    [Senate Hearing 110-613]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 110-613

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2009

    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                           ONE HUNDRED TENTH CONGRESS

                                 SECOND SESSION

                                       on

                                    S. 3289

     AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD
     AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL
             YEAR ENDING SEPTEMBER 30, 2009, AND FOR OTHER PURPOSES

                                   __________

                           Department of Agriculture
     Department of Health and Human Services: Food and Drug Administration
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

      Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                   index.html

                                   __________

                           U.S. GOVERNMENT PRINTING OFFICE

    41-239 PDF                       WASHINGTON : 2008

    For sale by the Superintendent of Documents, U.S. Government Printing
    Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
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                          COMMITTEE ON APPROPRIATIONS

                    ROBERT C. BYRD, West Virginia, Chairman
    DANIEL K. INOUYE, Hawaii             THAD COCHRAN, Mississippi
    PATRICK J. LEAHY, Vermont            TED STEVENS, Alaska
    TOM HARKIN, Iowa                     ARLEN SPECTER, Pennsylvania
    BARBARA A. MIKULSKI, Maryland        PETE V. DOMENICI, New Mexico
    HERB KOHL, Wisconsin                 CHRISTOPHER S. BOND, Missouri
    PATTY MURRAY, Washington             MITCH McCONNELL, Kentucky
    BYRON L. DORGAN, North Dakota        RICHARD C. SHELBY, Alabama
    DIANNE FEINSTEIN, California         JUDD GREGG, New Hampshire
    RICHARD J. DURBIN, Illinois          ROBERT F. BENNETT, Utah
    TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
    MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
    JACK REED, Rhode Island              SAM BROWNBACK, Kansas
    FRANK R. LAUTENBERG, New Jersey      WAYNE ALLARD, Colorado
    BEN NELSON, Nebraska                 LAMAR ALEXANDER, Tennessee

                        Charles Kieffer, Staff Director
                      Bruce Evans, Minority Staff Director
                                     ------

         Subcommittee on Agriculture, Rural Development, Food and Drug
                      Administration and Related Agencies

                         HERB KOHL, Wisconsin, Chairman
    TOM HARKIN, Iowa                     ROBERT F. BENNETT, Utah,
    BYRON L. DORGAN, North Dakota        THAD COCHRAN, Mississippi
    DIANNE FEINSTEIN, California         ARLEN SPECTER, Pennsylvania
    RICHARD J. DURBIN, Illinois          CHRISTOPHER S. BOND, Missouri
    TIM JOHNSON, South Dakota            MITCH McCONNELL, Kentucky
    BEN NELSON, Nebraska                 LARRY CRAIG, Idaho
    JACK REED, Rhode Island              SAM BROWNBACK, Kansas
    ROBERT C. BYRD, West Virginia
      (ex officio)

                               Professional Staff

                                 Galen Fountain
                            Jessica Arden Frederick
                                 Dianne Preece
                          Fitzhugh Elder IV (Minority)
                            Stacy McBride (Minority)
                            Graham Harper (Minority)
                             Brad Fuller (Minority)

                             Administrative Support

                                 Renan Snowden

                                C O N T E N T S

                                  ----------

                             Tuesday, April 8, 2008

                                                                       Page
    Department of Agriculture: Office of the Secretary...............     1

                            Tuesday, April 15, 2008

    Department of Health and Human Services: Food and Drug
      Administration.................................................    99
    Nondepartmental Witnesses........................................   171

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2009

                                  ----------

                             TUESDAY, APRIL 8, 2008

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:06 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Herb Kohl (chairman) presiding.
        Present: Senators Kohl, Reed, Bennett, Cochran, Specter,
    and Craig.

                           DEPARTMENT OF AGRICULTURE

                            Office of the Secretary

    STATEMENT OF HON. ED SCHAFER, SECRETARY
    ACCOMPANIED BY:
            CHUCK CONNER, DEPUTY SECRETARY
            DR. JOSEPH GLAUBER, CHIEF ECONOMIST
            SCOTT STEELE, BUDGET OFFICER

                     opening statement of senator herb kohl

        Senator Kohl. Hello and welcome to one and all. Today we
    begin hearings for the fiscal year 2009 budget. We have before
    us Secretary Schafer and other distinguished guests from the
    Department of Agriculture. As you know, this is our first
    budget hearing for the year.
        Secretary Schafer, Dr. Glauber, and Mr. Steele, we want to
    welcome you before our panel. It is good to have you here
    today. I would also like to note that Dr. Glauber did receive
    his Ph.D. from the University of Wisconsin, which makes you a
    very smart man and a very intelligent man.
        Before we get started with you, that is.
        The President's budget includes fiscal year 2009
    discretionary spending levels of $17.3 billion for USDA, which
    is a decrease of over $400 million from last year. We have to
    assume that you were told to hold the line on spending, but
    however, this budget, notwithstanding that, as you know, does
    not have very many highlights to it.
        Although the WIC budget provides an increase of $80
    million, we are already hearing that up to an additional $750
    million could well be necessary and that number might go even
    higher.
        CSFP is eliminated yet again. Although we are hearing calls
    from all over to fix the food safety problems, this budget
    provides no funding for additional inspectors or inspections.
        Research is cut by over $250 million. Conservation is cut
    by over $140 million. Scores of rural development programs
    vital to America are simply abolished. Food aid requests remain
    stagnant, although the need is clearly growing, and a looming
    Farm Service Agency IT disaster is not addressed.
        As we move through the appropriations process, I pledge to
    you that we will maintain a constructive dialogue with USDA. We
    have many challenges this year, and I hope to work closely with
    the Department so we can produce a constructive and a
    responsible bill.
        I am going to turn to my very good friend and the ranking
    member, Senator Bennett, but first I want to thank publicly
    Senator Bennett and his staff for the helpful and bipartisan
    manner in which we have worked over the past few years. And I
    assume him and all members of the subcommittee that that very
    constructive working relationship will continue.
        So, Senator Bennett will now make an opening statement, and
    then we will turn to other members, if they arrive, for their
    opening statements. Following that, we will be pleased to hear
    from Secretary Schafer.
        Members will have 1 week to submit questions for the
    record, and we will act quickly on their questions.
        Now, Senator Bennett.

                     statement of senator robert f. bennett

        Senator Bennett. Thank you very much, Mr. Chairman, not
    only for your leadership, but for your kind words. We have
    worked together in a bipartisan fashion and I hope for the
    benefit of agriculture in the country.
        I want to welcome Secretary Schafer back to the
    subcommittee and those joining him, Deputy Secretary Conner and
    Chief Economist Glauber, and Budget Director Steele.
        Dr. Glauber, congratulations on your appointment. I enjoyed
    the analysis provided by your predecessor, Dr. Keith Collins,
    who retired earlier this year, and look forward to hearing from
    you and working with you.
        The atmosphere in which we find ourselves with respect to
    this budget hearing is that food prices are rising sharply
    throughout the whole world and causing unrest in certain
    places, not excluding our own country. Decades of nearly
    stagnant farm gate prices have led us to anticipate stable
    prices in the marketplace, but farmers are now enjoying record
    high commodity prices at the same time as costs for feed, fuel,
    and fertilizer are also reaching record highs.
        Biofuel production continues to grow. This year roughly a
    third of the U.S. corn crop will be used for biofuel
    production. And that, too, helps increase the price for
    farmers.
        But the other side of it, which may have serious problems
    for the rest of us, is that the cost of WIC, food stamps, and
    other feeding programs keeps going up. I am not sure these are
    issues that are easily resolved, and I hope we can talk a
    little bit about them this morning.
        Now, we have had food recalls and people have been
    concerned about the safety of their food supply. I appreciate
    your quick response to the humane slaughter violations in the
    Hallmark/Westland case, Mr. Secretary, but as a subcommittee,
    we will continue to fully and properly fund and monitor the
    activities in the area of food safety. We want to make sure the
    Department has all of the resources that it needs, but we
    recognize that everybody else, producers, processors,
    suppliers, importers, retailers, and so on, must work together
    in conjunction with the regulators to make sure that the
    consumers have no reason to question the safety of our food
    supply.
        Mr. Secretary, you are defending a budget you did not
    prepare by virtue of the timing of your entry into your present
    position, but you are accompanied by Deputy Secretary Conner
    who did help prepare this. So I am confident that between the
    two of you, you will be able to give us a full explanation of
    where we are and how we got there. And I look forward to
    hearing your thoughts.
        Thank you, Mr. Chairman.

                               prepared statement

        Senator Kohl. Thank you very much, Senator Bennett. And now
    we will hear from you, Mr. Secretary.
        The subcommittee has received a statement from Senator
    Johnson which will be placed in the record.
        [The statement follows:]

                   Prepared Statement of Senator Tim Johnson

        Thank you, Chairman Kohl and Ranking Member Bennett, for holding
    today's Agriculture, Rural Development, Food and Drug Administration,
    and Related Agencies subcommittee hearing to discuss the state of
    fiscal year 2009 appropriations for agriculture. Your leadership is
    invaluable and appreciated during this process. Thank you also,
    Secretary Schafer, Deputy Secretary Conner, Chief Economist Dr.
    Glauber, and Budget Officer Steele, for your time this morning. We
    appreciate your coming to the Hill to discuss appropriations for this
    next fiscal year for the United States Department of Agriculture.
        As members of the Senate Appropriations Committee, we have an
    obligation to ensure that our Federal programs function as both
    intended and promised in enacted legislation. Programs addressed by
    this subcommittee specifically should strive to ensure that our
    Nation's rural and agriculture communities remain intact, and that we
    provide opportunity in those regions that are struggling. I'm sure that
    many subcommittee members' home States are impacted by rural out-
    migration as significantly as mine is, and population loss is often
    irreversible. The Department of Rural Sociology at South Dakota State
    University released an analysis in 2006 that addressed population
    changes. The study's findings included an 8.0 percent gain in
    Southeastern Minnehaha County from 2000-2005, which includes Sioux
    Falls, the largest city in South Dakota. Minnehaha County's gain
    presents a stark contrast to rural Harding County, located in the
    Northwest corner of South Dakota, which experienced a 10 percent drop
    in population over that same time. Rural communities are impacted
    dramatically by the shortfalls or inadequacies of each fiscal year's
    budget proposals, and as a member of this subcommittee I will continue
    to fight to keep our rural communities vibrant.
        There are many areas in the President's proposed budget for fiscal
    year 2009 that are enormously concerning, and I do not believe that the
    administration's proposed budget can accomplish the intended goal of
    our Federal programs. I will work with my colleagues to make these
    areas whole, and I would like to touch on just a few of those programs
    today.
        The 2002 farm bill included an 80 percent increase in Federal
    dollars for conservation programs over previous measures. However, this
    administration's most recent suggestion for conservation funding
    includes a 20 percent reduction. In the wake of the Department of
    Agriculture's handling of the Conservation Reserve Program with
    expiring 2007-2010 contracts, which has discouraged participation in
    the program, this additional proposal is counterproductive for
    conservation efforts in South Dakota and nationally.
        The President's budget proposal includes eliminating the Resource,
    Conservation and Development (RC&D) program entirely. The President has
    clearly not been a fan of this program, proposing substantial
    reductions consistently for several years. The RC&D program encourages
    economic growth in rural areas that aren't privy to the economic
    stimulus of urban areas. For every $1 invested into this program by the
    Federal Government, the program generates an impressive $7.50 in
    return. I have worked to restore this program in the past, and I will
    continue to support full funding for this program.
        For the third year in a row, this administration has attempted to
    slash funding for the Commodity Supplemental Food Program (CSFP).
    Elimination of this program would cause nearly half a million low-
    income seniors and children to be cut off from nutritious commodities.
    In my home State, nearly 300,000 senior citizens rely on the nutritious
    meal boxes CSFP provides each month. The Bush administration proposes
    simply transferring CSFP recipients to the food stamp program. However,
    food stamp benefits alone are not sufficient to meet the dietary needs
    of most CSFP participants. I will again fight to reinstate funding for
    CSFP and ensure that this important program receives meaningful dollars
    to support their growing needs.
        I have heard from many South Dakotans who share in my concern for
    the President's proposed budget, and I appreciate the opportunity to
    share some of these concerns. I will continue to work for the strongest
    possible agriculture budget we can achieve in Congress, which is simply
    what America's farmers and ranchers deserve.

                       STATEMENT OF SECRETARY ED SCHAFER

        Secretary Schafer. Thank you, Mr. Chairman and ranking
    member. I am pleased to appear before the committee, and thank
    you for the opportunity to discuss our fiscal year 2009 budget
    for the Department of Agriculture.
        As was mentioned, I am joined at the table here by my
    esteemed colleagues who can provide the expertise and
    background to your questions.
        I am grateful that the President has provided me this
    opportunity to serve the people of the United States, and I
    will do my very best to promote, preserve, and enhance the
    mission of the United States Department of Agriculture.
        Before I discuss the 2009 budget, I would like to thank the
    committee for the opportunity to appear before you in late
    February to testify on the inhumane handling of cattle at the
    Hallmark/Westland Meat Packing Company. At that hearing, I
    described actions that we took immediately. Also, soon after
    learning of the situation, we asked the Office of Inspector
    General to immediately begin an investigation into the matter.
        Since that hearing, we have taken additional actions,
    including auditing 18 beef processing facilities that supply
    products to the Department's nutrition assistance programs,
    including the school lunch program. In addition, FSIS has
    directed inspectors to increase the amount of time spent on
    humane handling surveillance.
        I have been concerned that some Members of Congress and
    some of the media have mischaracterized this recall as a food
    safety issue. I again want to assure our citizens that this
    class II recall does not pose an imminent threat to our food
    supply.
        As we learn more from the ongoing investigations, we look
    forward to keeping the committee well informed.
        Now I would like to discuss the USDA and our 2009 budget.
    As I mentioned earlier, I am very pleased to have been given
    the opportunity to lead this great Department at a time in
    history when the agriculture economy has never been stronger.
    Market prices are at or near record levels for virtually all of
    our major crops and net cash income for 2007 will exceed $87
    billion, which is up almost $20 billion from last year.
        I look forward to working with you, Mr. Chairman, as well
    as your other members, during the 2009 budget process to ensure
    that we have the resources needed to continue making a positive
    impact on the economic well-being, safety, and health of all
    Americans.
        Let me start by saying we are proud that USDA's 2009 budget
    advances the President's goal of achieving a balanced Federal
    budget by 2012, also while encouraging our economic growth and
    enhancing our security.
        As was noted, I am new to the Federal budget process, but I
    have faced many challenges in developing budgets at a State
    level. As a Governor for 8 years, I was required to make tough
    decisions to balance our State budget as required by law. Today
    at the Federal level, we face similar challenges to keep
    spending under control and meet the President's deficit
    reduction goals.
        The USDA's total budget authority request pending before
    this committee proposes an increase from $88 billion in 2008 to
    $93 billion in 2009, while the discretionary appropriation
    request is $17.4 billion. That is a decrease of approximately
    $400 million from the 2008 enacted level.
        The budget before you proposes to terminate $1 billion in
    lower-priority activities, earmarks, and programs that
    duplicate other activities. I would like to point out that even
    within this tight overall budget framework, we request that
    additional funds be allocated to food safety, nutrition, and
    high-priority bioenergy research.
        The budget requests nearly $1 billion in appropriated funds
    for the Food Safety and Inspection Service, a record level of
    funding. This funding will ensure that the demand for
    inspection is met, and we will build on our success in
    improving the safety of our food supply. We will continue to
    pursue the development and implementation of inspection systems
    that are better grounded in science and that can increase the
    speed in which we detect and respond to outbreaks of food-borne
    illnesses.
        The budget supports increased participation and food costs
    for the Department's three major nutrition assistance programs:
    food stamps, WIC, and child nutrition. I would like to mention,
    Mr. Chairman, that we are monitoring the WIC situation very
    carefully, both food costs and participation levels, and I know
    that you have been as well. We will keep the committee informed
    of the trends and work with you to ensure that this important
    program is appropriately funded.
        The budget includes additional funding for bioenergy
    research aimed at increasing the efficiency of converting
    cellulose to biofuels. Under the National Research Initiative,
    USDA will support efforts to develop and enhance feedstock
    sources and biocatalysts for cellulosic conversion.
        The Agricultural Research Service will focus on developing
    sustainable, efficient production of energy from a variety of
    agriculture products and from enabling on-farm processing for
    cellulosic feedstocks.
        The budget also provides support to ensure that critical
    program delivery systems are maintained so the infrastructure
    is in place that we can build upon to meet the demands of
    implementing a new farm bill and addressing other needs in
    rural America.
        The budget proposes the funding needed to increase the
    enrollment of our conservation programs to record levels of
    acres. These programs are essential to protecting and
    preserving our land, our water, and our air resources for
    future generations.
        The budget provides $15 billion for rural development. This
    level of support maintains USDA's role in financing rural home
    ownership, rural utilities, and business and industry. It also
    includes $1 billion to protect the rents of low-income rural
    residents.
        Within this program level, we are proposing to shift the
    emphasis from grants to loans and from direct loans to loan
    guarantees. These shifts permit us to continue to address the
    priorities but at a lower cost to the taxpayer.
        All Americans and particularly our farmers and ranchers
    know the importance of a healthy economy. It creates jobs and
    it boosts incomes. Keeping America's agriculture strong means
    we must continue to build on our recent successes in trade. We
    are forecasting record agriculture exports of $101 billion in
    2008, an increase of over $19 billion from 2007. And as you
    know, agriculture is the sector of the economy that provides a
    positive trade balance.
        USDA has worked aggressively to open new markets for
    America's farmers and ranchers, and those efforts are showing
    results. Progress was made in our efforts when the President
    signed the trade promotion agreement with Peru last December.
        Congress can continue to help create jobs and economic
    opportunity by passing the Free Trade Agreements with Colombia,
    Panama, and South Korea. As you know, the President yesterday
    sent up the signed Colombia FTA for ratification, and we urge
    Members of Congress to vote for American agriculture and pass
    this legislation.
        We also need to secure a new farm bill. More than a year
    ago, the administration announced a comprehensive set of farm
    bill proposals for strengthening the farm economy in rural
    America. These proposals represent a reform-minded, fiscally
    responsible approach to supporting America's farmers and
    ranchers and our rural communities.
        Because of that, we are still working with Congress to
    shape the farm bill, but as of today, we do not have new
    legislation in place. The President's 2009 budget for USDA is
    based on the provisions of the 2002 farm bill and reflects the
    administration's proposals for change. We expect, however, some
    changes will be made to the budget estimates when the new farm
    bill is finally passed. I am still confident that that will
    happen.

