, 
performed poorly. Therefore, we initiated a review of FS' use of 
private contract crews to determine the effectiveness of FS' procedures 
and oversight pertaining to the contract crews' readiness, training 
certifications, and communication proficiencies, among other issues.

Reducing USDA Program Vulnerabilities and Enhancing Program Integrity
    OIG's second priority is to help USDA reduce vulnerabilities and 
ensure or restore integrity in the various benefit and entitlement 
programs of USDA, including a variety of programs that provide payments 
directly and indirectly to individuals or entities.

Targeting Risk and Improper Payments Within USDA
    The Improper Payments Information Act of 2002 (IPIA) requires the 
head of each agency to annually review all programs and activities the 
agency administers to identify those that may be susceptible to 
significant improper payments. Once these programs are identified, the 
agencies must estimate the annual amount of improper payments, and, if 
the estimate is over $10 million and greater than 2.5 percent of 
program payments, report the estimate to Congress along with the 
actions the agency is taking to reduce those improper payments. The 
Department's farm programs and food and nutrition programs, which 
amounted to $34 billion and $46 billion, respectively, last year, are 
subject to this statute's requirements. Three primary agencies (the 
Risk Management Agency (RMA), the Farm Service Agency (FSA), and the 
Natural Resources Conservation Service (NRCS)) administer USDA's crop 
insurance, crop disaster, and conservation programs, respectively, 
while the feeding programs are administered by the Food and Nutrition 
Service (FNS). We audited implementation of the IPIA in these agencies. 
We found that FNS had available information from numerous sources to 
establish baseline information the agency could have used to establish 
error rates for feeding programs in response to OMB's data request for 
improper payment information. However, the agency did not believe the 
information was statistically valid and, therefore, could not be used 
to report on improper payments.
    Our review of IPIA implementation in FSA and NRCS disclosed little 
progress being made. The agencies did not take necessary action to 
comply with the Act and implement OMB's guidance. The agencies stated 
the guidance provided by OMB and the Department's Office of Chief 
Financial Office (OCFO) was unclear; and, therefore, they were unsure 
of what actions to take. Our audit of OCFO's implementation measures 
disclosed that OCFO's direction and guidance to the agencies needs to 
be strengthened in order to provide reasonable assurance that program 
areas vulnerable to improper payments are fully identified. We will 
continue to monitor the Department's implementation of the IPIA.
    We have initiated a multifaceted and comprehensive review of USDA's 
farm programs to identify improper payments and address fraud and 
abuse. This initiative is now focusing on crop insurance, disaster 
payments, and payment limitations but will be expanded to other USDA 
farm programs. Our audit and investigative staffs, which have extensive 
experience with these programs, are now reviewing previously conducted 
audits and investigations and are compiling data on program 
vulnerabilities and their causes. Efforts will then shift to the 
development of innovative solutions and the means to identify abuse. 
OIG is working with RMA this year to access and learn how to better use 
data mining tools that will help us proactively target crop insurance 
fraud by farmers, agents, and adjustors involving suspicious patterns 
of claims. Our computer forensics unit will play a major role in the 
latter phase, as it will use its recently enhanced capability to 
develop processes that will analyze, manipulate, and cross-match 
computer data in the various agencies' databases and detect those most 
likely to be involved in abuse. We were very successful in our initial 
development of computerized targeting of fraud in the Food Stamp 
Program and hope to achieve similar success with USDA's farm programs. 
We also plan to work with RMA to enhance our ability to use satellite 
imagery to strengthen the hard evidence used in crop insurance fraud 
cases.

Food and Nutrition Programs
    OIG has continued to work with FNS to improve program integrity and 
to identify improvements in program administration. In fiscal year 
2004, we evaluated internal controls related to National School Lunch 
Program (NSLP) meal accountability, procurement, and accounting systems 
in six States. We identified control weaknesses in meal accountability 
procedures, including lack of proper edit checks, to ensure the 
accuracy of the daily meal counts and claims for reimbursement and 
procurement procedures. For instance, in the 2000 school year, the 
Philadelphia school district claimed reimbursement for 241,852 meals 
served in excess of students in attendance, 147,954 meals in the 
incorrect reimbursement category, and 109,778 more free and reduced-
price meals than could be supported by approved applications and direct 
certifications. This resulted in excess reimbursements of over 
$800,000. In Chicago, nearly 27 percent of the 598 schools in the 
district submitted undetected inflated meal claims, over-claiming 
642,102 breakfasts and lunches in the period of October 2003-May 2004. 
Due to the school district's limited oversight, we questioned over $1.2 
million in program funds and recommended collection of over $650,000.
    In fiscal year 2004, FNS received about $5 million to enhance 
program integrity in Child Nutrition Programs by expanding assessment 
of certification accuracy in the school meals programs. FNS is using 
this funding to conduct a study aimed at providing a reliable, national 
estimate of over and under payments in the NSLP and the School 
Breakfast Program (SBP). The study will analyze data for school year 
2005-2006, and we will monitor the study results to assure it meets its 
intended purpose. Depending on the significance of the error rates that 
will be identified by the study, FNS should be better able to determine 
whether changes are needed in eligibility requirements for NSLP and SBP 
to reduce ineligible participation.
    OIG also conducted investigations involving over $1 million in 
false claims involving inflated meal claims for reimbursement from the 
NSLP and the Child and Adult Care Feeding Program. Through court 
actions, we have recovered $570,000 in California, Louisiana, and 
Wisconsin and have $1 million in claims pending in a New York case 
along with three persons sentenced from 6 to 30 months in prison.

Food Stamp Program Investigations
    Illegal trafficking in Food Stamp Program (FSP) benefits, whether 
issued through electronic benefits transfers (EBT) systems or food 
coupons, continues to be a major area of concern. Over the last year, 
we spent approximately 20 percent of our investigative time on 
investigations of FSP fraud. The use of EBT systems to deliver FSP 
benefits, in addition to saving administrative program costs by 
eliminating costs of printing, issuing, and reconciling millions of 
paper food stamps every month, has also provided a wealth of electronic 
data of enormous benefit in detecting and investigating suspicious 
patterns of activity and in compiling evidence that is used to 
successfully prosecute corrupt retailers.
    Using the Computer Forensic Unit's (CFU) capabilities, we can 
analyze the EBT database and track recipient and store redemption 
patterns to prove fraud and determine the total amount of money 
involved. The investigation of an authorized store in Chicago 
illustrates how we are able to use the data. The subjects of the 
investigation had moved the authorized point of sale device to 
different locations in Chicago so they could exchange cash for EBT 
benefits away from the authorized store. We were able to analyze the 
EBT data to track recipient and store redemption patterns to prove the 
fraud, as well as determine the total amount of fraud involved in the 
case. For example, recipients redeemed benefits in two stores that were 
miles apart and physically impossible to travel to in the time 
indicated in the redemption data. Our work resulted in four individuals 
being sentenced to serve from 15 to 57 months in prison and ordered to 
pay $29.1 million in restitution.

RMA: Reducing IT Security and Operations Vulnerabilities
    RMA administers the Federal Crop Insurance Corporation (FCIC) and 
oversees all programs authorized under the Federal Crop Insurance Act. 
RMA's fiscal year 2004 crop year potential liability exceeded $46 
billion. FCIC's 2004 crop year premium subsidy and producer-paid 
premiums are $2.5 billion and $1.6 billion, respectively. As of August 
30, 2004, insurance indemnities paid on the 2003 crop year were $3.2 
billion.
    We audited RMA's IT security and operations, which disclosed 
serious internal control weaknesses in the overall management and 
organizational structure for these activities. RMA's IT environment is 
highly vulnerable due, in part, to the overall control of IT operations 
by production managers who also control the financial commitments and 
outlays. This vulnerability resulted in material noncompliance with OMB 
and Presidential Decision Directives. Our electronic vulnerability 
scans of RMA's network revealed over 300 high- and medium-risk 
vulnerabilities, insufficient system policy settings, and serious and 
recurring access control weaknesses, compounded by inadequate firewalls 
and intrusion detection devices. Overall, RMA managers did not adhere 
to the Department's system development lifecycle methodology for 
software application development, installation, and/or maintenance.
    We recommended that RMA provide sufficient resources to its new 
Chief Information Officer to effectively oversee IT security and 
preclude undue influence by production managers. We additionally 
recommended that RMA include the noted material control weaknesses in 
its Federal Managers' Financial Integrity Act (FMFIA) report; take 
immediate action to eliminate the vulnerabilities noted; and establish 
appropriate policies, procedures, and controls for the agency's IT 
operations. We also recommended that RMA obtain background 
investigations for all IT contractor employees before access to 
systems, hardware, and facilities is authorized. RMA officials have 
indicated that they plan to take aggressive action by prioritizing the 
recommendations and acting first on those that will mitigate the FMFIA 
material internal control weakness. We will follow up to see that 
corrective actions will be taken.

RMA: Investigations into Crop Insurance Payment Fraud
    We have a number of investigations ongoing into crop insurance 
fraud, as well as disaster payment fraud. Most of these investigations 
involve substantial dollar amounts. For example, in two of our cases, 
OIG investigated 9 persons who schemed to gain over $20 million in 
fraudulent RMA and FSA payments. The investigations have resulted in 
forfeiture of $13 million in cash and property to the Government in 
order to recoup some of these losses. One of the persons has been 
sentenced up to 60 months in prison, and the others pled guilty and are 
waiting to be sentenced.

FSA: Investigations into Payment Limitation Fraud
    In addition to fraud cases involving crop insurance and disaster 
payments, we have a number of open investigations pursuing fraud 
involving payment limitations. Our investigations have found variations 
of a common scheme, such as: fraudulently including the names of 
individuals on farm operating plans who do not meet FSA's requirement 
that one be ``actively engaged in farming operations''; establishing 
farming partnerships where alleged partners do not actually share in 
the farming operation; failing to disclose that partners in one farming 
partnership have an interest in another farming operation; and 
falsifying documents to hide the fact that the financial accounts are 
actually commingled with those of another farming entity.
    As an example, OIG investigated a case of fraud committed by one of 
Mississippi's largest farmers and his brother. This resulted in both of 
them pleading guilty in June 2004 to conspiracy to defraud FSA of $11.2 
million in subsidy program payments, submitting false statements to 
FSA, wire fraud, mail fraud, money laundering, and witness tampering. 
The plea agreement included the criminal forfeiture of approximately 
400 acres and one of the farmer's houses that had been built with the 
proceeds from this scheme. The farmer's accountant actively 
participated in the conspiracy and also pled guilty. From 1999 through 
2001, the conspirators created 13 partnerships and 64 different 
corporations to fraudulently obtain payments from FSA and RMA. They 
recruited and paid individuals for the use of their names and Social 
Security numbers to secure enough stockholders for each entity and 
misrepresented those names to FSA to obtain the subsidy payments. The 
conspirators also attempted to persuade those individuals to testify 
falsely before a Federal grand jury and to OIG agents. The farmer was 
sentenced to 5 years imprisonment and ordered to repay $11.2 million to 
the Government in restitution. The brother was fined $5,000 and 
sentenced to 2 years probation. The accountant was sentenced to 7 
months imprisonment and fined $20,000.

Natural Resources Conservation Service (NRCS)
    We are also evaluating the potential for improper payments in NRCS 
conservation programs, as well as determining the impact of any 
improper payments on other farm program payments. Under various 
conservation programs administered by NRCS, the Government pays 
landowners to take marginal agricultural land out of production and put 
it into environmentally friendly conservation uses. At the same time, 
FSA agricultural programs provide payments to eligible producers 
predicated on the number of crop-specific ``base acres'' on the farm 
used for agricultural activities, as determined by FSA. In general, 
producers are prohibited from receiving both an NRCS conservation 
easement payment and FSA agricultural program payments on the same base 
acres. Landowners are also paid for conservation easements based on 
agency appraisals. If appraised values are not properly established, 
significant overpayments can be made for conservation easements. We are 
finalizing our work and expect to release a report by late spring, 
2005.

Forest Service
    Each year, wildfires destroy 2 to 7 million acres of resources in 
the United States, and the Forest Service (FS) faces significant 
challenges in utilizing its personnel and resources to suppress and 
control wildland fires and to protect the health of our public forests. 
OIG will conduct extensive audit work in fiscal year 2005 related to FS 
firefighting programs, activities, and management actions. We recently 
completed a review of FS' firefighting safety program. Our review found 
that while FS had excellent written firefighting safety policies and 
procedures, improvements were needed in the agency's overall fire 
safety program. OIG determined that FS had not fully implemented 
recommendations from past internal and external safety reviews and that 
the agency did not have documentation to support the qualifications of 
all its firefighters. OIG will monitor FS management actions to follow 
up on this audit and related issues that arose in our aforementioned 
Cramer Fire investigation.
    The accumulation of hazardous fuels has been one of the major 
contributors to the increase in large destructive wildfires. OIG will 
examine FS' Hazardous Fuels Reduction efforts to assess the agency's 
controls over the funds, activities, and effectiveness of reducing the 
accumulation of hazardous fuels. Our review of FS' National Fire Plan 
Large Fire Suppression Costs will assess FS' efforts to control, 
account for, and report its large fire suppression costs. FS' costs to 
fight fires now exceed an average of $1 billion per year. As part of 
our audit, we will assess the agency's implementation of 
recommendations from prior reviews, including FS' action plan, to 
determine whether FS has taken the necessary actions to reduce its fire 
suppression costs.
    OIG will also assess FS' use of Emergency Equipment Rental 
Agreements (EERAs) to rent equipment on a short-term basis to assist in 
fighting wildland fires and the agency's use of collaborative ventures 
and partnerships with non-Federal entities. FS' use of such 
partnerships has increased significantly, and our review will focus on 
whether they are well managed, meeting program objectives, and avoiding 
potential conflicts of interest. OIG will also review FS' management 
procedures pertaining to the control and potential elimination of 
invasive species, which cost more than $138 billion per year in damage, 
losses, and control efforts. Nonnative insects and diseases have 
infested over 3.5 million acres in the national forests, and 
approximately half the species on the endangered species list are at 
risk because of competition and loss of habitat traceable to invasive 
species.

                 USDA'S MANAGEMENT OF PUBLIC RESOURCES

    OIG conducts audits and investigations that focus on improved 
financial management and accountability, information technology 
security and management, protection of public assets, employee 
corruption, Forest Service resources, and rural development programs, 
among others.

Financial Management and Accountability
    Both the Congress and the President's Management Agenda have placed 
emphasis on improving financial management in all Federal departments. 
Improvements made by the Department to its financial systems have 
allowed USDA to maintain an unqualified opinion on its consolidated 
financial statements for the third consecutive year. While this is a 
major achievement, the Department still needs to improve its financial 
management processes to correct internal control weaknesses. Strong 
financial management is required to ensure the availability of accurate 
and timely financial data needed to properly manage USDA programs.

Information Technology (IT), Security, and Management
    In 2004, we assessed the adequacy of IT security in the Rural 
Development (RD) mission area; Risk Management Agency; APHIS; the 
Economic Research Service; the Grain Inspection, Packers and Stockyards 
Administration (GIPSA); the Office of Budget and Program Analysis; and 
the Office of the Chief Economist. Advances in technology have 
increased the Department's vulnerability to unlawful destruction and 
penetration by hackers and other individuals. USDA agencies manage 
multibillion dollar programs that are integral to homeland security, 
food safety, and critical infrastructure that must be protected. We 
found weaknesses in IT security programs due to inadequate 
implementation at each agency we reviewed. IT security improvements are 
still needed at USDA's second largest data center, the Office of the 
Chief Information Officer/National Information Technology Center's 
(OCIO/NITC). We recommended improvements in access controls, security 
plans, risk assessments, disaster recovery plans, and identification 
and correction of potential system vulnerabilities. OCIO stated that 
corrective action either has been taken or is underway to address each 
issue.

                    FISCAL YEAR 2006 BUDGET REQUEST

    We are very proud of the accomplishments of OIG and pleased to 
report that, in fiscal year 2004, we continued to more than pay our own 
way. In the investigations arena, OIG issued 425 investigative reports 
that resulted in 370 indictments and 350 convictions. These actions 
resulted in $292.9 million in fines, restitutions, other recoveries, 
and penalties during the year. In the audit arena, we issued 97 audit 
reports, and management made decisions based on 77 of the reports. Our 
audits resulted in questioned and unsupported costs of $15.2 million. 
Of this, management agreed to recover $9.2 million. In addition, 
management agreed to put another $748.2 million to better use. Equally 
as important, implementation of our recommendations by USDA managers 
will result in more efficient and effective operations of USDA 
programs.
    During the past year, we have continued to review and evaluate OIG 
activities and made changes as needed to provide the most effective 
support to the Department's programs and operations. One of our most 
critical efforts continues to be in our IT arena. With the essential 
funding provided by this Committee, we were able to continue rebuilding 
our crucial IT infrastructure. Specifically, the agency was able to 
continue improvements and updates to the network operating system and 
associated software. In addition, new servers were acquired for 
headquarters and each regional office. These servers include remote 
management capabilities, which should allow quicker resolution and more 
efficient use of resources. We have also successfully mirrored our 
program databases at two locations. This balances workload during 
normal operations and provides a real-time backup if a major outage or 
emergency would occur at one of the sites.
    We are continuing to see results through improvement in our audit 
processes and our investigative forensic efforts. The new IT equipment 
and specialized software has continued to help OIG complete its audits 
faster and target its analyses to the highest USDA risk areas. The 
reduced staff-time allows OIG to review additional high-risk or 
vulnerable programs and operations. As I mentioned earlier, we also 
plan to continue to increase our use of our IT capabilities to further 
our effort in the improper payments area.
    For example, we use automated data mining and analysis software to 
extract, sort, analyze, and summarize large volumes of financial and 
program data to support our opinions on USDA agency and consolidated 
financial audits. In contrast, in a manual environment, analysis of 
such large volumes of data would not be feasible for OIG due to 
resource constraints and mandatory audit deadlines.
    On the Investigations side, the IT funding has allowed our Computer 
Forensics Unit (CFU) to process cases utilizing the most up-to-date 
forensic hardware and software tools. The CFU has also designed and 
developed its own specialized software, for example, to analyze 
millions of food stamp EBT transactions in order to identify fraud in 
this program. An example of the CFU's capabilities was demonstrated 
during the investigation of a recent $3 million rural development 
business and industrial loan fraud investigation. During the execution 
of a search warrant, a laptop was seized, and the subjects stated that 
the laptop had been ``reformatted'' and that nothing would be found on 
the laptop. Through CFU analysis, a copy of Quick Books was found on 
the restored computer; once recovered, we were able to prove how the 
fraud was committed. Hardware and software used in the CFU allow 
servers and workstations to be restored in a forensics laboratory 
setting, meeting required professional and judicial standards in a 
manner that maintains the integrity of the data so that they can be 
used in a court of law.
    These forensic tools must be regularly upgraded and replaced in 
order to keep pace with the ever-changing IT hardware and software 
standards and investigative needs.
    Again, I want to especially thank the Committee for its support in 
this area.
    The President's fiscal year 2006 request of $81 million for OIG 
provides for an increase of $1.6 million for mandatory pay costs and 
$1.7 million for program changes. The program change increases are $1.1 
million to fund the Nationwide Emergency Response Program, $300,000 for 
continued improvements to the CFU, and $300,000 for secure IT 
communications at the ``secret'' level. The increase for the Emergency 
Response Program will allow OIG to staff, train, and equip specially 
trained, quick-response teams to investigate biohazard threats against 
American agriculture and, as mandated by Public Law 107-203, the duty-
related deaths of FS firefighters. The increase for the CFU will be 
primarily for a storage network to efficiently store voluminous amounts 
of electronic evidence that can potentially translate to higher case 
convictions. The increase for secure communications will allow OIG to 
target IT investments to enable our special agents and auditors to 
access Homeland Security information at the ``secret'' level.
    I believe adequate funding for our OIG activities makes good sense. 
OIG audits and investigations save money for the taxpayers, help ensure 
the safety and wholesomeness of the Nation's food supply, promote USDA 
Homeland Security efforts, and ensure the integrity of USDA programs. 
As such, I support the President's budget request for OIG.
    This concludes my statement, Mr. Chairman. I appreciate the 
opportunity to appear before you today and would be pleased to respond 
to any questions you and the Committee may have at this time.
                                 ______
                                 

                     ADDITIONAL SUBMITTED QUESTIONS

            Questions Submitted by Senator Robert F. Bennett

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration

                            MEDICAL DEVICES

    Question. I appreciate the Administration's request for nearly $6 
million for the Devices and Radiological Health program for fiscal year 
2006, which comes on top of the nearly $26 million the committee 
enacted in fiscal year 2005. These significant investments have been 
difficult in the current environment but are critical to ensure timely 
patient access to increasingly complex medical technologies, and are 
consistent with the appropriations targets contained in the Medical 
Device User Fee and Modernization Act (MDUFMA).
     Can you tell the committee the steps you are taking with these 
funds to improve the device review function in terms of hiring FTE's, 
making improvements in your IT infrastructure, and meeting performance 
goals?
    Answer. Medical device user fees, combined with appropriations, 
have made it possible for FDA to make substantial improvements to the 
process for the review of device applications.
    FDA has used the greatest portion of the resources made available 
by MDUFMA to hire additional staff to enhance the review process and to 
enable FDA to meet the MDUFMA performance goals. The following table 
shows the increase in staffing made possible by MDUFMA resources.
    [The information follows:]

                                  ADDITIONAL STAFF-YEARS ADDED TO DEVICE REVIEW
                                        [Compared with fiscal year 2002]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                          FDA Component                             Fiscal year     Fiscal year    2005 (Current
                                                                       2003            2004          Estimate)
----------------------------------------------------------------------------------------------------------------
CDRH............................................................              12              63             152
CBER............................................................              14              25              36
ORA.............................................................               5               6              10
                                                                 -----------------------------------------------
      Total.....................................................              31              91             198
----------------------------------------------------------------------------------------------------------------

    The increased staffing shown for fiscal year 2005 is the current 
planning estimate, assuming that Congress acts quickly to ensure that 
MDUFMA continues in effect with no changes other than modification of 
the appropriations trigger requirement to forgive the shortfall in 
appropriations for fiscal year 2003 and 2004.
    MDUFMA funds have also enabled FDA to strengthen the device review 
process by initiating a Medical Device Fellowship Program to make more 
use of expertise in academia and the private sector, and by expanding 
training and professional development for staff dedicated to device 
review.
    FDA has also undertaken several significant, ongoing projects to 
modernize its information technology infrastructure. These efforts are 
critical to meeting the performance goals under MDUFMA and they require 
continued funding to be completed or to remain viable. These projects 
include:
  --Establishing premarket database and tracking systems for ODE/OIVD, 
        including specialized reports and tracking for each review 
        division. These systems will help FDA better manage review 
        times and processes.
  --Developing of assignment tracking systems for the Office of 
        Compliance, including integration with ODE/OIVD systems.
  --Developing of a streamlined pre-approval inspection program, with 
        clear timeframes and monitoring systems.
  --Establishing Turbo 510(k) to provide for rapid review and clearance 
        of in vitro diagnostic products.
  --Establishing the eConsult Pilot to make reviews more efficient.
  --Scheduling, systematic upgrading of reviewer PCs (on a 3-year 
        cycle) to ensure data security, compatibility with industry 
        submissions, and more efficient operating systems and program.
  --Upgrading hardware and software for the CDRH document imaging, 
        storage, and retrieval system.
  --Issuing new guidances to implement MDUFMA and establishing a 
        guidance tracking system to prioritize guidance development and 
        revision.
    Modernized infrastructure will help FDA meet the demands placed on 
it while ensuring continued high quality reviews.
    FDA has made excellent, substained progress towards meeting 
MDUFMA's performance goals. We are confident that our performance for 
fiscal year 2005 will reflect the time and effort we are investing in 
improving our device review processes and in making the other 
improvements called for by MDUFMA. The goals for fiscal year 2006 and 
fiscal year 2007 are even more challenging, and will require a 
sustained commitment by FDA if they are to be met. Our actions and 
performance to date provide a sound foundation on which we will 
continue to build.
    Our performance during fiscal year 2003 and fiscal year 2004 and 
the first quarter of fiscal year 2005 shows we are on track to meet the 
goals for fiscal year 2005 and later years; we have attached FDA's 
performance reports for fiscal year 2003 and fiscal year 2004. Although 
it is too early to provide precise forecasts for fiscal year 2005, we 
are pleased with our progress to date and we would be glad to provide 
you an update later in the year.
    During fiscal year 2005, FDA is focusing on building our capacity 
to conduct the high-quality reviews expected by Congress, the 
Administration, and our stakeholders, including:
  --Providing new and updated guidance to industry,
  --Making our review processes more efficient, more predictable, and 
        more interactive,
  --Developing innovative review processes such as modular and 
        expedited reviews,
  --Recruiting scientific, engineering, and medical experts, and making 
        greater use of experts outside FDA, to improve the scope and 
        timeliness of our review processes, and
  --Modernizing our data systems and IT infrastructure to ensure the 
        sound management and accountability of our review programs.
    This Committee enacted a nearly $26 million increase for the device 
program in fiscal year 2005 and the President has proposed a nearly $6 
million increase for fiscal year 2006, putting appropriations on the 
trajectory contained in MDUFMA. However, these appropriations increases 
will not keep the program viable beyond this fiscal year without a 
change to the MDUFMA law that would forgive the appropriated shortfall 
amount for those years when the Administration did not request enough 
funding to meet the appropriations target.
    Question. Does FDA still intend to request that the Authorizing 
Committees make this change to the MDUFMA law? If so, when will the 
change need to be enacted in order to keep the program from 
terminating? What is FDA required to do with the MDUFMA fees and staff 
if this legislative fix is not enacted?
    Answer. On October 29, 2003, OMB Administrator Joshua Bolten, sent 
a letter to the Speaker of the House, agreeing to a ``clean fix'' of 
the appropriations trigger problem. The Administration's proposal would 
forgive the fiscal year 2003 and 2004 appropriations shortfalls, 
thereby ensuring that MDUFMA would not sunset at the end of fiscal year 
2005, and pledging Administration support for full appropriations 
funding in the remaining years of MDUFMA. At that time, industry 
supported a clean trigger fix, and the Administration did request and 
Congress appropriated full funding for the program for fiscal year 
2005. FDA continues to work with stakeholders to ensure the success of 
MDUFMA.
    If Congress does not enact corrective legislation, FDA will lose 
its authority to collect medical device user fees beginning October 1, 
2005 and the performance goals negotiated for the medical device 
program will end. FDA would have to reduce staffing levels, abandon 
critical infrastructure modernization, reduce interaction with 
applicants, abandon planned guidance development, terminate the Medical 
Device Fellowship Program and largely eliminate our use of contract 
expertise in academia and the private sector, and take a variety of 
other steps to limit expenditures to the amounts made available in our 
fiscal year 2006 and fiscal year 2007 appropriations. FDA would expect 
review times to deteriorate, resulting in significant delays in the 
introduction of new medical devices.
    Question. What effect, if any, would a continuing resolution have 
on MDUFMA?
    Answer. FDA's most critical need for this program is for Congress 
to enact corrective legislation before the end of the fiscal year to 
modify the ``appropriations trigger'' requirement to forgive the 
shortfall in appropriations for fiscal year 2003 and 2004. If Congress 
does not enact corrective legislation, FDA will lose its authority to 
collect medical device user fees beginning October 1, 2005 and the 
performance goals negotiated for the medical device program will end. 
The problems associated with a continuing resolution are small compared 
with the prospect of an early, abrupt end to the MDUDMA user fee 
program.
    If the MDUFMA fee program dies, FDA would have to reduce staffing 
levels, abandon critical infrastructure modernization, reduce 
interaction with applicants, abandon planned guidance development, 
terminate the Medical Device Fellowship Program and largely eliminate 
our use of contract expertise in academia and the private sector, and 
take a variety of other steps to limit expenditures to the amounts made 
available in our fiscal year 2006 and fiscal year 2007 appropriations. 
FDA would expect review times to deteriorate, resulting in significant 
delays in the introduction of new medical devices.
    Any continuing resolution would create its own challenges. Assuming 
the MDUFMA appropriations trigger issue is resolved, FDA's primary 
concern is the length of any continuing resolution. A year-long CR that 
is at levels below the MDUFMA-specified appropriation would cause the 
program to terminate. FDA will be unable to collect fees during a 
continuing resolution. This is not a small problem, it is an effect of 
the continuing resolution.
    The Agency appears to be making progress on meeting the MDUFMA 
performance goals. However, I have heard from some device company 
constituents that they are concerned about the increases in the 
application fees they are paying. For example, application fees for 
breakthrough products (Premarket Applications) have grown by over 50 
percent in the first 3 years. Unless such increases are limited in the 
remaining 2 years, PMA fees will grow from the MDUFMA-envisioned 
$250,000 in the final year of the program to over $350,000. Some have 
suggested limiting fee increases in the last 2 years of MDUFMA to the 
rate of inflation--similar to the rate of growth for appropriations 
expected for the next 2 years.
    Question. Would you support limiting fee increases in the remaining 
2 years of the program to preserve the larger goals of MDUFMA? If not, 
can you tell the committee why the agency could not accept such a 
limitation and what impact such a proposal would have specifically in 
terms of FDA's ability to meet performance goals, recruit and retain 
staff necessary to meet the performance goals and fulfill non-goal 
related activities?
    Answer. FDA is committed to working with our stakeholders and 
Congress to save the MDUFMA user fee program and its performance goals. 
FDA staff are now working with Congressional staff and stakeholders to 
save the MDUFMA user fee program and the many benefits it offers. FDA 
sincerely hopes this process will lead to quick action on a solution 
that is acceptable to FDA and the Administration, our stakeholders, and 
Congress.
    It is my understanding that part of the growing frustration on the 
part of the medical technology companies with regard to MDUFMA is the 
feeling that the Center for Devices and Radiological Health still does 
not have baseline information on what it costs to review each type of 
application, and has dedicated more user fee revenue to reserve funds 
than hiring actual reviewers.
    Question. Can you tell the committee what it costs to review the 
different application types? If not, will this information be available 
in time for reauthorization? How many new FTE reviewers has CDRH hired 
with this massive infusion of appropriations and fees?
    Answer. FDA has contracted for a study to develop information on 
the standard costs of various types of medical device applications, but 
the contractor has not yet provided his report of findings to FDA. The 
study results, showing costs per completed application in fiscal year 
2003 and fiscal year 2004, will be available in time for 
reauthorization.
    [This information follows:]

                                  ADDITIONAL STAFF-YEARS ADDED TO DEVICE REVIEW
                                        [Compared with fiscal year 2002]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                          FDA Component                             Fiscal year     Fiscal year    2005 (Current
                                                                       2003            2004          Estimate)
----------------------------------------------------------------------------------------------------------------
CDRH............................................................              12              63             152
CBER............................................................              14              25              36
ORA.............................................................               5               6              10
                                                                 -----------------------------------------------
      Total.....................................................              31              91             198
----------------------------------------------------------------------------------------------------------------

                              FOOD SAFETY

    Question. According to statements made by former HHS Secretary 
Thompson, the food supply is extremely vulnerable to attack. However, I 
note in the budget request that FDA plans to do fewer food import 
physical exams in fiscal year 2005 and fiscal year 2006 than it did in 
fiscal year 2004. This is particularly troubling because the Committee 
provided an increase of $35.5 million for food safety activities in 
fiscal year 2005 and FDA has requested an increase of slightly more 
than $30 million in fiscal year 2006.
    Has FDA changed its food safety strategy so that import physical 
exams are no longer a priority? If so, what other activities are you 
undertaking to protect the food supply?
    Answer. Food import physical exams have always been just one part 
of FDA's import strategy. A field examination is a visual and physical 
examination of a product to determine whether it complies with FDA 
requirements for admissibility. During food import physical exams, FDA 
personnel check attributes such as damage during storage or transit, 
inadequate refrigeration, rodent or insect activity, presence of lead 
in dinnerware, appearance of decomposition, and compliance with 
labeling requirements. However, a food import physical exam cannot be 
used to test for microbiological or chemical contamination and must be 
supplemented with other activities.
    FDA cannot rely solely on the physical examination of a product 
through a food import physical exam to reduce the potential risks posed 
by imported foods. Currently, a significant effort is underway to 
broaden and develop appropriate knowledge based risks. ORA continues to 
think that the best approach to improving the safety and security of 
food import lines is to devote resources to expanding and refining 
targeting and by following through on potentially high risk import 
entries rather than by simply increasing the percentage of food import 
lines that receive a physical field exam.
    To manage the ever-increasing volume of imported food shipments, 
FDA is using risk management criteria to achieve the greatest food 
protection possible. While we cannot physically inspect every shipment, 
it is important to note that every shipment containing FDA-regulated 
products entered through the Bureau of Customs and Border Protection's 
(CBP) automated system is electronically reviewed by FDA's system. 
FDA's Operational and Administrative System for Import Support (OASIS) 
determines if the shipment meets identified criteria for physical 
examination or sampling and analysis or warrants other review by FDA 
personnel. This electronic screening allows FDA to concentrate its 
enforcement resources on high-risk shipments while allowing low-risk 
shipments to proceed into commerce.
    The Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002 provided a significant new tool that enhances 
FDA's ability to electronically review all FDA-regulated imported food 
shipments. That law requires that FDA receive prior notice submissions 
before food is imported or offered for import into the United States. 
Advance notice of imported food shipments, called ``Prior Notice,'' 
provides FDA with detailed information regarding the product, shipment 
and supply chain before imported food arrives in the United States. 
This not only allows the electronic system to review and screen the 
shipments for potential serious threats to health, intentional, alleged 
or otherwise, before the food enters the United States but also allows 
FDA staff to review prior notice submissions for those products flagged 
by the systems as presenting the most significant risk. Screening and 
review of the augmented data allows FDA, with the support of the 
Customs and Border Protection also known as the CBP, to target import 
inspections more effectively and help protect the Nation's food supply 
against terrorist acts and other public health emergencies. FDA worked 
very closely with CBP to develop the screening system. FDA receives 
approximately 27,000 prior notice submissions about incoming food 
shipments every day. FDA believes this new system, which complements 
food import physical exams, provides for risk based targeting and 
follow through on potentially high-risk import entries.
    Question. What is FDA doing with the funding provided in fiscal 
year 2005 and what does the Agency plan to do with the fiscal year 2006 
request amount?
    Answer. We appreciate the committee's support for the 
Administration's food defense initiative. The fiscal year 2006 budget 
continues to fund the programs initiated with fiscal year 2005 
appropriations. Below is a short summary of what the agency is doing 
with the $35.2 million provided by the congress last year, and what we 
plan to do with the $30 million increase requested for fiscal year 
2006.
    [The information follows:]

    FDA FOOD DEFENSE INCREASES FISCAL YEAR 2005 AND FISCAL YEAR 2006

Fiscal year 2005 Appropriations: + $35,216,000 and + 99 FTE
            Food Emergency Response Network (FERN) + $14,880,000
    FDA, along with USDA's FSIS, is building a national laboratory 
network that will enable us to test thousands of food samples within a 
matter of days in the event of a food terrorism crisis or other 
emergency event. The fiscal year 2005 appropriations increase will add 
6 FDA-funded State laboratories to the 10 FDA Federal laboratories 
already a member of FERN. It will also continue efforts to expand the 
electronic Laboratory Exchange Network (eLEXNET). The Request for 
Applications (RFA) for cooperative agreements to fund 6 State 
laboratories was published in the Federal Register in May 2005.
            Research + $9,920,000
    The enacted increase will help ensure that we have the capability 
to anticipate, prevent, detect, inactivate and recover from a broad 
range of agents that could pose serious threats to the food supply. The 
increase will also enable us to understand the behavior of threat 
agents in foods and the lethal/toxic dose needed to cause illness or 
death. FDA's intramural and extramural food defense research projects 
focus, in particular, on developing and validating field-deployable 
methods, as mandated by section 302 of the Public Health Response and 
Bioterrorism Preparedness Act of 2002.
            Inspections + $6,944,000
    The enacted increase helps ensure that domestic and imported foods 
are safe for consumption. FDA is planning to conduct 60,000 import 
field exams and 38,000 Prior-Notice Security Reviews using targeted 
information gleaned from prior-notice submissions and intelligence made 
available to the Prior-Notice Center.
            Bio-Surveillance + $1,984,000
    FDA will contribute to the Administration's Bio-Surveillance 
Initiative by developing nationally recognized standards for data 
messaging and communication in the health area and by researching the 
appropriate connectivity method with the National Biosurveillance 
Integration System at the Department of Homeland Security.
            Crisis/Incident Management + $1,488,000
    The enacted increase will support the Emergency Operations Network 
Incident Management System Project. This project will provide a 
comprehensive system for managing emergencies and related incidents 
handled throughout the FDA, including its centers and field offices. 
The development of such a system is in accordance with Homeland 
Security Presidential Directive (HSPD-5), ``Management of Domestic 
Incidents'', and the establishment of a National Incident Management 
System.
Requested Fiscal Year 2006 Budget Authority Increase + $30,074,000 and 
        + 17 FTE
            Food Emergency Response Network + $20,000,000
    The requested increase will add 19 FDA-funded State laboratories to 
the 6 funded in fiscal year 2005 and to the 10 FDA Federal laboratories 
already members of FERN.
            Research + $5,574,000
    The requested increase will continue to ensure that we have the 
capability or ``science tools'' to anticipate, prevent, detect, 
characterize, confirm, inactivate, and recover from a broad range of 
agents that could pose serious threats to the food supply in accordance 
with section 302 of the Bioterrorism Act.
            Bio-Surveillance + $3,000,000
    FDA will continue to contribute to the Administration's Bio-
Surveillance Initiative by integrating existing surveillance systems 
with the Department of Homeland Security.
            Crisis/Incident Management + $1,500,000
    The enacted increase will continue to support the Emergency 
Operations Network Incident Management System Project.
            Import Examinations and Inspections
    (No increase is requested, but FDA will focus base resources on 
more effective Prior-Notice Security Reviews)
    The enacted increase helps ensure that domestic and imported foods 
are safe for consumption. Funds allow for 60,000 import field exams and 
38,000 Prior-Notice Security Reviews (new Goal) using intelligence made 
available to the Prior-Notice Center.
    In the Food and Drug Administration's fiscal year 2006 request, the 
agency has requested an increase of $20 million for the Food Emergency 
Response Network. When FERN is completed, this collaborative effort 
with USDA, will include a mix of chemical, radiological, and 
microbiological labs that total 100 across the United States. The 
Committee has already provided significant funding increases for FERN 
and completing this project promises to be a sizable investment that is 
not currently known by the Committee.
    Question. What does this investment buy and what is the anticipated 
outcome of increasing lab capacity through FERN? Also, please provide, 
for the record, a table that displays the complete investment for the 
FERN project to date and in future fiscal years. In addition, include 
the number of labs that have been and will be added in each year.
    Answer. We would be happy to provide this information on the FERN 
project.
    [The information follows:]
    The first two tables below describe our planned expenditures for 
the total food defense increases in fiscal year 2005 and fiscal year 
2006. The third table displays FERN lab output data from fiscal year 
2005 to the outyears. The number of USDA and FDA funded FERN 
laboratories needed to respond to a terrorist event involving food was 
based on discussions with the White House Interagency Food Working 
Group. These discussions included the development of a plausible 
scenario in which 100,000 units of a specific food was contaminated 
with a threat agent. Based on this scenario, we estimated that 100 
laboratories would be required to provide the needed surge capacity to 
respond to the attack Please note that FDA will fund 50 chemical/
radiological labs and FSIS plans to fund 50 microbiological 
laboratories, for a total of 100 FERN laboratories. For specific 
funding information for FSIS, please see the USDA/FSIS Budget 
Submission transmitted to this Subcommittee.

                                       FERN PERFORMANCE--FISCAL YEAR 2006
----------------------------------------------------------------------------------------------------------------
                Request                         What the funds provide               Related program goals
----------------------------------------------------------------------------------------------------------------
$35,216,000 Budget Authority...........  6 new State Labs added to Food       Increase national laboratory
                                          Emergency Response Network (FERN).   capacity to test food samples in
                                          Laboratory equipment, supplies,      the event of a terrorist attack.
                                          training and security to enhance    Expand Federal/State/local
                                          State capability to assist in        involvement in FDA's eLEXNET
                                          FDA's Food Defense activities.       system by having 95 laboratories
                                         A secure food laboratory IT network   participate in the system by the
                                          (eLEXNET) for the real time          end of fiscal year 2005.
                                          sharing of information on a         Provide more targeted, risk-based
                                          national basis.                      inspectional coverage of imported
                                         60,000 import field exams, 38,000     foods to reduce the risk of
                                          Prior-Notice Security Reviews.       contaminated products entering
                                         Increased research on prevention      domestic commerce.
                                          technologies, agent                 Develop effective protection
                                          characteristics, new methods, and    strategies to ``shield'' the food
                                          dose response relationships.         supply from terrorist threats.
                                         Improved coordination and            Improve early attack warning and
                                          integration of existing food         bio-surveillance capabilities at
                                          surveillance capabilities with the   the national level to prepare
                                          Department of Homeland Security's    against a potential terrorist
                                          integration and analysis function,   attack.
                                          as part of the government-wide Bio-
                                          Surveillance Initiative.
                                         Improved Crisis Management
                                          capabilities.
----------------------------------------------------------------------------------------------------------------


                                       FERN PERFORMANCE--FISCAL YEAR 2006
----------------------------------------------------------------------------------------------------------------
                Request                         What the increase buys               Related program goals
----------------------------------------------------------------------------------------------------------------
Increase $30,074,000 Budget Authority..  19 new State Labs added to Food      Increase national laboratory
                                          Emergency Response Network (FERN).   capacity to test food samples in
                                          Laboratory equipment, supplies,      the event of a terrorist attack.
                                          training and security to enhance    Develop effective protection
                                          State capability to assist in        strategies to ``shield'' the food
                                          FDA's Food Defense activities.       supply from terrorist threats.
                                         Increased research on prevention     Improve early attack warning and
                                          technologies, agent                  bio-surveillance capabilities at
                                          characteristics, new methods, and    the national level to prepare
                                          dose response relationships.         against a potential terrorist
                                         Improved coordination and             attack.
                                          integration of existing food
                                          surveillance capabilities with the
                                          Department of Homeland Security's
                                          integration and analysis function,
                                          as part of the government-wide Bio-
                                          Surveillance Initiative.
                                         Improved Crisis Management
                                          capabilities.
Base Resources.........................  60,000 import field exams and        Provide more effective, risk-based
                                          38,000 Prior-Notice Security         inspectional coverage of imported
                                          Reviews.                             foods to reduce the risk of
                                                                               contaminated products entering
                                                                               domestic commerce.
----------------------------------------------------------------------------------------------------------------


                                                      FDA TOTAL LABORATORY CAPABILITY DISTRIBUTION
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Fiscal year                       Project
                                            Fiscal year     Fiscal year        2006         Fiscal year       outyear        Two Year      Total  State
                                            2005 output    2005 enacted     cumulative     2006 request     cumulative        outyear          labs
                                                                \1\           output                          output       estimate \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Microbiological Screening & Confirmatory  ..............  ..............  ..............  ..............  ..............  ..............  ..............
 \3\....................................
Chemical................................               6            $9.9              20           $22.4              36           $46.6              36
Radiological............................               5             5.9              14            16.3              14
Food Lab Response and Methods Validation/ ..............             5.0  ..............             6.6  ..............            13.9  ..............
 Proficiency Testing/Training...........
                                         ---------------------------------------------------------------------------------------------------------------
      TOTAL.............................               6            14.9              25            34.9              50            76.8              50
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2005 Request includes enacted rescissions.
\2\ Outyear estimates reflect projected costs to complete FDA's 50 FERN labs, based on a 2 year estimate. Amounts requested in future budgets are
  contingent upon availability of funds. Once the 50 FERN labs are complete, FDA estimates that the FERN cost will be limited to annual recurring needs.

\3\ USDA funded.

    Question. How did you determine that 100 would be the appropriate 
number of FERN labs?
    Answer. The Administration based the number of USDA and FDA funded 
FERN Laboratories needed to respond to a terrorist event involving food 
on discussions with the Interagency Food Working Group or the IFWG. 
These discussions included the development of a plausible scenario in 
which 100,000 units of a specific food was contaminated with a threat 
agent. Based on this scenario, we estimated that 100 laboratories would 
be required to provide the needed surge capacity to respond to the 
attack.
    However, it should be noted that this number of 100 reflects 
laboratory capabilities for chemical, microbiological and radiological 
analyses rather than actual laboratory locations, because some State 
laboratories will have the capability to analyze samples for multiple 
agents at one location. Although the FERN strives to include 
laboratories with the ability to analyze foods for several types of 
agents, it is also realized that some laboratory locations may only 
have capabilities for one type of threat agent, but not the others. 
Hence, that is why the number of physical locations included within the 
FERN network could range from 50 with 50 laboratory locations 
performing multiple analyses to 100 laboratory locations performing one 
type of analysis each. Laboratories will need to be capable of being 
operational around the clock, 7 days a week, have trained personnel, 
use validated methods, and have satisfactorily completed proficiency 
test samples.
    Question. Once labs are added to the network, I assume maintenance 
of equipment and lab supplies in the facilities will begin. What is the 
annual cost of maintaining FERN labs? Will the cost be born by the FDA 
or State partners?
    Answer. Once FDA establishes a FERN lab, we also fund the 
maintenance costs, which we estimate at $350,000 per year for each 
laboratory. FDA continues to provide support to the States for the 
Annual Surveillance Sampling Program and to maintain capability for 
threat agents.

                              DRUG SAFETY

     Question. In recent months, FDA has received a significant amount 
of news coverage related to the withdrawal of some widely prescribed 
pain relievers over safety concerns. I note that the FDA has included 
an increase of $5.0 million for drug safety in the fiscal year 2006 
budget. What does FDA plan to do to reduce the likelihood that events 
like this will happen in the future?
    Answer. On November 5, 2004, Acting FDA Commissioner Lester 
Crawford announced a 5-step plan for enhancing our efforts in drug 
safety and on February 15, 2005, HHS Secretary Mike Leavitt and Acting 
FDA Commissioner Lester Crawford unveiled a new vision for FDA that 
will promote a culture of openness and enhanced oversight within the 
Agency. We would be happy to provide references to these documents and 
an outline of the information they contain.
    [The information follows:]
    FDA Acts to Strengthen the Safety Program for Marketed Drugs (11/
05/2004) http://www.fda.gov/bbs/topics/news/2004/NEW01131.html).
    The elements of this plan are:
  --Sponsor an Institute of Medicine (IOM) Study of the Drug Safety 
        System: An IOM committee, under an FDA contract, will study the 
        effectiveness of the United States drug safety system with 
        emphasis on the post-market phase, and assess what additional 
        steps could be taken to learn more about the side effects of 
        drugs as they are actually used. The committee will examine 
        FDA's role within the health care delivery system and recommend 
        measures to enhance the confidence of Americans in the safety 
        and effectiveness of their drugs.
  --Implement a Program for Adjudicating Differences of Professional 
        Opinion: CDER will formalize a program to provide an improved 
        process to ensure that the opinions of scientific reviewers are 
        incorporated into its decision-making process. In most cases, 
        free and open discussion of scientific issues among review 
        teams, and with supervisors, managers and external advisors, 
        leads to an agreed course of action. Sometimes, however, a 
        consensus decision cannot be reached, and an employee may feel 
        that his or her opinion was not adequately considered. Such 
        disagreements can have a potentially significant public health 
        impact, so CDER's program provides for a review of the involved 
        differing professional opinions by FDA and outside experts. An 
        ad hoc panel, whose members were not directly involved in 
        disputed decisions, will have 30 days to review all relevant 
        materials and recommend to the Center Director an appropriate 
        course of action.
  --Appoint Director, Office of Drug Safety: CDER will conduct a 
        national search to fill the currently vacant position of 
        Director of the Office of Drug Safety, which is responsible for 
        overseeing the post-marketing safety program for all drugs. The 
        Center is seeking a candidate who is a nationally recognized 
        drug safety expert with knowledge of the basic science of drug 
        development and surveillance, and has a strong commitment to 
        the protection of public health.
  --Conduct Drug Safety/Risk Management Consultations: In the coming 
        year, CDER will conduct workshops and Advisory Committee 
        meetings to discuss complex drug safety and risk management 
        issues. These may include emerging concerns for products that 
        are investigational or already marketed. Examples of input that 
        might be sought include whether a particular safety concern 
        alters the risk to benefit balance of a drug; whether FDA 
        should request a sponsor to conduct a particular type of study 
        to further address an issue; what types of studies would best 
        answer the question; whether a finding is unique to one product 
        or seems to be a drug class effect; whether a labeling change 
        is warranted and, if so, what type, and how to otherwise 
        facilitate careful and informed use of a drug. These 
        consultations will include experts from FDA, other Federal 
        agencies, academia, the pharmaceutical industry and the 
        healthcare community.
    Publish Risk Management Guidance: By the end of this year, FDA 
intends to publish final versions of three guidances that have been 
developed by our agency to help pharmaceutical firms manage risks 
involving drugs and biological products. These documents are 
``Premarketing Guidance,'' covering risk assessment of pharmaceuticals 
prior to their marketing; ``RiskMAP Guidance,'' which deals with the 
development and use of risk-minimization action plans; and 
``Pharmacovigilance Guidance,'' which discusses post-marketing risk 
assessment, good pharmacovigilance practices and pharmacoepidemiologic 
assessment.
    (Note: these were published on 3/24/05 and can be found at the 
following websites:
    Premarketing Risk Assessment: http://www.fda.gov/cder/guidance/
6357fnl.htm
    Development and Use of Risk Minimization Action Plans: http://
www.fda.gov/cder/guidance/6358fnl.htm
    Good Pharmacovigilance Practices and Pharmacoepidemiologic 
Assessment: http://www.fda.gov/cder/guidance/6359OCC.htm
    On February 15, 2005, HHS Secretary Mike Leavitt and Acting FDA 
Commissioner Lester Crawford unveiled a new vision for FDA that will 
promote a culture of openness and enhanced oversight within the Agency.
    Reforms Will Improve Oversight and Openness at FDA 02/15/2005: 
http://www.hhs.gov/news/press/2005pres/20050215.html
    In keeping with this vision, the FDA will create a new independent 
Drug Safety Oversight Board to oversee the management of drug safety 
issues. In addition, the FDA is proposing a Drug Watch web page through 
which the Drug Safety Oversight Board would share drug safety 
information sooner and more broadly, including information on potential 
safety problems even before the Agency has reached conclusions that 
would prompt a regulatory action. The new communications include:
  --The Proposed Drug Watch Page.--At the direction of the new Drug 
        Safety Oversight Board, this page would include emerging 
        information about possible serious side effects or other safety 
        risks.
  --Healthcare Professional Information Sheets.--We have increased out 
        efforts to develop and make these sheets available to better 
        communicate emerging risk information to the medical community. 
        We will continue to develop these information sheets, or will 
        update existing ones, as we become aware of possible serious 
        new side effects for a drug. The sheets will contain FDA Alert 
        describing emerging information.
  --Patient Information Sheets.--We have also increased our efforts to 
        develop and make available on CDER's Website user friendly 
        information for patients and consumers on drugs about which we 
        have identified emerging issues. We will continue to develop 
        these sheets, or update existing ones, as we become aware of 
        possible serious new side effects for a drug. The sheets will 
        contain FDA Alert describing emerging information.

                           COUNTERFEIT DRUGS

    Question. In last year's hearing record, FDA inserted its report on 
counterfeit drugs. In this report FDA identifies eight critical 
elements that need to be addressed in order to safeguard the drug 
supply. Please update the Committee on the progress you have made on 
these items.
    Answer. FDA has been actively working with stakeholders such as 
manufacturers, wholesalers, retailers, health professionals, State and 
Federal regulatory agencies, technology experts, and standard-setting 
bodies to put into place the measures outlined in the FDA Counterfeit 
Drug Task Force Report. We have made considerable progress in some 
areas, while in other areas there is still work to be done. FDA 
currently is finishing drafting a report that provides an update on the 
progress on the recommended measures. We expect that this update will 
provide you with the type of comprehensive update that you ask in your 
question.
    [The information follows:]
      combating counterfeit drugs: a report of the food and drug 

               ADMINISTRATION ANNUAL UPDATE--MAY 18, 2005

    On February 18, 2004, FDA issued a Report entitled ``Combating 
Counterfeit Drugs: A Report of the Food and Drug Administration.'' The 
comprehensive Report highlights several measures that can be taken to 
better protect Americans from counterfeit drugs. These measures address 
six critical areas:
  --Securing the actual drug product and its packaging
  --Securing the movement of the product as it travels through the U.S. 
        drug distribution chain
  --Enhancing regulatory oversight and enforcement
  --Increasing penalties for counterfeiters
  --Heightening vigilance and awareness of counterfeit drugs
  --Increasing international collaboration
    Over the past year, we have worked with manufacturers, wholesalers, 
pharmacies, consumer groups, technology specialists, standard-setting 
bodies, State and Federal agencies, international governmental 
entities, and others to advance the measures outlined in the Report. 
Significant progress is being made in many of these areas. Although we 
continue to believe that the U.S. drug supply is among the safest in 
the world, more work needs to be done to further implement these 
measures and further secure our Nation's drug supply.
    In 2004, FDA's Office of Criminal Investigations (OCI) initiated 58 
counterfeit drug cases, a significant increase from the 30 cases 
initiated in 2003. We believe that this is in part due to an increased 
awareness and vigilance at all levels of the drug distribution chain as 
a result of the Combating Counterfeit Drugs Report released last year. 
In addition, this increase in investigations is due to increased 
referrals from and coordination with other State and Federal law-
enforcement agencies and communication with drug manufacturers.
    Fortunately, most of the counterfeit drugs at issue did not reach 
consumers because we focused our limited resources and developed 
proactive investigations that enabled us to identify components of 
counterfeit products and interdict finished counterfeit drug products 
before they entered domestic distribution.
    Although the number of counterfeit drug cases has increased and the 
threat to the public health is real, most of the suspect counterfeits 
that we discovered in 2004 were found in smaller quantities, compared 
to those found in 2003. Most of these drugs were destined for the black 
market or internet distribution, rather than for widespread 
distribution in the Nation's drug supply chain.


 TECHNOLOGY: SECURING THE PRODUCT, PACKAGING, AND MOVEMENT THROUGH THE 
                              SUPPLY CHAIN

    In the Report, we stated that it is critical to implement new 
technologies to better protect our drug supply. We concluded that a 
combination of rapidly improving track and trace technologies and 
product authentication technologies could be used to provide a greater 
level of security for drug products. These technologies are intended to 
secure the product, packaging, and movement of the product as it 
travels through the drug supply chain.
Track and Trace Technology
    In the Report, we stated that adoption and wide-spread use of 
reliable track and trace technology is feasible by 2007. This would 
help secure the integrity of the supply chain by providing an accurate 
drug ``pedigree,'' a record documenting that the drug was manufactured 
and distributed under secure conditions. We particularly advocated for 
the implementation of electronic track and trace mechanisms and noted 
that radio-frequency identification (RFID) is the most promising 
technology to meet this need. RFID technology uses a tiny radio 
frequency chip containing essential data in the form of an electronic 
product code (EPC). Implementation of RFID will allow supply chain 
stakeholders to track the chain of custody (or pedigree) of every 
package of medication. By tying each discrete product unit to a unique 
electronic serial number, a product can be tracked electronically 
through every step of the supply chain.
    Over the last year stakeholders have made tremendous progress in 
the development and implementation of EPC/RFID. This is a huge endeavor 
that requires close collaboration among all constituents of the 
pharmaceutical distribution system. We have observed and supported this 
collaboration, and we continue to support it today.
    A critical piece of this undertaking is the development of 
standards for the type of technology to be used and the systems for 
storing and sharing pedigree information. This activity will ensure 
that the electronic track and trace technologies adopted are 
comprehensible and data communication systems are interoperable. We 
have been present at and actively participated in many industry, 
standard-setting, and government meetings and workshops where 
implementation issues have been discussed. We appreciate the 
opportunities we have been given to participate in the discussions and 
provide input when needed.
    We received a number of questions over the past year regarding RFID 
and regulatory issues from members of the supply chain. In response to 
these common questions, on November 15, 2004, we issued a Compliance 
Policy Guide (CPG) for implementing RFID feasibility studies and pilot 
programs as an important and essential step in moving this technology 
forward. The CPG presents FDA's current thinking regarding several 
labeling, current Good Manufacturing Practices (GMP), and other 
regulatory issues that may arise by affixing an RFID tag to a drug 
product for a feasibility study or pilot program. Several members of 
the supply chain simultaneously announced their intention to move 
forward with pilot programs (joint programs across the supply chain or 
within an individual company) that will involve the tagging of products 
susceptible to counterfeiting. In fact, three major pharmaceutical 
companies said that they will incorporate an RFID tag into at least one 
of their products by the end of 2005. We have been in close 
communication with participants in these and other pilot studies and 
provided input when appropriate.
    Also in November, we announced the creation of an internal, cross-
agency ``RFID Workgroup.'' This group is charged to monitor adoption of 
RFID in the pharmaceutical supply chain, pro-actively identify 
regulatory issues raised by the use of this new technology, and develop 
straightforward processes for handling those issues. We believe that 
the workgroup will improve communication with members of the supply 
chain on RFID related issues and will facilitate both the performance 
of pilot studies and the collection of data needed to formulate policy.
    It is important to gain a better understanding of the effects of 
RFID on drug products, particularly biological products because they 
may be more susceptible to change in their environment. In the past 
year, we developed a protocol for the Product Quality Research 
Institute (PQRI) (a collaboration of FDA, academia, and industry) to 
evaluate the effects of radio-frequency on specific biological protein-
based products. This study is in its very early stages. Also, a 
laboratory within FDA's Center for Devices and Radiological Health is 
conducting analyses of the heating and the radio-frequency field 
strengths induced in certain liquid pharmaceuticals by some RFID 
systems. We are encouraged by the response of individual companies 
informing us that they are conducting studies. In addition, the Health 
Research Initiative of the Auto-ID Laboratories is conducting 
additional studies on the effects of radio-frequency on various drug 
products and storage conditions. We look forward to the results of such 
studies.
    Next Steps.--FDA will continue to play an active role in public and 
private sector efforts toward developing an ``electronic safety net'' 
for our drug supply, including the adoption and widespread use of 
reliable track and trace technology by 2007. We will continue to 
facilitate and monitor standard-setting activities, including efforts 
by epcGlobal (an entity that has taken a lead role in developing 
standards) to establish standards for numbering systems, chip 
frequency, electronic pedigree, and data-sharing and security. In 
addition, we will continue to encourage and foster research on the use 
and potential impact of RFID on drug and biological products. Finally, 
we will regularly review the extent and pace at which RFID is being 
adopted.

Authentication Technology
    In the Report, we noted that authentication technologies for 
pharmaceuticals (such as color-shifting inks, holograms, taggants, or 
chemical markers imbedded in a drug or its label) have been 
sufficiently perfected that they can now serve as a critical component 
of a layered approach to control counterfeit drugs. FDA's Report 
acknowledged the importance of using one or more authentication 
technologies for drug products, in particular those most likely to be 
counterfeited. Over the past year, we have worked with individual drug 
manufacturers who sought to incorporate such technologies into their 
product, labeling, or packaging. When asked, we have provided advice 
and suggestions regarding application and use of authentication 
technologies and worked with sponsors on the regulatory issues 
associated with making changes to approved product labeling.
    In the Report, we said that in order to facilitate the use of 
authentication technologies on or in approved products, we would 
consider publishing a draft guidance on notification procedures for 
making changes to products, their packaging, or their labeling. We 
decided not to issue guidance in the past year because we would like to 
gain additional experience working with companies in their application 
and use of authentication technologies so the guidance can have 
appropriate general applicability.
    Next Steps.--We will continue to work with companies and 
organizations to facilitate use of authentication technologies in 
products, labeling, and packaging.

                  REGULATORY OVERSIGHT AND ENFORCEMENT

Electronic Pedigree
    In the Report, we said that adoption of electronic track and trace 
technology would help stakeholders meet and surpass the goals of the 
Prescription Drug Marketing Act (PDMA). We said that we intend to focus 
our efforts on facilitating industry adoption of this technology. To 
allow stakeholders to move toward an electronic pedigree we said that 
we would further delay the effective date for certain provisions in a 
final rule that FDA promulgated in December 1999 to implement the 
Prescription Drug Marketing Act of 1987 (PDMA), as modified by the 
Prescription Drug Amendments of 1992 (PDA). On February 23, 2004, we 
published a notice in the Federal Register delaying the effective date 
until December 2006.
    As stated above, we are pleased with the progress stakeholders, 
standard-setting bodies, and software and hardware companies have made 
thus far toward implementing an electronic pedigree for drug products. 
We recognize that there have been, and continue to be, challenges along 
the way. However, we are optimistic that this progress will continue in 
an expeditious manner toward meeting our 2007 goal. If it appears that 
this goal will not be met, we plan to consider the options regarding 
implementation of the PDMA provisions that are the subject of the stay.
    Next Steps.--We are closely monitoring the progress of widespread 
use of electronic pedigrees as we assess whether to lift, maintain, or 
pursue other options regarding the stay of implementation of the 
provisions in the PDMA final rule. We will continue to work with 
stakeholders to facilitate implementation.

State Efforts
    In the Report, we recognized the important role that the States 
have in regulating the drug supply chain, and we stated that adoption 
and enforcement of strong, proven anti-counterfeiting laws and 
regulations by the States would help in our collective effort to detect 
and deter counterfeit drugs. FDA strongly supported the efforts taken 
by the National Association of Boards of Pharmacy (NABP) in revising 
the Model Rules for Licensure of Wholesale Distributors for States to 
adopt. These Model Rules make it difficult for illegitimate wholesalers 
to become licensed and then to transact business. Four States have laws 
in place that are similar to the Model Rules (Florida, Nevada, 
California, and Indiana), and other States are considering adoption 
(e.g., New Jersey, Iowa). FDA has provided advice and input on a few 
State legislative proposals and we recommend that more States move in 
this direction in the coming year.
    NABP last year also announced the creation the Verified-Accredited 
Wholesale Distributors (VAWD) program as a complement to the Model 
Rules. Applicants for VAWD accreditation undergo a criteria compliance 
review, licensure verification, an inspection, background checks, and 
screening through NABP's clearinghouse. It is intended to provide 
assurance that the wholesale distribution facility operates 
legitimately, is validly licensed in good standing, and is employing 
security and best practices for safely distributing prescription drugs 
from manufacturers to pharmacies and other institutions. Recently, 
Indiana was the first State to pass a law that requires VAWD 
accreditation for all drug wholesale distributors who do business in 
Indiana.
    In the Report, we said that there would be great value in the 
creation of a national list of drugs most likely to be counterfeited 
based on factors that are likely to contribute to counterfeiting risk. 
The Model Rules called for such a national list as a starting point for 
application of pedigree requirements in the short term so that there 
would not be 50 different State lists. In December 2004, NABP convened 
a National Drug Advisory Coalition, which included industry and State 
and national government representation. FDA has served in an ex-officio 
role on this Coalition. The Coalition developed criteria for inclusion 
or removal from such a list and created a national list that includes 
31 drugs. FDA applauds NABP on this accomplishment.
    We recognize that States have implemented and are considering 
provisions requiring a pedigree (in some cases electronic) for drug 
products. We are pleased that these efforts complement Federal 
requirements and believe that rapid and uniform implementation of a 
pedigree that starts at the point of manufacture and accompanies the 
drug product until it is dispensed would be beneficial. As stated in 
the Report, adoption and enforcement of the Model Rules by all States 
would have the greatest impact on protecting the Nation's drug supply.
    In the Report, we also said that increased penalties would help 
deter counterfeiting and more adequately punish those convicted. As we 
continue the efforts on the Federal level, it is equally important that 
States adopt stronger penalties (like those outlined in the Model 
Rules) so the penalties associated with counterfeiting drugs are 
commensurate to the significant threat they pose to the public health.
    Next steps.--FDA will continue to support efforts by the States to 
adopt and enforce stricter laws and to pursue increased Federal 
penalties for drug counterfeiting.

Secure Business Practices
    In the Report, we described the important role that all 
participants in the drug supply chain have in adopting secure business 
practices. Around the time the Report was issued several trade 
associations for wholesale distributors issued guidelines for their 
members regarding best practices for drug distribution system 
integrity. In fact, in the past year, the Healthcare Distribution 
Management Association (HDMA) released new membership rules that 
require active members to adopt best practices that include extensive 
regulatory, financial, security, and due diligence processes and 
procedures.
    It is also important to note that many of the secure business 
practices outlined in these trade associations' best practices 
guidelines are included in the Model Rules for Licensure of Wholesale 
Distributors for adoption by the States.
    Next Steps.--We will continue to work with stakeholders who would 
like to develop secure business practices.

Heightened Vigilance and Awareness
            Health Professional Reporting Via MedWatch
    In the Report, we indicated that we would encourage and educate 
health professionals to use the MedWatch form as a mechanism to report 
suspect counterfeit drugs to FDA. To make the reporting of suspect 
counterfeits easier, we changed the instructions for the MedWatch 
reporting form, both paper and electronic versions, so reporters will 
know how and when to report suspect counterfeits. We have also amended 
the MedWatch website description of product problems and added 
``suspect counterfeit'' to the list of product problems to report to 
FDA using the MedWatch form. FDA staff has promoted the use of MedWatch 
for reporting suspect counterfeits in numerous speeches to health 
professional organizations over the past year. A small number of such 
reports are starting to come in using the MedWatch form.
    Next steps.--FDA will continue to educate health professionals to 
use the MedWatch form to report suspect counterfeit drugs.

Counterfeit Alert Network
    In the Report, we stated we would create a Counterfeit Alert 
Network (CAN) and partner with health professional and consumer groups 
to provide timely and effective notification to their members or 
constituents of a verified counterfeit event. By signing the CAN co-
sponsorship agreement, organizations become CAN partners and agree to 
deliver time-sensitive messages and information on specific counterfeit 
incidents and educational messages about counterfeits in general, as 
well as information about how and when to report suspect counterfeit 
drug products. In the past year, we have formed the CAN and currently 
13 organizations have signed the CAN co-sponsorship agreement.
    Also, in the Report, we stated we would develop internal guidelines 
for the informational contents of outgoing FDA messages that would be 
useful to communicate a counterfeiting incident to CAN partners. In the 
past year, we have developed these guidelines, in the form of a 
template, in collaboration with CAN partners. This template will allow 
for the efficient preparation and delivery of uniform counterfeit alert 
messages for partners to further disseminate.
    Next Steps.--FDA will encourage stakeholders to become members of 
the CAN and continue to work with CAN partners to be ready to 
disseminate effective and appropriate counterfeit alerts when needed.

Streamline FDA's Internal Rapid Response to Reports
    In the Report, we said that we would streamline our internal 
processes to respond quickly to reports of suspect counterfeits by 
improving coordination and communication among all initial responders 
in the agency. In the past year we amended our internal standard 
operating procedures and developed a protocol for more efficient 
internal communication and coordination when a suspect counterfeit drug 
is reported to the agency, regardless of where the report is received 
(e.g., MedWatch, an FDA field office, call to the FDA hotline).
    Next Steps.--No additional action is required.