                              PREPARED STATEMENTS

        In closing, I would like to emphasize that this budget
    provides the critical resources we need to keep our agriculture
    economy strong, and it is in keeping with the President's
    policy of funding the highest priorities while restraining
    spending.
        I look forward to working with the members of the staff and
    the committee. We will now be pleased to take your questions.
        [The statements follow:]

                        Prepared Statement of Ed Schafer

        Mr. Chairman and distinguished members of this committee, I am
    pleased to appear before you to discuss the fiscal year 2009 budget for
    the Department of Agriculture (USDA).
        I am joined today by Deputy Secretary Chuck Conner, Scott Steele,
    our Budget Officer; and Joseph Glauber, our Chief Economist.
        Before I begin to discuss the fiscal year 2009 budget, I would like
    to provide you an update to my February 28 appearance before this
    committee to testify about the inhumane treatment of cattle at the
    Hallmark/Westland Meat Packing Company in California. As you know, on
    January 30 when the Humane Society of the United States released the
    video from this facility, I asked the USDA Office of Inspector General
    to immediately begin an investigation into the matter. Since that time,
    USDA's Food Safety and Inspection Service (FSIS) has implemented a
    series of interim actions to verify and thoroughly analyze humane
    handling activities in federally inspected establishments. FSIS has
    also audited all 18 beef slaughter plants that supply beef to the
    Federal nutrition assistance programs. I have been concerned that some
    Members of Congress and some of media have mistakenly characterized
    this recall as a food safety issue. I again want to assure our citizens
    that this class II recall does not pose any eminent threat to our food
    supply. Therefore, once this review has concluded, we will have
    additional information that, along with the results of the additional
    verification activities and audits, will determine the actions for FSIS
    oversight, inspection and enforcement that may be required. We will
    continue to keep the committee informed of all developments and will
    report back to the committee on our actions.
        As I previously mentioned, it is a pleasure to come back before
    this committee today, this time to discuss the President's 2009 budget
    request for the Department of Agriculture. I come from an agriculture
    State and understand the important role the Department plays in the
    lives of many Americans. I look forward to working with you, Mr.
    Chairman, as well as the other members, during the 2009 budget process
    to ensure that we have strong programs that serve not only U.S.
    agriculture, but a broad spectrum of rural residents and consumers. By
    continuing the effective cooperation between this committee and the
    Department, we can build a stronger America.
        After reviewing the record, I am proud to report that the
    Department has made significant progress in achieving its goals to
    improve the rural economy, strengthen U.S. agriculture, protect
    America's natural resources, and improve nutrition and health.
    Specifically, I would like to note:
      --Under President Bush's economic policy, rural America and U.S.
            agriculture has prospered.
      --Renewable energy production continues to grow and is contributing
            to the energy security of the United States as well as
            improving the farm economy.
      --U.S. agricultural exports were at a record level of $82 billion in
            2007, the fourth record year in a row, and are now projected to
            set another record of $101 billion during 2008. This would be
            an unprecedented increase of $32 billion in just the last two
            years.
      --USDA continues to pursue the President's trade agenda that will
            create new market opportunities overseas and ensure the United
            States remains a leader in a rules-based global trading system.
            In this regard, we are continuing our efforts to achieve a
            successful conclusion to the Doha Round of multilateral trade
            negotiations--one that will provide fundamental reform of
            agricultural trading practices and spur economic growth and
            development.
      --In the future, as in the past, our long-term economic growth will
            be enhanced by supporting international trade, by opening world
            markets to U.S. goods and services and by keeping our markets
            open. Progress was made in our efforts to remove trade barriers
            and ensure a level playing field for U.S. farmers and ranchers
            when the President signed the Trade Promotion Agreement with
            Peru last December. Congress can continue to help increase jobs
            and economic opportunity by passing the pending Free Trade
            Agreements with Colombia, Panama and South Korea.
      --The Department continued its efforts to regain our beef export
            markets. We have reopened or maintained the markets in over 40
            countries that closed or threatened to close their borders to
            U.S. beef products after the first detection of BSE. Recently,
            Peru, Colombia, Panama, the Philippines, Indonesia, and
            Barbados have removed their remaining restrictions for beef and
            beef products in accordance with international guidelines.
      --In December 2007, the Department made the first major revision of
            the Special Supplemental Nutrition Program for Women, Infants,
            and Children (WIC) food package in nearly 30 years. The changes
            take into account an improved understanding of nutritional
            requirements as well as the changing profile of supplemental
            nutrition needs of WIC's diverse population.
      --Actions were taken to improve the safety of meat, poultry, and egg
            products, by identifying contamination earlier and reducing the
            exposure to foodborne pathogens.
      --The 2006 supplemental funding provided the resources for USDA to
            work with domestic partnerships to prepare for a potential
            influenza pandemic. Through these efforts, we have played a
            leadership role in the worldwide effort to stop the spread of
            the H5N1 virus overseas and have increased our preparedness to
            deal with an outbreak should one occur.
        In 2007, the administration announced a comprehensive set of farm
    bill proposals for strengthening the farm economy and rural America. We
    are continuing to work with the Congress to formulate a new farm bill.
    The enactment of the new farm bill may affect some of the 2009 budget
    estimates depending on specific provisions.
    2009 Budget
        Although I did not participate in the development of the 2009
    budget, Deputy Secretary Conner conducted an in-depth review of USDA's
    budget and program performance in order to develop a budget that meets
    the administration's 2009 budget targets and contributes to the
    President's policy of reducing the deficit and balancing the Federal
    budget by 2012. Tough choices had to be made to keep spending under
    control and achieve the President's deficit reduction goals. Therefore,
    this budget funds the Department's highest priorities, while reducing
    or terminating duplicative or lower priority programs, including
    earmarks. I believe this is a responsible budget that funds critical
    programs and priorities and focuses efforts on programs that work and
    achieve results. Key priorities in the budget include:
      --Reducing trade barriers and expanding overseas markets;
      --Increasing funding for bioenergy research in support of the
            President's goal for achieving energy independence;
      --Supporting policies that enhance job creation, improve rural
            infrastructure, and increase homeownership opportunities;
      --Ensuring Americans continue to enjoy a safe and wholesome food
            supply;
      --Protecting agriculture from diseases and pests;
      --Increasing funding for our major nutrition assistance programs;
      --Providing for a record number of acres in conservation programs;
            and
      --Carrying out high priority basic and applied sciences that provide
            the technology and information necessary for the development of
            innovative solutions facing American agriculture.
        The USDA's total budget authority request pending before this
    committee proposes an increase from $88 billion in 2008 to $93 billion
    in 2009, while the discretionary appropriation request is $17.4
    billion, a decrease of approximately $400 million below the 2008
    enacted level. The discretionary appropriation request is based on the
    2008 enacted level.
        I would now like to focus on some specific program highlights.
    Food and Agriculture Defense Initiative
        USDA continues its vigilance in ensuring the safety of our food and
    agriculture system. The Department is a strong partner in the
    administration's efforts to prepare for any potential bioterrorist
    attack. We are working to ensure an appropriate government response to
    a wide array of threats.
        To protect American agriculture and the food supply from
    intentional terrorist threats and unintentional pest and disease
    introductions, the budget proposes $277 million for USDA's part of the
    President's Food and Agriculture Defense Initiative. Funding for on-
    going programs is $264 million, an increase of $81 million from the
    2008 level. Of the total amount for on-going programs, an increase of
    about $14 million for Food Defense would enhance research to safeguard
    the Nation's food supply from foodborne pathogens and pathogens of
    biosecurity concern. For Agriculture Defense, the budget includes an
    increase of about $20 million for research to improve animal vaccines
    and diagnostic tests. An additional $47 million would be used to
    improve USDA's ability to safeguard the agricultural sector through
    enhanced monitoring and surveillance of pest and disease threats,
    improve animal identification, strengthen response capabilities, and
    other efforts, such as an expansion of the National Veterinary
    Stockpile.
        In order to keep USDA in the forefront of avian disease research,
    the budget requests $13 million to proceed with the design and planning
    of the Biocontainment Laboratory and Consolidated Poultry Research
    Facility in Athens, Georgia. This facility is critically needed to
    conduct research on exotic and emerging avian diseases that could have
    devastating effects on animal and human health.
    Food Safety
        One of the Department's top priorities is to ensure the safety of
    our food supply. The 2009 budget requests record funding of nearly $952
    million, an increase of about $22 million over 2008, for FSIS to
    protect the Nation's supply of meat, poultry and egg products. About 80
    percent of the FSIS funding goes for staff pay for Federal and State
    inspection programs to meet the demand for inspection services. With
    this funding, in addition to providing necessary food inspection, FSIS
    will continue to develop the food safety infrastructure to ensure that
    inspections systems are better grounded in science and inspector
    observations and data are captured and used in a timely manner. The
    objective is to reduce the risk of foodborne pathogens in meat, poultry
    and processed eggs and consequent infection.
        The budget estimates that $140 million in existing user fees for
    voluntary inspection will be collected. We will submit authorizing
    legislation to Congress to expand these collections, adding another $96
    million in new user fees. These fees will be used to offset needs in
    2010, so they have no direct effect on 2009. The proposed legislation
    will authorize a licensing fee projected to collect $92 million from
    meat, poultry, and egg products establishments based on their volume.
    An additional $4 million would be collected from establishments that
    require additional inspection activities for performance failures such
    as retesting, recalls, or inspection activities linked to an outbreak.
    Farm Program Administration and Agriculture Credit Programs
        The budget requests $1.5 billion for the Farm Service Agency to
    deliver farm programs. This level of funding will support approximately
    the same number of staff years as in 2008. The budget includes funding
    to support on-going operational needs based on current programs and the
    current delivery system.
        USDA's farm credit programs provide an important safety net for
    farmers by providing a source of credit when they are temporarily
    unable to obtain credit from commercial sources. The 2009 budget
    supports about $3.4 billion in direct and guaranteed farm loans. The
    2009 budget proposes loan levels that generally reflect actual usage in
    recent years.
    Crop Insurance
        Crop insurance is designed to be the primary Federal risk
    management tool for farmers and ranchers. In 2009, crop insurance is
    expected to provide coverage for nearly $72 billion in risk protection,
    more than double the amount of coverage provided as recently as 2000.
    This growth has been accomplished, in part, through the development of
    new and innovative plans of insurance. These innovations have expanded
    coverage to new crops or improved the coverage available under existing
    policies.
        Over the years, Congress has challenged USDA to expand the
    availability of crop insurance to under-served commodities, in
    particular, to livestock and pasture, rangeland, and forage. Our
    Department is meeting that challenge. Currently, the crop insurance
    program offers revenue protection for swine, fed cattle, feeder cattle
    and lamb. In 2007, the crop insurance program began offering two
    innovative pilot programs covering pasture, rangeland, and forage. The
    programs proved to be highly popular with farmers and ranchers and, in
    2008, the pilot area is being expanded to provide additional
    information on program performance.
        For 2009, the budget re-proposes legislation to initiate a small
    participation fee in the Federal crop insurance program to fund
    modernization and maintenance of a new information technology (IT)
    system. Modernization of the IT system would improve program efficiency
    and provide the capacity needed to keep pace with the ever expanding
    workload for developing new crop insurance products. The fee would
    generate about $15 million annually, which would initially supplement
    the annual appropriation to modernize the IT system. However, in future
    years, the fee would replace appropriated funding for IT maintenance.
    Based on current program indicators, we estimate that the fee would
    amount to about one-quarter cent per dollar of premium sold. In
    addition, the budget proposes to expand on language included in the
    2008 Appropriations Act by including IT modernization as an authorized
    purpose for mandatory funding already provided under the Federal Crop
    Insurance Act. Either approach could be implemented without increasing
    the Federal budget deficit.
    International Programs
        Expanding access to overseas markets and securing a level playing
    field are critical for the continued prosperity of America's farmers
    and ranchers. Future growth in demand for our agricultural products is
    primarily going to occur overseas, particularly in developing countries
    which are experiencing rapid economic growth and rising incomes. We
    must, therefore, ensure that our producers and exporters have the tools
    they need to be competitive in a rapidly expanding global marketplace.
        Our 2009 budget proposals support our continued commitment to
    opening new markets and expanding trade. Increased funding is provided
    for the Foreign Agricultural Service (FAS) to maintain its overseas
    office presence and continue its representation and advocacy activities
    on behalf of American agriculture.
        For the foreign food assistance programs, the budget continues to
    place the highest priority on meeting emergency and economic
    development needs of developing countries. The 2009 request for
    appropriated funding for the McGovern-Dole International Food for
    Education and Child Nutrition Program is $100 million. This level will
    allow USDA to extend school feeding and educational benefits to about 2
    million women and children during 2009. The program is helping children
    in countries with severe educational and nutritional needs. In recent
    years, more than 15 million children throughout the world have received
    benefits from the McGovern-Dole program and its predecessor, the Global
    Food for Education Initiative.
        The budget requests appropriated funding of $1.2 billion for the
    Public Law 480 Title II program, which provides emergency relief needs
    and addresses the underlying causes of food insecurity through non-
    emergency programs. In addition, to help improve the timeliness,
    efficiency, and effectiveness of the U.S. Government's response to food
    needs overseas, increased flexibility is requested in the purchasing of
    Title II commodities. As the President said in his State of the Union
    message, this flexibility is important to help break the cycle of
    famine. In countries like Bangladesh, this authority would have allowed
    us to provide more assistance, quicker, to those affected by the
    cyclone several months ago.
        The budget requests funding of $12.5 million in the Office of the
    Secretary to support the Department's efforts to assist in agricultural
    reconstruction activities in Afghanistan and Iraq. USDA is providing
    technical advisors assigned to the Ministry of Agriculture in Iraq, who
    are assisting in agricultural economics and planning, soil and water
    policy, extension, and food safety and animal inspection. This
    collaboration supported the development of the first national strategic
    plan for agriculture under the new government. Other USDA agricultural
    advisors are serving on the Provincial Reconstruction Teams (PRTs)
    working in the rural provinces of Afghanistan and Iraq on activities
    such as soil and water conservation, irrigation and water management,
    grain and seed storage, post-harvest loss reduction, marketing system
    improvements, and livestock health, nutrition, and breeding. These
    advisors are providing much needed assistance in addressing a wide
    range of problems brought on by years in some cases decades, of neglect
    and mismanagement in the agricultural sectors of these two countries.
    Additional funding will be needed for USDA to continue to be a key
    player in these areas.
    Conservation
        USDA fosters environmental stewardship through conservation
    programs supported with appropriated and mandatory CCC funding. Since
    2001, USDA has provided assistance to farmers and ranchers resulting in
    conservation on more than 130 million acres of land.
        The 2009 budget reflects a strong commitment to conservation and
    includes nearly $4.6 billion in mandatory funding. Of this amount, $775
    million is needed to support the Administration's Farm Bill proposals.
    This funding will be allocated among the various conservation programs
    described below when new program levels are established by the Farm
    Bill.
        Within the total amount of mandatory funds, the budget proposes
    $181 million for the Wetlands Reserve Program (WRP). The projected WRP
    enrollment for 2009 is approximately 100,000 acres, and will bring the
    total acreage enrolled in the program to 2,275,000 acres, the maximum
    level authorized by the 2002 Farm Bill. The WRP is the principal
    support program of the President's goal to restore, protect, and
    enhance 3 million acres of wetlands by 2009. The Administration's Farm
    Bill proposals for WRP would provide the funding necessary to achieve
    an annual enrollment goal of 250,000 acres.
        The Conservation Reserve Program (CRP) accounts for more than half
    of the mandatory funds with total funding of just under $2 billion.
    Enrollment in CRP is expected to decline by about 2 percent to 34.2
    million acres in 2009 due to expiring contracts and the conversion of
    farmable land to crop production. In addition, funding for the
    Environmental Quality Incentives Program (EQIP) will increase by $50
    million to just over $1 billion to protect 17.5 million acres in 2009.
        The budget includes $360 million for the Conservation Security
    Program (CSP). This level of funding is expected to support almost
    25,400 contracts signed in prior years, which cover 20.4 million acres.
    The Administration's Farm Bill proposals would increase funding for
    these programs to enroll and treat more acres. In addition, these
    proposals would reduce the complexity of conservation programs to
    encourage greater participation.
        The 2009 budget includes $801 million in discretionary funding for
    on-going conservation work. This level of funding supports programs
    that provide the highest quality technical assistance to farmers and
    ranchers and address the most serious natural resource concerns. The
    budget includes savings of $136 million from the elimination of funding
    for earmarked projects, duplicative programs, and programs that do not
    represent a core responsibility of the Federal Government. No funding
    is proposed for the Resource Conservation and Development Program and
    the Watershed and Flood Prevention Operations Program.
    Rural Development
        USDA's Rural Development (RD) programs support the quality of life
    and economic opportunities in rural America by providing financial
    support for housing, water and waste disposal and other essential
    community facilities, electric and telecommunication facilities,
    broadband access, and business and industry. This support includes
    direct loans and grants and guarantees of loans made by private
    lenders.
        The 2009 budget supports a program level of $14.9 billion for the
    RD programs. This level is similar to the level requested in the 2008
    President's budget, but is about $3.6 billion less than the amount
    appropriated for 2008. The difference is due primarily to a reduction
    in electric utility loans and the elimination of direct loans in favor
    of loan guarantees for single family housing. The budget supports
    shifting resources to address the highest priority programs.
        The 2009 budget includes almost $1 billion for rental and voucher
    assistance to protect the rents of 230,000 low-income households. This
    is $518 million more than the amount appropriated for 2008. Of this
    amount, $100 million is for vouchers that will promote choice by
    providing the rental subsidy directly to the low-income tenant. Within
    the last few years, the period to renew expiring rental assistance
    contracts has been reduced from 5 years to 1 year. This action provided
    initial budget savings but increased the number of expiring contracts
    and, hence, the funding needed for renewing these contracts in 2009 and
    beyond.
        With regard to single-family housing, the 2009 budget reflects a
    shift from direct to guaranteed loans as proposed for 2008. This shift
    would reduce the cost of providing homeownership opportunities in rural
    America in a manner than is consistent with the administration of other
    Federal housing programs and sustainable as a long-term policy.
    Guaranteed loans have accounted for almost all the growth in USDA's
    single-family housing program since the mid-1990's and have proven to
    be effective in reaching low-income as well as moderate income
    households. The 2009 budget includes $4.8 billion for such guaranteed
    loans, an increase of $658 million and an amount estimated to provide
    about 43,000 homeownership opportunities in rural America.
        For the water and waste disposal program, the 2009 budget supports
    $1.3 billion in direct loans, $75 million in guaranteed loans and $220
    million in grants, for a total program level of $1.6 billion, which is
    a slight increase over the program level for 2008. The 2009 budget does
    not repeat the 2008 budget proposal to change the interest rate
    structure for direct loans, but it does reflect a sizeable shift from
    grants to direct loans. This shift achieves substantial budget savings
    while maintaining a high level of financial assistance that most rural
    communities can afford to repay at low interest rates.
        For the electric program, the 2009 budget supports $4.1 billion in
    direct loans for distribution, transmission, and power generation
    improvements. This level is expected to meet the demand for these
    categories of loans. Funding for baseload generation loans will be
    determined contingent upon enactment of legislation to authorize a fee
    to cover all subsidy costs. It is the administration's policy that the
    Department of Energy be the sole source of financial support for
    nuclear power generation facilities.
        The 2009 budget supports almost $300 million in broadband access
    loans. We believe this amount will provide sufficient resources to
    serve creditworthy applicants. It is anticipated that new program
    regulations for the broadband program will be in place for 2009 to
    ensure proper administration of the program and that more assistance
    will be directed to areas without existing providers. The budget also
    proposes $20 million in distance learning and medical link grants.
        Based on recent trends in applications and the potential
    availability of carryover, the 2009 funding level for Business and
    Industry guaranteed loans is $700 million. In addition, the budget
    supports almost $33 million in zero-interest direct loans for
    intermediary relending.
    Research
        Research to improve the quality and productivity of America's food
    production and distribution system has contributed to the strength of
    American agriculture. By improving the competitiveness of agricultural
    research, we will continue to post gains in agricultural efficiency and
    production. The administration strongly believes that merit-based,
    peer-reviewed grants represent the best mechanism for providing the
    highest quality research. In support of this approach, the 2009 budget
    for the Cooperative State Research, Education and Extension Service
    (CSREES) includes a $19 million increase for the National Research
    Initiative (NRI), the Nation's premier competitive research program for
    fundamental and applied sciences in agriculture for bioenergy and
    biobased fuels, a continuing high priority of the administration. The
    NRI also supports integrated projects that focus on water quality, food
    safety, and pest management.
        The budget also supports the administration's goal for earmark
    reform to bring greater transparency and accountability to the budget
    process. In this regard, the budget proposes to eliminate $144 million
    in earmarked projects within CSREES. The budget also proposes to modify
    the Hatch and McIntire-Stennis formula programs. This proposal will
    expand multi-state research programs and direct a higher proportion of
    these funds to competitively awarded research projects. This will
    ultimately foster greater competition and improve the quality of USDA
    supported research. As proposed in the 2008 budget, the 2009 proposal
    would sustain the use of Federal funds to leverage non-Federal
    resources, maintain program continuity, facilitate responsiveness to
    State and local issues, and leverage and sustain partnerships across
    institutions and States.
        The budget for the Agricultural Research Service (ARS) includes $47
    million in increases for high priority research conducted in areas such
    as emerging and exotic diseases of livestock and crops, bioenergy,
    plant and animal genomics and genetics, and human nutrition and obesity
    prevention. Funding increases for these critical research priorities
    are offset by the discontinuation and redirection of $105 million in
    lower priority programs as well as the elimination of $41 million in
    Congressional earmarks.
        Finally, the budget includes $39 million to complete the 2007
    Census of Agriculture, the most comprehensive source of statistically
    reliable information regarding our Nation's agriculture. With
    information collected at the national, State, and county levels, the
    Census provides invaluable, comprehensive data on the agricultural
    economy which are relied upon to keep agricultural markets stable and
    efficient.
    Nutrition Assistance
        The budget supports increased participation and food costs for the
    Department's three major nutrition assistance programs--Food Stamps,
    WIC, and Child Nutrition. For WIC, the budget supports an average
    monthly participation of 8.6 million in 2009, up from 8.5 million in
    2008. Food Stamp monthly participation is estimated at 28 million,
    about 200,000 above the 2008 level. School Lunch participation is
    estimated to grow a little over 1 percent to keep pace with the growing
    student population to a new record level of 32.1 million children per
    day.
        For Food Stamps, legislation will be reproposed to allow
    participation of certain households currently not eligible due to
    retirement and education savings accounts, child care expenses, and
    military combat pay. These re-proposals will also include legislation
    to close a loophole that some States used to enroll people not intended
    to be served by the program. For 2009, the budget includes increased
    funding to assess ways to increase participation among the elderly and
    the working poor, two populations that historically have been
    underserved. In addition, funds are also included to study ways to
    improve the application process as well as for nutrition education so
    that we can continue to refine the program.
        The President's appropriation request is $6.1 billion for WIC and
    will provide benefits to an average of 8.6 million monthly
    participants. Language is reproposed to cap the national average grant
    per participant for State administrative expenses at the 2007 level,
    which will reduce overall financial requirements by about $145 million
    in 2009. This reduction will encourage States to seek ways to be more
    efficient without affecting core services. In addition, the budget is
    reproposing to limit automatic WIC income eligibility to Medicaid
    participants with household incomes that fall below 250 percent of the
    Federal poverty guidelines. The automatic eligibility provisions for
    Medicaid participants make some people with incomes up to 300 percent
    of poverty eligible, well above the 185 percent of poverty WIC
    statutory standard.
        The Food and Nutrition Service is working with the States to
    implement the revised WIC food packages rule promulgated in December.
    The new rules allow the States to offer fruits and vegetables, whole
    grains, and more flexibility to offer foods likely to appeal to a
    variety of cultural preferences which will improve WIC's ability to
    achieve its nutritional objectives.
        The budget reproposes the elimination of the Commodity Supplemental
    Food Program (CSFP), since the program is only available in limited
    areas, and overlaps with two of the largest nationwide Federal
    nutrition assistance programs--Food Stamps and WIC. USDA intends to
    pursue a transitional strategy to encourage the 30,000 women, infants
    and children that are eligible for WIC to apply for that program, and
    to encourage 434,000 elderly CSFP recipients to apply for the Food
    Stamp Program. As part of this strategy, the budget provides resources
    for outreach and temporary transitional food stamp benefits to CSFP
    participants 60 years of age or older. These benefits would equal $20
    per month for the lesser of 6 months or until the recipient starts
    participating in the Food Stamp Program. Overall the Food Stamp Program
    budget includes $72 million for the transition in 2009.
        The Department has had great success in promoting healthy eating
    habits and active lifestyles with MyPyramid, the new MyPyramid for
    Pregnant and Breastfeeding Women and associated web-based, interactive
    tools. There have been 4.3 billion hits to MyPyramid.gov and 3.2
    million registrations to MyPyramid Tracker, the on-line tool that
    assesses diet quality and physical activity status, since MyPyramid was
    made available April 2005. The budget includes an increase of $2
    million to update and improve these popular tools plus develop the 2010
    Dietary Guidelines for Americans. USDA has the lead in developing the
    Dietary Guidelines--the basis for determining benefit levels in Food
    Stamps, Child Nutrition Programs, WIC and others, as well as for
    Federal nutrition policy and nutrition education activities. This
    supports the HealthierUS Initiative, which is aimed at improving diets
    and increasing physical activity in order to reduce obesity in America.
    Department Management
        The 2009 budget continues to support the overall management of the
    Department. Increased funding is being sought for selected key
    management priorities including:
      --Reviewing agency compliance with civil rights laws in program
            delivery and affirmative employment goals, while providing
            effective outreach to ensure equal and timely access to USDA
            programs and services to all customers.
      --Ensuring that ethics oversight and the delivery of ethics services
            to the agencies is carried out in a consistent manner with
            clear accountability in the USDA program.
      --Providing oversight of program delivery by conducting audits and
            investigations and limiting fraud, waste, and abuse throughout
            USDA.
      --Funding rental payments to the General Services Administration and
            security payments to the Department of Homeland Security to
            provide USDA employees with a safe working environment.
        In closing, I want to emphasize that the USDA budget fully supports
    the President's goals and funds the Department's highest priorities.
        That concludes my statement. I look forward to working with members
    and staff of the committee and we will be glad to answer questions you
    may have on our budget proposals.
                                     ______