Educating Consumers and Health Professionals
    In the Report, we noted that educating consumers about the risks of 
counterfeits is a critical piece of the effort to stop counterfeits 
from entering the stream of commerce. In the past year we have taken 
many steps towards educating consumers. First, we developed two public 
service announcements (PSAs) geared to consumers. These PSAs ran in 4.5 
million magazines. In addition, 4.6 million medication leaflets 
distributed by retail pharmacies with patient's prescriptions also 
carried these PSAs along with additional consumer information about 
counterfeit drugs. Also, FDA drafted an article about counterfeit drugs 
that was printed in several local papers nationwide, with an estimated 
readership of about 9.5 million consumers.
    We also set up a webpage on the FDA website for consumers to obtain 
information about counterfeit drugs, FDA initiatives, and educational 
information. This website can be found at www.fda.gov/counterfeit. In 
addition, the National Consumers League (NCL) developed a highly 
informative website containing useful consumer information about 
counterfeit drugs.
    In the past year, FDA partnered with the National Health Council 
(NHC) to jointly create and disseminate educational messages on 
counterfeit drugs. NHC is a private, non-profit organization of over 
100 national health-related organizations. Under this partnership, 
messages to raise awareness of the dangers of counterfeit drugs and how 
to avoid them will be developed and tested to measure their 
effectiveness. In addition, products will be created to deliver these 
messages to the target audience.
    In addition, FDA is developing educational messages to inform 
pharmacists about how to recognize counterfeits, counsel patients on 
how to minimize the risk of exposure to counterfeits, and on how to 
notify FDA if a counterfeit drug is suspected. These efforts are in the 
early stages.
    In the Report, we said that we would re-launch our safe online 
buying practice campaign. In March 2005, we launched a new campaign 
with tips for consumers on how to buy drugs safely on the Internet and 
minimize their risks of getting a counterfeit or otherwise substandard 
drug.
    Next steps.--We will increase dissemination of the PSAs and 
counterfeit drug messages. We will continue to update and post relevant 
information on the counterfeit drug webpage. We will also continue to 
work with the NHC to finalize educational messages and develop a 
dissemination strategy for those messages. In the coming months, we 
will also work with pharmacy organizations to finalize educational 
messages for pharmacists and develop a strategy to disseminate these 
messages.

International Collaboration
    In the Report, we recognized that counterfeit drugs are a worldwide 
concern, and we stated that we would collaborate with foreign 
stakeholders to develop strategies to deter and detect counterfeits 
globally. In February 2004, the World Health Organization (WHO) hosted 
a meeting to discuss an approach for developing global strategies for 
combating counterfeit drugs. FDA participated in this meeting and 
supports WHO's efforts in this area. It was decided at the WHO meeting 
that a concept paper would be drafted with a proposed strategy to 
address this problem. In March 2005, we attended the 4 th Pan American 
Conference on Drug Regulatory Harmonization held by the Pan-American 
Health Organization (PAHO) where a report was presented and 
recommendations were discussed regarding combating counterfeit drugs in 
the Americas. FDA's counterfeit drug initiative is consistent with the 
recommendations of the PAHO report.
    FDA's Office of Criminal Investigations (OCI) continues to work 
with foreign law-enforcement agencies directly and through Interpol on 
individual international counterfeit cases.
    OCI also has provided training on counterfeit drugs to foreign law-
enforcement, customs and judicial officers from various parts of the 
world through the U.S. Patent and Trademark Office (PTO) Intellectual 
Property Enforcement Academy. In addition, in the past year, several 
individual countries have sought FDA's insights, advice, and/or 
training on combating counterfeit drugs. Although the approaches that 
we outlined in the Report were specific to the U.S. drug distribution 
system, many of the principles outlined in the Report are applicable 
generally.
    Next Steps.--To the extent that resources permit, FDA will continue 
to work with international organizations, foreign law enforcement 
agencies, and individual governments to provide training and advice 
concerning drug counterfeiting and to collaborate on coordinated 
strategies to combat the problem of counterfeit drugs globally.

Conclusion
    Significant progress has been made towards implementing the 
measures outlined in FDA's Combating Counterfeit Drugs Report issued in 
February 2004. Although the use of electronic track and trace 
technology is still in the implementation stage, adoption and 
widespread use is closer to becoming a reality as stakeholders work 
diligently to find solutions to the challenges faced along the way. The 
use of authentication technologies is gaining acceptance as 
manufacturers realize that steps should be taken to protect their 
products from sophisticated counterfeiters. States are starting to 
adopt stricter laws and harsher penalties to ensure that only 
legitimate wholesalers do business in their State and they are taking 
measures to do their part in protecting supply chain integrity. Trading 
partners in the drug supply chain are also taking steps to ensure 
secure business practices are adopted and utilized as drug products are 
bought and sold. Educational efforts have been undertaken to help 
health professionals and consumers develop a greater awareness and 
knowledge about counterfeit drugs and how to minimize the risks of 
exposure. In addition, efforts are underway to tackle counterfeit drugs 
on a global level.
    Despite the progress made, there remains a viable and concrete 
threat of counterfeit drugs entering the U.S. drug distribution system. 
We must all continue to work together to expeditiously pursue the 
measures outlined in the Report to further protect the safety and 
security of the U.S. drug supply.



    appendix: significant counterfeit cases closed in the past year
    Below are a number of significant counterfeit drug cases that were 
closed in the past year:

Counterfeit Lipitor
    During the first quarter of 2005, three men pled guilty to Federal 
criminal charges in a multi-million dollar Lipitor smuggling and 
counterfeiting conspiracy. The pleas are a result of an ongoing OCI 
investigation involving the manufacturing, smuggling, and interstate 
distribution of counterfeit pharmaceuticals that was initiated by OCI 
in April 2003. To date, eight people have been indicted; four have 
pleaded guilty, and another was convicted by a trial jury.
    In another counterfeit Lipitor case, an OCI undercover operation 
resulted in the arrest and conviction of a Belize citizen for violating 
Title 21, U.S.C.  331 (a)--Introduction into Interstate Commerce of a 
Misbranded Drug. In September 2004 the defendant was sentenced to 10 
months incarceration and 1 year probation.

Genapharm.com (Counterfeit Human Growth Hormone)
    On March 9, 2004, an Austin, Texas man pled guilty to four counts 
of conspiracy to introduce misbranded and unapproved new drugs into 
interstate commerce, counterfeiting human growth hormone, and 
possessing controlled drugs with intent to distribute. Two other 
persons involved in these offenses were previously convicted and 
sentenced.

Counterfeit Viagra
    On June 23, 2004, an individual pled guilty to charges of 
conspiracy, trafficking in counterfeit goods, and a felony violation of 
the Federal Food, Drug and Cosmetic Act. In pleading guilty, the 
defendant admitted that he conspired with a manufacturer in Beijing to 
import thousands of counterfeit Viagra tablets into the United States, 
which he would then resell. The defendant was sentenced on March 25, 
2005 to 18 months in prison, followed by 3 years probation and was 
fined $6,000.

Counterfeit Serostim
    On June 16, 2004, an indictment was unsealed in San Diego that 
charged an individual with conspiring to unlawfully distribute human 
growth hormone and trafficking in counterfeit goods. According to the 
indictment, this individual obtained counterfeit Serostim and sold it 
to bodybuilders who did not possess lawful prescriptions for the drug. 
Another individual involved in this investigation pled guilty to 
similar charges on February 19, 2003. Serostim is a prescription drug 
containing the active ingredient ``somatropin,'' a form of human growth 
hormone. Serostim is approved by the FDA for use in the United States 
to treat AIDS wasting disease.

Counterfeit Labeled Pharmaceuticals
    An Alabama drug wholesaler was convicted for violating Title 21, 
U.S.C.  331 (i) (3)--Selling and Holding for Sale a Counterfeit Drug. 
In October 2004 the company was sentenced to 5 years probation and 
fined $24,000.

Counterfeit Viagra
    In January 2005, a Southern California man pled guilty to importing 
counterfeit Viagra from China and manufacturing 700,000 counterfeit 
Viagra tablets at a lab in the United States. An accomplice was 
convicted of similar charges in September 2004. The total value of the 
counterfeit Viagra in this case is more than $5.65 million.

World Express Rx
    In January 2005, a San Diego man was sentenced to serve a 51-month 
prison term and forfeit substantial cash proceeds for his role in 
operating a large Internet pharmacy scheme. The drugs distributed 
included a variety of products counterfeited in Mexico, smuggled into 
the United States and sent throughout the country. Some of the 
ingredients for the drugs were shipped from India and China. In other 
instances, unapproved and counterfeit drugs made in India and Pakistan 
entered the United States via the Bahamas. At least 14 other 
individuals are also being prosecuted in California or Florida as part 
of this international conspiracy.

          NATIONAL ANTIMICROBIAL RESISTANCE MONITORING SYSTEM

    Question. Can we get a current accounting of funds available to FDA 
to fund the NARMS program and the distribution of these funds to the 
various agencies?
    Answer. At this time, FDA has not determined the exact amount of 
NARMS funding for CDC and USDA for fiscal year 2006 but plans to make 
decisions in the Fall of 2005. In fiscal year 2005, the NARMS program 
took a reduction due to competing Agency priorities, however, FDA 
funded USDA and CDC at the same level they were funded in fiscal year 
2004 with FDA absorbing any reduction in program funding. FDA believes 
that all three arms are integral to the success of the NARMS program 
and to achieve the benefits envisioned at its inception and agreed upon 
by all three agencies. We would be happy to provide a chart showing the 
allocation of NARMS funding in fiscal year 2004 and fiscal year 2005.
    [The information follows:]

                   NARMS FUNDING FISCAL YEAR 2004-2005
                        [In millions of dollars]
------------------------------------------------------------------------
                                            Fiscal year     Fiscal year
                                               2004            2005
------------------------------------------------------------------------
USDA....................................           1.606           1.606
CDC.....................................           2.037           2.037
FDA \1\.................................           3.991           3.686
                                         -------------------------------
      Total.............................           7.634           7.329
------------------------------------------------------------------------
\1\ Included in this figure are laboratory supplies FDA purchases for
  USDA, CDC and FDA.

    Question. Permanent funding needs to be established to allow ARS to 
hire permanent staff positions. Also, current funding is inadequate to 
allow for the collection of samples in a scientifically-based, 
randomized and statistically-sound manner. Can funding be line-itemed 
to insure on-going designated funding stream?
    Answer. All three components of NARMS are critical to monitor the 
development of bacterial resistance from the use of antibiotics in 
animals and subsequent public health impacts. NARMS is foremost a 
public health surveillance system. Emergence of bacterial antibiotic 
resistance among livestock is certainly critical to establish links 
between use in food producing animals and public health consequences. 
However, it is of equal importance to the other arms and should not be 
singled out as the most responsive measure of the NARMS program.
    FDA is planning an independent external review of all three 
components of the NARMS program, the human, retail meat, and slaughter 
components and is holding a public meeting, June 23-24, 2005, to 
address sampling issues and how the NARMS funds have been spent , as 
well as other issues.
    Question. Can an independent panel be formed to direct the 
activities and funding for the NARMS program?
    Answer. FDA is planning an independent external review of all three 
components of the NARMS program, the human, retail meat, and slaughter 
components and is holding a public meeting, June 23-24, 2005, to 
address sampling issues and how the NARMS funds have been spent , as 
well as other issues.
    Question. There was report language in last year's appropriations 
bill requiring adequate funding for the 3 arms of NARMS. Are the three 
portions of the NARMS program adequately funded as directed in this 
report language?
    Answer. FDA strongly supports NARMS and all its components, and 
believes that it is important to maintain NARMS funding, to the extent 
possible, even when there are competing public health priorities. FDA 
has funded NARMS since NARMS was conceived in 1996 and is committed to 
the continued funding of this program as much as possible without 
compromising our other core programs.
     In fiscal year 2005, the NARMS program took a reduction, however, 
FDA funded USDA and CDC at the same level they were funded in fiscal 
year 2004 with FDA absorbing any reduction in program funding. FDA 
believes that all three arms are integral to the success of the NARMS 
program and to achieve the benefits envisioned at its inception and 
agreed upon by all three agencies.
                                 ______
                                 

                Questions Submitted by Senator Herb Kohl

                             FDA PAY COSTS

    Question. In fiscal year 2005, the FDA's top priority was to 
provide funding to cover necessary increased salaries and expenses for 
their staff. The FDA's budget, in fact, is 60 percent salaries and 
expenses. In the fiscal year 2006 budget request, however, no funding 
is requested at all to cover the required pay increases, effectively 
resulting in a $36 million shortfall.
    Why isn't funding requested for increased salaries and expenses in 
the fiscal year 2006 budget, since it was the top priority for the 
previous fiscal year?
    Answer. In fiscal year 2006 FDA needs approximately $36 million to 
cover the cost of a pay increase. The agency will cover the costs of 
the pay raise within the total request.
    Question. How does FDA propose to absorb the funding for employee 
pay increases, approximately $36 million? What specific programs, and 
in what amounts, will that funding come from?
    Answer. This will be accomplished in fiscal year 2006 through 
instituting hiring freezes and attrition of over 250 FTE. In select 
areas where we are still hiring, we will carefully targeting the areas 
for backfills, such as import field exams. FDA will use risk-based 
management principles throughout the program areas to ensure we are 
properly targeting programs to protect public safety.

                           CITIZEN PETITIONS

    Question. It has been brought to my attention that FDA recognizes 
the need to expedite the decision making process for citizen petitions 
and that the current system may be contributing to agency delay in 
approval of abbreviated new drug applications (ANDAs). Further, I 
understand that FDA is currently exploring reforms to this process as a 
way to accelerate consumer access to more affordable medicines.
    Please provide a chart listing the citizen petitions filed with FDA 
in fiscal year 2003 and fiscal year 2004 that target ANDAs, including 
the name of filer, date the petition was filed and completion date for 
each petition.
    Answer. There were 42 citizen petitions filed with FDA in fiscal 
year 2003 and fiscal year 2004 that relate specifically to ANDAs. We 
would be happy to provide this information. The petitions are in 
alphabetical order by the topic of the petition so that related 
petitions are grouped together and where no completed date is provided, 
the petition is still pending with the Agency. The information 
describes only petitions that relate to ANDAs specifically and does not 
include certain types of petitions that are necessary to approving some 
ANDAs, but do not on their face relate to ANDAs, for example, relisting 
petitions. When a drug is no longer being marketed, an ANDA applicant 
seeking to reference that drug product must file a relisting petition 
requesting that the FDA determine that the drug product was not 
withdrawn for reasons of safety or effectiveness. Also, in some 
instances there were additional citizen petitions relating to a 
particular drug product that may have been filed outside of the 
requested timeframe. For example, only one petition relating to 
fentanyl transdermal products is shown, but a total of four petitions 
were filed, some in fiscal year 2005.
    [The information follows:]
 blocking petitions--submitted in fiscal year 2003 and fiscal year 2004
180-day; Gabapentin, can exclusivity be waived?
    PETITIONER: Pfizer.
    DOCKET #: 04P-0227.
    SUBMITTED: 5/11/2004.
    COMPLETED: 7/2/2004.
    That FDA acknowledge that 180-day exclusivity is not a right or 
asset subject to transfer or waiver in favor of one or more specified 
subsequent ANDA applicants; specifically that FDA not approve Teva 
during the running of Purepac's exclusivity.

180-day; para IV recertification for CMC changes
    PETITIONER: Biovail.
    DOCKET #: 03P-0121.
    SUBMITTED: 3/26/2003.
    That FDA require paragraph IV re-certification in the case of ANDAs 
when there is an amendment to the CMC portion of the ANDA.

30-month; DuoNeb (Ipatropium/Albuterol)
    PETITIONER: Dey, L.P.
    DOCKET #: 04P-0324.
    SUBMITTED 7/16/2004.
    That FDA determine that Ivax' ANDA 76-724 is subject to 30-month 
stay of approval. Related to Docket No. 04P-0520.

Agrylin (anagrelide HCl)--CP
    PETITIONER: Shire.
    DOCKET #: 04P-0365/CP1.
    SUBMITTED: 8/16/2004.
    COMPLETED: 4/18/2005.
    That FDA refrain from approving ANDAs that reference Agrylin.

Agrylin (anagrelide HCl)--PSA
    PETITIONER: Shire.
    DOCKET #: 04P-0365/PSA1.
    SUBMITTED: 9/3/2004.
    COMPLETED: 4/18/2005.
    Petition for Stay of Action (PSA) to CP1.

Alphagan; refuse ANDAs for 0.2 percent
    PETITIONER: Allergan.
    DOCKET #: 02P-0469.
    SUBMITTED: 10/28/2002.
    COMPLETED: 5/21/2003.
    That FDA refuse to approve ANDA's for brimonidine tartrate 0.2 
percent. A newer (and allegedly safer) 0.15 percent product has 
recently been approved. See relisting CPs, Docket Nos. 02P-0391and 02P-
0404.

Amino acid solutions
    PETITIONER: Braun Medical.
    DOCKET #: 02P-0450.
    SUBMITTED: 10/16/2002.
    COMPLETED: 6/19/2003.
    Withhold approval of any ANDA for amino acid drug products packaged 
in DEHP-plasticized PVC and intended for use in infant populations.

Amlodipine/Benazepril
    PETITIONER: Frommer Lawrence.
    DOCKET #: 04P-0339.
    SUBMITTED: 7/29/2004.
    That FDA refuse to accept for filing ANDAs for this combination 
drug that do not include fed and fasted BE studies.

Desmopressin BE
    PETITIONER: Ferring Pharm Inc.
    DOCKET #: 04P-0068.
    SUBMITTED: 2/13/2004.
    That FDA establish specific BE requirements for oral products 
containg desmopressin (DDAVP).

Doryx and Suitability Petition
    PETITIONER: Warner Chilcott.
    DOCKET #: 04P-0417.
    SUBMITTED: 9/13/2004.
    That FDA require ANDAs for Doxycycline Hyclate Capsule products 
containing powder or similar fill and using Doryx as the RLD first 
obtain FDA's acceptance of a suitability petition for a change in 
dosage form.

Fentanyl--Palo Alto
    PETITIONER; Palo Alto Health.
    DOCKET #: 04P-0340.
    UBMITTED: 7/29/2004.
    COMPLETED: 1/28/2005.
    That FDA require ANDA applicants for transdermal fentanyl 
(Duragesic) to perform BA/BE studies on both intact and stripped skin.

Ferrlecit (CP1)
    PETITIONER: Watson Pharma/CRG.
    DOCKET #: 04P-0070/CP1.
    SUBMITTED: 2/13/2004.
    That FDA not approve any ANDA for Ferrlecit (sodium ferric 
gluconate complex in Sucrose) until all conditions in the petition are 
met.

Ferrlecit (CP2)
    PETITIONER: Watson Pharma.
    DOCKET #: 04P-0070/CP2.
    SUBMITTED: 8/18/2004
    That FDA refuse to receive an ANDA for Ferrlecit until FDA 
establishes guidelines to deternine sameness of a generic sodium ferric 
gluconate complex product.

Flonase (Fluticasone Nasal Suspensions)
    PETITIONER: GSK.
    DOCKET #: 04P-0239.
    SUBMITTED: 5/19/2004.
    That FDA refrain from approving ANDAs for nasal suspension 
formulations and issue a BE guidance.

Flonase (Fluticasone Propionate Nasal Spray)
    PETITIONER: Bell Boyd & Lloyd.
    DOCKET #: 04P-0206.
    SUBMITTED: 5/3/2004.
    That FDA make a determination that no ANDA seeking FDA premarket 
approval of a generic formulation of Fluticasone Propionate Nasal 
Spray, 50 mcg, shall be received for substantive review, or granted 
final approval, unless such an ANDA contains successful results of BA 
and BE studies conducted under the methodologies set forth in FDA's.

Levothyroxine--allow Unithroid only as RLD
    PETITIONER: Jones Pharma.
    DOCKET #: 03P-0097.
    SUBMITTED: 3/13/2003.
    COMPLETED: 10/1/2003.

Levothyroxine--ANDA guidance
    PETITIONER: Jerome Stevens.
    DOCKET #: 04P-0061.
    SUBMITTED: 2/10/2004.
    COMPLETED: 6/23/2004.
    That FDA establish guidance and clarify requirements for levo 
ANDAs.

Levothyroxine--BE methodology
    PETITIONER: Abbott.
    DOCKET #: 03P-0387/CP1.
    SUBMITTED: 8/25/2003.
    COMPLETED: 6/23/2004.
    That FDA make certain requirements for BE studies of levothyroxine.

Levothyroxine--BE methodology (PRC)
    PETITIONER: Abbott.
    DOCKET #: 03P-0387/PRC1.
    SUBMITTED: 7/23/2004.
    That FDA reconsider its denial of earlier petition requesting that 
FDA require certain BE studies of levothyroxine.

Levothyroxine--CP and PSA re BE standards
    PETITIONER: Jones Pharma.
    DOCKET #: 03P-0126/CP1.
    SUBMITTED: 3/28/2003.
    COMPLETED: 6/23/2004.
    That FDA refrain from approving or accepting for filing any levo 
ANDA that shows BE via 2001 Guidance or as announced at Mar 12-13 2003 
meeting of Pharm Sci AC; that FDA convene a joint mtg of Pharm Sci AC 
and E&M Drugs AC to establish BE standards.

Levothyroxine--name Levoxyl as 3RLD--PSA
    PETITIONER: Abbott:
    DOCKET #: 03P-0113/PSA.
    SUBMITTED: 5/13/2003.
    COMPLETED: 11/7/2003.
    That FDA stay the effective date of the decision to grant Mylan's 
request that Levoxyl be named a RLD.

Levothyroxine--name Synthroid as 2RLD--PSA
    PETITIONER: Abbott.
    DOCKET #: 03P-0107/PSA.
    SUBMITTED: 5/13/2003.
    COMPLETED: 11/7/2003.
    That FDA stay the effective date of the decision to grant Mylan's 
request that Synthroid be named a RLD.

Levothyroxine--PRC on CP/PSA re BE standards
    PETITIONER: Abbott.
    DOCKET #: 03P-0126/PRC1.
    SUBMITTED: 7/23/2004.

Levothyroxine--w/d Synthroid & Levoxyl as RLDs
    PETITIONER: Abbott.
    DOCKET #: 03P-0210.
    SUBMITTED: 5/13/2003.
    COMPLETED: 11/7/2003.
    That FDA withdraw the decision in Docket Nos. 03P-0107 and 03P-0113 
to name Synthroid and Levoxyl as RLDs.

Loratadine and b2
    PETITIONER: GenPharm.
    DOCKET #: 03P-0160.
    SUBMITTED: 4/16/2003.
    COMPLETED: 6/24/2004.
    That FDA require 505(j) applications for generic OTC loratadine 
(Claritin), and not permit b2 applications.

Lovenox--not approve ANDAs
    PETITIONER: Aventis.
    DOCKET #: 03P-0064.
    SUBMITTED: 2/19/2003.
    That FDA not approve any ANDA using Lovenox (enoxaparin sodium 
injection, a low molecular weight heparin) as the RLD unless (a) the 
manufacturing process is determined to be equivalent, or equivalent s&e 
is supported by clinical trials, and (b) the generic product contains a 
1,6 anhydro ring structure at the reducing ends of between 15 percent 
and 25 percent.

Metaxalone
    PETITIONER: King.
    DOCKET #: 04P-0140/CP1.
    SUBMITTED: 3/19/2004.
    That FDA (a) rescind the 3/1/2004 ``Dear Applicant'' letter, (b) 
require ANDA applicants using SKELAXIN as the RLD to certify re the 128 
patent, and (c) prohibit a carve out of PK information.

Metaxalone--PSA1
    PETITIONER: King.
    DOCKET #: 04P-0140/PSA1.
    SUBMITTED: 3/19/2004.
    PSA to CP1.

Metaxalone--PSA2
    PETITIONER: Mutual.
    DOCKET #: 04P-0140/PSA2.
    SUBMITTED: 4/5/2004.
    That FDA stay approval of any sNDA for Skelaxin, specifically s-046 
regarding dosing with food.

Methylphenidate--Concerta
    PETITIONER: McNeil.
    DOCKET #: 04P-0139.
    SUBMITTED: 3/19/2004.
    That FDA apply additional BE metrics other than the average BE 
parameters to ensure that the approval of generic versions of Concerta 
(methylphenidate HCl) extended-release tablets are both bioequivalent 
and clinically equivalent to Concerta.

Methylphenidate--Metadate CD--BE
    PETITIONER: Celltech.
    DOCKET #: 04P-0225.
    SUBMITTED: 5/7/2004.
    That FDA require an additional BE test for generic versions of 
Celltech's Metadate CD (ER methylphenidate).

Mupiricin Calcium (topical)
    PETITIONER: Glaxo.
    DOCKET #: 04P-0290.
    SUBMITTED: 7/8/2004.
    That FDA refrain from approving any ANDAs for topical mupirocin 
calcium products containing the amorphous form of the active 
ingredient.

Mupirocin ointment; BE requirement for
    PETITIONER:--GlaxoSmithKline.
    DOCKET #: 03P-0140.
    SUBMITTED: 4/8/2003.
    COMPLETED: 11/7/2003.
    That FDA not approve ANDAs for topical mupirocin ointment products 
absent additional data to support the full labeling of the RLD 
(Bactroban).

Oxandrolone BE
    PETITIONER: Savient Pharm Inc.
    DOCKET #: 04P-0074.
    SUBMITTED: 2/18/2004.
    That FDA establish specific BE requirements for oral products 
containg oxandrolone.

Oxycontin, ANDAs and RMPs
    PETITIONER: Purdue Pharma.
    DOCKET #: 04P-0006/PSA.
    SUBMITTED: 1/7/2004.
    COMPLETED: 3/23/2004.
    That FDA stay approval of modified-release ANDAs that reference 
Oxycontin until FDA has evaluated supplements from Purdue that 
incorporate an RMP into labeling.

Periostat--2003 CP
    PETITIONER: CollaGenex.
    DOCKET #: 03P-0315/CP1.
    SUBMITTED: 7/14/2003.
    That FDA refuse to approve any ANDA for Periostat.

Periostat--2003 CP re West-ward
    PETITIONER: CollaGenex.
    DOCKET #: 03P-0372.
    SUBMITTED: 8/15/2003.
    That FDA refuse to approve West-ward's ANDA for Periostat.

Periostat--2003 PSA
    PETITIONER: CollaGenex.
    DOCKET #: 03P-0315/PSA1.
    SUBMITTED: 7/18/2003.
    PSA to CP1. That FDA refuse to approve any ANDA for Periostat.

Restasis
    PETITIONER: Allergan.
    DOCKET #: 03P-0275/PSA.
    SUBMITTED: 8/6/2003.
    COMPLETED: 12/18/2003.
    Stay approval of all Section 505(j) ANDAs and Section 505(b)(2) 
NDAs for generic versions of Restasis because it is not an antibiotic 
and therefore is entitled to 3-year exclusivity.

Ribavirin
    PETITIONER: ICN Pharm.
    DOCKET #: 03P-0321.
    SUBMITTED: 7/16/2003.
    COMPLETED: 4/6/2004.
    That FDA not approve generic Rebetol under 505(j) with labeling 
that omits information on the use of ribavirin with PEG-Intron because 
such a product would be misbranded; any guidance with respect to 
labeling and cross-labeling of generic ribavirin products must be done 
according to GGP regs and therefore requests that FDA defer action on. 
. .

Sirolimus with Rapamune
    PETITIONER: Wyeth.
    DOCKET #: 03P-518.
    SUBMITTED: 11/5/2003.
    COMPLETED: 9/20/2004.
    Refrain from approving any ANDA for Sirolimus with Rapamune as the 
RLD before the expiration of the statutory exclusivity that applies to 
Rapamune.

Therapeutic proteins and b2
    PETITIONER: BIO.
    DOCKET #: 03P-0176.
    SUBMITTED: 4/24/2003.
    That FDA not approve anything less than a full NDA for a 
therapeutic protein product regulated under the FDCA. This petition 
generally relates to the can-there-be-generic-biologics question.

    Question. Which offices at FDA are involved in reviewing citizen 
petitions that target ANDAs? What role, if any, does the HHS Office of 
General Counsel play?
    Answer. A number of offices within the Center for Drug Evaluation 
and Research are involved in reviewing citizen petitions that relate to 
ANDAs. The Office of Regulatory Policy or ORP is responsible for 
drafting responses to these types of citizen petitions. ORP consults 
the Office of Generic Drugs on all of these petitions and consults with 
the appropriate medical review division within Office of New Drugs 
regarding issues relating to the approval of the innovator product that 
is the basis for the ANDA. If a citizen petition raises safety issues, 
the Office of Drug Safety is also involved in reviewing the petition. 
In addition, other offices may be consulted, as needed, for example the 
Office of Compliance, Controlled Substances Staff. ORP consults with 
the Office of Chief Counsel FDA, the Food and Drug division of the HHS 
Office of General Counsel, regarding petitions that raise legal issues, 
and the Office of Chief Counsel reviews all citizen petition responses 
for litigation risk and legal sufficiency. The Office of Commissioner, 
Office of Policy, may be consulted and the Associate Commissioner of 
Policy and Planning has signed some of the citizen petition responses 
in the past.
    FDA's Office of Chief Counsel, which is the Food and Drug Division 
of HHS OGC, assists in resolving legal issues raised in incoming 
citizen petitions, assists in drafting citizen petition responses, and 
reviews citizen petition responses and administrative records 
supporting those responses for legal sufficiency. The Food and Drug 
Division of HHS OGC consults the Immediate Office at HHS OGC when a 
citizen petition raises issues that are particularly sensitive, novel, 
or complex.
    Question. Currently, how many citizen petitions targeting ANDAs 
have been under review by the FDA Office of General Counsel for more 
than 180 days? How many FTEs are dedicated to reviewing citizen 
petitions in the FDA Office of General Counsel?
    Answer. Currently there is one citizen petition that raises ANDA-
related issues that has been under review by the Food and Drug Division 
of HHS OGC for more than 180 days. The Food and Drug Division of HHS 
OGC devotes approximately .7 FTE per year to responding to ANDA-related 
citizen petitions.
    Question. What specifically is FDA doing to reform the FDA citizen 
petition review process, and what potential solutions are under 
consideration?
    Answer. We are examining our citizen petition process very 
thoroughly. During the past 8 months, the Office of Regulatory Policy, 
or ORP, has undertaken an extensive review of how we handle citizen 
petitions assigned to CDER. The purpose of this review is to identify 
areas where we can work more efficiently and effectively, despite the 
significant increase in the number of citizen petitions received. For 
example, CDER has seen approximately a 50 percent increase in the 
number of citizen petitions received in CY04 over CY03, and we 
anticipate an additional increase in the number of citizen petitions 
submitted in CY05, based on the current rate of receipt for CY05. As 
part of this review process, ORP worked with the Office of Generic 
Drugs or OGD, the Office of New Drugs, and the Office of Chief Counsel 
to determine causes of delay. We have already begun implementing 
changes to our internal processes and will track whether these changes 
improve the overall response time for citizen petitions. As part of 
this process, ORP will increase its interactions with other offices 
early in the process to provide better direction on what information is 
needed for a citizen petition response. We believe that increased 
communication will help to avoid misunderstandings, wasted efforts, or 
unnecessary delays. ORP and OGD are also increasing communications 
relating to priorities and anticipated timetables, so that we can 
coordinate citizen petition responses with upcoming ANDA approvals. In 
addition, we have added recommended goal dates for each stage of the 
citizen petition review process.
    We also note that outside of ORP's process improvement efforts, OGD 
has made organizational changes designed to improve the citizen 
petition review process. OGD has established a specific group of 
scientists who will be responsible for addressing citizen petition 
review issues. This organizational change will increase the 
consistency, quality, and speed of OGD input on citizen petition 
responses.
    Question. Do you believe FDA needs additional FTEs and/or funding 
to make the citizen petition review process more efficient? If so, 
please provide an estimate of the increased funding amount needed in 
fiscal year 2006.
    Answer. During the past 8 months, the Office of Regulatory Policy, 
or ORP, has undertaken an extensive review of how we handle citizen 
petitions assigned to CDER. The purpose of this review is to identify 
areas where we can work more efficiently and effectively, despite the 
significant increase in the number of citizen petitions received.
    We have already begun implementing changes to our internal 
processes and will track whether these changes improve the overall 
response time for citizen petitions. As part of this process, ORP will 
increase its interactions with other offices early in the process to 
provide better direction on what information is needed for a citizen 
petition response. We believe that increased communication will help to 
avoid misunderstandings, wasted efforts, or unnecessary delays. ORP and 
OGD are also increasing communications relating to priorities and 
anticipated timetables, so that we can coordinate citizen petition 
responses with upcoming ANDA approvals. In addition, we have added 
recommended goal dates for each stage of the citizen petition review 
process.
    We also note that outside of ORP's process improvement efforts, OGD 
has made organizational changes designed to improve the citizen 
petition review process. OGD has established a specific group of 
scientists who will be responsible for addressing citizen petition 
review issues. This organizational change will increase the 
consistency, quality, and speed of OGD input on citizen petition 
responses.

                            MDUFMA SHORTFALL

    Question. As you know, the MDUFMA user fee program is set to expire 
this year, unless additional authorizing language is passed by the 
Congress. We have provided significant increases for CDER since this 
program was initiated, and further increases are requested this year.
    Has authorizing language been submitted by the FDA to forgive 
previous MDUFMA funding shortfalls, enabling the MDUFMA program to 
continue past the current fiscal year?
    Answer. The Administration informally transmitted its legislative 
proposal to alter the appropriations triggers for fiscal year 2003 and 
2004 to Congress in May 2004. FDA staff are now working with 
Congressional staff and stakeholders to save the MDUFMA user fee 
program and the many benefits its offers to industry, FDA, the health 
care community, and patients. FDA sincerely hopes this process will 
lead to a proposal that is acceptable to FDA and the Administration, 
our stakeholders, and Congress.
    Question. If not, what is the status of that language, and 
specifically when do you expect it to be sent to Congress?
    Answer. The Administration informally transmitted its legislative 
proposal to alter the appropriations triggers for fiscal year 2003 and 
2004 to Congress in May 2004. Since that time, some of the stakeholders 
have asked for further changes in the MDUFMA law. FDA staff are now 
working with Congressional staff and stakeholders to develop the 
legislative language required to save the MDUFMA user fee program and 
the many benefits it offers to industry, FDA, the health care 
community, and patients. FDA sincerely hopes this process will lead to 
a proposal that is acceptable to FDA and the Administration, our 
stakeholders, and Congress.
    Question. What will happen if the language is not submitted or 
passed by the Congress before October 1, 2005? Does FDA have a plan to 
make up for the potentially lost user fee income?
    Answer. If Congress does not enact corrective legislation, FDA will 
lose its authority to collect medical device user fees beginning 
October 1, 2005 and the performance goals negotiated for the medical 
device program will end.
    FDA would have to reduce staffing levels, abandon critical 
infrastructure modernization, reduce interaction with applicants, 
abandon planned guidance development, terminate the Medical Device 
Fellowship Program and largely eliminate our use of contract expertise 
in academia and the private sector, and take a variety of other steps 
to limit expenditures to the amounts made available in our fiscal year 
2006 and fiscal year 2007 appropriations. FDA would expect review times 
to deteriorate, resulting in significant delays in the introduction of 
new medical devices.

                             TISSUE SAFETY

    Question. What is the status of the FDA rule that was proposed in 
1997 that would provide guidelines for current good manufacturing 
practices for establishments that produce human cells, tissues, and 
related products?
    Answer. In 2004, FDA published the last two of three final rules to 
implement a new risk-based approach for the regulation of human cells, 
tissues, and cellular and tissue-based products, HCT/Ps. Together, 
these three rules are expected to prevent the spread of communicable 
diseases, assure that safety and effectiveness are demonstrated for 
cellular and tissue-based products that are also drugs, biological 
products, or devices, and enhance public confidence in these products 
so that they can fulfill their potential for saving and improving 
lives.
    FDA published the third and last final rule on November 24, 2004. 
The Good Tissue Practice Rule requires manufacturers to recover, 
process, store, label, package, and distribute human cells, tissues, 
and cellular and tissue-based products in a way that prevents the 
introduction, transmission, or spread of communicable disease. Good 
tissue practice includes the methods, facilities and controls used to 
manufacture HCT/Ps. The rule also contains provisions for FDA 
inspection of establishments and enforcement of the regulations.
    FDA published the second of the three final rules on May 25, 2004. 
The Donor Eligibility rule requires donor screening and testing to 
prevent the unwitting use of contaminated tissues with the potential to 
transmit infectious disease. The new rule extends the protections 
provided by FDA's previously issued tissue rules by requiring testing 
and/or screening for additional communicable diseases that can be 
transmitted through transplanted tissues and cells. The new regulation 
adds requirements to screen for human transmissible spongiform 
encephalopathies, including Creutzfeldt-Jakob disease, and to screen 
and test for syphilis. Screening and testing for still other relevant 
communicable disease agents, such as human T-lymphotropic virus, will 
be required for viable cells and tissue rich in leukocytes such as 
semen and hematopoietic stem cells. For reproductive tissues, the 
regulation also addresses potential risks associated with Chlamydia 
trachomatis and Neisseria gonorrhoeae.
    The Donor Eligibility rule also provides a framework for 
identifying and addressing new or emerging diseases that may pose risks 
to recipients of transplanted HCT/Ps and for which appropriate 
screening measures or testing are available. Thus, this regulation 
gives FDA the flexibility to rapidly address new disease threats as 
they appear, providing substantial additional protections for patients 
receiving tissue transplants. The Donor Eligibility final rule and the 
Good Tissue Practice final rule will become effective on May 25, 2005.
    FDA previously published the Establishment Registration and Listing 
final rule requiring human cell, tissue, and cellular and tissue-based 
product establishments to register and list their products with the 
Agency. On January 21, 2004, this rule became effective for certain 
establishments, for example, reproductive tissue and cord blood 
establishments, which had previously been exempt from its provisions. 
The rule is now fully effective. This complete database of HCT/P 
establishments and their products will provide important information to 
FDA, and will assist the agency to improve communications with industry 
and the public.
         nutritional products, labeling and dietary supplements
    Question. This month, FDA published two Advance Notices of Proposed 
Rulemaking regarding the appearance and usefulness of food labels. 
Specifically, these ANPRMs discussed how calories and serving sizes are 
shown on food labels.
    How much funding is included in the fiscal year 2006 budget request 
for the Office of Nutritional Products, Labeling and Dietary 
Supplements?
    Answer. The estimated fiscal year 2006 budget for the Office of 
Nutritional Products, Labeling and Dietary Supplements is $10 million.
    Question. Would these proposed rules come under the FDA Office of 
Nutrition Products, Labeling and Dietary Supplements?
    Answer. Yes, the two Advance Notices of Proposed Rulemaking 
regarding the appearance and usefulness of food labels will come under 
the FDA Office of Nutrition Products, Labeling and Dietary Supplements.
    Question. Please provide a summary of the activities under the 
jurisdiction of this office, including funding allocated for each 
activity, for the past 5 years.
    Answer. We would be happy to provide the budget and FTE for the 
Office of Nutritional Products, Labeling and Dietary Supplements also 
known as ONPLDS for fiscal year 2001-2006, and an estimate breakdown of 
budgetary resources and FTE among major activity areas appears below. 
Compliance, international activities, outreach and education, and 
research activities are included within the major activity areas listed 
below.
    [The information follows:]

    
    
                             DRUG LABELING

    Question. As you know, once FDA approves a drug, they are no longer 
able to direct the drug manufacturer to ensure that labels on the 
approved drug appear a certain way. Vioxx, the drug recently pulled 
from the market because of serious safety questions, negotiated with 
the FDA for 14 months before finally changing their drug label to 
reflect an increased risk of heart attacks, and FDA couldn't force them 
to change the label earlier. There are serious concerns about the 
potential number of people who died as a result of taking this drug 
during this time of negotiation. An FDA official has recently said that 
FDA needs additional authority to be able to force drug manufacturers 
to present labels in a specific way, without negotiation.
    Dr. Crawford, do you believe FDA needs additional authority to 
force manufacturers to present drug labels in a manner deemed 
appropriate by the FDA, without negotiation with the drug companies?
    Answer. I do not believe additional authority is needed. FDA has 
significant authority to determine that a drug is misbranded if its 
labeling is false or misleading. We can seek judicial relief to mandate 
changes to the label or take action to remove the product from the 
market. However, both of these actions take time. The process would 
normally begin with a warning letter to the company expressing FDA's 
position, and the company would have a chance to respond. If the 
company does not make the changes voluntarily, FDA would then have to 
pursue judicial relief, which is a time-consuming process.
    When FDA considers removing a product from the market over a 
sponsor's objections, FDA would first evaluate whether the risks of 
marketing the product with false or misleading labeling outweighed the 
benefits to the population of patients that rely on the product. In 
many cases, the risks may not outweigh the benefits. And again, if the 
sponsor does not agree to stop marketing, the procedures for removing a 
drug from the market are very time consuming. They require publication 
of a notice and opportunity for hearing in the Federal Register, and a 
possible administrative hearing if the sponsor demonstrates that there 
is a genuine issue of material fact to be decided in a hearing.
    Question. If you don't believe additional authority is needed, what 
steps can FDA take to make sure that situations and questions such as 
those surrounding Vioxx and the need for stronger labels on certain 
drugs don't present themselves again? Essentially, how do you keep this 
from happening time and again?
    Answer. FDA is taking a number of steps to help ensure that 
patients and health care professionals have access to current 
information about drug safety. As we explained in our response to a 
previous question, we are proposing a Drug Watch Web Page to respond to 
the needs of patients and health care providers. This web page will 
contain emerging information for both previously and newly approved 
drugs about possible serious side effects or other safety risks. This 
information may alter the benefit/risk analysis of a drug for some 
patients, and affect patient selection or monitoring decisions. FDA is 
also improving communication through more widespread development of 
Healthcare Professional and Patient Information Sheets.
    Healthcare Professional Information Sheets are one-page information 
sheets for healthcare professionals for all new molecular entities as 
well as some other drugs (e.g., drugs on FDA's Drug Watch and all drugs 
with Medication Guides (FDA-approved patient labeling). The information 
sheets will contain the most important new information for safe and 
effective product use, such as known and potential safety issues based 
on reports of adverse events, new information that may affect 
prescribing of the drug, and the approved indications and benefits of 
the drug. Patient Information Sheets are one-page information sheets 
for patients containing new safety information as well as basic 
information about how to use the drug in a consumer friendly format.
    Finally, it is important to recognize that, as Dr. Janet Woodcock 
emphasized before the Senate Health, Education, Labor and Pensions 
Committee last March, another significant issue is that once a label 
change is made, old labels in paper form are still in distribution and 
it takes time to get newer labels in circulation. Dr. Woodcock 
testified that the new strategy of posting drug safety information 
sooner using the Drug Watch mechanism will help alleviate this concern 
because it will enable the FDA to get information directly to the 
people who need it in a more timely manner. We are confident that the 
new drug safety actions we are implementing will help ensure that 
consumers and healthcare practitioners have access to the most recent 
safety information about drug products.
    Question. How do you respond to the findings of this study?
    Answer. There is a common misconception that FDA issued new 
regulations in 1997. In fact, that is not the case. As a result of the 
changing social, health, and marketing environments, FDA issued 
guidance clarifying existing regulations governing how sponsors could 
comply with the requirements for presenting risk information.
    Existing regulations require that drug advertisements not be false 
or misleading. FDA closely monitor all prescription drug promotion 
including direct-to-consumer (DTC) promotion. For most drugs, there is 
no requirement that manufacturers submit promotional pieces to FDA for 
review prior to use. As a result, FDA often reviews promotional pieces 
at the same time as they are used in the public domain to promote the 
drug. When FDA finds that promotion is misleading, FDA works to ensure 
that the promotion ceases, typically by issuing enforcement letters, 
known as untitled letters and Warning Letters.
    Overall, the results of the study that you cite corroborate one of 
the primary findings of FDA's research on DTC promotion--that DTC 
advertising has positive and negative outcomes. Specifically, higher 
prescribing rates were seen among those patients who showed symptoms of 
the relatively more ambiguous adjustment disorder and requested 
prescription medication than those who did not. However, when patients 
presented with the symptoms of major depression, their requests 
resulted in more of the acceptable steps in the care for major 
depression, the clearer of the two disorders to diagnose.
    FDA's own work has examined this issue in research on the impact of 
DTC advertising on the doctor-patient relationship. In our study 
sample, FDA research showed that 32 percent of patients asked about a 
prescription drug. Of this proportion of responses, 49 percent reported 
that they received the drug they had asked about (51 percent did not 
get the drug they asked for). Forty-one percent said they received 
advice to change diet or behavior, and 34 percent said they received a 
prescription for another drug. FDA's final report of its three surveys 
entitled Patient and Physician Attitudes and Behaviors Associated with 
DTC Promotion of Prescription Drugs can be found online at http://
www.fda.gov/cder/ddmac/researchka.htm.
    FDA's physician data showed that when patients asked for a specific 
brand, 64 percent of primary care physicians and 46 percent of 
specialists prescribed the requested drug (i.e., 36 percent and 54 
percent did not provide requested drug). The most common reasons 
reported for not prescribing a requested drug were that a different 
drug was more appropriate or the drug was not right for the patient. Of 
those physicians who recalled a patient asking about a prescription 
drug, 88 percent reported the patient had the condition the drug 
treats.
    Question. Do you believe that doctors are commonly prescribing 
medication that may not be necessary due to increased public requests? 
Do you believe this is a public health issue?
    Answer. The issue of inappropriate prescribing predates Direct to 
Consumer or DTC, TV advertising. Of note, it is arguably most 
problematic for antibiotics, a class of drugs that is very rarely 
advertised DTC.
    Patients do ask about prescription medications, but DTC advertising 
is not the primary driver of those requests. FDA survey research shows 
that among patients who had been to their doctor in the last 3 months, 
approximately 4 percent reported that they made an appointment because 
they wanted a prescription for a product they had seen advertised.
    Physicians use their clinical judgment when deciding to prescribe 
or not prescribe. The simple act of a patient requesting treatment 
should not automatically trigger the presumption that the request is 
inappropriate. The question is when we should give deference to 
clinical expertise and let science be the final arbiter of 
``appropriateness.''
    Question. How much money is allocated in the FDA budget to be spent 
on monitoring of drug advertisements?
    Answer. An estimated $1,948,000 is planned in the FDA 2005 budget 
and an estimated $2,140,000 is planned in the FDA 2006 budget for 
monitoring of drug advertisements.
    Question. What role is FDA playing in trying to ensure that drug 
advertisements include appropriate information regarding potential 
benefits, warnings and side effects?
    Answer. The Division of Drug Marketing, Advertising, and 
Communications, or DDMAC is responsible for regulating prescription 
drug promotion. DDMAC's mission is to protect the public health by 
insuring that prescription drug information is truthful, balanced, and 
accurately communicated. DDMAC accomplishes its mission through a 
comprehensive surveillance, enforcement, and education program, and by 
fostering optimal communication of labeling and promotional information 
to both health care professionals and consumers.
    Based in part on discussion at FDA's September 22-23, 2003 public 
meeting, FDA developed guidance to encourage advertising that provides 
understandable risk and benefit information appropriate to support 
conversations between consumers and their health care providers. On 
February 4, 2004, the agency issued three draft guidance documents, 
addressing: Options for presenting risk information in consumer-
directed print advertisements for prescription drugs, to encourage use 
of consumer-friendly language and formats; criteria FDA uses to 
distinguish between disease awareness communications and promotional 
materials, in an effort to encourage manufacturers to disseminate 
disease educational messages to the public; and, a manner in which 
restricted device firms can comply with the rules for disclosure of 
risk information in consumer-directed broadcast advertising for their 
products, to help encourage compliance in this emerging area of medical 
product promotion.
    Question. Do you believe the FDA needs to play a greater role in 
drug advertisement monitoring? Is more money required for these 
activities?
    Answer. The pharmaceutical industry spends more than $20 billion a 
year on promoting prescription drugs to healthcare professionals and 
consumers. Expenditures on DTC promotion has increased from $791 
million in 1996 to over $4 billion in 2004.
    FDA's monitoring program includes reviewing promotional pieces that 
are submitted at the time of initial use and monitoring companies' 
websites, TV and print DTC advertisements, medical journal 
advertisements, and promotion in the exhibit halls at medical 
conferences. Any violations noted in promotion are prioritized using a 
risk-based approach so that the most serious violations are addressed 
first. FDA issues untitled and warning letters to address violations. 
These letters almost always result in the cessation of the misleading 
promotion. In the case of more serious violations that are addressed 
with Warning Letters, the company agrees to disseminate remedial 
information to correct the misleading messages presented in the 
violative promotion. In addition, FDA uses its resources to encourage 
voluntary compliance by companies to the regulations. These efforts 
include providing advisory comments to companies when requested, and 
for accelerated approval drugs, issuing guidance and conducting 
outreach programs.
    Question. What percentage of drug advertisements are seen and 
approved, even unofficially, by FDA before they are put on television? 
Do you believe this percentage should be higher? How often does FDA 
send out warning letters regarding drug advertisements, and how 
effective is this method of monitoring?
    Answer. There were 143 proposed Direct to Consumer, or DTC 
broadcast ads submitted to the Division of Drug Marketing, Advertising 
and Communication for comment and 485 DTC broadcast ads disseminated in 
2004. However these numbers cannot be simply used to calculate a 
percentage of ads that are seen before they are disseminated because of 
the following factors. Companies sometimes choose not to proceed with 
specific ads after they receive comments from FDA. In addition, some of 
the disseminated ads are different versions of the proposed ads. It is 
not unusual for a company to generate several ads during the same 
promotional campaign.
    FDA issued 2 Warning Letters and 8 untitled letters in 2004 for DTC 
promotion. These letters are effective in stopping the misleading 
promotion. In addition, the Warning Letters resulted in the company 
disseminating remedial ads to correct the misleading promotional 
messages contained in the cited ads.

        COUNTERTERRORISM/FOOD AND AGRICULTURE DEFENSE INITIATIVE

    Question. Since fiscal year 2002, funding for FDA's 
counterterrorism activities, including regular increases and emergency 
supplemental funding, has increased from approximately $7 million to 
$244 million, an increase of $237 million in less than 4 years, 
including a requested increase of more than $30 million in fiscal year 
2006. While I don't doubt the necessity of increased funding and 
activities related to counterterrorism, I do believe that it is 
imperative that we maintain tight control and knowledge over how these 
funds are being spent, and specifically how they are benefiting and 
keeping the public safe.
    Is all of the $244 million funding requested for counterterrorism 
this year part of the President's Food and Agriculture Defense 
Initiative? If not, how much is considered a part of this initiative?
    Answer. The fiscal year 2006 counterterrorism (CT) request includes 
$65 million for continued implementation of Homeland Security 
Presidential Directive 9, also known as HSPD-9, relating to ``Defense 
of United States Agriculture and Food.'' This includes a $30 million 
increase above the initial fiscal year 2005 HSPD-9 implementation of 
$35 million. The balance of the $244 million was provided to FDA prior 
to the issuance of HSPD-9 in February 2004 and funds a number of 
initiatives and efforts supported by Congress. These includes FTE hired 
for field operations under the fiscal year 2002 Supplemental; 
counterterrorism research, including the food defense research mandated 
by section 302 of the Bioterrorism Act; vulnerability assessments to 
identify high priority products and likely threat agents; 
countermeasures to protect the public from harm caused by a terrorism; 
and physical security for FDA facilities, including Agency 
laboratories.
    Question. How is FDA working with other agencies on FADI? What is 
the FDA's proportion of the funding? Is it your belief that other 
agencies are paying a proportionate share of their cost for FADI, and 
how is that determined? Who makes that determination?
    Answer. FDA is working with the USDA/FSIS, Department of Homeland 
Security,
    White House Homeland Security Council, and the intelligence 
community to implement the initiative. We believe the fiscal year 2006 
President's budget appropriately reflects funding levels government-
wide to implement the initiative. Section 26 of HSPD-9 appears below 
and describes the budget process for implementing the initiative.
    Budget
    (26) For all future budgets, the Secretaries of Agriculture, Health 
and Human Services, and Homeland Security shall submit to the Director 
of the Office of Management and Budget, concurrent with their budget 
submissions, an integrated budget plan for defense of the United States 
food system.
    Question. Please provide the total amount of funding transferred to 
other agencies, and specifically how this funding will be used.
    Answer. The agency anticipates that a portion of the $3 million 
requested in fiscal year 2006 for food defense may be made available to 
Department of Homeland Security as part of the biosurveillance 
initiative. The funds will be used to integrate FDA's food defense 
biosurveillance systems with the Department of Homeland Security. Funds 
also will be used to support staff sent to the National biosurveillance 
analysis center to provide technical expertise to DHS led information 
integration and analysis efforts.
    Question. When will FADI and the other FDA counterterrorism 
initiatives be fully implemented? Should the Committee expect continued 
requests for increases in the years to come?
    Answer. The U.S. Government's counterterrorism initiatives, 
including FDA's efforts, are anticipated to continue in the near term 
and will be re-evaluated, as appropriate, based on future intelligence 
and threat assessments conducted by the intelligence and homeland 
security officials in collaboration with FDA and other Federal 
agencies. Therefore, it would be difficult to predict a meaningful 
timetable for full implementation of counterterrorism initiatives by 
FDA or any other agency. If the $30 million request for food defense is 
fully funded, we anticipate that most out-year requirements can be 
funded with recurring base funds. Below is specific information on our 
request for enabling the agency to protect the food supply.
    [The information follows:]

                        COUNTERTERRORISM FUNDING

FERN--$20.0 million
    FERN, which is managed by FDA's Office of Regulatory Affairs, or 
ORA, is a multiyear effort to establish a comprehensive network of 
Federal and State laboratories across the United States that will 
enable FDA to test thousands of food samples within a matter of days in 
the event of an act of terrorism or other emergency.
    The requested increase, in conjunction with base funding, will 
provide an additional 19 FDA-funded State laboratories, adding to the 
six that were funded in 2005 and to the 10 FDA laboratories that are 
already up and running. Currently, 99 labs in 44 States and Puerto Rico 
have satisfactorily completed the FERN Laboratory Qualification 
Checklist, which provides vital information to determine if a lab meets 
the criteria for participation in FERN and is eligible for Federal 
funding.
    These funds will also permit FERN's National Program Office to 
manage the laboratory response in the event of a food related emergency 
and coordinate the FERN support programs which provide validated food 
testing methods, proficiency testing for laboratories, electronic 
communications, and training programs for laboratory personnel.
    FERN, developed in accordance with HSPD-9, integrates the Nation's 
laboratory infrastructure to detect and identify biological, chemical 
or radiological threat agents in food at the local, State, and Federal 
levels. Its primary objectives include prevention (Federal and State 
surveillance sampling programs); preparedness (strengthen laboratory 
capacity and capabilities); response (surge capacity to handle 
terrorist attacks or a national emergency involving the food supply); 
and, recovery (support recalls, seizures, and disposal of contaminated 
food to restore confidence in the food supply). FERN resources are 
leveraged by collaborating and coordinating with other lab networks 
including the Laboratory Response Network (LRN) and the National Animal 
Health Laboratory Network.
    Below is FDA's plan to fully implement FERN. For specific funding 
information for FSIS, please see the USDA/FSIS Budget Submission 
transmitted to this Subcommittee.

                                                      FDA TOTAL LABORATORY CAPABILITY DISTRIBUTION
                                                            [Dollars in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Fiscal year                      Projected
                                            Fiscal year     Fiscal year        2006         Fiscal year       outyear        Two year       Total State
                                            2005 output    2005 enacted     cumulative     2006 request     cumulative        outyear          labs
                                                                \1\           output                          output       estimate \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Microbiological Screening & Confirmatory  ..............  ..............  ..............  ..............  ..............  ..............  ..............
 \3\....................................
Chemical................................               6            $9.9              20           $22.4              36           $46.6              36
Radiological............................  ..............  ..............               5             5.9              14            16.3              14
Food Lab Response and Methods Validation/ ..............             5.0  ..............             6.6  ..............            13.9  ..............
 Proficiency Testing/Training...........
                                         ---------------------------------------------------------------------------------------------------------------
      TOTAL.............................               6            14.9              25            34.9              50            76.8              50
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2005 Request includes enacted rescissions.
\2\ Outyear estimates reflect projected costs to complete FDA's 50 FERN labs, based on a 2 year estimate. Amounts requested in future budgets are
  contingent upon availability of funds. Once the 50 FERN labs are complete, FDA estimates that the FERN cost will be limited to annual recurring needs.

\3\USDA funded.

Food Defense Research--$5.574 million
    This applied and targeted research initiative addresses the 
significant need for research funding to ensure our ability to detect 
or inactivate a broad range of agents that could pose serious threats 
to the food supply. These funds will:
  --Expand and accelerate the food defense research plan by identifying 
        additional agent/commodity combinations which will effect the 
        relevant food defense research thrusts of methods development, 
        agent characteristics, prevention technologies, and dose-
        response relationships;
  --Provide the required base support from FDA for the microbial 
        forensics program that the Interagency Agreement with the DHS/
        National Biodefense Analysis and Countermeasures Center 
        specifies; and,
  --Help to maintain the foods defense research enterprise 
        infrastructure (equipment maintenance and repair, BSL-3 labs, 
        select agent inspections, animal care inspections, and LRN/FERN 
        methods validation labs).
    In the food defense area, mission-critical knowledge gaps are 
addressed through an integrated portfolio of intramural, extramural, 
and consortia-based programs, which address the need to anticipate, 
prevent, detect, respond, and recover from a terrorist attack on the 
food supply. This requires research activities in:
  --Knowledge of the behavior and susceptibility of the population to 
        microbiological, chemical, radiological, and biologically-
        derived toxic agents in priority vulnerable foods during the 
        stages of production, distribution, marketing, and preparation;
  --Identification and/or development of new techniques for 
        ``shielding'' priority vulnerable foods through the development 
        of new prevention and/or security technologies;
  --Development of enhanced sampling and detection methods for priority 
        agents in vulnerable foods including field deployable and in-
        line sensor-based screening, analytical, and investigational 
        (forensic) technologies;
  --Development of effective methods for ensuring that critical food 
        production and manufacturing infrastructure can be rapidly and 
        effectively decontaminated if a terrorism event were to occur;
  --Assessments of vulnerabilities of foods and identifying areas where 
        enhancements in preventive measures could increase the security 
        of the food supply, and,
  --Knowledge of consumer behaviors and the critical role consumers 
        play in preventing illness associated with an attack on the 
        food supply, to ensure timely and relevant information about 
        threats and/or an attack is understood by consumers.
Crisis Management: Emergency Operations Network Project and Incident 
        Management System--$1.5 million
    The request also supports the Emergency Operations Network/Incident 
Management System Project to provide a comprehensive system for 
managing emergencies and related incidents in FDA's centers and field 
offices. The development of this system conforms to HSPD-5, 
``Management of Domestic Incidents'', and the establishment of a 
National Incident Management System. The Emergency Operations Network 
Incident Management System (EON IMS), managed by the FDA Office of 
Crisis Management, is the central hub for exchanging and relaying all 
emergency-related information into, within, and outside of FDA. One of 
its overarching objectives is to integrate multiple data streams from 
other electronic systems--such as the FERN, eLEXNET, Epidemic 
Information Exchange, and from FDA laboratories/investigators and 
external agencies--into a coherent fashion during critical decision 
points. This improved information management will create a safety net 
that significantly reduces the probability that terrorists will achieve 
their aims and minimize the impact of these threats if they occur. The 
EON IMS is important in all emergencies and exercises requiring 
efficient receipt and dissemination of large volumes of information to 
our stakeholders, including the public and other Federal and State 
agencies. This system will provide a web-based connection for all FDA 
offices and our partners, through which accurate real-time information 
about various incidents can be shared and discussed.
    The EON IMS, which is critical for the agency to manage, plan for, 
and respond to emergency situations, has three components: incident 
tracking and contact management, a collaboration and knowledge 
management tool for meetings and document management, and a Geographic 
Information System for mapping and impact assessment.
    By developing and incorporating agency-wide guidance in the EON 
IMS, FDA will ensure that its emergency response is uniform, 
consistent, and coordinated. Participants coordinating an emergency 
will be able to provide input and access real-time data regarding a 
specific emergency, Agency operating plans and procedures, contact 
databases, and analysis tools which will enhance the agency's 
capability of responding in the most efficient way possible.
Biosurveillance/NBIS--$3.0 million
    The Department of Homeland Security is leading the development of 
the National Biosurveillance Integration System (NBIS), which is 
intended to integrate systems that monitor health, environment, and 
intelligence information in order to provide early detection of 
threats, guided responses to events, and information sharing among 
agencies. eLEXNET and FERN data capture system, have been identified as 
a food sector data system that would address an unmet need in the DHS-
led information integration effort that is a candidate system to 
participate in NBIS. FDA's ORA will contribute to the Administration's 
Bio-Surveillance Initiative by developing nationally recognized 
standards for data messaging and communication in the health area and 
by establishing the appropriate connectivity with the NBIS. FDA also 
will provide its technical expertise by providing staff to the national 
biosurveillance analysis center at DHS.
    Question. Can you tell us what FDA has achieved and what work 
remains to be done? How does FDA measure success in achieving these 
goals?
    Answer. As stated in the previous answer to a question, full 
implementation of the Administration's counterterrorism initiatives, 
including FDA's efforts, is an on-going activity that depends on 
current as well as future intelligence and threat assessments. 
Therefore it we cannot accurately predict a timetable for full 
implementation. In the area of food defense, however, the Presidents 
budget places high priority on fully developing the Food Emergency 
Response Network so that there is adequate lab testing surge capacity 
in the event of a terrorist attack on the food supply, food defense 
research so that we have the ability to identify threats and the 
science tools to address them, crisis management, and biosurveillance. 
The goal of FERN is to establish 100 State laboratories, 50 of which 
are chemical and radiological laboratories funded by FDA and the 
remaining 50 are microbiological laboratories funded by USDA/FSIS. The 
fiscal year 2006 budget fully funds 25 of the planned 50 FDA FERN State 
labs. We would be happy to provide specific examples of FDA's on-going 
CT activities and accomplishments.
    [The information follows:]

                FDA'S CT ACTIVITIES AND ACCOMPLISHMENTS

Foods
    Working with industry to reduce threats and contain outbreaks of 
foodborne illness.--FDA has issued new industry guidance on security 
measures, and has encouraged specific additional industry security 
measures in response to the increased threat level. The guidance will 
help food producers, warehouses, importers, stores, restaurants, and 
other food establishments minimize the risk that their food will be 
subject to terrorism.
    Increasing risk-based surveillance of domestic and imported food.--
FDA has increased risk-based inspections of domestic food facilities 
and sampling and lab analysis of foods produced here and abroad.
    Expanding the Food Emergency Response Network.--With the U.S. 
Department of Agriculture, FDA is designing a network of labs that will 
help prevent and respond to chemical, biological or radiation 
contamination of our Nation's food supply.
    Implementing the 2002 Bioterrorism Act.--Under the Public Health 
Security and Bioterrorism Preparedness and Response Act of 2002, FDA 
has developed and published regulations requiring the estimated over 
400,000 domestic and foreign food facilities to register with FDA. This 
will allow FDA to contact food facilities in the case of a bioterrorism 
or food-borne illness incident. Also, the new regulations require 
importers to tell FDA in advance about food shipments, improve FDA's 
ability to detain food, and require food companies to keep records that 
will help FDA address a bioterrorism or food-borne illness incident. To 
implement the prior notice regulation and screen intelligence data on 
food imports, the agency also established the Prior Notice Center, 
which is co-located with the Customs and Border Protection's National 
Targeting Center.
    Increasing ability to quickly identify outbreaks of foodborne 
illness.--FDA is working with the U.S. Centers for Disease Control and 
Prevention to ensure that outbreaks or unusual patterns of illness are 
investigated quickly.
    Increasing participation in the first Internet-based food safety 
system.--FDA's goal is to have 105 laboratories in fiscal year 2006. 
Currently there are 95 laboratories around the country participating in 
eLEXNET (Electronic Laboratory Exchange Network). This shared 
electronic data system consolidates and shares microbial food 
contamination findings among Federal, State and local laboratories.
    Medical Products
    Helping to speed development of new emergency treatments and 
diagnostic tests.--FDA is adapting its review processes and working 
vigilantly to speed the development of products to diagnose, treat or 
prevent outbreaks from exposure to anthrax, smallpox, plague, and other 
biological, chemical and radiological agents that could be used by 
terrorists. FDA is even assuming many of the responsibilities normally 
carried out by drug sponsors. Specific efforts to date have focused on:
  --Products to reduce the effects of radioactive elements;
  --New antitoxins to prevent or treat botulism and anthrax;
  --Novel vaccines to prevent smallpox;
  --Antimicrobials to treat pneumonic plague;
  --Approval of Levaquin (levofloxacin) for inhalational anthrax post-
        exposure prophylaxis in adults;
  --Approval of new labeling for Cipro (ciprofloxacin), based on the 
        information obtained from the CDC's program evaluation 
        conducted after the anthrax events of October 2001;
  --A number of generic ciprofloxacin drug products have been approved, 
        which will ensure an adequate supply of product should a 
        biologic event occur.

Speeding Availability of Critical Medical Products
    FDA has made it possible for critically important treatments and 
diagnostic tests to be made rapidly available for use during 
emergencies. Flexible, creative ways are being found to share 
information about these new products (for example, videos for patients 
who might receive smallpox vaccine).

Providing Researchers With Early Guidance and Assistance
    FDA is providing guidance early on to researchers so that 
discoveries made in the laboratory can be more quickly turned into 
counterterrorism products available to first responders, health 
professionals and the military. FDA published the Draft Guidance for 
Industry: Vaccinia Virus-Developing Drugs to Mitigate Complications 
from Smallpox Vaccination.

Relying on Animal Efficacy Studies
    Under a new regulation, FDA can now approve medical treatments 
against chemical, biological, radiological, or nuclear agents based on 
evidence of effectiveness from animal studies when human studies are 
not ethical or feasible. Human data supporting the safety of such 
products is still required.

Ensuring an Adequate Stockpile of Emergency Medical Pproducts
    FDA is working with the CDC's Strategic National Stockpile, as well 
as with industry, the National Institutes of Health, the Defense 
Department, and foreign governments to ensure the safety and 
effectiveness of stockpiled vaccines and other medical products so that 
the products are available for use during terrorist attacks. FDA and 
CDC formed a Post-event Surveillance Working Group and developed a plan 
for the collection of post-event safety and outcome information on 
medical countermeasures deployed from the SNS and distributed due to a 
mass casualty situation caused by a terrorist event.

Offering Research Grants and Other Funding
    FDA continues to facilitate the ongoing human trials in plague in 
Africa and monkey studies in pneumonic plague, funded in previous years 
through interagency agreements with the CDC and NIAID, respectively. 
Concomitantly with the human plague studies, an investigational rapid 
plague diagnostic test kit is being evaluated. Previously funded trials 
are ongoing to study the impact of long-term use of antibiotics that 
could be used for post-exposure prevention in healthy adults and in 
special populations (such as pregnant women).

Working With the Military
    FDA has worked with the Joint Chiefs of Staff to help obtain 
critical medical products for combat readiness. It has helped U.S. 
Special Forces obtain medical countermeasures for airborne hospitals 
used in evacuating battlefield casualties. It has provided intensive 
consultation and review to help make available needed investigational 
and licensed medical products such as antisera and vaccines. FDA 
approved pyridostigmine bromide for combat use by U.S. military 
personnel to protect them from the lethal effects of the nerve gas 
Soman. The agency also cleared a high-tech battlefield wound dressing 
that can stop massive bleeding within minutes and a decontamination 
lotion for use by the military to remove or neutralize chemical warfare 
agents and other toxins from the skin, preventing serious burns and 
death.

Protecting Children
    FDA has been providing guidance to parents and health professionals 
when they use antibiotics and other drugs to treat children and 
pregnant and nursing women stricken by bioterrorist attacks. The advice 
covers such areas as:
  --Proper dosage,
  --Adverse effects, and
  --How to pulverize the tablets and mix them with foods or drinks to 
        give to children in an emergency.
    FDA has now approved pediatric dosage forms of the AstroPen 
atropine autoinjector to treat children, from infants to adolescents, 
exposed to certain nerve agents or organophosphate insecticides.
    Two forms of potassium iodide, appropriate for pediatric use, have 
been approved as a thyroid blocking agent for use in radiation 
emergencies. ThyroShield is an oral solution, and ThyroSafe Tablets are 
half the strength of previously approved tablets. ThyroSafe is also 
scored in quarters for dosing very young children.