    Prepared Statement of Phyllis K. Fong, Inspector General, Office of the
                               Inspector General

        I want to thank Chairman Kohl and Ranking Member Bennett for the
    opportunity to submit testimony to the subcommittee about the work of
    the Office of Inspector General (OIG) and our fiscal year 2009 budget
    request.
        I am pleased to have the chance to provide the subcommittee with an
    overview of our most significant recent activities and the oversight
    work we have planned and in-process at this time. In fiscal year 2007,
    OIG issued 61 audit reports containing 255 recommendations to improve
    and protect USDA programs and operations. Pursuant to the statistical
    reporting requirements established by Congress in the Inspector General
    Act of 1978, we determined that OIG audits resulted in a potential
    monetary impact of $91 million in fiscal year 2007.\1\ OIG criminal
    investigations resulted in over 520 indictments and 440 convictions in
    fiscal year 2007 and achieved an additional potential monetary impact
    of over $63 million.\2\
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        \1\ 5 U.S.C. App. 3  5.
        \2\ Components of the monetary impact figure include fines,
    recoveries/collections, restitutions, claims established, cost
    avoidance, questioned costs, and administrative penalties achieved in
    OIG criminal investigative cases.
    ---------------------------------------------------------------------------
        This written statement will follow the framework of our four
    Strategic Goals. We organize our audit and investigative work under
    these Strategic Goals to effectively target OIG resources toward the
    key programmatic issues and public concerns facing the Department and
    our Congressional oversight committees. Our four Strategic Goals are
    (I) Safety, Security, and Public Health; (II) Integrity of USDA
    Benefits and Entitlement Programs; (III) Management Improvement
    Initiatives; and (IV) Stewardship of Natural Resources. The final
    section of my testimony provides information in support of the
    President's fiscal year 2009 Budget Request for OIG.
                      safety, security, and public health
    OIG Food Safety Reviews
                Assessing USDA's Risk Based Inspection Program for Meat and
                        Poultry Processing Establishments
        In February 2007, the Food Safety and Inspection Service (FSIS)
    announced its plan to implement a pilot risk-based inspection (RBI)
    program for meat and poultry processing establishments. The agency
    believed it had comprehensive and reliable data and that ``real and
    immediate'' improvements could be made to the effectiveness of
    inspection operations. Congress and other stakeholders became concerned
    that FSIS was beginning to implement RBI before it had corrected
    deficiencies reported in prior OIG audits and that issues regarding the
    agency's methodology for determining risk had not been addressed.
    Consequently, there was a concern that food safety might be compromised
    if RBI proceeded at that time.
        This subcommittee, working with the House Agriculture
    Appropriations Subcommittee, included language in the May 2007
    emergency appropriations act \3\ to prevent FSIS from using funds to
    implement RBI in any location until OIG studied the program, including
    the data supporting its development and design. We conducted an
    assessment of the FSIS processes and methodologies used to design and
    develop its proposed RBI program, as well as FSIS' infrastructure and
    management controls that would support a reliable, data-driven RBI
    program. Our December 2007 report questioned whether FSIS has the
    systems in place to provide reasonable assurance that risk can be
    properly assessed, especially since the agency lacks current and
    comprehensive assessments of food safety systems at meat and poultry
    processing facilities.
    ---------------------------------------------------------------------------
        \3\ Public Law 110-038, enacted May 25, 2007. The U.S. Troops
    Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability
    Appropriations Act, 2007.
    ---------------------------------------------------------------------------
        Throughout the course of OIG's review, we discussed our concerns
    and provided recommendations to FSIS so that the agency could act to
    immediately address the weaknesses we identified. OIG's concerns
    related to FSIS' (1) assessments of establishments' food safety
    systems, (2) security over information technology (IT) resources and
    application controls, and (3) management control structure, among other
    issues. OIG reached agreement with FSIS on the agency actions necessary
    to implement each of the 35 recommendations we presented in our report.
        OIG recommended that FSIS complete its plan for improving the use
    of food safety assessment-related data and determine how the assessment
    results will be used in determining risk. As the agency moves forward
    with the development and implementation of an RBI program, FSIS should
    ensure that its risk analysis and assessments are thoroughly documented
    and any data limitations are mitigated, and the decisions made in its
    inspections process are published and transparent to all stakeholders.
    FSIS also needs to implement appropriate oversight for the development
    of critical IT systems needed to support RBI. We made numerous
    additional recommendations to improve FSIS' management controls, data
    collection and analyses processes, and staff training.
        FSIS has responded substantively to OIG's findings and
    recommendations. During the course of our audit, FSIS began a critical,
    in-depth examination of the data used as the components of its RBI
    assessment with a view to refining and expanding the data used in
    future versions of RBI. As of September 2007, FSIS awarded a contract
    to build the agency's new Public Health Information System (PHIS) to
    better integrate its numerous IT systems that are used to manage
    inspector activities. The primary goal of PHIS is to improve the
    timeliness of collecting/analyzing inspection data, and thereby enhance
    the agency's capability to address food safety hazards.
    Strengthening USDA's E. coli Testing Program
        In response to a large recall involving contaminated ground beef
    product, the then-Acting Secretary requested in October 2007 that OIG
    determine whether improvements could be made to FSIS' sampling and
    testing procedures for Escherichia coli O157:H7 (E. coli) and identify
    relative costs and benefits associated with these improvements. OIG
    promptly initiated a review of the actions FSIS already had in process
    to improve its E. coli sampling and testing program. As part of our
    review, we solicited feedback from a broad array of stakeholders
    actively involved in this issue, such as representatives from other
    USDA and Federal entities with similar sampling and testing programs,
    meat industry representatives, academic institutions that perform E.
    coli research, and the quick-service restaurant industry.
        OIG provided a memorandum report to USDA officials at the end of
    January 2008 containing our observations and suggestions. We concluded
    that while the actions FSIS has in process will improve its testing
    program, we believe that strengthening the adequacy, timeliness, and
    effectiveness of other aspects of the agency's Hazard Analysis and
    Critical Control Point (HACCP) verification activities would provide
    stronger assurance that federally-inspected establishments are properly
    identifying and controlling their food safety hazard risks. FSIS
    generally concurred with our findings and conclusions.
    Improving Safety Inspections for Egg Products
        Since 1995, FSIS has administered USDA's responsibilities under the
    Egg Products Inspection Act. FSIS inspects egg products to ensure they
    are wholesome, processed under sanitary conditions, and properly
    packaged and labeled to protect consumers. OIG evaluated FSIS'
    monitoring and inspection of egg processing plants to assess the
    agency's performance in meeting these responsibilities.
        OIG found that FSIS has not yet integrated egg product inspections
    into its overall management control structure, including the science-
    based HACCP program and the automated Performance-Based Inspection
    System (PBIS).\4\ FSIS increasingly depends on PBIS and other automated
    systems to provide safeguards and oversight of its meat and poultry
    inspection operations. However, these automated systems cannot be
    extended to egg processing inspections until a system of electronic
    records is created to record inspection data for this area. This delay
    raises concerns about potential adulteration of processed products.
    ---------------------------------------------------------------------------
        \4\ FSIS has not implemented HACCP at the egg processing plants and
    it needs to accomplish this first before egg inspection results can be
    included in PBIS. Once egg inspection results, non-compliance records
    and other data are in PBIS, FSIS will have information in an electronic
    format that can be analyzed.
    ---------------------------------------------------------------------------
        FSIS is developing a rule that would require egg product processing
    plants to develop and implement HACCP systems. In response to OIG's
    recommendations, FSIS agreed to develop a new IT system to track
    domestic inspection activities, including egg products processing,
    thereby replacing PBIS. FSIS also agreed to conduct trend analyses to
    identify and correct serious or widespread deficiencies at egg products
    processing plants.
    OIG Investigations: Food Safety
                Investigating Allegations of Adulterated Beef Entering the
                        Food Supply
        As members of the subcommittee are aware, USDA's investigation into
    recent allegations, made by the Humane Society, of inhumane treatment
    of cattle at a Chino, California, slaughter/processing facility has
    identified potentially adulterated beef entering the food supply. This
    has led to the biggest food recall in U.S. history. At the request of
    the Secretary, OIG is leading the Department's investigation into
    potential violations of the Federal Meat Inspection Act and the Humane
    Slaughter Act.\5\ Our investigation is ongoing, and we are working
    cooperatively with FSIS and other law enforcement agencies. We are
    coordinating our efforts with the U.S. Department of Justice (DOJ). At
    the conclusion of our investigation, we will report on our findings to
    the appropriate USDA officials. We have also initiated a companion
    audit that will examine procedural issues arising from the allegations
    against the Chino, California, facility. (Described on the following
    page of this statement.)
    ---------------------------------------------------------------------------
        \5\ Federal Meat Inspection Act, 21 U.S.C. Sec. Sec. 601-695
    (FMIA); Humane Slaughter Act, 7 U.S.C. Sec. Sec. 1901-1907.
    ---------------------------------------------------------------------------
                Investigating Fraud in the BSE Surveillance Program
        OIG investigated allegations of fraud on the part of an Arizona
    facility that housed both pet food slaughter and meat processing
    operations and that participated in the Department's Bovine Spongiform
    Encephalopathy (BSE) Surveillance Program. Our agents revealed that the
    corporation's owner used various schemes to increase the number of
    brain stem samples submitted for testing, thereby increasing the amount
    of USDA payments he received. Some of the samples the company submitted
    were from healthy, USDA inspected cattle. The owner was convicted of
    theft, mail/wire fraud, and aiding and abetting. A Federal court
    sentenced him to 8 months of imprisonment and 36 months supervised
    release and ordered him to pay a total of $490,000 in fines/
    restitution.
                Fraudulent Conduct Involving Contaminated Food Products
        A joint OIG-Food and Drug Administration (FDA) food safety
    investigation in the past year disclosed that a Florida food processing
    company was the source of poultry and seafood products that were
    contaminated with Listeria monocytogenes, a potentially fatal
    pathogenic bacterium that can be found in ready-to-eat food products.
    The company did not initiate a recall of the product after learning
    that it tested positive for Listeria monocytogenes. The product was
    misbranded and shipped to several locations throughout the United
    States and Canada. The company president was charged with a scheme to
    defraud through the sale of adulterated foods and a scheme to introduce
    misbranded food into interstate commerce. He was sentenced to 15 months
    imprisonment and 36 months supervised release. Additionally, he
    received a fine of $5,000 and was ordered to pay $200,000 in
    restitution to the University of Florida to support its food safety
    programs.
        OIG assisted in a multi-agency food safety investigation into the
    egregious conduct of a man who had made several allegations that his
    two young children were harmed by eating contaminated soup. The younger
    child, an 18-month old, had to be airlifted to an Atlanta hospital for
    critical care. A sample of the soup submitted to an FDA laboratory for
    analysis tested positive for Prozac and other anti-depressants. The
    investigation revealed that the father was responsible for
    contaminating the soup. He was charged in Federal court with food
    tampering and ultimately sentenced to 60 months imprisonment and 36
    months supervised release.
    Food Safety Oversight Work for Fiscal Year 2008: Planned and in Process
        As mentioned above in my discussion of OIG's investigation into
    allegations of what occurred in the Chino slaughterhouse facility, OIG
    has recently initiated an audit concerning FSIS' Management Controls
    Over Pre-Slaughter Activities. Our objectives are to determine whether
    inspection controls and processes in that facility may have broken down
    and whether the alleged conduct (or omissions) represents an isolated
    or systemic problem. OIG will evaluate the adequacy of pre-slaughter
    controls and determine whether improvements are needed to identify and
    prevent similar problems from occurring elsewhere. We will coordinate
    this new audit with our ongoing inquiry into alleged criminal
    violations of food safety and humane animal handling laws at the Chino
    facility.
    Follow-up Review on Meat and Poultry Import Inspections
        We are currently conducting a follow-up audit of the Federal
    inspection system for meat and poultry imports. We will evaluate the
    adequacy of FSIS' foreign inspection processes concerning the
    equivalency of foreign food safety systems to U.S. standards; the
    agency's periodic, in-country reviews that assess whether foreign
    systems remain equivalent; and FSIS' re-inspection of imported products
    at U.S. ports of entry. We anticipate releasing our report in late
    April 2008.
    FSIS Recall Procedures for Adulterated or Contaminated Product
        As part of a request from the former Acting Secretary, OIG is
    evaluating issues regarding FSIS recall procedures for adulterated or
    contaminated product that have already entered the food distribution
    chain. We will identify whether improvements can be made to FSIS
    processes for handling recalls to ensure that appropriate information
    is rapidly conveyed to the appropriate agency decisionmakers. We plan
    to also evaluate whether FSIS is taking full advantage of its statutory
    authority to address recall situations. We anticipate releasing this
    report in late May 2008.
    Oversight of the National Organic Program
        America's organic foods industry is growing rapidly. Without
    effective oversight, non-organic products could be marketed as organic
    and sold for significant profit. To ensure producer compliance with
    USDA's National Organic Program, OIG plans to conduct an audit to
    evaluate the oversight provided by the Agricultural Marketing Service
    (AMS) and State and private certifying agents. As will be discussed
    below (Section V), the start of this audit has been delayed but we
    anticipate beginning work in August 2008.
    OIG Investigations into Animal Cruelty and Dog Fighting
        OIG is devoting increased attention to animal cruelty cases. During
    fiscal year 2007 and the first 4 months of fiscal year 2008, OIG
    criminal investigators opened 21 cases and helped achieve 132
    convictions related to animal cruelty investigations.
    Shutting Down Dog Fighting
        OIG dog fighting investigations in 2007 resulted in two of the most
    significant cases we have pursued in recent years with respect to the
    number of convictions gained and the extensive public attention
    received. Foremost was our investigation into a dog fighting ring in
    Smithfield, Virginia, involving a professional athlete and his
    associates. This dog fighting ring operated from 2001-2007, until it
    was shut down as the result of OIG's investigation. The primary
    defendant's property contained structures specifically designed for dog
    breeding, housing, and fighting. A total of 66 dogs (52 pit bulls and
    14 other breeds) were seized by State and local authorities in the
    execution of a search warrant on the property. OIG's Emergency Response
    Team (ERT) assisted in this investigation by recovering and
    transporting evidence located on the grounds. Pursuant to a court
    order, the 47 pit bulls forfeited to the U.S. Government were
    eventually transferred to a Utah animal sanctuary or seven other animal
    rescue organizations for foster and/or lifetime care of the dogs.
        The five subjects of the dog fighting ring pled guilty in Federal
    court to conspiracy to travel in interstate commerce in aid of unlawful
    activities and to sponsoring a dog in an animal-fighting venture. The
    primary defendant was sentenced to 23 months incarceration and was
    ordered to pay $928,073 in restitution to fund the lifetime care of the
    dogs rescued from his property. The four other subjects received
    varying sentences ranging from 2 to 21 months incarceration.
        Our second major animal fighting investigation in 2007 was
    ``Operation Bite Back,'' an investigation conducted jointly with the
    Ohio Organized Crime Investigations Commission into a multi-state dog
    fighting and gambling enterprise operating in Ohio, Kentucky, and
    Michigan. This investigation resulted in more convictions than any
    other single OIG investigation into dogfighting. During surveillance of
    various dog fighting events, we observed food stamp (Electronic
    Benefits Transfer, EBT) fraud, illegal wagering, the sale and use of
    narcotics, and felons illegally carrying firearms. Agents from OIG and
    other agencies seized pit bulls, U.S. currency, marijuana, cocaine,
    firearms, a bulletproof vest with a ski mask, and a warehouse full of
    dog fighting equipment and blood-stained fighting pits.
        Operation Bite Back resulted in charges against 55 individuals,
    including violations of Federal and State laws prohibiting dog
    fighting, possession of firearms, gambling, food stamp trafficking, and
    interstate transportation of stolen vehicles. Guilty pleas were entered
    by 46 of the accused. OIG's National Computer Forensics Division
    provided digital analysis of three seized computers for the Dayton,
    Ohio, Police Department. Federal and State prosecution activity in this
    case is ongoing.
    Homeland Security Oversight