Detecting Bioterrorism Agents
    FDA is helping develop methods to detect biological agents that 
terrorists might use in an attack.

Blood Donations
    Keeping the blood supply safe.--FDA has provided guidance to blood 
donation centers and healthcare facilities on prudent measures to 
reduce any possible risk of transmitting anthrax through blood donated 
by people who may be infected with the disease.
    Radiation Protection
    Helping companies develop drugs to prevent and treat radiation 
exposure.--Radiogardase (insoluble Prussian blue) capsules were 
approved to treat people internally contaminated with radioactive 
Cesium-137 or Thallium. Pentetate calcium trisodium injection (Calcium 
DTPA) and pentetate zinc trisodium injection (Zinc DTPA) were approved 
for the treatment of internal contamination with plutonium, americium, 
or curium. FDA also posted a draft guidance on ``Internal Radioactive 
Contamination--Development of Decorporation Agents.'' This guidance to 
industry is to encourage the development of drugs that help eliminate 
radioactive materials from the body.
    Reviewing radiation devices used against terrorism.--FDA is 
monitoring the safety and effectiveness of radiation-emitting devices 
used to detect potential security threats in airports and other 
locations, devices used to destroy biological agents released in a 
terrorist attack, and used to treat victims of radiation exposure.

Veterinary Products
    Increasing security measures for animal feed.--FDA is working with 
other government agencies, the animal feed industry and other producer 
groups to minimize the risk of terrorist attacks on feed for animals 
that are raised for human food.
    Facilitating the supply of critical animal drugs.--FDA is ensuring 
the availability of veterinary drug products to meet emergency needs.

Cosmetics
    Working with the cosmetic industry to reduce threats.--In November 
2003, FDA issued final guidance to industry on security steps they can 
take to help ensure that their products are secure against terrorism.
    Field Operations
    Improving inspections.--Thanks to increased bioterrorism funding 
from Congress, FDA has hired over 650 new inspectors and other field 
personnel to keep watch on imports and other avenues our enemies might 
try to use to contaminate our food or tamper with other FDA-regulated 
products. FDA has also increased inspections of facilities that 
manufacture medical products that could be used in response to a 
terrorism threat.
    Upgrading laboratories.--FDA has upgraded its laboratories to 
handle the increased number of sample analyses. Lab scientists are 
developing rapid methods for detecting bacterial and viral food 
contaminants.
    Scrutinizing imports.--FDA has expanded its coverage to an 
additional 45 ports of entry where there are significant shipments of 
FDA-regulated products. The agency is also strengthening its import 
information systems to improve targeting of suspect products. The links 
between import and domestic information are being tightened so imported 
products can be better traced in this country.
    Toxicological Research
    Enhancing research facilities and technologies.--FDA is developing 
a Level 3 lab at its National Center for Toxicological Research to 
safely allow analysis and research on select agents. The lab will be 
used to test food samples that may be contaminated by biological, 
chemical or radiological means. The center is continuing research to 
identify and characterize biological warfare agents using technologies 
involving DNA and proteins.
    Developing methods to detect explosives.The center is developing 
sensor technologies to detect nitrogen-based explosives in airline 
cargo by refining its patented methodology currently used to detect and 
identify deteriorating food.

                                 NARMS

    Question. How much money is in the FDA fiscal year 2006 budget 
request for NARMS? How much of that money will be transferred to CDC, 
to USDA, and how much will be used to collect and test retail meat 
samples?
    Answer. At this time, FDA has not determined the exact amount of 
NARMS funding for CDC and USDA for fiscal year 2006 but plans to make 
decisions in the Fall of 2005. FDA believes that all three arms are 
integral to the success of the NARMS program and to achieve the 
benefits envisioned at its inception and agreed upon by all three 
agencies.
    Question. What is the status of the report requested in the fiscal 
year 2005 Senate Report regarding the distribution of NARMS funding 
between USDA, FDA and CDC? By what date can we expect to receive this 
report, which is currently overdue?
    Answer. The requested NARMS report is currently in the clearance 
process.

                       FDA OFFICE OF DRUG SAFETY

    Question. As you are aware, the FDA Office of Drug Safety has been 
under significantly increased scrutiny in recent months due to the 
removal of several drugs such as Vioxx and Bextra from the market and 
high levels of media coverage. Part of FDA's response to this has been 
to conduct a 3 day panel on Cox-2 Inhibitors, the creation of a new 
Drug Safety Oversight Board, and increased efforts to ensure that 
adverse events are properly monitored and the public is aware of risks 
associated with different drugs, such as the creation of a new Drug 
Watch web page. The fiscal year 2006 budget request includes an 
increase of $5 million for the Office of Drug Safety, bringing total 
funding to $22.9 million. Although this is nearly a 25 percent increase 
in funding, in a budget that totals nearly $1.5 billion, $22.9 million 
seems like a small amount for a subject under such scrutiny and facing 
so many difficulties. Further, many of the new efforts recently 
announced by the FDA appear as though they will be under the 
jurisdiction of the Office of Drug Safety.
    Please provide a chart showing specifically how much all of the new 
activities announced on February 15 regarding drug safety will cost, 
and from where that funding will come.
    Answer. We believe that additional funding beyond what is in our 
fiscal year 2006 budget request would significantly improve our 
oversight of drug safety. Additional funding would enable the Agency to 
increase its access to large population-based databases and to develop 
software tools to manage and analyze the data. The following 
information provides background on the current postmarketing 
surveillance system and explains why we believe that system should be 
expanded.
     On February 15, 2005, HHS Secretary Leavitt and Acting FDA 
Commissioner Crawford unveiled a new, emboldened vision for FDA that 
will promote a culture of transparency, openness, and enhanced 
oversight within the Agency. As part of this vision, FDA plans to 
create a new Drug Safety Oversight Board or DSB to provide independent 
oversight and advice on the management of important drug safety issues 
and to manage the dissemination of certain safety information through 
FDA's web site to health care professionals and patients.
    Under this proposal, FDA plans to enhance the independence of 
internal deliberations and decisions regarding risk/benefit analyses 
and consumer safety. The DSB will oversee the management of important 
drug safety issues within CDER. The DSB will include individuals from 
FDA, as well as medical experts from other HHS agencies and government 
departments, such as the National Institutes of Health and Department 
of Veterans Affairs. Individuals on the Board who have conducted the 
primary review of data or served as deciding officials for any 
regulatory action under consideration will be recused from voting on 
issues concerning those particular drugs. CDER's Deputy Director will 
serve as the Chair of the DSB. The DSB also may consult with other 
medical experts and representatives of patient and consumer groups. 
CDER is updating its Manual of Policies and Procedures or MAPP, to 
reflect the organizational structure, roles, and responsibilities of 
the DSB in CDER. Among other responsibilities described in the MAPP, 
the DSB and its staff will; Identify, track, and oversee the management 
of important drug safety issues; Adjudicate organizational disputes 
concerning the management of drug safety issues; Establish policies 
regarding management of drug safety issues in CDER; Select drugs to be 
placed on Drug Watch (described below) and update their status 
(including deciding to remove drugs from Drug Watch) as appropriate; 
Oversee the development of patient and professional information sheets 
in CDER; Track important emerging safety issues and ensure that they 
are resolved in a timely manner; and Ensure that CDER decisions about a 
drug's safety benefit from the input and perspective of experts within 
and outside FDA who have not conducted the primary review or served as 
a deciding official in the ongoing pre-market evaluation or post-market 
surveillance activities with respect to that drug.
    FDA also plans to increase the transparency of the Agency's 
decision-making process by establishing new and expanding existing 
communication channels to provide drug safety information to the 
public. These communications will help ensure that established and 
emerging drug safety data are quickly available in an easily accessible 
form. The increased openness will enable patients and their health care 
professionals to make better-informed decisions about individual 
treatment options.
    One communication mechanism the Agency is proposing is a new Drug 
Watch webpage that would include emerging information about possible 
serious side effects or other safety risks for previously and newly 
approved drugs. Per our proposal, this resource would contain important 
information that might affect patient selection or monitoring 
decisions. The web resource might also contain information about 
measures that patients and practitioners could take to prevent or 
mitigate harm. Once implemented, this information resource will 
significantly enhance public knowledge and understanding of safety 
issues by discussing emerging or potential safety problems, sometimes 
even before FDA has reached a conclusion that would prompt a regulatory 
action.
    We are also intensifying our current efforts to provide the public 
with the most important information for the safe and effective use of 
drugs in patient-friendly language. We are doing this through two 
tools: Patient Information Sheets and Healthcare Professional 
Information Sheets.
    Patient Information Sheets.--Are intended to convey critical facets 
of a product's approved labeling in lay terms. These sheets will also 
include a section for ``emerging safety information'' in those 
instances when we determine that there is information on the Drug Watch 
that a patient should consider. This ``emerging safety information'' 
will match the information on the Drug Watch. Information from the Drug 
Watch that is not in the final labeling of the product will be clearly 
identifiable and accompanied by a disclaimer, such as: ``This 
information reflects FDA's preliminary analysis of data concerning this 
drug. FDA is considering, but has not reached a final conclusion about, 
this information. FDA intends to update this sheet when additional 
information or analyses become available.'' Our ultimate objective is 
to develop Patient Information Sheets for all approved drugs, most of 
which will not have an emerging safety section.
    Healthcare Professional Information Sheets.--Are intended to 
highlight the most up-to-date information practitioners may want to 
consider in prescribing drugs for their patients. We ultimately intend 
to develop these sheets for all new molecular entities as well as some 
other drugs. This is not a new approach. When available, the highlights 
section of a product's approved labeling will be used to develop the 
Healthcare Professional Information sheets.
    We would be happy to provide a chart that provides estimates for 
costs associated with the activities announced by Secretary Leavitt in 
February.
    The activities described below were announced in February 2005 and 
we have an estimate of the total FTE resources that we plan to use to 
conduct these additional drug safety activities in fiscal year 2005 and 
fiscal year 2006. However, because we have just launched these new 
activities--the Drug Safety Oversight Board, the Drug Watch Web Page, 
and Patient and health care professional information sheets--we do not 
have an historical basis to definitively estimate the share of 
resources that each of these activities will command from the total 
resources allocated to perform the activities announced in February, 
2005. For example, we cannot reliably predict whether the work 
associated with the Drug Watch Web Page will be more or less demanding 
compared to the work to support the Drug Safety Oversight Board or to 
prepare the information sheets. However, we have committed a total of 8 
FTEs in fiscal year 2005 and 4 additional FTEs in fiscal year 2006 (for 
a cumulative commitment of 12 FTEs) to these three areas.
    [The information follows:]

                                             DRUG SAFETY ACTIVITIES
----------------------------------------------------------------------------------------------------------------
                                                   Budgeted from current fiscal    Projected additional funding
                                                     year 2005 base resources     with fiscal year 2006 increase
           New Drug Safety Activities            ---------------------------------------------------------------
                                                    Dollars in                      Dollars in
                                                     millions       Amount FTE       millions       Amount FTE
----------------------------------------------------------------------------------------------------------------
Drug Safety Oversight Board (DSB)...............  ..............  ..............  ..............  ..............
Drug Watch Web page.............................  ..............  ..............  ..............  ..............
Patient and Healthcare Professional Information   ..............  ..............  ..............  ..............
 Sheets and related drug safety communications
 efforts........................................
                                                 ---------------------------------------------------------------
      TOTAL.....................................           $1.08               8          $0.552               4
----------------------------------------------------------------------------------------------------------------

    Question. Do you believe additional funding beyond what is in the 
budget request will be necessary to significantly improve FDA's 
oversight of drug safety?
    Answer. We believe that the funding requested in the fiscal year 
2006 Budget for drug safety oversight, combined with other FDA 
initiatives, will significantly improve our oversight of drug safety. 
Today, FDA's post-marketing risk monitoring and assessment rely 
primarily on two methods of adverse event reporting to the Agency 
through direct, voluntary reporting by health professionals and 
consumers and required reporting by pharmaceutical manufacturers. 
Required reporting by manufacturers is based primarily on reports they 
receive voluntarily from user facilities, healthcare professionals, and 
consumers. In 2003, FDA received more than 370,000 such reports. The 
Agency's medical, statistical, and epidemiological experts use these 
reports to continually evaluate a product's safety profile. Our post-
marketing monitoring programs focus primarily on identifying events 
that were not observed or recognized before approval and identifying 
adverse events that might be happening because a product is not being 
used as anticipated.
    The system has inherent limitations--mainly that it relies on 
healthcare providers being able to recognize and then voluntarily 
report an adverse event. We usually do not know if we are missing 
important problems or whether underreporting is obscuring a problem. 
During the past 7 years, we have made vast improvements in the way we 
manage and analyze this large amount of data. We now use a variety of 
electronic and statistical tools that have increased our ability to get 
information to our safety evaluators in a timely way, but these 
improvements do not address the inherent limitations in the system.
    The United States lacks a systematic approach to monitoring and 
assessing the safety of medicines that are in general use. This fact is 
particularly concerning for newly marketed products. In the case of a 
new drug, the only safety data we have comes from the product's use in 
clinical trials, where small numbers of carefully screened and closely 
monitored patients use a drug for a relatively short time period. The 
clinical trial world is very different from the real world where a drug 
is suddenly available to millions of people who may have multiple 
conditions, may be taking multiple drugs, and may be working with 
multiple healthcare providers. If the United States had a systematic 
approach to monitoring and assessing drug safety, it would contain 
systems to help identify and quantify risks, programs to investigate 
and analyze the risks, and methods to intervene and inform as needed to 
prevent further harm.
    To ensure that the FDA is fulfilling its responsibility to monitor 
the safety of drugs, we can no longer rely on information gleaned 
solely from voluntary reporting. Instead, the FDA needs a drug safety 
system dedicated to the timely collection, triage and analysis of post-
marketing data. Such a Drug Safety Net would have four major 
components. The first component is access to large clinical and drug 
use data sets to help detect adverse events and medication errors and 
to conduct population-based safety studies. In fiscal year 2006, using 
the increased resources requested in the President's budget for drug 
safety activities, we estimate that we will allocate $2.24 million in 
budget authority and $0.4 million in user fees to this first activity. 
The second component is a network of partnerships to increase the power 
to detect problems. In fiscal year 2006, we estimate that we will 
allocate $0.8 million in budget authority and $0.2 million in user fees 
to this second component. The third component is strong analytic tools 
to rapidly identify drug safety signals. In fiscal year 2006, we 
estimate that we will allocate $1.4 million in budget authority and 0.5 
million in user fees for this third component. The fourth component is 
communicating timely and practical information to help healthcare 
providers and consumers make good choices regarding medicines. In 
fiscal year 2006, the estimated allocation for this fourth component is 
$0.5 million in budget authority and $0.2 million in user fees.
    To appropriately assess post-marketing safety of drugs, FDA needs 
access to a wide range of clinical, pharmacy, and administrative 
databases. Given the highly fragmented healthcare system in the United 
States, there is no single healthcare database that the Agency can rely 
on to monitor drug adverse events. It is essential that the FDA have 
access to a wide range of databases to adequately assess drug safety. 
Such databases include: Existing Federal databases, such as those 
maintained by the Center for Medicare and Medicaid Services (CMS), the 
Department of Veterans Affairs (VA), the Department of Defense (DOD), 
the Indian Health Service (IHS); clinical and hospital networks, and 
insurers, for example, health maintenance organizations, preferred 
provider organizations, Blue Cross/Blue Shield; and pharmacy benefit 
management organizations such as Advance PCS, Premier.
    In addition, access to a greater variety and breadth of data will 
give the FDA the opportunity to perform broad epidemiologic studies 
that can examine the risks of adverse events and the risk factors 
associated with these events for individual medicines or drug classes.
    Tools to manage and analyze the large databases described above are 
essential if the value of the information contained therein is to be 
realized. The FDA is currently pilot testing tools such as desktop data 
mining techniques. A much greater effort is needed on the part of the 
FDA, in consultation with experts in government, academia, the private 
sector, and the pharmaceutical industry, to help us realize the 
potential of these data mining and analysis tools.

                                MERCURY

    Question. The fiscal year 2005 Senate Report included language 
encouraging FDA to ``implement an outreach and education effort with 
physicians and other appropriate outlets in order to increase awareness 
among potentially affected consumers, and to measure the effectiveness 
of the efforts on target group behavior and impact on their overall 
consumption of seafood.'' The EPA is currently working to determine and 
outline what safe levels of mercury are.
    What has FDA done in response to the Senate report language? How is 
FDA working with EPA on the mercury issue?
    Answer. FDA and EPA are jointly sponsoring a public education 
campaign to reach women who may become pregnant, pregnant women, 
nursing mothers, and parents of young children about the methylmercury 
advisory. An extensive outreach effort to over 9,000 print and 
electronic media outlets, including outlets that specialize in reaching 
women, has been conducted.
    Information about the advisory has been sent to over 50 
organizations of health care providers to women and children, such as 
the American Academy of Pediatrics, the American Academy of Family 
Physicians, the American College of Obstetricians and Gynecologists, 
and the American College of Nurse Midwives; directors of the Women, 
Infant, and Children, or WIC, program; and all local health 
departments. The advisory has also been distributed through exhibits at 
medical professional association meetings that took place in 2004 and 
will be distributed at similar meetings scheduled during 2005.
    Brochures about the methylmercury advisory have been sent to 
practicing pediatricians, obstetricians and gynecologists, nurse 
midwives, and nurse practitioners and physician assistants specializing 
in pediatrics or obstetrics throughout the country for distribution 
through their offices. These health professionals can order additional 
copies of the brochure, as needed, from FDA and EPA for their patients. 
In November and December of 2004, EPA and FDA were filling additional 
requests for these brochures at a rate of approximately 35,000 
brochures per week.
    An educational program for pregnant women on food safety for use by 
health educators will be launched in spring 2005 that will highlight 
information from the methylmercury advisory. This program will include 
an educational video and a curriculum and will be sent to 35,000 health 
educators working with pregnant women. A special web page for pregnant 
women will be part of the program.
    Special funding has been set aside for community outreach efforts 
in several different geographic locations to insure that the message 
reaches women in special populations at greater potential exposure. 
Examples include Native Americans and certain Hispanic and Asian groups 
who have high fish consumption practices. Some of these projects are 
already underway; others will begin later this year.
    A Federal-State Working Group on the Coordination of Methylmercury 
advisories has been established to examine ways to join the Federal 
advisory with the State advisories as much as possible.
    This outreach campaign will be evaluated through the FDA-USDA 
consumer survey on food safety knowledge, attitudes, and behaviors that 
will be completed in 2005.
                                 ______
                                 

               Questions Submitted by Senator Tom Harkin

                            IMPORTED GELATIN

    Question. Imports into the United States of gelatin and gelatin 
products, such as unfilled capsules, have increased significantly since 
2000. U.S. producers of gelatin products have raised serious questions 
about the safety of the raw materials and manufacturing practices used 
in facilities producing gelatin for shipment to the United States. It 
is my understanding that Food and Drug Administration inspectors have 
not to date inspected any gelatin-producing facilities in developing 
countries.
    In particular, imports of these products from India have increased 
nearly 1300 percent over the period since 2000. In fact, many countries 
bar beef exports from India because of widespread cattle and livestock 
diseases, such as rinderpest and foot and mouth disease. Those diseases 
should not be a problem if the gelatin is produced with modern 
manufacturing practices, but without FDA inspection it could not be 
known what practices and facilities are used in gelatin production in 
India. Further, although the Indian cattle population is deemed to be 
BSE-free by the OIE, that alone would not assure the wholesomeness and 
safety of cattle products and byproducts from India--including gelatin 
produced from cattle bones.
     What criteria does FDA use to determine which overseas food 
processing facilities it should inspect as a condition of shipping to 
the United States and which it should allow to ship products to the 
United States without any inspection?
    Answer. In general, FDA focuses foreign inspections on the same 
high-risk food products highlighted for domestic coverage, and FDA does 
not inspect overseas food processing facilities as a condition of 
shipping products to the United States. The number of foreign 
inspections conducted each year for CFSAN regulated products is 
minuscule compared to the number of firms exporting to the United 
States. For these reasons, it is very important that FDA carefully 
select the foreign firms it inspects. The results of triaging the 
Center's ``databases'' of inspectional information are used to better 
identify the risks associated with particular imported products and 
allow the Center to prioritize and efficiently use resources to inspect 
at the port of entry or for onsite inspections in the identified 
foreign countries. The Center must assure the broadest use of the 
information obtained by carefully selecting the products, firms and 
countries to be as representative as possible.
    Countries are selected if they are significant sources of product 
for U.S. markets or if FDA identifies or suspects there is a food 
safety or security concern that must be further evaluated. Product 
selections focus on products produced commercially and shipped in large 
quantities into the United States or shipped in smaller quantities but 
intended for consumption by vulnerable populations. These inspections 
are considered ``mission critical.''
    Question. By what date can this Committee be assured that FDA will 
have inspected the plants in India from which gelatin shipments to the 
United States are made?
    Answer. FDA does not have the authority to require inspection of 
foreign facilities and the agency must be invited by the country of 
interest to inspect facilities in that country. This process can become 
quite protracted, and requires coordination with the authorities of the 
exporting country. The first step in scheduling inspections of foreign 
food manufacturers is to contact the regulatory agency in India that 
has authority over the firms to be inspected.
    CFSAN has tentatively identified 12 gelatin manufacturing 
facilities in India that it would like to inspect. FDA also hopes to 
inspect some of the bone suppliers to these gelatin manufacturing 
facilities as they are identified. The Indian agency with regulatory 
authority over gelatin manufacturers usually provides a representative 
to accompany the FDA investigator during the inspections.
    FDA has initiated contact with the regulatory agency in India and 
expects to conduct inspections during this fiscal year.

          NATIONAL ANTIMICROBIAL RESISTANCE MONITORING SERVICE

    Question. The National Antimicrobial Resistance Monitoring Service 
(NARMS) is a tool used by three Federal agencies--the Food and Drug 
Administration (FDA), the Department of Agriculture (USDA), and the 
Centers for Disease Control and Prevention (CDC)--to monitor changes in 
antimicrobial resistance in bacterial pathogens.
    In December of 2004, I submitted a request to you for more 
information about the operation of NARMS and the distribution of NARMS 
funds, but I have not received any new information about this important 
program.
    Answer. On March 7th, 2005, FDA sent a response to you addressing 
your request for information about the operation of NARMS and the 
distribution of NARMS funds. We would be happy to provide a copy of 
this letter, for your convenience.
    Question. Have FDA, USDA and CDC planned a meeting to discuss the 
distribution of NARMS fiscal year 2005 funds?
    Answer. Quarterly meetings on NARMS are conducted and the budget is 
one of the items discussed. In addition, FDA is planning an independent 
external review of all three components of the NARMS program including 
human, retail meat, and slaughter, in conjunction with a public 
meeting, June 23-24, 2005, to address sampling issues and how the NARMS 
funds have been spent as well as other issues. If there are any 
particular Senate staff members whom you would like us to invite to 
this meeting, please let us know.
    Question. When will the annual report on NARMS activities for 2002 
and 2003 be prepared and released to the public?
    Answer. FDA published the first annual NARMS retail meat report on 
September 30, 2004. This can be found on line at the NARMS website. See 
http://www.fda.gov/cvm/narms_pg.html. This report provides data on the 
prevalence of antimicrobial resistant foodborne pathogens and commensal 
bacteria among retail meat and poultry samples. The 2003 retail meat 
report is currently in preparation. CDC is responsible for the annual 
report on the human arm of NARMS and USDA for the animal arm of NARMS. 
CDC and USDA annual reports can also be viewed from the NARMS website.
    Question. What was the level of funding for NARMS in fiscal year 
2004, and what are the current expenditures (fiscal 2005) for this 
program?
    Answer. FDA's total funding of NARMS in fiscal year 2004 was $7.6 
millions and $7.3 million in fiscal year 2005. This level reflects both 
the fiscal year 2005 across the board rescission and FDA efforts, 
announced in the fiscal year 2005 Congressional Justification, to find 
efficiencies across FDA programs.
    Question. How are NARMS funds being distributed among FDA, USDA and 
CDC, and what specific activities are being conducted through this 
program?
    Answer: At this time, FDA has not determined the exact amount of 
the National Antimicrobial Resistance Monitoring System, or NARMS, 
funding for FDA, CDC and USDA for fiscal year 2006 but plans to make 
decisions in the Fall of 2005. FDA believes that all three arms are 
integral to the success of the NARMS program and to achieve the 
benefits envisioned at its inception and agreed upon by all three 
agencies. The Agency has continued the retail meat arm of NARMS at FDA. 
Ten participating FoodNet sites collect samples from local grocery 
stores and submit the isolates to the FDA laboratory for antimicrobial 
susceptibility testing. This allows FDA to have a more representative 
picture of the contribution of the food supply to antimicrobial 
resistance and helps sponsor with their antimicrobial drug submissions 
to FDA under GFI#152. In addition, FDA has improved NARMS methods 
including the development of a standardized Campylobacter broth 
microdilution method approved by the National Committee for Clinical 
Laboratory Standards, and completed the first annual NARMS retail meat 
report on September 30, 2004 which can be found on line at http://
www.fda.gov/cvm/narms_pg.html. This report provides data on the 
prevalence of antimicrobial resistant foodborne pathogens and commensal 
bacteria among retail meat and poultry samples. Also, FDA has enhanced 
the robustness of the NARMS retail meat arm by training personnel in 
participating State public health labs in isolation and testing 
methodologies as well as instituted randomized sampling strategies; 
screened animal feeds and animal feed components for the presences of 
resistant pathogens including Salmonella, E. coli and Enterococcus; 
presented numerous abstracts, posters, and scientific talks on NARMS at 
national and international scientific meetings. CDC and USDA also have 
accomplished numerous activities under NARMS. Please contact CDC and 
USDA directly for information on their specific activities under NARMS.
                                 ______
                                 

             Questions Submitted by Senator Byron L. Dorgan

              MANUFACTURING SUPPLEMENTS AND ANNUAL REPORTS

    Question. How many applications did the FDA receive and review from 
drug manufacturers under section 506A of the Federal Food, Drug, and 
Cosmetic Act in fiscal year 2004? How many of those applications were 
approved?
    Answer. I would be happy to provide that for the record.
    [The information follows:]
    
    
    
    Question. How many drug manufacturing facilities has the FDA 
inspected overseas from fiscal year 2000 through fiscal year 2004? In 
how many countries are those facilities located? Please provide a list 
of those countries.
    Answer. For fiscal year 2000-fiscal year 2004 FDA conducted 1,159 
inspections at 858 facilities located in 41 foreign countries. These 
inspections took place in: Italy, Germany, United Kingdom, Canada, 
India, France, Japan, China, Switzerland, Ireland, Spain, Sweden, 
Netherlands, Denmark, Belgium, Mexico, Australia, Israel, Austria, 
Czech Republic, Hungary, Taiwan, Singapore, Slovenia, Finland, South 
Africa, South Korea, Portugal, Norway, Turkey, Croatia, Argentina, 
Romania, Jordan, Poland, Slovakia, Russia, Thailand, Macau, Latvia, and 
Malta.
                                 ______
                                 

            Questions Submitted by Senator Richard J. Durbin

                       SINGLE FOOD SAFETY AGENCY

    Question. Currently, Federal oversight for food safety is 
fragmented with at least 12 different Federal agencies and 35 different 
laws governing food safety. There are also dozens of House and Senate 
subcommittees with food safety oversight. With overlapping 
jurisdictions and scattered responsibilities, Federal agencies often 
lack accountability on food safety-related issues and resources are not 
properly allocated to ensure the public health is protected. The recent 
rise of concerns about antibiotic resistance transferred from food 
animals to humans and mad cow disease underscore the need for change. 
Our Federal food safety statutes need to be modernized to more 
effectively ensure that food safety hazards are minimized and research 
and education programs are bolstered. I introduced a bill last week--S. 
729--that would do just that.
    President Bush and former Homeland Security Secretary Ridge have 
both publicly discussed the concept of combining Federal food safety 
responsibilities into a single agency, and outgoing HHS Secretary Tommy 
Thompson noted in December that he had trouble sleeping at night, 
worrying about attacks on our food supply.
    Just last Thursday, the trade press reported that Gerald Masoudi, 
FDA's chief counsel, said the lack of coordination among the agencies 
with responsibility for beef safety as one of the greatest challenges 
to protecting the public against mad cow disease. Masoudi said: ``The 
responsibility of contaminated food products is spread out among three 
Federal agencies that do not regulate the problem in a consistent 
manner.''
     With all these high-ranking officials raising concerns about the 
safety of the food supply, has FDA decided to embrace the concept of a 
single food safety agency? What do you see as the disadvantages of 
combining the Federal food safety agencies into a single agency? Are 
there any advantages?
    Answer. Over the years, there has been much discussion about 
consolidating all food safety, inspection, and labeling functions into 
one agency with the intention of increasing the effectiveness of the 
food safety system. In 2002, the White House examined into food safety 
issues, including the single food agency issue, and concluded that the 
goals of the Administration are better advanced through enhanced 
interagency coordination rather than through the development of 
legislation to create a single food agency.
    From FDA's viewpoint, the important question is whether the various 
Federal agencies with food safety authorities are working together 
effectively. The answer to that question is yes. The existing system is 
working. The American food supply continues to be among the safest in 
the world. Food safety agencies are working more closely together than 
ever before.
    With regard to the Federal Government's efforts to protect the 
public from mad cow disease, or Bovine Spongiform Encephalopathy known 
as BSE, the Federal agencies with responsibility for food and animal 
feed have a harmonized national food safety policy for BSE. For 
example, the Interim Final Rule published by FDA that bans the use of 
specified risk materials and other prohibited cattle materials in all 
FDA-regulated foods and cosmetics parallels USDA's Interim Final Rule 
for meat and meat products. Both FDA and USDA closely coordinated the 
Federal Government's actions in response to the finding of a BSE-
positive cow in the State of Washington in December 2003. This 
coordinated response was successful in quickly containing adulterated 
food and feed products and in limiting food safety concerns in the 
general public.
    FDA appreciates your continued leadership in food safety issues. 
Ensuring the safety of the food supply is a top priority for FDA and 
for the Administration. A great deal has been done in the past few 
years to improve food safety and security. FDA has worked with food 
safety agencies at the Federal, State and local levels to significantly 
strengthen the Nation's food safety system across the entire 
distribution chain, from farm to table, to better protect our food 
supply against deliberate and accidental threats. This cooperation has 
resulted in greater awareness of such vulnerabilities, the creation of 
more effective prevention programs, new surveillance systems, and 
faster foodborne illness outbreak response capabilities. An effective 
food defense system is built on a strong food safety system.
    The fiscal year 2006 budget requests an increase of $30 million for 
food defense activities. Of this amount, $20 million will support a 
national laboratory network known as the Food Emergency Response 
Network, or FERN. FDA and USDA have worked in close collaboration to 
establish this network. A critical component of controlling threats 
from deliberate food-borne contamination is the ability to rapidly test 
large numbers of samples of potentially contaminated foods for a broad 
array of biological, chemical, and radiological agents. FERN will 
increase the Nation's laboratory surge capacity through a nationwide 
network of Federal and State laboratories capable of testing the safety 
of thousands of food samples, thereby enhancing the Nation's ability to 
swiftly respond to a terrorist attack. The additional $10 million will 
be used for targeted food defense research, for continued coordination 
and sharing of data with the Department of Homeland Security as part of 
the government-wide Bio-Surveillance Initiative, and for upgrades in 
FDA's crisis management capabilities.
    Significant new tools to enhance the safety of the food supply were 
provided by the Public Health Security and Bioterrorism Preparedness 
and Response Act also know as the Bioterrorism Act, which the President 
signed in 2002. This landmark legislation represents the most 
fundamental enhancement to FDA's food safety authorities in many years, 
and FDA has been working hard to implement it. In response to the 
provisions included in the Bioterrorism Act, FDA has: Published a final 
rule to implement recordkeeping requirement on 12/9/2004; Published a 
final rule to implement the administrative detention provision on 6/4/
2004; Signed a Memorandum of Understanding with Customs and Border 
Protection or CBP, on 12/3/2003 to allow FDA to commission CBP officers 
in ports and other locations to conduct investigations and examinations 
of imported foods; and Published Interim Final Rules to implement the 
requirement for domestic and foreign facilities to register with FDA 
and the requirement for prior notice of imported food on 10/10/2003.
    In addition to implementing the Bioterrorism Act, FDA has many 
other ongoing counterterrorism activities. For example, since September 
11, 2001, FDA has increased its emergency response capability by 
realigning resources to counterterrorism and by reassessing and 
strengthening its emergency response plans. FDA has also conducted 
numerous emergency response and preparedness exercises to further 
strengthen our response to a terrorist event involving our Nation's 
food supply. These exercises have included Federal, State, and industry 
partners.
    FDA has completed vulnerability assessments focused on specific 
foods, suspect agents, and processing steps where an agent could be 
intentionally introduced. These vulnerability assessments have assisted 
the agency in focusing on those commodities considered to be most at 
risk for intentional contamination. Government and industry have worked 
together on specific and targeted mitigation steps to address the 
vulnerabilities identified in our assessments. These assessments have 
also assisted the agency in focusing intramural and extramural research 
on four major areas: new methods for detection of agents, prevention 
technologies, agent characteristics, and dose response.
    FDA has also issued food security guidance documents to different 
segments of the food industry on the preventive measures they can take 
to minimize the risk that food or cosmetics under their control will be 
subject to tampering or other malicious, criminal, or terrorist 
actions.
    Other Counterterrorism Activities over past 3 years include: 
Increasing laboratory surge capacity by expanding participation in the 
Food Emergency Response Network, constructing BSL-3 laboratories in the 
Field and supporting the construction and deployment of two mobile 
laboratories; Enhancing an early-warning system to identify hazardous 
foods by expanding the number of Federal, State, and local laboratories 
providing data through our Electronic Laboratory Exchange Network; 
Conducting numerous research projects to improve our ability to detect 
contamination, focusing on rapid test methods for use in the Field; 
Carrying out food defense activities under Homeland Security 
Presidential Directives; the Interagency Security Plan; the Secretary's 
Bioterrorism Strategic Plan; and FDA's Strategic Action Plan; Enhancing 
FDA's ability to plan, manage, and respond to food emergencies through 
the Emergency Operations Network or EON, an electronic incident 
management system; and Enhancing law enforcement and intelligence 
gathering/analysis by, for example, participating in select Joint 
Terrorism Task Forces and establishing a dedicated Counterterrorism 
Section in FDA's Office of Criminal Investigations.
    Question. Do you believe the creation of the Department of Homeland 
Security could serve as a model for the creation of a single food 
safety agency?
    Answer. As we explained in our response to the previous question, 
the Administration has looked at the issue of consolidation and has 
determined that the goals of the Administration are better advanced 
through enhanced interagency coordination rather than through 
consolidation.
    Question. Can you explain the rationale for cutting back the 
inspections budget for all FDA products at a time when we are facing 
greater risks to the food supply?
    Answer. FDA's Field Program budget has increased every year since 
fiscal year 2002. However, as Agency resources for particular programs 
and activities fluctuate due to funding changes, budget priority 
changes or demands of higher priority work, we have responded by 
working to ensure that we use available resources strategically.
    To manage the ever-increasing volume of imported food shipments, we 
are using risk management strategies to achieve the greatest food 
protection with our available resources. While we cannot physically 
inspect every shipment, it is important to note that every shipment 
containing FDA-regulated products entered through the Bureau of Customs 
and Border Protection's (CBP) automated system is electronically 
reviewed by FDA's system. FDA's system, OASIS, determines if the 
shipment meets identified criteria for physical examination or sampling 
and analysis or warrants other review by FDA personnel. This electronic 
screening allows FDA to concentrate its inspection resources on high-
risk shipments while allowing low-risk shipments to proceed into 
commerce.
    The Prior Notice provision of the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002 provided a 
significant new tool to the agency. It requires that FDA receive prior 
notice before food is imported or offered for import into the United 
States. Advance notice of imported food shipments, called ``Prior 
Notice,'' allows FDA, with the support of the CBP, to target import 
inspections more effectively and help protect the Nation's food supply 
against terrorist acts and other public health emergencies. With the 
new prior notice requirement, specific information mandated by the 
Bioterrorism Act must be submitted to FDA before the imported food 
arrives in the United States. This not only allows the electronic 
system to review and screen the shipments for potential serious threats 
to health (intentional or otherwise) before food arrives in the United 
States, but it also allows for FDA staff review of prior notices for 
those products flagged by the system as presenting the most significant 
risk. FDA worked very closely with CBP in developing this screening 
system. FDA receives approximately 27,000 prior notice submissions 
about incoming food shipments every day. The Prior Notice electronic 
system uses intelligence data, known risk factors, and information 
about the shipper and consignee to identify prior notice submissions 
that warrant additional scrutiny for security purposes.

                             SEAFOOD SAFETY

    Question. The New York Times reported on Sunday, April 10, that six 
out of eight major stores selling salmon as wild were in fact selling 
farm-raised salmon labeled as wild salmon. As you know, in the last 2 
years, scientific bodies have warned that farm-raised salmon contains 
higher levels of polychlorinated biphenyls, or PCBs, then wild salmon. 
The EPA says PCBs can cause cancer and other effects on the immune 
system, the reproductive system and the endocrine system. So consumers 
are paying premium prices for what they may consider ``safer'' salmon, 
and they are not getting what they pay for.
    What is FDA doing to investigate this potential case of misbranding 
that may affect the public health? Does the agency have plans to 
implement a more rigorous sampling system to ensure that consumers are 
in fact buying what is on the label?
    Answer. Reported polychlorinated biphenyls or PCBs residue levels 
found in farmed salmon are far below the FDA's tolerance level of 2 
parts per million for total PCBs in fish tissue and do not justify any 
restrictions in fish consumption. FDA advises that consumers should not 
alter their consumption of salmon. This fish is an excellent source of 
protein and omega 3-fatty acids. From a public health perspective, 
there is no need to make a distinction between farmed vs. wild salmon. 
Both are low in chemical contamination and should be consumed as a part 
of healthy, nutritional diet.
    FDA has limited ability to increase enforcement action of labeling 
violations. In the broader interest of the consumer, food safety issues 
continue to take precedence. Moreover, most of the alleged misbranding 
occurred in retail establishments. In these cases, FDA usually defers 
to the States in matters related to retail food safety. The 
Agricultural Marketing Service, or AMS, recently announced mandatory 
labeling of fish and shellfish in retail food stores to indicate 
country of origin and method of production (i.e., wild-caught or farm-
raised). AMS is responsible for implementing this country of origin 
labeling program, which went into effect on April 4, 2005.
    Question. With most food plants going un-inspected for 5 years or 
more at a time, what resources do you need to assure the food industry 
that the cop is on the beat?
    Answer. Inspection frequencies vary depending on the products 
produced and the nature of the establishment, although our statistics 
indicate that it is not true that most food plants go un-inspected for 
5 years or more. Inspection priorities may be based on a firm's 
compliance history or coverage of new firms that have not been 
previously inspected. Food firms producing high-risk products are 
inspected annually with provisions that allow for less frequent 
inspections of high-risk firms that have a good inspection history. 
After accounting for resources needed to cover their high-risk 
responsibility, FDA districts apply their remaining resources, 
including available State contract inspections, to non-high risk food 
firms in their jurisdictions. On average, non-high risk establishments 
are inspected once every 3.7 years. These include FDA, State contract, 
and State partnership inspections. In fiscal year 2006, the requested 
funds will provide for a total of 21,325 domestic inspections. Of 
these, FDA investigators will perform 10,025 inspections and States 
will perform 11,300 inspections. These 11,300 State inspections include 
an estimated 2,000 State partnership inspections which are voluntarily 
provided. In addition, FDA follows up on consumer and trade complaints, 
voluntary recalls conducted by the industry.

                           DIETARY SUPPLEMENT

    Question. The agency has promised to finalize the regulations for 
the last several years and both consumer groups and the dietary 
supplement industry agree that these requirements would go a long way 
toward implementing the Dietary Supplement Health and Education Act of 
1994.
    What is the status of the final rule on dietary supplement good 
manufacturing practices?
    Answer. The proposed rule was published on March 13, 2003, and 
included responses to numerous comments received after publication of 
the ANPRM in 1997. The comment period for the proposed rule was 
extended until August 2003. We held public stakeholder meetings on 
April 29, 2003 in College Park, MD, and on May 6, 2003 in Oakland, CA. 
We also held a public meeting, via satellite downlink, on May 9, 2003, 
with viewing sites at our district and regional offices throughout the 
country. After the comment period closed, we began the process of 
analyzing the comments submitted to the proposed rule. The issues 
raised by the comments are complex, and in some cases, novel. We have 
expended significant internal resources on reviewing and preparing 
responses to the comments received.
    The publication of a final rule on the current good manufacturing 
practice requirements for dietary supplements is a very high priority 
at FDA's Center for Food Safety and Applied Nutrition. I can assure you 
that this final rule is one of FDA's highest priorities and will be 
published as soon as possible.
    I have been working with Senator Hatch to develop a requirement 
that dietary supplement companies report serious injuries, known as 
adverse events, to FDA. FDA's support would GREATLY speed our progress.
    Question. Would you support our efforts to require mandatory 
adverse event reporting?
    Answer. At this time, the Administration has not established a 
position on legislative proposals requiring manufacturers of dietary 
supplements to report serious adverse events related to use of their 
products to the FDA.
    Following the removal of ephedra from the market in 2003, FDA said 
it would conduct a full safety review of the twelve dangerous 
supplements identified by Consumer Reports by October 2004. This has 
not happened, to my knowledge, even though four of these supplements 
that are known to be carcinogenic or to cause liver failure--
aristolochic acid, androstenedione, chaparral, and kava--appeared with 
warnings on FDA's website.
    Question. What is the status of FDA's review of the dozen dietary 
supplements that have been identified as dangerous by Consumer Reports?
    Answer. Under section 402(f)(1)(A) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 342(f)(1)(A)), a food is considered adulterated 
if, among other things, it is a dietary supplement or contains a 
dietary ingredient that presents a significant or unreasonable risk of 
illness or injury under the conditions of use recommended or suggested 
in labeling, or if no conditions of use are suggested or recommended in 
the labeling, under ordinary conditions of use. FDA bears the burden of 
establishing that the product presents a significant or unreasonable 
risk. We continually monitor the marketplace and the scientific 
literature to identify dietary supplements and dietary ingredients that 
may present safety concerns. Regulatory actions are based upon the 
totality of the scientific evidence available, including the 
pharmacology of the substance, scientific literature, adverse event 
reports, and evidence-based reviews.
    We continue to consider emerging information on the safety of all 
dietary supplements, including those listed in the Consumer Reports 
Magazine article, as it becomes available. Based on information 
available to FDA at this time, we have no basis to conclude that any of 
the dietary supplements containing the substances identified in the 
Consumer Reports Magazine article violate the act.

                                MAD COW

    Question. I requested, with Senators Harkin, Cochran and Chambliss, 
a GAO report which found that FDA's oversight of the feed ban contains 
``program weaknesses that continue to undermine the Nation's firewalls 
against BSE.'' While FDA has banned the use in cattle feed of certain 
cattle parts suspected to cause BSE transmission, there are loopholes 
in the ban and loopholes in its enforcement. The report suggested that 
FDA more frequently inspect animal feed facilities, sample cattle feed 
for the presence of banned materials, and work more closely with USDA. 
You introduced legislation last year, S. 2007, that we are in the 
process of revising to concur with these recommendations.
    How will FDA address the recommendations in the new GAO report 
highlighting weaknesses in FDA's enforcement of the feed ban, such as 
implementing more frequent inspections and testing for banned 
materials?
    Answer. As noted in the FDA response to the GAO report, while a few 
areas to further strengthen the feed ban program were identified, for 
which FDA has or will implement the recommendations suggested, FDA does 
not believe that material weaknesses were identified.
     It is important to understand that FDA's risk-based approach to 
implementation of the ruminant feed ban regulation. This regulation 
potentially impacts a wide variety of firms involved in the animal feed 
industry. For example, every firm that manufactures, transports, 
distributes or sells animal feed or feed ingredients for any animal 
species is subject to inspection under the FDA ruminant feed ban 
compliance program, regardless of whether prohibited material is 
utilized. Even swine and poultry farms that mix their own feed and 
grocery stores that sell pet food are potentially subject to inspection 
under this rule. All operations that involve feeding ruminants, such as 
dairy and beef cattle are also subject to the rule. In consideration of 
the limited resources for inspecting this large population of firms, 
FDA is obligated to set priorities for inspecting a meaningful 
subpopulation of these regulated firms.
    FDA informs FDA and State investigators of its inspection 
priorities via its publication of the BSE/Ruminant Feed Inspection 
Compliance Program guidance document. FDA's highest inspection priority 
is firms that manufacture or process animal feeds or feed ingredients 
that contain prohibited material. It is most important that these 
products are not used for ruminant feed so this industry segment, which 
includes renderers, protein blenders, and feed mills, is inspected on 
an annual basis.
    Firms outside of this segment generally, have a lower inspection 
priority since they pose a lower risk of producing contaminated feed. 
Other segments, such as cattle feeders, are of interest to the FDA, but 
according to estimates, there are over one million ruminant feeders in 
the United States. The agency continues to develop and utilize 
educational tools to complement inspections and to promote voluntary 
compliance in these large industry segments. FDA will additionally 
implement inspectional initiatives to increase its presence in some of 
these less inspected segments, such as transporters and animal feed 
salvagers, based upon our assessment of compliance and risk in these 
industry sectors.
    FDA has been collecting and testing animal feed samples since 
August 18, 2003, when FDA issued a sampling assignment to the FDA field 
staff for the collection of 600 domestic samples. In fiscal year 2005, 
we will collect 900 samples for testing. The characteristics of the 
ruminant feed ban sampling assignment are unique and more complex when 
compared to other FDA sampling programs. Other programs are more simply 
based on a methodology that can definitively detect the presence of the 
objectionable contaminant or pathogen. Further, the nature of the 
contaminants in some of the other programs allows for the establishment 
of tolerance levels. The mere detection of a pathogen or some of these 
other contaminants, in excess of an established tolerance, is 
sufficient to consider the sample violative in these other programs. In 
contrast to these other programs, analytical findings alone under the 
ruminant feed ban program do not establish that the sample violates the 
ruminant feed ban rule. As the ruminant feed ban sampling assignment 
notes, positive analytical findings necessitate follow-up evaluations 
to determine whether the findings were indeed the result of a violation 
of the ruminant feed ban regulation.
     Since no test currently exists for the detection of the infectious 
prion agent that causes BSE in feed, analysis of feed is not, by 
itself, a means of verifying the safety of cattle feed. Additionally, 
feed microscopy and/or PCR analytical results alone are not adequate to 
make compliance decisions about whether or not the presence of 
materials does or does not comply with the provisions established in 
the ruminant feed ban rule. The feed microscopy method has limitations 
and the rule has exemptions. Feed microscopy generally can only detect 
the presence of mammalian tissue, through the identification of either 
bone or hair. In certain other situations, feed microscopy can only 
detect the presence of animal tissue when blood is detected. The 
present ruminant feed ban allows for certain exemptions regarding the 
application of the mammalian protein prohibition. Exempted materials 
include pure porcine meat and bone meal, blood from any animal species, 
including ruminants; gelatin, and milk protein. Further, there is no 
prohibition on the use of non-mammalian proteins such as poultry meal. 
The detection of certain non-specific materials, such as bone or 
muscle, may be the result of exempt ingredients, such as ruminant blood 
meal, pure porcine meat and bone meal, or poultry meal. PCR has similar 
limitations since the test cannot differentiate between prohibited 
material ingredients and certain ruminant-containing exempt 
ingredients, such as ruminant blood, ruminant milk products, and plate 
waste. Since feed microscopy and PCR cannot differentiate prohibited 
material from other acceptable materials, the analytical results cannot 
be used to verify the presence of prohibited material, nor can they be 
used for confirming the adequacy of clean-out measures. When research 
identifies new or better means of identifying the agent that causes BSE 
in feed or the presence of prohibited material in feed, FDA will 
further assess how best to use sampling and testing to ensure the 
safety of animal feed.
     We have attached FDA's full response to the nine GAO 
recommendations for executive action for your information.
    Question. When does FDA intend to ban cattle feed materials that 
carry a risk of BSE transmission, such as poultry litter and plate 
waste?
    Answer. In July 2004, FDA published jointly with the USDA an 
advance notice of proposed rulemaking, ANPRM, requesting comments and 
scientific information on possible measures that would strengthen the 
animal feed regulations.
    See http://www.fda.gov/OHRMS/DOCKETS/98fr/04-15882.htm. As part of 
the ANPRM, FDA also announced that the Agency had tentatively decided 
to issue a proposed rule to implement the International Review Team's 
main recommendation to prohibit the use of specified risk materials in 
all animal feed. Such a prohibition of specified risk materials may 
preclude the need for prohibiting additional ingredients, such as 
poultry litter. The present prohibition of specified risk materials in 
foods for human consumption implemented with the rules published by 
USDA and FDA in January and July 2004, respectively, may obviate the 
need for prohibiting plate waste and other human food product waste. 
FDA analyzed the comments and information received in response to the 
ANPRM and is currently preparing a proposed regulation that would 
prohibit the use of certain cattle material that carry the risk of BSE 
transmission in all animal feed. In developing the proposed regulation, 
the agency is examining the economic and environmental effects that 
would be involved with this proposed measure. The proposed regulation 
is presently undergoing internal Agency review as part of the clearance 
process.

                              DRUG SAFETY

    Question. Serious pain medication and antidepressant side effects 
are the latest in a series of problems that have come to light publicly 
several years after the drugs were approved by FDA. It has been 
suggested that FDA appears to be holding back on the release of 
negative information about new drugs. Companies are not required to 
publish all the drug safety studies they conduct, but they must provide 
these studies to FDA.
     While the painkillers Vioxx and Bextra have been removed from the 
market pending the inclusion of an improved warning label, what are 
FDA's plans for letting the public know in a more timely manner the 
results of drug studies that do not necessarily favor the drugs?
    Answer. FDA has authority to determine that a drug is misbranded if 
its labeling is false or misleading and can seek judicial relief to 
mandate changes to the label or take action to remove the product from 
the market. Both of these actions take time. The process would normally 
begin with a warning letter to the company expressing FDA's position, 
and the company would have a chance to respond. Unless the company 
voluntarily made the changes, FDA would then have to pursue judicial 
relief, a time-consuming process. For FDA to remove the product from 
the market over a sponsor's objections, FDA would consider whether the 
risks of marketing the product with false or misleading labeling 
outweighed the benefits for the population of patients that use the 
product. The risks may not outweigh the benefits for many drugs, and 
again, the procedures for removing a drug from the market if the 
sponsor does not agree to stop marketing are very time consuming. They 
require publication of a notice and opportunity for hearing in the 
Federal Register, and a possible administrative hearing if the sponsor 
demonstrates that there is a genuine issue of material fact to be 
decided in a hearing.
    We understand the concern regarding the time involved in 
negotiating labeling changes with the company. However, as Dr. Janet 
Woodcock emphasized in testimony before the Senate HELP Committee last 
March, another significant issue is that once a label change is made, 
old labels in paper form are still in distribution and it takes time to 
get newer labels in circulation. Dr. Woodcock testified that the new 
strategy of posting drug safety information sooner using the Drug Watch 
mechanism will help alleviate this concern because it will enable the 
FDA to get information directly to the people who need it in a timely 
manner. We are confident that the new drug safety actions we are 
implementing will help to ensure that consumers and healthcare 
practitioners will have access to the most recent safety concerns with 
drug products. As we explained in our response to a previous question, 
we are proposing a Drug Watch Web Page that would include emerging 
information for both previously and newly approved drugs about possible 
serious side effects or other safety risks that have the potential to 
alter the benefit/risk analysis of a drug, affect patient selection or 
monitoring decisions, or that could be avoided through measures taken 
to prevent or mitigate harm. FDA is also improving communication 
through more widespread development of:
    Healthcare Professional Information Sheets one-page information 
sheets for healthcare professionals for all drugs on FDA's Drug Watch 
and all drugs with Medication Guides (FDA-approved patient labeling) 
containing the most important new information for safe and effective 
product use, such as known and potential safety issues based on reports 
of adverse events, new information that may affect prescribing of the 
drug, and the approved indications and benefits of the drug.
    Patient Information Sheets one-page information sheets for patients 
containing new safety information as well as basic information about 
how to use the drug in a consumer friendly format.
    David Graham, the FDA drug safety analyst responsible for first 
raising red flags about Vioxx, suggests he was intimidated by the 
agency before giving Congressional testimony last November. His 
suggestions that Vioxx and five other new drugs were being approved 
despite serious safety concerns were recently validated in an HHS 
Inspector General Office report that indicated nearly one-fifth of FDA 
scientists surveyed said they had been pressured to approve a drug 
despite safety concerns.
    Question. What is FDA's official policy toward whistleblowers?
    Answer. On January 18, 2005, I personally issued an ``all hands'' 
e-mail to Agency staff to address this matter. It specifically stated:
    ``Let me also remind all employees that, consistent with the law, 
any act of retaliation against FDA employees resulting from their 
actions within the law to criticize the agency (either internally or 
externally, including to Congress) is not acceptable. The Agency has 
consistently operated using the highest ethical standards, and I expect 
all Agency employees to continue to uphold the highest standards of 
conduct and fully comply with all relevant Federal requirements and 
government policies.''

                          DIETARY SUPPLEMENTS

    Question. Utah District Court ruled on April 13th that FDA's ban on 
ephedra and ephedra products was illegal.
    What action does the agency intend to take to appeal this decision 
and what legislative authority would be helpful to clarify that FDA has 
the authority to take deadly dietary supplements such as ephedra off 
the market?
    Answer. FDA is reviewing the decision that applies to the 
Neutraceutical Solarary product line of 10mg or less. Any final 
decision on whether or not to appeal must be made by the Solicitor 
General.
                       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 2006 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 and Food for Progress (FFP) programs 
under Title I of Public Law 480 at a baseline level that will ensure 
the continued viability of the programs.
---------------------------------------------------------------------------
    \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 Ocean Shipping, Inc., Transportation Institute, USA Dry Pea 
& Lentil Council, USA Rice Federation, U.S. Wheat Associates, Inc., and 
Wheat Export Trade Education Committee.
---------------------------------------------------------------------------
    In recent years, funding appropriated to the Title I account 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 fiscal year 2005, it declined again to $94.2 million. 
In the administration's fiscal year 2006 budget, the requested funding 
is $65,040,000. According to the fiscal year 2006 USDA Budget Summary, 
this request, together with carryover funding, will support a fiscal 
year 2006 program level for concessional sales and FFP donations of 
$145 million in commodity and (separately funded) freight costs. Total 
Title I commodity assistance in fiscal year 2006 is estimated to be 
540,000 metric tons.
    Mr. Chairman, our coalition has noted that funding for the Title I 
account in recent years increasingly has been used to support FFP 
grants. FFP is an essential component of our overall food aid system, 
and deserves strong support. 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 funding.

                 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. Unfortunately, this downward trend 
has continued. For fiscal year 2006, the President's budget would 
support only 3.49 million metric tons of food assistance under all 
program authorities.

            THE ADMINISTRATION'S BUDGET FOR FISCAL YEAR 2006

    The administration proposes Title I funding that would support a 
direct loan level of only $43 million. Projected carryover funding and 
reimbursements from the Maritime Administration would supplement 
available funding, allowing the administration to project an overall 
Title I program level (including FFP donations) of $145 million. The 
fiscal year 2006 request, however, is limited to $65 million in new 
funding to the Title I account. The effect of this drastic reduction in 
the annual appropriation would be to empty the account of all reserves, 
leaving the Title I program (and Food for Progress donations) with a 
greatly diminished baseline and bleak prospects for future fiscal 
years. 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 
reduced from $1.185 billion in fiscal year 2005 to $885 million. This 
initiative was designated as a ``major reform'' by the administration 
on February 11, 2005. Under the president's budget, Title II food aid 
would be reduced by $300 million and USAID's International Disaster and 
Famine Assistance (IDFA) program would be increased by an equivalent 
amount. The effect of this initiative would be to reduce Title II 
shipments to about 1.75 million metric tons, far below the statutory 
level established in the authorizing law of 2.5 million metric tons.
    Mr. Chairman, our coalition strongly opposes the administration's 
proposal to convert essential American food assistance to a program 
under which USAID would use appropriated funds to procure food supplies 
in markets that are closer to their final destination. Under Public Law 
480, the United States has delivered high-quality, nutritious food to 
billions of people throughout the world for more than half a century. 
The administration seeks to reverse the longstanding policy that U.S. 
food assistance should consist of U.S. commodities, produced by 
American farmers and processed by American enterprises. If USAID 
requires increased funding for emergency requirements, such funding 
should not come at the expense of the Title II program, upon which 
American producers, processors, and shipping companies rely. 
Furthermore, transfer of Title II funding to the State Department's 
IDFA program will undermine our negotiating position in the WTO, where 
the United States has spent the last two years defending our current 
food assistance programs as a necessity if the world is committed to 
reducing hunger.
    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 2006, with a commodity value 
estimated at $151 million. This represents another year of diminished 
reliance on the 416(b) program, which is CCC-funded.
    In its fiscal year 2006 Budget Summary, the Department of 
Agriculture estimates that CCC-funded FFP shipments will be 300,000 
metric tons of grain equivalent. Unfortunately, this falls short of the 
400,000 ton level established for CCC-funded FFP shipments in the 2002 
Farm Bill.
    Finally, the administration has requested $100 million for the 
McGovern-Dole International Food for Education and Child Nutrition 
Program (IFEP), an increase of 15 percent over the fiscal year 2005 
level.
    The administration's recommendations, taken together, would lead to 
further reductions in food aid. Of even more significance, the 
administration's recommendation to reduce Title II funding in favor of 
USAID cash assistance undermines the foundation upon which U.S. food 
aid policy has been built in the post-World War II era. The coalition 
strongly urges this subcommittee to sustain Title II funding at $1.185 
billion, thus ensuring that U.S. food assistance will continue to 
consist of U.S. commodities produced and processed by Americans.

         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 2006, this would require an incremental increase in Title I 
baseline funding, restoration of the Title II baseline to $1.185 
billion 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 2006, the subsidy cost of 
        the Title I program is established for the fiscal year at 55.40 
        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 55 cents. Moreover, Title I 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 2006 will 
generate only $43 million in commodity sales. Of course, 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 
recent years, 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 2006, 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.
  --The Title II program should be restored to its fiscal year 2005 
        baseline level of $1.185 billion. This will ensure that funding 
        is not diverted to programs relying primarily upon foreign 
        commodities for food assistance. This action will also 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 Farm Security and Rural Investment Act of 2002 (FSRIA) was 
enacted 3 years ago following 2 years of exhaustive debate in the House 
and Senate. The new farm law represents a delicate balance by 
effectively addressing the stability of our agricultural production 
base, protecting our important natural resources and enhancing 
nutrition and food assistance programs in our Nation.
    The mandatory programs administered by the Department of 
Agriculture such as commodity, conservation, crop insurance, export 
promotion programs, nutrition and forestry are of enormous importance 
to farmers, ranchers, rural businesses, low-income Americans and our 
Nation's children. Therefore, we respectfully ask the Appropriations 
Committee avoid making any changes to mandatory programs within the 
USDA budget.
    Contract-based working lands conservation programs such as the 
Environmental Quality Incentives Program (EQIP), Conservation Security 
Program (CSP), Wildlife Habitat Incentives Program and Forest Land 
Enhancement Program (FLEP) enjoy wide support within the agricultural 
and landowner community, as shown by current levels of 
oversubscription. Farm Bureau is concerned that many of these programs 
have not been funded at optimum levels, especially the Conservation 
Security Program. This has led to a level of confusion among farmers 
and ranchers of when and how the program will be implemented within 
their particular watershed, and whether or not the financial incentives 
will be adequate to encourage participation. As we move forward in this 
budget process, Farm Bureau encourages Congress to find an appropriate 
balance of funding for targeted land idling programs, such as the 
General and Continuous Conservation Reserve Programs, with our current 
working lands conservation programs.
    Farm Bureau supports the farm bill's energy title that includes 
provisions for Federal procurement of bio-based products, bio-refinery 
development grants, a biodiesel fuel education program, renewable 
energy development program, renewable energy systems, a bioenergy 
program, biomass research and development and value-added agricultural 
product development and marketing. These programs play a critical role 
in assisting in rural economic development as well as in increasing our 
Nation's energy independence and should be fully funded at authorized 
levels.
    Farm Bureau has identified three areas as priorities for 
discretionary funding in fiscal year 2006. They are: BSE and animal 
identification, programs to increase agricultural exports and crop 
protection.

       BOVINE SPONGIFORM ENCEPHALOPATHY AND ANIMAL IDENTIFICATION

    The threat of bioterrorism and the discovery of Bovine Spongiform 
Encephalopathy (BSE) in the United States has prompted increased action 
by USDA and others to step up animal 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 ARS for these 
activities.
    Animal Identification.--We have serious concerns about the adequacy 
of the administration's proposal for $33 million to continue 
implementation of the National Animal Identification System (NAIS). 
Industry estimates of the U.S. Animal Identification Plan (USAIP) 
forecast an ongoing cost of about $100 million per year to effectively 
implement such a system. USDA has expended just $51 million in the 
first year of development of the NAIS. When added to this year's budget 
request, the total Federal fund commitment amounts to approximately $84 
million. This is significantly short of the Department's own cost 
estimate of $550 million for the first 5 years of NAIS operation.
    If the government were to fund $33 million each year (the same as 
their fiscal year 2005 and fiscal year 2006 requests), two-thirds of 
the cost of the NAIS would be funded by producers and affected 
industries. Farmers and ranchers cannot afford to bear the brunt of the 
cost of this program, especially when most of the benefit will accrue 
to the general public. This program undoubtedly benefits consumers as 
much or more than it does producers and the industry and a larger 
portion of the cost must be borne by the government. We appreciate the 
inclusion of NAIS funding in the fiscal year 2005 agriculture funding 
bill, and strongly encourage the Committee to significantly increase 
that amount in this year's version of the agriculture appropriations 
bill. Implementation of this critical 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.
    BSE.--Farm Bureau supports the $66 million in BSE-related funding 
proposed by USDA in their fiscal year 2006 budget request. After the 
discovery Dec. 23, 2003, of a single cow with BSE in the United States, 
a one-time, enhanced BSE surveillance program was implemented, 
beginning in June 2004. The enhanced surveillance program will exceed 
its testing goals in fiscal year 2005, providing an accurate risk 
profile of the probable prevalence of BSE. However, we must continue 
our monitoring and surveillance program to protect the health of the 
U.S. herd. We support the administration's requested $7.7 million 
increase for the Animal Health Monitoring and Surveillance (AHMS) 
program, including both program costs and employee compensation. The 
AHMS budget request includes $17.1 million for the Animal and Plant 
Health Inspection Service (APHIS) to continue BSE testing of at least 
40,000 samples (including sampling at rendering plants and on farms) 
and to continue to use the 12 State diagnostic laboratories that 
support the work of the national BSE reference lab, APHIS' National 
Veterinary Services Laboratories.
    We support an increase of $7.5 million for an enhanced BSE research 
program. The additional research funding would allow Agriculture 
Research Service (ARS) scientists to increase our understanding of the 
disease and develop the technology needed by regulatory agencies to 
establish science-based policies and control programs. This scientific 
emphasis will not only help us in our current trade negotiations to 
reopen export markets lost since December 2003, but also to focus on a 
new understanding of the disease risks in the long run.
    In addition, Farm Bureau supports funding for the Agriculture 
Research Service (ARS) to complete the National Centers for Animal 
Health (NCAH) in Ames, Iowa. The NCAH will offer facilities and 
physical resources capable of supporting internationally-recognized 
animal health research, including efforts to increase the global body 
of scientific knowledge about BSE. We appreciate the inclusion of $59 
million in the fiscal year 2006 budget request to complete construction 
of the National Centers for Animal Health. However, we believe that the 
budget request does not reflect extra-inflationary costs that have 
occurred since the original construction plan was completed. Therefore, 
we request at least $85 million be appropriated to complete the world-
class NCAH originally envisioned.

                 CROP PROTECTION AND AGRICUTLURE INPUTS

    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, and in 
some cases restored, to the following offices and programs:
    Office of Pest Management Policy (OPMP).--OPMP has the primary 
responsibility for coordination of USDA's Food Quality Protection Act 
(FQPA) and crop protection obligations and interaction with EPA. Proper 
funding is vital for the review of tolerance reassessments, 
particularly dietary and worker exposure information; to identify 
critical uses, benefits 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) must have funding 
maintained, and research on alternatives to methyl bromide must have 
funding restored and receive future funding to satisfactorily 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).--Funding must be maintained, in some cases restored, and full 
future funding provided for Integrated Pest Management 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).--USDA and EPA rely on ERS programs 
to provide unique data information and they should be properly funded 
including IPM research, pesticide use analysis program and the National 
Agriculture Pesticide Impact Assessment Program.
    Food Quality and Crop Protection Regulation.--Additional funding 
for proper regulation of pesticides is needed in the following 
programs: National Agriculture Statistics Service pesticide use 
surveys; Food Safety Inspection Service increased residue sampling and 
analysis; Agricultural Marketing Service; and the Pesticide Data 
Program.