                Evaluating USDA Controls on the Importation of Biohazardous
                        Materials
        In order to protect our Nation's animal and plant resources from
    diseases and pests--and preserve the marketability of U.S. agricultural
    products--USDA's APHIS requires permits for entities \6\ seeking to
    import or move certain animals, animal products, pathogens, plant
    pests, and specified agricultural products. OIG evaluated APHIS'
    controls over its permit system regarding the importation of
    biohazardous and other regulated materials and assessed the
    effectiveness of APHIS' corrective actions in response to our 2003
    audit report.
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        \6\ Examples include private, State, and Federal research
    laboratories, universities, and vaccine companies.
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        OIG determined that APHIS has taken some of the corrective actions
    recommended in a prior audit, such as restricting the hand-carrying of
    packages containing regulated materials through ports of entry. Persons
    authorized to hand-carry must now be named in the permit, and the
    permit holder must contact APHIS in advance to coordinate the arrival
    of all hand-carried regulated material. In addition, inspectors at the
    ports can now access the ``ePermits'' database system to verify the
    basic information contained on incoming permit documents.
        Our audit found, however, that other key OIG recommendations to
    strengthen APHIS' permit systems against vulnerabilities and misuse
    still needed to be implemented. The agency had not fully implemented
    the new ePermits monitoring system. Until ePermits is fully
    operational, APHIS cannot monitor import activity at a nationwide
    level.\7\ Inspectors have not been provided instructions for using
    ePermits to screen incoming shipments. Although APHIS has made progress
    in improving its screening procedures for plant inspection stations at
    ports of entry, APHIS needs to develop controls to ensure that
    biohazardous materials are routed to those facilities.
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        \7\ For example, until the ePermits system is fully operational,
    the agency cannot perform analyses to identify trends in permit
    activity that could signal possible misuse of the permit system. The
    ePermits system could not provide officials with information on which
    permit holders had been inspected or were required to be inspected
    before permit issuance.
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    The National Strategy for Pandemic Influenza: Reviewing USDA's Response
        In late 2005, the President announced the National Strategy for
    Pandemic Influenza (National Strategy), a comprehensive approach to
    addressing the threat of pandemic influenza. The Implementation Plan of
    the National Strategy included over 300 tasks that were designed to
    ensure that the Federal Government, along with its State and local
    partners, continues to prepare for a possible outbreak in the United
    States. USDA was assigned responsibility for completing 98 of these
    tasks.
        We have provided testimony to the subcommittee about the findings
    of our review of APHIS oversight of Avian Influenza (AI).\8\ We
    continued our oversight work in this area by evaluating USDA's progress
    regarding its responsibilities under the National Strategy. We found
    that USDA has made significant progress in developing or revising
    policies and procedures to detect, contain, and eradicate highly
    pathogenic
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        \8\ APHIS-Oversight of Avian Influenza. OIG report number 33099-11-
    HY. June 2006.
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        AI in order to reduce the threat of a pandemic.
        USDA took action on each lead task we reviewed, such as helping to
    develop the interagency response playbook that detailed step-by-step
    actions that Federal agencies should take in response to an outbreak.
    Our review found, however, that these new procedures were not tested to
    ensure they worked as designed.
        We also found that APHIS had not implemented all of the
    recommendations from our 2006 report intended to strengthen the
    agency's outbreak response capabilities. One was the recommendation
    that the agency work closely with State and industry representatives
    regarding outbreaks affecting live birds, in order to develop necessary
    response plans and review/certify State plans. These State plans are
    necessary to address gaps in the Federal response plan, including
    cleaning and disinfection, humane euthanasia, quarantine, and movement
    control. As a result, we believe APHIS has reduced assurance that it
    will be able to timely and effectively respond in the event of an
    outbreak. APHIS generally agreed with OIG's findings and
    recommendations.
    Homeland Security Oversight in Fiscal Year 2008: Planned and in Process
                USDA Participation in the Rehabilitation of Flood Control
                        Dams
        The Natural Resource Conservation Service (NRCS) is authorized to
    assist local organizations with the rehabilitation of aging flood
    control dams. Many NRCS assisted dams in the United States are near or
    at the end of their 50-year design life and warrant inspection and
    potential rehabilitation. A dam failure in Hawaii and a ``near
    bursting'' dam in Massachusetts demonstrate the need to determine the
    conditions of NRCS-financed dams. OIG initiated an audit to review the
    adequacy of NRCS' controls for the rehabilitation of agency-assisted
    flood control dams. We anticipate releasing this report in mid-2008.
       protecting the integrity of usda benefit and entitlement programs
    USDA's Response to Hurricanes Katrina and Rita: Preventing Waste and
            Abuses
        Since I last submitted testimony to the subcommittee (March 2007),
    OIG has concluded several of the primary audits we initiated in
    response to the devastating 2005 hurricane season. Members of Congress
    urged Federal OIGs to work in concert to ensure that the massive
    Federal funds allocated for multi-agency disaster relief efforts in
    2005 were expended efficiently and not subject to waste and abuse. In a
    series of audits, OIG found areas where improved agency controls were
    necessary to avoid further waste and fraud, and we identified USDA
    ``best practices'' that could also benefit other Federal entities. I
    would like to highlight several of our more significant reviews for the
    subcommittee.
        At the onset of the hurricanes, OIG quickly deployed audit teams to
    the Food and Nutrition Service's (FNS) food stamp distribution centers
    in the Gulf region. Our personnel reviewed and observed the operation
    of FNS disaster food stamp programs \9\ as State and local personnel
    disbursed benefits to families affected by the disasters. Our audit
    teams were able to provide feedback to FNS and State personnel on
    whether program controls were sufficient to prevent abuses such as
    duplicate payments, dual participation, and employee fraud. OIG
    concluded that FNS and participating State agencies quickly and
    effectively provided over $800 million in disaster food stamp benefits
    to millions of disaster victims. However, we did note that improvements
    could be made to ensure that State agencies are adequately prepared in
    disaster situations. States did not always include required components
    in their disaster plans, such as fraud prevention procedures. Some
    application processing systems used by States did not track denied
    applications or account for all family members--two factors that can
    result in fraudulent benefits. Based on OIG recommendations, FNS agreed
    to specify in regulations the State agency responsibilities for
    developing and implementing disaster assistance programs.
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        \9\ Under a disaster food stamp program, FNS can waive requirements
    of the regular program in order to provide benefits quickly to disaster
    victims. Some items that were waived during the hurricanes included
    income requirements, eligibility tests, and identity tests. Benefits
    are provided at many different locations. Because of the reduced
    eligibility requirements, duplicate participation and other types of
    fraud can readily occur.
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        Focusing primarily on loan and grant funds being disbursed to
    repair hurricane damage in the Single Family Housing Program (SFH), OIG
    audit staff found that USDA's Rural Housing Service (RHS) and other
    Federal agencies had not coordinated activities to prevent duplicate
    housing assistance payments to hurricane victims. RHS had not required
    recipients to provide information about reimbursements and assistance
    they received from insurance companies and charitable organizations.
    This resulted in some recipients receiving duplicative financial
    assistance from RHS and other sources for a single damage claim. We
    also found that RHS emergency grant funds were awarded for ineligible
    purposes, such as non-disaster related repairs, improvements and
    repairs unrelated to health and safety concerns, and use of unlicensed
    contractors. RHS is taking action to address the majority of our
    recommendations. We are continuing discussions with agency officials to
    reach management decision on the propriety of using hurricane disaster
    funding for non-hurricane related repairs.
        Disruptions resulting from Hurricanes Katrina and Rita temporarily
    impacted commodity prices received by farmers. Afterwards, USDA
    developed initiatives to alleviate transportation congestion on the
    Mississippi River, such as providing grants to move damaged corn from
    New Orleans and move agricultural commodities through other regions.
    The Farm Service Agency (FSA) implemented the initiatives and provided
    monetary assistance through the Commodity Credit Corporation (CCC). OIG
    conducted an audit that determined USDA needed an improved response and
    recovery plan to relieve future, serious disruptions in the movement of
    commodities along the Mississippi River. Due to the urgent situation
    brought about by the hurricanes, USDA had initially used ad hoc
    procedures to award noncompetitive agreements that resulted in higher
    costs compared to competitively-secured agreements. FSA acted upon OIG
    audit recommendations to coordinate with USDA entities, industry
    stakeholders, and other Federal agencies to formalize a response/
    recovery plan for disruptions to the grain transportation/storage
    system.
        OIG also conducted numerous criminal investigations into
    allegations of fraudulent activity resulting from Federal hurricane
    relief efforts. To date, our investigations have achieved 61
    indictments and 18 convictions involving the Food Stamp Program. We
    continue to work closely with DOJ Fraud Task Forces in Louisiana and
    Mississippi to ensure that allegations of fraud are investigated.
        While the aforementioned audit and investigative work represent
    OIG's most recent contributions to USDA's disaster relief activities,
    this year we will assess the efficiency of other USDA programs that
    assist citizens and communities during emergencies. In fiscal year
    2008, we expect to issue reports on the Hurricane Indemnity Program,
    Livestock and Feed Indemnity Programs, Emergency Forestry Conservation
    Reserve Program, and Emergency Conservation Program, among others.
    Review of Misreported Nonfat Dry Milk Pricing Data
        Each week, the National Agricultural Statistics Service (NASS)
    collects data from plants that commercially produce in excess of 1
    million pounds of dairy products, which are then used to determine
    current market prices. In brief, the nonfat dry milk prices NASS
    publishes are used by AMS to help set the minimum prices paid to milk
    producers in the Federal milk marketing order system.
        In a review done by OIG's Office of Inspections and Research, OIG
    determined that a large dairy firm misreported nonfat dry milk volume
    and price information when submitting its weekly reports to NASS
    beginning in 2002. The incorrect data, once aggregated with other
    firms' data, was then factored into the Federal milk marketing order
    formula, resulting in a $50 million underpayment to milk producers.
        We offered recommendations to NASS centering on the need for the
    agency to verify the information previously received from dairy plants
    which will allow the calculation of a more precise Federal milk
    marketing order price for milk producers. We also recommended measures
    to ensure improvement in NASS' data collection process. NASS agreed
    with each of our recommendations and has taken steps to improve its
    data collection and review processes.
    Identifying Improper Payments: Conservation Programs
        The Natural Resources Conservation Service (NRCS) administers
    conservation easement programs that restore lands to their natural
    state (i.e., wetlands and grasslands) by purchasing conservation
    easements from landowners. Participating landowners agree to limit use
    of their land to activity that both enhances and protects the purposes
    for which the easements were acquired. Land under conservation
    easements may be ineligible for farm assistance payments from FSA.\10\
    NRCS field offices are required to notify FSA whenever land is placed
    under a conservation easement, so that FSA does not make payments to
    landowners with conservation easements on farm land. In a previous
    audit, OIG found situations where FSA made improper farm assistance
    payments to landowners for land under conservation easements. To
    determine the extent of such ineligible payments in one major
    agricultural State, we conducted an audit in 2007 to expand our
    previous work in California.
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        \10\ If a landowner with NRCS conservation easements participates
    in FSA farm assistance programs, he or she is required to inform FSA
    about the easements so the agency can appropriately reduce the
    landowner's crop bases and calculate their assistance payments.
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        OIG's review found additional examples demonstrating the need for
    better interagency communication, coordination, and program integration
    between NRCS and FSA. In 49 of the 53 Wetland Reserve Program and
    Emergency Watershed Protection Program easements we reviewed, NRCS did
    not notify FSA when the easements were recorded. This occurred because
    the local NRCS field offices mistakenly expected the relevant NRCS
    State office to fully inform FSA of the easements. Without the
    necessary easement information, FSA made improper farm assistance
    payments on 33 easements, totaling $1,290,147. During our fieldwork, we
    recommended that NRCS immediately provide a list of easements in
    California to FSA. Our report recommended that NRCS provide training
    for field staff in California regarding their responsibility to notify
    FSA about recorded easements. NRCS and FSA responded that each agency
    has taken appropriate corrective action to remedy the specific concerns
    noted in OIG's report and established a protocol to ensure better
    interagency communications.
    Assessing USDA's Efforts to Promote U.S. Farm Exports
        In response to a Congressional request, OIG reviewed the extent to
    which the Foreign Agricultural Service's (FAS) market development
    programs foster expanded trade activities in the exporting of U.S.
    agricultural products. OIG was asked to review concerns regarding U.S.
    trade practices, promotion efforts, and financing operations, and to
    identify areas for USDA to achieve greater results with improvements
    such as enhanced inter-department coordination.
        OIG found that FAS does not formally track its efforts to expand
    exports or its outreach to U.S. exporters and thereby had no assurance
    that outreach efforts were effective in expanding U.S. agricultural
    exports. OIG issued recommendations intended to allow USDA to more
    effectively measure its accomplishments and thereby prioritize limited
    resources to better promote U.S. exports. FAS generally concurred with
    OIG's recommendations and has agreed to take corrective action on each.
    Reviewing the Tobacco Transition Payment Program
        Legislation enacted in 2004 ended the Depression-era tobacco quota
    program and established the 10-year, $10.14 billion Tobacco Transition
    Payment Program (TTPP) to provide annual transitional payments to
    eligible tobacco quota holders and producers.\11\ Payments began in
    fiscal year 2005 and are funded through assessments on tobacco product
    manufacturers and importers. CCC estimates that payments made over the
    10-year period will approximate $6.7 billion to quota holders and $2.9
    billion to tobacco producers. OIG is conducting a three-phase review of
    TTPP. The first phase has now been completed; we examined FSA's
    controls on payments to quota holders and concluded that they were
    generally adequate to ensure that TTPP payments were issued to eligible
    quota holders. The second phase (audit of TTPP assessments) is ongoing
    and the final phase (audit of payments to producers) is planned for
    later this fiscal year.
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        \11\ TTPP quota holders are the landowners of farms to which
    tobacco quota was assigned.
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    OIG Investigations: Farm Programs and Crop Insurance Fraud
        In fiscal year 2007, OIG criminal investigators helped obtain 35
    convictions in cases involving criminal activity related to FSA and
    Risk Management Agency operations. Our investigative work related to
    these two agencies achieved approximately $21.6 million in monetary
    results during fiscal year 2007.
                Uncovering Fraud Related to the Tobacco Program
        OIG conducted a joint investigation that resulted in two North
    Carolina men being ordered to forfeit $4.5 million for their conspiracy
    to structure financial transactions to avoid filing currency
    transaction reports. The men used an extensive network of accomplices,
    family members, and friends to conduct over $4.5 million of
    transactions in increments under $10,000 to avoid filing the required
    reports. OIG agents determined that both men intentionally engaged in
    fraudulent actions regarding the proper identification of tobacco grown
    under FSA's Burley Tobacco Marketing Program. The IRS, FBI, and
    Tennessee Bureau of Investigation participated in this investigation.
                Uncovering Fraud in the Crop Insurance Program
        OIG agents revealed a crop insurance scheme in Virginia wherein an
    insurance company supervisor and a claims adjuster colluded to
    misrepresent a tomato farmer's production records. The supervisor
    backdated forms to enable the producer to meet planting dates approved
    by RMA and falsified production totals to ensure the producer would
    realize a loss. The adjuster made false statements by verifying that he
    visited the producer's fields; in fact, no such visits were made. The
    producer was unaware of the actions taken by the supervisor and the
    adjuster. OIG determined that the misrepresentations resulted in the
    producer receiving a $308,000 Federal crop insurance indemnity payment
    for purported tomato losses. The supervisor and the adjuster were
    sentenced in 2007; the supervisor was sentenced to 5 months