               PROGRAMS TO INCREASE AGRICULTURAL EXPORTS

    Creating new and expanding existing overseas markets for U.S. 
agricultural and food products is essential for a healthy agricultural 
economy. Continued funding of export development and expansion programs 
is essential for improving U.S. farm and food income. Farm Bureau 
recommends maximum funding of all authorized export development and 
expansion programs in a manner consistent with our commitments in the 
World Trade Organization agreement. USDA services and programs that 
facilitate U.S. exports by certifying plant and animal health to 
foreign customers, that protect U.S. agricultural production from 
foreign pests and diseases, and fight against unsound non-tariff trade 
barriers by foreign governments are also critical and should receive 
priority funding.
    Plant and Animal Health Monitoring, Pest Detection and Control.--
Plant and animal health monitoring, surveillance and inspection are 
crucial programs. We support funding increases for improved plant pest 
detection and eradication, management of animal health emergencies and 
to increase the availability of animal vaccines. Expansion of Plant 
Protection and Quarantine personnel and facilities is necessary to 
protect U.S. agriculture from new and often-times virulent, costly pest 
problems.
    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 (i.e., sanitary and phytosanitary measures), real 
or contrived, to resist or prohibit the entry of American products into 
their markets. Only APHIS can respond effectively to this resistance. 
It requires however, placing more APHIS officers at U.S. ports and 
overseas where they can monitor pest and disease conditions, negotiate 
trading 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 and Expansion Programs.--We recommend full 
funding of all export development and expansion programs consistent 
with our WTO commitments. Farm Bureau supports General Sales Manager 
credit guarantee programs. These important export credit guarantee 
programs help to make commercial financing available for imports of 
U.S. food and agricultural products via a deferred payment plan. The 
Market Access Program, the Foreign Market Development Program, the 
Emerging Markets Program and the Technical Assistance for Specialty 
Crops program are all very important and effective export development 
and expansion programs that increase demand for the U.S. agriculture 
and food products abroad. These programs also benefit U.S. agriculture 
by recruiting far more private sector funds into development and 
expansion activities for U.S. agriculture and food products than the 
U.S. government contributes.
    Direct assistance of U.S. agricultural exports is also authorized 
by the Export Enhancement Program, a program 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 allows U.S. dairy producers to compete with foreign nations 
that subsidize their commodity exports. The International Food for 
Education Program will be an effective platform for delivering severely 
needed food aid and educational assistance.
    Public Law 480.--We recommend fully funding Public Law 480. Public 
Law 480 programs serve as the primary means by which the United States 
provides foreign food assistance through the purchase of U.S. 
commodities. The Public Law 480 program provides humanitarian and 
public relations benefits, positively impacts market prices and helps 
develop long-term commercial export markets. We oppose any efforts to 
reduce funding of Public Law 480, especially efforts to transfer 
funding to other food aid and development programs outside the 
jurisdiction of USDA.
    APHIS Biotech Regulatory Service (BRS).--Agricultural biotechnology 
is an extremely promising technology and all reasonable efforts must be 
made to allow continued availability and marketability of biotech tools 
for farmers. BRS plays an important role in overseeing the permit 
process for products of biotechnology. Funding for BRS personnel and 
activities are essential for ensuring public confidence and 
international acceptance of biotechnology products. AFBF supports 
increased spending of $4.5 million in this area because it will enable 
the USDA to increase inspections of genetically-modified crop field 
test sites and enhance its capacity to regulate transgenic animals, 
arthropods, and disease agents.
    Foreign Agricultural Service (FAS).--The USDA's Foreign 
Agricultural Service will require sufficient funding to expand services 
to cover all existing and potential market posts.
                                 ______
                                 

    Prepared Statement of the American Forest and Paper Association

    The American Forest and Paper Association \1\ (AF&PA) supports 
sustainable forest management on all forest lands and encourages 
funding for research programs that advance sustainable forestry. In 
particular, there is a need to focus resources on research that 
addresses forest productivity, wood utilization, inventory, and 
conversion of wood to produce bioenergy/bioproducts. The following 
recommendations concern fiscal year 2006 appropriations for the U.S. 
Department of Agriculture.
---------------------------------------------------------------------------
    \1\ AF&PA is the national trade association of the forest, paper 
and wood products industry. AF&PA represents more than 200 companies 
and related associations that engage in or represent the manufacture of 
pulp, paper, paperboard and wood products. The forest products industry 
accounts for approximately 7 percent of total U.S. manufacturing 
output, employs 1.3 million people, and ranks among the top ten 
manufacturing employers in 42 States.
---------------------------------------------------------------------------
Cooperative State Research, Education, and Extension Service Programs
    There is a critical need for practical research and outreach 
designed to produce and measure healthier, faster-growing forests. The 
USDA Cooperative State Research, Education, and Extension Service 
(CSREES) and the universities that partner with the agency play a key 
role on-the-ground in meeting this need.
  --Cooperative Forestry Research (McIntire-Stennis) Program.--AF&PA 
        recommends funding of $22.2 million, keeping it at the fiscal 
        year 2005 enacted level. This program is the foundation of 
        forest resources research and scientist education efforts at 
        universities. It provides cutting-edge research on 
        productivity, technologies for monitoring and extending the 
        resource base, and environmental quality. The program is a 
        Federal-state-university partnership and one that has been 
        highly effective in leveraging the Federal investment and 
        producing results; in fact, program funding is matched more 
        than three times by universities with State and non-federal 
        funds. The Administration's fiscal year 2006 budget request 
        would cut program funding by 50 percent compared to fiscal year 
        2005. Proceeding with the Administration's request would 
        devastate our national forestry research capacity; thus, we 
        strongly urge restoring funding to the fiscal year 2005 enacted 
        level.
  --National Research Initiative (NRI) Competitive Grants Program.--
        AF&PA supports the President's request of $250 million, 
        provided at least 10 percent of the total is directed towards 
        forestry research. These NRI grants are a significant source of 
        funding for basic and applied research on forest resources, 
        including their management and utilization. Last year, less 
        than 6 percent of the $180 million funding was allocated to 
        forestry research proposals. Given the considerable potential 
        of the program to contribute to the nation's sustainable 
        forestry research needs, that percentage should be increased to 
        a minimum of 10 percent, with specific focus on grants that 
        support forest productivity, wood utilization, and biorefining 
        technologies.
  --Renewable Resources Extension Program (RREA).--AF&PA supports the 
        President's request of $4.1 million funding, a slight increase 
        over the fiscal year 2005 funding level. This program provides 
        the foundation for extension and outreach efforts delivered to 
        private landowners through universities. Cutting-edge forestry 
        research is of limited benefit unless it can be effectively 
        delivered to the nation's forest landowners.

Agenda 2020
    Agenda 2020 began in 1994 as a partnership between the forest 
products industry and the Department of Energy's Forest Products 
Industry of the Future program to accelerate the research, development, 
and deployment of new technologies in the industry. This collaborative 
research is focused on forest productivity, and developing processes 
and technologies that can cut energy use, minimize environmental 
impacts, and improve overall productivity in the industry to make it 
more globally competitive. The partnership has expanded to include 
USDA.
  --Biomass Research and Development Initiative.--AF&PA recommends $15 
        million, with increased focus on production and management of 
        forests and the efficient conversion of forest biomass into 
        energy. USDA funding for this initiative supports key 
        components of Agenda 2020 research, development, and 
        demonstration for the integrated forest products biorefinery 
        (IFPB): cultivation and production of high-quality feedstocks 
        engineered for both bioenergy/bioproducts and traditional 
        forest products; and conversion technologies to produce 
        bioenergy/bioproducts at several points during the traditional 
        harvest and manufacturing process. This IFPB research helps 
        ensure sustained, healthy forest productivity as the industry 
        evolves into a producer of high-valued, renewable, carbon-
        positive bioenergy and bioproducts.

Conclusion
    AF&PA appreciates the chance to provide the Subcommittee with 
testimony regarding fiscal year 2006 appropriations for the U.S. 
Department of Agriculture. The funding levels proposed for the programs 
listed above will help promote sustainable forest management on our 
nation's public and private lands.
                                 ______
                                 

  Prepared Statement of the American Honey Producers Association, Inc.

    I am Steve Park of Palo Cedro, California, and I serve as 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 honeybee 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 honeybee 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 2006 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 honeybee research funding at current levels for the ARS 
laboratory in Tucson, Arizona.

The President's Budget Proposal
    The American Honey Producers Association applauds the President's 
fiscal year 2006 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 current 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 $394,000 in cuts for the Baton Rouge facility and $246,000 
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 honeybee 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 very serious and growing 
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
    Honeybees fill a unique position in contemporary U.S. agriculture. 
They pollinate more than 90 food, fiber, and seed crops, valued at more 
than $20 billion a year in the United States, according to the 
Department of Agriculture. Honeybees are necessary for the production 
of such diverse crops as almonds, apples, oranges, melons, vegetables, 
alfalfa, soybeans, sunflower, and cotton, among others. In fact, 
honeybees pollinate about one-third of the human diet. In addition, 
honeybees 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. For example, the pinhead sized Varroa mite is 
systematically destroying bee colonies and is considered by many to be 
the most serious malady of honeybees. In fact, one of the most 
publicized effects of the devastating mite infestation is the recent 
shortage of honeybees to pollinate California's almond crop--the 
biggest crop requiring honey bees for pollination and California's 
largest agricultural export. California grows 100 percent of the 
Nation's almond crop and supplies 80 percent of the world's almonds. 
More than one million honeybee hives are needed to pollinate the half a 
million acres of almond groves that line California's Central Valley. 
That means nearly half of the managed colonies in the United States are 
involved in pollinating almonds in California during February and early 
March. Having enough bees to pollinate the almond crop can mean the 
difference between a good crop and disaster. Unfortunately, we estimate 
that as many as 30 percent of California's almond groves were not 
pollinated this year due to a lack of honeybees. As one news report 
noted in January of this year, growing almonds without honeybees ``is 
like sky diving without a parachute.'' Thus, the damaging effects of 
mites and other pests reach far beyond the American honey industry.
    Tracheal mites are another contributing factor to the loss of 
honeybees. Tracheal mites infest the breathing tube of adult honeybees 
and also feed on the bees' blood. The mites essentially clog the bees' 
breathing tubes, blocking the flow of oxygen and eventually killing the 
infested bees. The industry is also plagued by a honeybee bacterial 
disease that has become resistant to antibiotics designed to control it 
and a honeybee 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 these 
pests 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 honeybee 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 
honeybee 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 honeybee research programs conducted by ARS.
    The sequencing of the honeybee 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 honeybee traits. The 
sequenced honeybee genome is the necessary key that will allow 
scientists to discover the important DNA sequences. Because of the 
sequenced honeybee genome, it is now possible to apply molecular 
biological studies to the development of marker-assisted breeding of 
honeybees. Marker-facilitated selection offers the first real 
opportunity to transform the beekeeping industry from one that has been 
dependent upon a growing number of expensive pesticides and antibiotics 
into an industry that is free of chemical inputs and that is 
economically viable in today's competitive global marketplace.
    Furthermore, research on honeybees, one of five animals chosen by 
the National Institutes of Health for genome sequencing, may provide 
important insight into other areas of science. The honeybee is the 
first agricultural species to be sequenced, and such work may provide 
breakthrough advances in many areas of science. In fact, honeybees 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 
honeybees' olfactory capabilities are at least on par with that of 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 honeybees. 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 and assuring essential pollination services 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 
$246,000 in funding added by Congress in fiscal year 2001 for the ARS 
Honey Bee Laboratory at Weslaco, Texas. Retaining the current 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 honeybee 
colonies annually as well as devastating wild bee colonies. As noted in 
a February 2005 USA Today article, the Varroa mite has destroyed as 
much as 60 percent of the hives in some areas.
    For example, in Florida, the number of commercial bee colonies has 
fallen from approximately 360,000 hives in 1990 to just 220,000 today--
primarily as a result of the Varroa mite. These tiny parasites--also 
known as the ``vampire mite''--attach themselves to the backs of adult 
bees and literally suck out their insides. When these mites were first 
discovered in the United States in the 1980s, beekeepers were able to 
fight them with strips of the chemical fluvalinate. However, the Varroa 
mites have evolved into a parasite seemingly immune to current 
pesticides. The ARS laboratory at Weslaco has been developing 
alternative chemicals to control the Varroa mite. Presently, there are 
no other chemicals available for controlling the Varroa mite, and the 
laboratory is working frantically to develop other means of control. 
The laboratory also is working with a potent fungus, which may kill the 
mites without impeding colony development or population size.
    Furthermore, 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 the chemical 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 honeybees in the presence of Africanized 
honeybees, 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. honeybee 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. honeybee industry.

            Research at the ARS Baton Rouge Laboratory
    While we are pleased that the President has requested an increased 
funding in the amount of $500,000 for honey bee genome research at the 
ARS Baton Rouge Laboratory, we are dismayed by and opposed to the 
Administration's simultaneous request for $394,000 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 and, 
we believe, in the world, developing long-term, genetic-based solutions 
to the Varroa mite. Existing stocks of U.S. honeybees are being tested 
to find stocks that 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 honeybees 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 honeybee 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 
honeybee 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 2006. 
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 honeybee colony 
productivity through quantitative ecological studies of honeybee 
behavior, physiology, pest and diseases, and feral honeybee bionomics. 
Currently, the Tucson laboratory is working to finalize the development 
of a pheromone that kills the Varroa mite.
    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 honeybee 
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 honeybee 
germplasm in order to maintain genetic diversity and superior honeybee 
stock. Scientists at the facility also provide authoritative 
identification of Africanized honeybees 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 
honeybee research in the past and for your Subcommittee'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 $500,000, as proposed by the Administration in its 
fiscal year 2006 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 $394,000 for 
the Baton Rouge facility and $246,000 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 33 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 2006.
    This statement is presented in three parts: (a) a summary of our 
fiscal year 2006 funding recommendation, (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 and support needed 
to maximize the economic development potential of their resources.

                          SUMMARY OF REQUESTS

    We respectfully request the following funding levels for fiscal 
year 2006 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; 
$3.3 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 5 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-$4.5 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--33 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.
    All of the 1994 Land Grant Institutions are accredited by 
independent, regional accreditation agencies and like all institutions, 
must undergo stringent performance reviews 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.
    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

    Tragically, 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 starting to 
rectify this situation and is our hope for future advancement.
    Our current land grant programs are small, yet very important to 
us. It is essential that American Indians explore and adopt new and 
evolving technologies for managing our lands. We have the potential of 
becoming significant contributors to the agricultural base of the 
nation and the world.
    Native American Endowment Fund.--Endowment installments that are 
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 2004) is $2,180,705, after the USDA's administrative fee 
of $87,228 is deducted; $2,093,477 remains to be distributed among the 
33 tribal college Land Grant Institutions by statutory formula. While 
we have not yet been provided the breakdown of fiscal year 2004 funds 
as distributed per institution, in the prior year the USDA's 
administrative fee 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. We ask the Subcommittee to review the 
Department's administrative fee and consider reducing it for this 
program, so that more of these already limited funds can be distributed 
to 1994 Land Grant Institution 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 to help address 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 institutions. 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, under treaty 
rights, warrant the facilities and infrastructure necessary to fully 
engage in education and research programs vital to the future health 
and well being of our reservation communities. We respectfully request 
the subcommittee agree to fund the fiscal year 2006 endowment payment 
at $12 million, as included in the President's Budget recommendation.
    1994 Institutions' Educational Equity Grant Program.--Closely 
linked with the endowment fund, this program is designed to assist 1994 
land grant institutions with academic programs. Through the modest 
appropriations made available since fiscal year 2001, 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 2005, 
approximately $2,160,000 or two-thirds of the authorized level was 
available for distribution to the 1994 institutions, after across-the-
board cuts and Department fees were applied to the initial appropriated 
level of $2,250,000. We respectfully request full funding of $3.3 
million to allow the tribal 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 2005, $3,273,000 was appropriated for the 1994 
Institutions' competitive extension grants, a slight increase over 
fiscal year 2004. Without adequate funding, 1994 Institutions' ability 
to maintain existing programs and to respond to emerging issues such as 
food safety and homeland security, especially on border reservations, 
is severely limited. Increases in funding are needed to support these 
vital programs designed to address the inadequate extension services 
provided to Indian reservations, by their respective state programs. It 
is important to note that the 1994 extension program is designed to 
complement the Indian Reservation Extension Agent program and does not 
duplicate extension activities. 1994 Land Grant programs are funded at 
very modest levels. The tribal college land grants have applied their 
ingenuity for making the most of every dollar they have at their 
disposal by leveraging funds to maximize their programs whenever 
possible. For example, over the last 5 years the College of Menominee 
Nation (CMN) in Keshena, Wisconsin, has leveraged funding from several 
programs to expand its extension program focusing its efforts on 
strengthening the economic capacity of the local community. Partnering 
with U.S. Department of Health and Human Services, CMN is designing a 
curriculum that involves tribal elders, relevant service providers, 
local schools, the Commission on Aging, and health clinics designed to 
encourage minority youth to enter Allied Health fields. With a grant 
from the Wisconsin Department of Transportation, the college's 
extension and outreach offers the Transportation Alliance for New 
Solutions (TrANS) program. This is a 120 hour program designed to train 
women and minorities in roads construction. In addition, the Federal 
Highway Administration and the Wisconsin Department of Transportation 
have provided grant funds to CMN extension and outreach to conduct a 
Summer Transportation Institute focusing on middle school students. 
Students spend 4 weeks exploring various careers within the 
transportation industry. To continue and expand successful programs 
such as those being conducted at CMN, 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, $1,087,000, 
the fiscal year 2005 appropriated level, is grossly inadequate for a 
competitive pool of 33 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 agriculturebased 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. Project 
areas being studied 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).--In fiscal year 2005, 
$4.5 million of the RCAP funds appropriated for loans and grants to 
benefit Federally recognized Native American tribes was targeted for 
community facility grants for improvements at Tribal Colleges and 
Universities. This amounts to a $500,000 increase over the level that 
had been allocated to the program each year since fiscal year 2001. 
This program requires a minimum 25 percent non-Federal match. This has 
become a barrier for some of the colleges to even consider applying for 
these funds. Tribal colleges are chartered by their respective tribes 
which enjoy a government-to-government relationship with the Federal 
Government. Due to this relationship, tribal colleges have very limited 
access to non-Federal monies. Non-Federal matching requirements present 
a significant barrier to our colleges in their ability to compete for 
much needed funds. In the 2002 Farm Security and Rural Investment Act, 
(Public Law 107-171) language was adopted with regard to the Rural 
Cooperative Development Grants that limits non-Federal matching to no 
more than 5 percent in the case of a 1994 institution. 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 for each of the next 5 fiscal 
years to afford the 1994 institutions the means to aggressively address 
critical facilities needs, thereby allowing them to better serve their 
students and respective communities. Additionally, we request that 
Congress include language directing the agency to limit the non-Federal 
matching requirement to no more than 5 percent, the same level as 
applied to the Rural Cooperative Development Grants program, to help 
the 1994 land grant institutions to effectively address critical 
facilities and construction issues at their institutions.

                               CONCLUSION

    The 1994 Land Grant Institutions have proven to be efficient and 
effective vehicles 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 potential for 
benefiting from 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 help move our communities 
toward self-sufficiency. 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 2006 appropriations requests.
                                 ______
                                 

Prepared Statement of the American Nursery & Landscape Association and 
                    the Society of American Florists

    The American Nursery & Landscape Association (ANLA) and the Society 
of American Florists (SAF) welcome this opportunity to present the 
nursery and floriculture industry's views regarding the U.S. Department 
of Agriculture's (USDA) budget for the fiscal year 2006.
    ANLA is the national trade organization representing the U.S. 
nursery and landscape industry. ANLA represents 2,500 production 
nurseries, landscape firms, retail garden centers and horticultural 
distribution centers, and the 16,000 additional family farm and small 
business members of the State and regional nursery and landscape 
associations. ANLA's grower members are estimated to produce about 75 
percent of the nursery and greenhouse crops moving in domestic commerce 
in the United States that are destined for landscape use. Members also 
produce various plants used in the commercial production of tree and 
small fruits.
    SAF is the national trade association representing the entire 
floriculture industry, a $19 billion component, at retail, of the U.S. 
economy. Membership includes some 10,000 small businesses, including 
growers, wholesalers, retailers, importers and related organizations, 
located in communities nationwide and abroad. The industry produces and 
sells cut flowers and foliage, foliage plants, potted flowering plants, 
and bedding plants, which compete in the international marketplace.

                  ECONOMIC IMPORTANCE OF THE INDUSTRY

    Our industries represent the fastest-growing part of American 
agriculture. The 2002 Census of Agriculture shows a 40 percent increase 
from 1997 to 2002. According to a 2004 study by the Economic Research 
Service of USDA, floriculture and nursery crops posted total sales in 
excess of $15.3 billion, a value exceeded only by corn, soybeans, ad 
vegetable crops. Nursery and floriculture crops represent about 15 
percent of total U.S. crop receipts and are produced in every State in 
the United States.

                  AGRICULTURAL RESEARCH SERVICE (ARS)
               FLORICULTURE & NURSERY RESEARCH INITIATIVE

    ANLA and SAF developed and jointly submitted a detailed $21 million 
proposal to Congress in 1998, establishing a coordinated Research 
Initiative for the environmental horticulture industry. We are pleased 
that Congress chose to recognize the growing importance and size of the 
industry in U.S. agriculture and has continued to increase the funding 
level of the Initiative to $6 million in fiscal year 2005. We 
respectfully request a $1 million increase in this amount, for a total 
of $7 million in fiscal year 2006. This research is currently funding 
projects of importance to the floral and nursery industry, but its 
projects are also of importance to agriculture and society in general.
    The additional funding would enhance the basic research efforts to 
address emerging imported insect and disease issues in the floral and 
nursery industry. It would also allow for the strengthening of ongoing 
research efforts--for instance, it would allow expansion of 
Phytophthora ramorum (also known as ``Sudden Oak Death'') research.
    The Initiative represents a strong and cost-effective cooperation 
between industry, ARS scientists, and existing ``university centers of 
excellence'' with experience with the industry's needs. In tight fiscal 
times, the Initiative has a proven track record of results and return 
on investment. With continued support, crucial research--ranging from 
pest and disease management to mechanization to reduced chemical use to 
reduced runoff and environmental management--will not be diminished or 
on-going projects invalidated before their results can be brought to 
bear.
    The continued funding allows us to move forward modestly on our 
crucial goals, which are:
  --Protect the environment, including human health and safety through 
        research leading to reduced use of chemicals and a reduction in 
        runoff and other wastes.
  --Enhance environmental remediation and cleanup, efforts on wetlands, 
        post-industrial sites, air quality and other environmental 
        areas through research on the ability of plants to reverse and 
        mitigate environmental pollution.
  --Improve the ability to prevent the spread of plant pests and 
        diseases, in international trade.
  --Contribute to the U.S. agricultural economy, and increase United 
        States competitiveness in international markets by conducting 
        research leading to improved nursery/greenhouse and 
        floriculture products and production strategies, and by 
        improving technology transfer of research results to benefit 
        other U.S. agricultural sectors.
  --Strengthen rural and suburban economies across the United States by 
        providing improved crop production systems and technologies to 
        growers to increase production efficiency.
  --Maintain biodiversity through germplasm preservation enabling 
        useful botanic traits to be transmitted to future generations.
  --Enhance Americans' quality of life by increasing the availability 
        and diversity of plants and flowers for the consumers' purchase 
        and enjoyment.
    The floriculture and nursery industry supports its own research, 
which is typically applied research rather than the basic, long-term 
research funded by ARS. The industry's private foundations fund an 
average of $3 million annually on research.
    However, the Federal Government also has a recognized role in 
funding research. The basic, long-term USDA-ARS funding, with projects 
at major ARS stations and land-grant universities across the country, 
has brought valuable new tools and help to a segment of agriculture 
otherwise underserved in the USDA budget. The research funded by the 
Initiative is of crucial importance to the floral and nursery 
industry--but it will also benefit other segments of agriculture, and 
will provide benefits to society at large.
    The wave of the future will be found in increased industry-
academic-government partnerships and cooperation. The money 
appropriated by Congress in fiscal year 2005 and previous years is 
already funding long-term basic research of critical importance to the 
industry, on projects chosen to compliment industry's privately funded 
efforts and to address long-term industry needs to:
  --Help prevent and deal with the increasing import of foreign pests 
        and diseases, which have a devastating impact on American 
        agriculture and the environment--like Ralstonia solanacearum 
        and Phytophthora ramorum are being studied and important 
        projects underway will be lost, should funding not be 
        continued.
  --Reduce chemical usage
  --Find ways to improve the post-harvest life of both flowers and 
        plants
  --Develop disease-resistant and pest-resistant flowers and plants to 
        reduce the need for pesticide application in the environment
  --Find ways to control root diseases
  --Improve spray technology and pest control in greenhouses
  --Manage nursery and greenhouse irrigation, fertilization and runoff
  --Develop better tests leading to virus-free stock
    The Agricultural Research Service, private industry, and 
universities have developed a strong program of coordination and 
cooperation to accomplish the goals of the Initiative. We ask Congress 
to continue and increase funding for this very important effort, which 
represents a new level of cooperation among industry, the Federal 
Government, and university researchers, to meet the needs of the floral 
and nursery industry. We were disappointed that the President's budget 
request for fiscal year 2006 failed to include the funding appropriated 
to the Initiative by Congress in fiscal year 2005 and previous years. 
Were the President's budget to be enacted by Congress, the current $6 
million would be cut back and valuable research efforts already in 
progress would be lost.
    We believe that these Congressional appropriations reflect the 
voices of constituents to whom this research is of very high 
importance, and we request that funding be restored. Further, we 
respectfully request a $1 million increase in the Floriculture and 
Nursery Research Initiative, through the Agricultural Research Service 
budget, for a total of $7 million in fiscal year 2006.
    We very much appreciate this opportunity to present a statement for 
the record, and will be pleased to answer any questions from the 
Subcommittee.
                                 ______
                                 

      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 43 
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 2006 funding priorities within the jurisdiction of the 
Agriculture, Rural Development, 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 $10 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 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.
                                 ______
                                 

     Prepared Statement of the American Sheep Industry Association

    The American Sheep Industry Association (ASI) is a federation of 
state member associations representing over 67,000 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 building on the 
first growth in the U.S. Sheep Industry since 1990 through 
strengthening our infrastructure primarily through the programs of 
USDA, APHIS, Veterinary Services, Wildlife Services, and National Sheep 
Industry Improvement Center to fully funding critical predator control 
activities, national animal health efforts, and expanding research 
capabilities.
    We appreciate this opportunity to comment on the USDA fiscal year 
2006 budget.

                           RURAL DEVELOPMENT

    The National Sheep Industry Improvement Center is critical to the 
industry and we fully support appropriations for the balance of the 
authorized spending of $21 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.
    We strongly support the appropriations level of fiscal year 2005 
and urge the Subcommittee to continue funding at that level for fiscal 
year 2006.
    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.
           animal and plant health inspection service (aphis)

Scrapie
    The American Sheep Industry Association is very appreciative for 
the increased appropriations approved in fiscal year 2005 of $17.5 
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 $19 million for scrapie eradication 
in the 2005 budget.
    Scrapie is one of the families 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 3 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 $19 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 the 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 2005 appropriations for 
Wildlife Services operations and methods development programs, 
particularly as related to livestock protection. We request the 
Committee to restore the funding levels that are decreased in the 
Administration's fiscal year 2006 budget and approve an increase to the 
livestock protection program of Wildlife Services operations of $9 
million. We encourage and support continued recognition in the 
appropriations process for fiscal year 2006 of the importance of aerial 
hunting as one of Wildlife Service's most efficient and cost-effective 
core programs. 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.
    Federal funding available for livestock predation management by the 
Western Region program has remained relatively constant for 
approximately 16 years. WS program cooperators have been forced to fund 
more and more of the costs of the program. WS Western Region base 
funding has increased only 5.6 percent in the past 10 years while 
cooperative funding has increased 110 percent (see chart). This 
increase has primarily come from individual livestock producers, 
associations, counties, and States.
    Additionally, new Federal mandates and program investments such as 
narrow-banding of radios, computer record keeping and compliance with 
the Endangered Species Act are requiring a larger portion of the 
already stretched budget and negatively impacting the amount of 
livestock predation management work that WS can conduct.

Economics of Predation Management
    The WS Western Region predation management program is one of the 
few government sponsored programs that is cost-shared, and this 
provides a significant benefit to both the producers and the 
government. Predation management, as conducted by the WS program, is 
cost effective and returns more money to the U.S. treasury than it 
costs. An analysis of 1998 data shows that for every dollar spent for 
predation management, $3 worth of livestock were saved. In that same 
year the total investment in just the predation management program was 
$20 million ($9 million Federal and $11 million cooperative funds); 
therefore, the full impact of this investment was a $250 million net 
increase in economic activity. Using today's values for livestock, 
every Federal dollar spent on predation management results in $10.84 in 
livestock saved, conservatively, $97.5 million in livestock saved 
($52.5 million in calves, $34 million in sheep and lambs, $11 million 
in goats). When cooperative funding is included with Federal funds, the 
benefit cost ratio is $4.87:1.

----------------------------------------------------------------------------------------------------------------
                                                                                                  Total value of
                        Type of Livestock                             Number       Number saved      livestock
                                                                     protected    from predators       saved
----------------------------------------------------------------------------------------------------------------
Calves..........................................................       2,500,000          70,000     $52,500,000
Adult Sheep.....................................................       2,000,000          82,000       8,200,000
Lambs...........................................................       1,850,000         214,600      25,752,000
Goats...........................................................         292,000         110,960      11,096,000
----------------------------------------------------------------------------------------------------------------

    The value of livestock saved is much greater in rural economies 
than any other type of economic development. Livestock dollars, that 
would have been lost without adequate predation management, generate an 
additional three fold increase in non-agricultural economic activity in 
rural America. The total economic activity (both agriculture and non-
agricultural sectors) generated by predation management is $390.2 
million.

Emerging Issues
    Additional issues are emerging in the West that will challenge the 
Federal WS program.
  --Wolves.--Recently a Federal judge struck down the threatened 
        species status for wolves in the Western Distinct Population 
        area eliminating the ability of private land ranchers to deal 
        with wolves, thus requiring additional government intervention.
  --Wildlife.--The declines in predation management that have already 
        occurred, and that will continue to occur without additional 
        Federal funding, have resulted in negative impacts on many 
        native wildlife populations. Several western States currently 
        need to fund predation management to prevent the listing of 
        sage grouse as an endangered species or to recover mule deer 
        herds.
    Without additional Federal funding to support existing western 
livestock protection programs, predation management expertise will be 
lost and livestock grazing in some areas will be jeopardized. Rural 
economies need this support, and the return for the investment exceeds 
the requested assistance.
    ASI urges the Subcommittee to provide USDA, APHIS, WS, Western 
Region an additional $9 million of Federal funds for livestock 
protection. At a nominal 16 percent tax rate on the economic activity 
generated by the investment would result in over $62 million to the 
Treasury.

------------------------------------------------------------------------

------------------------------------------------------------------------
Total Livestock Protected...............................       6,642,000
Total Value of Livestock Saved (Using $10.84:1 Ratio)...     $97,548,000
Value incl. Multiplier..................................    $390,192,000
16 percent Nominal Tax rate.............................     $62,430,720
------------------------------------------------------------------------

  Chart 1. Ten Year Comparison--WR Federal Base and Cooperative Funds 
                   (Including Livestock Protection) 



                 FARM AND FOREIGN AGRICULTURAL SERVICES

Foreign Agricultural Service (FAS)
    The sheep industry participates in FAS programs such as the Market 
Access Program (MAP), Quality Samples Program (QSP) and the Foreign 
Market Development Program (FMD). 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 increased dramatically with 
approximately 60 percent of U.S. production now competing overseas.

Risk Management Agency (RMA)
    Through ASI, the U.S. sheep industry is working with RMA on the 
development of ``Livestock Risk Protection'' for lamb (LRP-Lamb), a 
price-risk insurance product to help sheep producers manage the primary 
factor in their operation's financial exposure. The sheep industry is 
very anxious to begin a pilot project with LRP-Lamb with the goal of 
providing a market-based, user-friendly risk management tool that 
effectively and efficiently protects against price downswings, 
providing producers and their lenders with a critically needed 
financial management tool.
    We note that the Administration's budget request supports the 
expanded use of crop insurance and recommends an increase in the crop 
insurance budget. While we appreciate the Administration request 
focusing on the traditional crops and crop insurance, the livestock 
sector and the sheep industry in particular will be well-served to have 
the opportunity to participate in crop insurance programs. ASI urges 
the Subcommittee to support the President's request and recommend 
additional funding especially in the ``Delivery and other 
Administrative Expenses'' to help cover the research and developmental 
costs to design creative new programs for the livestock sector as well 
as in the ``Administrative and Operating Expenses'' category to enable 
RMA to deliver these products, including appropriate maintenance 
expenses.
    ASI understands and supports USDA's goal to provide innovative 
price protection products for livestock producers. The 2000 Crop 
Insurance Reform Act authorized funding for fiscal year 2006 at $20 
million and if necessary, we recommend the Subcommittee to approve an 
increase in the dollars allocated for each year by a nominal amount to 
provide pilot program monies for LRP-Lamb while continuing to 
adequately fund pilot programming for cattle and swine.

             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. In 
order for the sheep industry to continue to be more globally 
competitive, 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 note the President's request for fiscal year 2006 includes 
$7.5 million for BSE research. 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. As the Subcommittee is 
aware unlike scrapie which transmits from sheep to sheep within flocks, 
BSE doesn't transmit from cow to cow in the absence of recycled 
protein. This difference between BSE and scrapie transmission explains 
the need for continuing to concentrate research efforts on scrapie 
detection and control methods. 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.
    Since 2001, Congress has had the foresight to appropriate $764,195 
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 and Ovine Progressive Pneumonia 
virus (OPPv). Scrapie remains endemic within the United States; however 
ongoing research efforts continue to provide tools necessary for 
control and eventual eradication. OPPv causes life-long infection which 
continues to have significant economic impact for U.S. Sheep producers. 
Very promising on-going genomic research efforts are directed at early 
determination of which sheep are susceptible to disease and responsible 
for economic losses. Early detection of susceptibility and resistance 
will lead to practical intervention strategies. We respectively request 
the Subcommittee to recommend the restoration of $764,195 to ADRU for 
the fiscal year 2006 budget.
    We also urge the Subcommittee to recommend the restoration of 
$489,183 for Malignant Catarrhal Fever (MCF) at the ARS/ADRU in Pullman 
for the fiscal year 2006 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 and economic losses caused by 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.
    We note that the President's fiscal year 2006 includes an increase 
of $2.5 million in the ``Product Quality/Value Added'' category for 
``Bioenergy and Biobased Products'' research. Within this category, the 
budget request recommends a portion of these funds be used for the 
development of ``technologies leading to new value added products from 
food animal byproducts''. We agree that this is an important area of 
research and urge the Subcommittee to recommend that a significant 
proportion of funds for this category, as supported by ARS, be directed 
toward research on wool at the molecular level focusing on flame 
retardation, and enhancement of fiber properties through enzyme 
treatments targeting military needs and other niche consumer 
applications.

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 is administered as a national program 
``NRSP-7'' cooperatively with FDA/CVM to provide research information 
for the approval process on therapeutic drugs that are needed. 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. We appreciate the Administration's request of 
$1,000,000 for this program in the USDA budget, and urge the 
Subcommittee to recommend that it be funded at least at this level to 
help meet the needs of the animal industries. FARAD provides 
veterinarians the ability to accurately prescribe products with 
appropriate withdrawal times protecting both animal and human health.
    On-going research in wool is critically important to the sheep and 
wool industry. ASI urges the Subcommittee's support to restore and 
continue the CSREES special grants program for wool research at least 
to the fiscal year 2005 level of $300,000 for fiscal year 2006.
    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 to 
continue funding at the fiscal yeaer 2005 level of $574,000 for 2006.
    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 continue the funding for this program to $1,000,000 for 
fiscal year 2006.

Grants to Train Farm Workers in Technologies and to Train Farm Workers 
        in Specialized Skills Necessary for Higher Value Crops
    The shortage of skilled sheep shearers has increasingly become a 
problem for U.S. sheep producers and strong interest has been expressed 
in utilizing this grant program through USDA as authorized in section 
6025 of the 2002 Farm Security and Rural Investment Act. Grant funds 
are authorized; however appropriations would be necessary for the 
program to allow the U.S. sheep industry the opportunity to apply for 
funds to train U.S. workers as sheep shearers.
                                 ______
                                 

      Prepared Statement of the American Society for Microbiology

    The American Society for Microbiology (ASM) appreciates the 
opportunity to submit testimony on the fiscal year 2006 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. 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 plant, animal 
and human 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 ensuring 
food availability, quality and safety, as well as a competitive 
agricultural economy. U.S. 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. ASM urges Congress to provide 
increased funding for research programs within the USDA in fiscal year 
2006.
    Microbiological research in agriculture is vital to understanding 
and finding solutions to foodborne diseases, endemic diseases of long 
standing, new and emerging plant and animal diseases, development of 
new agriculture products and processes and addressing existing and 
emerging environmental challenges. 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. According to the 
USDA Economic Research Service (ERS) report, Agricultural Research and 
Development: Public and Private Investments Under Alternative Markets 
and Institutions, the rate of return on public investment in basic 
agricultural research is estimated to be between 60 and 90 percent.
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 
        and the environment 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, NRI was able to fund only 11 percent of the 
grant proposals it received, while agencies such as the National 
Institutes of Health (NIH) and the NSF fund between 20-30 percent. ASM 
urges Congress to fund NRI at the President's requested level of $250 
million in fiscal year 2006. NRI's requested increase comes from the 
proposal to shift CSREES Integrated Activities, such as food safety and 
water quality, making up $40 million of the proposed $70 million 
increase, and to reallocate funds from the CSREES formula grants to the 
NRI in the administration's effort to eliminate the formula grant 
programs by fiscal year 2007. If new funds cannot be found, ASM 
supports the proposed 50 percent reduction of formula grant funds, part 
of which will be redirected to the NRI, and the remaining 50 percent be 
phased out over a 3-year period rather than a 1-year period of time, 
giving the institutions currently receiving formula grants time to 
adjust. ASM supports the Administration's effort to increase 
competitively awarded funding mechanisms and believes that competitive 
grants ensure the best science.
    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 and products. ASM 
supports the President's requested level of $250 million for NRI.

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. ASM supports the President's request for 
this initiative within the USDA budget of $376 million for fiscal year 
2006, an increase of $78 million over fiscal year 2005. Of this total, 
$59 million is for the completion of the USDA's National Centers for 
Animal Health in Ames, Iowa. This funding will go towards:
    Enhancing food defense by:
  --Expanding the Food Emergency Response Network (FERN) with 
        participating laboratories including implementation of the 
        Electronic Laboratory Exchange Network (eLEXNET) and an 
        electronic methods repository;
  --Upgrading laboratory capabilities to quickly identify chemical and 
        radiological threats to the food supply; and
  --Strengthening research on diagnostic methods for quickly 
        identifying various pathogens and contaminated foods and 
        innovative biosecure foods.
    Enhancing agriculture defense by:
  --Strengthening research on rapid response systems for bioterror 
        agents, improved vaccines, and identifying genes affecting 
        disease resistance;
  --Expanding the National Plant Disease Recovery System to ensure 
        disease resistant seed varieties are continually developed and 
        made available to producers in the event of a natural or 
        intentional catastrophic disease or pest outbreak;
  --Substantially expanding the Regional Diagnostic Network with links 
        to the National Agricultural Pest Information System;
  --Establishing a Higher Education Agrosecurity Program for 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;
  --Establishing connectivity with the Department of Homeland Security 
        (DHS) integration and analysis to improve biosurveillance of 
        pests and diseases in plants;
  --Increasing activities to safeguard plants from intentional threats 
        to spread pests and diseases;
  --Strengthening the system to track biological disease agents;
  --Improving USDA's ability to respond to a disease outbreak, 
        including increasing supplies of vaccines for the National 
        Veterinary Stockpile;
  --Providing funds for completing the consolidated state-of-the-art 
        BSL-3 animal research and diagnostic laboratory at Ames, Iowa; 
        and
  --Improving biocontainment safeguards at the Foreign Disease Weed 
        Science Laboratory in Frederick, MD.
    ASM believes there should be greater emphasis on research in the 
Food and Agriculture Defense 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.

Food Safety
    Each year foodborne pathogens cause 76 million human illnesses, 
325,000 hospitalizations, 5,200 deaths, and an unknown number of 
chronic conditions, according to the CDC (ERS: Economics of Foodborne 
Disease: Feature, 2005). The USDA's Economic Research Service (ERS) 
estimates that the medical costs, productivity losses, and costs of 
premature deaths for diseases caused by just five foodborne pathogens 
exceeds $6.9 billion per year in the United States. The USDA plays a 
vital 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. The most significant outcome of food safety research is to 
provide greater public health protection which, in part, can be 
measured by reductions in the incidence of foodborne illnesses. The 
Centers for Disease Control and Prevention reports that the 2003 
incidence of illness caused by four major foodborne pathogens exceed 
the levels outlined in the National Health Objectives for 2010 (CDC: 
MMWR, April 30, 2004). Although increases are requested for the Food 
and Agriculture Defense Initiative and the Food Safety and Inspection 
Service, we note that a reduction in funding for food safety within ARS 
has been proposed, and level funding is requested within CSREES. 
Without a sustained significant increase in the level of food safety 
research funding, meeting the National Health Objectives for 2010 in 
all likelihood will not become reality. ASM recommends a substantial 
increase in food safety research, which is essential to ensure the 
protection of the Nation's health.

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. Determining the function of the 
sequenced genomes (functional genomics) and analyses of the data 
(bioinformatics) now need investment for new management techniques and 
tools. 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 utilize it 
have implications for virtually all aspects of agriculture. An increase 
of $11 million has been requested for the NRI in fiscal year 2006 to 
support investments in the sequencing and annotation of the maize and 
swine genomes. A $9.2 million increase in animal and plant genomics 
research within the ARS has been requested. ASM supports the requested 
increases for the genomics initiative and USDA.

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 and opportunistic plant pathogens and 
soil inhabiting microorganisms can be causal agents of infection and 
disease in humans. For emerging diseases to be effectively detected and 
controlled the biology, ecology, and mechanisms for pathogenicity of 
the causal pathogens must be understood and weaknesses exploited to 
limit their impact. This research will help address the risk to humans 
from emerging diseases and opportunistic pathogens, and will ensure the 
safety of plant and animal products. Additionally, expanded research is 
needed to accelerate the development of information and technologies 
for the protection of United States agricultural commodities,, wildlife 
and human health against emerging 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; the USDA has expanded monitoring to include the 
Collaboration on Animal Health Food Safety Epidemiology (CAHFSE) 
program. USDA support for these projects 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. 
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 of leadership on food, agriculture, 
and natural resources, based on sound public policy, the best available 
science, and efficient management should be supported. 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 by increasing funding for agricultural research 
programs, including providing $250 million for NRI in fiscal year 2006.
    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.

                                                            SCHEDULE OF FEDERAL AWARDS--2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Grants        Receipts or                       Grants
  Federal Grantor/Pass-through Grantor/     Cost Center    Federal CFDA     Program or    Receivable 1/1/     Revenue     Disbursements/   Recivable 12/
              Program Title                                   Number       Award Number        2005         Recognized     Expenditures       31/2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
MAJOR PROGRAMS: Resident Postdoctoral                783           93.28    1,157,764.00       83,055.50  ..............  ..............       83,055.50
 Research...............................
                                         ---------------------------------------------------------------------------------------------------------------
      Total Major Programs..............  ..............  ..............    1,157,764.00       83,055.50  ..............  ..............       83,055.50
                                         ===============================================================================================================
OTHER FEDERAL ASSISTANCE:
    HHS:
        NIGMS-MARC......................             789           93.88      431,300.00      155,195.00  ..............  ..............      155,195.00
        DNA Repair and Mutagenesis......             457           93.39       25,000.00       25,000.00  ..............  ..............       25,000.00
        Candida and Candidiasis.........             434           93.12       10,000.00       10,000.00  ..............  ..............       10,000.00
        ASM Conf New phage Biology......             430           93.86       10,000.00       10,000.00  ..............  ..............       10,000.00
        ASM Conf Cell Cell..............             470           93.86       18,000.00       17,000.00  ..............  ..............       17,000.00
        ASM Conf Signal Transduction....             429           93.86       20,000.00       20,000.00  ..............  ..............       20,000.00
        ASM Conf Viral Immune Evasion...             428           93.86       20,000.00  ..............  ..............  ..............  ..............
    National Science Foundation:
        Plant Biotechnology.............             678           47.07       15,000.00  ..............  ..............  ..............  ..............
        Pathogens.......................             697           47.07      110,000.00  ..............  ..............  ..............  ..............
        Cell-Cell Communications........             470           47.07        5,000.00        5,000.00  ..............  ..............        5,000.00
        Colloquium Genome Annotation....             672           47.07       63,408.00        2,421.00  ..............  ..............        2,421.00
    U.S. Department of Energy:
        DNA Repair and Mutagenesis......             457           81.05       20,000.00       20,000.00  ..............  ..............       20,000.00
        Prokaryotic Development.........             472           81.05       10,000.00  ..............  ..............  ..............  ..............
        Geobiology......................             675           81.05       15,000.00  ..............  ..............  ..............  ..............
        Microbial Ecology and Genomics..             676           81.05       25,000.00  ..............  ..............  ..............  ..............
        Multicellular Cooperation.......             671           81.05       15,000.00  ..............  ..............  ..............  ..............
        Integrating Metabolism..........             477           81.05       10,000.00       10,000.00  ..............  ..............       10,000.00
        Beyond Microbial Genomics.......             691           81.05       94,520.00  ..............  ..............  ..............  ..............
    USDA: Conf Salmonella Pathogenesis..             421           10.21       10,000.00  ..............  ..............  ..............  ..............
    EPA:
        Microbial Eolocy................             676           66.50       20,000.00  ..............  ..............  ..............  ..............
        Infectious Disease GI Tract.....             670           66.61       50,000.00  ..............  ..............  ..............  ..............
                                         ---------------------------------------------------------------------------------------------------------------
          Total Other Awards............  ..............  ..............      997,228.00      274,616.00  ..............  ..............      274,616.00
                                         ---------------------------------------------------------------------------------------------------------------
          Total Federal Awards..........  ..............  ..............    2,154,992.00      357,671.50  ..............  ..............      357,671.50
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                 ______
                                 

      Prepared Statement of the American Society for Microbiology

    The American Society for Microbiology (ASM), the largest single 
life science society with over 43,000 members, is pleased to submit a 
statement on the fiscal year 2006 appropriation for the Food and Drug 
Administration (FDA). The proposed fiscal year 2006 budget request of 
$1.9 billion for the FDA represents a 4.5 percent increase over the 
fiscal year 2005 appropriation. Much of the $81 million dollar increase 
is allocated to defending the Nation's food supply and further 
improving FDA evaluation of medical devices and health care products.
    The ASM recommends a 6 percent increase for FDA's budget in fiscal 
year 2006. FDA is the principal guardian of consumer and medical 
product safety in the United States. FDA regulations encompass human 
and veterinary drugs, biological products, cosmetics, medical devices, 
products that emit radiation, and a wide range of food products. 
Increased funding will strengthen FDA's responsibilities to ensure safe 
and effective medical products, food safety, accurate consumer product 
information and safe and effective drug and device evaluations.

                     NATIONAL SECURITY AND THE FDA

    FDA researchers and field officers are collaborating with other 
Federal, State, and local agencies to implement the Bioterrorism Act of 
2002. The fiscal year 2006 budget proposes $244 million for FDA 
activities to prevent or mitigate bioterrorism, including $180 million 
for food defense. Protecting the Nation's food supply from intentional 
contamination is an ongoing responsibility of the FDA, which now 
coordinates these efforts with the U.S. Department of Agriculture 
(USDA) and the Department of Homeland Security (DHS) under the Homeland 
Security Presidential Directive (HSPD-9) of 2004. Last September, the 
FDA, DHS, and USDA signed an agreement with the National Association of 
State Departments of Agriculture to improve cooperation among all 
levels of government when responding to food and agricultural 
emergencies, with technical expertise provided by the Federal entities.
    Two-thirds of the proposed funding increase would enhance the 
multi-agency Food Emergency Response Network (FERN), a relatively new 
nationwide consortium of Federal and State laboratories capable of 
testing thousands of food samples for biological, chemical, or 
radiological agents. The network, which continues to add laboratories, 
incorporates detection and reporting systems that are more 
comprehensive and better coordinated than previous surveillance and 
monitoring systems. A variety of FDA programs address the network's 
objectives of prevention, preparedness, response, and recovery in the 
event of terrorism. Last year FDA personnel, for instance, conducted 
training seminars on optimal detection methods for the pathogens 
Bacillus anthracis and Salmonella. If approved, the fiscal year 2006 
budget request will help elevate FERN's surge capacity, as well as add 
nineteen additional FDA funded State laboratories to the six funded in 
fiscal year 2005, joining the ten laboratories already in place.
    Data collected from FERN activities are quickly available across 
the country through the Electronic Laboratory Exchange Network 
(eLEXNET), one of several surveillance information systems supported by 
the FDA. Together, the FERN and eLEXNET networks are FDA's contribution 
to the National Biosurveillance Integration System, developed by the 
DHS to coordinate health, environment, and intelligence information 
systems against terrorist threats. Part of the requested fiscal year 
2006 increase for food security would underwrite another FDA component 
as well, the Emergency Operations Network Incident/Management System 
(EON IMS) managed by the agency's Office of Crisis Management. Its 
mission is to integrate multiple electronic data systems (e.g., FERN, 
eLEXNET, Epidemic Information Exchange) into formats conducive to rapid 
decision making during crisis situations. Among its components is a 
Geographic Information System (GIS) for mapping and impact assessments. 
Last year, the system was pilot tested successfully during several 
outbreaks of foodborne salmonellosis in 15 States.
    Basic and applied research projects linked to food defense also 
would benefit from the proposed fiscal year 2006 increase, in 
particular those useful in prevention or detection of pathogenic 
bioagents in food supplies. Subsequent discoveries undoubtedly will 
benefit the understanding of infectious diseases in general. Among the 
areas included in the FDA research agenda are population susceptibility 
factors, new food security technologies to protect particularly 
vulnerable foods, tamperproof packaging, rapid test methodologies to 
strengthen a currently overloaded field testing system, and innovative 
sensor technologies to detect bioagents in consumer products.
    Within the FDA mission to protect public health, the agency 
reinforces the Nation's drug preparedness against bioterrorism, by 
evaluating and approving vaccines and therapeutics included in the 
Strategic National Stockpile. Among the counterterrorism therapeutics 
evaluated by the FDA are improved smallpox vaccines and treatments for 
anthrax infections. As with its other national security efforts, the 
FDA cooperates with other Federal agencies in development, production, 
and approval of critical vaccines and therapeutics to be used against 
possible biological weapons. The agency also informs the public with 
science based updates on candidate countermeasures, explaining the 
benefits and possible side effects of their use.
    After September 11, 2001, the FDA assessed the Nation's food 
production, transport, and import systems for vulnerability to 
intentional release of microbial, chemical, or radiological agents. The 
FDA subsequently hired 655 new employees for its Office of Regulatory 
Affairs (ORA). Most were given food safety assignments, many at border 
or port entry locations or otherwise dealing with imports. The ORA's 
thirteen laboratories analyze more than 41,000 product samples 
annually, often from inspected import shipments. The number of FDA 
regulated products imported to the United States each year has exploded 
from about 1.5 million in 1992 to nearly 10 million today. Under the 
Bioterrorism Act of 2002, new regulations effective December 2004 
require the registration of food facilities, both foreign and domestic, 
that manufacture, process, or hold food for human or animal consumption 
in the United States. The agency expects more than 400,000 facilities 
to register. The new regulations also require prior notification of 
imported food shipments, an estimated 25,000 notifications daily, to 
help alert FDA inspectors to suspicious or otherwise questionable 
shipments.

                     FOOD SAFETY AND PUBLIC HEALTH

    The FDA's Center for Food Safety and Applied Nutrition (CFSAN) 
oversees our entire food supply, excluding meat, poultry, and some egg 
products regulated by USDA programs. According to the FDA, about $417 
billion worth from U.S. agriculture and an additional $49 billion 
imported from worldwide sources, pass through 60,000 businesses that 
manufacture, process, and store and transport food products. Given the 
size and complexity, there are multiple possibilities for negligent or 
accidental contamination. The Centers for Disease Control and 
Prevention (CDC) estimates that foodborne microbial diseases cause 
approximately 76 million illnesses, 325,000 hospitalizations, and 5,000 
deaths in the United States each year. In 2000, the USDA's Economic 
Research Service (ERS) estimated the annual cost from just five 
bacterial foodborne pathogens as $6.9 billion, including medical costs, 
lost productivity, and premature death. About one-third of total costs 
are the result of illnesses in children under the age of ten. Working 
to update costs, the ERS now calculates that 1.4 million cases due to 
Salmonella alone cost $3 billion annually.
    In the 1990s, the FDA boosted food safety efforts through numerous 
initiatives and new regulations, after several outbreaks of foodborne 
illnesses related to Escherichia coli O157:H7, Listeria and Salmonella 
raised public concerns about food safety. Federal statistics indicated 
a 20 percent decline in the incidence of several foodborne diseases 
from 1997 to 1999. Today CFSAN personnel both instigate and implement 
improved regulations, among them the requirement that more production 
plants adopt Hazard Analysis and Critical Control Points (HACCP) 
procedures that prevent problems at the most contamination prone steps 
in a production process. The center also participates in nationwide 
surveillance networks, such as FoodNet and PulseNet, that detect 
disease outbreaks. Prevention goals guide many of the CFSAN programs; 
e.g., a 50 percent reduction in all salmonellosis cases by 2010.
    While the FDA steadily makes advances in preserving food safety, 
new challenges routinely face agency personnel. The volume and 
diversity of imported foods continue to expand rapidly, creating new 
food types and sources to be regulated and evaluated. The dramatic 
growth of the dietary supplements industry (already $17 billion in 
2000) creates additional demand on FDA resources. The U.S. population 
continues to age, adding more individuals most susceptible to foodborne 
illnesses. Scientists are identifying new foodborne pathogens and other 
contaminants, as well as new routes of transmission through the food 
chain. Bioengineering of agricultural products and irradiation of 
processed foods will continue to push FDA oversight duties into unique 
directions. Most recently the FDA is confronting the economic, 
political, and public health ramifications of a group of diseases known 
as transmissible spongiform encephalopathies, thought to be associated 
with contaminated meat products.
    The most controversial and well known of these is bovine spongiform 
encephalopathy (BSE), more commonly called ``mad cow disease.'' Fifteen 
years ago, after cases of BSE in Great Britain were linked to eating 
contaminated beef, the FDA established its first anti-BSE regulations 
through controls on live cattle imports. In 1997, the agency banned the 
use of mammalian animal products in ruminant animal feed, to prevent 
the spread of BSE. Thus far, there has been one proven case of a BSE-
infected, Canadian raised cow in this country, in late December 2003. 
Thirty FDA employees along with State inspectors rapidly mobilized to 
trace products from the cow to twenty-two facilities, retrieving meat 
materials from a range of businesses in the meat processor pipeline. 
During 2004, the agency further strengthened its safeguards against BSE 
with additional animal feed restrictions, recordkeeping requirements 
for meat growers and processors, and scientific studies of rapid 
diagnostic kits that detect animal protein in ruminant feed. The agency 
also increased its inspections of feed mills and renderers, expecting 
to conduct 2,800 visits itself and process information from an 
additional 3,800 State based inspections. Thus far, no additional case 
of BSE contamination has been detected in this country.

       CONSUMER PRODUCT SAFETY, MEDICAL DEVICES AND PUBLIC HEALTH

    Recently publicized problems with some FDA approved prescription 
drugs refocused attention on the extent to which FDA regulatory 
activities affect our daily lives. In addition to the Nation's food 
supply, the agency evaluates the safety and efficacy of human and 
veterinary drugs, biological products such as blood and human vaccines, 
medical devices, and products that emit radiation, as well as 
cosmetics. The agency rigorously tests drugs and devices in its 
laboratories, ensures that products are truthfully and clearly labeled 
for users, and conducts post-market surveillance on approved products. 
In 2003, for example, the agency handled more than 370,000 reports of 
adverse effects related to use of pharmaceuticals, a third of which 
were serious in nature. In fiscal year 2004, the FDA approved 534 new 
and generic drugs and biological products. The fiscal year 2006 budget 
proposes significant increases for the FDA's Human Drugs and Biologics 
program and for the Office of Drug Safety. A $19 million increase is 
proposed for the human drugs program and a $7 million increase is 
requested for the biologics program. Increased resources will in part 
be used to access a wide range of databases containing information 
related to drug safety. The fiscal year 2006 budget also proposes an 
increase of $12 million for the safety and efficacy of medical devices. 
The increase will help improve the device application review process as 
well as post-market surveillance efforts. Collaboration between the FDA 
and the National Institutes of Health will develop standards for 
electronic reporting of adverse events in clinical trials, to eliminate 
inferior products much earlier in their development.
    ASM appreciates the opportunity to comment on the fiscal year 2006 
budget request which supports science based FDA activities that will 
ensure both homeland security and public health.
                                 ______
                                 

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

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
California Industry and Government Central California Ozone Study 
(CCOS) Coalition, we are pleased to submit this statement for the 
record in support of our fiscal year 2006 funding request of $500,000 
from the Department of Agriculture for CCOS. These funds are necessary 
for the State of California to address the very significant challenges 
it faces to comply with new national ambient air quality standards for 
ozone and fine particulate matter. The study design incorporates recent 
technical recommendations from the National Academy of Sciences (NAS) 
on how to most effectively comply with Federal Clean Air Act 
requirements.
    First, we want to thank you for your past financial support of the 
Central California Ozone Study (CCOS) and California Regional 
PM10/PM2.5 Air Quality Study (CRPAQS). Your 
support of these studies has been instrumental in improving the 
scientific understanding of the nature and cause of ozone and 
particulate matter air pollution in Central California and the nation. 
Information gained from these two studies is forming the basis for the 
8-hour ozone, PM2.5, and regional haze State Implementation 
Plans (SIPs) that are due in 2007 (ozone) and 2008 (particulate matter/
haze). As with California's previous SIPs, the 2007-2008 SIPs will need 
to be updated and refined due to the scientific complexity of our air 
pollution problem. This request would fund the extension of CCOS to 
address important questions that won't be answered with results from 
previously funded research projects.
    To date, our understanding of air pollution and the technical basis 
for SIPs has largely been founded on pollutant-specific studies, like 
CCOS. These studies are conducted over a single season or single year 
and have relied on modeling and analysis of selected days with high 
concentrations. Future SIPs will be more complex than was anticipated 
when CCOS was originally designed and involve new technical challenges. 
The National Academy of Sciences (NAS) is now recommending a weight-of-
evidence approach that will involve utilizing more broad-based, 
integrated methods, such as data analysis in combination with seasonal 
and annual photochemical modeling, to assess compliance with Federal 
Clean Air Act requirements. This will involve the analysis of a larger 
number of days and possibly an entire season. In addition, because 
ozone and particulate matter are formed from some of the same emissions 
precursors, there is a need to address both pollutants in combination, 
which CCOS will do.
    Consistent with the new NAS recommendations, the extended CCOS 
study will involve the conduct of corroborative analyses with the 
extensive data provided by past studies, advance the state-of-science 
in air quality modeling, and improve our understanding of multi-
pollutant, multi-year air pollution. In addition, it will facilitate 
continuous data collection, using an expanded monitoring network, over 
a three-year period. Access to data over a multi-year timeframe will 
enable us to perform seasonal and annual modeling of all pollutants. It 
will also allow us to consider year-to-year variations in air quality. 
The study will incorporate further refinements to emission inventories, 
develop observation-based analyses with sound theoretical bases, and 
include the following five general components:

------------------------------------------------------------------------

------------------------------------------------------------------------
Conducting weight-of-evidence data analyses.............       2006-2008
Developing an enhanced monitoring network...............       2006-2007
Making emission inventory improvements..................       2006-2010
Collecting enhanced monitoring data.....................       2007-2009
Performing seasonal and annual modeling.................       2008-2011
------------------------------------------------------------------------

    As with CCOS and CRPAQS, Policy and Technical Committees consisting 
of representatives from Federal, State and local governments, as well 
as private industry, would direct the new study elements. Under CCOS 
and CRPAQS, these committees set landmark examples of collaborative 
environmental management. The proven methods and established teamwork 
provide a solid foundation for this study.
    For Fiscal Year 2006, our Coalition is Seeking Funding of $500,000 
From the Department of Agriculture/CSREES in Support of CCOS.--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 on-field 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 funding request is for: (1) Development and evaluation of 
methods and equipment to reduce on-field particulate matter emissions, 
(2) Evaluation of baseline livestock emissions (VOCs, PM10, 
ammonia) and effective methods to reduce these emissions, (3) 
Development of livestock facility emissions models that are based on 
individual processes emissions, as recommended by the National Academy 
of Sciences, and (4) Study of agricultural VOC emissions from pesticide 
application. This work will help answer questions that will be relevant 
to farmers and regulators throughout the Nation.
    Thank you very much for your consideration of our request.
                                 ______
                                 

          Prepared Statement of the City of Avondale, Arizona

    Chairman Bennett, Ranking Member Kohl, thank you for allowing me to 
testify in support of $3 million in funding for the expansion of the 
City of Avondale's waste water treatment facility through the Rural 
Development Agency's Water and Waste Disposal Grants program in the 
fiscal year 2006 Agriculture, Rural Development and Related Agencies 
Appropriations bill.
    Mr. Chairman, let me state it bluntly--we are in a desperate 
situation. The City of Avondale has experienced exponential growth as 
the sixth fastest growing city in the second fastest growing state in 
the Nation. In 1990, the population was approximately 16,800. Today, 
the City has nearly tripled in size to more than 50,000 residents. It 
is estimated that the population will almost double to 80,000 by 2010. 
In 1995, it was estimated that the City's population growth would not 
reach 80,000 until 2020. This rapid and sudden expansion, in 
conjunction with the city's economic malaise, has placed our finances 
at a premium to meet our needs to provide water and wastewater capacity 
that serves the expected population growth. As you may know, Avondale 
has a majority of minority races (overwhelmingly Hispanic), and a 
population that is moderate to low-income. Fourteen percent of 
Avondale's residents live at or below the poverty line.
    The City of Avondale has exhausted all state and local funding 
options prior to seeking Federal assistance. In fact, in 2000, the city 
passed a one-half of one cent sales tax to fund street, water and sewer 
projects. The City used this funding source for the first expansion of 
the Wastewater Treatment Plant, which was completed in January 2003. 
The previous 2 years economic downturn, resulting in declining sales 
tax revenue, has left the city with limited local funds for the next 
expansion of the Treatment Plant, and the City does not have voter 
authorization to issue bonds required by the State Revolving Fund.
    As you know, the EPA mandates that current treatment facilities 
must be expanded once they reach 80 percent capacity. Even with the 
recently completed expansion of the facility, it is estimated that the 
Avondale facility will reach over 80 percent by 2008. Knowing that time 
and money is needed to design such a large project, the City has begun 
the necessary preliminary permitting, environmental and pre-design 
processes in anticipation of the master plan and construction, which 
will be aided by the $850,000 of Federal funds received in fiscal year 
2004 and 2005. With Federal funding, the city will increase the current 
6.4 MGD capacity of the plant to 10 to 12 MGD, while also increasing 
the capacity of the plant to reuse treated water for irrigation or 
recharge purposes, and allow the plant to treat effluent to supplement 
the city's potable water supply.
    Furthermore, under the Clean Water Act's outdated formula Arizona 
ranks last in per-capita and per-need funding under the State Revolving 
Fund that is designed to help communities finance infrastructure 
projects. This funding inequity has created problems for communities 
like Avondale that have limited means but that must still meet Federal 
water quality standards. The only fair way to rectify this inequity 
would be for the Federal Government to provide the necessary funds to 
complete the mandated expansion of the facility.
    It is important to note that the City of Avondale's improved and 
expanded wastewater treatment facility will do more than provide 
wastewater services to the residents. It will also provide treated 
effluent that will dramatically reduce its need for potable water 
supplies. The expansion will also enable the City to better meet its 
state-mandated 100-year water supply by recharging the remaining 
effluent into the ground for future use, allowing nature to further 
purify the water in order for it to be used for future potable 
purposes.
    Not only will this expansion allow the City to remain in compliance 
with strict local, state and Federal regulatory requirements, it will 
also add treatment processes that will allow the City to reuse the 
treated wastewater for irrigation purposes, thereby recharging this 
valuable resource. Recharging treated wastewater will allow the City to 
reduce its dependence on imported water sources such as the Colorado 
River, which benefits all municipalities relying on the river.
    Finally, it is important to note that $850,000 included in the last 
2 fiscal years was a critical first step because the waste water plant 
is reaching full capacity. However, it is critically important to keep 
this project on an optimal funding schedule to ensure the project is 
completed before the treatment plant reaches maximum capacity. With 
that in mind, we can utilize $3 million in fiscal year 2006 through the 
Rural Development Agency's Water and Waste Disposal Grants program 
toward completion of this $20 million project of which the City will 
provide 53 percent of the funding.
    This Project Serves a Broad Public Purpose in Three Ways.--(1) it 
will allow the City to continue to provide the necessary sewer service 
for our residents; (2) will benefit the rest of Arizona by helping to 
cut down on the amount of scarce water the City uses, because the plant 
also treats the water to allow it to be re-used for irrigation 
purposes; and, (3) will allow the city to treat the effluent to bring 
it up to Class A standards and to recharge it into the ground to be 
withdrawn later as potable water.
    Therefore, I ask that you support the City's request for $3 million 
for the expansion of our waste water treatment plant through the Rural 
Development Agency's Water and Waste Disposal Grants program in the 
fiscal year 2006 Agriculture, Rural Development and Related Agencies 
Appropriations bill.
                                 ______
                                 

 Prepared Statement of the Coalition on Funding Agricultural Research 
                                Missions

    Dear Mr. Chairman, Ranking Member Kohl and Members of the 
Subcommittee: The Coalition on Funding Agricultural Research Missions 
(CoFARM) appreciates the opportunity to submit testimony on the fiscal 
year 2006 appropriation for the United States Department of 
Agriculture. CoFARM is a coalition of 23 professional scientific 
organizations with 130,000 members dedicated to advancing and 
sustaining a balanced investment in our Nation's research portfolio. 
CoFARM understands the challenges the Senate Agriculture Appropriations 
Subcommittee faces with this year's (fiscal year 2006) tight 
agriculture budget. We also recognize that the Agriculture 
Appropriations bill has many valuable and necessary components, and we 
applaud the efforts of the Subcommittee to fund mission-critical 
research through the USDA-Cooperative State, Research, Education and 
Extension Service. We are particularly grateful to the Subcommittee for 
funding the NRI at $180 million in fiscal year 2005. Below we have 
highlighted recommendations for the fiscal year 2006 appropriations 
cycle.
    National Research Initiative.--CoFARM strongly endorses the 
President's proposed fiscal year 2006 budget of $250 million for the 
National Research Initiative Competitive Grants Program (NRI). 
According to the USDA's Economic Research Service (Agricultural 
Economic Report Number 735), publicly funded agricultural research has 
earned an annual rate of return of 35 percent. This rate of return 
suggests that additional allocation of funds to support research in the 
food and agricultural sciences would be beneficial to the U.S. economy.
    NRI Integrated Research.--CoFARM requests that any new monies 
appropriated for the NRI, as requested by the administration, allow the 
Secretary the discretion to apply up to 30 percent towards carrying out 
the NRI integrated research, extension and education competitive grants 
program.
    Indirect Costs.--CoFARM applauds the administration's proposal to 
eliminate the indirect cost cap on the NRI, set at 20 percent for 
fiscal year 2005, which will broaden its appeal by putting the NRI on 
equal footing with other Federal competitive grants programs such as 
those of NSF and NIH.
    Formula Funding.--CoFARM believes that cuts to and proposed 
elimination of CSREES' formula-funded research programs can be 
detrimental to the entire USDA research portfolio. Because of their 
timing and potential regional and intra-state impacts, much of the 
infrastructure needed to conduct competitively funded research would be 
compromised if formula funds were to be cut. To cut Hatch, McIntire-
Stennis, and Animal Health & Disease in a single fiscal year would 
irreparably harm those projects. This would mean a huge and potentially 
damaging loss of research data nationwide.
    Food and Agriculture Defense Initiative.--CoFARM supports the 
request of the administration that $30 million be provided for the 
Homeland Security Program to facilitate protecting America's 
agricultural production systems. Recent security threats facing America 
require new and expanded agricultural research to protect our Nation's 
natural resources, food processing and distribution network, and rural 
communities that will secure America's food and fiber system.
    A balance of funding mechanisms, including competitive and formula 
funding, is essential if the capacity of the United States to conduct 
agricultural research, both basic and applied, is to be maintained and 
the country is to continue to improve crop and livestock quality, and 
the processes that deliver safe and nutritious food products from farm 
to table while protecting and enhancing the Nation's environment and 
natural resources. In order to address these challenges and maintain 
our position in an increasingly competitive world, we must continue to 
support research programs funded through CSREES.
    Past investments in agricultural research have yielded many 
breakthroughs in American agricultural productivity, including these 
few Hatch and NRI funded research success stories:
  --Pennsylvania researchers are developing rapid diagnostic tests to 
        curb avian influenza, a disease that could cripple the state's 
        $700 million poultry industry.
  --University of Maryland researchers have created an advanced machine 
        vision technology to detect bone fragments and foreign objects 
        in meat.
  --Researchers in Florida have tested a common fern's ability to soak 
        up arsenic, a cancer-causing heavy metal, from contaminated 
        soils. The market for plant-based remediation of wastes is 
        estimated to be $370 million in 2005.
  --NRI funded research supported research by a University of 
        California scientist who has genetically engineered a breed of 
        corn with half the usual amount of carbohydrates and double the 
        protein, which should lead to the development of new crops that 
        will help alleviate protein deficiencies in children in 
        developing countries.
  --Entomologists and Nematologists developed a vaccine for the 
        protection of cattle from the horn fly, a major insect pest in 
        many parts of the world costing the North American cattle 
        industry alone more than $1 billion annually.
  --As a result of NRI funding, a group of economists found that the 
        competitive environment of supermarket retailers encourages 
        patterns of adoption of food products using technologies that 
        are new to the market.
  --Through NRI funded research, scientists developed a new assay that 
        allows for rapid identification of Clostridium perfringens, 
        which is associated with common food-borne illness, in hospital 
        outbreaks and has resulted in improved diagnostic procedures.
  --Florida family and youth researchers have shed light on crime and 
        violence trends in schools and evaluated prevention programs. 
        The result has been a decline in disruptive behavior in 
        classrooms by 40 percent over 2 years. The work is a national 
        model for improving school safety.
    Congress must enhance funding for agricultural research to assure 
Americans of a safe and nutritious food supply and to provide for the 
next generation of research scientists.
    As you lead the Congress in deliberation on funding levels for 
agricultural research, please consider CoFARM as a supportive resource. 
We hope you will call on our membership and scientific expertise.
                                 ______
                                 

   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 
(see attached). 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 highly 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 
previous decade. For fiscal year 2006, the Farm Bill authorizes funding 
for MAP at $200 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 
2005, U.S. agriculture exports are projected to reach $59 billion, 
which would make the current year the 3rd highest export sales year 
ever following fiscal year 2004 at $62.3 billion and fiscal year 1996 
at $59.8 billion. However, exports could be significantly higher if it 
were not for a combination of factors, including continued high levels 
of subsidized foreign competition and related steep artificial trade 
barriers. Agricultural imports are also forecast to be a record $58 
billion, continuing a 35-year upward trend that has increased at a 
faster pace recently. If these projections hold, then agriculture's 
trade surplus is only expected to be about $1 billion, a huge decline 
from the roughly $27 billion surplus of fiscal year 1996. In fiscal 
year 1999, the United States recorded its first agricultural trade 
deficit with the EU of $1 billion. In fiscal year 2005, USDA forecasts 
that the trade deficit with the EU will grow to $6 billion, the largest 
agriculture deficit the United States runs with any market.
    According to recent information from USDA, the European Union (EU) 
spent more than $3.25 billion on agricultural export subsidies in 2003, 
compared to approximately $30 million by the United States. In other 
words, the United States is being outspent by more than 100 to 1 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 approximately $1.2 billion on various market 
development activities to promote their exports of agricultural, 
forestry, and fishery products. A significant portion of this is 
carried out in the United States. 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 in unlimited amounts under WTO rules to help 
American agriculture and American workers remain competitive in a 
global marketplace still characterized by highly 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. Since 1992, MAP participants have 
increased their contributions from 30 percent (30 cents for every 
dollar contributed by USDA) to 166 percent ($1.66 in industry funds for 
every USDA dollar). For FMD, the contribution rate has risen from 76 
percent to the current level of 139 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 in export markets 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.
             coalition to promote u.s. agricultural exports
Alaska Seafood Marketing Institute
American Feed Industry Association
American Forest and Paper Association
American Hardwood Export Council
American Meat Institute
American Peanut Council
American Quarter Horse Association
American Seed Trade Association
American Sheep Industry Association
American Soybean Association
Blue Diamond Growers
Calcot, Ltd.
California Agricultural Export Council
California Asparagus Commission
California Association of Winegrape Growers
California Canning Peach Association
California Cling Peach Board
California Dried Plum Board
California Fig Institute
California Kiwifruit Commission
California Pistachio Commission
California Plum Marketing Board
California Strawberry Commission
California Table Grape Commission
California Tomato Commission
California Walnut Commission
Cherry Marketing Institute
CoBank
Diamond of California
Florida Citrus Commission
Florida Citrus Mutual
Florida Citrus Packers Association
Florida Citrus Processors Association
Florida Department of Citrus
Food Export USA--Northeast
Georgia Poultry Federation
Ginseng Board of Wisconsin
Hop Growers of America
Indian River Citrus League
Kansas Livestock Association
Kentucky Distillers Association
Land O'Lakes, Inc.
Mid-America International Agri-Trade Council
Mohair Council of America
National Association of State Departments of Agriculture
National Association of Wheat Growers
National Barley Growers Association
National Cattlemen's Beef Association
National Chicken Council
National Confectioners Association
National Corn Growers Association
National Cotton Council
National Council of Farmer Cooperatives
National Grain Sorghum Producers
National Grange
National Grape Cooperative Association, Inc.
National Milk Producers Federation
National Oilseed Processors Association
National Pork Producers Council
National Potato Council
National Renderers Association
National Sunflower Association
National Turkey Federation
NORPAC Foods, Inc.
North American Millers' Association
Northwest Horticultural Council
Ocean Spray Cranberries, Inc.
Pet Food Institute
Produce Marketing Association
Softwood Export Council
Southern Forest Products Association
Southern U.S. Trade Association
Sunkist Growers
Sun Maid Growers of California
Sunsweet Growers, Inc.
Texas Cattle Feeders Association
The Catfish Institute
The Popcorn Institute
Tree Top, Inc.
United Egg Association
United Egg Producers
United Fresh Fruit and Vegetable Association
USA Dry Pea and Lentil Council
USA Poultry & Egg Export Council
USA Rice Federation
U.S. Apple Association
U.S. Dairy Export Council
U.S. Dry Bean Council
U.S. Hides, Skins & Leather Association
U.S. Livestock Genetics Export, Inc.
U.S. Meat Export Federation
U.S. Rice Producers Association
U.S. Wheat Associates
Valley Fig Growers
Vinifera Wine Growers Association
Virginia Wineries Association
Welch's
Western Growers Association
Western Pistachio Association
Western U.S. Agricultural Trade Association
Wheat Export Trade Education Committee
WineAmerica (The National Association of American Wineries)
Winegrape Growers of America
Wine Institute
                                 ______
                                 

 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 $1 billion for fiscal year 2006.
    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. Realizing that agricultural on-farm strategies were some 
of the most cost-effective strategies, the Congress authorized a 
program for the United States Department of Agriculture (USDA) through 
amendment of the Colorado River Basin Salinity Control Act in 1984. 
With the enactment of the Federal Agriculture Improvement and Reform 
Act of 1996 (FAIRA), the Congress directed that the Program should 
continue to 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 have 
been, for the first time in a number of years, opportunities to 
adequately fund the Program within the EQIP.
    The Program, as set forth in the Colorado River Basin Salinity 
Control Act, is to benefit Lower Basin water users hundreds of miles 
downstream from salt sources in the Upper Basin as the salinity of 
Colorado River water increases as the water flows downstream. 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 look for local benefits. These local benefits are in the 
form of enhanced beneficial use and improved crop yields. They submit 
cost-effective proposals to the State Conservationists in Utah, Wyoming 
and Colorado and offer to cost share in the acquisition of new 
irrigation equipment. The Colorado River Basin Salinity Control Act 
provides that the seven Colorado River Basin States will also cost 
share with the Federal funds for this effort. This has brought together 
a remarkable partnership.
    After longstanding urgings from the States and directives from the 
Congress, the USDA 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 and receives water from numerous 
tributaries. The USDA has determined that this effort should receive a 
special funding designation and has appointed a coordinator for this 
multi-State effort.
    In fiscal years 2003, 2004 and 2005, the Natural Resources 
Conservation Service (NRCS) directed $13.6 million, $19.8 million and 
$19.5 million respectively to be used for the Program. The Forum 
appreciates the efforts of the NRCS leadership and the support of this 
subcommittee. 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 United States 
Environmental Protection Agency (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 annually. Over the last three fiscal 
years, for the first time, funding reached this level on an average 
annual basis. State and local cost-sharing is triggered by the Federal 
appropriation. In fiscal year 2005, it is anticipated that the States 
will cost share with about $8.3 million and local agriculture producers 
will add another $7.5 million. Hence, it is anticipated that in fiscal 
year 2005 the State and local contributions will be 45 percent of the 
total program.
    Over the past few years, the NRCS has designated that about 2.5 
percent of the EQIP funds be allocated to the Colorado River salinity 
control program. The Forum believes this is the appropriate future 
level of funding as long as the funding does not drop below $17.5 
million. Funding above this level assists in offsetting pre-fiscal year 
2003 funding below this level. The Basin States have cost sharing 
dollars available to participate in funding on-farm salinity control 
efforts. The agricultural producers in the Upper Basin are waiting for 
their applications to be considered so that they might improve their 
irrigation equipment and also cost share in the Program.

                                OVERVIEW

    The Program was authorized by the Congress in 1974. The Title I 
portion of the Colorado River Basin Salinity Control Act responded to 
commitments that the United States made, through a Minute of the 
International Boundary and Water Commission, to Mexico specific 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 Salinity Control Act needed to be 
amended. The 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 USDA. The Congress 
has charged the Administration with implementing the most cost-
effective program practicable (measured in dollars per ton of salt 
controlled). 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 (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 
Federal agencies and the Congress in support of the implementation of 
the Salinity Control Program. In close cooperation with the EPA and 
pursuant to requirements of the Clean Water Act, every three years the 
Forum prepares a formal report evaluating the salinity of the Colorado 
River, its anticipated future salinity, and the program elements 
necessary to keep the salinity concentrations (measured in Total 
Dissolved Solids--TDS) at or below the levels measured in the river 
system in 1972 at Imperial Dam, and below Parker and Hoover Dams.
    In setting water quality standards for the Colorado River system, 
the salinity concentrations at these three locations in 1972 have been 
identified as the numeric criteria. The plan necessary for controlling 
salinity and reducing downstream damages has been captioned the ``Plan 
of Implementation.'' The 2002 Review of water quality standards 
includes an updated Plan of Implementation. In order to eliminate the 
shortfall in salinity control resulting from inadequate Federal funding 
for a number of years from the USDA, the Forum has determined that 
implementation of the Program needs to be accelerated as the President 
has requested. The level of appropriation requested in this testimony 
is in keeping with the agreed upon plan. If adequate funds are not 
appropriated, significant damages from the higher salt concentrations 
in the water will be more widespread in the United States and Mexico.
    Concentrations of salts in the river cause $330 million in damage 
in the United States and result in poorer quality water being delivered 
by the United States to Mexico. Damages occur from:
  --a reduction in the yield of salt sensitive crops and increased 
        water use for leaching in the agricultural sector,
  --a reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector,
  --an increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector,
  --an increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector,
  --a decrease in the life of treatment facilities and pipelines in the 
        utility sector,
  --difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, and an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins, and
  --increased use of imported water for leaching and cost of 
        desalination and brine disposal for recycled water.
    For every 30 mg/L increase in salinity concentrations, there is $75 
million in additional damages in the United States. The Forum, 
therefore, believes implementation of the USDA program needs to be 
funded at 2.5 percent of the total EQIP funding.
    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 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 the 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 Reclamation, State officials in Utah, Colorado and 
Wyoming and with NRCS State Conservationists in Utah, Colorado and 
Wyoming, agreed upon a program parallel to the salinity control 
activities provided by the EQIP 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 made possible 
by contracts with the NRCS. 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 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. Prior to the enactment of the Farm Security and Rural 
Investment Act (FSRIA) in 2002, the salinity control program had not 
been funded at the level necessary to control salinity with respect to 
water quality standards since the enactment of the Federal Agriculture 
Improvement and Reform Act (FAIRA) of 1996. Inadequate funding of the 
salinity control program also 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. FSRIA authorized a funding level of at least $1.2 
billion for EQIP in fiscal year 2006, and the President's budget for 
fiscal year 2006 requests an appropriation of $985 million for EQIP. I 
urge the Subcommittee to support funding from Commodity Credit 
Corporation (CCC) of at least $985 million to be appropriated for EQIP. 
I request that the Subcommittee designate 2\1/2\ percent of the EQIP 
appropriation, but no less than $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 $330,000,000 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 FAIRA in 1996, that the 
salinity control program could be most effectively implemented as a 
component of the Environmental Quality Incentives Program (EQIP). 
However, until 2004, the salinity control program since the enactment 
of FAIRA was not 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. Appropriations 
for EQIP prior to 2004 were insufficient to adequately control salinity 
impacts from water delivered to the downstream States, and hampered the 
required quality of water delivered 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 to address the 
funding problem, 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 EQIP. 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 improved irrigation practices, and 
agricultural producers have succeeded in submitting cost-effective 
proposals to NRCS.
    The Basin States, including New Mexico, were very dismayed that 
funding for EQIP since the 1996 enactment of FAIRA was inadequate until 
2004. Years of inadequate Federal funding for the Department of 
Agriculture prior to 2004 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 the Farm Security and Rural Investment 
Act in 2002, an opportunity to adequately fund the salinity control 
program now exists. The President's budget request of $985 million 
accomplishes the needed acceleration of the NRCS salinity control 
program if the USDA continues its practice of designating 2\1/2\ 
percent of the EQIP funds appropriated. The requested funding of 2\1/2\ 
percent of the EQIP funding or no less than $17.5 million will continue 
to be needed each year for at least the next few fiscal years.
    State and local cost-sharing is triggered by and indexed to the 
Federal appropriation. Federal funding for the NRCS salinity control 
program of about $19.5 million for fiscal year 2005 has generated about 
$15.8 million in cost-sharing from the Colorado River Basin States and 
agricultural producers, or roughly an 80 percent match of the Federal 
funds appropriated for the fiscal year.
    The Department of Agriculture salinity control 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 $985 million from the 
CCC in fiscal year 2006 for EQIP. Also, I request that Congress 
designate 2\1/2\ percent of the EQIP appropriation, but no less than 
$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 directed to 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 because of the inadequacy imposed by Federal 
limitations on funding for these needed activities. I urge the Congress 
to appropriate adequate funds for these support activities essential to 
the successful implementation of the salinity control program.
                                 ______
                                 

 Prepared Statement of the Council on Food, Agricultural and Resource 
 Economics (C-FARE) and the Consortium of Social Science Associations 
                                (COSSA)

    Dear Mr. Chairman, Ranking Member Kohl and Members of the 
Subcommittee: The Council on Food, Agricultural, and Resource Economics 
(C-FARE) and the Consortium of Social Science Associations (COSSA) 
appreciate the opportunity to submit testimony on the fiscal year 2006 
appropriation for the United States Department of Agriculture. C-FARE 
is a non-profit, non-partisan organization dedicated to strengthening 
the presence of the agricultural, natural resources, and applied 
economics profession to matters of science policy and Federal budget 
determination, and we represent approximately 3,500 economists 
nationwide. COSSA is an advocacy organization for the social and 
behavioral sciences supported by more than 100 professional 
associations, scientific societies, universities and research 
institutions.
    Our organizations understand the challenges the Senate Agriculture 
Appropriations Subcommittee faces given the tight fiscal year 2006 
agriculture budget. We also recognize that the Agriculture 
Appropriations bill has many valuable and necessary components, and we 
applaud the efforts of the Subcommittee to fund mission-critical 
research. Below are listed recommendations for the fiscal year 2006 
appropriations cycle.
   usda cooperative state research, education, and extension service 
                                (csrees)
National Research Initiative
  --C-FARE and COSSA endorses funding for the National Research 
        Initiative Competitive Grants Program (NRI). The NRI encourages 
        high quality research that is conducted through a peer reviewed 
        format. In particular, the research issues addressed by Markets 
        and Trade and Rural Development are diverse and multi-faceted. 
        Social Science research also enhances ideas and technologies 
        from other fields of science and research which adds value to 
        their role in the NRI.
  --C-FARE and COSSA requests that any new monies appropriated for the 
        NRI, as requested by the administration, allow the Secretary 
        the discretion to apply up to 30 percent towards carrying out 
        the NRI integrated research, extension and education 
        competitive grants program.
  --Our organizations applaud the administration's proposal to 
        eliminate the indirect cost cap on the NRI, set at 20 percent 
        for fiscal year 2005, which will broaden its appeal by putting 
        the NRI on equal footing with other Federal competitive grants 
        programs.
  --Social Science research is highly valued by USDA and much of what 
        our scientists offer can help meet the strategic goals of 
        CSREES. For example, social science research meets CSREES 
        strategic goal number 1, ``Enhance Economic Opportunities for 
        Agricultural Producers'' by providing science-based 
        information, knowledge, and education to help farmers and 
        ranchers understand risk management, and the long-term impacts 
        of trade barriers. Research by our members also meets CSREES 
        goal number 2, ``Support Increased Economic Opportunities and 
        Improved Quality of Life in Rural America,'' by providing 
        information to help inform decisions affecting the quality of 
        life in rural America. Therefore, we request that the Committee 
        encourage CSREES to fund the social science research components 
        of the NRI at a level sufficient to allowing scientists address 
        these unmet research needs.
    Formula Funding.--Cuts to and proposed elimination of CSREES' 
formula-funded research programs can be detrimental to the entire USDA 
research portfolio. Formula Funds support the continuing costs of 
research activities while providing for long-term commitments to 
research that is often essential. Because of their timing and potential 
regional and intra-state impacts, much of the infrastructure needed to 
conduct competitively award research would be compromised if formula 
funds were cut. This would mean a huge and potentially damaging loss of 
research data nationwide. A balance of funding mechanisms, including 
competitively awarded and formula funding, is essential if the capacity 
of the United States to conduct agricultural research, both basic and 
applied, is to be maintained and the country is to continue to excel in 
areas such as agricultural production and expanding the quality of 
rural life.

                   REGIONAL RURAL DEVELOPMENT CENTERS

    C-FARE and COSSA endorse the continued funding as requested by the 
President for the RRDCs (Regional Rural Development Centers). They are 
an important avenue for supporting research and extension work. 
Utilizing social and economic research, the RRDCs help the engagement 
of rural people and organizations in the civic life of their 
communities, promote sound rural economic and workforce development 
strategies that improve job quality and the competitiveness of workers 
in rural areas, and they assist rural communities in developing 
strategies for addressing the challenges associated with the expansion 
of urban and suburban localities into rural areas.

                  USDA ECONOMIC RESEARCH SERVICE (ERS)

    C-FARE and COSSA applaud the House and Senate for their support in 
the fiscal year 2005 Appropriations Bill of the Flexible Consumer 
Behavior Survey. The funding from last year helped lay the foundation 
for this much needed data program. C-FARE and COSSA support the 
President's proposed funding level of $5.8 million to continue the 
development of the data and analysis framework of the post-farm gate 
food system. If fully funded it will help identify, understand, and 
track changes in food supply and consumption patterns. Such information 
is essential for use in making policy decisions in the food, health and 
consumer arenas. These funds will help implement the system by creating 
and developing a rapid consumer response module which will allow USDA 
to link consumer reactions to food purchases, sales, consumption and 
price information. It will also help develop a behavioral economic 
research program, the implementation of system surveys, and a web-based 
data dissemination program. These surveys and information will provide 
knowledge for producers to better target products to consumer behavior, 
while providing policymakers with a better basis for formulating 
effective nutritional policy.

          USDA NATIONAL AGRICULTURAL STATISTICS SERVICE (NASS)

    C-FARE and COSSA recommend supporting the President's priority 
activities for NASS. These include:
  --Agricultural Estimates ($7.0 million).--This increase will build on 
        2004 and 2005 efforts to restore and modernize NASS's core 
        survey and estimation program, which covers most agricultural 
        commodities produced in the United States and encompasses 
        economic, environmental and rural data With these funds a 
        restored sample size, and other positive attributes will be 
        utilized by agencies and constituents alike.
  --Locality Based Agricultural County Estimation Program ($1.9 
        million).--This funding supports the NASS goal to improve 
        statistically defensible survey precision for small area 
        statistics.
  --Census of Agriculture ($6.5 million).--The Census of Agriculture 
        provides comprehensive data on the agricultural economy with 
        national, State, and county level details. This increase 
        supports the normal increase in activity levels due to the 
        cyclical nature of the 5-year Census program. Funding will be 
        used to prepare for the 2007 Census of Agriculture and to 
        conclude analysis and publication of the Census of Aquaculture 
        in December 2006.

                USDA AGRICULTURE MARKETING SERVICE (AMS)

    C-FARE and COSSA encourage Congress to continue supporting USDA's 
AMS at a level that will allow them to continue offering the high value 
programs they provide. As economists and social scientists we 
appreciate that the AMS programs promote a competitive and efficient 
marketplace. AMS services such as standardization, grading, market 
news, commodity procurement, and other market-facilitating activities 
benefit both consumers and producers. For the research community 
specifically, AMS market news services provide in-depth data regarding 
a wide range of commodities and modes of transportation; such basic 
information is invaluable for analysis. AMS also supports research on 
marketing and transportation issues through cooperative agreements and 
through the Federal-State Marketing Improvement Program.
 usda grain inspection, packers, and stockyards administration (gipsa)
    C-FARE and COSSA also value the vital work of GIPSA to help USDA 
enhance economic opportunities for agricultural producers by promoting 
fair and competitive trade practices and financial integrity in the 
grain, livestock, meat and poultry industries. GIPSA reports provide 
information that aid in the development of industry standards and 
policy decision-making. Several of these reports are used in the 
research conducted by social scientists. In particular, the Packers and 
Stockyards Statistical Report provides researchers with data on 
industry concentration, plant size, and other industry economic 
information. The data helps social science researchers study important 
social and economic issues, including concentration in the meat packing 
industry. We encourage Congress to continue providing appropriate 
support for GIPSA and their important programs.

           USDA NATURAL RESOURCES CONSERVATION SERVICE (NRCS)

    Our organizations also support sustained investment in our Nation's 
natural resources and environment. We applaud USDA NRCS for promoting 
conservation and sustainable use of natural resources on the Nation's 
private lands. NRCS helps provide science-based knowledge to improve 
the management of forests, rangelands, soil, air and water resources. 
Social science researchers use this vital information to develop policy 
recommendations that impact the future of our agricultural sector, as 
well as life in rural America.

                               CONCLUSION

    Recent security threats facing America require new and expanded 
agricultural research to protect our Nation's forests, water supplies, 
food processing and distribution network, and rural communities and 
insure the future security, safety and sustainability of America's food 
and fiber system. In order to address these challenges and maintain our 
position in an increasingly competitive world, we must continue to 
support research programs such as the NRI and those supported through 
formula funding.
    Thank you for the opportunity to present our recommendations. As 
you know, past investments in agricultural research have yielded many 
breakthroughs in American agricultural productivity. If you have any 
questions or concerns regarding our priorities please do not hesitate 
to contact us.
                                 ______
                                 

              Prepared Statement of Defenders of Wildlife

    On behalf of our members and supporters, Defenders of Wildlife 
appreciates the opportunity to comment upon the fiscal year 2006 budget 
for the U.S. Department of Agriculture. Defenders of Wildlife is a 
national nonprofit conservation organization committed to preserving 
the integrity and diversity of natural ecosystems, preventing the 
decline of native species, and restoration of threatened habitats and 
wildlife populations.
    Defenders of Wildlife has significant concerns about the 
administration's fiscal year 2006 budget and we strongly oppose a 
number of changes the Bush Administration's proposed fiscal year 2006 
budget would make to Farm Bill conservation programs. The Bush 
Administration's proposal attempts to rewrite the Farm Bill to the 
great detriment of USDA voluntary conservation programs. We make 
recommendations in the following priority areas.
2002 Farm Bill Conservation Title Programs
    Resource conservation programs within the Farm Security and Rural 
Investment Act of 2002 (Public Law 107-171) (Farm Bill) provide an 
integrated approach, through incentives and technical assistance, to 
both production and stewardship of farm and ranch lands and the 
environment. Further, these programs have been particularly valuable in 
providing resources for addressing threatened and endangered species 
conservation issues. The 2002 Farm Bill tried to achieve a balance 
between farm commodity provisions and critical conservation, nutrition, 
research and rural development programs that reach far more Americans 
than the traditional commodity programs. But, in every year since the 
passage of the Farm Bill, these conservation programs continue to be 
funded well under authorized levels. This comes at the expense of 
meaningful benefits to both sustainable farmers and ranchers and the 
environment.
    The conservation title specifically has bourn the brunt of the 
cuts. Since the farm bill passed, the combination of congressional and 
administrative actions has re-opened the farm bill to reduce promised 
conservation title funding for programs administered by the National 
Resource Conservation Service (NRCS) by $3.7 billion. This includes 
nearly $800 million from the fiscal year 2003 through fiscal year 2005 
funding cycles, plus an additional $2.9 billion from the Conservation 
Security Program (CSP) alone in the out years.
    For fiscal year 2006, President Bush is again proposing a cut to 
conservation programs that will result in a 28 percent decrease in 
funding originally promised by the 2002 Farm Bill. The 2002 Farm Bill 
promised mandatory conservation funding in fiscal year 2006 of $2.435 
billion. Yet, the total amount in the President's fiscal year 2006 
budget request for all programs is $1.739 billion, $700 million less 
than was promised and is needed. The fiscal year 2005 appropriations 
bill already drastically scaled back the mandatory farm bill spending 
for oversubscribed programs by nearly $500 million. The President's 
fiscal year 2006 budget request programs would scale them back again. 
This despite the fact that the USDA's voluntary conservation programs 
continue to be in demand and oversubscribed, Nationally, there are over 
150,000 qualified farmers and ranchers interested in implementing 
conservation practices to improve soil, water and air quality and add 
wildlife habitat through the conservation programs, who are waiting for 
funding; the value of the backlog of these qualified applicants exceeds 
$2 billion.
    Defenders of Wildlife urges Congress to restore balance to the Farm 
Bill and to not shortchange progressive voluntary conservation 
programs. National Farm Bill legislation has a profound impact on 
native species and wildlife habitat conservation choices of individual 
private landowners who practice crop, livestock, and forestry 
activities. Almost 60 percent of at risk species (as defined by The 
Nature Conservancy) are on private or State lands. Nearly 40 percent of 
plant and animal species listed as threatened or endangered are found 
only on private or State lands. Seventy percent of the land in the 
United States is held in private ownership in the form of range, 
forestry, or agricultural use. As of 1995, nearly 84 percent of the 
plants and animals listed as endangered or threatened were listed in 
part due to agricultural activities. Specifically, we urge Congress to 
restore balance by protecting funding allocations for the following 
programs:

The Conservation Security Program
    The Bush Administration's proposed fiscal year 2006 budget 
continues to cripple the landmark Conservation Security Program (CSP). 
CSP supports farmers who implement and maintain effective stewardship 
practices on their working farm lands. The President's fiscal year 2006 
budget reduces the CSP substantially below the level authorized in the 
Farm Bill with a 58 percent decrease. Moreover, because a significant 
portion of fiscal year 2006 funding will go to fund the continuation of 
contracts signed in 2004 and 2005, the proposed funding level will 
severely curtail the number of watersheds where the program can be 
offered in 2006 to well below the intent of the 2002 Farm Bill. Current 
funding levels have permitted enrollment of only about 10 percent of 
the Nation's watersheds in the first 2 years of program implementation. 
The President's budget suggests a rollout rate that will result in 10 
to 12 year cycle for reaching all of the Nation's farmers. That means 
many contracts will expire long before farmers get their next chance to 
re-enroll, which risks the loss of the environmental benefits of the 
program and turns away many good stewards of the land.
    The Conservation Security Program offers long term benefits for 
continued management of lands to promote environmental health. CSP is 
structured to reward farmers who have already invested in environmental 
stewardship, and to encourage them to go even farther to implement 
stewardship practices on their working lands through the enhancement 
payment structure. CSP is an essential part of the USDA portfolio of 
conservation programs to protect our water, soil, and wildlife 
resources. In order to achieve its promise of continuous income support 
to all of the country's best stewards, the program must be available to 
all producers nationwide, and must be implemented on a schedule that 
permits farmers to re-enroll when their contracts are up. Defenders 
urges Congress to consider the benefits that these programs can provide 
to sustainable farmers in all types of agriculture and in all regions 
of the country, and authorize at appropriated levels. At this point, 
perpetual cuts seems to have the effect of rewriting the Farm Bill and 
changing CSP from the first-ever working lands conservation entitlement 
program envisioned by Congress, to a program with limited enrollment, 
preferential bidding, and waiting lists.
    This program can provide great benefits if funded as intended by 
the 2002 Farm Bill.

The Wildlife Habitat Incentives Program
    In the President's fiscal year 2006 budget the Wildlife Habitat 
Incentives Program (WHIP) gets slashed by 29 percent, a $25 million cut 
below the authorized level mandated in the 2002 Farm Bill and was 
already cut by 45 percent below farm bill authorized levels in 2005. 
WHIP provides cost sharing and technical assistance for the development 
of wildlife habitat on private lands. Though small in size, the program 
provides significant benefits for wildlife and wildlife habitat and 
provides proactive solutions to dealing with endangered habitat and 
species issues before they become critical. More than 8,400 projects 
affecting some 1.4 million acres have been approved under WHIP (source: 
National Wildlife Federation fact sheet). There is demand for more as 
backlog statistics from NRCS show us. Nationwide, over 3,000 qualified 
applicants, likely small farmers and ranchers, are being turned away. 
The value of the backlogged applications that could be going to these 
stewards totals $10 million.
    Agriculture Secretary Johanns recently lauded the performance 
benefits WHIP saying that, ``More than $27 million funded over 3,000 
private landowners create, restore and enhance wildlife habitat for 
upland wildlife; wetland wildlife; threatened, endangered or at-risk 
species and fisheries as well as other types of wildlife. Of the more 
than 430,000 acres enrolled in the program last year, 21,000 acres will 
help threatened and endangered species.'' Defenders urges Congress to 
restore full funding to this program and protect the allocation of this 
program to continue to provide meaningful benefits to sustainable 
farmers and ranchers and to wildlife.

The Wetland Reserve Program
    President Bush has stated as a priority his commitment to a goal of 
``no net loss'' of wetlands, yet one of the most progressive and 
meaningful programs that works towards that goal, the Wetlands Reserve 
Program (WRP) is slated in the President's budget to be cut by 20 
percent. On April 22, 2004 the President announced his commitment to 
provide funding for an overall increase of wetlands each year and 
stated he would seek to ``create, improve, and protect at least three 
million wetland acres over the next 5 years in order to increase 
overall wetland acres and quality.'' (source: White House Press 
Release, April 22, 2004) To meet this goal the President called on 
Congress to fund conservation programs--specifically the Wetlands 
Reserve Program, yet his fiscal year 2006 budget cuts that program by 
$80 million dollars.
    WRP provides farmers with cost-share assistance and easements to 
take wetlands converted for agricultural purposes out of production and 
to restore them to beneficial wetlands. According to statistics by U.S. 
Fish and Wildlife service, one-third of all bird species, 190 species 
of amphibians and 5,000 species of plants depend on wetlands habitat. 
Along with WHIP, WRP has contributed the most to the creation and 
improvement of habitat for at-risk and declining species. Yet, WRP saw 
a 38 percent reduction in its acreage allotment in 2005 and, again 
faces a 20 percent reduction in 2006. This despite a demand that has 
led to a backlog of over 3,100 applicants nationwide, that would have 
provided restoration to almost 536,000 acres across the country. This 
is a substantial amount when one considers that, according to the USDA, 
overall annual wetlands losses are estimated at some 60,000 acres. 
Defenders urges Congress to take up the President's promise to conserve 
wetlands, and restore funding to this program which is integral to the 
success of that goal.

The Grasslands Reserve Program
    The Grasslands Reserve Program (GRP) is a voluntary program 
offering landowners the opportunity to protect, restore and enhance 
grasslands on their property. The program received $254 million over 
the life of the Farm Bill, and that money has been widely used for 
projects that benefit wildlife, particularly grassland birds like the 
sage grouse, and is important to addressing endangered species issues. 
However, GRP is predicted to use up its entire Farm Bill allocation by 
the end of 2005, so there is no money in the budget for GRP in 2006. 
Defenders urges Congress to consider the benefits of this program for 
addressing threatened and endangered species issues and note that if 
this amount is capped, it will be more critical then ever to fund other 
similar conservation programs such as WHIP to help continue the work 
started under the GRP.

Other Important Conservation Programs in the Farm Bill
    Several other critical programs, that are part of the forward 
thinking conservation initiatives in the Farm Bill, will also be 
significantly cut, which in turn will undermine progressive efforts by 
farmers and ranchers to steward land, conserve soil and water, and 
provide habitat for wildlife. The Environmental Quality Incentives 
Program (EQIP), which provides technical assistance, cost-share/
incentive funding to assist crop and livestock producers with 
environmental and conservation improvements on their farms and ranches, 
is cut by 17 percent. And the Farm and Ranch Land Protection Program 
(FRPP), which keeps working farms and ranches in production and puts 
cash in the pockets of farmers and ranchers, will suffer a 17 percent 
cut. Defenders again urges Congress to protect the restore funding and 
protect the allocation for these programs, as well as the Conservation 
Reserve program. Farm Bill conservation programs should be appropriated 
at authorized levels as intended by the 2002 Farm Bill.

Farm Bill Energy Title Programs
    Inclusion of an Energy Title in the 2002 Farm Bill was a huge 
bipartisan victory for renewable energy and for rural America. However, 
the program was allocated $23 million per year in mandatory funding for 
fiscal years 2003-2007. The President's fiscal year 2006 budget request 
provides only $10 million in discretionary funding. This title provides 
programs to spur the growth of renewable energy within the agriculture 
sector, an immense potential energy source. Sec. 9006 is the only 
provision specific to renewable energy project development within the 
Farm Bill. It provides grants, and eventually loans and loan 
guarantees, to farmers, ranchers, and rural small businesses for the 
development of renewable energy projects and energy efficiency 
improvements. The program is designed to help farmers develop much 
needed new income streams from renewable energy generation, including 
wind, biomass, geothermal, hydrogen and solar energy, as well as 
helping to meet the Nation's critical energy needs in an 
environmentally sustainable way, and generate economic development in 
every region of the country. Defenders urges Congress to restore full 
funding to the Renewable energy program as mandated by the Farm Bill.

Wildlife Services
    The Wildlife Services (WS) program housed under the Animal and 
Plant Health and Inspection Service (APHIS) is tentatively funded, 
under the President's fiscal year 2006 budget, at a program level of 
approximately $76 million. Defenders of Wildlife is pleased to see more 
engagement in the invasive species issue by APHIS in general and 
Wildlife Services in particular, as we have been advocating for just 
such a policy change for many years.

Invasive Species
    Defenders of Wildlife recognizes that exotic invasive species are 
an enormous threat to native ecosystems and biological diversity and 
urges full funding of efforts to control invasive species. They are 
also a source of huge economic losses; the Asian longhorned beetle, for 
instance, potentially threatens maple syrup and tourism industries, as 
well as street trees, and could cause damage in the hundreds of 
billions of dollars. Therefore, we urge full funding of efforts to 
exclude, control, and halt the spread of invasive species. 
Specifically, we urge the Subcommittee to fund control efforts for the 
Asian longhorned beetle and the emerald ash borer at $40 million each 
in fiscal year 2006; to fund APHIS's work to halt Sudden Oak Death at 
$40 million; to fully fund the cactus moth sterile release program at 
$1.5 million; to fully fund the Noxious Weed Control and Eradication 
Act at the $15 million authorized level; and to fully fund the 
Department of Agriculture's portion of the Interdepartmental National 
Invasive Species Crosscut Budget.

Livestock Protection
    However, it also appears that the agency continues to spend a 
disproportionate amount of its annual allocation for livestock 
protection activities, which translates generally into the killing of 
predators. The allocation to livestock protection is particularly 
troubling because a close analysis reveals that in fiscal year 2001, 
Wildlife Services killed 88,868 coyotes, 386 mountain lions, and 2,467 
bobcats. While the agency no longer keeps detailed records on the 
reported value of resources damaged by livestock, in fiscal year 1997 
(the last year for which WS collected such information) WS spent $9.8 
million in response to a reported $7.7 million in livestock-related 
damages and spent just $9.5 million to address the more than $63 
million in damages reported in the 6 other program categories. 
Considering that in fiscal year 2001, 49 percent of its budget on 
agriculture-related activities ($15 million), and divided the remaining 
51 percent between human health and safety ($10.4 million), property 
($2.99 million) and natural resource protection ($2.26 million) 
expenditures, the trend suggests that Wildlife Services could expend up 
to $38 million for agriculture protection this year. Continuing to 
increase the amount of money used to kill predators to protect 
livestock is an inefficient use of taxpayer resources, given that 
national sheep inventories are declining by roughly 200,000 head per 
year, and cattle inventories are declining by nearly 600,000 per year. 
These declines are greatest in the twelve western States where Wildlife 
Services allocates nearly 63 percent of its agriculture protection 
dollars.
    Defenders is concerned with the consistent lack of attention paid 
to the directives by Wildlife Services which deal with modernizing the 
field activities of its staff. Defenders recommends that Congress ask 
for a report on Wildlife Services' implementation of the directives 
dealing with the increased use of non-lethal methods.
    Defenders of Wildlife requests also that the Committee's report 
language follow the model of previous years and revise the directive as 
follows, ``The Committee expects that Wildlife Services will make use 
of the non-lethal methods developed by the National Wildlife Research 
Center and will make non-lethal controls as the method of choice and 
resort to lethal means only as a last resort.''
    Defenders of Wildlife appreciates this opportunity to provide 
testimony on the fiscal year 2006 USDA budget. Thank you for your 
consideration of these comments.
                                 ______
                                 

                   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 $5 million in fiscal year 
2006.
    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 2005 appropriation of $4.6 
million is funding 24 State projects.

What is AgrAbility?
    AgrAbility is a program authorized through a provision in the 1990 
Farm Bill that provides information and technical assistance to 
farmers, ranchers, and farmworkers with disabilities. Congress began 
funding the project in 1991 and has continued to do so each year since. 
The U.S. Department of Agriculture Cooperative State Research, 
Education, and Extension Service (CSREES)--a network that links 
research, science, and technology to meet the needs of people where 
they live and work--administers the AgrAbility Program. CSREES awards 
program funds though a competitive grant process to land-grant 
universities that have partnered with at least one nonprofit disability 
service provider to provide education and assistance to agricultural 
workers with disabilities and their families.
    A network comprised of a National AgrAbility Project and numerous 
State AgrAbility Projects provides program services in over half of the 
States in the United States. The National AgrAbility Project partners, 
University of Wisconsin-Extension, Cooperative Extension Service and 
Easter Seals, collaborate to support State AgrAbility Project 
activities. The State projects provide the direct on-site services to 
farmers, ranchers, and farmworkers with disabilities and other chronic 
health conditions. AgrAbility Project services are available to people 
of all races, creeds, genders, abilities, and national origins. The 
project staff works with operators regardless of the size of their 
operations or extent of their resources.

Why is AgrAbility Needed?
    Agricultural production is hazardous. Over 700 farmers and ranchers 
die in work-related incidents yearly and another 120,000 workers 
sustain disabling injuries from work-related incidents (National Safety 
Council, 2002). In addition, the USDA National Agricultural Statistics 
Service estimates that more than 200,000 farmers, ranchers, and other 
agricultural workers experience lost-work-time injuries and 
occupational illnesses every year, approximately 5 percent of which 
have serious and permanent results. Off-farm incidents; health 
conditions, such as heart disease, arthritis, or cancer; and aging 
disable tens of thousands more. Nationwide, approximately 288,000 
agricultural workers between the ages of 15 and 79 have a disability 
that affects their ability to perform one or more essential tasks 
(Bureau of Labor Statistics, 1999).
    Additionally, like their urban counterparts, approximately 20 
percent of children and other family members in agricultural families 
have disabilities, such as cerebral palsy, mental retardation, and 
epilepsy. Physical and attitudinal barriers often prevent these 
children and adults from participating fully in farm and ranch 
operations, and from engaging in social and recreational activities 
enjoyed by other rural residents.
    For most of the over 3 million Americans earning their livings in 
agriculture, the work is not just their livelihood--it is their way of 
life--a productive and satisfying way of life of which they are very 
proud. This is also true for the majority of people with disabilities 
or chronic health conditions who work or live in agricultural settings. 
These people want to find ways to accommodate their disabilities and 
continue to farm. All too often, however, they are frustrated in their 
attempts. Rural isolation, limited personal resources, limitations in 
rural health delivery systems, and inadequate access to agriculture-
oriented assistance, are among the obstacles they face.

How Does AgrAbility Help?
    The AgrAbility Project offers education and assistance to help 
identify ways to accommodate disabilities and chronic health 
conditions, eliminate barriers, and create a favorable climate among 
rural service providers for people with disabilities. AgrAbility helps 
to prevent people from being forced out of agriculture because of their 
disabilities and provides them with ideas for safe, affordable 
solutions that allow them to maintain their businesses and rural 
lifestyles.

Who Does AgrAbility Serve?
    Farmers, ranchers, and farmworkers involved in all types of 
production agriculture who have any type of disability (physical, 
cognitive, or sensory) or chronic health condition may receive 
services. Family members who have a disability or chronic health 
condition may also receive assistance.

Who are the AgrAbility Clients?
    Juan Padron, AGE, a dairy farmer, sustained a spinal cord injury 
that left him paralyzed from the chest down in 2001 while helping a 
neighbor unload large square hay bales. AgrAbility staff recommended 
purchasing a heavy-duty wheelchair that could navigate farm terrain and 
adding hand controls to the tractor. In addition, his son, who 
originally contacted AgrAbility on his father's behalf, has developed a 
unique chute for restraining cows making it possible for his father to 
continue to artificially insemination them.
    Daun Koke, AGE, is a wife and mother of five and has cerebral 
palsy. She and her husband have a 100-head beef operation and over 600 
acres of row crops. She heard about AgrAbility on television and 
contacted the project immediately. AgrAbility staff has helped her 
obtain funding for adding a lift, wide mirrors, and hand controls to 
the tractor and automatic livestock gates. These changes have increased 
Daun's ability to work alongside her husband on their operation.
    Tyler McElwee, 16, has always been actively involved in his 
family's beef and crop operation. After sustaining a spinal cord injury 
(on the farm) 4 years ago, he and his family learned about AgrAbility 
from a school advisor. AgrAbility provided information on adding lifts 
and hand controls to the farm equipment. He now is able to help out by 
cleaning pens, feeding cattle, and working in the fields. He also shows 
beef cattle and is actively involved in FFA. His plans to one day own 
his own beef operation.
    Randy Jiminez, AGE, who has post-polio syndrome, has what he calls 
a ranchette with ducks and geese, and teaches gun safety courses. With 
the assistance of AgrAbility staff and the Department of Vocational 
Rehabilitation (DVR), his house was to accommodate his wheelchair and a 
golf cart was obtained and modified to increase his outdoor mobility. A 
business loan was also secured through DVR for setting-up the gun 
safety program.
    Brenda Besse, AGE, has a purebred Brown Swiss dairy farm and a 
2,000-acre grain operation. She lost her right leg above the knee in an 
entanglement with a combine head. AgrAbility staff helped her get a 
utility vehicle for hauling feed, wood shavings, hay, straw, and calf 
bottles around the farm. She now helps other AgrAbility clients learn 
about the various resources available to them. When Brenda is not 
farming, you can find her on the golf course where she is ranked the #1 
female amputee golfer in the United States.
    Bobby Clay, AGE, has a pastured poultry and vegetable farm and also 
operates a poultry processing enterprise. Following a spinal cord 
injury, he contacted his local extension agent who, with AgrAbility 
staff, assisted him in modifying his operation including the addition 
of 2,000 feet of water lines, chicken tractors, 20 water hydrants, and 
a front end-loader. With these modifications, Bobby can still maintain 
his agricultural enterprise and locally market his own poultry.
    Larry LeMasters, AGE, and his wife have a 200-head dairy operation, 
several flocks of chickens, and a ``herd of six kids.'' In 2000, he 
began having problems getting around the farm and doing his chores due 
to pain. Larry was diagnosed with fibromyalgia, a form of muscular and 
soft tissue rheumatism that has limited his mobility, strength, and the 
amount of bending and lifting he can do. They decided to contact 
AgrAbility after reading an article about it and reviewing the project 
website. AgrAbility staff recommended changes to the milking system to 
alleviate the need for constant bending and reaching.

What Services Do AgrAbility Clients Receive?
    AgrAbility clients benefit from partnerships between the extension 
services at land-grant universities and nonprofit disability service 
organizations. Together members of each AgrAbility Project staff 
provide clients with direct on-site assistance that includes the 
following activities.
  --Assessing agricultural tasks and providing guidance on how to 
        restructure them to accommodate the clients' disabilities.
  --Reviewing agricultural worksites and equipment and making 
        suggestions for modifications.
  --Identifying ways to prevent secondary injuries and disabilities.
  --Coordinating needed community resources and services by
    --putting them in touch with community volunteers who have the 
            ingenuity and contacts to augment AgrAbility project 
            support;
    --linking them to a network of engineers, health and rehabilitation 
            service providers, agricultural experts, product 
            manufacturers and suppliers, educators, skilled tradesmen, 
            and other rural resources; and
    --helping them access existing services within public agencies, 
            including State vocational rehabilitation agencies and 
            assistive technology centers, to maximize benefits 
            available to them.
  --Referring individuals and family members to and facilitating 
        participation in peer support groups.

How Does Collaboration Benefit Clients?
    The AgrAbility projects build collaborations with State offices of 
vocational rehabilitation, State assistive technology projects, and 
farm and community business organizations, such as agricultural 
cooperatives, Farm Bureau, or Lion's Club. AgrAbility clients benefit 
from the added expertise and resources such collaborations bring to the 
projects. Many AgrAbility projects have developed contractual 
arrangements with their State's vocational rehabilitation office that 
provide a win-win for the client, the project, and the State.

What Services Does the National AgrAbility Project Provide?
    The National AgrAbility Project staff provides training and 
technical assistance, and information on available resources to the 
State AgrAbility project staffs through a variety of means, including
  --annual National AgrAbility Project Training Workshops,
  --toll-free telephone consultations,
  --an online library of technical resources, and
  --collaboration on and presentations at statewide educational 
        activities.
    In addition, the National AgrAbility Project staff
  --provides direct technical consultation on developing assistive 
        technology solutions to clients, rehabilitation engineers, and 
        fabricators;
  --presents information about AgrAbility at national agricultural and 
        health-related events; and
  --develops and disseminates new educational materials relevant to 
        farming and ranching with disabilities.
    These and other activities all help to meet the goal of promoting 
awareness that with technical assistance, information, and education 
farmers, ranchers, and farmworkers with disabilities can successfully 
continue to do the work they know and love.

How are Federal Resources Maximized and New Resources Secured?
    National and State project staffs seek to form partnerships and 
alliances with corporations and organizations that will help expand the 
reach and services of the program. Additional efforts are made to 
secure financial and in-kind contributions to augment the base funds 
provided through the USDA-CSREES grants. These efforts help maximize 
the Federal support and invest community and corporate leaders in the 
mission and work of the AgrAbility Project--Promoting success in 
agriculture for farmers, ranchers, and farmworkers with disabilities. 
Such efforts also provide these leaders with a tangible way to give 
back to the rural communities in which they live and/or conduct 
business. By supporting the AgrAbility Project, they are helping their 
customers who face the challenges of accommodating their disabilities 
while continuing to work in agricultural production.

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
                                 ______
                                 

   Prepared Statement of the Farmer-Rancher/Oklahoma Farmers Union, 
                           Ringling, Oklahoma

  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 funding of the red imported fire ant. I am an agriculture 
producer in southern Oklahoma, employed with the Oklahoma Farmers Union 
and a 20-year advocate for research initiatives to combat this growing 
problem impacting both agriculture and the daily lives of citizens in 
affected States and counties. Oklahoma Farmers Union is a general farm 
organization representing over 100,000 families in the State of 
Oklahoma.
    My work on this issue goes back to the 1980's 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 (13 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 stings.
    The fire ant impact on the American economy is approximately $5 
billion per year. Agriculture producers are economically hurt by the 
loss of animals due to stings, short-circuiting of electrical equipment 
as a result of 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. Total annual fire ant losses to 
U.S. agriculture are estimated at $750 million.
    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. Because of the intensity of the fire ant 
problem within our State, a special State legislature directed fire ant 
task force is being formed. While 9 Oklahoma counties are currently 
quarantined from selling products to non-quarantined areas, we 
anticipate that number to rise given an additional 31 counties now have 
fire ant populations for a total of 40 impacted counties. Over one-
third of our State is now impacted while in 1984 that number was zero!

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. While the Administration budget included a request for 
funding this activity last year, no additional funds were appropriated 
for the program. We are delighted to see that the President's fiscal 
year 2006 budget request includes $600,000 for fire ant research for 
the Gainesville location for molecular research work, including 
pathogen discovery as part of an Administration request of $10 million 
for Invasive Species Affecting Animals and Plants.
    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 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. Contributing to the overall effort 
is the continued development of novel uses for pheromones in fire and 
control and technology transfer of repellent and attractant technology 
to commercial interests.

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 future.
    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 collected in South America, will be 
quarantine tested and evaluated for use.
    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 $10 million research 
initiative contained in the ARS budget for further targeted research 
for Invasive Species Affecting Animals and Plants and specifically the 
$600,000 directed to Gainesville site.
    Thank you for this opportunity. I would appreciate the 
Subcommittee's consideration of this most important issue.
                                 ______
                                 

             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 $182 
million this past year in research awards.
    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 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 project we are pursuing this 
year through the U.S. Department of Agriculture.
    In fiscal year 2001, Congress passed the Federal Crop Insurance 
Act, which included funding of partnerships for Risk Management 
Development and Implementation. This legislation authorized the USDA, 
working with NOAA, to enter into partnerships for the purpose of 
increasing the availability of tools for crop loss mitigation. The 
partnerships give priority for producers of agricultural commodities 
for specialty crops and under-served agricultural commodities. Congress 
authorized the program through fiscal year 2008.
    The Federal Government can utilize new cost-effective ways to 
reduce risk by using modern ideas such as decision support tools and 
using El Nino and La Nina to predict climate variability. This allows 
for fair pricing of premiums for crop insurance. The Southeast Climate 
Consortium (SECC), which consists of Florida State University, the 
University of Florida, the University of Miami, the University of 
Georgia, Auburn University, and University of Alabama at Huntsville, 
has been at the forefront of climate prediction work. The SECC has 
worked throughout the Southeastern United States, with support from 
NOAA and USDA, to develop new methods to predict the consequences of 
climate variability for agricultural crops, forests, and water 
resources. More recently, in actual real-life tests, these methods have 
been applied to the problems that farmers raising specialty crops face 
relative to rainfall, temperature and assessing the risk of wild fires. 
By the use of these methods, these challenges have been successful.
    In the SECC, Florida State University provides the climate 
forecasts and risk reduction methodology, the University of Florida 
translates this climate information into risks associated environmental 
impacts and work with Extension Services to provide information to the 
agricultural community, and the University of Miami provides the 
economic modeling of the agricultural system. Utilization of these 
tools and their application to agricultural problems in this project 
has the strong support of extension managers.
    The new tasks for fiscal year 2006 will be to develop drought 
forecasting methods to help farmers and producers plan for reducing 
risks of economic losses, develop best management practices (BMPs) that 
incorporate climate forecasts to give farmers options for compliance 
with water quality standards, and investigate the possible applications 
of using climate forecasts to guide disaster preparedness, such as for 
hurricanes.
    FSU, on behalf of the Southeastern Climate Consortium, is 
requesting $4,000,000 for this important activity in fiscal year 2006.
    Mr. Chairman, this is just one 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 Friends of Agricultural Research--Beltsville, 
                                  Inc.

    Mr. Chairman, and Members of the Subcommittee, thank you for this 
opportunity to present our statement regarding 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--
promotes the Center's current and long-term agricultural research, 
outreach, and educational missions.
    Our testimony addresses three main themes:
    We begin with our highest recommendation for any item in the 
President's fiscal year 2006 budget--Systematics Research at the 
Beltsville Agricultural Research Center.
    The Department of Agriculture recently named systematics research 
at BARC the Department's Number One priority for addressing problems 
with invasive species. The President's fiscal year 2006 budget 
recommends $1 million for systematics research at BARC within $1.8 
million for Invasive Species (Home Land Security). We strongly support 
approval.
    If the proposed $1 million is approved, BARC capabilities in plant 
pathogenic fungi, whiteflies, thrips, weevils, and animal parasites 
will improve substantially. All of these organisms pose serious threats 
to U.S. agricultural production, yet all are tiny and hard to identify. 
About 80 percent of the Department's systematics programs are based at 
BARC. Systematics scientists make up about 10 percent of the BARC 
scientific staff.
    Systematics has suffered from attrition and inflation for the past 
20 years. Staff sizes are probably only about half of what they were 20 
years ago. Systematics identification depends on priceless BARC 
collections--some entries being more than a century old. These 
collections are critical to accurate identifications. Systematics is 
essential for identifying exotic or new species, for barring invasive 
species from entering the United States. Amazingly, only about 10 
percent of all insects and fungi have been named and described as to 
how they relate to other organisms.
    Dr. John Marburger, Presidential Science Advisor and Director of 
the Office of Science and Technology Policy, has said that systematics 
is part of the Nation's critical scientific infrastructure. Because 
systematics is critical to foreign trade as well as domestic 
production, the Department has the largest systematics program in the 
Federal Government. Authoritative sysematics not only protects the 
United States against invasive species, it also assures our trading 
partners that United States exports are free of invasive species. At 
least once, systematics enabled the United States to successfully 
refute an accusation of biowarfare, an accusation that the United 
States had deliberately introduced an invasive insect into another 
country
    Long-term needs for ARS systematics research may exceed $30 
million, not including modernization of facilities. The $1 million in 
the President's fiscal year 2006 budget would be an important step 
toward meeting the needs for this fundamentally important research.
    Next, we turn to the urgent need to continue support for specific 
research areas that the Congress has mandated at BARC in previous 
fiscal years. These mandates address research that has enormous 
national impact. The mandates have been strongly endorsed and supported 
by this Subcommittee and others. We list them below with brief 
descriptions and our recommendations for continued funding.
    Dairy Genetics.--For over 75 years, the Animal Improvement Programs 
Laboratory has created statistical genetic predictions to aid the dairy 
industry in identifying the best bulls for dairy breeding. Genetic 
improvement in dairy cattle has steadily increased milk yield per cow 
and feed efficiency (milk produced per pound of feed) over many years. 
The result is lower milk prices for consumers and less animal waste to 
contaminate the environment because fewer cows are needed to produce 
the Nation's milk supply. We confirm that this mission critical 
research should continue.
    Barley Health Food Benefits.--Barley contains soluble fiber 
compounds called beta-glucans that are beneficial for health. Beta-
glucans can lower cholesterol and improve control of insulin and blood 
sugar. These funds support human-volunteer studies designed to help us 
better understand how barley could be used in a healthful diet to 
reduce the incidence of chronic disease. We recommend continued 
support.
    Biomineral Soil Amendments for Control of Nematodes.--Plant 
nematodes are microscopic worms that feed on the roots of plants. 
Nematodes can cause substantial losses in crop yields. This research 
focuses on using such industrial byproducts as environmentally benign 
soil additives for controlling nematodes. We recommend funding for 
these promising approaches.
    Foundry Sand Byproducts Utilization.--Waste sands from the metal-
casting industry currently are dumped in landfills. This project is 
working with industry on guidelines for beneficial uses of these sands. 
We recommend continuation.
    Poultry Disease (Avian Coccidiosis).--Coccidiosis, a parasitic 
poultry disease, costs the industry $2-3 billion per year. This 
research focuses on understanding the genetics of both the parasite and 
the host chicken to identify targets that will allow better disease 
control. We recommend this funding.
    Biomedical Materials in Plants.--Plants can be used as factories to 
manufacture vaccines and other pharmaceuticals for both animals and 
humans. This research focuses on development of tobacco as a crop with 
this beneficial use. This research should continue.
    National Germplasm Resources Program.--Sources of germplasm for all 
agricultural crops are maintained either as seed or live plant material 
at several locations across the country. Much of this germplasm is the 
result of plant exploration around the world. This group maintains the 
computer database that indexes all crop germplasm in our repositories 
with critical information as to where it was obtained, the specific 
scientific identification, and information on useful traits for plant 
breeding. We strongly support continued funding for this mission-
critical program.
    Bovine Genetics.--This research focuses on bovine functional 
genomics, especially for dairy cattle. Scientists are identifying 
specific genes for quality traits such as easier calving, higher milk 
production, and resistance to mastitis. We recommend this funding.
    Minor-use Pesticides (IR-4).--``Minor-use'' pesticides are those 
that are used on crops such as fruits and vegetables that are not one 
of the ``big four'' crops like corn, wheat, and soybeans, and cotton. 
Because markets are much smaller than for major crops, chemical 
manufacturers have little incentive to obtain all the safety data 
needed to obtain EPA registration for pesticides used on minor crops. 
Nevertheless, producers of minor crops find certain agrochemicals to be 
essential. This project produces the data needed for EPA registration 
of minor-use pesticides. We recommend continued funding.
    National Nutrition Monitoring System.--Scientists at BARC have the 
unique responsibility of carrying out the national surveys of food 
consumption by individuals. This is now done in collaboration with 
HHS's health surveys. BARC scientists also maintain the National 
Nutrient Database, which includes information on 126 nutrients in 
thousands of foods. This work supports the school lunch program, WIC, 
Food Stamps, senior nutrition programs, food labeling, dietetic 
practices, and even the EPA. We urge continuation of this funding.
    Coffee and Cocoa.--Producers of chocolate candy are the single 
largest users of fluid milk, sugar, peanuts, and almonds in the United 
States. United States specialty coffee shop chains also are one of the 
major markets for fluid milk. Events that limit the availability of 
cocoa or coffee can have significant impacts on major U.S. commodity 
markets. Candy producers need a stable supply of cocoa, but 
smallholders in developing countries produce most cocoa. Several 
devastating diseases and insects threaten cocoa. This research is aimed 
at developing environmentally friendly ways to control pests and 
diseases. Coffee is threatened by insects very similar to those that 
infest cacao; thus, work on the two crops benefits from being co-
located We recommend continuation of this funding.
    Johne's Disease.--Johne's disease is a contagious bacterial disease 
of the intestinal tract of ruminants. It occurs most often in dairy 
cattle, causing weight loss and diarrhea. Nearly one-fourth of dairy 
herds are infected. Producers lose $54 million annually from reduced 
milk production. The disease is spread in manure. This research focuses 
on disease control. We recommend continuation of this funding
    Food Safety--Listeria, E.Coli, and Salmonella.--Food-borne illness 
annually costs $3 billion in health-care costs, and annually costs the 
economy up to $40 billion in lost productivity. This research focuses 
on diagnostics for food-borne pathogens, and on ways to control 
pathogens in fruits and vegetables. We recommend continuation of this 
funding
    Weed Management Research.--All farmers must contend with weeds. For 
organic farmers, weeds are the single biggest challenge to crop 
production. This research, in collaboration with the Rodale Institute 
and Pennsylvania State University, focuses on developing systems for 
controlling weeds in organic production systems. Organic crop 
production was valued at $400 million per year in the 2002 Census of 
Agriculture. These research funds will improve non-chemical weed 
control.
    Last, we turn to our recommendation for construction funds to 
complete Phase III of the Beltsville Human Nutrition Research Center 
and construction of a combined facility for swine and other research.
    The most urgent facilities need at BARC is funds to modernize 
building 307--the final phase of the three-phase process to modernize 
the Beltsville Human Nutrition Research Center. Phases I and II funded 
two new human nutrition research buildings. Both buildings have been 
completed, are fully functional, and are contributing to the research 
mission of the Beltsville Human Nutrition Research Center. Congress 
provided design money for modernizing building 307, or Phase III, 
several years ago. We recommend full funding to complete Phase III 
construction. An estimated $27 million is needed.
    Also, we recommend $10 million for the construction of a combined 
research facility for swine, certain related human nutrition research, 
immunology (human and animal), and parasitological research.
    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

    Summary of fiscal year 2006 Testimony:
  --Re-affirm Support for Local Decision Making.--The success of the 
        U.S. Department of Agriculture's Environmental Quality 
        Incentives Program (EQIP) and Wildlife Habitat Incentives 
        Program (WHIP) is due in large part to a program structure that 
        stresses local decision making.
  --Restore $275,000 for the Wisconsin Tribal Conservation Advisory 
        Council.--GLIFWC requests Congress restore $275,000 in funding 
        for the Wisconsin Tribal Conservation Advisory Council (WTCAC) 
        eliminated by the Administration in fiscal year 2006.
  --Maintain EQIP and WHIP Program Funding.--GLIFWC supports the 
        Administration's budget request for $1 billion for the 
        Environmental Quality Incentives Program (EQIP) and $60 million 
        for Wildlife Habitat Incentives Program (WHIP).
    Disclosure of USDA Grants Contracted.--GLIFWC 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 (See map). Under the USDA's 
Environmental Quality Incentives Program, GLIFWC contracted $10,000 in 
fiscal year 1998 and an additional $40,000 in fiscal year 1999. In 
addition, GLIFWC 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 (GLIFWC). Our eleven member tribal 
governments thank you for considering our testimony regarding programs 
funded by USDA's Natural Resource Conservation Service. GLIFWC's 
testimony stresses three major objectives: (1) Re-affirm support for 
local decision making in EQIP and WHIP programs; (2) restore funding 
for the Wisconsin Tribal Conservation Advisory Council (WTCAC) at 
$275,000 annually; and (3) provide funding for the Environmental 
Quality Incentives Program (EQIP) at $1 billion and Habitat Incentives 
Program at $60 million and support intertribal and tribal efforts to 
participate in conservation partnerships.
    Background.--GLIFWC is comprised of eleven (11) 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.
    Re-affirm Support for Local Decision Making.--GLIFWC's success in 
contracting and implementing USDA's EQIP and WHIP programs is due in 
large part to a program structure that stresses local decision making. 
This local decision making process includes: (1) identification of 
local conservation problems; (2) establishment of local priorities, 
ranking systems, and cost share rates; and (3) selection of options 
that best solve problems based upon local environmental conditions. 
GLIFWC requests Congress reaffirm its support for community based 
decision making structures within USDA's EQIP and WHIP programs and 
closely scrutinize any proposals to impose top down ranking systems 
that may attempt to mandate a one size fits all philosophy.
    Local Decision Making Within the EQIP Program Results in Successful 
Efforts to Control Purple Loosestrife in the Bad River and Chequamegon 
Bay Watersheds and Built Conservation Partnerships.--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.
    GLIFWC completed a 5 year EQIP project to control purple 
loosestrife in the Bad River and Chequamegon Bay watersheds at a cost 
of $50,000. GLIFWC incorporated a watershed strategy utilizing funding 
from the BIA's Noxious Weed Program to control loosestrife on public 
lands and NRCS EQIP funding to control loosestrife on private lands 
with land owner consent. GLIFWC also incorporated an integrated pest 
control strategy utilizing both chemical controls and biological 
controls--beetles that feed exclusively on purple loosestrife. The 
beetles were grown and released on a number of sites as a long term 
control measure. Field assessments indicate that the beetles have 
established themselves at the release sites. The use of GPS and GIS 
technology enabled GLIFWC to document the effectiveness of this 
invasive species control strategy.
    GLIFWC has also completed two EQIP education grants in support of 
its purple loosestrife and leafy spurge control efforts. Under these 
grants, the GLIFWC: (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 (see http://
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.
    These EQIP education grants provided an informational foundation 
for the Northwood's Weed Initiative (NWI). The Northwood's Weed 
Initiative (NWI), a partnership including: NRCS, GLIFWC, The Nature 
Conservancy, USFWS, USFS, WDNR, UWEX and private citizens, is working 
to slow the spread of leafy spurge and other invasive plants that have 
been identified in the area. This invasive plant poses a threat to 
tribal gathering rights as it will disrupt plant communities, out-
competing native plants used by tribal members. The first efforts to 
control and contain leafy spurge were begun on private lands within the 
ceded territory. An educational poster on leafy spurge is in the 
development phase and will be distributed State-wide.
    Wisconsin Tribal Conservation Advisory Council.--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. 
GLIFWC requests Congress restore funding for WTCAC at $275,000 in 
fiscal year 2006 thereby ensuring tribal communities in Wisconsin have 
the technical resources needed to address their conservation needs.
    WTCAC and EQIP Funding set-asides Increase Program Participation by 
Indian Nations in Wisconsin.--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. The WTCAC was allocated $88,000 in WHIP 
funding and $1,100,000 in EQIP funding over fiscal year 2003 and fiscal 
year 2004. These resources enabled tribes to conserve and protect 
natural resources through a number of innovative projects including:
  --Supporting Aquaculture Development.--Tribes have taken a leadership 
        role in integrating aquaculture projects into USDA's EQIP 
        program including: (1) Red Cliff's construction of a wetland 
        filtration system as part of Red Cliff's Coaster Brook Trout 
        Restoration Project at $75,000--which was critical in 
        supporting the selection of Red Cliff for the State's new $3 
        million aquaculture training facility; (2) St Croix's 
        installing an aquaculture effluent treatment system at its St. 
        Croix Waters Aquaculture facility at $43,162 and establishment 
        of nutrient management of fish waste at $3,780; and (3) St. 
        Croix's contracting of $19,918 to improve water volume and 
        quality for the rearing of food fish and walleye and perch 
        fingerlings for restocking efforts on local lakes. NRCS is now 
        working with Lac Courte Oreilles (LCO) on plans to expand the 
        fish rearing ponds currently operated by the tribal hatchery.
  --Decommissioning Abandoned Wells.--Tribes have used EQIP funding to 
        decommission abandoned wells that are a potential source of 
        groundwater contamination including: (1) $5,500 contracted at 
        Bad River; (2) $10,026 contracted at Lac du Flambeau; and (3) 
        $45,800 at the Sokaogan Chippewa community.
  --Controlling Shoreline Erosion on Wisconsin Lakes.--EQIP funding has 
        been used to provide shoreline stabilization to prevent 
        sedimentation, adverse effects on water quality, and aquatic 
        habitat damage including projects on: (1) the Chippewa Flowage 
        and Skull Island and Middle Three Sisters Islands by LCO at 
        $225,000; (2) Flambeau and Pokegama Lakes by Lac du Flambeau at 
        $40,000; and (3) Big Sand Lake in Burnett County by St. Croix.
  --Wetland and Wild Rice Restoration Project.--The Sokaogon Chippewa 
        Community contracted $47,780 (EQIP) 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. St. Croix contracted 
        $18,750 (EQIP) to install a grade stabilization structure to 
        control soil erosion upstream of the confluence of the Yellow 
        River and the St. Croix River impaired wild rice beds 
        downstream on the St. Croix River. LCO used $7,050 (WHIP) to 
        re-establish wild rice and install 100 wood duck houses and 12 
        loon nesting platforms. These efforts build upon the tribe's 
        earlier success in establishing wild rice beds on Billy Boy 
        Flowage.
  --Stream Corridor Restoration Projects.--Tribes used WHIP funding for 
        habitat projects to support efforts to establish spawning 
        migrations of coaster brook trout from Lake Superior through 
        stream habitat work in Graveyard Creek (i.e. by Bad River at 
        $15,732) and in Red Cliff Red Cliff Creek (i.e. by Red Cliff at 
        $10,000).
  --Forest Restoration and Protection Project.--The Bad River 
        contracted $74,988 to plant white pine, red pine, balsam fir, 
        and white spruce on tribal lands that, left untreated, would 
        regenerate to aspen and increase erosion problems. Lac du 
        Flambeau contracted $54,160 in EQIP funding for Forest site 
        preparation on 200 Acres, Forest stand improvement on 250 
        acres, a prescribed burn on 223 acres, and three water control 
        structures.
    Michigan Tribes Begin to Access NRCS EQIP and WHIP Funding.--The 
success of Wisconsin tribes experienced in contracting EQIP and WHIP 
funding from NRCS is now starting in Michigan. In 2004, the Lac View 
Desert Band contracted EQIP funding to construct two walleye rearing 
ponds at $100,000. The tribe also received an additional $11,000 in 
WHIP funding to drill wells for the ponds.
    The Keweenaw Bay Indian Community contracted $50,000 in WHIP 
funding to construct a walleye rearing pond. Keweenaw Bay also 
contracted $20,000 to establish buffer zones to protect coastal 
wetlands from sedimentation from stamp sands in Keweenaw Bay. 
Unfortunately, the Bay Mills Indian Community has yet to receive 
funding through USDA's EQIP or WHIP programs and is looking to rectify 
this problem in the future.
    Once projects move into the implementation phase at Keweenaw Bay 
and Lac View Desert, GLIFWC will also begin assessing and documenting 
program delivery to its member tribes in Minnesota.
    Tribal Contributions to NRCS.--It is import for Congress to 
acknowledge that while NRCS has provided tribes with fiscal resources, 
tribes have also provided assistance to NRCS in meeting their 
conservation mission. GLIFWC, and its professional biologists, have 
taken a leadership role in assisting NRCS in preparing: (1) Wisconsin 
Biology Technical Note 4 Wild Rice Seeding Guidelines; (2) Wisconsin 
Biology Technical Note 5 Invasive Plant Species Control; and (3) 
Wisconsin Practice Standard 595 Pest Management -Aquatic Invasive 
species.
    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.
  --The lessons learned in Wisconsin are useful in supporting efforts 
        to bring NRCS programs to Michigan tribes given those tribes 
        are provided an adequate commitment of staff time and fiscal 
        resources.
    A partnership integrating WTCAC, the State NRCS offices, and 
financial resources from USDA's EQIP and WHIP programs enables Tribal 
Nations to directly address conservation needs that are prioritized 
within their respective communities. We ask Congress to support 
increased funding for these programs and re-affirm support for local 
decision making processes.
                                 ______
                                 

     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 
2006 funding items of great importance to The Humane Society of the 
United States (HSUS) and its more than 8.9 million supporters 
nationwide.