    imprisonment and additional home detention; and the adjuster received a
    sentence of 24 months probation. Both men were ordered to pay $240,031
    in restitution and were debarred by RMA from participation in the crop
    insurance program for 3 years.
        A second crop insurance case investigated by OIG determined that
    producers in Georgia conspired to use a third producer as a ``front.''
    The scheme involved using the front's name as the producer because he
    had a higher production yield for tobacco. The two producers thereby
    received larger crop insurance payments during several years from 2000
    to 2004 and paid cash to the front for his participation. OIG's
    investigation resulted in the two producers paying a combined
    restitution of $739,000 to USDA prior to their sentencing for
    misprision (concealment) of a felony. The producers were each sentenced
    in August 2007 to 48 months probation and fined $80,000 in addition to
    the restitution. The front producer cooperated in the investigation and
    received pretrial diversion.
    OIG Investigations: RD Programs-Fraud by Company Financial Officer
            Results in Sentence and Restitution
        OIG conducted an investigation into an Oklahoma manufacturing
    company's former chief financial officer who used falsified documents
    to obtain RD loans. Our investigation disclosed that the individual
    fraudulently obtained $4.9 million in financial assistance from USDA
    and an Oklahoma bank, and another loan of $275,000 from a local lender.
    USDA ultimately paid the lender $1.8 million as a result of the loans
    going into default. The investigation resulted in the former financial
    officer being sentenced to 40 months imprisonment and 60 months
    supervised release. He was also ordered to pay $3.8 million in
    restitution.
    OIG Oversight of the Crop Insurance Program in Fiscal Year 2008:
            Planned and in Process
                Reviewing RMA Compliance Activities
        RMA administers the Federal crop insurance program in a partnership
    with approved, private sector insurance providers (AIP). RMA is
    mandated to ensure integrity in the program; its actions include
    monitoring AIP performance and conducting various compliance
    activities. We are in the latter stages of our review of the
    effectiveness of the agency's compliance activities and expect to issue
    our report in mid-2008.
                Implementing an Effective Quality Control System for Crop
                        Insurance
        We previously reported that RMA must have an effective quality
    control system in place to fully implement the Agricultural Risk
    Protection Act of 2000 and thereby strengthen the program's integrity
    and improve participant compliance. To date, we still have not reached
    management decision on three of the four recommendations in OIG's 2002
    report. OIG recently initiated a review of the corrective actions
    planned and/or implemented by RMA. We will assess the agency's
    oversight activities concerning AIP program delivery and examine
    whether AIPs have implemented the controls required to prevent/detect
    program abuses, waste, and improper payments.
                Evaluating Crop Losses and Indemnity Payments Due to
                        Aflatoxin-Infected Corn
        RMA issued indemnity payments totaling $27 million nationwide for
    the 2005 crop year due to Aflatoxin-infected corn.\12\ Agency concerns
    about the market price data used to calculate the resulting indemnity
    payments led RMA to request OIG's assistance. We therefore initiated an
    audit to evaluate (1) whether RMA had sufficient management controls
    regarding those payments, (2) whether indemnity payments were properly
    determined, and (3) whether payments were based on reasonable
    reductions in market value, among other issues.
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        \12\ Aflatoxin, produced by the fungus Aspergillus flavus, is a
    potent carcinogen. Its presence in corn reduces marketability.
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    OIG Oversight of Rural Development Programs in Fiscal year 2008:
            Planned and in Process
                Rural Business Cooperative Service: Reviewing Economic
                        Development Loans to Intermediaries
        RBS' Intermediary Relending Program (IRP) seeks to increase
    economic activity and employment in rural communities and alleviate
    poverty by providing loans to local organizations that utilize the
    funds to make direct, smaller loans to eligible businesses and projects
    in the community. In fiscal year 2007, the IRP had over 400 borrowers
    and a loan portfolio of $687 million. Congress has appropriated
    approximately $33 million for the IRP for each of the past 3 fiscal
    years. OIG is examining RBS' internal controls to determine if they are
    sufficient to ensure that IRP loan funds are properly spent. OIG will
    examine whether these loans are made to eligible borrowers for eligible
    purposes, the liens are appropriately used to secure the loans, and
    RBS' servicing actions are effectively managing collections,
    delinquencies, and defaults.
                Rural Rental Housing: Concerns About Owner Financial Data
                        and Maintenance
        OIG has previously found theft of project funds by owners and
    management companies, totaling $4.2 million.\13\ The thefts contributed
    to deteriorated Rural Rental Housing (RRH) projects that threatened the
    health and safety of rural residents nationwide. We are planning a new
    review to determine whether there is adequate accounting for the
    financial data submitted by owners, whether the RRH project's operating
    expenses are reasonable and documented, and whether Rural Development's
    (RD) inspection procedures effectively resolve RRH maintenance and
    repair issues.
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        \13\ Rural Rental Housing Program, Uncovering Program Fraud and
    Threats to Tenant Health and Safety. OIG Report 04801-6-CH, issued
    March 1999.
    ---------------------------------------------------------------------------
        During fiscal year 2008, OIG also plans to audit the Rural Housing
    Service's (RHS) management controls to determine if they are sufficient
    to limit delinquencies in the SFH Direct Loan Program.
                Rural Utilities Service: Broadband Loan Programs and Water
                        and Waste Programs
        Based upon the findings of OIG's September 2005 audit, the House
    Agriculture Appropriations Subcommittee expressed concern that the
    Rural Utilities Service (RUS) had not taken sufficient corrective
    actions regarding its Broadband Loan Program. OIG reported that of the
    $599 million in broadband funds reviewed, over $340 million (67
    percent) was expended for questionable purposes. We plan to conduct a
    comprehensive follow-up audit to determine RUS' progress in managing
    its broadband programs and address specific concerns raised by Members
    of Congress.
        In fiscal year 2007, RUS' Water and Waste Programs provided over
    1.3 million rural subscribers with new or improved service facilities
    at a cost of approximately $1.6 billion. These programs are limited to
    communities that have populations of 10,000 or less, with low median
    household income levels, and cannot obtain credit elsewhere. OIG plans
    to evaluate management controls in the agency's Southeast region to
    determine whether water and waste funding is being allocated only to
    communities meeting these criteria.
    Improving USDA Nutrition Programs: Oversight of Governmental and
            Private Entities
        In addition to our disaster food stamp program work, we also issued
    several other nutrition assistance program audits in 2007. We audited
    nonprofit sponsors in California and Nevada participating in the
    agency's Summer Food Service Program. We found several deficiencies in
    three sponsors' administration of the program, including unsafe food
    handling and storage. The sponsors also submitted reimbursement claims
    for unsupported and questionable costs. Our review of the Special
    Supplemental Nutrition Program for Women, Infants, and Children (WIC)
    in Puerto Rico determined that FNS had not ensured that the
    Commonwealth's agency resolved deficiencies noted in prior FNS reviews,
    including inadequate oversight of WIC vendors. Commonwealth WIC
    officials compromised the vendor bidding process by releasing
    information that allowed vendors to calculate bid prices in ways that
    increased food costs to the program and violated regulations by
    permitting in-store credits. These credits resulted in reimbursement to
    vendors for products that were not delivered to WIC participants.
        In 2007, OIG also assessed the EBT system controls of the company
    that is the program's largest EBT processor. In fiscal year 2008, we
    will continue our oversight in this field by reviewing elements of the
    EBT systems in Colorado and California.
    OIG Investigations: Targeting Fraud and Theft in USDA Nutrition
            Programs
        In fiscal year 2007, OIG investigators helped obtain 77 convictions
    in cases involving criminal activity related to food stamp program/EBT
    fraud and achieved $25.4 million in monetary results.\14\ For criminal
    activity related to the WIC program in fiscal year 2007, OIG
    investigators helped obtain 10 convictions and $507,884 in monetary
    results.
    ---------------------------------------------------------------------------
        \14\ Each of the monetary result statistics contained in this
    testimony statement were determined as required by the Inspector
    General Act of 1978, 5 U.S.C. App. 3 Sec. 5.&
    ---------------------------------------------------------------------------
        The following cases provide examples of the type of criminal
    activity and schemes our agents uncover.
                Vendor Fraud in the Food Stamp Program
        A repeat offender of the food stamp program received an extended
    sentence after a joint investigation OIG conducted with Internal
    Revenue Service (IRS) and the Syracuse Police Department. The
    individual was a ``straw owner'' of a grocery store that redeemed over
    $1 million in illegal food stamp benefits during 2005 and 2006. Seeking
    to hide his prior conviction on food stamp fraud, the individual had
    another person act as the store owner and obtain the FNS license
    necessary to redeem food stamp benefits. The straw owner purchased food
    stamp benefits for below face-value from recipients and was then
    reimbursed by the food stamp program for their full value. The OIG/
    joint investigation resulted in the former store owner being sentenced
    in June 2007 to 30 months in prison, 36 months probation, and
    restitution of $330,074 to USDA. The sentence will run consecutively
    with the 33-month sentence (currently being served) he received for
    money laundering in an earlier food stamp fraud case prosecuted in the
    Northern District of Ohio.
        OIG conducted an investigation with U.S. Immigration and Customs
    Enforcement (ICE) into the former owners of two Chicago grocery stores
    engaged in EBT trafficking. The owners redeemed approximately $1.2
    million in EBT benefits and over a year's time withdrew more than
    $100,000 without reporting the financial transactions to IRS. The two
    were found guilty of wire fraud, aiding and abetting, money laundering,
    and conspiracy to avoid currency regulations. In September 2007, the
    first owner was sentenced to 90 months of imprisonment, to be followed
    by deportation and was ordered to pay $1.1 million in restitution. The
    second owner was sentenced to 12 months imprisonment and ordered to pay
    approximately $61,000 in restitution.
                Investigations to Safeguard the Women, Infants, and
                        Children Program
        A major OIG case involved an interstate conspiracy in which
    extremely large amounts of infant formula that were shoplifted in the
    Atlanta metro area were transported to New York in rental trucks. A
    covert search during the investigation revealed that the baby formula
    was stored in an infested, non-refrigerated storage unit during extreme
    heat conditions, causing the formula to become adulterated. The value
    of the stolen goods for the two organized crime organizations involved
    was approximately $6.48 million. In December 2007, five members of the
    two organizations received sentences ranging from 27 to 60 months in
    Federal prison for conspiracy and 42 to 65 months for interstate
    transportation of stolen property. The five members each received an
    additional 36 months of supervised release. OIG investigated this case
    with FDA and the Organized Crime Unit of the Atlanta Police Department.
    Prosecutorial activity is ongoing.
        We are currently awaiting sentencing in a case in which OIG agents
    determined that the husband and wife owners of a Michigan grocery store
    had fraudulently redeemed approximately $917,000 in WIC coupons and
    food stamp benefits. In July 2007, the husband pled guilty to food
    stamp trafficking and agreed not to contest the forfeiture of
    approximately $108,000 (including WIC vouchers) seized from his
    business and residential properties. The woman was enrolled in Medicaid
    and childcare subsidy programs; she did not disclose her part-ownership
    in the store and provided false information regarding her family
    income, thereby improperly receiving over $22,000 in Government
    subsidies. The wife pled guilty to false statements related to her
    welfare fraud. OIG worked this case jointly with the State of
    Michigan's Human Services Department.
        OIG agents worked with Federal and local law enforcement agencies
    to reveal that an FNS authorized convenience store operator in North
    Carolina was involved with other individuals in a stolen infant formula
    theft ring and counterfeit pharmaceutical scheme. A Virginia man
    involved in the conspiracy had devised a scheme to illegally transport
    stolen ``WIC approved'' infant formula from the North Carolina
    convenience store to Virginia and New York. Two suspects paid
    undercover agents approximately $100,000 for ``stolen'' infant formula
    that had a retail value in excess of $700,000. The store operator was
    sentenced in June 2007 to 37 months in prison and 36 months supervised
    probation; a deportation hearing will be held upon release. The
    individual responsible for transporting and trafficking the infant
    formula had previously pled guilty in Federal court. The FDA, FBI, and
    the Wilson, North Carolina, Police Department participated in the
    investigation.
                           improving usda management
    USDA's Fiscal Year 2007 and 2006 Consolidated Financial Statement
            Audits
        Pursuant to the Chief Financial Officers Act of 1990 and Office of
    Management and Budget (OMB) guidance, Federal OIGs are responsible for
    annual audits of Departmental and agency financial statements to obtain
    reasonable assurance that the financial statements are free of material
    misstatements. For fiscal year 2007, OIG issued a qualified opinion on
    the USDA Consolidated Financial Statements and the RD Financial
    Statements. The qualified opinions were the result of significant
    revisions made to RD's credit reform processes related to the Single
    Family Housing Program cash flow model and subsidy re-estimates. We
    were unable to obtain sufficient evidence to support USDA's or Rural
    Development's financial statement amounts as of the end of fiscal year
    2007 for estimated allowances for subsidy costs.
        The Commodity Credit Corporation, Forest Service (FS), FNS, and
    Federal Crop Insurance Corporation/RMA received unqualified opinions on
    their fiscal year 2007 financial statements.\15\ However, OIG noted
    that the Department needs to continue improving its overall financial
    management, information technology security and controls, and certain
    financial management processes. The Office of the Chief Financial
    Officer (OCFO) has immediate and long-term plans to substantially
    improve these financial and IT material weaknesses.
    ---------------------------------------------------------------------------
        \15\ An unqualified opinion means USDA and standalone agencies'
    financial statements fairly presented their financial position and
    related reporting.
    ---------------------------------------------------------------------------
    Oversight of USDA's Information Technology Security
        Last fall, we issued our annual review of the Department's Federal
    Information Security Management Act (FISMA) efforts for fiscal year
    2007. Our review determined that the Department has improved its IT
    security oversight in several areas during the fiscal year. For
    example, the inventory of agency systems had significantly improved. In
    other areas, such as the certification and accreditation (C&A) process,
    improvements were noted, but additional work is still needed. However,
    a continuing material IT control weakness exists within the Department
    due to the lack of an effective, Departmentwide IT security plan. In
    our view, an effective plan would measurably improve USDA's ability to
    correct IT issues that affect its agencies and the Department as a
    whole. If the Department and its agencies effectively identify and
    prioritize the IT risks that exist and work collaboratively to resolve
    them, they can implement a time-phased plan to systematically mitigate
    them. Increased agency emphasis will facilitate improvements in
    compliance with required standards, plan of action and milestones
    reporting, risk level characterization, C&A of key IT processes,
    Privacy Act implementation and encryption, and configuration
    management.
        The Department concurred with OIG findings and recommendations and
    is taking steps to implement corrective actions. USDA officials advise
    that these IT control weaknesses are complex, affect most agencies
    within the Department, and will take time to fully resolve.
    Processing USDA Employee Civil Rights Complaints
        In response to a request from Senators Harkin and Lugar, we
    followed up on an earlier OIG review and evaluated USDA's performance
    in tracking and processing equal employment opportunity (EEO)
    complaints from USDA employees and job applicants.\16\ We found that
    the Office of Civil Rights (CR, now known as the Office of Adjudication
    and Compliance) had significantly reduced the time required to complete
    an average case by approximately 50 percent from 1997 through 2006. The
    agency also began implementation of its Civil Rights Enterprise System
    (CRES) a web-based application that enables USDA agencies and CR to use
    a single, improved automated system for processing/tracking EEO
    complaints. Previously, USDA agencies all maintained separate systems
    that were not reconciled. However, our audit also found that CR could
    not track EEO complaints effectively or process them on time and
    material weaknesses persisted in CR's management control structure and
    environment. Consequently, CR continued to miss Equal Employment
    Opportunity Commission (EEOC) required timeframes. While the
    implementation of CRES was a positive step, CR did not establish
    sufficient protocols in the system to ensure the accuracy and
    sufficiency of complaint data.
    ---------------------------------------------------------------------------
        \16\ Office of Civil Rights--Management of Employment Complaints.
    OIG report 60801-3-HQ, issued March 10, 2000.
    ---------------------------------------------------------------------------