                   ENFORCEMENT OF ANIMAL WELFARE LAWS

    We are writing to thank you for your outstanding support during the 
past few years for improved enforcement by the U.S. Department of 
Agriculture of key animal welfare laws, and to urge you to sustain this 
effort in fiscal year 2006. 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 trafficking, 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 that are still conscious; (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; 
and (6) injuries and deaths of pets on commercial airline flights due 
to mishandling and exposure to adverse environmental conditions. For 
fiscal year 2006, we want to ensure that the important work made 
possible by the fiscal year 2005 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:
APHIS/Animal Welfare Act (AWA) Enforcement
    We commend the Committee for responding in recent years to the 
urgent need for increased funding for the Animal Care division to 
improve its inspections of approximately 10,000 sites, including 
commercial breeding facilities, laboratories, 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. We are pleased that the 
President's budget recommends an increase of $770,000 (plus allowance 
for pay costs) and 8 staff years to further improve AWA enforcement in 
fiscal year 2006. This responds to Animal Care's significantly 
increased workload as a result of rapid growth in the number of new 
licensees and registrants, particularly in the Western Region 
(including the Midwest), which has had an average increase of 109 
facilities per month so far in fiscal year 2005. Since fiscal year 
2001, the number of licensed/registered facilities in the Western 
Region has nearly doubled. The Eastern Region is also experiencing 
growth of an average 57 new facilities per month. We commend Animal 
Care for reaching out to those that had previously failed to become 
licensed or registered as the law requires, and bringing them under the 
agency's oversight for AWA compliance. To ensure that the program's 
effectiveness is not compromised, we urge you to provide $17,478,056, 
as recommended by the President, for Animal Welfare.

           APHIS/INVESTIGATIVE AND ENFORCEMENT SERVICES (IES)

    The President's budget recommends an increase of $928,000 and 8 
staff years for IES in fiscal year 2006, and 3 of the 8 new field 
investigator positions are to focus primarily on enforcement of Federal 
animal welfare laws. This reflects the fact that the volume of animal 
welfare cases is rising significantly as new facilities become licensed 
and registered. IES has already initiated more cases in the first half 
of fiscal year 2005 than it had pursued in each of the previous two 
years. In fiscal year 2004, IES conducted 288 formal investigations of 
alleged AWA violations, with 97 cases resolved through either civil 
penalty stipulations or Administrative Law Judge decisions and a total 
of $548,614 assessed in fines. To ensure the vital support for Animal 
Care's front-line work, we urge you to provide the $10,398,944 
requested by the President for IES.

Office of Inspector General/Animal Fighting Enforcement
    We very much appreciate the inclusion of $800,000 in fiscal year 
2005 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 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 four children in Asia in 2004 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 2006.

Food Safety and Inspection Service/Humane Methods of Slaughter Act 
        (HMSA) Enforcement
    We are grateful that Congress provided $5 million in fiscal year 
2005 to sustain no fewer than 63 full time equivalent (FTE) positions 
dedicated solely to inspections and enforcement related to the Humane 
Methods of Slaughter Act, plus $3 million to incorporate a new tracking 
system to ensure compliance with this law. The HMSA is designed to 
ensure that livestock are treated humanely and rendered unconscious 
before they are killed. The effort to target funds for this purpose was 
undertaken following reports of lax enforcement of the HMSA and animals 
being skinned, dismembered, and scalded while still alive and 
conscious. We urge that $5 million be provided again in fiscal year 
2006 exclusively for HMSA enforcement, and that language again be 
included to ensure effective implementation. Specifically, we hope such 
language will encourage USDA to: (1) use a portion of these funds to 
designate additional FSIS personnel to work with the existing District 
Veterinary Medical Specialists solely on HMSA enforcement; (2) employ 
objective scoring techniques (such as ratings on physical plant layout) 
to determine when regulatory actions are needed and to document 
improvements or failures in animal handling and slaughter operations; 
and (3) use location and technologies to enhance enforcement through 
unannounced observations.

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 $497,024 requested by the President for fiscal year 2006. 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 in January 2004 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). We hope the 
Committee will codify this 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 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 through their meat, such as
    E. coli and Salmonella, and these animals, too, suffer when they 
are moved en route to slaughter.
    As the Committee is aware, some segments of industry and members of 
Congress have recommended weakening the USDA downed cattle ban. They 
claim that animals unable to walk because of injury pose no health 
risk. But injury and illness are often interrelated--an animal may 
stumble and break a leg because of disease that causes weakness and 
disorientation. And USDA inspectors would have a difficult--if not 
impossible--task trying to sort out the reason an animal became non-
ambulatory. Major consumer groups including Consumers Union and 
Consumer Federation of America, support groups for victims of food-
borne illness, such as Safe Tables Our Priority (S.T.O.P.), 
Creutzfeldt-Jakob Disease Foundation, and CJD Voice, food safety 
organizations, companies such as McDonald's and Wendy's, and many 
others have all pointed out how reckless such a system would be. Of the 
BSE cases identified in Canada and the United States to date, 3 out of 
the 5 were identified as downed due to injuries, including the 
Washington State case (``calving injuries'') and the most recent case 
in Canada (``slipped on ice/broken leg'').
    From an animal welfare perspective, a comprehensive ban is needed 
because a downer cow with a broken leg would suffer just as much as a 
sick one if it's dragged through a slaughterplant--maybe even more. A 
ban on use of all downers for human food also provides an incentive for 
producers to treat animals humanely and prevent livestock from going 
down. Even before the administrative ban, USDA estimated that only 0.4 
percent to 0.8 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.'' Cases that involve broken 
bones and other injuries are perhaps the most preventable with improved 
husbandry.
    Most Americans had no idea that animals too sick or injured to walk 
were being dragged with chains or hauled by bulldozer en route to the 
food supply. When that fact came to light in December 2003, USDA's 
prompt decision to ban all downer cattle from human food calmed 
consumers. Unraveling the ban would undermine consumer confidence. More 
than 99 percent of the 22,000+ public comments USDA received on its 
downer ban called on the agency to maintain and strengthen its downer 
ban, with most asking that other species be included. For a report on 
the comments received by the agency, please go to: http://
files.hsus.org/web-files/PDF/2004_06_16_rept_USDA_comments.pdf.
    USDA testimony before various congressional committees has made 
clear that the agency need not rely on slaughterplant testing for BSE 
surveillance purposes. The USDA can conduct a viable surveillance 
program at rendering plants and farms to track the potential 
progression of BSE in this country.
    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 2006 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 2006. 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 InterTribal Bison Cooperative

                      INTRODUCTION AND BACKGROUND

    My name is Ervin Carlson, a 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 54 federally recognized Indian Tribes 
located across 18 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 first 
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 to 
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 2005 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 has implemented a health care 
initiative to provide easy access to buffalo meat on Indian 
reservations and to educate more Indian familes on the health benefits 
of range fed buffalo meat in their daily diets. 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 Metropolitan Water District of Southern 
                               California

    Dear Chairman Bennett: The Metropolitan Water District of Southern 
California is writing in support of the following Federal program under 
the Department of Agriculture's (USDA) budget that we believe is 
deserving of your Subcommittee's support during the fiscal year 2006 
budget process:
    Farm Security and Rural Investment Programs, Environmental Quality 
Incentives Program Activity.
    $25 million earmark for the Colorado River Basin Salinity Control 
Forum.
    The Metropolitan Water District of Southern California is a public 
agency that was created in 1928 to meet the supplemental water demands 
of people living in what is now portions of a six-county region of 
southern California. Today, the region served by Metropolitan includes 
approximately 18 million people living on the coastal plain between 
Ventura and the international boundary with Mexico. It is an area 
larger than the State of Connecticut and, if it were a separate Nation, 
would rank in the top ten economies of the world.
    Included in our region are more than 300 cities and unincorporated 
areas in the counties of Los Angeles, Orange, San Diego, Riverside, San 
Bernardino, and Ventura. We provide over half of the water used in our 
5,200-square-mile service area. Metropolitan's water supplies come from 
the Colorado River via our Colorado River Aqueduct and from northern 
California via the State Water Project's California Aqueduct.
    MWD continues to support USDA implementation of conservation 
programs. MWD firmly believes that interagency coordination, along with 
incentive-based cooperative conservation programs that facilitate the 
development of partnerships, are critical to addressing natural 
resources concerns, such as water quality degradation, wetlands loss 
and wildlife habitat destruction. It is vital that the Congress 
provides USDA with the funding necessary to successfully carry out its 
commitment to natural resources conservation.

            ENVIRONMENTAL QUALITY INCENTIVES PROGRAM (EQIP)

    An important program for MWD has been the Colorado River Basin 
Salinity Control Program, which is funded by USDA at the Federal level 
through the Environmental Quality Incentives Program Activity of the 
Farm Security and Rural Investment Programs. MWD recommends that EQIP 
be funded at $1 billion in fiscal year 2006, as proposed in the 
President' Budget, with the Colorado River Basin Salinity Control 
Program funded at $25 million, 2.5 percent of the EQIP Activity, as 
requested by the seven Colorado River Basin States through the Colorado 
River Basin Salinity Control Forum.
    EQIP provides assistance to farmers and ranchers who face threats 
to soil, water, air and related natural resources on their land. EQIP 
provides assistance in a manner that will promote agricultural 
production and environmental quality as compatible goals. The Natural 
Resources Conservation Service (NRCS) offers the program throughout the 
Nation.
    In Public Law 104-127, Congress amended the Colorado River Basin 
Salinity Control Act to direct the Secretary of Agriculture to carry 
out salinity control measures in the Colorado River Basin as part of 
EQIP. Beginning with the first full year of EQIP funding in 1997 
through 2001, USDA's participation in the Colorado River Basin Salinity 
Control Program (Salinity Control Program) had significantly diminished 
as compared to the 1996 level of funding for salinity control. After 
requests had been made by the Colorado River Basin Salinity Control 
Forum (Forum), the interstate organization responsible for coordinating 
the seven Basin States' salinity control efforts, and others, as well 
as directives from the Congress, USDA concluded that the Salinity 
Control Program warranted a multi-state river basin approach. The Forum 
is composed of Gubernatorial appointees from Arizona, California, 
Colorado, Nevada, New Mexico, Utah, and Wyoming. Clearly, Colorado 
River Basin salinity control has benefits that are not merely local or 
intrastate in nature, but continue downstream. EQIP is also important 
because it provides funding for agricultural source water protection 
measures that protect and improve the quality of Metropolitan's 
imported supplies from Northern California.
    The Colorado River is a large component of Southern California's 
regional water supply and its relatively high salinity causes 
significant economic impacts on water customers in MWD's service area, 
as well as throughout the Lower Colorado River Basin (Lower Basin). MWD 
and the Bureau of Reclamation (Reclamation) completed a Salinity 
Management Study for Southern California in June 1999. The study 
concluded that the high salinity from the Colorado River continues to 
cause significant impacts to residential, industrial and agricultural 
water users. Furthermore, high salinity adversely affects the region's 
progressive water recycling programs, diminishes the effectiveness of 
water conservation efforts, and is contributing to an adverse salt 
buildup through infiltration into Southern California's irreplaceable 
groundwater basins.
    In April 1999, MWD's Board of Directors authorized implementation 
of a comprehensive Action Plan to carry out MWD's policy for management 
of salinity. The Action Plan focuses on reducing salinity 
concentrations in Southern California's water supplies through 
collaborative actions with pertinent agencies, recognizing that an 
effective solution requires a regional commitment. MWD, the Association 
of Groundwater Agencies, the Southern California Association of 
Publicly Owned Treatment Works, and the WateReuse Association of 
California have formed a Salinity Management Coalition.
    During 2003, the Coalition was expanded to include major water and 
wastewater agencies throughout Southern California. Presently, the 
eleven members of the coalition are working to implement a Strategic 
Action Plan that focuses primarily on local contributions to southern 
California's high-salinity problem. In addition, Southern California 
leaders are working with urban areas in Arizona, Nevada, New Mexico, 
and Texas to find solutions to mutual problems with salinity in 
imported supplies, such as from the Colorado River, and other sources. 
In December 2004, these agencies participated in the National Salinity 
Summit to examine and coordinate salinity management activities.
    Concentrations of salts in the Colorado River cause hundreds of 
millions of dollars in damage in the United States according to the 
U.S. Department of the Interior. Implementation of salinity control 
measures:
  --increases the yield of salt sensitive crops and decreases water use 
        for leaching in the agricultural sector,
  --increases the useful life of galvanized water pipe systems, water 
        heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and decreases the use of bottled water and water 
        softeners in the household sector,
  --decreases the use of water for cooling, and the cost of water 
        softening, and increases equipment service life in the 
        commercial sector,
  --decreases the use of water and the cost of water treatment, and 
        decreases sewer fees in the industrial sector,
  --increases the life of treatment facilities and pipelines in the 
        utility sector,
  --eases the meeting of wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, and decreases desalination and brine 
        disposal costs due to less accumulation of salts in groundwater 
        basins, and
  --decreases use of imported water for leaching and the cost of 
        desalination and brine disposal for recycled water.
    Absent the Salinity Control Program, impacts would progressively 
increase with continued agricultural and urban development upstream of 
California's points of Colorado River diversion. Droughts will cause 
spikes in salinity levels in the future that will be highly disruptive 
to Southern California water management and commerce. The Salinity 
Control Program has proven to be a very cost-effective approach to help 
mitigate the impacts of higher salinity. Adequate Federal funding of 
the Salinity Control Program is essential.
    The Forum issued its 2002 Review, Water Quality Standards for 
Salinity, Colorado River System (2002 Review) in October 2002. The 2002 
Review found that 1 million tons of salinity needs to be controlled 
annually to maintain 2001 salinity levels through 2020. From 1994 
through 2003, funding for USDA's salinity control program did not equal 
the Forum-identified funding need for the portion of the program the 
Federal Government is responsible to implement. While NRCS has 
designated Colorado River Basin salinity control as an area of special 
interest, appointed a multi-state coordinator, and allocated about 
$19.8 million in fiscal year 2004 and $19.5 million in 2005, it is 
essential that implementation of salinity control efforts through EQIP 
continue to be accelerated to reduce economic impacts. The Basin States 
and farmers continue to stand ready to pay their share of the 
implementation costs of EQIP.
    The Forum has determined that allocation of 2.5 percent of the EQIP 
funds, that is $25 million, is needed in fiscal year 2006 for on-farm 
measures to control Colorado River Basin salinity. Funding at this 
level will permit the state adopted and U.S. Environmental Protection 
Agency approved water quality standards to be met. With 2.5 percent of 
the EQIP cost share financial assistance, monitoring, and technical 
assistance funding requested by the President allocated to the Salinity 
Control Program, an additional $21 million in States and local cost 
sharing could be committed.
    MWD urges the Subcommittee to support funding of $1 billion for 
EQIP, the amount requested in the President's Budget, and advise USDA 
that $25 million, or 2.5 percent of the EQIP funds, be designated for 
the Salinity Control Program. Thank you for your consideration of our 
testimony. USDA's conservation programs are critical for achieving 
Colorado River Basin salinity control objectives, as well as broader 
source water quality protection objectives in the Colorado River Basin 
and California.
    We look forward to working with you and your Subcommittee. Please 
contact Brad Hiltscher, MWD's Executive Legislative Representative in 
Washington, D.C. at (202) 296-3551, if we can answer any questions or 
provide additional information.
                                 ______
                                 

    Prepared Statement of the National Association of State Energy 
                           Officials (NASEO)

    Mr. Chairman and members of the Subcommittee, I am Sara Ward of 
Ohio and Chair of the National Association of State Energy Officials 
(NASEO). NASEO is submitting this testimony in strong support of 
funding at a $23 million level in fiscal year 2006 for Section 9006 of 
the Farm Bill, dealing with energy efficiency and renewable energy for 
farms and rural small businesses. NASEO also supports a $14 million 
funding level for the critical biomass R&D program contained in Section 
9010 of the Farm Bill.
    The state energy offices implement energy programs in the states in 
all sectors of the economy and develop energy policies for the States. 
The energy offices work closely with agricultural extension offices 
throughout the United States to support a vibrant rural economy, while 
increasing productivity and the use of energy efficiency and renewable 
energy. NASEO has long-supported expanded use of ethanol, as part of a 
balanced national energy policy.
    The ``Renewable Energy System and Energy Efficiency Improvements 
Program'' (Section 9006 of the Farm Security and Rural Investment Act 
of 2002 ) (Public Law 107-171) received $23 million in fiscal year 
2005. Despite the budget request of $10 million, we strongly support 
level funding of $23 million in fiscal year 2006. This program has 
already proven to be effective in promoting the use of renewable energy 
and energy efficiency in the agriculture sector. The State energy 
offices are working to promote this program. A number of States have 
matching efforts to expand the reach of this critical activity. The 
first 2 years of the program distributed $44 million in Federal grants 
across 29 States, for $300 million in energy projects. These projects 
have included wind power, energy efficiency, anaerobic digesters, 
biofuels processing and many other projects.
    The State energy offices stand ready to respond to any questions or 
concerns from the Subcommittee regarding these two important programs.
                                 ______
                                 

   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 2006. Representing the directors of State 
forestry agencies from the 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: 
Research, Education, and Economics, as well as Natural Resources and 
Environment. We believe the USDA budget for fiscal year 2006, which 
offers opportunities for advancing the sustainable management of 
private forestland nationwide, can be strengthened through our 
recommendations.

   USDA COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE 
                           (CSREES) PROGRAMS

Cooperative Forestry Research (McIntire--Stennis) Program
    The Cooperative Forestry Research (McIntire-Stennis) Program (CFRP) 
is a crucial part of the foundation that underlies academic and 
scientific understanding of the Nation's forest resources. McIntire-
Stennis CFRP was originally enacted in order to provide universities 
with formula funds for the explicit purpose of research in the field of 
forestry, which was not provided for in similar research funding 
programs. For more than forty years, CFRP has equipped both private and 
land-grant universities with the ability to produce invaluable research 
concerning forest productivity, environmental quality, and technologies 
for monitoring and extending the natural resource base. The program 
also provides rigorous scientific education and training for university 
students--the future managers of the Nation's forest resources.
    Universities, supported by base funds from the Federal Government, 
have consistently supplied science-based forestry research not 
affiliated with any particular resource use or interest group. Without 
sufficient base funds from the Federal Government, society will lose 
the benefits wrought by this productive partnership.
    The Administration's proposed fiscal year 2006 budget reduces 
funding for the McIntire-Stennis CFRP to half the amount enacted in 
fiscal year 2005 and aims to eliminate the program formula funds in 
fiscal year 2007. The Administration plans to redirect the funds toward 
both the National Research Initiative competitive grants program (NRI), 
and the new State Agriculture Experiment Station competitive grants 
program (SAES), which would provide competitive grants exclusively to 
land-grant universities. Although the amount of funding would 
theoretically be maintained, the proposed change in the funding 
mechanism would drastically alter the way that the funds would 
ultimately be used. Neither NRI nor SAES support specific forestry 
research efforts. The combination of the proposed elimination of 
McIntire-Stennis formula funds and the shift in the program funding 
mechanism would significantly reduce universities' ability to conduct 
necessary and credible forest resource research.
    NASF recommends full restoration of program funding for the 
Cooperative Forestry Research (McIntire-Stennis) Program to $22 
million. The proposed increase in CFRP 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.

The National Research Initiative Competitive Grants Program (NRI)
    The National Research Initiative Competitive Grants Program (NRI) 
advances fundamental scientific agriculture and forestry research. Two 
of the notable NRI forestry funding opportunities available in 2005 are 
Bio-based Products research grants and Bioenergy Production research 
grants. While grants such as these have great potential to contribute 
to forest resource research efforts, only 6 percent of NRI funds were 
allocated to forestry research proposals in fiscal year 2005.
    NASF supports continued funding for NRI, and encourages the 
President to increasing the proportion of spending dedicated to forest 
research to a minimum of 10 percent. However, NASF strongly disapproves 
of the proposed shift of McIntire-Stennis funds to NRI, thereby ending 
the forestry focus of the McIntire-Stennis program.

The Renewable Resources Extension Act (RREA)
    The Renewable Resources Extension Act (RREA) facilitates the 
transfer of needed forestry information and technology to non-
industrial private forest landowners, as well as loggers and small 
businesses involved with forest resource management.
    Extension's education programs aid private landowners in 
understanding their management options and responsibilities, and 
encourage them to take advantage of other technical and financial 
assistance programs.
    NASF recommends funding RREA at $4.1 million for fiscal year 2006, 
in order to sustain the program's ability to address critical extension 
and stewardship needs.

                    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 forestry and 
agricultural operations. Trees and forestry practices are often the 
best solution to many of the conservation challenges arising from these 
operations.
    NASF recommends funding for the Environmental Quality Incentives 
Program (EQIP) at the fiscal year 2005 level of $1.2 billion, full 
funding for the Conservation Reserve Program (CRP), $85 million for the 
Wildlife Habitat Improvement Program (WHIP), targeting of 321,000 acres 
under the Wetlands Reserve Program (WRP), and $150 million for the 
Emergency Watershed Program (EWP). NASF supports the President's fiscal 
year 2006 funding proposal of $274 million for the Conservation 
Security Program (CSP). NASF recommends that the Subcommittee strongly 
encourage the Secretary of Agriculture and the NRCS to expand the 
emphasis on forestry practices in EQIP and the other Farm Bill 
Conservation Programs.
    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. Investing Federal funds in conservation practices on 
private forest lands produces benefits for all, not simply landowners. 
These benefits include abundant clean water for drinking and 
recreation, improved wildlife habitat, open space, viable rural 
economies, and many other tangible and intangible public benefits.

                               CONCLUSION

    The National Association of State Foresters seeks the 
Subcommittee's support for a USDA fiscal year 2006 budget that will 
make sure the public's conservation needs--provided by private 
landowners--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 2006 budget 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 for the 
Cooperative State Research, Education and Extension Service, and the 
Natural Resources Conservation Service:

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal Year
                                                                 -----------------------------------------------
                       USDA Agency/Program                                             2006
                                                                   2005 Enacted     President's     2006 NAUFWP
                                                                                      Budget        Recommended
----------------------------------------------------------------------------------------------------------------
Coop. St. Research, Education, and Extension Serv:
    Hatch Act...................................................         178,707          89,354         178,707
    McIntire-Stennis Cooperative Forestry.......................          22,205          11,103          22,205
    Renewable Resources Extension Act...........................           4,060           4,093           4,093
    Natural Resources Inventory.................................         179,552         250,000         250,000
Natural Resources Conservation Service:
    Forest Land Enhancement Program.............................  ..............  ..............          80,000
    Conservation Program Monitoring and Evaluation..............  ..............  ..............           1,000
----------------------------------------------------------------------------------------------------------------

      COOPERATIVE STATE RESEARCH, EDUCATION AND EXTENSION SERVICE

    Hatch Act.--The President's fiscal year 2006 request for the Hatch 
Act proposes a 50 percent cut in these formula funds, moving toward 
elimination of the program in fiscal year 2007. The Hatch Act supports 
agricultural research in the States at college and university 
agriculture experiment stations. Experiment stations conduct research 
that relates directly to maintaining an effective agricultural industry 
and promoting 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. Eliminating the 
base funding for critical agricultural research at land grant 
universities would be detrimental to rural economies and our natural 
resources. NAUFWP strongly encourages Congress to continue Hatch Act 
formula funding into the future, starting with restoring the program to 
$178.707 million in fiscal year 2006.
    McIntire-Stennis.--The proposed budget for McIntire-Stennis 
Cooperative Forestry in fiscal year 2006 reflects a 50 percent cut, and 
reports elimination of the program in fiscal year 2007. These funds are 
essential to the future of resource management on non-industrial 
private forestlands, where forest products are produced while natural 
resources, including fish and wildlife, are conserved. As societal 
pressures for forest products grow, private forestlands will 
increasingly be needed to supplement wood products and supplies. In the 
absence of long-term, on-going research on forest health, productivity 
and environmental quality provided through McIntire-Stennis, the Nation 
could easily become unable to meet future forest product needs. 
Replacing formula funds with competitive grants will erode essential 
base funding for land grant universities, and leave long-term, stable 
forest research to chance. NAUFWP strongly encourages you to continue 
the McIntire-Stennis Cooperative Forestry program into the future by 
restoring the program to $22.505 million in fiscal year 2006.
    Renewable Resources Extension Act.--We strongly recommend that the 
Renewable Resources Extension Act be funded at the President's 
requested level, $4.093 million, in fiscal year 2006. RREA funds are 
apportioned to State Extension Services at land grant universities for 
educational programs aimed at private forests and rangelands. The 
programs help landowners improve management, marketing, and utilization 
of their renewable natural resources. RREA funds are leveraged up to 
15-fold (average of 7:1) by State, local, and private funds to develop 
and disseminate information. Given that 58 percent of the Nation's 
forestland is privately owned, it is imperative that we provide these 
landowners with the knowledge to sustainably manage their forests for 
timber, watershed protection, recreation, biodiversity, and carbon 
sequestration. Extension programs supported by RREA also offer 
information about technical assistance, tax incentives, and cost-
sharing opportunities.
    Recently, CSREES and the Land Grant universities developed a 5-year 
strategic plan to guide RREA implementation from 2005-2009. The 
resulting goals and actions, if appropriately funded, will allow State 
Extension Services to help private forest landowners develop more 
profitable resource-based enterprises while improving environmental 
quality, controlling invasive species, decreasing land conversion and 
fragmentation, and increasing economic and quality of life benefits to 
landowners and communities.
    RREA is a ``win-win'' program with measurable results. For example, 
the University of Florida used RREA funds to develop a Wildland Fire 
Education program, leveraging $200,000 and reaching 2,000 workshop 
participants. Cornell University used RREA funds to work with the New 
York Department of Environmental Conservation's Division of Lands and 
Forests to implement the State's Stewardship Plan for the 2002 Farm 
Bill. As a result of Cornell's RREA-supported involvement, 
approximately $323,000 has been leveraged to provide educational 
assistance to over 57,000 forest owners who control more than 3 million 
acres of forestland in the State. Texas A&M used RREA funds to initiate 
creation of an electronic version of the Texas Friendly quality 
customer service training, to help Texas landowners expand 
opportunities for nature tourism income sources.
    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 
support the President's $250 million request for National Research 
Initiative Competitive Grants in fiscal year 2006, provided the 
increase does not come at the expense of important formula fund 
programs such as Hatch Act and McIntire-Stennis.

                 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 2006.
    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 Mr. Chairman, 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 2006 and beyond.

                   SUMMARY POSITION--FISCAL YEAR 2006

    With the noteworthy exceptions indicated below, National C-FAR 
urges the Subcommittee and Committee to fund the Administration's 
request for food and agricultural research, extension and education for 
fiscal year 2006, including much-needed increases in the National 
Research Initiative. National C-FAR urges that funding for research, 
extension and education be augmented to the maximum extent practicable, 
as an important next step toward building the funding levels needed to 
meet identified food and agricultural research, extension and education 
needs. In particular--
  --National C-FAR urges the Subcommittee and Committee to maintain 
        funding for the Hatch, McIntyre-Stennis and Animal Health and 
        Disease formula fund programs at or above fiscal year 2005 
        enacted levels. National C-FAR is concerned that the 
        Administration's proposal to (1) cut Hatch and McIntyre-Stennis 
        funds by 50 percent in fiscal year 2006 and 100 percent in 
        fiscal year 2007; and (2) eliminate funding for Animal Health 
        and Disease in fiscal year 2006 would destabilize the important 
        research and extension activities currently funded by those 
        programs, as well as the ability to maintain critical 
        scientific expertise at the affected institutions.
  --National C-FAR appreciates the Administration's proposed increases 
        for selected programs in the Agricultural Research Service. We 
        also are concerned about the apparent arbitrary reduction in a 
        number of programs without a careful review of their merits, 
        including adequate stakeholder input.
    As a coalition representing stakeholders in both the research, 
extension and education community and the customers' who need and 
depend upon their outcomes, National C-FAR urges expanded public 
participation in the Administration's research priority setting and 
funding decision process and stands ready to work with the 
Administration and other interested stakeholders in such a process.

                       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 and extension community. 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, extension and 
education. For example, National C-FAR is hosting an educational series 
of ``Break & a Briefing'' seminars on the hill, featuring leading-edge 
researchers on timely topics to help demonstrate the value of public 
investment in food and agricultural research, extension and education. 
National C-FAR also circulates a series of one-page Success Profiles 
highlighting some of the many benefits already provided by public 
investment in food and agricultural research, extension and education. 
Each provides a contact for more information. Profiles released to date 
are titled ``Anthrax,'' ``Mastitis,'' ``Penicillin,'' ``Witchweed,'' 
``Making Wine,'' ``Fighting Allergens,'' and ``Harnessing 
Phytochemicals.'' 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 and 
practical application of results 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, extension and education to date 
have 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, extension and education are necessary 
complements 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, extension and education 
help provide oversight and measure long-term progress. Public research, 
extension and education also act 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 contributions of publicly supported 
agricultural research, extension and education 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 funding in 
recent years for food and agricultural research, extension and 
education 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 for 
food and agricultural research, extension and education has been flat 
for over 20 years, while support for other Federal research has 
increased substantially. 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.
    Reduced public investment in food and agricultural research, 
extension and education may well be a result of a view that the U.S. 
food and agricultural system is an unprecedented success story. 
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 continuing shortfalls in 
funding for food and agricultural research, extension and education 
will jeopardize the food and agricultural community's ability to 
maintain its leadership role. 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, extension and education so that the food and agricultural 
system can respond to these challenges on a sustainable basis:
  --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, extension and education are key to providing 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, extension and education 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, extension and education 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 natural fiber 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.
    Translational education (extension) is a vital link connecting the 
research community to those who need and use research outcomes. The 
extension and education system helps translate basic and applied 
research outcomes into practical applications and more timely 
implementation by the end user community, thus helping to realize 
positive economic, environmental, health, food security and a host of 
other benefits in the food and agricultural system, and for the 
consuming public. The USDA's National Research Initiative has made 
significant progress in recognizing this role, through funding of 
projects that undertake an integrated research and extension approach. 
National C-FAR strongly supports funding for extension and education.
    Finally, there is a continuing need to build the human capacity of 
expertise to do quality food and agricultural research, extension and 
education, and to implement research outcomes in the field and 
laboratory. The food and agricultural sciences face a daunting task of 
supplying the Nation with the next generation of scientists and 
educators. If these basic human resource 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 today and in the future must simultaneously satisfy 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 funding in food and agricultural research, extension and 
education 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. At the 3-year mark, the larger 
reality is the threat of funding cuts.

         NATIONAL C-FAR FISCAL YEAR 2006 FUNDING RECOMMENDATION

    With the noteworthy exceptions indicated below, National C-FAR 
urges the Subcommittee and Committee to fund the Administration's 
request for food and agricultural research, extension and education for 
fiscal year 2006, including much-needed increases in the National 
Research Initiative. National C-FAR urges that funding for research, 
extension and education be augmented to the maximum extent practicable, 
as an important next step toward building the funding levels needed to 
meet identified food and agricultural research, extension and education 
needs. In particular--
  --National C-FAR urges the Subcommittee and Committee to maintain 
        funding for the Hatch, McIntyre-Stennis and Animal Health and 
        Disease formula fund programs at or above fiscal year 2005 
        enacted levels. National C-FAR is concerned that the 
        Administration's proposal to (1) cut Hatch and McIntyre-Stennis 
        funds by 50 percent in fiscal year 2006 and 100 percent in 
        fiscal year 2007; and (2) eliminate funding for Animal Health 
        and Disease in fiscal year 2006 would destabilize the important 
        research and extension activities currently funded by those 
        programs, as well as the ability to maintain critical 
        scientific expertise at the affected institutions.
  --National C-FAR appreciates the Administration's proposed increases 
        for selected programs in the Agricultural Research Service 
        (ARS). We also are concerned about the apparent arbitrary 
        reduction in a number of programs without a careful review of 
        their merits, including adequate stakeholder input.
    As a coalition representing stakeholders in both the research, 
extension and education community and the customers' who need and 
depend upon their outcomes, National C-FAR urges expanded public 
participation in the Administration's research, extension and education 
priority setting and funding decision process and stands ready to work 
with the Administration and other interested stakeholders in such a 
process.

                               CONCLUSION

    In conclusion, National C-FAR respectfully 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, extension and education;
  --Recent funding levels for food and agricultural research, extension 
        and education have been inadequate to meet pressing needs;
  --Federal investments in food and agricultural research, extension 
        and education should be enhanced in fiscal year 2006 and 
        beyond;
  --Funding in fiscal year 2006 for USDA, CSREES formula fund programs 
        (Hatch, McIntyre-Stennis and Animal Health and Disease) should 
        be continued, at or above fiscal year 2005 enacted levels; and
  --The Administration should provide for expanded public 
        participation, including during review of programs being 
        considered for possible reforms or cuts.
    National C-FAR appreciates the opportunity to share its views and 
stands ready to work with the Chair and members of the Subcommittee and 
Committee in support of these important funding objectives.
                                 ______
                                 

Prepared Statement of the National Commodity Supplemental Food Program 
                              Association

    Mr. Chairman and subcommittee members, I am Vicki Metheny, 
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, low income 
mothers, infants, and children. The program first authorized in 1969, 
serves approximately 536,000 individuals every month in 32 States, 2 
Tribal Organizations and the District of Columbia.
  --The fiscal year 2006 President's Budget has proposed only $106.9 
        million for the CSFP and projects total resources of $112.8 
        million, with which the Department expects to support only 
        491,056 caseload slots, an 8 percent cut. 45,140 low-income 
        seniors will no longer receive much needed nutritious commodity 
        foods.
  --The $110.8 million in total resources made available in fiscal year 
        2005 will only maintain the fiscal year 2004 caseload of 
        536,196.
  --Within the last 7 years, CSFP has added 15 new States to the 
        Program serving 113,792 new program participants, the vast 
        majority being low-income seniors.
  --The program is not yet in all 50 States due to budget constraints, 
        not due to a lack of interest or need for the services. In 
        fiscal year 2003 when additional resources were made available 
        to the program, 84,160 additional participants were served, 
        mostly seniors.
    The CSFP's 36 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 cost 
        for fiscal year 2005 is $13.95 with an approximate retail cost 
        of $50.00.
  --The CSFP involves the entire community in the problems of hunger 
        and poverty. Thousands of volunteers as well as 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. Forty-five percent 
        of State and local operating resources are provided at the 
        grassroots level along with an additional $7.7 million in items 
        donated to participants.
    The Agriculture Appropriations Sub-Committee has consistently been 
supportive of CSFP, acknowledging it as a cost-effective way of 
providing nutritious supplemental food packages to low income eligible 
seniors, mothers and children.
    This year, your support is needed urgently to provide adequate 
resources in order to retain the existing services for the 536,196 
mothers, children and seniors currently receiving benefits. If the 
philosophy behind the President's budget is to do no harm to nutrition 
programs then $123.2 million must be provided to maintain fiscal year 
2005 level services.
    The sub-committee itself has provided funding increases over the 
years to allow States with approved plans to join the growing list of 
CSFP participants. Five States currently have approved State plans. 
$3.5 million would be needed to fund this vital program expansion into 
Arkansas, Delaware, New Jersey, Oklahoma and Utah.
    While it is true that budget times are difficult just now for the 
government, as they are for many individuals, States already operating 
CSFP have indicated that there is additional need for the program and 
have asked for 110,000 slots for expansion of the program. The total 
cost of this expansion would be $21.3 million, however, any expansion 
would be worthwhile and very much appreciated.

                 FISCAL YEAR 2006 PROGRAM SERVICE NEEDS
                          [Dollars in millions]
------------------------------------------------------------------------
               Description                 Funding Need    Service Level
------------------------------------------------------------------------
Maintain current service level..........          $123.2         536,196
Maintain service level and expansion of            126.7         556,696
 service into five new States (20,500
 people)................................
Maintain service level and expansion of            142.5         648,164
 service in current States (111,968
 people)................................
Maintain current service level,                    148.0         674,664
 expansion of service and five new
 States.................................
------------------------------------------------------------------------


                          CURRENT SERVICE LEVEL
------------------------------------------------------------------------
                 Participant description                      Number
------------------------------------------------------------------------
Senior Citizens 60 and over who are at or below 130              472,000
 percent of poverty.....................................
Women, Infants, Children (exclusive of WIC recipients)..          64,000
                                                         ---------------
      TOTAL.............................................         536,000
------------------------------------------------------------------------

    Current Service Area:
    
    

            FISCAL YEAR 2006 PROPOSED FUNDING IS NOT ADEQUATE
------------------------------------------------------------------------
                                             Proposed     Senior Service
               Description                    Funding        Decrease
------------------------------------------------------------------------
$106.9 million appropriation + $6.02      $112.8 million        (45,140)
 million USDA commodity drawdown........
------------------------------------------------------------------------

    The Commodity Supplemental Food Program (CSFP) provides Federal 
commodity food, nutrition education, and related services to senior 
citizens 60 and over (who are at or below 130 percent of Federal 
Poverty Income Guidelines). CSFP also serves pregnant and post-partum 
women, children under 6 (at or below 185 percent of Federal Poverty 
Income Guidelines), each month who are at nutritional risk due to low 
income. Eighty-eight percent of our monthly participants are seniors. 
The remaining 12 percent of those served by CSFP are moms and kids, of 
whom 9 out of 10 are no longer eligible for the WIC program. CSFP is 
currently distributed in 32 States, two (2) Indian Tribal 
Organizations, and the District of Columbia with the help of three (3) 
million volunteer hours, hundreds of non-profits and faith based 
organizations.

                                                                  CSFP ADMINISTRATIVE EXPENSE/VALUE SURVEY FOR FISCAL YEAR 2004
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                     Volunteer
                            Programs                                USDA Grants     Total Costs      Not USDA      In-Kind Cost        Value        Total Value    Percent USDA     Extra Goods
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NH..............................................................        $423,110        $467,684         $44,574          $1,702        $151,812        $621,198              68          $2,750
NY..............................................................       1,846,888       3,816,178       1,969,290           9,000          51,570       3,876,748              48          20,425
VT, FB..........................................................         291,667         291,667               0               0          30,942         322,609              90         268,200
DC..............................................................         447,667       2,030,320       1,582,653         507,873          12,256       2,550,449              18               0
PA..............................................................         795,923       1,084,276         288,353         236,891         828,304       2,149,471              37         128,281
KY..............................................................         943,750         963,000          19,250  ..............          55,008       1,018,008              93               0
MS..............................................................         399,922         426,672          26,750          36,000         422,049         884,721              45               0
NC..............................................................          82,803         122,803          40,000               0           3,438         126,241              66          20,000
SC..............................................................         210,562         251,350          40,788         119,386         251,489         622,225              34          21,061
TN..............................................................         840,733         840,733               0               0               0         840,733             100               0
IL..............................................................         946,303         946,303               0               0         336,099       1,282,402              74               0
IN..............................................................         263,202         298,202          35,000          17,520         358,095         673,817              39               0
MI..............................................................       4,465,551       4,751,458         285,907         264,202       3,258,607       8,274,267              54      13,012,108
MN..............................................................         811,741         150,848         339,107           7,508         691,494       1,849,850              44         240,000
RL, MN..........................................................           7,422          14,844           7,422               0               0          14,844              50               0
OH..............................................................         713,646         808,976          95,330          57,906         237,910       1,104,792              65         158,754
WI..............................................................         261,820         306,025          44,205               0         240,110         546,135              48         528,550
LA..............................................................       4,539,024       4,539,024               0         953,286       1,429,323       6,921,633              66             940
NM..............................................................       1,113,015       1,428,969         315,954         368,815         237,144       2,034,928              55         646,964
TX..............................................................         671,165         757,819          86,654          15,000         139,652         912,471              74          75,000
CO..............................................................       1,158,839       1,289,224         130,385          87,860         597,192       1,974,276              59         577,049
IA..............................................................         231,552         518,095         286,543               0          67,247         585,342              40         108,510
KS..............................................................         325,397         394,416          69,019         329,960         255,881         980,257              33          81,424
MS..............................................................         526,404         579,089          52,685          71,278         223,659         874,026              60               0
MT..............................................................         357,744         406,496          48,752         116,529         199,301         722,326              50         295,666
NE..............................................................         757,561       1,051,670         294,109          39,643         261,662       1,352,975              56          69,597
ND..............................................................         157,368         192,942          35,574           1,135         226,220         420,297              37          23,940
SD..............................................................         157,921         197,366          39,445          12,980          41,376         251,722              63          15,743
OS, SD..........................................................          36,848          36,848               0               0               0          36,848             100               0
AK..............................................................         157,921         176,196          18,275               0          36,271         212,467              74               0
AZ..............................................................         992,153       1,632,789         640,636         442,950       1,030,066       3,105,805              32         655,000
CA..............................................................       3,016,611       3,186,426         169,815         404,734         358,180       3,949,340              76         741,872
NV..............................................................         473,764         490,051          16,287          33,000          30,474         553,525              86               0
OR..............................................................          53,312          53,312               0               0               0          53,312             100               0
WA..............................................................         134,194         145,743          11,549             300          62,366         208,409              64               0
                                                                 -------------------------------------------------------------------------------------------------------------------------------
      TOTAL.....................................................      28,613,503      34,647,814       7,034,311       4,135,458      12,125,197      51,908,469              55       7,691,834
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

   Prepared Statement of the National Council of Farmer Cooperatives

    Thank you, Mr. Chairman, and members of the Subcommittee for your 
leadership and support for U.S. agriculture. The National Council of 
Farmer Cooperatives (NCFC) appreciates this opportunity to submit its 
views regarding the fiscal year 2006 agriculture appropriations bill, 
and respectfully requests this statement be made part of the official 
hearing record.
    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.
    We appreciate very much the challenges facing Congress in the 
current budget environment. At the same time, we want to emphasize the 
continued importance and high priority of policies and programs, 
together with needed funding, under the 2002 Farm Bill to help promote 
an economically healthy and competitive U.S. agricultural sector, meet 
the food and fiber needs of consumers at home and abroad, strengthen 
farm income, improve our balance of trade, promote rural development, 
and maintain and create needed jobs.
    To help achieve these important objectives, it is also vital to 
maintain and strengthen the ability of farmers to join together in 
cooperative self-help efforts. There is a long history of congressional 
support for public policy to enhance the ability of farmers to join 
together in farmer cooperatives to improve their overall income from 
the marketplace, manage their risk, capitalize on new market 
opportunities, and to compete more effectively in a global economy. 
Accordingly, in addition to supporting basic farm and commodity 
programs under the 2002 Farm Bill, we recommend the following:
  --USDA's Rural Business--Cooperative Service (RB-CS).--The rural 
        development mission area includes responsibility for carrying 
        out a variety of programs to help achieve these objectives, 
        including research, education and technical assistance for 
        farmers and their cooperatives. Since the elimination of a 
        separate agency with responsibility for such programs, funding 
        for such purposes has generally been provided through the 
        salary and expense budget relating to rural development.
      For fiscal year 2006, the administration's budget proposal 
        provides $683 million in both budget authority and program 
        level for salaries and expenses for the rural development 
        mission area, compared to $639 million for fiscal year 2005. 
        Since there is no separate line item relating to programs in 
        support of cooperative self-help efforts by farmers and their 
        cooperatives, we recommend that specific language be included, 
        as Congress previously has, to ensure that programs to 
        encourage such cooperative self-help efforts be given a high 
        priority.
  --Value-Added Producer Grants.--USDA's Value-Added Producer 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.
      In fiscal year 2005, the program was funded at $15.5 million. For 
        fiscal year 2006, the administration has recommended 
        approximately $16 million. Given the importance and success of 
        the program in promoting cooperative self-help efforts by 
        farmers, we would like to see the program fully funded at $40 
        million as provided under the 2002 Farm Bill and hope the 
        Subcommittee will be able to move toward that goal. It is also 
        important to note that the program is administered on a 
        matching basis, thereby doubling the impact of such grants and 
        helping encourage needed investment in rural America. 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.
  --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 
        historic 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 
        2006, the administration's budget proposal provides an overall 
        program level of $899 million, which represents an increase 
        over fiscal year 2005. 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. We are concerned over proposals that would 
        eliminate funding for this important program. 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 implemented as Congress intended.
    We would also like to take this opportunity to express our strong 
support for USDA's export programs. Such 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. As a member of the Coalition to Promote 
U.S. Agricultural Exports, we urge that funding be provided at $200 
million, together with $34.5 million for the Foreign Market Development 
program, as provided under the 2002 Farm Bill. In addition, we urge 
full funding for 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.
    We also would like to urge support for needed 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.
    Another important area of emphasis when it comes to enhancing the 
global competitiveness of farmer cooperatives and American agriculture 
is research. NCFC supports the National Coalition for Food and 
Agriculture Research goal of doubling Federal funding over the next 5 
years.
    Finally, we also want to express our strong support for important 
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 Fish and Wildlife Foundation

    Mr. Chairman and Members of the Subcommittee: I appreciate the 
opportunity to submit testimony for the record regarding the fiscal 
year 2006 funding request for the National Fish and Wildlife Foundation 
(Foundation). The Foundation respectfully requests that this 
Subcommittee fund the Foundation at $4 million through the U.S. Natural 
Resources Conservation Service (NRCS) appropriation. This request would 
allow the Foundation to expand its highly successful grant program to 
better assist the NRCS in maximizing the benefits of the Conservation 
Title of the 2002 Farm Bill.
    Federal dollars appropriated by this Subcommittee allow us to 
leverage State, local, and private dollars for on-the-ground 
conservation. The Foundation's relationship with NRCS began in 1996 
when we signed a cooperative agreement to protect and restore 
previously converted agricultural wetlands through the Wetland Reserve 
Program (WRP). Through that partnership the Foundation received $5 
million in NRCS funds, matched it with $5.4 million in non-Federal 
funds and awarded a total of 31 WRP grants. More than 10,000 acres were 
restored and enrolled in the WRP through this effort. Since that time, 
the Foundation has received $15 million in NRCS Federal funds ($3 
million per fiscal year since fiscal year 2000) which it has dedicated 
to a matching grant program focused on private land conservation. The 
Foundation has been able to support 330 projects in 49 States by 
matching the $15 million with $47 million in non-Federal funds for a 
total of more than $62 million in on-the-ground conservation. These 
projects have led to the direct restoration of more than 200,000 acres 
of farmland and rangeland and to 775 miles of restored streams and 
rivers.
    Our general conservation grant program allowed us then and 
continues to allow the Foundation to be highly successful in assisting 
the NRCS in accomplishing its mission to help people conserve, maintain 
and improve our natural resources and environment. Whether it involves 
farm, range or grassland conservation, species management, or 
conservation education, the Foundation strategically invests the 
Federal funds entrusted to us in sound projects. In fiscal year 2004, 
the Foundation received $3 million in Federal funds, which it leveraged 
with over $9 million in non-Federal funds for a total of more than $12 
million in on-the-ground conservation. This marks the fourth year in a 
row that the Foundation has been able to average a 3:1 non-Federal to 
Federal funding ratio. With the funds provided by the Committee in 
fiscal year 2005, we expect to successfully continue our leveraging of 
Federal funds to increase on-the-ground conservation benefits.
    The Foundation's achievements are based on a competitive grant 
process where Federal funds are matched by the grantee with non-Federal 
funds and in-kind services. Those grantees include Resource 
Conservation and Development Areas, conservation districts, 
universities, and non-profit organizations who work in partnership with 
farmers and ranchers to support conservation efforts on private land. 
The Foundation also works to further maximize Federal funds by 
providing private funds through the generosity of one of our growing 
number of corporate and foundation partners. These funds are in 
addition to the non-Federal funds that are provided by the Foundation's 
grantees. In the Foundation's partnership with NRCS, Federal funds have 
been supplemented with funding from the Shell Oil Company, the FMC 
Corporation, the Anheuser-Busch Companies, Inc., the Summer T. McKnight 
Foundation, the Charles Stewart Mott Foundation, the William Penn 
Foundation, and the David and Lucile Packard Foundation. In total, 
these organizations provided approximately $700,000 to enhance our NRCS 
partnership grants.
    Working Landscapes.--Through our partnership, we work with NRCS to 
identify and fund projects that have strong support in affected 
agricultural and rural communities. We place our highest priority on 
projects integrating conservation practices on ongoing agricultural, 
ranching, and forestry operations. We fund partners and provide 
expertise by engaging watershed experts, ranchers, foresters, farmers, 
local governments, and non-profits to undertake on-the-ground private 
land activities with willing landowners.
    The Foundation has provided critical support to organizations that 
are assisting farmers and ranchers in implementing private land 
conservation activities. Through these efforts the Foundation has 
helped to restore and protect thousands of acres of buffer, wetland, 
and grassland habitats. One way Foundation grants promote the 
integration of conservation practices on farmland and rangeland is by 
demonstrating the economic benefits that can be obtained through these 
practices. Our Encouraging Wildlife on Direct-Market Farms project will 
attempt to demonstrate that preserving and restoring native plant and 
animal communities can be economically beneficial to direct-market 
farming operations. The University of Northern Iowa (UNI) will utilize 
$31,158 in Foundation NRCS funds that it will match with $91,308 in 
non-Federal funds to document the conservation activities on 200 
direct-market farms. UNI will then work with five farms to coordinate 
wildlife habitat restoration plans based on the most successful 
documented conservation activities found on surrounding farms. Three 
well-publicized field days will be conducted on participating farms and 
a variety of media will be used to inform consumers of the links 
between these farms and wildlife habitat improvements. It is 
anticipated that this demonstration project will encourage other area 
farmers to incorporate wildlife management into their operations.
    The Foundation has also invested heavily in efforts to improve the 
ecological health of working agricultural lands. Grantees supported by 
the Foundation have worked with farmers and ranchers to reduce 
agricultural runoff, remove invasive species, and restore native 
ecosystems. One of our stellar projects is the Conservation Agriculture 
Model Farms (ND)-IV project which is a cooperative effort between 
government, non-profit organizations, and private landowners to 
demonstrate the economic efficiency and profitability of designing 
whole farm plans. These plans identify the best soils to farm and 
design appropriate alternatives on the rest. The project is funded with 
$50,000 in Federal funds and is being match with $100,000 in non-
Federal funds. The project will lower the costs of farming by making 
farming more efficient and by reducing the use of herbicides and 
fertilizers, while providing conservation benefits such as improved 
wildlife habitat, improved water storage, and reduced soil loss due to 
erosion. The template farm plans developed through this project will be 
able to be used by other farmers throughout the region.
    Conserving Fish, Wildlife and Plants.--With our NRCS dollars, the 
Foundation funds projects that directly benefit diverse fish and 
wildlife species including, salmon in the west, migratory birds in the 
midwest and grassland birds in the south. Habitat for native fish has 
been restored on private lands throughout the United States through 
vegetative planting, streambank stabilization, livestock fencing and 
nutrient reduction efforts. In addition to improving water quality, 
efforts have been undertaken by our grantees to reduce water loss 
caused by invasive species or from outdated irrigation systems. By 
reducing the water taken from rivers, there is less chance that drought 
will negatively impact aquatic life.
    A project that highlights one of these efforts is our Wildlife 
Habitat Enhancement (TX) project. The West Nueces-Las Moras Soil and 
Water Conservation District, funded with $31,200 in Foundation NRCS 
funds that is being matched with $62,400 in non-Federal funds, will 
conduct prescribed burns on over 3,000 acres of private lands to reduce 
densities of ashe juniper. Ashe juniper is an invasive plant species 
that uses a disproportionate amount of water resources. The removal of 
ashe juniper in the Edwards Aquifer will result in increases in water 
quality and quantity and improved wildlife habitat. In addition to the 
prescribed burns, the grantee will conduct field days and distribute 
brochures to local landowners on prescribed burning and grazing 
techniques that can be conducted to decrease ashe juniper infestations.
    We also measure our success in part by preventing the listing of 
species under the Endangered Species Act and by stabilizing and 
hopefully moving others off the list. Some species that have received 
support through our NRCS grant program include salmonids, golden-
cheeked warblers, southwestern willow flycatchers, whooping cranes, 
sage grouse, lesser prairie chickens, aplomado falcons, black-tailed 
prairie dogs, Louisiana black bears, bog turtles, and Karner blue 
butterflies. We invest in common sense and innovative cooperative 
approaches to endangered species, building bridges between the 
government and the private sector.
    Expanding Conservation Education Opportunities.--Our grants also 
use our NRCS dollars to expand conservation education opportunities. Of 
our fiscal year 2004 NRCS partnership grants, approximately one fourth 
contained an environmental education or outreach component. Some of the 
conservation education projects supported through our NRCS grant 
program seek to educate farmers and ranchers on conservation practices 
while demonstrating how best management practices and wildlife 
incentives provide both environmental and economic benefits. Other 
projects have provided training to secondary school teachers on the 
ecological, economic and cultural benefits of rangeland and farmland 
conservation. The Sustainable Vineyard Ecosystem Management grant 
highlights some of the Foundation's environmental education work. In 
this project the grantee, California Sustainable Winegrowing Alliance, 
was awarded $60,000 in Federal funds that is being matched with 
$150,000 in non-Federal funds to encourage sustainable on-the-ground 
conservation practices that will benefit diverse species and habitats 
in California's winegrowing region. This sizable educational effort 
will target more than 4,000 winegrape growers who farm over 500,000 
acres through local workshops and outreach events.
    Continued Need.--The Foundation is uniquely positioned to continue 
assisting NRCS in meeting its need to implement beneficial conservation 
practices on our Nation's farms and ranches by leveraging NRCS's scarce 
Federal resources to maximize the on-the-ground conservation benefits. 
The Foundation's matching grant program has the flexibility to address 
many agricultural conservation needs. These include, but are not 
limited to, increasing instream flow for rivers while continuing to 
support agricultural irrigation, promoting the recovery of specific 
threatened or endangered animals on private land, implementing critical 
conservation practices on private land that does not qualify for 
funding under a Farm Bill program, and by forging broad community-based 
partnerships. The need for these projects is evident by the number of 
grant applications the Foundation receives. On average we receive two 
times the number of applications we are able to fund. In addition, we 
regularly fund projects at a reduced level that still permits the 
project to be successfully completed while allowing the Foundation to 
fund additional worthwhile agricultural conservation projects.
    Accountability and Grantsmanship.--All potential grants are subject 
to a peer review process involving local NRCS staff, State agency 
staff, academics, commodity and environmental interests, corporations, 
and others. The review process examines the project's conservation 
need, technical merit, the support of the local community, the variety 
of partners, and the amount of proposed non-Federal matching funds. We 
also provide a 30 day notification to the Members of Congress for the 
congressional district and State in which a grant will be funded prior 
to making the grant. In addition, the Foundation requires strict 
financial reporting by grantees and is subject to an annual audit.
    Basic Facts About the Foundation.--The Foundation promotes 
conservation solutions by awarding matching grants using its federally 
appropriated funds to match private sector funds. We have a statutory 
requirement to match Federal funds with at least an equal amount of 
non-Federal funds, which we consistently exceed. No Federal 
appropriations meet our administrative expenses.
    The Foundation is governed by a 25-member Board of Directors 
appointed by the Secretary of The Interior. At the direction of 
Congress, the Board operates on a nonpartisan basis. Directors do not 
receive any financial compensation for service on the Board; in fact, 
all of our directors make financial contributions to the Foundation. It 
is a diverse Board, representing the corporate, philanthropic, and 
conservation communities; all with a tenacious commitment to fish and 
wildlife conservation.
    The National Fish and Wildlife Foundation continues to be one of, 
if not the, most cost-effective conservation program funded in part by 
the Federal Government. By implementing real-world solutions with the 
private sector while avoiding regulatory or advocacy activity, our 
approach is more consistent with this Congress' philosophy than ever 
before. We serve as a model for bringing private sector leadership to 
Federal agencies and for developing cooperative solutions to 
environmental issues. We are confident that the money you appropriate 
to the Foundation will continue to make a difference.
                                 ______
                                 

          Prepared Statement of the National Organic Coalition

    Chairman Bennett, Senator Kohl, and Members of the Subcommittee: My 
name is Steven Etka. I am submitting this testimony on behalf of the 
National Organic Coalition (NOC) to detail our recommendations and 
requests for fiscal year 2006 funding for several USDA marketing, 
research, and conservation programs of importance to organic 
agriculture.
    The National Organic Coalition (NOC) is a national alliance of 
public interest organizations working to provide a voice for farmers, 
ranchers, environmentalists, consumers and others involved in organic 
agriculture. The goal of the Coalition is to assure that organic 
integrity is maintained, that consumer confidence is preserved and that 
policies are fair, equitable and encourage diversity of participation 
and access. The current members of NOC are the Center for Food Safety, 
Rural Advancement Foundation International--USA, National Cooperative 
Grocers Association, and the Northeast Organic Farming Association --
Interstate Council.
    We urge the Subcommittee's strong consideration of the following 
funding requests for various USDA programs of importance to organic 
farmers, marketers and consumers:
USDA/Agricultural Marketing Service (AMS)
    Organic Standards--Request: $2.5 million.
    Responding to a strong growth in consumer demand for organically 
produced foods, Congress enacted the Organic Foods Production Act of 
1990 (OFPA) to authorize the creation of national organic standards so 
that consumers across the Nation could be confident that one common set 
of rules applies to all foods that carry the label ``certified 
organic.''
    When the organic agriculture community agreed in the late 1980s to 
pursue legislation to create a Federal organic standards program, it 
was done in recognition of the benefits to producers and consumers of 
establishing one common standard in the Nation for organically produced 
agricultural products. Yet for many in the organic community, it was 
done with some apprehension, as well. Many saw the great risks 
associated with turning the keys to a grassroots effort over to the 
Federal Government.
    To capture both the promise and the apprehension associated with a 
federalized organic standards program, the Organic Foods Production Act 
(OFPA) of 1990 was enacted with an emphasis on maintaining a strong 
public/private partnership in the implementation and administration of 
Federal organic programs. There is concern, however, that some the 
provisions of OFPA that were included to assure strong participation by 
organic farmers and consumers in the national standard-setting and 
oversight process have not been fully implemented, in part due to lack 
of adequate funding.
    In fiscal year 2005, Congress specified funding of $1.98 million 
for the AMS category of ``Organic Standards,'' of which the National 
Organic Program (NOP) is a subset. This level represented funding of 
approximately $1.5 million for the National Organic Program, 
essentially level with the previous year. In the President's fiscal 
year 2006 budget submittal, a request was made for $2.026 million for 
AMS ``Organic Standards,'' representing a slight increase of $46,000 
over fiscal year 2005. However, we are requesting $2.5 million for AMS/
organic standards, to provide USDA with the extra resources needed to 
establish certifier training programs and to respond more fully to the 
program deficiencies outlined in the outside audit conducted in 2004.
    The issue of how AMS spends the money appropriated for organic 
standards is of great importance and concern to the members of NOC. 
Congress included report language in fiscal year 2004 that urged AMS to 
use some of the funding increase received in fiscal year 2004 for the 
National Organic Program (NOP) to comply more fully with the statutory 
requirements of the Organic Foods Production Act (OFPA). Specifically, 
the Senate report language in fiscal year 2004 called on NOP to hire an 
Executive Director for the National Organic Standards Board (NOSB), to 
create an ongoing Peer Review Panel, and to improve scientific 
technical support for the NOSB. These points were reiterated in the 
fiscal year 2005 Senate Report. The members of NOC very much appreciate 
the Congressional efforts to provide NOP with the necessary funds and 
direction to bring about greater compliance with OFPA. This is an 
important step toward ensuring the public/private partnership 
intentions of that Act.
    However, the Department has not completed action on any of these 
Congressional recommendations. Therefore, NOC is urging that the 
Committee reiterate the importance of OFPA compliance on these matters, 
using the following suggested report language:
    ``In fiscal year 2004 and 2005 the committee urged AMS to use a 
portion of their appropriation to comply with unfulfilled statutory 
requirements of the Organic Foods Production Act (OFPA). While initial 
efforts are underway, the statutory requirements have not yet been 
fully complied with and the Committee urges the Department to fully 
comply with them in the 2006 fiscal year. Specifically, NOP and NOSB 
should work together to complete the hiring of a NOSB director. The 
Committee urges the Department to correct problems noted in the outside 
audit of the NOP conducted in 2004. This one-time audit should not be 
construed to meet the requirements under OFPA for the creation of an 
on-going Peer Review Panel to oversee the accreditation process for 
organic certifiers. Additionally, the committee urges AMS to promptly 
make available their list of certified organic entities.''
                                  usda
Organic Data Initiatives
    Authorized by Section 7407 of the 2002 Farm Bill, the Organic 
Production and Marketing Data Initiative states that the ``Secretary 
shall ensure that segregated data on the production and marketing of 
organic agricultural products is included in the ongoing baseline of 
data collection regarding agricultural production and marketing.'' As 
the organic industry matures and grows at a rate between 15 and 20 
percent annually, the lack of national data for the production, 
pricing, and marketing of organic products has been an impediment to 
further development of the industry and to the effective functioning of 
many organic programs within USDA. Reliable, current data is needed by 
all participants in the organic sector, and are also needed to support 
USDA organic programs through various USDA agencies.
    Because of the multi-agency nature of data collection within USDA, 
the effort to improve organic data collection and analysis within USDA 
must also be undertaken by several different agencies within the 
Department:
Economic Research Service (ERS)
    Collection and Analysis of Organic Economic Data--Request: 
$500,000.
    In fiscal year 2005, Congress appropriated $495,850 to USDA's 
Economic Research Service to continue the collection of valuable 
acreage and production data, as required by Section 7407 of the 2002 
farm bill. This funding level was down slightly from the $500,000 
appropriated in fiscal year 2004.
    Because increased ability to conduct economic analysis for the 
organic farming sector is greatly needed, we request $500,000 million 
be appropriated to the USDA Economic Research Service to implement the 
``Organic Production and Market Data Initiative'' included in Section 
7407 of the 2002 farm bill.
Agricultural Marketing Service (AMS)
    Organic Price Collection--Request: $750,000.
    Accurate, public reporting of agricultural price ranges and trends 
helps to level the playing field for producers. Wholesale and retail 
price information on a regional basis is critical to farmers and 
ranchers, but organic producers have fewer sources of price information 
available to them than conventional producers. Additionally, the lack 
of appropriate actuarial data has made it difficult for organic farmers 
to apply for and receive equitable Federal crop insurance. AMS Market 
News is involved in tracking product prices for conventional 
agricultural products, and with funding, could broaden their efforts to 
include organic price data as well. We request $750,000 to be 
appropriated to the USDA Agricultural Marketing Service for collection 
of organic price information.
National Agriculture Statistics Service (NASS)
    Census Follow-up/Organic Grower Survey--Request: $500,000.
    The mission of USDA's National Agricultural Statistics Service 
(NASS) is to provide timely, accurate, and useful statistics in service 
to U.S. agriculture. The Agency is currently in the process of 
developing the 2007 agricultural census. Although NASS is making an 
effort to expand the quantity of organic questions in the census, they 
will need to conduct a follow-up survey in order to collect more in-
depth information on acreage, yield/production, inventory, production 
practices, sales and expenses, marketing channels, and demographics. 
Therefore, we are requesting $500,000 for USDA NASS.
USDA/CSREES
    Organic Transitions Program--Request: $4 million.
    The Organic Transition Program, funded through the CSREES budget, 
is a research grant program that helps farmers surmount some of the 
challenges of organic production and marketing. As the organic industry 
grows, the demand for research on topics related to organic agriculture 
is experiencing significant growth as well. Extension agents and other 
information providers report an increase in number of farmers seeking 
reliable information on making the transition to organic production. 
The benefits of this research are far-reaching, with broad applications 
to all sectors of U.S. agriculture, even beyond the organic sector. Yet 
funding for organic research is minuscule in relation to the relative 
economic importance of organic agriculture and marketing in this 
Nation.
    The CSREES Organic Transition Program was funded at $2.1 million in 
fiscal year 2003, $1.9 million in fiscal year 2004, and $1.88 million 
in fiscal year 2005. Given the rapid increase in demand for organic 
foods and other products, and the growing importance of organic 
agriculture, the research needs of the organic community are expanding 
commensurately. Therefore, we are requesting that the program be funded 
at $4 million in fiscal year 2006.
USDA/CSREES
    National Research Initiative--Request: Report Language on Plant and 
Animal Breeding.
    In recent decades, public resources for classical plant and animal 
breeding have dwindled, while expenditures by private firms on seed and 
breed development for a limited set of major crops and breeds have 
increased greatly. Unfortunately, this shift has significantly 
curtailed the public access to plant and animal germplasm, and limited 
the diversity of seed variety and animal breed development. This 
problem has been particularly acute for organic and sustainable 
farmers, who seek access to germplasm well suited to their unique 
cropping systems and their local environment.
    In the Senate Report that accompanied the fiscal year 2005 
Appropriations bill, language was included that encouraged ``the 
Department, especially in the establishment of priorities within the 
National Research Initiative, to give consideration to research needs 
related to classical plant and animal breeding.'' Despite this 
language, the need to foster classical plant and animal breeding has 
yet to be reflected in the NRI priority-setting process. Further, the 
relationship between public plant and animal breeding and meeting the 
needs of organic and sustainable farmers is still not clearly 
understood within CSREES. Therefore, we are requesting the inclusion of 
the following report language to continue to urge CSREES to make 
classical plant and animal breeding a greater priority in future NRI 
grant proposal request processes, and to underscore the importance of 
this effort for organic and sustainable agricultural systems:
    Through the fiscal year 2005 process, CSREES was urged to give 
consideration to research needs related to classical plant and animal 
breeding, especially in the establishment of priorities within the 
National Research Initiative. The Committee is concerned that classical 
plant and animal breeding is still not reflected in the NRI priority 
setting process, and that the importance of classical breeding to 
organic and sustainable agricultural systems is still not well 
understood within the Agency. The Committee would like to reiterate its 
concern about dwindling public funding for classical plant and animal 
breeding, and urges the Agency to use the NRI as a tool to revitalize 
public resources in this important area.
USDA/Rural Business Cooperative Service
    Appropriate Technology Transfer for Rural Areas (ATTRA)--Request: 
$3.4 million.
    ATTRA is a national sustainable agriculture information service, 
which provides practical information and technical assistance to 
farmers, ranchers, Extension agents, educators and others interested in 
sustainable agriculture. ATTRA interacts with the public, not only 
through its call-in service and website, but also provides numerous 
publications written to help address some of the most frequently asked 
questions of farmers and educators. Much of the real-world assistance 
provided by ATTRA is extremely helpful to the organic community. As a 
result, the growth in demand for ATTRA services has increased 
significantly, both through the website-based information services and 
through the growing requests for workshops. Currently, given the lack 
of resources, ATTRA is only able to service 1 out of 5 requests for 
workshops. Therefore, we are requesting that ATTRA be funded at $3.4 
million for fiscal year 2006, representing a $920,000 increase over 
fiscal year 2005.
USDA/ARS
    1.8 percent Set-Aside for Organic Research (No Net Increases)--
Request: Report language.
    Development of organic production effectively serves USDA strategic 
objectives for environmental quality, human health and nutrition, and 
agricultural trade. ``Fair share'' funding of organic agricultural 
research, based on relative market size (between 1.5 percent and 2.5 
percent of total U.S. retail food sales), translates to at least a 5-
fold increase in the proportion of USDA-ARS resources explicitly 
allocated to organic. In 2004, USDA-ARS spent about $3.5 million on 
organic-specific projects, or about 0.35 percent of the $1 billion 
fiscal year 2004 ARS expenditures. Under a 1.8 percent ``fair share'' 
framework, the ARS would have generated about $18 million for organic 
research in its budget.
    The 2005 appropriations omnibus bill contained language encouraging 
ARS, when appropriate, to direct research resources in a manner that 
reflects the growing interest in organic production and the need to 
provide enhanced research for this growing organic sector. For fiscal 
year 2006 we are requesting more explicit report language encouraging 
the USDA ARS to set aside 1.8 percent of their budget to be used 
exclusively on organic research at appropriate ARS locations, under 
direction of the National Program Staff.
USDA/NRCS
    Conservation Security Program--Request: No Funding Limitation.
USDA/Rural Business Cooperative Service
    Value-Added Producer Grants--Request: No Funding Limitation.
    The Conservation Security Program (authorized by Section 2001 of 
the 2002 farm bill) and the Value-Added Producer Grant (authorized by 
Section 6401 of the 2002 farm bill) are new programs with great 
potential to benefit organic producers in their efforts to conserve 
natural resources and to explore new, value-added enterprises as part 
of their operations.
    Unfortunately, while these programs were authorized to operate with 
mandatory funding, their usefulness has been limited by funding 
restrictions imposed through the annual appropriations process. We are 
urging that the Conservation Security Program and the Value-Added 
Producer Grant Program be permitted to operate with unrestricted 
mandatory funding, as authorized.
    Thank you for this opportunity to testify and for your 
consideration on these critical funding requests.
                                 ______
                                 

           Prepared Statement of the National Potato Council

    My name is Jim Wysocki. I am a potato farmer from Wisconsin 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 2006 appropriations priorities are as 
follows:

                            POTATO RESEARCH

Cooperative State Research Education and Extension Service (CSREES)
    The NPC urges the Congress not to support the President's fiscal 
year 2006 budget request to eliminate the CSREES Special Grant Programs 
and the formula funds under the Hatch Act. Both of these programs 
support important university research work that helps our growers 
remain competitive in today's domestic and world marketplace.
    The NPC supports an appropriation of $1.8 million for the Special 
Potato Grant program for fiscal year 2006. The Congress appropriated 
$1.417 million in fiscal year 2004, a decrease from the fiscal year 
2003 level of $1.584 million and $1.509 million in fiscal year 2005. 
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 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 
after review by the Potato Industry Working Group.''