        In response to OIG's recommendations, CR agreed to a series of
    corrective measures. These include developing a detailed formal plan to
    process EEO complaints timely and effectively, fully test and implement
    improved CRES protocols and validate the accuracy of its complaint
    information, and implement procedures to control and monitor case file
    documentation and organization.
    OIG Investigations Involving USDA Employees
        In addition to OIG's law enforcement activities regarding external
    parties and individuals who violate Federal laws pertaining to USDA
    programs and operations, we are responsible for examining and
    investigating allegations that USDA employees have engaged in serious
    misconduct or criminal activity related to their employment. Following
    are two examples of such cases from 2007.
        An OIG investigation involving a former RD Community Development
    Technician with 25 years of Federal service revealed that the
    individual had created fictitious loan files and grant applications.
    The former employee wrote checks from an agency supervised account
    regarding fictitious loan applications and stole the funds for her
    personal use. The former employee was sentenced to serve 24 months in
    prison, followed by 36 months supervised release, and ordered to pay
    $160,484 in restitution for embezzlement.
        Following a joint OIG-FBI investigation, an Illinois man was
    arrested by the Cairo, Illinois, Police Department and found to possess
    hundreds of counterfeit identification cards, including two APHIS
    Veterinary Service photo identification (ID) cards. The police also
    found an identification-making machine and related paraphernalia. The
    individual utilized the false ID cards to cash fabricated checks at
    grocery stores throughout the Midwest. He was sentenced in Federal
    court in May 2007 to 60 months in prison, 60 months of supervised
    release, and ordered to pay $26,129 in restitution for the manufacture/
    possession of counterfeit USDA identification documents.
    Oversight Work Regarding USDA Management in Fiscal Year 2008: Planned
            and in Process
                The Use of Suspension and Debarment in USDA
        OIG is conducting an audit to assess the use of suspension and
    debarment procedures by USDA agencies. We will determine the extent to
    which USDA personnel are effectively using and enforcing existing
    authorities, so that individuals and entities found to have previously
    abused Federal programs do not cause further injury or loss to the
    Government.
                  the stewardship of usda's natural resources
    Implementation of Renewable Energy Programs in USDA
        In 2006, the President developed the Advanced Energy Initiative to
    reduce the Nation's dependence on foreign energy sources as a matter of
    economic and national security. USDA established an Energy Council to
    coordinate and guide renewable energy activities within the Department
    and with other Federal departments. USDA uses its renewable energy
    funding to conduct research and to provide loans and grants to build
    facilities for ethanol, cellulosic, wind, and solar renewable energy
    projects.
        OIG has an audit ongoing to evaluate the Department's efforts to
    promote renewable energy projects, as it was directed by the 2002 Farm
    Bill, the 2005 Energy Policy Act, and the Advanced Energy Initiative.
    Our review includes an assessment of the agencies' internal controls
    regarding recipient eligibility, the issuance of renewable energy
    funds, and the coordination of renewable energy research within USDA.
    Our audit work is focusing on renewable energy activities at the
    Departmental level and within the following agencies: RBS; RUS;
    Agricultural Research Service; Cooperative State Research, Education,
    and Extension Service; and FS. We anticipate releasing this report in
    April 2008.
    Natural Resources Oversight Work for Fiscal Year 2008: Planned and in
            Process
                Conservation: Wetlands Reserve Program--Restoration Costs
                        and Oversight
        The Wetlands Reserve Program (WRP) assists private landowners by
    providing financial and technical assistance to restore, enhance, and
    protect wetlands in a cost-effective manner through long-term easements
    and cost-share agreements. WRP focuses on enrolling marginal lands that
    have a history of crop failure or low yields and restoring and
    protecting degraded wetlands. OIG is examining WRP restoration costs
    and NRCS' monitoring of restoration efforts on these lands.
                Farm and Ranch Lands Protection Program--Review of Non-
                        Governmental Organizations
        The Farm and Ranch Lands Protection Program provides matching funds
    to purchase development rights to keep productive farm and ranch lands
    in agricultural use. NRCS uses cooperative agreements to partner with
    State, tribal, or local governments and non-governmental organizations
    (NGO) to acquire conservation easements or other interests in land from
    landowners. Due to our 2006 audit findings that an NGO circumvented
    NRCS policies, we initiated a nationwide audit to evaluate the adequacy
    of NRCS' controls regarding NGOs and the appraisals used in
    conservation easement purchases.
                Effectiveness of NRCS' Reviews Regarding Producer
                        Compliance with Conservation Requirements
        In order to maintain their eligibility for USDA program benefits,
    producers are required to apply conservation systems to control soil
    loss or preserve wetlands on highly erodible lands and wetlands. NRCS
    implemented a status review process to assess producer compliance with
    its conservation requirements and thereby determine (with FSA)
    producers' continued eligibility for farm program benefits. Due to
    problems disclosed in prior OIG and Government Accountability Office
    audits, OIG is reviewing actions taken by NRCS to address our prior
    findings and recommendations and evaluating the agency's current status
    review operations.
    OIG Oversight of Forest Service Programs and Operations
        While I recognize that the subcommittee does not appropriate funds
    for FS, I would like to briefly discuss OIG's oversight work related to
    FS because it is an important area of oversight responsibility for us.
    Due to FS' vast size--a budget of $4.4 billion and approximately 30,000
    FTEs in fiscal year 2008--and its vital mission to manage America's
    national forests and grasslands, OIG devotes considerable resources to
    FS oversight activities.
        To address concerns about the airworthiness of firefighting
    aircraft, we audited the FS Air Safety Program to determine whether it
    minimizes the risk of accidents and contributes to the effective use of
    aerial resources.\17\ We concluded that FS has made strides in
    improving its air safety program, but believe the agency still needs to
    implement an airworthiness assessment and maintenance program for all
    of its aircraft that is targeted towards the demands that a
    firefighting flight environment imposes on aircraft.
    ---------------------------------------------------------------------------
        \17\ Forest Service's Air Safety Program. OIG Report 08601-48-SF,
    issued February 2008.
    ---------------------------------------------------------------------------
        In 2007 and 2008, OIG provided testimony on three occasions to
    House and Senate committees regarding our work assessing the
    increasing, large fire suppression costs borne by USDA/FS, and the
    over-accumulation of hazardous fuels in the national forests that is
    contributing to these larger and more destructive fires.\18\ We advised
    that the majority of FS' large fire suppression costs (50 percent to 95
    percent) are directly linked to protecting private property in the
    Wildland Urban Interface. At the time of our audit, FS did not have the
    ability to ensure that the highest priority fuels reduction projects
    were funded first. The financial burdens on FS due to wildland
    firefighting are likely to continue to rise because of current public
    expectations and uncertainties about Federal, State, and local
    responsibilities.
    ---------------------------------------------------------------------------
        \18\ Fire suppression costs for FS averaged $994 million annually
    from fiscal year 1998 through fiscal year 2006. Suppression costs for
    the 2007 fire season are estimated to exceed $1.3 billion.
    ---------------------------------------------------------------------------
    OIG Investigations: FS Operations and Personnel
        As part of our FS oversight responsibilities, OIG has a statutory
    duty to conduct an independent investigation into the death of an
    officer or an employee of the Forest Service that is caused by wildfire
    entrapment or burnover and to provide the results of our investigation
    to the Secretary and Congress. With the support of this subcommittee,
    we therefore established our Wildland Fire Investigation Team (WFIT) to
    ensure that select OIG criminal investigators receive extensive
    training in the highly specialized field of wildland fire fighting. We
    currently have two investigations ongoing related to FS firefighter
    fatalities. The first pertains to the Thirtymile Fire that occurred in
    July 2001 in the Chewuch River Canyon area north of Winthrop,
    Washington. The second ongoing investigation pertains to the FS
    fatalities that occurred during the Esperanza Fire that occurred in
    October 2006 in Riverside County, California.
        A further OIG investigation of note regarding FS in 2007 was our
    investigation into the cause of several 2004 wildfires in the Coconino
    National Forest (Arizona) that consumed 24 acres. OIG agents found
    evidence that a long-serving, experienced FS fire management officer
    had intentionally set the fires. The former FS employee eventually
    confessed to starting two wildfires in the forest and retired during
    the course of the investigation. He was sentenced in Federal court in
    June 2007 to 24 months in prison and 36 months of supervised release
    and ordered to pay a total of $15,390 in fines and restitution.
    FS Oversight Work for Fiscal Year 2008: Planned and in Process
        We have audit initiatives underway to review FS' firefighting
    succession planning (ensuring the agency will have a sufficient number
    of skilled, well-trained Incident Commanders), the agency's use of
    contract labor crews, and its replacement plan for firefighting aerial
    resources. We also plan to review FS' acquisition practices for IT
    hardware and software.
                     oig's fiscal year 2009 budget request
        Finally, I would like to provide the subcommittee with information
    describing OIG's budget situation in fiscal year 2008 and the
    President's fiscal year 2009 request for OIG. We are very appreciative
    of the support this subcommittee has shown for OIG's work and your
    understanding of our need for resources to produce that work. We are
    providing this information to assist you with your review of the fiscal
    year 2009 budget request.
    OIG's Current Budget Situation
        As the chart below demonstrates, OIG's Congressional appropriation
    was essentially straight-lined between fiscal years 2006 and 2007 and
    actually went down between fiscal years 2007 and 2008. For fiscal year
    2008, the President had requested $83,998,000 in appropriated funds for
    OIG. OIG received only $79,491,000 (an appropriation of $80,052,000
    minus a recision of $560,364). This does not include funding requested
    to cover the mandatory pay raise, allow OIG to expand its work on crop
    insurance issues, or make needed improvements to its IT infrastructure.
        In order to live within these budget constraints, meet our mission
    as best we can, and fund legislatively mandated pay increases, OIG has
    now reached the point where it has instituted a hiring freeze with the
    goal of reducing staff levels. Our plan calls for OIG staffing levels
    to be reduced, through attrition, to 570 by the end of fiscal year
    2008. This is a reduction of 18 staff from fiscal year 2007, which
    itself was a reduction of 7 staff over fiscal year 2006.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Unfortunately, these reductions follow an extended period of
    decline for OIG staffing levels. In the 10 years between fiscal year
    1996 and fiscal year 2006, OIG staff declined approximately 22 percent.
    With the reductions over the last 2 years, OIG has lost 26 percent of
    its work capacity in just a 12 years.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Staff reductions alone do not tell the full story of operational
    changes OIG has had to make. For instance, for fiscal year 2008 we have
    made a series of tough budget decisions to enable us to live within our
    appropriated funds.
      --We postponed equipment purchases for the National Computer
            Forensics Division (NCFD), which are necessary to keep that
            unit within compliance with professional equipment and training
            standards.
      --We postponed necessary training and equipment purchases for the
            Emergency Response Program (ERP).
      --We cut a total of $900,000 from our IT budget. Most recently, we
            concluded that we would have to skip a year in our normal cycle
            of replacing one third of our laptops each year. We cannot
            suspend this replenishment cycle another year without finding
            ourselves in the position of having laptops that will not be
            compatible with the new operating system USDA is expecting to
            roll out in fiscal year 2009 or fiscal year 2010.
      --We cut basically all other OIG discretionary spending (contracting,
            training, and travel) by an average of 8 percent. The travel
            cuts were particularly painful as they have a direct effect on
            the number and scope of the audits and investigations OIG can
            do. Where previously an audit might have included sufficient
            sites to support nationwide projections and recommendations, we
            will likely have to limit a number of our future audits to a
            regional scope.
    President's Fiscal Year 2009 Budget Request for OIG
        The President's Budget request for OIG for fiscal year 2009 is
    $85,776,000. The request would enable OIG to:
      --Cover the mandatory pay raise costs expected for fiscal year 2009.
      --Eliminate the hiring freeze and address critical vacancies.
      --Purchase two new Storage Area Networks (SAN) to enable OIG to take
            advantage of data replication and disaster recovery options not
            available when OIG's current SANs (which go out of warranty in
            fiscal year 2009) were purchased.
      --Make the delayed purchases to support our NCFD and ERP.
      --Restore funds cut from Audit and Investigations travel, thereby
            increasing the scope of oversight work we can perform.
        If, however, OIG does not receive the staff support and IT costs
    requested by the President, OIG would have to reduce staff further in
    fiscal year 2009. Should OIG not receive the requested funding, we
    estimate that it will be necessary to reduce the fiscal year 2009
    staffing level by 21 staff, or almost 4 percent below the already
    drastically reduced fiscal year 2008 levels. OIG staff would then be
    down 30 percent since fiscal year 2006.\19\
    ---------------------------------------------------------------------------
        \19\ This estimated reduction is based on the following
    assumptions: OIG would have to absorb a pay cost approximate to the
    $1.9 million we absorbed this year, the postponed NCFD and ERP
    enhancements would have to be funded at $.3 million, and one-third of
    OIG laptops would need to be replaced at approximately $.4 million.
    This would equal a total additional cost of $2.6 million that would
    have to be absorbed at OIG's current budget level. Estimating $122,000
    per FTE, that would be approximately 21 staff.
    ---------------------------------------------------------------------------
        OIG's ability to provide services to the Department, Congress, and
    the public is directly tied to the number of staff it can support
    through pay and related costs. Over the last 3 fiscal years, management
    has agreed to over 1,143 OIG recommendations for program improvements
    and over $1.8 billion in OIG financial recommendations and
    investigative recoveries. Those numbers--which are really just a
    statistical barometer of OIG's impact on Departmental operations--will
    most likely decrease as our staff continues to decline, as will our
    ability to do the types of work we summarized for you today in this
    testimony. We have done all we can to do more with less; we are now at
    that juncture where, in truth, we can only do less with less.
      --In fiscal year 2008 alone, our Audit office will lose approximately
            12 work years and $400,000 in travel funds. Several audits
            (including some identified as high priority) will need to be
            delayed; the scope of some audits will have to be reduced; and
            some audits will have to be cancelled outright. The following
            is a partial list of audits that have already been delayed and
            may have to be cancelled.
          An audit of the National Organic Program, which was scheduled to
            start in January 2008, will now be delayed until August 2008.
            Organic food sales have grown between 14 to 21 percent each
            year since 1997. Sales of organic foods in 2006 exceeded $16
            billion. However, with the staffing and travel requirements for
            this audit, the work will need to be split between 2 fiscal
            years to have sufficient resources to conduct the audit.
          Audits addressing WIC vendor monitoring, new farm programs
            included in the Farm Bill, acquisition of IT software and
            hardware, the FSA comprehensive compliance system, and the RMA
            National Program Operations Review are being delayed, and no
            estimated start date has been set due to lack of currently
            available resources. These audits involve billions of dollars
            in program payments and analyses of agency internal control and
            compliance systems that help ensure program integrity.
      --Should staff, equipment, and travel resources available to our
            Investigations office continue to diminish, OIG will have to
            increasingly limit our investigative focus only to those food
            safety and security issues that directly imperil public health.
            The resources dedicated to detecting and preventing fraud in
            USDA programs would have to decline, in order to preserve our
            ability to work on critical safety and security cases.
            Unfortunately, this reduced capacity for fraud investigations
            would likely end in greater cash losses to the Federal
            Government than are saved by the cuts to OIG.
        It is to avoid further limitations on OIG's ability to provide
    independent, effective audit and investigations coverage to USDA
    programs and operations that we are asking for your support of the
    President's Budget Request for fiscal year 2009 for OIG.
        This concludes my statement. I again want to thank the leadership
    of the subcommittee for the opportunity to submit testimony to you. I
    hope you will not hesitate to contact me should you have any questions
    or desire additional information.
                                     ______

     Prepared Statement of Nancy C. Pellett, Chairman and Chief Executive
                      Officer, Farm Credit Administration

        Mr. Chairman, members of the subcommittee, I am Nancy C. Pellett,
    Chairman and Chief Executive Officer of the Farm Credit Administration
    (FCA or Agency). On behalf of my colleagues on the FCA Board, Dallas
    Tonsager of South Dakota and Leland Strom of Illinois, and all the
    dedicated men and women of the Agency, I am pleased and honored to
    provide this testimony to the subcommittee.
        I would like to thank the subcommittee staff for its assistance
    during the budget process, and before I discuss the role and
    responsibility of the Farm Credit Administration and our budget
    request, I would respectfully bring to the subcommittee's attention
    that FCA's administrative expenses are paid for by the institutions
    that we regulate and examine. In other words, FCA does not receive a
    Federal appropriation but is funded through annual assessments of Farm
    Credit System (FCS or System) institutions and the Federal Agricultural
    Mortgage Corporation (Farmer Mac). Earlier this fiscal year, the Agency
    submitted a proposed total budget request of $49,640,147 for fiscal
    year 2009. The Agency's proposed budget for fiscal year 2009 includes
    funding from current and prior assessments of $49,000,000 on System
    institutions, including Farmer Mac. Almost all this amount
    (approximately 82 percent) goes for salaries, benefits, and related
    costs.
                   mission of the farm credit administration
        As directed by Congress, FCA's mission is to ensure a safe, sound,
    and dependable source of credit and related services for agriculture
    and rural America. The Agency accomplishes its mission in two important
    ways.
        First, FCA ensures that the System and Farmer Mac remain safe and
    sound and comply with the applicable law and regulations. Specifically,
    our risk-based examinations and oversight strategies focus on an
    institution's financial condition and any material existing or
    potential risk, as well as on the ability of its board and management
    to direct its operations. Our oversight and examination strategies also
    evaluate each institution's efforts to serve all eligible borrowers,
    including young, beginning, and small farmers and ranchers.
        Secondly, FCA approves corporate charter changes and researches,
    develops, and adopts regulations and policies that govern how System
    institutions conduct their business and interact with their customers.
    If a System institution violates a law or regulation or operates in an
    unsafe or unsound manner, we use our supervisory and enforcement
    authorities to ensure appropriate corrective action.
                        fiscal year 2007 accomplishments
        In fiscal year 2007 we continued our efforts to achieve our
    Agency's strategic goals through (1) effective risk identification and
    corrective action and (2) responsible regulation and public
    policymaking. FCA has worked hard to maintain the System's safety and
    soundness. We also continually explore ways to reduce regulatory burden
    on the FCS and to ensure that all System institutions are able to
    provide agriculture and rural America with continuous access to credit
    and related services.
              examination programs for fcs banks and associations
        The Agency's highest priority is to maintain appropriate efficient
    and effective risk-based oversight and examination programs. Our
    examination programs and practices have worked well over the years and
    have contributed to the present overall safe and sound condition of the
    System, but we must continue to evolve and prepare for the increasingly
    complex nature of financing agriculture and rural America.
        With the changes in the System and our human capital challenges
    within the Agency (i.e., pending retirements, normal attrition of
    staff, and the ever-increasing need for more sophisticated skills in
    the financial sector), we have undertaken a number of initiatives to
    enhance our skills and expertise in key examination functions. We have
    also realigned our organizational structure to make the best use of our
    resources. Our Office of Examination has completed its transition from
    a regionally-based field office structure to divisions of nationally-
    based examination teams. Office locations have been retained, but the
    examination programs are now managed nationally to better manage
    strategic risks faced by the FCS institutions.
        On a national level, we actively monitor risks that may affect
    groups of System institutions or the entire System, including risks
    that may arise from the agricultural, financial, and economic
    environment in which the System institutions operate. Examiners use a
    risk-based examination and supervision program to differentiate the
    risks and develop individual oversight plans for each FCS institution.
    For example, the System has been a leader in lending to the ethanol
    industry from its infancy and continues to support this rapidly
    evolving sector. Our examiners watch the concentration risk in this and
    other areas to make certain lending is done in a safe and sound manner.
        We set the scope and frequency of each examination based on the
    level of risk in the institution. Examiners base the scope of their
    oversight and examination activities on their assessment of an
    institution's internal controls environment and the ability of the
    institution's board and management to manage risks. Our regulations
    require FCS institutions to have prudent loan underwriting and loan
    administration processes, to maintain strong asset-liability management
    capabilities, and to establish high standards for governance and
    transparent shareholder disclosures. The frequency and depth of our
    examination activities may vary, but each institution is provided a
    summary of our activities and a report on its overall condition at
    least every 18 months as required by the Farm Credit Act. Most issues
    are resolved through corrective actions established in the Report of
    Examination or other communications. In extreme cases, FCA will use its
    enforcement powers to effect changes in the institution's policies and
    practices to correct unsafe or unsound conditions or violations of law
    or regulations.
        As part of our ongoing efforts, we evaluate each institution's risk
    profile. The Financial Institution Rating System (FIRS) is the primary
    risk categorization and rating tool used by examiners to indicate the
    safety and soundness of an institution. FIRS ratings range from 1 (for
    a sound institution) to 5 (for an institution that is likely to fail).
    As of December 31, 2007, FIRS ratings as a whole continued to reflect
    the stable financial condition of the FCS: 83 institutions were rated
    1, 14 institutions were rated 2, and three institutions were rated 3.
    Importantly, there were no institutions rated 4 or 5. In addition, no
    FCS institutions are under enforcement action and no FCS institution is
    in receivership. The overall financial strength maintained by the
    System remains strong and does not pose material risk to investors in
    FCS debt, the Farm Credit System Insurance Corporation (FCSIC), or FCS
    institution stockholders.
        During fiscal year 2007, FCA also performed various examination and
    other services for the Small Business Administration, the U.S.
    Department of Agriculture, FCSIC, and the National Consumer Cooperative
    Bank. Each of these entities reimbursed FCA for its services.
                              regulatory activity
        Congress has given the FCA Board statutory authority to establish
    policy and prescribe regulations necessary to ensure that FCS
    institutions comply with the law and operate in a safe and sound
    manner. The Agency's regulatory philosophy articulates our commitment
    to establishing a flexible regulatory environment that enables the
    System, consistent with statutory authority, to offer high-quality,
    reasonably priced credit to farmers and ranchers, their cooperatives,
    rural residents, and other entities on which farming operations depend.
    This focuses our efforts on developing balanced, well-reasoned,
    flexible, and legally sound regulations. We strive to ensure that the
    benefits of regulations outweigh the costs; to maintain the System's
    relevance in the marketplace and rural America; and to ensure that
    FCA's policy actions encourage member-borrowers to participate in the
    management, control, and ownership of their Government-sponsored
    enterprise (GSE) institutions. For fiscal year 2007, the Agency's
    regulatory and policy projects included the following:
      --Young, Beginning and Small Farmers (YBS).--The Board acted to
            ensure that all System institutions assist YBS farmers to
            enter, grow, or remain in agricultural or aquaculture
            production. A revised Bookletter, issued in August, provides
            guidance to all FCS institutions on interpreting the phrase
            ``sound and constructive credit'' when applied to YBS farmers
            and ranchers and on extending credit to part-time YBS farmers
            who demonstrate a commitment to be full-time agricultural
            producers. The Bookletter further encourages System lenders to
            provide credit enhancements so that YBS farmers can qualify for
            financing, and it encourages System lenders to mitigate the
            risk of lending to YBS farmers by increasing coordination with
            other lending entities and sharing best practices.
      --Policy Guidance Provided on Rural Housing Lending.--FCS
            institutions are authorized to provide rural housing financing
            for single-family, owner-occupied, and moderately priced
            dwellings, but System institutions had reported difficulties in
            applying the regulatory definition of a ``moderately priced''
            rural home. In response, the Agency issued an Informational
            Memorandum providing answers about the regulatory definition of
            moderately priced housing, what is necessary to identify
            moderately priced housing values, and what data are acceptable
            to establish those values.
      --Disclosure and Reporting Final Rule.--The Agency issued a final
            rule amending existing disclosure requirements for reports to
            System shareholders and investors. These amendments ensure that
            the System's disclosures and financial reporting keep pace with
            recent changes in industry practices, Securities and Exchange
            Commission regulations implementing the Sarbanes-Oxley Act of
            2002, and Public Company Accounting Oversight Board auditing
            standards.
      --Final and Proposed Rule Updating the Farmer Mac Risk-Based Capital
            (RBC) Stress Test.--We amended the RBC regulations in response
            to changing financial markets, new business practices, and the
            evolution of the loan portfolio at Farmer Mac, as well as
            continued development of industry best practices among leading
            financial institutions. The RBC is used to calculate Farmer
            Mac's regulatory minimum risk-based capital level. The rule is
            intended to improve the model's output by more accurately
            reflecting risk. In addition, we also proposed to further amend
            RBC regulations to update the recent additions to Farmer Mac's
            program operations, to address assumptions on the carrying
            costs of nonperforming loans, and recognize counterparty risks
            on nonprogram investments. The FCA Board is expected to act on
            this final rule in 2008.
      --Advance Notice of Proposed Rulemaking (ANPR) on Capital Adequacy.--
            We issued an ANPR to solicit public input on appropriate
            changes to FCA's capital adequacy requirements for the System
            in light of Basel II proposals by the other Federal banking
            agencies.
        The Agency has also adopted an ambitious regulatory and policy
    agenda for fiscal year 2008. The agenda includes the following goals:
      --Finalizing a proposed rule to change the requirement for
            determining the eligibility of processing and marketing
            entities for System funding.
      --Developing a proposed rule to describe how System partnerships and
            investments can increase the availability of funds to help
            stimulate economic growth and development in rural America. The
            System began using such partnerships and investments under a
            pilot program initiated during fiscal year 2005.
      --Continuing to review current regulatory requirements governing
            eligibility and scope of lending to determine if these
            requirements are reasonable in light of agriculture's changing
            landscape. Agency staff will identify issues and explore
            options for the Board's consideration.
                              corporate activities
        The pace of System restructuring remained slow in fiscal year 2007.
    Only one corporate application was submitted for FCA Board review and
    approval during fiscal year 2007, compared with four applications the
    prior year. As of January 1, 2008, the System had 94 direct-lender
    associations and five banks for a total of 99 banks and associations.
    Seven service corporations and special-purpose entities brought the
    total number of FCS institutions to 106 entities. Through mergers, the
    number of FCS associations has declined slightly more than 45 percent
    since 2000, and the number of FCS banks has decreased almost 30
    percent.
                      condition of the farm credit system
        As noted previously, the System's overall condition and performance
    remained strong throughout 2007. The FCS is fundamentally sound in all
    material aspects, and it continues to be a financially strong, reliable
    source of affordable credit to agriculture and rural America. Capital
    levels continued to be strong, especially in consideration of the
    System's risk profile. Asset quality remained high, loan volume growth
    was strong, and the System earned $2.7 billion in 2007, a 13.8 percent
    increase from 2006.
        Gross loans grew by 15.8 percent in 2007, compared with 16.2
    percent the previous year. Nonperforming loans increased by $6 million
    to $621 million as of December 31, 2007. However, nonperforming loans
    represented just 2.35 percent of total capital by the end of 2007, down
    from 2.52 percent at the end of 2006. The System has earned more than
    $1 billion consistently each year since the early 1 990s; as a result,
    capital remains strong and is made up largely of earned surplus, the
    most stable form of capital. A strong capital position will help the
    System remain a viable, dependable, and competitive lender to
    agriculture and rural America during any near-term downturns in the
    agricultural economy.
                   federal agricultural mortgage corporation
        FCA also has oversight, examination, and regulatory responsibility
    for the Federal Agricultural Mortgage Corporation, which is commonly
    known as Farmer Mac. Congress established Farmer Mac in 1988 to provide
    secondary market arrangements for agricultural mortgage and rural home
    loans. In this capacity, Farmer Mac creates and guarantees securities
    and other secondary market products that are backed by mortgages on
    farms and rural homes. Through a separate office required by statute
    (Office of Secondary Market Oversight), the Agency examines, regulates,
    and monitors Farmer Mac's disclosures, financial condition, and
    operations on an ongoing basis and provides periodic reports to
    Congress.
        Like the Farm Credit System, Farmer Mac is a GSE devoted to
    agriculture and rural America. FCA and the financial markets recognize
    Farmer Mac as a separate GSE from the System's banks and associations.
    Farmer Mac is not subject to any intra-System agreements or to the
    joint and several liability of the FCS banks, nor does the Farm Credit
    System Insurance Fund back Farmer Mac's securities. However, by
    statute, in extreme circumstances Farmer Mac may issue obligations to
    the U.S. Treasury Department to fulfill the guarantee obligations of
    Farmer Mac Guaranteed Securities.
                                   conclusion
        In conclusion, we at FCA remain vigilant in our efforts to ensure
    that the Farm Credit System and Farmer Mac remain financially strong
    and focused on serving agriculture and rural America. It is our intent
    to stay within the constraints of our fiscal year 2009 budget as
    presented, and we continue our efforts to be good stewards of the
    resources entrusted to us in order to meet our responsibilities. While
    we are proud of our record and accomplishments, I assure you that the
    Agency will continue its commitment to excellence, effectiveness, and
    cost efficiency and will remain focused on our mission of ensuring a
    safe, sound, and dependable source of credit for agriculture and rural
    America. On behalf of my colleagues on the FCA Board and at the Agency,
    this concludes my statement and I thank you for the opportunity to
    share this information.