                  AGRICULTURAL RESEARCH SERVICE (ARS)

    The NPC urges that the Congress not support the Administration's 
fiscal year 2006 budget request to rescind all fiscal year 2005 
Congressional increases for research projects.
    The Congress provided funds for a number of important ARS projects 
and due to previous direction by the Congress the ARS continues to work 
with the NPC on how overall research funds can best be utilized for 
grower priorities.

                       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 $200 
million for fiscal year 2006 and not support the Administration's 
budget request to cap this valuable export program at the $125 million 
level.
Foreign Agriculture Service (FAS)
    The NPC supports the Presidents fiscal year 2006 budget request of 
$152.4 million for the USDA Foreign Agriculture Service (FAS). This 
level is the minimum necessary for the agency given the multitude of 
trade negotiations and discussions currently underway.

                           FOOD AID PROGRAMS

McGovern Dole
    The NPC supports the Administration's fiscal year 2006 budget 
request of $100 million for the McGovern-Dole International Food Aid 
Program. PVO's have been including potato products in their 
applications for this program.
Public Law 480
    The President's fiscal year 2006 Budget requests $1.2 billion for 
USAID programs, including $964 million for USAID Public Law 480 Title 
II programs. The President's budget also transfers $300 million from 
USAID Title II activities funded under the Agriculture Budget to the 
Foreign Operations Budget. The NPC urges that the $300 million be 
reinstated in the regular USAID Public Law 480 Title II budget to avoid 
a significant loss of applications for dehydrated potatoes in Title II 
programs and procurement of U.S. food commodities for food aid.

                      PEST AND DISEASE MANAGEMENT

Animal and Plant Health Inspection Service (APHIS)
    Golden Nematode Quarantine.--The NPC supports an appropriation of 
$1,266,000 for this quarantine which is what is believed to be 
necessary for USDA and the State of New York to assure official control 
of this pest. Failure to do so could adversely impact potato exports.
    Given the transfer of Agriculture Quarantine Inspection (AQI) 
personnel at U.S. ports to the Department of Homeland Security, it is 
important that certain USDA-APHIS programs be adequately funded to 
ensure progress on export petitions and protection of the U.S. potato 
growers from invasive and harmful pests and diseases.
    Pest Detection.--The NPC supports $45 million in fiscal year 2006, 
which is the Administration's budget request. 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.
    Emerging Plant Pests.--$101 million was appropriated in fiscal year 
2005. The President requests $127 million in fiscal year 2006 which the 
NPC supports.
    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.
    Trade Issues Resolution Management.--$12,578,000 was appropriated 
in fiscal year 2005 and the President requests $18 million in fiscal 
year 2006. The NPC supports this increase ONLY if it is specifically 
earmarked for plant protection and quarantine activities. These 
activities are of increased importance yet none of these funds are used 
directly for plant protection activities. As new trade agreements are 
negotiated, the agency must have the necessary staff and technology to 
work on plant related import/export issues. The NPC also relies heavily 
on APHIS-PPQ resources to resolve phytosanitary trade barriers in a 
timely manner.

                        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.

                        RURAL DEVELOPMENT GRANTS

    Since potato growers do not receive direct payments, the 2002 Farm 
Bill provided for, among other things, grants to allow our growers to 
expand their business opportunities. One program that has been used by 
our growers is the value-added grant program. The NPC would urge that 
the Farm Bill funding level for this program be maintained. In 
addition, maintaining adequate farm labor is also important to our 
growers. The NPC urges that farm labor housing grants be maintained and 
not reduced as proposed by the Administration's budget request.
                                 ______
                                 

Prepared Statement of the National Research Center for Coal and Energy 
                                  \1\

    Chairman Bennett and Members of the Subcommittee: Thank you for the 
opportunity to offer testimony to the Subcommittee on Agriculture, 
Rural Development, and Related Agencies. Our testimony concerns three 
programs under USDA which support small communities. We request funding 
to continue the National Drinking Water Clearinghouse program ($1.5 
million) and the Special Services for Underserved Communities program 
($1 million) as part of the overall Rural Community Advancement 
Program. We request new funding to initiate a Rural Brownfields 
Redevelopment Center ($1 million). These programs are described below.
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    \1\ The National Research Center for Coal and Energy is located at 
West Virginia University. This statement has been prepared by Richard 
Bajura, Director, Pamela Schade, and Paul Ziemkiewicz. For additional 
information, contact our web site at http://www.nrcce.wvu.edu.
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            DRINKING WATER AND WASTEWATER TREATMENT PROGRAMS

Need for Federal Programs
    Clean, safe drinking water and wastewater treatment are critical to 
public and environmental health. For most of us, it's easy to take 
water for granted. But not that long ago, most people didn't have 
indoor plumbing. According to U.S. Census Bureau data, only half of 
American homes in 1940 had complete plumbing facilities--defined as hot 
and cold piped water, a bathtub or shower, and a flush toilet. By 2002, 
the Environmental Protection Agency (EPA) found that the number of 
homes having complete plumbing facilities increased to 91 percent. Much 
of this improvement can be attributed to Federal infrastructure 
investment.
    The U.S. Department of Agriculture's Rural Utilities Service (RUS) 
has provided more than $20 billion for water and wastewater projects 
since 1947. In spite of these improvements, however, 670,000 households 
(with nearly 2 million people) lack access to water, sanitation, or 
both. Safe, affordable water infrastructure is an investment in the 
economic viability and public health of rural America.

Water and Wastewater Challenges
    Over 50,000 water treatment systems serve the U.S. population, with 
43,000 of these systems being classified as ``small'' systems (serving 
fewer than 3,300 people) and ``very small'' systems (serving fewer than 
500 customers). Because smaller systems have lower revenues and fewer 
resources, they are more likely to fail in meeting regulatory 
requirements. Very small systems are 50 percent more likely to incur 
violations than all other system sizes. When the Safe Drinking Water 
Act was passed in 1974, eighteen (18) contaminants were regulated. By 
2004, that number had grown to 86. Another eight will be added by 2008.
    While significant progress has been made, a number of challenges 
confront communities as they try to safeguard public health. In many 
communities, water distribution systems and wastewater collection 
systems are 40 to 50 years old, with many dating back more than a 
century. In the 2002 report titled Clean Water and Drinking Water 
Infrastructure Gap Analysis, EPA estimated that we need to invest $265 
billion for infrastructure for drinking water systems through 2022. 
Wastewater infrastructure systems will need an estimated $388 billion 
during the same time period. The report suggests that, without new 
investment, progress made over the last 30 years is threatened. As a 
partial solution to addressing the challenges of inadequate funding, 
the Technical Assistance and Training (TAT) grants under the Rural 
Community Advancement Program make it possible for small communities to 
maximize their investments in water infrastructure through deployment 
of appropriate technology.

              NATIONAL DRINKING WATER CLEARINGHOUSE (NDWC)

    For nearly 15 years, the National Drinking Water Clearinghouse at 
West Virginia University has helped small and rural communities with 
their water infrastructure management and utility security issues. The 
NDWC is currently funded at approximately $1.2 million through the 
USDA's Rural Utilities Service (RUS) under the Rural Community 
Advancement Program (RCAP).
    The NDWC provides a range of assistance activities for small 
communities. Telephone callers can obtain toll-free technical 
assistance from our staff of certified operators, engineers, and 
scientists. Our quarterly publication ``On Tap,'' a magazine about 
drinking water treatment, financing, and management options helps 
communities and small water systems operate, manage and maintain their 
facilities, while keeping them financially viable. A comprehensive Web 
site and databases with thousands of entries provide around-the-clock 
access to contemporary information on small water systems. Training 
sessions customized for small and rural areas, teleconferences, and 
more than 400 free and low-cost educational products give people the 
instruction and tools they need to address their most pressing drinking 
water issues.
    These services are well received by small community officials and 
service providers and should be continued. We request funding of $1.5 
million to continue the NDWC programs through the Technical Assistance 
and Training Grants.

              SPECIAL SERVICES TO UNDERSERVED COMMUNITIES

    In addition to the National Drinking Water Clearinghouse's 
knowledge base and technical support, the NDWC is expanding its 
assistance to underserved communities through technical field support. 
The NDWC's funding currently does not provide for direct services to 
underserved communities, so West Virginia University is piloting an 
effort to honor requests for site specific technical support. This 
support gives small and very small communities assistance through site 
assessments and feasibility studies that they might not otherwise be 
able to access for planning needed infrastructure improvements, their 
financing, and management. We request funding for technical services to 
underserved communities at the $1 million level.
    For fiscal year 2005, we anticipate receiving approximately $1.4 
million in total for the NDWC and the Special Services to Underserved 
Communities programs from appropriations provided by the Subcommittee.

                 RURAL BROWNFIELDS REDEVELOPMENT CENTER

    ``Brownfields'' is a catch-all term for the approximately 450,000 
former industrial and commercial sites across the United States that 
are contaminated, unused and often abandoned. The cleaning up, or 
``remediation'' of these sites is essential to protect public health, 
strengthen local economies and encourage local growth. Communities with 
brownfields often face economic and social concerns, such as 
unemployment, substandard housing, outdated or faulty public 
infrastructure, and crime. Although Federal and state programs may be 
in place to address local issues, too often the programs operate in 
isolation.
    Additionally, Federal resources have been difficult to access by 
small and rural communities. Through the enactment of recent 
legislation, more funding with more flexibility in application is 
available for redeveloping brownfields in rural areas. Rural 
communities are now at the forefront for assessment and clean-up funds, 
particularly with the availability of direct grants. There is also 
widespread recognition that rural communities require different 
approaches and a variety of models to make brownfield redevelopment 
possible, and these communities require more technical assistance and 
other informational materials. The Appalachian Regional Commission 
(ARC) cites the following obstacles to brownfield redevelopment for 
rural Appalachian communities:
  --Unused open space is often more readily available and cheaper to 
        develop than reclaiming a brownfield site.
  --Recruiting an experienced brownfield redevelopment manager is 
        difficult.
  --Liability concerns are compounded by insufficient information to 
        establish responsibility for contamination.
  --Cleaning up a brownfield site can be expensive.
  --There is no formal venue for exchanging information and providing 
        guidance about brownfield redevelopment among rural 
        communities.
    West Virginia University (WVU) proposes to initiate a Rural 
Brownfields Redevelopment Center. This center will merge our water 
research expertise with our technical assistance skills to enable us to 
provide support for brownfields redevelopment initiatives in small 
communities nationwide.
    Our work under the proposed Center will focus on developing data 
bases, information, and redevelopment models that can be deployed 
nationally to assist small communities in addressing needs for 
reclaiming brownfield sites and turning these sites into economic 
engines for developing regional economies. Topics to be addressed 
include:
  --information collection and dissemination,
  --map site libraries which include GIS data,
  --technical assistance by phone and in person, and field assistance 
        (at the sites),
  --demonstration programs,
  --assistance to state agency personnel and communities,
  --assistance with planning and identifying funding options,
  --specialization in rural brownfields redevelopment,
  --state-based brownfields conferences,
  --manuals, models, and personal consultation and courses to assist 
        other communities based on lessons we learn.
    WVU is well positioned to lead a national brownfields redevelopment 
effort. Our National Drinking Water Clearinghouse, National Small Flows 
Clearinghouse, and WV Water Research Institute and its Geotechnology 
Center have technical assistance, education and outreach, and research 
capabilities relevant to brownfields issues. All three programs have 
installed and managed successful demonstrations on the ground. 
Nationally, there is no current brownfields assistance program that has 
married the practice of brownfields redevelopment with expertise in 
water issues.
    We request funding in fiscal year 2006 at a level of $1 million to 
initiate this program. Stakeholders will include regional universities, 
state offices, development agencies, and industry.
    Thank you for the opportunity to offer testimony on the USDA 
programs.
                                 ______
                                 

       Prepared Statement of the National Rural Housing Coalition

    Mr. Chairman and members of the House Subcommittee on Agriculture, 
my name is Robert Rapoza, 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. The Coalition is comprised of approximately 
300 members nationwide. We have testified before the Subcommittee 
before and appreciate this opportunity to share the views of our 
members on Federal rural housing and community development policy.
    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 than 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 targeted directly at the issues facing its population. The 
Rural Housing Service (RHS) of Rural Development (RD) meets many of 
these needs, serving low and very-low income families with safe 
affordable housing.
    According to the 2000 Census, there are 106 million housing units 
in the United States. Of that, 23 million, or 22 percent, are located 
in non-metro areas. 1.6 million of these units are either moderately or 
severely substandard. At the same time, many non-metro households are 
unable to afford adequate housing due to high poverty rates. According 
to a 1999 Economic Research Service report, the poverty rate in Rural 
America was 15.9 percent--over 8 million people--compared to 13.2 
percent in urban areas. A full 5.5 million people, or one-quarter of 
the non-metro population, are overburdened by housing costs.
    Renters in rural areas are, in fact, the worst housed individuals 
and families in the country. Thirty-five percent of all rural renters 
are cost-burdened, paying more than 30 percent of their income for 
housing. Almost one million rural renters suffer from multiple housing 
problems, 60 percent of whom pay more than 70 percent of their income 
for housing.
    Prospective homeowners suffer the same problems of high rates of 
poverty and poor quality of housing as rural renters. Additionally, 
they suffer from the non-availability of credit, specifically a 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 banks have replaced local community 
lenders with large centralized institutions located in urban areas. 
Aside from shifting the locus of loan making, this trend has eroded the 
competitive environment that, in the past, encouraged rural lenders to 
offer terms and conditions that were attractive to borrowers.

                         RURAL HOUSING SERVICE

Section 515 Rural Rental Housing Program
    Although we often talk about the surge in homeownership and all of 
its benefits, not all of us, especially in rural areas, have the means 
to be homeowners. Thus, USDA's RHS Section 515 rural rental housing 
program is invaluable to low-income residents in rural communities. The 
portfolio contains 450,000 rented apartments in Section 515 
developments, the value of which is evident when compared to the 
900,000 rural renters in substandard housing. The average 515 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 present investment in rural rental housing 
is at its lowest level in more than 25 years. Over the last 15 years, 
Congress and Administrations of both parties have unwisely cut the 
rural rental housing budget, and lending has declined from over $500 
million a year in 1994 to just $114 million in fiscal year 2003 and 
2004. In fact, for the last 3 years the Administration's budget 
included no funding whatsoever for rural rental housing production. As 
a result, there is scant production of new rural rental housing. The 
Administration clams that low income rural renters can get housing 
assistance through the section 538 guarantee program. We think that is 
highly unlikely.
    As Congress considers future policy for rural housing, it has two 
opportunities to protect our Nation's rural renters and homeowners. 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, and as a result of declining Federal resources for the 
development of new housing developments, it is essential to preserve 
the existing stock.
    The existing Section 515 portfolio is aging. Of the 17,000 
developments across the country close to 10,000 are more than 20 years 
old. To maintain this stock, it will take a commitment of Federal funds 
for restoration. An injection of new debt or equity is required to 
finance repairs and upgrades, and keep rural housing safe and 
available.
    The Housing Act of 1987 regulated roughly two-thirds of 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 theory, 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.
    However, the lack of adequate funding for incentives has raised a 
great concern among owners. Many wish to prepay, but cuts to Section 
515 have eliminated RHS's means to compel them to keep their properties 
affordable when they do. Moreover, the law restricts their ability to 
seek incentives or sell to a nonprofit organization or public body.
    In 2004, the administration initiated an important study of the 
Section 515 portfolio. It determined that only 10 percent of the units 
were in hot' markets in which they could be used for market rate 
tenants or owners. The balance of the units were in markets in which 
their highest and best use is low income housing. Most need repair and 
renovation and the price tag over a 20 year period is over $2 billion.
    So the Administration is to be congratulated in documenting the 
need for additional assistance for rural rental housing developments. 
They are also to be congratulated for gaining additional funds in the 
budget request: $214 million for housing vouchers for tenants living in 
development in hot markets where prepayment is a real possibility.
    But while it is important to protect vulnerable tenants, this 
policy ignores the long-term implications of an escalating decline in 
the affordable housing stock. We believe the administration's approach 
is too narrow. By focusing solely on protecting tenants in hot markets, 
the Administration may provide an incentive that encourages prepayment. 
The policy also ignores the other 90 percent of units that need repair 
and renovation.
    We urge the Subcommittee to approve the request for additional 
assistance for rural rental housing. However, we also urge that, in 
additional to providing some funding for vouchers, this assistance be 
distributed across Section 515 for use as equity loans, financing for 
transfer to non-profits and repair and renovation of existing projects.
Section 502 Single Family Direct Loan Program
    Section 502 is the only Federal program providing home ownership 
opportunities to low income-families. 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. Some 46 percent of Section 
502 families have incomes at 46 percent of area median. Since its 
inception, Section 502 has provided loans to almost two million 
families. The current average budget authority cost to the Federal 
Government is extremely low, less than $10,000 per unit.
    Despite low cost to the government and failing delinquency rates, 
the number of home ownership loans for low income people is falling. In 
fiscal year 2004, RHS provided 14,641 loans and in fiscal year 2005, 
10,800 loans, even though RHS had on hand more than 35,000 loan 
requests of over $2.3 billion at the end of fiscal year 2004. Even in 
the face of unprecedented demand the projected total falls in fiscal 
year 2006 to 9,000.
    The decline in direct loans for low-income families has been 
inversely proportional to the major trend in rural housing: the 
increase in homeownership loan guarantees. In fiscal year 2005, the 
total available for guaranteed loans was $3.309 billion. The fiscal 
year 2006 request is $3.374 billion. Unfortunately for low-income 
people, the average income for families receiving guaranteed loans is 
roughly double that of those families receiving direct loans.
    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 each year over the past 3 years 
has been approximately 1,500. Sixty-eight percent of the participants 
in self-help housing are minority households.
    The budget requests $34 million.
Non-Profit Organizations
    Due to dramatic housing program reductions and the continuing 
strength of the Nation's real estate market, the private sector 
delivery system is not as prominent as it used to be and in many rural 
communities no longer exists. In some rural areas, non-profits have 
filled the void by pursuing a multiple funding strategy. Skilled local 
organizations meld Federal, State, local and private resources together 
to provide affordable housing financing packages to low-income 
families. But there is yet no comprehensive source of federal support 
to promote a non-profit delivery system.
    The Rural Community Development Initiative 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 in previous years to 240 communities. Yet this valuable 
program has been eliminated in this year's budget request. For fiscal 
year 2006, we recommend $6.5 million for the Rural Community 
Development Initiative, the current rate.
Farm Labor Housing
    Two additional rental housing programs specifically address the 
needs of farm laborers. Migrant and seasonal farmworkers, who help keep 
our local and state economies growing, are some of the Nation's most 
poorly housed populations. The last documented national study indicated 
a shortage of almost 800,000 units of affordable housing for 
farmworkers.
    Farmworkers and their families are some of the poorest and least 
assisted people in the Nation. 61 percent of farmworkers earn incomes 
below the poverty-level and consequently some 60 percent of farmworker 
households live below the poverty threshold, almost six times the 
national rate. Despite this level of poverty, less 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 which specifically 
target farmworkers and their housing needs: USDA's Section 514 loans 
and 516 grants. Non-profit housing organizations and public bodies use 
the loan and grant funds, along with the Rural Housing Service's rural 
rental assistance, to plan and develop housing and related facilities 
for migrant and seasonal low-income farmworkers. Section 514 authorizes 
the Rural Housing Service to make loans with terms of up to 33 years 
and interest rates as low as one percent. Section 516 authorizes RHS to 
provide grant funding when the applicant will provide at least 10 
percent of the total development cost from his own resources or through 
a 514 loan.
    We appreciate the past support of this Subcommittee and urge an 
appropriation of $100 million for section 514 and 516.

                         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 will be required over the next 20 years to 
provide the 19,000 wastewater treatment facilities needed for 
communities of fewer than 10,000 people. In all, small communities will 
need some $64 billion in order to meet their water and wastewater 
needs.
    The budget request cuts $99 million from rural water-sewer loans 
and grants. We urge the Subcommittee to restore these funds.
    The issue of affordability is critical to 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, and other amenities, all of 
which eventually require an efficient wastewater disposal system. Low-
income communities often pay as much as they can afford for water 
service alone and are unable to manage the combined user fees for water 
and waste. Furthermore, 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 utility rates, they typically underestimate operation and 
maintenance costs in the budgets for new systems. Therefore, there is 
often limited or no investment in the kinds of upgrades and expansions 
of infrastructure needed for community development to stabilize local 
small businesses, develop affordable housing, and invest in other 
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 their state's non-metro median household income.
    In providing these important services, RUS 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 and inflict long-term damage on 
the environment. Additionally, businesses and industries are often 
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 to improve their health and their 
economies.
    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), leveraged funds through HUD's Community 
Development Block Grant program, and the EPA's State Revolving Loan 
Funds, as well as through some private lenders.
Other Federal Agencies
    Mr. Chairman, for many rural communities the USDA's Rural 
Development programs are the only source of housing and community 
development assistance. Other Federal agencies do not have a good 
record of supporting Rural America.
    Rural households have limited access to mortgage credit and the 
secondary mortgage market and 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 seven 
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. For 
these reasons we oppose the Strengthening America's Community 
Initiative and urge the Subcommittee and the Congress to continue to 
provide appropriations for Federal rural development programs.
    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 present 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 2006 in the amounts 
        requested in the President's budget for 5 percent direct ($175 
        million) and cost of money ($425 million) and the associated 
        subsidy, as required, to fund those programs at the requested 
        levels. Supporting guaranteed loans in the same amount ($125 
        million), as contained in the fiscal year 2005 Agriculture 
        Appropriations Act. Supporting the budget recommendation to 
        transfer $175 million in lending authority from the Rural 
        Telephone Bank (RTB) to the cost-of-money program in connection 
        with the administration's stated intention to dissolve the bank 
        in fiscal year 2006.
  --Supporting the budget request for $358.9 million in direct loans 
        for broadband facilities and internet service access provided 
        through discretionary funding.
  --Supporting, subject to the successful implementation in fiscal year 
        2006 of the administration initiative to dissolve the Rural 
        Telephone Bank pursuant to Sec. 411 of the RTB enabling act, 
        elimination of the restriction on retirement of Rural Telephone 
        Bank Class A stock, 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.
  --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.
    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 1,000, 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 4 percent of total U.S. subscribers. On 
the other hand, borrower service territories total 37 percent of the 
land area--nearly 12 million squares miles. RUS borrowers average about 
six 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 long-term, 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 this administration 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 loan default by a rural telephone system borrower! All of 
their loans have been repaid in accordance with their terms, $12.4 
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 3 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 have increased pressures to shift more costs onto rural 
ratepayers. These 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.

      ONGOING CONGRESSIONAL MANDATES FOR RURAL TELECOMMUNICATIONS

    Considerable loan demand is being generated because of the mandates 
for enhanced rural telecommunications standards contained in the 
authorizing legislation. We are, therefore, recommending the following 
loan levels for fiscal year 2006 and the appropriation of the 
associated subsidy costs, as required, to support these levels:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
5 percent Direct Loans..................................    $145,000,000
Cost-of-Money Loans.....................................     425,000,000
Guaranteed Loans........................................     125,000,000
Broadband Loans.........................................     358,875,000
                                                         ---------------
      Total.............................................   1,053,875,000
------------------------------------------------------------------------

    These are the same levels established in the fiscal year 2005 
appropriations Act for the 5 percent direct and guaranteed loan 
programs and the same amounts for 5 percent direct and cost-of-money 
loans, as requested in the President's budget for fiscal year 2006. The 
authorized levels of loans in each of these programs were substantially 
obligated in fiscal year 2004 and current estimates are that authorized 
program levels will be met in fiscal year 2005. 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 DISSOLUTION INITIATIVE

    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. However, changed circumstances in the rural 
telephone industry and difficulties associated with accelerating 
privatization of the Rural Telephone Bank have made this transition to 
private ownership and control problematic raising difficult questions 
about the viability of a privatized bank and its future support among 
rural telephone systems.
    In recognition of these factors, the administration has determined 
to liquidate and dissolve the bank in fiscal year 2006 pursuant to Sec. 
411 of the RTB enabling act. We support this action as well as the 
budget recommendation to transfer the current lending authority of the 
RTB ($175 million) to the cost-of-money loan program so that rural 
telephone systems will continue to have adequate loan resources 
available for rural telecommunications infrastructure development at 
the levels intended by the Congress.

                       THE BROADBAND LOAN PROGRAM

    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 2006 and in its place the budget 
requests $11.7 million in new discretionary authority for these 
purposes. NRTA supports the administration's budget request of the 
subsidy cost for this program that will provide approximately $358.9 
million in loan levels for fiscal year 2006. We applaud the 
administration's continuing commitment to this program to facilitate 
the deployment of broadband technology throughout our Nation's rural 
areas.

                      SPECIFIC ADDITIONAL REQUESTS

  --Subject to the successful implementation in fiscal year 2006 of the 
        administration's initiative to liquidate and dissolve the Rural 
        Telephone Bank pursuant to Sec. 411 of the RTB enabling act, 
        NRTA supports elimination of the restriction on the retirement 
        of class A government stock in the RTB, the prohibition against 
        transfer of RTB funds to the general fund and the requirement 
        for the payment of interest by Treasury
    The Administration has recommended in the budget that the general 
provision of the fiscal year 2005 act (Sec. 413) containing the 5 
percent annual statutory restriction on the retirement of class A 
government stock in the Rural Telephone Bank be eliminated in its 
entirety. In principle, the association supports that proposal. 
However, we urge the Committee to continue this provision in its 
entirety in the fiscal year 2006 act while providing an exception that 
would make the provision inapplicable in the event of liquidation or 
dissolution of the bank. This would assure that the protections 
provided the private stockholders by this provision would be maintained 
in the event that, for some unanticipated reason, the administration 
does not go forward with its stated intention to liquidate the bank or, 
if its implementation is delayed beyond fiscal year 2006. Previous 
appropriations acts (fiscal year 1997 through fiscal year 2005) have 
recognized the ownership rights of the private class B and C 
stockholders by prohibiting a transfer to the Treasury of the bank's 
excess, unobligated fund balances which otherwise would have been 
required by the Federal credit reform act. The balance of the current 
statutory provision, also contained in previous years' appropriations 
acts, that requires Treasury to pay interest on bank funds deposited 
with it should also be continued in fiscal year 2006, except in the 
event of dissolution of the bank.
  --Reject Budget Proposal to Transfer Funds from RTB Liquidating 
        Account for Administrative Costs
    The President's budget again 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. As NRTA has pointed out in its testimony in 
previous years, this recommendation is contrary to the specific 
language of Sec. 403(b) of the RTB enabling act. 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.
  --Grants for Medical Link and Distance Learning Purposes
    We support the continuation in fiscal year 2006 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 medical link 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 Turfgrass Evaluation Program

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
National Turfgrass Evaluation Program (NTEP), 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 2005 budget for turfgrass research within the Agricultural 
Research Service (ARS) at Beltsville, MD. Secondly, we are asking for 
twelve individual research positions of $450,000 each. This amount is 
being requested by House members in individual districts where the 
positions are located. We appreciate the support of research funding at 
Logan, UT ($125,000) and Beaver, WV ($150,000) provided by the 
committee in fiscal year 2005 and request that funding be increased to 
$450,000 for each position in fiscal year 2006.
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 within the USDA, ARS at Beltsville, MD, focusing on 
turfgrass research, that was appropriated in the fiscal year 2005 
budget, and in the three previous budget cycles.
    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 70 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.
    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 Funding for 12 ARS Scientist Positions at ARS 
        Installations Around the United States $450,000 Each; Total: 
        $5,400,000 Appropriation Request for the First Installment on 
        the National Turfgrass Research Initiative
    The turfgrass industry also requests that the Subcommittee 
appropriate an additional $5,400,000 for the 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. $450,000 is being 
requested for each location.
    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 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, until the recently 
        appropriated funds become available.
    The turfgrass industry has met on several occasions with USDA/ARS 
officials to discuss the new turfgrass scientist positions, 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 as follows:

             A 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' credit, the 
agency has committed staff, planning and technical resources to this 
effort. However, despite ARS' 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 2006, 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 Scientist      450,000
 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: Entomologist       450,000
 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. For each of the individual 
scientist positions, we are requesting $300,000 for each ARS scientist 
position with an additional $150,000 attached to each position to be 
distributed to university partners, for a total of $450,000 per 
position. We are also asking that the funding be directed to ARS and 
then distributed by ARS to those university partners selected by ARS 
and industry representatives.
    In fiscal year 2005, in addition to restoring most of the $490,000 
appropriated in fiscal year 2004, the Subcommittee generously provided 
additional funding for turfgrass research at Beaver, WV ($150,000) and 
Logan, UT ($125,000). We appreciate the support of the Subcommittee for 
this new funding in fiscal year 2005 and ask for your continued support 
of that funding in fiscal year 2006 at $450,000 per location.
    In addition, you will be receiving Member requests for funding of 
each of the twelve positions described above. Therefore, we appreciate 
your strong consideration of each individual member request for the 
turfgrass research position in his or her respective congressional 
district.
    In conclusion, on behalf of the National Turfgrass Evaluation 
Program and the turfgrass industry across America, I respectfully 
request that the Subcommittee continue the funding appropriated in 
fiscal year 2005 for Beltsville, MD, ($490,000), Beaver, WV ($150,000) 
and Logan, UT ($125,000) within the Agricultural Research Service. I 
also request that the Subcommittee appropriate an additional $5,400,000 
for twelve new turfgrass scientist positions around the country, with 
$450,000 provided for each location.
    Thank you very much for your assistance and support.
                                 ______
                                 

              Prepared Statement of The Nature Conservancy

    Mr. Chairman and members of the Subcommittee, I appreciate this 
opportunity to present The Nature Conservancy's recommendations for 
fiscal year 2006 appropriations. The Conservancy urges the Subcommittee 
to provide funding for Animal and Plant Health Inspection Service 
(APHIS) eradication efforts for four destructive invasive species--the 
Asian Longhorned Beetle, the Cactus Moth, the Emerald Ash Borer, and 
Sudden Oak Death. In addition we urge the Subcommittee to fully fund 
the Noxious Weed Control Act of 2004, and to place no limitation on the 
amount of acres to be enrolled in fiscal year 2006 in the Wetlands 
Reserve Program (WRP) administered by the Natural Resources 
Conservation Service.
    The Nature Conservancy is an international, non-profit organization 
dedicated to the conservation of biological diversity. Our mission is 
to preserve the plants, animals and natural communities that represent 
the diversity of life on Earth by protecting the lands and waters they 
need to survive. The Conservancy has more than 1,000,000 individual 
members and 1,900 corporate associates. We have programs in all 50 
States and in 27 foreign countries. We have protected more than 15 
million acres in the United States and Canada and more than 117 million 
acres with local partner organizations globally. The Conservancy owns 
and manages 1,400 preserves throughout the United States--the largest 
private system of nature sanctuaries in the world. Sound science and 
strong partnerships with public and private landowners to achieve 
tangible and lasting results characterize our conservation programs.
    Asian Longhorned Beetle (ALB).--The Asian Longhorned Beetle kills a 
wide variety of hardwood trees, particularly sugar maple. ALB threatens 
to devastate forests reaching from New England to the Great Lakes. 
Currently the beetle is found primarily in New York City and New 
Jersey. APHIS, State, and local officials are succeeding in a 9-year 
program to eradicate ALB. The President has proposed funding of $15.521 
million in fiscal year 2006 as compared to $28.933 million in fiscal 
year 2005. We urge the Subcommittee to fund ALB at $40 million in 
fiscal year 2006, so that the ongoing efforts to eradicate this pest 
are not jeopardized. Failure to eradicate the ALB exposes both urban 
and rural areas of northern States to substantial risk. If not stopped, 
ALB could kill 30 percent of the Nation's urban trees at a compensatory 
value of $669 billion.
    Maple trees are especially threatened. If unchecked, the New 
England maple syrup industry is threatened as well as autumn foliage 
tourism which generates $1 billion in revenue in New England every 
year.
    Cactus Moth.--The cactus moth kills prickly pear cacti. First found 
in Florida, the moth is rapidly moving along the Gulf Coast (currently 
it has traveled as far as Alabama) killing prickly pear cacti. APHIS 
has bred a sterile cactus moth that may help control the spread of this 
pest. Control of the cactus moth before it disperses around the Gulf 
Coast would protect the vast diversity of prickly pear cacti in the 
southwestern United States and Mexico. There are 31 likely host prickly 
pear species (opuntia) for the moth across the United States (9 found 
nowhere else in the world), including the federally endangered Opuntia 
treleasei, and 56 in Mexico (38 found nowhere else in the world). 
Additionally, control would protect agricultural interests. 
Horticultural production of prickly pears occurs in Arizona, 
California, Nevada, New Mexico, and Texas. Annual revenues for Arizona 
alone are estimated at $14 million. In drought years, ranchers in Texas 
have burned the spines off opuntias and fed them to cattle. This 
practice is even more important in Mexico, where opuntias are critical 
for the cattle industry. In Mexico, the agricultural impacts would be 
devastating: the area of cultivated and harvested wild cactus is 
estimated to be 3 million hectares. Opuntia products are the seventh 
most important agricultural product and the third most important 
subsistence food source. Further, opuntias are cultivated for 
agricultural purposes in at least 28 other countries. Thus, the cactus 
moth presents both a critical ecological and agricultural threat. We 
urge you to fund eradication efforts at $1.5 million in fiscal year 
2006 for a full sterile release program.
    Emerald Ash Borer (EAB).--The Emerald Ash Borer, an Asian native, 
was detected in 2002. Control programs began in 2003. The affected area 
covers 13,000 square miles in Michigan's Lower Peninsula and adjacent 
areas in Indiana, Ohio, and Ontario. At present, spread of the emerald 
ash borer to the Upper Peninsula, Illinois, and Wisconsin is partially 
prevented by lakes Michigan, Erie, and Huron. However, if eradication 
efforts are not sufficiently aggressive, EAB will spread further south 
into Ohio and Indiana, and be carried by people across bridges and 
through tunnels to other vulnerable areas in the East and Midwest. 
Seven billion ash trees are at risk across the Nation, at an estimated 
cost of $282 billion. We urge the Subcommittee to provide APHIS with 
$40 million to contain the Emerald Ash Borer in fiscal year 2006. The 
President's budget recognizes the urgent need to fight this pest and 
has requested $32.586 million for fiscal year 2006. In fiscal year 
2005, APHIS is spending $3.961 million in appropriated funds plus $11 
million in emergency funds drawn from the Commodity Credit Corporation 
(CCC). As you know, OMB does not usually allow emergency draws over 
several years from CCC so additional funding is needed in 2006 to 
eradicate this very dangerous pest.
    Sudden Oak Death (SOD).--Since 2000, APHIS has worked with 
California, Oregon, and other States to prevent the spread of SOD. This 
disease infects at least 38 native tree, shrub and herb species. The 
disease kills a variety of western and eastern oak trees. SOD has 
already killed tens of thousands of tanoaks, live oaks and black oaks 
in California. If SOD spreads into Oregon and Washington, it could 
severely disrupt production and movement of Douglas-fir seedlings used 
in replanting. If SOD spreads to the East, it is likely to kill large 
numbers of red oaks. Collectively the red and white oaks comprise 38 
percent of the Nation's total hardwood saw-timber volume.
    Containing Sudden Oak Death has become more challenging as the 
number of host plants has grown from 1 dozen to 3 dozen. The situation 
became a crisis in March 2004 when officials discovered that infected 
nursery plants had been shipped nationwide; more than 200 nurseries 
received these plants. APHIS has adopted highly restrictive regulations 
to prevent a recurrence of the 2004 crisis; the agency is receiving 
funding from CCC to fully implement these regulations in fiscal year 
2005. In fiscal year 2006, at least $12 million will be needed to 
ensure the efficacy of these regulations and curb the spread of this 
disease, approximately $10.5 million more than the President has 
requested. We recognize that funding is tight. However, relatively 
small investments now will go a long way toward eliminating these 
invasive species and prevent larger funding demands in the future.
    Noxious Weed Control and Eradication Act.--We respectfully request 
$15 million, the authorized amount, for implementation of the Noxious 
Weed Control and Eradication. As control and management of invasive 
species are important for agriculture, natural areas, forestry, and 
rangeland, this effort has strong bipartisan support. This issue is 
vital to the health of the Nation's economy and ecosystems.
    Interdepartmental National Invasive Species Crosscut Budget.--The 
Conservancy strongly supports the Interdepartmental National Invasive 
Species Crosscut Budget prepared by the National Invasive Species 
Council. This effort represents the most cost-effective way for Federal 
Government agencies to work together and prioritize their invasive 
species activities, and it will help them to measure success and 
achieve their goals of prevention, early detection, rapid response, 
control and management and restoration. When considering the 
Interdepartmental Crosscut Budget, the Conservancy recommends that you 
fund four requested increases for the Agricultural Research Service. 
These increases, on taxonomic knowledge of invasive species, biological 
control of tamarisk, nursery research for sudden oak death, and 
research to control yellow star thistle and leafy spurge across the 
Western States, would each benefit extensive agricultural and natural 
areas across the United States.
    Wetlands Reserve Program (WRP).--On Earth Day last year, President 
Bush committed to increasing the number of wetland acres in the United 
States. For fiscal year 2006, the President's budget proposes no cap 
via the appropriations bill on the number of acres that can be enrolled 
in WRP. We urge the subcommittee to not restrict the enrollment of 
wetland acres under WRP. Without a cap, we expect the Administration to 
enroll 250,000 acres consistent with 2002 farm bill authority. In 2005 
the appropriations bill limited WRP signup to 154,500 acres. WRP is the 
Nation's premier wetland protection program and without full funding 
the Administration will be hard pressed to meet its goal of adding 
wetlands to our national resources. Wetlands are critical for 
biodiversity in addition to the flood control and pollution filtering 
services they provide throughout the United States.
    Thank you for the opportunity to present The Nature Conservancy's 
comments on the U.S. Department of Agriculture's budget.
                                 ______
                                 

    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 Tribes, 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 U.S. 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.
                                 ______
                                 

       Prepared Statement of the Oregon Water Resources Congress

    I am Anita Winkler, Executive Director, Oregon Water Resources 
Congress (OWRC). Our organization was established in 1912 as a trade 
association to support member needs to protect water rights and 
encourage conservation and water management statewide. OWRC represents 
non-potable agriculture water suppliers in Oregon, primarily irrigation 
districts. as well as member ports, other special districts and local 
governments. The association represents the entities that operate water 
management systems, including water supply reservoirs, canals, pipeline 
and hydropower production.
    This testimony is submitted to the United States Senate 
Appropriations Committee, Agriculture, Rural Development and Related 
Agencies Subcommittee in support of the fiscal year 2006 appropriation 
request of our member irrigation district, the Three Sisters Irrigation 
District for their McKenzie Canyon Project.
    The McKenzie Canyon Project (MCP) focuses on water conservation to 
improve instream flows in Squaw Creek for fish and water quality and to 
provide farmers with a more economical and reliable supply of water. 
The project would be constructed under the Department of Agriculture's 
Watershed Protection and Flood Prevention Act (Public Law 83-566 
program). The Natural Resource Conservation Service (NRCS) has 
completed the engineering for the project under the Bridging-The-
Headgates Program Memorandum of Understanding. NCRS has completed a 
watershed plan and environmental assessment for the McKenzie Canyon 
Project. The project has been approved by NRCS Chief Bruce Knight.
    The total project cost is $1,130,148, and OWRC and the Three 
Sisters Irrigation District are requesting $386,776 for fiscal year 
2006.
    This project will significantly decrease system water losses. 
Currently the water is delivered to 31 farms through a series of open 
canals and on-farm ditches that experience seepage losses on the order 
of 40 percent to 50 percent. Phase one of this project will replace 
approximately 10,265 feet of an open canal irrigation water conveyance 
system with buried High-Density Polyethylene pipeline. This will return 
1.2 cfs instream to Squaw Creek permanently through the Oregon Water 
Resources Department conserved water program. Squaw Creek is important 
for providing habitat for Endangered Species Act (ESA) listed bull 
trout, as well as, redband and other resident trout. Fishery agencies 
and the tribes are also counting on improving conditions in Squaw Creek 
to support spawning and rearing for Chinook and steelhead once 
anadromous fish are reintroduced above Pelton and Round Butte Dams on 
the Deschutes River. Efforts to reintroduce anadromous fish are 
expected to start in 2007 as part of the Federal Energy Regulatory 
Commission (FERC) re-licensing requirements.
    Thank you for the opportunity to provide this statement for the 
hearing record.
                                 ______
                                 

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

Summary of Request
    The Organization for the Promotion and Advancement of Small 
Telecommunications Companies (OPASTCO) seeks the Subcommittee's support 
for fiscal year 2006 loan levels for the telecommunications loans 
program administered by the Rural Utilities Service (RUS) in the 
following amounts:

                        [In millions of dollars]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
5 percent hardship loans................................             145
Treasury rate loans.....................................             425
Guaranteed loans........................................            125
------------------------------------------------------------------------
Note: The $425 million recommended for Treasury rate loans assumes that
  the President's budget proposal to dissolve the RTB is carried out.
  Dissolution of the RTB would necessitate additional funds for RUS
  telecommunications loans in order to maintain the level of funds
  available to rural telecommunications borrowers.

    In addition, OPASTCO requests the following action by the 
Subcommittee: (1) eliminate the 5 percent limitation on the retirement 
of Class A stock of the Rural Telephone Bank (RTB); (2) maintain the 
prohibition on the transfer of unobligated RTB funds to the general 
fund of the Treasury and the requirement that interest be paid on these 
funds; and (3) fund the distance learning, telemedicine, and broadband 
program at sufficient levels.
General
    OPASTCO is a national trade association of approximately 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.
    Perhaps at no time since the inception of the RUS (formerly the 
REA) has the telecommunications loans program 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. In addition, the President has established as 
a goal that all Americans have affordable access to broadband 
technology by 2007. However, without continued support of RUS's 
telecommunications loans program, rural telephone companies will be 
hard pressed to continue building the infrastructure necessary to bring 
their communities into this new age and achieve policymakers' 
objectives.
    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 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. Moreover, the ability of consumers to use increasingly 
popular Voice over Internet Protocol (VoIP) services requires that they 
first have a broadband connection from a facilities-based carrier. 
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. In the 
FCC's September 2004 report on the deployment of advanced 
telecommunications capability, the Commission correctly noted that 
``[r]ural areas are typically characterized by sparse and disperse 
populations, great distances between the customer and the service 
provider, and difficult terrain. These factors present a unique set of 
difficulties for providers attempting to deploy broadband services.'' 
Thus, in order for rural telephone companies to continue modernizing 
their networks and providing 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 program is not a grant program. 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 program 
is tremendously successful. Borrowers actually build the infrastructure 
and the government is reimbursed with interest.
The 5 Percent Limitation on the Retirement of Class A Stock of the RTB 
        Should be Eliminated
    OPASTCO supports the elimination of the provision adopted in prior 
Agriculture Appropriations Acts that limits the retirement of Class A 
stock of the RTB to no more than 5 percent. Elimination of this 
restriction is necessary for the Administration to move forward with 
its proposal to dissolve the RTB. OPASTCO is receptive to this 
proposal, assuming it can be accomplished in a manner that equitably 
compensates the private Class B and C stockholders for their holdings 
in the bank. In addition, even if the dissolution of the RTB does not 
occur, elimination of the 5 percent limitation on the retirement of 
Class A stock would provide the bank's board of directors with the 
necessary flexibility to accelerate the bank's privatization.
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 2006 appropriations bill will ensure that RTB 
borrowers are not stripped of the value of this required investment.
The Distance Learning, Telemedicine, and Broadband Program Should 
        Continue to be Funded at Adequate Levels
    In addition to RUS's telecommunications loans program, OPASTCO 
supports adequate funding of the distance learning, telemedicine, and 
broadband program. 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 2006.
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 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 85 
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 toward 
reducing product costs and improving human diets and 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, which 
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.

        VEGETABLE CROPS RESEARCH LABORATORY, MADISON, WISCONSIN

    First, we thank the Committee for $200,000 in 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 Congress to restore this funding in 
fiscal year 2006, 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 $655 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 on the safety of our products and development of 
new processing technologies related to fermented and acidified 
vegetables. 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 related to protecting our products from acid tolerant 
pathogens (E. coli O157:H7, Listeria, and Salmonella) this industry 
needs better technology for waste minimization related to the salt and 
organic waste generated in our processing plants.
    We thank Congress for the additional funding it provided to this 
laboratory in the fiscal year 2004 ($270,000) and fiscal year 2005 
($100,000) budgets to hire a microbial physiologist and to enhance the 
capabilities of this research program that is so important to our 
industry. After 6 years of stable funding, these budget increases have 
made it possible for the laboratory to return to four scientists and to 
proceed with a very active research program. It is very important that 
Congress restore the full $370,000 funding in the fiscal year 2006 
budget, since the funds were not included in the budget sent to the 
Congress.
    For the future safety and security of the food supply of the United 
States, PPI supports the Food Safety and Security Initiative the 
President has proposed in his fiscal year 2006 budget. It takes 
continuous vigilance and good science to deal with the natural threats 
to human health posed by pathogenic bacteria. However, the possibility 
that the acid tolerant pathogens might be used to intentionally disrupt 
the food supply, adds a different and more dangerous element to the 
already difficult job of assuring safety throughout the complex food 
chain. We believe the special expertise of the ARS Food Fermentation 
Laboratory scientists in working with these pathogens in acid and 
acidified foods can make an important contribution to this initiative.

       SUGAR BEET AND BEAN RESEARCH UNIT, EAST LANSING, MICHIGAN

    The USDA/ARS cucumber post harvest engineering research at East 
Lansing, Michigan is the only federally funded program that is devoted 
to developing new and/or improved engineering methods and technology 
for assessing, retaining, and assuring post harvest quality, 
marketability, and wholesomeness of pickling cucumbers and other 
vegetable products. The cucumber post harvest engineering research is 
one component of the post harvest engineering research program within 
the Sugar Beet and Bean Research Unit in East Lansing, Michigan. The 
post harvest engineering research program currently has a full-time 
research agricultural engineer whose primary research is to develop 
methods and technology for assessing and assuring post harvest quality 
of tree fruits. Because of severe under-funding, the location's 
cucumber post harvest engineering research has not been carried out at 
the full scope it would have been expected. A postdoctoral research 
associate has been hired to carry out research on developing 
nondestructive technology for assessing and grading pickling cucumbers 
and other vegetables. The ARS East Lansing location has been 
internationally recognized for developing innovative, practical 
engineering methods and techniques to improve harvest and post harvest 
handling systems for vegetables and tree fruits. The location recently 
developed a new laser-based multi-spectral imaging technology for 
grading and sorting fruit for texture and soluble solids content. The 
technology has the potential for inspecting a variety of vegetable 
crops including cucumbers. The location also developed an advanced 
hyper-spectral imaging system for automated detection of defects and 
quality attributes of fruit, which could also be used for pickling 
cucumber inspection.
    Today, consumers have increasing choices of foods and they are 
demanding for better, consistent safe products. Defective and inferior 
cucumbers/vegetables will lead to poor quality, inconsistent pickled 
products and can cause significant economic losses to growers and 
processors. An effective quality control and assurance system 
throughout the handling steps between harvest and retail is required 
for the pickling industry to provide consistent, superior products to 
the marketplace. Methods currently available for measuring and grading 
quality of cucumbers and other vegetables are either ineffective or 
time consuming. New and/or improved technologies are needed to assess, 
inspect and grade fresh cucumbers rapidly and accurately for various 
internal and external quality characteristics so that raw products can 
be directed to, or removed from, appropriate processing or marketing 
avenues. This will minimize post harvest losses of food that has 
already been produced and ensure high quality, consistent final product 
and end-user satisfaction. Research at East Lansing, MI is currently 
applying technology in imaging, machine vision and spectroscopy and 
advanced data/image processing methods (neural networks, genetic 
algorithms, and fuzzy logic) to develop rapid inspection techniques for 
detecting and segregating defective cucumbers resulting from mechanical 
and temperature injury, physiological disorders, and diseases. Advanced 
imaging and spectroscopy techniques are being used for rapid, 
nondestructive evaluation of internal quality attributes of fresh 
cucumbers, which will directly impact the processing and keeping 
quality of pickled products. The research will lead to new inspection 
and grading technology that will help the pickling industry in 
delivering high-quality safe products to the marketplace. To enhance 
research on the development of engineering methods and technology for 
assuring post harvest quality and marketability of pickled and 
vegetable products, a full-time research scientist (engineering) will 
be needed for the ARS East Lansing research program.

         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``)pesticide 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 U.S. 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 head house using the funds appropriated for 
this purpose in fiscal year 2003 was completed in July 2004. In fiscal 
year 2004, construction of the head house component of this project was 
funded. In fiscal year 2005, $2.976 million was appropriated for 
construction of greenhouses, but $8.251 million is still needed for the 
planned $11.227 million greenhouse complex. 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 2002, fiscal year 2003, and fiscal year 2004 
appropriated funds for expansion of the Charleston research staff is 
maintained in fiscal year 2006. 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 $350,000 for their establishment.

------------------------------------------------------------------------
                                                           Gross Funds
       Appropriations to Restore          Fiscal year       Impacted
------------------------------------------------------------------------
Minor Use Pesticides (IR-4)...........            2002            $5,000
U.S. Vegetable Laboratory.............            2003           490,000
U.S. Vegetable Laboratory.............            2004           266,000
                                                       -----------------
      Total Funds to Restore..........  ..............           761,000
------------------------------------------------------------------------


------------------------------------------------------------------------
   New Scientific Staff Needed        Current Status    New Funds Needed
------------------------------------------------------------------------
Entomologist.....................  Needed.............          $350,000
Molecular Biologist..............  Needed.............           350,000
                                                       -----------------
      Total New Funds............  ...................           700,000
------------------------------------------------------------------------

Food Fermentation Laboratory, Raleigh, North Carolina
    The current funding for the laboratory is $1,274,000. This includes 
the new funds provided in fiscal year 2004 ($270,000) and in fiscal 
year 2005 ($100,000) that are not in the fiscal year 2006 budget 
proposal that was sent to the Congress. We request that the additional 
funding provided by the Congress in fiscal year 2004 and fiscal year 
2005 be restored in the fiscal year 2006 budget, so that the funds 
available to the Food Fermentation Laboratory remain constant.

------------------------------------------------------------------------
         Scientific Staff              Current Status      Funds Needed
------------------------------------------------------------------------
Microbiologist....................  Active..............        $300,000
Chemist...........................  Active..............         300,000
Food Technologist/Biochemist......  Active..............         300,000
Microbial Physiologist............  Hiring process               300,000
                                     active.
Post-doctoral microbiologist......  Active..............          74,000
                                                         ---------------
      Total Funding Required......  ....................       1,274,000
      Current funding (fiscal year  ....................       1,274,000
       2005).
                                                         ---------------
Additional Funding Needed.........  ....................               0
------------------------------------------------------------------------

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 $267,600 is 
needed to fully fund the scientists and support staff, including 
graduate students and post-doctorates.

------------------------------------------------------------------------
     Scientific Staff in Place         Current Status      Funds Needed
------------------------------------------------------------------------
Geneticist........................  Active..............        $300,000
Horticulturist....................  Active..............         300,000
Geneticist........................  Active..............         300,000
                                                         ---------------
      Total Funding Required......  ....................         900,000
      Current Funding.............  ....................         832,400
                                                         ---------------
      Shortage....................  ....................          67,600
      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 2006. 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.
Sugar Beet and Bean Research Unit, East Lansing, Michigan
    The location urgently needs to hire a full-time research engineer 
to develop a comprehensive research program on nondestructive 
inspection, sorting and grading of pickling cucumbers and other 
vegetable crops to assure the processing and keeping quality of pickled 
products. The current base funding for the cucumber engineering 
research is $200,000. An increase of $100,000 in the current base 
funding level would be needed to fund the research engineer position.

------------------------------------------------------------------------
     Scientific Staff in Place         Current Status      Funds Needed
------------------------------------------------------------------------
Postdoctoral Research Associate...  Active..............        $200,000
Research Engineer.................  Needed..............         100,000
                                                         ---------------
      Total Funding Required......  ....................         300,000
      Current Funding.............  ....................         200,000
                                                         ---------------
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 Public Citizen's Energy and Environment 
                                Program

    Chairman Bennett, Ranking Member Kohl and Members of the 
Subcommittee: My name is Wenonah Hauter. I am Director of Public 
Citizen's Energy and Environment Program. As you know, Public Citizen 
is a non-profit consumer organization, representing 150,000 members. We 
welcome this opportunity to present our views on the fiscal year 2006 
Agriculture, Rural Development, Food and Drug Administration and 
Related Agencies Appropriations Bill.

            USDA--FOOD SAFETY AND INSPECTION SERVICE (FSIS)

    We are adamantly opposed to the Administration's proposal to 
collect $139 million in user fees in order to recover the cost of 
providing inspection services beyond an approved eight-hour primary 
shift, as it could compromise the effectiveness of FSIS inspectors. 
This proposal has been rejected in the past by Congress and we request 
that you do so again this year. Furthermore, FSIS has already taken 
action to de-list foreign establishments that had been previously 
approved to export their meat and poultry products to the United States 
on the basis that inspection services were paid for by the companies 
involved instead of by the foreign government. Given this history, 
implementation of the Administration's proposal would be hypocritical.
    While not fully under its jurisdiction, we believe that the 
subcommittee needs to look into the mixed signals top USDA officials 
have been sending in regards to FSIS' authority. On March 19, 2003, 
former USDA Secretary Ann Veneman delivered a speech before an 
industry-sponsored conference in which she stated:
    ``. . . we are working under a Meat Inspection Act that pre-dates 
the Model T. In an effort to modernize food safety authorities, we want 
to work with Congress and our partners to consider various ideas, some 
of which have been discussed in the past. These include: ``Mandatory 
notification to USDA when a federally inspected establishment has 
reason to believe that meat or poultry has been adulterated or 
misbranded; Authority to impose civil penalties after notice in writing 
and continued lack of compliance. This authority would involve due 
process before an administrative law judge, and liabilities would be 
limited to penalties based on continued noncompliance; And cease-and-
desist orders and potential suspensions at earlier phases and on an 
expedited basis arising from HACCP violations.'' \1\
---------------------------------------------------------------------------
    \1\ http://www.usda.gov/news/releases/2003/03/0092.htm.
---------------------------------------------------------------------------
    Industry opposition was quick and ferocious, and nothing has 
occurred since her speech. In light of adverse court rulings which FSIS 
has suffered in recent years regarding its attempts to exert authority 
over meat processors that have violated food safety regulations, we 
believe that the Congress needs to take action to plug the current 
legal loopholes.
    We are also concerned that FSIS does not have adequate in-plant 
inspection staffing to ensure that our meat and poultry products are 
safe. In recent years, the requests for additional staffing by the 
Administration have been modest. FSIS has been engaged over the past 
year in a process to realign staffing based on new standards that take 
into account food safety risk. While the agency claims that the new 
staffing model is based on ``science,'' we are concerned that the data 
upon which the agency is basing its decisions may not be sufficient or 
reliable. The agency is relying on data that it has collected through 
its Field Automation and Information Management (FAIM) system. We have 
learned from inspection personnel that the FAIM system has been fraught 
with problems. For example, inspection personnel have had difficulty 
logging on to the system and the system often crashes before 
inspectors' reports have been completely transmitted. Consequently, 
there may be a ``garbage-in-garbage-out'' scenario whereby the agency 
will find itself having re-deployed its inspection staff based on 
faulty and/or incomplete data. There have been a number of product 
recalls in recent months that seem to be directly attributable to lack 
of inspection resources.\2\ We request that the subcommittee fully 
investigate this issue before the agency completes its staffing 
reassignments.
---------------------------------------------------------------------------
    \2\ http://www.fsis.usda.gov/Fsis_Recalls/RNR_013_2005/index.asp.
    http://www.fsis.usda.gov/Fsis_Recalls/RNR_007_2005/index.asp.
    http://www.fsis.usda.gov/Fsis_Recalls/RNR_003_2005/index.asp.
    http://www.fsis.usda.gov/Fsis_Recalls/RNR_001_2005/index.asp.
    http://www.fsis.usda.gov/Fsis_Recalls/RNR_042_2004/index.asp.
    http://www.fsis.usda.gov/Fsis_Recalls/RNR_047_2004/index.asp.
---------------------------------------------------------------------------
    In a related area, the USDA Office of Inspector General (OIG) found 
serious security weaknesses in the FSIS information technology systems. 
Specifically, the OIG stated:
    ``Our vulnerability scans of selected FSIS systems disclosed 
weaknesses that may be exploited both internally and externally from 
the Internet. FSIS had not adequately protected physical access to its 
headquarters computer facility by limiting it to users who need access 
to perform their duties, and it had not completed all security plans 
required by OMB Circular A-130. FSIS database administrators were 
allowed to make changes to FSIS data without following up with 
appropriate personnel to verify the validity of the changes.\3\
---------------------------------------------------------------------------
    \3\ http://www.usda.gov/oig/webdocs/OIG-Report010604.pdf, p. 6.
---------------------------------------------------------------------------
    On the issue of equivalence and import re-inspections, we believe 
that FSIS needs to do a better job of safeguarding consumers against 
unsafe food that may be imported. In July 2003, Public Citizen released 
a report entitled, ``The WTO Comes to Dinner: USDA Implementation of 
Trade Rules Bypasses Food Safety Requirements'' in which we documented 
shortcomings in the FSIS food safety program for imported meat and 
poultry products. For example, we have not been able to determine how 
FSIS permanently bans a country from exporting food to the United 
States if FSIS finds habitual violations of food safety regulations. We 
have also become alarmed that since the fall of 2002, when FSIS 
instituted a new sampling regime, the amount of imported meat and 
poultry products re-inspected at our ports of entry has dropped 
precipitously. During a period in which we must be more vigilant about 
the security of our food supply, FSIS seems to have adopted a policy 
that is counterintuitive. In 2004, there were three recalls of imported 
products that should not have entered into U.S. commerce.\4\ We ask 
that the subcommittee review FSIS' food safety program for imported 
products.
---------------------------------------------------------------------------
    \4\ http://www.fsis.usda.gov/News_&_Events/Recall_028_2004_Release/
index.asp;
    http://www.fsis.usda.gov/News_&_Events/Recall_038_2004_Release/
index.asp;
    http://www.fsis.usda.gov/News_&_Events/Recall_046_2004_release/
index.asp.
---------------------------------------------------------------------------
    While we applaud FSIS' steps in protecting consumers from beef that 
may be contaminated with bovine spongiform encephalopathy (BSE), the 
initiatives announced on December 30, 2003 still do not go far enough. 
First, we are concerned that meat product that is obtained through the 
use of advanced meat recovery (AMR) systems is still permissible for 
cattle that are slaughtered under the age of 30 months. AMR systems 
recover meat close to the spinal column. The spinal column is an area 
of concern since that is where infected tissue is often found. There 
have been cases of BSE-infected cattle reported abroad that were 
younger than 30 months. Consequently, we believe that the 30-month 
cutoff is too high, and that AMR should be banned entirely. Second, 
there needs to be a rigorous training program on BSE for FSIS 
inspectors and veterinarians to ensure that FSIS personnel fully 
comprehend the symptoms of BSE and the new regulations FSIS has put in 
place. There have been allegations made by FSIS inspection personnel 
that the regulation on the removal of specified risk materials from 
beef entering the food supply has not been fully enforced,\5\ and we 
urge the subcommittee to investigate this matter fully, including 
requesting copies of non-compliance reports that document these 
shortcomings. Third, there has been much controversy over the 
``downer'' ban that FSIS announced. We believe that the definition of 
``non-ambulatory, disabled'' animal is adequate to prevent any 
confusion at the slaughter facilities, but we are concerned about how 
USDA will continue to thoroughly conduct BSE surveillance since such 
animals will no longer be presented for slaughter. Fourth, the recall 
of meat from the slaughtered BSE-contaminated cow in Washington State 
illustrated, once again, the weaknesses of the FSIS recall process, 
which restricts state and local departments of health from publicizing 
recall information. Fifth, we are concerned that USDA may have 
prematurely lifted its ban on Canadian beef imports in August 2003. It 
is obvious that there was confusion over what was eligible to be 
imported into the United States which led to a systematic breakdown 
between the fall 2003 and spring 2004 that was vividly described in a 
recent Office of Inspector General Report.\6\ In light of the fact all 
recent cases of BSE-contaminated cows on the North American continent 
were of Canadian origin, it is too soon to allow the import of beef 
from Canada.
---------------------------------------------------------------------------
    \5\ http://www.citizen.org/documents/PiersonLetter12-20-04.pdf.
    \6\ http://www.usda.gov/oig/webdocs/33601-01-HY.pdf, pp. 15-20.
---------------------------------------------------------------------------
                 USDA--REGULATORY AND MARKETING AFFAIRS

    At the outset, we request that the subcommittee revisit the issue 
of country-of-origin labeling and provide funding for the full 
implementation of this provision of the 2002 Farm Bill as quickly as 
possible. USDA is responsible for implementing country-of-origin-
labeling for seafood, which includes notice of whether the seafood is 
farm-raised or wild caught. Unfortunately, the final rules that the 
USDA developed fall short of the original mandate by exempting half of 
imported seafood due to the definition of ``processed'' put forth by 
the agency. The USDA's final rules define ``processed'' so broadly that 
any seafood altered from its natural state is exempt from COOL. We urge 
the subcommittee to allocate sufficient resources to USDA to strengthen 
and adequately enforce the labeling rule for seafood.
    Some industry and non-governmental organizations are also 
developing organic standards for aquatic species. Without any 
accountability, these standards will simply confuse consumers and 
weaken the term ``organic.'' The USDA must develop national organic 
standards for aquatic species. A National Organic Standards Board 
committee is currently being formed and will require resources to 
thoroughly and effectively develop organic standards for aquatic 
species.
    We believe that recent announcements by the Animal and Plant Health 
Inspection Service (APHIS) regarding its surveillance program for BSE 
are less than adequate. First, we do not believe that re-opening our 
border to live Canadian cattle is prudent at this time. Prior to the 
finding of the BSE-positive cow in Washington State, APHIS had 
published a proposed rule permitting the import of live cattle from 
countries that had a minimal risk of BSE. Published in October 2003, 
the rule was an attempt to reshape previous U.S. policy which shut our 
borders to any country that had a reported case of BSE. We believe this 
proposed rule was APHIS' attempt to make an exception to existing 
policy because the border closure which resulted from the May 2003 
discovery of a BSE-infected cow in Alberta impacted the U.S. 
agribusiness interests which have operations on both sides of the 
border.
    Since May 2003, three more cows in North America have been 
diagnosed with BSE--all of Canadian origin.\7\ There have been 
investigative reports by Canadian journalists that indicate that Canada 
has had a difficult time enforcing its bovine feed rules.\8\ In 
addition, our own Food and Drug Administration has documented 
contamination in cattle feed produced in Canada and exported to the 
United States, issuing at least nineteen import alerts since October 
2003.\9\ As we have already cited above, the recent USDA Office of 
Inspector General Report on the importation of Canadian beef clearly 
showed that APHIS was not equipped to handle this permitting process. 
Furthermore, we are concerned that there was undue outside influence 
brought to bear on the agency to expand the importation of Canadian 
beef products in clear violation of departmental policy.\10\
---------------------------------------------------------------------------
    \7\ http://www.citizen.org/cmep/foodsafety/madcow/
articles.cfm?ID=12776.
    \8\ Skelton, Chad. ``Secret tests reveal cattle feed contaminated 
by animal parts; Mad cow fears spark review of vegetable-only' 
livestock feeds,'' Vancouver Sun, December 16, 2004.
    \9\ Statement of Senator Kent Conrad, Congressional Record, March 
3, 2005, pp. S 1964.
    \10\ Hisey, Peter. ``DeLauro: Inspector General said White House 
pressured USDA on Canadian beef,'' The MeatingPlace.com, February 24, 
2005.
---------------------------------------------------------------------------
    While the enhanced BSE surveillance program announced by APHIS on 
March 15, 2004 was a step in the right direction, it still leaves many 
questions unanswered. The size of the sample is still not finite. We 
have been critical of APHIS in the past for its sampling 
techniques,\11\ and it seems that the agency is leaving itself 
vulnerable to criticism with its new program. In fact, Dr. George Gray, 
Executive Director of the Harvard Center for Risk Analysis recently 
stated that APHIS was basing its new surveillance regime on faulty 
assumptions and cautioned APHIS to adjust its sampling to reflect the 
possibility of BSE being found in so-called low risk animal 
populations.\12\ We are also concerned that APHIS has not decided what 
its surveillance regime will be after the ``enhanced'' program is 
completed later this year.
---------------------------------------------------------------------------
    \11\ http://www.citizen.org/documents/madcowreport.pdf.
    \12\ Sugarman, Carol. ``USDA's Ambitious BSE Testing Program Gets 
Guarded Support,'' Food Chemical News, March 22, 2004.
---------------------------------------------------------------------------
    On the issue of food irradiation, we believe that APHIS is opening 
up our borders to increased fruit and vegetables imports from abroad, 
leaving our domestic farmers vulnerable to unfair competition, and 
possibly exposing American consumers to harmful health effects from 
consuming irradiated food. In October 2002, APHIS approved the use of 
irradiation as an approved phytosanitary measure for imported fruits 
and vegetables. We opposed this rule.\13\ When APHIS issued its final 
rule in October 2002, we were perplexed by the convoluted structure of 
the rule.\14\ APHIS is still reviewing applications from foreign 
governments that wish to use irradiation as a phytosanitary measure. 
There has been interest expressed in a number of countries to use this 
technology on their products for export. On April 1, 2005, APHIS 
published a proposed rule that will permit the importation of 
irradiated apples from Australia and New Zealand that will compete with 
our domestic apple industry.\15\
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    \13\ http://www.citizen.org/documents/aphiscomments.PDF.
    \14\ http://www.citizen.org/pressroom/release.cfm?ID=1254.
    \15\ http://frwebgate.access.gpo.gov/cgi-bin/
getdoc.cgi?dbname=2005_register&docid=fr31mr05-16.pdf.
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    In 2004, APHIS approved the use of irradiation to treat Hawaiian 
sweet potatoes to be shipped to the mainland of the United States. This 
approval came even after mainland sweet potato growers opposed the 
approval of the rule.\16\ What is even more troubling is that APHIS 
seemed to have approved this rule to assist a financially ailing food 
irradiation company. In fact, in approving this new rule, APHIS stated: 
``The irradiation facility in Hawaii will benefit from having more 
crops available to treat. The treatment available at this facility has 
enabled many producers in Hawaii to move their products to the 
mainland, thus providing them with access to markets that were not 
previously available. For several years, the State of Hawaii has 
encouraged farmers to diversify agricultural production, given the 
significant decline in the production of sugarcane as a major crop. The 
approval of irradiation as a treatment for sweet potatoes moved 
interstate from Hawaii will help to provide steady throughput for this 
facility. The facility currently treats seasonal crops whose volume is 
more variable than that of sweet potatoes and is thus sometimes 
underutilized. A steady source of revenues from treatment, such as 
revenues from treating sweet potatoes to be moved interstate, would 
help assure this facility's continued operation and availability for 
all the producers in Hawaii who can use it.'' \17\
---------------------------------------------------------------------------
    \16\ Skrzycki, Cindy. ``Approval of Irradiated Sweet Potatoes Has 
Critics Steamed,'' Washington Post, March 9, 2004.
    \17\69 FR 7547.
---------------------------------------------------------------------------
    The facility in question is owned by Hawaii Pride, a company that 
was created using a USDA Rural Development Administration loan.\18\ The 
firm was having difficulty making payments on the loan because of its 
precarious financial condition.\19\ In essence, APHIS is running an 
irradiation ``industrial policy'' by helping bail out Hawaii Pride from 
total financial ruin with the approval of this rule. We filed a Freedom 
of Information Act request with the agency on March 12, 2004 requesting 
all documents related to this decision and we have yet to receive a 
response. The subcommittee should review APHIS' activities regarding 
this rule.
---------------------------------------------------------------------------
    \18\ http://www.hiedb.org/
showtext.asp?ArticleID=26&Category=Articles.
    \19\ Titan Corporation. Form 10-K filed with the Securities and 
Exchange Commission, March 10, 2004, p.21.
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   USDA--COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE

    It has come to our attention that the Cooperative State Research, 
Education, and Extension Service (CSREES) provided funds to Texas A&M 
University to establish a National Center for Electronic Beam Research 
at its campus. The initial grant of $185,000 was approved on July 28, 
2003, and certain Texas congressional delegation members were credited 
for securing the funds.\20\ The timing of the grant approval raised 
suspicions since Texas A&M and the SureBeam Corporation, a leading food 
irradiation processor and electron-beam irradiation equipment 
manufacturer, entered into a strategic partnership only 3 years 
earlier.\21\ SureBeam donated to the University $10 million worth of 
electron-beam irradiation equipment in exchange for the use of a 
building on the campus where the company could use the equipment for 
commercial purposes and University could use it for research purposes. 
In the summer of 2003, SureBeam's dubious accounting practices began to 
surface in the press, and among the areas of concern was the manner in 
which SureBeam was reporting ``revenues'' from its relationship with 
Texas A&M.\22\ On January 19, 2004, SureBeam filed for Chapter 7 
bankruptcy and is in the process of liquidating its assets.\23\ On 
August 12, 2004, CSREES awarded the Texas A&M Electron Beam Facility 
another $328,357 grant.\24\ In September 2004, the supermarket chain 
Wegman's revealed that it was offering irradiated frozen hamburger 
patties in its stores that were treated at the Texas A&M facility.\25\ 
We believe that the subcommittee needs to investigate this matter 
further to determine whether there were any improprieties in the award 
of these grants.
---------------------------------------------------------------------------
    \20\ http://www.meatandpoultryonline.com/content/news/
article.asp?docid=(d63bd189-14d2-450d-b399-bd02eac5cbc6).
    \21\ http://www.ift.org/publications/docshop/ft_shop/10-00/
10_00_pdfs/10-00-p&t-proc.pdf.
    \22\ Norris, Floyd. ``SureBeam Revenue Policy Questioned,'' New 
York Times, August 27, 2003.
    \23\ Freeman, Mike. ``SureBeam's Bankruptcy Filing Offers Few 
Details,'' San Diego Union-Tribune, January 21, 2004.
    \24\ http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_01OB/.cmd/
ad/.ar/sa.retrievecontent/.c/
6_2_1UH/.ce/7_2_5JM/.p/5_2_4TQ/.d/5/_th/J_2_9D/_s.7_0_A/7_0_1OB?PC_7_2_
5JM_contentid=2004%2F08%2F0330.xml&PC_7_2_5JM_navtype=RT&PC_7_2_5JM_
parentnavid=LATEST_RELEASES&PC_7_2_5JM_navid=NEWS_RELEASE#7_2_5JM.
    \25\ http://www.wegmans.com/meb/columns/091804.asp.
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                      FOOD AND DRUG ADMINISTRATION

    We applaud the Food and Drug Administration (FDA) for revisiting 
its feeding restrictions for ruminant animals in light of the discovery 
of a BSE-infected cow in Washington State. Unfortunately, while the FDA 
made its announcement on January 26, 2004 that it intended to 
promulgate interim final rules creating new BSE firewalls, none of 
those rules have yet been published in the Federal Register. That means 
that cattle in this country are still being fed under the old feeding 
rules that the FDA has found to be deficient. The FDA needs to take 
immediate action to place those new restrictions in effect. While we 
believe the new rules proposed are a step in the right direction, we 
believe that further restrictions are needed that include the 
prohibition of any mammalian and poultry protein to be fed to cattle, 
as recommended by the International Advisory Panel appointed by USDA 
Secretary Ann Veneman.\26\
---------------------------------------------------------------------------
    \26\ http://www.aphis.usda.gov/lpa/issues/bse/US_BSE_Report.pdf.
---------------------------------------------------------------------------
    We are also concerned that the FDA is not able to increase its 
surveillance over imported foods that fall under its jurisdiction. In 
fact, the FDA is being overwhelmed with imports--leaving U.S. consumers 
vulnerable to unsafe imported food making its way into commerce. The 
subcommittee needs to review the staffing levels for FDA, especially as 
they relate to import inspection.
    Shrimp is currently the number one seafood choice for American 
consumers and 80 percent of it is imported, at least half of which is 
farm-raised. Chemicals banned in the United States., such as 
chloramphenicol and nitrofurons, are used to raise shrimp that are 
exported to the United States. Yet the FDA only inspects one to two 
percent of all imported seafood. The FDA must be appropriated funds to 
inspect a significant amount of imported seafood.
    In his testimony in 2003, then-FDA Commissioner Mark McClellan 
reported that an FDA working group has been considering a re-definition 
of the term ``pasteurization'' to include such new technologies as 
irradiation. Such a re-definition could be used by food processors on 
product labeling. The group that has been charged with this 
responsibility is a subcommittee of the National Advisory Committee on 
the Microbiological Criteria for Food. As we have testified in the past 
on this issue, consumers have repeatedly rejected such a re-definition 
in focus group studies conducted by the USDA and FDA.\27\ We believe 
that such an exercise is a waste of resources since re-defining 
pasteurization would lead to consumer deception and confusion.
---------------------------------------------------------------------------
    \27\ http://www.citizen.org/documents/agappropsmarch03.pdf.
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                                 ______
                                 

         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 80th Annual Meeting in Bossier City, Louisiana on February 
24, 2005, 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 and the war in Iraq; 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 2006 budget for NRCS indicates a 
decrease of $70 million from what Congress appropriated in fiscal year 
2005. In reality, NRCS is taking a major decrease in program funding 
and staff years. This is reflected in the fact that NRCS manpower for 
fiscal year 2006 would have to decrease by over 2,000 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. The President's budget included 
$767.8 million, which is a decrease of $69.6 million from fiscal year 
2005. Maintaining a ``level'' funding level is actually a cut, due to 
mandated increases in pay and benefits, in addition to continuing 
increases in the ``cost of doing business''.
    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 be 
placed in ``Conservation Technical Assistance'', and allow NRCS to 
provide assistance to all who are in need of assistance.
    It is our understanding that the Technical Service Providers (TSP) 
program has not lived up to its expectations. It has been difficult to 
fund this initiative at or below what it would cost to use NRCS 
manpower. Therefore, it is an increase in funding to delivery these 
services. We believe that TSPs should be used 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 Law 566 & 534).--
We are greatly disappointed that the President's Budget provided no 
funding for watershed operations. There is no doubt that this is a 
Federal responsibility, in conjunction with a local sponsor. This 
program addresses all watershed needs to include: flood protection, 
water quality, water supply and the ecosystem. There is no Corps of 
Engineer, Bureau of Reclamation or FEMA program to address small 
watershed needs, before disaster strikes. We recommend that Congress 
hold oversight hearings to understand the importance and hear how 
popular this program is to our communities.
    We are very appreciative for the funding level of $75.6 million 
enacted in fiscal year 2005. 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. These 
projects 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.--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 
these projects in fiscal year 2006.
    Red Bayou Irrigation Project, LA.--The plans and specifications 
have been completed, making this project ready for construction in 
fiscal year 2006. 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 2006.
    Watershed Rehabilitation.--More than 10,400 individual watershed 
structures have been installed nationally, with approximately one-third 
in the Red River Valley. 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 $15.1 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 2005 $7.1 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 disagree with this low level and ask 
Congress to fund this 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 2006 appropriation bill.
    Maniece Bayou Irrigation Project, AR.--This is a project in its 
initial stage of planning. An irrigation district is being formed 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 $250,000 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, and has 
relied on supplemental appropriations. Since the Administration has 
decided to ``zero out'' Watershed and Flood Prevention Operations do 
they intend to eliminate this program, since both are included in the 
same authorization?
    As our populations expand and shift, land use changes and 
intensifies. Impacts of severe weather events are becoming more of an 
impact 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 
$25.6 million is not adequate to accomplish the needs of the Nation. 
This program leverages its resources at 4 to 1, with communities, local 
sponsors and non-government organizations. The benefits are realized at 
over 14 to 1, average per project. What other Federal program can claim 
such a return on investment?
    We request that $51 million be appropriated for this program.
    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 Farm Bill, wisely increased conservation programs each year. 
This increased investment, with the multi-year CCC programs, will 
increase the NRCS workload. It is imperative that NRCS receive the TA 
funding levels required to administer these programs. If they do not 
receive full funding these programs will not realize their full 
capability.
    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.
    We are all aware of the issue with TMDL levels in our waterways. If 
our Nation is to seriously address this we must look at the impacts 
from our farmlands. Assistance for land treatment plans and plan 
implementation is exactly what the NRCS Watershed programs are intended 
to address. Watershed programs should be receiving an increase in 
funds, not zeroed out!
    With these new clean water initiatives 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.
    These NRCS studies and watershed projects are an example of true 
cooperative ``conservation'' initiatives. There is an interface with 
communities and local sponsors at each step of the process and local 
sponsors do cost share at the levels expected of them.
    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].
                                 ______
                                 

     Prepared Statement of the Society for Women's Health Research

    On the behalf of the Society for Women's Health Research and the 
Women's Health Research Coalition, we are pleased to submit testimony 
in support of increased funding for biomedical research, and more 
specifically women's health research.
    The Society is the only national non-profit women's health 
organization whose mission is to improve the health of women through 
research, education, and advocacy. Founded in 1990, the Society brought 
to national attention the need for the appropriate inclusion of women 
in major medical research studies and the need for more information 
about conditions affecting women disproportionately, predominately, or 
differently than men.
    The Coalition was created by the Society in 1999 as a way to 
strengthen our grassroots advocacy with scientists and researchers and 
clinicians from across the country who are concerned and committed to 
improving women's health research. The Coalition now has more than 620 
members from across the country, including leaders within the 
scientific community and medical researchers from many of the country's 
leading universities and medical centers, directors from various 
Centers of Excellence on Women's Health as well as leading voluntary 
health associations, and pharmaceutical and biotechnology companies.
    The Society and the Coalition are committed to advancing the health 
status of women through the discovery of new and useful scientific 
knowledge. We believe that sustained funding for the women's health 
research programs that are conducted across the federal research 
agencies is necessary if we are to accommodate the health needs of the 
population and advance the Nation's research capability. Therefore, we 
urge your support for the Food and Drug Administration (FDA) Office of 
Women's Health and request funding of $5 million in order that it may 
meet its program goals.

         FOOD AND DRUG ADMINISTRATION OFFICE OF WOMEN'S HEALTH

    As you know, the FDA has jurisdiction over drugs, medical devices, 
vaccines, blood and tissue products, foods and cosmetics. Within the 
FDA, we would like to highlight women's health and sex and gender-based 
research, areas in which the Society long has been a proponent.
    The Office of Women's Health at the FDA was administratively 
established in 1994 and has been critical to women's health, both 
within and outside the agency. The office aims to provide scientific 
and policy expertise on gender sensitive regulatory and oversight 
issues; to correct gender disparities in the areas for which the FDA is 
responsible--drugs, devices, and biologics and to monitor women's 
health priorities, providing leadership and an integrated approach 
across the agency. Finally, it forms partnerships, within the 
government and with outside groups and organizations. Currently, the 
Office of Women's Health at the FDA is doing admirable work, but its 
inadequate budget prevents this Office from fully accomplishing its 
mission.
    In 2001, the Society submitted testimony on behalf of the Office of 
Women's Health and in support of a centralized database at the FDA to 
coordinate clinical trial oversight, monitor the inclusion of women in 
clinical trials, oversee the parameters of informed consent, and 
identify training needs. Due to Society efforts and this Committee's 
commitment, in 2002 Congress provided the Office of Women's Health at 
the FDA with funds to develop an agency-wide database focused on women 
health activities to include demographic data on clinical trials. The 
FDA has been developing this database now known as the ``Demographic 
Information and Data Repository'' to review clinical studies, enhance 
product labeling, identify knowledge gaps, and coordinate data 
collection.
    While progress has been made, the database is far from up and 
running. Currently, the FDA receives large volumes of information in 
applications from drug manufacturers for review and evaluation. The FDA 
reviewers must comb through the submitted drug trial reports and 
digital data in as many as twelve formats to evaluate a new drug's 
safety and effectiveness. With no database, reviewers must handpick 
gender, age, and ethnicity information from stacks of reports and craft 
their own data comparisons. This is time consuming, makes the review 
process less efficient, and delays access to important information. 
Scientific and medical advances are occurring rapidly and the public 
needs and deserves access to the most recent and accurate information 
regarding their health. Therefore, in order to fully capitalize on the 
potential of the data warehouse and the resulting wealth of 
information, we urge Congress to commit $1 million for the Demographic 
Information and Data Repository.
    Scientists have long known of the anatomical differences between 
men and women, but only within the past decade have they begun to 
uncover significant biological and physiological differences. Sex 
differences have been found everywhere from the composition of bone 
matter and the experience of pain to the metabolism of certain drugs 
and the rate of neurotransmitter synthesis in the brain. Sex-based 
biology, the study of biological and physiological differences between 
men and women, has revolutionized the way that the scientific community 
views the sexes. The evidence is overwhelming, and as researchers 
continue to find more and complex biological differences, they are 
gaining a greater understanding of the biological and physiological 
composition of both sexes.
    Much of what is known about sex differences is the result of 
observational studies, or is descriptive evidence from studies that 
were not designed to obtain a careful comparison between females and 
males. The Society has long recognized that the inclusion of women in 
study populations by itself was insufficient to address the inequities 
in our knowledge of human biology and medicine, and that only by the 
careful study of sex differences at all levels, from genes to behavior, 
would science achieve the goal of optimal health care for both men and 
women. This has given rise to sex-based biology.
    Many sex differences are already present at birth, whereas others 
develop later in life. These differences play an important role in 
disease susceptibility, prevalence, time of onset and severity and are 
evident in cancer, obesity, coronary heart disease, autoimmune, mental 
health disorders, and other illnesses. Physiological and hormonal 
fluctuations may also play a role in the rate of drug metabolism and 
effectiveness of response in females and males. This research needs to 
be supported and encouraged.
    Building upon sex differences research, the Society encourages the 
establishment of drug-labeling requirements to ensure that drug labels 
include language about differences experienced by women and men. 
Further, we advocate for research on the comparative effectiveness of 
drugs with specific emphasis on data analysis by sex.
    Our country's drug development process has succeeded in developing 
new and better medicines for the health of both women and men. However, 
there is no requirement that the research data about a new drug's 
safety and effectiveness be analyzed for sex differences or that 
information about the ways drugs may differ in various populations 
(e.g., women requiring a lower dosage because of different rates of 
absorption or chemical breakdown) be included in prescription drug 
labels and other patient educational and instructional materials.
    Additionally, proper drug labeling is not always the complete 
solution. If the drug is not a new type of product or if the sex-
specific information is detected only in post-marketing studies, the 
drug label will not be the primary source of information for the 
prescribing physician, and it may be difficult to get new information 
incorporated into physicians' prescribing habits.
    The Society is encouraged by the FDA's commitment to improve the 
health of women and its recognition of the need for more specific drug 
labeling by sex. We believe the opportunity is before us to communicate 
the sex differences data discovered from clinical trials to the medical 
community and consumers (patients) through drug labeling and packaging 
inserts. As part of advancing the need to analyze and report sex 
differences, the Society encourages the FDA to continue adequately 
addressing the need for accurate drug labeling to identify important 
sex and gender differences as well as to ensure appropriate data 
analysis of post market surveillance reporting for these differences.
    As part of their outreach and education efforts, the Office of 
Women's Health at the FDA has been committed to ensuring that women in 
every community in the United States have the vital information they 
need to make healthy choices for themselves and their families. For 
example, the office launched a nationwide menopausal hormone therapy 
information campaign in collaboration with other agencies and women's 
health organizations. The campaign distributed materials for women to 
use as tools to gain a better understanding of the health risks and 
benefits of hormone therapy.
    To ensure adequate analysis and recording of sex and gender 
disparities in drugs, devices and biologics and appropriate regulatory 
policy, and accurate drug labeling, we believe that the Office of 
Women's Health at the FDA should be funded at a total of $5 million so 
that it can create, implement, and coordinate gender sensitive programs 
vital to women and men throughout the Nation.
    In conclusion, Mr. Chairman, we thank you and this Committee for 
its strong record of support for women's health. We look forward to 
continuing to work with you to build a healthier future for all 
Americans.
                                 ______
                                 

        Prepared Statement of the Society of American Foresters

    The Society of American Foresters (SAF) represents over 15,000 
forestry professionals dedicated to the conservation of our forest 
resources. SAF members use their education and experience to better use 
and manage public and private forest resources for this generation and 
the next. Only with the proper resources can these professionals both 
within and outside the Federal agencies help to make this happen. SAF 
offers the following suggestions that we believe will ensure forest 
resource professionals can continue to conserve and improve the 
Nation's forest resources and ensure the many forest goods and services 
are provided to benefit society.
    SAF is deeply concerned with the proposed cuts to several forestry 
programs within the U.S. Department of Agriculture budget, as noted 
below. We strongly urge reconsideration of these cuts in light of the 
impacts they will have on the Nation's forests and their conservation.
Cooperative Forestry Research Program (McIntire-Stennis Act)
    The funding provided through the Cooperative Forestry Research 
Program has provided the backbone of forestry research in the United 
States at the various forestry universities and colleges across the 
country since 1962. At the same time, this program helps to train 
tomorrow's forestry professionals. Offering opportunities for graduate 
students to gain real research experience while also getting an 
advanced education, ensures that this country retains the capacity to 
manage its forests today and in the future. For these reasons, SAF 
strongly disagrees with the proposed 50 percent cut to the Cooperative 
Forestry Research Program and urges Congress to ensure this program is, 
at a minimum, funded at $22 million, the level provided in fiscal year 
2005.
    Forestry research is critically important to conserving forests 
while at the same time enabling society to benefit from the diverse 
array of goods, services and values that forests can provide through 
sustainable management.
    SAF believes that forestry research should be funded through both 
public and private investments. The Cooperative Forestry Research 
Program helps to make this happen. With each dollar provided through 
this program, forestry schools leverage an additional $9 from other 
Federal, State, and private sources. In fact, this program provides 
only 10 percent of the funding for public forestry research, extension 
and education at public colleges and universities, but without this 10 
percent the other 90 percent could not be leveraged. SAF recognizes 
that formula funds are sometimes regarded as ``entitlements'' and are 
perceived as lacking in accountability. However, we believe that this 
program provides important and different research opportunities 
relative to the larger competitive grant programs. Perceptions of 
improved accomplishment reporting can be readily dealt with. Cutting 
this program's funding in half simply halves the program's 
effectiveness without addressing the perceived problems. We look 
forward opening a dialogue with Congress and the Administration about 
this program and potential improvements and urge that this conversation 
take place before changes are made to this critical program.
National Research Initiative
    SAF supports the proposed $70 million increase in the National 
Research Initiative's Competitive Grants Program (NRICGP) but 
recommends allocating at least 10 percent of this funding to renewable 
natural resource research. Forestland constitutes over 30 percent of 
this country's land base and currently, less than 6 percent of funding 
provided through the NRICGP funds forestry research. As noted above, 
these forests provide high-demand goods and services such as clean 
water and air, wildlife habitat, hunting, fishing, and other outdoor 
recreation opportunities that are an increasing part of rural 
economies, and forest products that the Nation cannot survive without. 
Through the NRICGP, funding is provided for research on various issues 
in the biological and environmental sciences arena. While the research 
currently conducted through this program is important, we believe that 
this program should place more emphasis on forestry research to ensure 
our professionals have the information and new ideas to succeed at a 
time when more and more demands are being placed on the Nation's 
forests.
    We strongly believe this combination of formula-based funding 
through the Cooperative Forestry Research Program and competitive-based 
research funding through NRI to be appropriate if we are to maintain 
the long-term stability and focus required in forestry research, and 
foster new and innovative thinking characteristic of competitive 
grants.
Renewable Resources Extension Act
    SAF recommends funding the Renewable Resources Extension Act 
through the Cooperative State Research and Extension Service at the 
authorized level of $30 million. We recommend a modest increase in this 
program because we believe this program has potential to greatly 
improve the Nation's forests and their management.
    Current budget deficits demand that every dollar invested be 
leveraged as much as possible. Research funding is no exception. 
Outreach and extension, which assists in the translation of research 
findings to solve real world problems, greatly increase the value of 
research investments. Through the RREA program, much needed outreach 
and extension is provided through universities around the country. 
These efforts utilize research findings, making investments in research 
increasingly important.
    This outreach and extension provided through the RREA program helps 
the every growing number of family forest owners who own over 40 
percent of the forestlands in this country, deal with the pressing 
problems they face. Development pressures, wildfire and forest health 
problems, declining U.S. forest products markets, and increasing 
demands on family forests for environmental services such as clean 
water and wildlife habitat, are just a few of the challenges family 
forest owners must deal with. Family forest owners need information and 
assistance to be able to address these problems, the RREA program helps 
make this possible.
Natural Resources Conservation Service
    SAF is extremely concerned with the proposed cuts to the Natural 
Resources Conservation Service (NRCS) conservation operations account 
and recommends funding this account at $837 million, as provided in 
fiscal year 2005. The Administration's proposal would cut funding for 
this account by almost 10 percent of current funding levels, 
drastically affecting the Agency's capacity to provide much needed 
technical assistance to family forest owners and farmers with 
incidental forest land.
    Through NRCS' conservation operations account, family forestland 
owners receive much needed assistance for a variety of conservation 
practices, influencing the stewardship of these valuable resources. In 
addition, the conservation operations account helps ensure conservation 
programs can be implemented as mandated. 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.
    Thank you for your consideration. We are happy to provide 
additional details on any of the programs mentioned above upon request.
                                 ______
                                 

            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 areas: the Market Access 
Program (MAP); funding for the Specialty Crop Competitiveness Act, 
Cooperative State Research, Extension and Education Service (CSREES) 
and Agricultural Research Service (ARS) funding, nutrition education 
and expansion of the fruit and vegetable snack program.
    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 $200 million in MAP 
funds, the level authorized in the farm bill for fiscal 2006.
    The apple industry receives $3.1 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. 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.
Codling Moth Research
    The U.S. apple industry needs better pest management techniques, 
improved understanding of secondary pests and the biology of pest 
predators, improved mating disruption techniques, rapid and efficient 
pest detection and instrumentation methods. Geographic differences in 
codling moth control capabilities requires a regional approach to 
research funding. U.S. Apple requests the following additional 
appropriations for this problem:
    $400,000 Agricultural Research Service--Yakima, Washington
    $400,000 Agricultural Research Service--Kearneysville, West 
Virginia
Soil Replant Disease and Rootstock Breeding Research
    Soil replant disease is a poorly understood phenomenon that reduces 
tree vigor and stunts tree growth in new orchards, which are planted on 
the site of a previously existing orchard. A combination of organisms 
such as bacteria, fungi, nematodes and viruses are suspected to play a 
role in attacking the roots of new apple trees, limiting their growth 
potential. This problem has surfaced as a high priority problem because 
of the scarcity of new orchard sites, the need to replant existing 
orchards, the high per acre cost of planting new orchards and shortage 
of good options to control replant disease. Soil replant disease is a 
problem for all tree fruits, including apples, pears, peaches and 
cherries. Genetics and genomics research on resistance issues would be 
applicable to all of these tree fruit crops.
    Research is needed to better understand site-specific drivers 
causing the disease and how the disease causes damage. Research is 
necessary to develop biorational and sustainable controls. Research is 
needed to explore possible avenues for genetic resistance of 
rootstocks. U.S. Apple requests the following additional appropriations 
for this problem:
    $400,000 Agricultural Research Service--Geneva, New York
    $400,000 Agricultural Research Service--Wenatchee, Washington
Fruit Quality Research
    The future of the U.S. apple industry will depend on the ability of 
apple growers to consistently grow and market apples with superior 
quality. Improved fruit quality will not only ensure greater 
international competitiveness, but it will increase consumer demand for 
apples.
    Research is needed on the physical, chemical and genetic 
composition of apples so apple growers can produce apples with superior 
consumer traits, such as texture, aroma, and nutrition, and apples with 
superior production traits including uniform ripening and better 
storage characteristics and systems to deliver better fruit quality to 
consumers through improved defect and quality sorting. This research 
would also be useful for other tree fruits such as peaches. U.S. Apple 
requests the following additional appropriations for this problem:
    $750,000 Agricultural Research Service--Albany, California
    $750,000 Agricultural Research Service--Wenatchee, Washington
Automation, Sensors and Precision Agriculture Research
    Improving labor productivity is a critically important goal for the 
apple industry as it strives to remain competitive with low-wage 
international competitors. Labor accounts for approximately 50 percent 
of the cost of producing U.S. apples. Tree fruit industries must 
identify and incorporate new technologies that will minimize low skill 
tasks, enhance worker productivity and safety, reduce production and 
handling costs, decrease seasonality of labor, and maximize fruit 
quality delivered to consumers. This research would also be applicable 
to a host of tree fruits including cherries, peaches, almonds and 
apples and pears.
    $4,000,000 Agricultural Research Service--Kearneysville, West 
Virginia
Genetics and Breeding
    Research on genetics, genomics, and plant breeding are high 
priority area for tree fruit growers who produce a variety of crops, 
such as apples, cherries, peaches and almonds. Genetics and genomics 
have to be applied through an active plant-breeding program to be 
successful.
    The U.S. apple industry supports the appropriations of $350,000 in 
Federal research funds for cherry genetics, genomics and plant 
breeding, which will also benefit tree fruit crops such as apples, 
peaches and almonds using functional genomics approaches to extend the 
research benefits. The effort would be national in scope and lead by 
Dr. Amy Iezzoni at Michigan State University (MSU). This research, 
which will provide the much needed scientific knowledge needed to 
develop better varieties in the future that would reduce labor costs, 
provide new disease and insect resistant varieties, and enhance overall 
fruit quality. The U.S. apple industry believes strongly in aggressive 
research programs in this area. This research keeps U.S. growers on the 
cutting edge of new varieties and rootstocks. U.S. Apple requests the 
following additional funding to address this need:
    $350,000 Cooperative State Research Education And Extension 
Service--Michigan State University
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 2006 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 2006 budget for the postharvest quality 
research position in East Lansing, Mich.
    The East Lansing, Mich., USDA ARS facility is conducting research 
critical to the future survival of the U.S. 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 2006 rescinds this funding.
Specialty Crops Competitiveness Act
    U.S. Apple urges Congress to fund the Specialty Crop 
Competitiveness Act at the authorized level of $54.5 million for fiscal 
year 2006.
    The Specialty Crop Competitiveness Act (SCCA) was introduced in the 
108th Congress by Reps. Cal Dooley (D-CA) and Doug Ose (R-CA) and in 
the Senate by Sens. Craig (R-ID) and Stabenow (D-MI). The bill was 
designed to strengthen demand, reduce production costs, and enhance 
production and marketing efficiencies.
    A scaled-back version of the SCCA passed Congress last fall and was 
signed into law by President Bush in December. The law authorizes a 
total of $54.5 million per year but does not mandate funding. The 
majority of the funds authorized funds would go toward block grants, 
with each State department of agriculture being guaranteed a minimum of 
$100,000.
Fresh Fruit and Vegetable Snack Program
    U.S. Apple urges Congress to include $42 million in the USDA budget 
to expand the fruit and vegetable snack program to 25 schools in each 
of the 42 remaining States.
    The 2002 farm bill established the Fruit and Vegetable Pilot 
Program to promote consumption of fruits and vegetables among school 
children by providing free produce to schools in 25 schools in each of 
four States (Iowa, Indiana, Michigan, Ohio and one Indian Tribal 
Organization in New Mexico). The Child Nutrition and WIC 
Reauthorization Act of 2004 made the pilot permanent and expanded it to 
25 schools in Mississippi, three additional States (North Carolina, 
Pennsylvania and Washington were chosen by USDA) and two additional 
Indian Reservations.
    Reports from the original pilot showed that students were 
increasing their consumption of fruits and vegetables, choosing more 
fruits and vegetables for lunch, and asking their parents for fruits 
and vegetables at home. The fruit and vegetable snack program works to 
educate children about the healthy eating habits that will last a 
lifetime. The fruit and vegetable snack program should be expanded to 
25 schools in every State.
Nutrition Education to Promote Health and Fight Obesity
    U.S. Apple strongly encourages Congress to fully fund the nutrition 
education programs authorized under the Child Nutrition and WIC 
Reauthorization Act of 2004.
    Childhood obesity is a national epidemic. Numerous studies have 
shown that children in the United States are not getting anywhere near 
the recommended servings of fruits and vegetables per day. According to 
the Centers for Disease Control (CDC) obesity treatment cost over $90 
million per year. USDA estimates that we could save over $70 billion 
per year with better diets.
    Nutrition education will be key in changing these behavior 
patterns. The Child Nutrition and WIC Reauthorization Act of 2004 
authorized funding up to 1 cent per school lunch served ($58 million) 
for nutrition education programs, materials and staffing. The 
President's budget did not include this 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 U.S. Marine Shrimp Farming Consortium

    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 Consortium (USMSFC), 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 USMSFC, have made major advances in technology development and 
services to support the U.S. shrimp farming industry. The USDA in its 
2004 program review 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. shrimp farming industry, consolidating its competitive advantages, 
and satisfying consumer's demands for safe and wholesome seafood 
products. Shrimp is the number one consumed seafood product in the 
United States, yet contributes to a $3.6 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, USMSFC 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. Domestic farmed shrimp production 
has tripled over the last 6 years, yielding an average growth rate of 
20 percent per year. The year 2004 recorded over 12 million pounds of 
shrimp produced in addition to nearly $5 million recorded in sales of 
broodstock animals for improved market characteristics.
    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.
Industry Vulnerability
    While exceptional progress has been made, this emerging industry is 
continually confronted with new challenges. The industry depends on the 
USMSFC 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.
    Diseases present in imported commodity shrimp products threaten not 
only the emerging domestic shrimp farming industry, but also the 
Nation's native shrimp stocks. During 2004, limited disease outbreaks 
did occur in Texas and Hawaii that were caused by a breakdown in 
biosecurity protocols against imported shrimp products. A quick 
response of the USMSFP, working in concert with the USDA's Animal and 
Plant Health Inspection Services and other agencies in the State of 
Texas, helped identify and isolate these outbreaks, limit the spread, 
and minimize the loss in production nationwide.
    While significant progress has been made in risk assessment and 
risk management with visible success, the industry and the USMSFC 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 USMSFC 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 the significant decline in market prices for domestic 
shrimp due to a surge of foreign imports over the last 3 years. The 
decline has also seriously threatened the domestic shrimp harvest 
industry. Average U.S. farm gate prices have fallen 40 percent percent 
since then, constraining profitability and plans for industry 
expansion. Anti-dumping tariffs imposed in February 2005 have not nor 
are forecasted to stem the tide of rising imports, or improve domestic 
shrimp prices as intended. Affected buyers and distributors have 
largely absorbed those costs or producers have switched to product 
forms not covered by the tariffs. Moreover, other countries not named 
on the order have filled any voids with increased imports into the 
United States.
    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
    In fact, despite recent price and profitability trends, investor 
confidence is rising as a result of the work of the Consortium. New 
farms are emerging utilizing new and improved technologies, while 
others are working in cooperation with the Consortium on more advanced 
approaches that are nearing fruition. In addition to supporting today's 
industry, our advanced, high-density 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. These important traits of an evolving 
domestic industry 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 $3.941 million to $6 
million is requested. The increase will be used to: strengthen the 
Consortium's biotechnology and molecular capabilities and activities to 
support rapid and more advanced disease monitoring and genetic 
selection efforts; accelerate the development of new genetic lines for 
market advantage; advance high-density production prototypes to 
commercial-scale testing; determine the mechanisms of disease immunity 
in shrimp for protection of both farmed and wild shrimp stocks; and 
address niche market technologies for competitive advantage. 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.
                                 ______
                                 

      Prepared Statement of the United States Telecom Association

                           SUMMARY OF REQUEST

Project Involved
    Telecommunications Loan and Grant Programs Administered by the 
Rural Utilities Service of the U.S. Department of Agriculture.
Actions Proposed
  --Supporting Rural Utilities Service (RUS) loan levels and the 
        associated funding subsidy, as required, for the 5 percent 
        direct loan program and cost of money programs in fiscal year 
        2006 in amounts requested in the President's budget. Supporting 
        a continuation of the $125 million loan level as contained in 
        the fiscal year 2005 Agriculture Appropriations Act for the 
        guarantee program. Also supporting $358,875,000 in funding for 
        broadband telecommunications loans, as recommended in the 
        President's budget. Supporting the Administration's proposal to 
        transfer the $175 million in loan authority currently allocated 
        to the Rural Telephone Bank to the cost of money program.
  --Also, except in the event of liquidation or dissolution of the 
        Rural Telephone Bank per Sec. 411 of the Rural Electrification 
        Act of 1936, as amended, supporting an extension of the 
        prohibition on retiring more than 5 percent of the Class A 
        stock of the Rural Telephone Bank, supporting the prohibition 
        on maintaining any account or subaccount within the accounting 
        records of the Rural Telephone Bank which has not specifically 
        been authorized by statute, supporting 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.
  --Opposing the rural recertification proposal through denial of funds 
        for a rule change.
  --Supporting $25 million for telemedicine and distance learning 
        grants in rural areas.
    I am Walter B. McCormick, Jr., President and CEO of the United 
States Telecom Association (USTA), the premier trade association 
representing service providers and suppliers for the telecom industry. 
USTA's 1,200 member companies offer a wide range of services, including 
local exchange, long distance, wireless, Internet, VOIP, IP video and 
cable television service. Our membership ranges from the smallest rural 
co-op to some of the largest corporations in American. I submit this 
testimony in the interests of the members of USTA and the customers 
they serve.
    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 telecom service. We appreciate the strong 
support this Committee has provided for the RUS telecom program since 
its inception in 1949 and look forward to a vigorous program for the 
future.

                          A CHANGING INDUSTRY

    Nearly a decade has passed since the President signed the 
Telecommunications Act of 1996, a landmark piece of legislation in its 
time, and calls are multiplying for the Act to be updated 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 telecom 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) or even fiber optic 
connections to the Internet, outside plant must be modernized and 
switching must be migrated to new platforms. 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 telecom 
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 packet 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 voice, video and 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. It is a voluntary program designed to provide 
incentives for local telecom 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 because of a telecom carrier 
default.

                            RECOMMENDATIONS

    For fiscal year 2006, this Committee should set the loan levels and 
necessary associated subsidy amounts for the 5 percent direct loan 
program and cost of money loan programs consistent with the levels 
recommended in the President's budget. The guaranteed 
telecommunications loan program should be maintained at the fiscal year 
2005 level. These levels would preserve our members' ability to serve 
the Nation's telecommunications needs, maintain universal service and 
bring advanced telecom services to rural America.
    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. USTA urges the provision of funding for this 
program in the amount of $358,875,000 as proposed in the President's 
budget. The capital intensive nature of the telecommunications 
industry, particularly with respect to implementation of broadband, 
requires a stable and predictable source of funds. The President should 
be lauded for his recognition of the importance of broadband deployment 
to our Nation's economy and particularly for his recognition, through 
support of the RUS program, of the tremendous impact broadband 
telecommunications can have on economic growth and development in rural 
America.
Elimination of the 7 Percent Cap on the Interest Rate for the ``Cost of 
        Money'' Program
    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. 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 7 
percent cap on cost-of-money insured loans in fiscal year 2006.
Recommended Loan Levels
    USTA recommends that the telephone program loan levels for fiscal 
year 2006 be set as follows:

                          [Millions of dollars]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Insured 5 percent Direct Loans (5 percent)..............             145
Insured Cost-of-Money Loans.............................             425
Loan Guarantees.........................................             125
Broadband Telecommunications Loans......................         358,875
                                                         ---------------
      Total.............................................       1,053,875
------------------------------------------------------------------------

Loans and Grants for Telemedicine and Distance Learning
    USTA supports the continuation of $25 million in grants 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 and economic 
development and promote education and medicine, such funds can help 
continue the historic mission of RUS to support the extension of vital 
new services to rural America.
Recertification of Rural Status Would Be Disruptive and Chill Rural 
        Telecom Investment
    The Administration's budget notes that USDA will propose rule 
changes to require recertification of rural status for each electric 
and telecommunications borrower on the first loan request received in 
or after 2006 and on the first loan request received after each 
subsequent Census.
    Telecom construction and investment is a long term continuous 
process, not a project by project proposition. The uncertainty created 
by the possibility of decertifying a borrower as rural after it has 
established a relationship with RUS and begun borrowing funds for 
expansion and upgrading according to a long term plan would be 
disruptive and discourage borrowers from participating in the RUS 
program, thereby denying its benefits to subscribers. The ``once rural 
always rural'' practice of RUS has been extraordinarily successful at 
providing needed long term capital, at a careful and measured pace, to 
telecom carriers intent on expanding and upgrading service to promote 
rural economic development. Congress should deny funding in fiscal year 
2006 for such a rule change.
Liquidation and/or Dissolution of the Rural Telephone Bank Under the 
        Proper Conditions Will Benefit the Government and RUS Telecom 
        Borrowers
    The Rural Telephone Bank (RTB) was created by Congress under 
extraordinary circumstances in 1971 when the President seemed intent on 
shutting down the rural telephone lending program. USTA applauds the 
commitment of the current Administration to supporting telecom 
infrastructure development in rural America through the RUS telecom 
programs, and particularly the Administration's goal of universal 
broadband availability within the next two years. Given that support, 
the ongoing administratively cumbersome privatization scheme of the 
Rural Telephone Bank is no longer necessary as long as the 
Administration continues to support, and Congress adopts, an equivalent 
level of capital available in the RUS cost of money program.
    When the RTB was formed, Congress provided a variety of options for 
its future. USTA supports the Administration's recommended choice of 
liquidation and/or dissolution of the RTB per the statutory 
requirements included in Section 411 of the Rural Electrification Act 
of 1936, as amended, with the equivalent increase in loan level in the 
cost of money program, as the optimal direction for the future of the 
RTB. Return of the paid in capital of the RTB stockholders, both 
government and private, at par value per Section 411 is a proper and 
fair deal for both the government and the stockholders.

                               CONCLUSION

    Our members take pleasure and pride in reminding the Committee that 
the RUS telecommunications program continues its perfect record of no 
defaults by telecommunications carriers in over a half century of 
existence. RUS telecommunications carrier 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 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. Research efforts over the last year have 
focused on agricultural-based polymeric emulsions, and the production 
of a commercial quality, formaldehyde-free, soybean-based adhesive for 
use in particleboard manufacture. The emulsion polymer research has 
resulted in higher levels of agricultural-derived monomer incorporation 
and better control over the polymerization process that provides high 
performance environmentally friendly coatings. We are excited about 
this development as we believe the agricultural-derived monomers used 
in the polymer formation clearly and convincingly produces superior 
latex polymer with numerous potential advantages and applications. 
Furthermore, we have successfully produced lab-scale fiberboards that 
exceed all medium density particleboard commercial specifications. 
Thus, we have designed, synthesized, and utilized a soybean-derived 
adhesive with no added formaldehyde. This is, to our knowledge, the 
first such glue prepared from agricultural products with absolutely no 
added formaldehyde. This continued success demands the expansion of 
formaldehyde-free soybean-based adhesive for use in the very large 
oriented strand and medium density fiberboard markets if the technology 
is to be adequately exploited. Such technical achievements guarantee 
more potential revenue for U.S. farmers. Coupled with the reduction in 
air pollution and the absence of formaldehyde, the new adhesive is a 
winning product. With these and other previously reported achievements, 
we have clearly shown that many products manufactured heretofore from 
petroleum can be replaced with agricultural products if adequate 
funding, facilities, and commitment are available. This is exciting 
work and we are most appreciative of your support. This document 
provides an overview of our research to date and validates the 
necessity for continued funding.
    In the research and development of vegetable oil macromonomers 
(VOMMs), we have chemically modified various vegetable oils such as 
castor, soy, linseed, safflower, sunflower, and tung oil to design and 
synthesize over 100 novel monomers, derivatives, and methods for 
functionalization. This year's main focus has been the tailoring of 
monomer structures that encourage higher polymerization efficiencies. 
The molecular changes affected have broadened the options for polymer 
building blocks while increasing real performance potential. The 
technology success is dependent upon the use of agricultural materials 
as the primary building blocks for emulsion-derived polymers, and 
offers opportunities for using ag-derived materials as a basic 
feedstock in the polymer industry. In developing a variety of VOMMs, 
our synthetic techniques have been optimized to achieve greater than 90 
percent conversion of usable oil in VOMMs, producing in some cases only 
glycerol as a byproduct. The revised and now accepted synthetic 
procedure affords a useful, polymerizable VOMM without extraordinary 
methods or processes. During this year, our synthetic efforts have 
produced emulsion polymers containing greater than 40 percent of VOMM 
by weight (based upon polymer solids), and provide chemically and 
physically stable polymers suitable for a variety of end uses, 
particularly in coating formulations. A significant advancement this 
year is attributed to our new level of control and understanding 
between monomer design and partitioning during the emulsion 
polymerization process. These new VOMMs are readily copolymerizable 
with common commercial monomers, and exhibit higher degrees of useful 
crosslinking after application and cure. The fundamental scientific 
principles regarding the transfer of hydrophobic monomers across the 
aqueous phase have been confirmed, yet additional data must be 
collected as more of these novel monomers building blocks are being 
designed, synthesized, and studied.
    VOMMs that function both as a monomer and as the stabilizing 
surfactant have been synthesized and evaluated. These unique monomers 
are termed surfmers. Three soybean oil-derived surfmers were 
successfully synthesized and polymerized to produce new polymer 
structures. The first was a nonionic surfmer possessing poly(ethylene 
oxide) moieties of three different chain lengths, and concurrently 
three levels of hydrophilicity. The idealized structures were named 
EMMSO 35, EMMSO 55, and EMMSO 75. Stable styrene emulsion copolymers 
containing as high as 44 weight percent of EMMSO 35 were synthesized. 
Moreover, a latex with 30 weight percent copolymerized EMMSO 35 was 
formulated into architectural coatings that exhibited good film 
formation and performance stability. The second one was an anionic 
surfmer, based upon a neutralized version of an earlier VOMM, soybean 
acrylate monomer (SAM). All-acrylic latexes containing 5-40 weight 
percent of 100 percent neutralized SAM have been successfully 
synthesized. Latexes containing 30 percent by weight of 100 percent 
neutralized SAM provided good gloss and adhesion, and was formulated as 
an environmentally friendly binder for nail polish.
    Our sustained efforts to patent the technology developed in these 
collective projects have resulted in a total of 21 patents and patent 
applications, both United States and foreign. More applications will be 
submitted during the coming year.
    Commercial nail polishes contain very high amounts 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 that are environmentally-friendly and possess high 
gloss. We are continuing to optimize our VOMM-based latexes to provide 
faster dry time while maintaining a zero-VOC formulation.
    Paper coatings derived from VOMM-based emulsions have been 
formulated for paper coating applications. Testing equipment has been 
purchased and installed, and testing is underway to enhance our 
understanding of polymer performance on paper substrates. VOMM latexes 
formulated into paper coatings have exhibited performance properties 
similar to those of styrene-acrylic commercial controls. VOMM coating 
properties continue to be evaluated and optimized using various co-
monomer compositions.
    A soybean-derived product, SAM, was successfully incorporated into 
a permanent press textile treatment to replace the previous VOMM, 
castor oil acrylate monomer (CAM). The novel product increases military 
uniform durability over 30 percent, and increases the acceptable level 
of wrinkle resistance from 20 washes to 170 wash cycles, thereby 
reducing laundry costs, at a significant savings for service personnel 
and the Department of Defense. This polymer was utilized for the 
treatment of Marine camo uniforms during Iraqi freedom campaign. 
Warmkraft, the company who purchased our textile latex cited cost 
issues and over engineering (meaning the product was too good) and 
therefore chose an alternate formulation after more than 2 years of 
treating Marine uniforms. However, they recently contacted us and noted 
experiencing consistency problems with their current product, and thus 
may purchase the latex from us again. Textile latex research is 
expanding to understand the fundamental mechanisms for its adhesion, 
longevity, and the efficacy of antimicrobial agents to provide added 
combat force protection.
    In yet another of our novel ag-based technologies, we have 
developed a formaldehyde-free adhesive for use in particleboard 
composites. The primary component in the developmental adhesive is soy 
protein isolate (SPI), and lab produced particleboards have met or 
exceeded industry performance requirements as defined by ANSI standards 
for M1, M2, M3, and M-S grade boards. Processing and board production 
are compatible with current equipment and methodologies. Efforts are 
underway to reduce the water content of the current adhesive to 
decrease dry time and increase line speeds. The new adhesive was scaled 
up to semi-commercial quantities for process and formulation robustness 
testing in preparation for full-scale evaluations with a commercial 
partner. Alternative less expensive proteins have also been evaluated 
in our current shelf-stable formulation, and have demonstrated similar 
immediate performance characteristics (long-term testing is in 
progress). Last year, formulations only met a single industry 
performance standard, and required higher curing temperatures and 
times. We have successfully exceeded M1, M2, M3 and M-S particleboard 
standards while providing higher moisture resistance and improved 
structural integrity even after 24 hours of water immersion when 
evaluated against particleboards formulated with formaldehyde-based 
adhesives.
    In 1983, the Mississippi Legislature authorized the Polymer 
Institute at USM to work closely with emerging and other existing 
polymer-related industries to assist with research, problem solving, 
commercializing efforts, and workforce development. 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.
    Our research remains focused on the study and development of a 
technology platform that facilitates further commercialization of 
alternative agricultural crops for use in the polymer industry. The 
polymer industry maintains its position as the single largest consumer 
of petroleum chemical intermediates in the world. The finite supply of 
petroleum resources has resulted in extreme price pressures as 
worldwide demand continues to increase. Unfortunately, this feedstock 
normally generates non-biodegradable raw materials that are not carbon 
neutral, and therefore do not represent a sustainable alternative for 
economic development in the polymer industry. The theme of our work is 
to develop high performance and environmentally friendly technology 
utilizing agricultural 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, these successful efforts to utilize alternative 
agricultural products as an industrial feedstock continue to receive 
more and more attention but drastically less than these high tech 
innovations and 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 almost 
unlimited design potential 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 despite its enormous 
potential. The School of Polymers and High Performance Materials and 
the Mississippi Polymer Institute at USM 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 more than 40 
years ago, and have watched its evolution where almost each new product 
offered the opportunity for many more. Although polymer science as a 
discipline has experienced expansion and a degree of public acceptance, 
alternative agricultural materials in the polymer industry continue to 
be an underutilized national treasure. Today, society displays less 
acceptance of petroleum-derived materials than ever before, and 
consequently, the timing is ideal for agricultural materials to make 
significant inroads as environmentally-friendly, biodegradable, and 
renewable raw materials. Agricultural materials have always been 
available for our use, yet society for many reasons, continues to 
ignore their potential.
    U.S. agriculture has made the transition from the 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 previous testimonies but continues to ring 
true. We are making progress and must continue to aggressively pursue 
this opportunity by:
  --Intensify United States efforts to commercialize alternative crops 
        and dramatically reduce atmospheric VOC emissions and odor.
  --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 
        cannot be easily exported to other countries.
  --Maintain our innovative and developmental competitive edge over 
        other less environmentally-friendly countries and less 
        competitive economies.
    Mr. Chairman, your leadership and support are deeply appreciated by 
the entire USM 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 to pay 
dividends by way of increasing commercialization opportunities for 
agricultural materials in the 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 the cleaner and safer environment that these technologies offer, 
as well as new jobs, and expanded opportunities for the U.S. farmer. Of 
course, while working to achieve commercialization, we are committed to 
continue technology advancement, as will basic research on those topic 
areas where knowledge is required.
    Since our testimony last year, we have continued to research, 
develop, and trial larger scales for commercializing agricultural-based 
products. Indeed, the technology on a lab scale has matured, and 
marketing and sales must move parallel with continued research and 
commercial development of novel products. Thus, we are in need of 
additional resources to advance these infant technologies to the market 
place, and to continue our development of other exciting technologies. 
We therefore respectfully request $1.7 million in Federal funding to 
more fully exploit the potential of commercializing the technologies 
described herein. We have shown that we can be successful, yet we need 
additional resources in order to ultimately utilize the potential of 
this technology. Our efforts will be recognized as instrumental in 
developing a ``process'' for the commercialization of new ag-based 
products. The development of this process, and to show it is 
successful, is extremely important to all entrepreneurs who believe in 
and support 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.
    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.
Conservation Reserve Program
    The UMRBA supports President Bush's fiscal year 2006 budget request 
of $2.02 billion for the Conservation Reserve Program, a modest 
increase over fiscal year 2005. This increase is testament to the 
strong landowner interest and high environmental benefits resulting 
from enrollment of fragile cropland acres in CRP. Through CRP, farmers 
and ranchers can voluntarily establish long term conservation 
practices, such as filter strips and riparian buffers, on highly 
erodible and environmentally sensitive cropland.
    In Illinois, Iowa, Minnesota, Missouri, and Wisconsin, total CRP 
enrollment is currently 6.9 million acres, or approximately 20 percent 
of the national CRP acreage. Yet the five States' CRP enrollment 
represents 42 percent of the total number of CRP contracts and 40 
percent of the total number of farms enrolled nationwide in the CRP. In 
the most recent general sign-up (#29), producers with eligible lands 
competed nationally for acceptance into CRP, based on an environmental 
benefits index. In the five States of the Upper Mississippi River Basin 
(UMRB), 80 percent of the offers made were accepted for enrollment, 
adding over 200,000 acres to the CRP.
    All five States also have active Conservation Reserve Enhancement 
Programs tailored to meet their priority conservation needs. Current 
CREP enrollment in the UMRB States is approximately 240,000 acres, or 
38 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
    The President's fiscal year 2006 budget proposes $321 million for 
the Wetlands Reserve Program, nearly a 17 percent increase over fiscal 
year 2005 funding. UMRBA applauds this increase and urges Congress to 
provide sufficient funding to meet WRP's annual enrollment goal of 
250,000 acres.
    Since the WRP was established 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. Through fiscal year 2003, WRP enrollment in Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin totaled more than 271,000 acres, or 
18 percent of the national total. In fiscal year 2004, landowners in 
the five States enrolled an additional 38,000 acres in the WRP. 
However, there were eligible, but unfunded, applications to enroll 
another 136,000 acres from the five States in fiscal year 2004. This 
represents 25 percent of the total national backlog of applications for 
that year.
Environmental Quality Incentives Program
    In contrast to conservation programs that protect land and water 
resources by curtailing production on sensitive lands, the 
Environmental Quality Incentives Program supports conservation on 
working lands. Promoting agricultural production and environmental 
quality as compatible goals is particularly important in the Midwest 
agricultural heartland.
    The 2002 Farm Bill provides $1.2 billion of budget authority for 
the EQIP in fiscal year 2006. However, the President is proposing to 
fund EQIP at only $1.0 billion in fiscal year 2006. The UMRBA urges 
Congress to fund EQIP at its full authorized level. Like many other 
conservation programs, EQIP funding has not kept pace with demand. Even 
at full funding, there will likely be significant numbers of unfunded 
EQIP applications. In fiscal year 2004, the EQIP allocation to the 
States of Illinois, Iowa, Minnesota, Missouri, and Wisconsin totaled 
$111 million. Yet that amount still left a backlog of $180 million in 
unmet requests for EQIP assistance, 12 percent of the Nation's total 
unfunded EQIP applications. In fiscal year 2005, the EQIP allocation to 
the five basin States has increased to $121 million, still well below 
the need, as reflected in unfunded applications for the past 3 years.
Conservation Security Program
    The President's budget request of $274 million for the CSP reflects 
a 36 percent increase over fiscal year 2005 and is nearly 7 times what 
was spent in fiscal year 2004, when the program began. Yet it is 
unlikely that this will be sufficient to meet the demand for this 
popular voluntary program, which provides financial and technical 
assistance to agricultural producers who implement conservation 
measures on working lands.
    In fiscal year 2004, CSP contracts were limited to farmers and 
ranchers in 18 priority watersheds across the country. Five of those 
watersheds were in the five States of the Upper Mississippi River 
Basin. In those five watersheds, NRCS approved contracts totaling $15.5 
million, which was 44 percent of the total CSP contract payments that 
year.
    It is too early to judge what effect the fiscal year 2005 CSP 
funding cap of $202 million will have. The fiscal year 2005 sign-up 
opened March 28, 2005 and is scheduled to close May 27, 2005. In 
contrast to fiscal year 2004, when only 18 watersheds were eligible, in 
fiscal year 2005, 220 watersheds are eligible. Thus, while CSP funding 
increased 5-fold in fiscal year 2005, the number of eligible watersheds 
has increased more than 12-fold and the number of eligible farms has 
increased 8-fold. Of the 220 eligible watersheds nationwide, 22 are in 
the five States of Illinois, Iowa, Minnesota, Missouri, and Wisconsin. 
Those 22 watersheds include over 19 percent of the total number of 
farms that will be eligible for CSP in fiscal year 2005. It remains to 
be seen what the ultimate level of landowner interest will be in the 
CSP, as the number of eligible watersheds grows. But the UMRBA is 
encouraged that CSP is continuing to expand and funding levels are 
increasing.
Conservation Technical Assistance
    Through the Conservation Technical Assistance program, NRCS 
provides the technical capability that helps people plan and apply 
conservation on the land. NRCS works through and in partnership with 
conservation districts to assist individuals and groups in assessing 
conservation needs and planning, designing, and installing conservation 
practices. In addition, the CTA program assists in preparing landowners 
to participate in USDA conservation financial assistance and easement 
programs, provides emergency disaster technical assistance, and enables 
NRCS to coordinate with other programs such as U.S. EPA's nonpoint 
source management program and U.S. Fish and Wildlife Service's Partners 
for Wildlife.
    Given that CTA is the foundation for much of the Nation's private 
lands conservation assistance, it is disappointing that the President's 
fiscal year 2006 budget proposes a $61 million, or 8 percent, decrease 
in the CTA account. The UMRBA urges that, at a minimum, funding for CTA 
be maintained at the fiscal year 2005 level.
Watershed Programs
    The UMRBA is deeply concerned that the President is proposing deep 
cuts to NRCS's watershed programs, including total elimination of the 
Watershed and Flood Prevention Operations program, which funds Public 
Law 566 and Public Law 534 projects. Funding for Watershed Operations 
has declined substantially over the past 20 years, from an historical 
high of $199 million in fiscal year 1994 to only $75 million in fiscal 
year 2005. And yet this program provides significant local, regional, 
and national benefits, by addressing watershed protection, flood 
prevention, erosion and sediment control, water supply, water quality, 
water conservation, agricultural drought problems, rural development, 
municipal and industrial water needs, upstream flood damages, fish and 
wildlife habitat enhancement, and wetland creation and restoration. In 
fiscal year 2004 there were $191 million in Public Law 566 and Public 
Law 534 projects ready for construction, and a total project backlog 
estimated at $1.56 billion. Nearly $230 million of that backlog was in 
the States of Illinois, Iowa, Minnesota, Missouri, and Wisconsin. 
Despite the fact that Public Law 566 and Public Law 534 projects in the 
five States were allocated over 22 percent of the total national 
funding in fiscal year 2004, that amount ($17.9 million) was far less 
than the $230 million backlog. Rather than eliminating this important 
program, UMRBA urges that it be funded at least equal to the fiscal 
year 2005 level of $75 million.
    In addition to continuing to invest in watershed and flood 
prevention projects, the rehabilitation of aging flood control dams 
must also be addressed. Of the 11,000 Public Law 534 and Public Law 566 
dams nationwide, more than 3,000 will reach the end of their design 
life by 2013. Recognizing this fact, Congress authorized the Watershed 
Rehabilitation Program in 2000 and authorized significant new funding 
for the program in the 2002 Farm Bill. In particular, $60 million is 
authorized for the Watershed Rehabilitation Program in fiscal year 
2006. Yet the President's fiscal year 2006 budget request is only $15 
million, a 44 percent decrease over the fiscal year 2005 funding level. 
In fiscal year 2005, $27.3 million was appropriated for the Watershed 
Rehabilitation Program, only 60 percent of the $46 million of project 
requests that year. Rehabilitation of aging dams, which could become a 
threat to public health and safety, is extremely important and UMRBA 
thus urges Congress to fund the Watershed Rehabilitation Program at 
least equal to its fiscal year 2005 level.
    Also of concern is the Watershed Surveys and Planning account which 
is slated to be cut in the President's fiscal year 2006 budget. The 
fiscal year 2006 request of $5.1 million for Watershed Surveys and 
Planning compares with pending projects totaling $18.8 million in 
fiscal year 2004. UMRBA thus urges Congress to provide funding at least 
equal to the fiscal year 2005 level for this important watershed 
program.
                                 ______
                                 

  Prepared Statement of the Western Coalition of Arid States (WESTCAS)

    The Western Coalition of Arid States (WESTCAS) is submitting this 
testimony to the United States Senate Appropriations Committee, 
Agriculture, Rural Development and Related Agencies Subcommittee 
regarding the U.S. Department of Agriculture's fiscal year 2006 Federal 
budget. The USDA's budget is of particular concern for our members 
because of the tie-in to water use in irrigation that consumes a large 
percentage of available water resources in many of our member States.
    WESTCAS is an organization created in 1992 with coalition 
membership of approximately 125 water and wastewater districts, cities 
and towns, and professional associates focused on water quality issues 
in many western States.
    Most of the water and wastewater related funding in the USDA's 
budget is found in the Natural Resources Conservation Service (NRCS) 
budget. Some programs received slight increases for fiscal year 2006, 
in particular the Ground and Surface Water Conservation program, and we 
support these increases. However, most programs' budgets have been cut 
and WESTCAS advocates restoring these cuts to at least fiscal year 2005 
enacted levels. These programs include:
  --Environmental Quality Incentives Program (EQIP), which provides 
        funding for ``innovative approaches to leveraging Federal 
        investment in environmental enhancement and protection in 
        conjunction with agricultural production'';
  --Watershed and Flood Prevention Program which had funding eliminated 
        entirely for three of its programs;
  --Watershed Surveys and Planning's budget, which has been decreased 
        each of the last 2 years;
  --Conservation Technical Assistance program;
  --Watershed Rehabilitation Program which provides funding for dam 
        safety; and
  --technical assistance budget for Resource Conservation and 
        Development, which was reduced by 50 percent.
    WESTCAS feels that other water-related program cuts also need close 
review since it appears that the President's USDA budget took the 
biggest cut of all Federal budgets this year. For example, the 
Agriculture Research Service funding for the Environmental Stewardship 
program was reduced from $219 million to $178 million. And the 
Cooperative State Research, Education and Extension Service's Water 
Quality research and education budget line item was completely 
eliminated.
    WESTCAS believes that budget cuts regarding these types of 
programs, which affect a scarce natural resource so vital to continued 
growth and prosperity in the West, are not warranted, and we urge the 
Committee to restore these programs' funding levels.
    The Colorado River Basin Salinity Control Program, as set forth in 
the Colorado River Basin Salinity Control Act, is another program under 
EQIP that is supported by WESTCAS. The Colorado River Basin Salinity 
Control Act provides that the seven Colorado River Basin States will 
cost share on Federal funds received for salinity control efforts for 
the river. Over the past few years, the NRCS has designated that about 
2.5 percent of the EQIP funds be allocated to the Colorado River 
Salinity Control Program. WESTCAS supports continued designation of 2.5 
percent of EQIP dollars to be dedicated to the Salinity Control Program 
for the Colorado River.
    We thank you for the opportunity to provide this statement for the 
hearing record.
                                 ______
                                 

               Prepared Statement of The Wildlife Society

    The Wildlife Society appreciates the opportunity to submit 
testimony concerning the fiscal year 2006 budgets for the Natural 
Resources Conservation Service (NRCS), Farm Service Agency (FSA), 
Animal Plant Health Inspection Service (APHIS), and Cooperative State 
Research, Education and Extension Services (CSREES). 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.
Natural Resources Conservation Service
    Wildlife Habitat Incentives Program (WHIP).--WHIP is a voluntary 
program that provides technical and financial support to farmers and 
ranchers to create high quality wildlife habitat. The Wildlife Society 
recommends funding WHIP at $85 million in 2006, the full amount 
authorized by the 2002 Farm Bill.
    Wetland Reserve Program (WRP).--WRP is a valuable program designed 
to assist farmers and ranchers protect and restore wetland habitat. The 
Wildlife Society appreciates the continued targeting of 200,000 acres 
annually for enrollment in WRP. However, we recognize that if the 
authorized level of 250,000 acres is not enrolled every year, then 
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 the President's goal of no-net-loss of wetlands. The 
Wildlife Society supports an enrollment target of 250,000 acres in 
fiscal year 2006.
Animal and Plant Heath Inspection Service
    Wildlife Services.--Wildlife Services (WS), a unit of APHIS, 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. Its activities are based on the principles of wildlife 
management and integrated damage management, and are carried out 
cooperatively with State fish and wildlife agencies.
    The Wildlife Society is concerned about the proposed $3.4 million 
decrease in funding for Methods Development for 2006. Many current 
wildlife control tools such as traps, snares, and wildlife toxicants 
are becoming less acceptable to the public and are being prohibited in 
many States as the result of public referenda. The only credible way to 
identify and perfect new methods is through research. However, WS 
funding is only adequate to cover maintenance and operating costs and 
no funding is being provided for the development of new innovative 
wildlife damage management methods. We strongly recommend that Congress 
restore the reductions of $3.413 million in this program category, and 
add an additional $1.5 million to provide for uncontrollable costs and 
to accelerate research in cormorant management and feral hog control. 
Further, we recommend Congress fully fund the trap standards and 
testing program at $0.5 million and to direct the Agency to allocate 
the $500,000 to fulfill international commitments to trap evaluation in 
full cooperation with State fish and wildlife agencies and the IAFWA.
    Veterinary Services.--The Wildlife Society commends APHIS-
Veterinary Services' cooperation and sincerely appreciates funding for 
State wildlife management agencies for CWD surveillance and management 
in free-ranging deer and elk. Additionally, we 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 surveillance and monitoring efforts conducted by all 50 
States during 2004 and 2005 would not have been possible without this 
cooperative funding. Additionally, knowledge of the presence and 
prevalence of CWD, as well as knowledge on the range of the disease, 
has been enhanced by this program. Without continued funding, States 
will be unable to maintain the level of CWD surveillance and monitoring 
necessary to track the disease. The National CWD Plan calls for 
additional efforts on management activities to prevent the spread of 
CWD in the United States. The Wildlife Society recommends increased CWD 
funding to a total of $30 million in fiscal year 2006, with $20 million 
designated for cooperative grants to the States for surveillance and 
management of CWD in free-ranging deer and elk.
Cooperative State Research, Education, and Extension Service
    Renewable Resources Extension Act.--RREA provides an expanded, 
comprehensive extension program for forest and rangeland renewable 
resources. 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 private landowners. The need for RREA 
educational programs is greater today than ever because of continuing 
fragmentation of ownership, urbanization, the diversity of landowners 
needing assistance and increasing societal concerns about land use and 
the impact on natural resources including soil, water, air, wildlife 
and other environmental factors. The Wildlife Society recommends that 
the Renewable Resources Extension Act be funded at $30 million as 
authorized in the 2002 Farm Bill.
    McIntire-Stennis.--The proposed budget for fiscal year 2006 
reflects a significant decrease in the McIntire-Stennis Cooperative 
Forestry formula funding program and reported elimination in the fiscal 
year 2007 budget process. These funds are essential to the future of 
resource management on non-industrial private forestlands as forest 
products are produced while conserving natural resources, including 
fish and wildlife. As societal pressures for forest products grows, 
private land forests will increasingly be needed to supplement supplies 
but trees suitable for harvest take decades to produce versus the 
single year in which crops such as corn and soybeans can be produced. 
In the absence of long-term and on-going research such as provided 
through McIntire-Stennis, the Nation could easily become ill-suited to 
meet future forest product needs. Replacement of McIntire-Stennis 
funding with competitive grants will leave long-term and stable forest 
research to chance. The Wildlife Society strongly believes that the 
reasons for continuing the McIntire-Stennis Cooperative Forestry 
program into the future are compelling and urges Congress to increase 
the fiscal year 2006 budget amount to $25 million, an amount more 
consistent with historic funding levels.
    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 supports funding of $240 million for National Research 
Initiative Competitive Grants.
    Thank you for considering the views of wildlife professionals. We 
look forward to working with you and your staff to ensure adequate 
funding for wildlife conservation.
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