                           AUDITS OF SLAUGHTER PLANTS

        Senator Kohl. Thank you very much, Mr. Secretary.
        We would like to thank you again for testifying last month
    about the Westland/Hallmark beef recall. I believe that was a
    productive hearing. We have been following up with your staff
    since then. We are drafting a bill that gets at this issue from
    several angles, which will include a potential downer ban. I
    believe we need to continue working on this and I am hopeful we
    can achieve an accord.
        Yesterday, Mr. Secretary, I received the results of the
    audits of slaughter plants under contract with USDA for
    nutrition programs, to which you referred. As you said, you
    audited 18 plants. If you add in the plant at Chino, there are
    19 total plants actively participating in the Federal nutrition
    programs. Of these, two had offenses serious enough to require
    a notice of suspension. While it is just two, it is over 10
    percent of the total that were audited.
        In early March, the Las Vegas Sun quoted you as saying that
    you would not be surprised if there were more plants like the
    one in Chino out there and that hiring additional inspectors
    will not help because ``if they're going to break the rules,
    then they're going to break the rules.'' These remarks did
    trouble me a bit, especially if 10 percent of the plants have
    serious problems, because they suggest that perhaps USDA has
    reached a limit in what it can do to improve food safety.
        So we would like to give you a chance to elaborate and
    clarify. Do you really think that USDA cannot do a better job?
    And what action has USDA taken since our hearing and what
    action is planned?
        Secretary Schafer. Thank you, Mr. Chairman. As we did point
    out in the letter to you yesterday, we have done audits at 18
    facilities. I appreciate you bringing up the Hallmark/Westland
    plant as number 19, but as you know, that is not operating. It
    is in suspension.
        The three issues where we found problems in humane
    treatment of animals were not on a downer cow situation. They
    were things like crowding in the pens. It was bunching up of
    cattle going into the stunning operation and excessive use of
    stunning sticks or the prodders. Those facilities have been
    corrected.
        As we look at this, we are confident that USDA can do a
    better job. We have redirected our inspectors. We are rotating
    the inspectors, the time they are coming in and out of the
    facilities. As you know, the plants cannot operate unless the
    inspector is in place, as we do a carcass-by-carcass inspection
    of every cow that goes through the process.
        As we have looked at the inhumane treatment of animals, you
    will also notice in the investigation that we sent you
    yesterday that all facilities have cameras and surveillance in
    some portions. Many of them have them in the stunning area and
    in the pens as well. So we are looking at ways that we can
    better observe. We have helped train our inspectors to observe
    while being unobserved so that they can properly watch over the
    system. And I do believe that the result of our investigations,
    when we get completed, will allow us to make some further
    changes to enhance the process. But we believe that the USDA
    inspectors and veterinarians are capable, are hard-working and
    committed to their jobs, and we think we can direct them in the
    proper place so that this does not take place again.

                                   OIG REPORT

        Senator Kohl. In your statement, you talked about the OIG
    report. Can you estimate when that report will be complete?
        Secretary Schafer. I cannot, Mr. Chairman. I met with the
    OIG officer a few days ago, and as you know, that is an
    independent investigation arm and we do not have the legal
    relationship for them to include us in the timing and the depth
    of the investigation. But we were urging them to get it done as
    soon as possible because we are working on efforts to assure
    the people of the United States that we have a safe food supply
    out there, and as we start enhancing the message on safe food,
    we want to make sure that we incorporate the results of the
    investigation.

                                 RECALLED MEAT

        Senator Kohl. Can you tell us whether all of the recalled
    meat from the school lunch program has been identified,
    collected, and destroyed?
        Secretary Schafer. Sir, I think all of the meat has been
    identified. It has been contained. Most of it has been
    destroyed. All of it has not.
        Senator Kohl. What do you want us to take from that
    statement, or what would you want the public to take from that
    statement?
        Secretary Schafer. It was put on hold. Once we started the
    recall, all meat that went into the school lunch program was
    identified. It was contained. We purchased meat to replace
    product taken from the schools. And so as we are going through
    that process, we are destroying that meat as we go. We are not
    complete with that process, so I know there is still some that
    is contained, identified, but not totally destroyed. And we are
    reimbursing those schools for the costs in doing so.
        Senator Kohl. All right.

                                  WIC PROGRAM

        Before I turn it over to Senator Bennett, I would like to
    discuss WIC with you a bit. As you know, we need to start
    talking about WIC immediately. The President's request last
    year was $633 million short of what was ultimately needed. We
    had to come up with the difference and we were forced to do it
    without any input from USDA. We do not want to repeat that
    situation, I think we could agree. So we have asked USDA for
    monthly reports on participation and food cost estimates.
        We did receive the second of these reports yesterday, and
    in a nutshell, in the current fiscal year will be short
    somewhere between $65 million and $100 million, even after
    releasing the entire contingency fund. The report says that you
    are looking at available options to address this problem.
        What options are you considering? As you know, we are
    currently working on a supplemental appropriations bill.
        Secretary Schafer. Maybe I could get the best answer from
    Scott for you, as we look at these dollars. As we looked at the
    budget, we planned on an 8.6 million participation level and
    also increased the budget based on current food costs and
    estimated food costs. We think that the budget does reflect the
    proper dollars for the participation and cost level. But maybe
    Scott could give us a few more details.
        Mr. Steele. Yes, thank you, Mr. Secretary.
        Mr. Chairman, the shortfall that was identified in Under
    Secretary Johner's letter to you identified a shortfall for
    2008, the current fiscal year at somewhere between $65 million
    and $100 million.
        There are some options we are looking at. We have used the
    Secretary's interchange authority in prior years and we are
    looking at that option as a possibility. We are in discussions
    with OMB on that. We have not yet defined exactly what we are
    going to do.
        We have yet some more time here in April and maybe part of
    May to figure out a solution to that problem. We certainly will
    be in touch with the committee in terms of how we are going to
    resolve that and whether we need to discuss some options with
    you in terms of resolving it.
        For 2009, we are still staying with our current
    participation estimate, as the Secretary just indicated, the
    8.6 million. We are looking at that estimate, obviously, on a
    monthly basis. We will be doing our mid-session review estimate
    in July, which would be an official estimate by the executive
    branch. OMB would be clearing off on that. A revised estimate
    would come to Congress in July.
        But as you say, we are on an ongoing basis, looking at
    this, submitting our monthly reports to you, and we will try to
    keep abreast of it and identify problems that we see coming
    forward.
        It is our biggest discretionary program, as you know. It is
    over $6 billion a year. It is rising rapidly. As the Budget
    Officer of the USDA, I am concerned about the funding for the
    program given it is a discretionary program. So we are going to
    have to work closely together to try to resolve this.
        Thank you.
        Senator Kohl. Thank you. I think we can all agree that it
    is something that needs to be monitored, as you have suggested,
    very, very closely. WIC needs to be funded. It is really not
    something that we have discretion in terms of whether we will
    or will not. We know we are going to have to fund WIC. And if
    we do not work very closely, then we will be caught in a very
    serious situation, and I think collectively we do not want that
    to happen. So we do look forward to working with you in an
    honest, forthcoming, and timely manner on WIC.
        Senator Bennett.
        Senator Bennett. Thank you very much, Mr. Chairman.

                         PUBLIC LAW 480 TITLE II GRANTS

        Secretary Schafer, the supplemental request from the
    President contains a request from you for additional funding
    for Public Law 480 Title II grants of $350 million. The
    supplemental last year contained a request for $350 million.
    The supplemental for the year before that contained a request
    for $350 million.
        This is a pretty strong coincidence, that for 3 years in a
    row, you have asked for an additional $350 million and it
    raises the question, why do you not just put $350 million in
    the regular budget and be done with it? Is this request really
    based on unanticipated needs and is it just a coincidence? Help
    us understand why there is not something in the regular budget
    for this.
        Secretary Schafer. Well, we think that the budget reflects
    a prioritization among the competing demands for international
    humanitarian assistance. This budget request really addresses
    the most severe and critical emergency food and needs overseas.
        As far as the specifics, I will turn to our Budget Officer,
    Scott Steele, for information on the specific programs.
        Mr. Steele. Thank you, Mr. Secretary.
        Mr. Bennett, yes, the Department of Agriculture does not
    unilaterally decide on the level for Public Law 480, Title II
    assistance. As you well know, the Title II program is operated
    by USAID.
        Senator Bennett. Right.
        Mr. Steele. And they have people in the field. As you know
    as well, the foreign assistance situation is a very dynamic
    situation right now, and we have the issues in Darfur in Sudan
    and other places that are----
        Senator Bennett. I am not questioning the need for it.
        Mr. Steele. Yes, I understand what you are saying. It has
    gone on repeatedly and we do have other options to consider as
    well. We have the Emerson Trust as something that could come
    into play here at some point as well.
        I do not have a good answer for you in terms of why the
    Department's budget did not reflect the additional $350 million
    in terms of a request. You are right. It continues on as a
    major problem in funding food assistance. We will try to
    provide more information for the record, if that is okay.
        [The information follows:]
                     Public Law 480 Title II Budget Request
        International emergency food assistance needs have been unusually
    high in recent years due to a variety of causes, both man-made and
    natural. The United States has continued to demonstrate leadership in
    responding to those needs, including through the provision of food aid
    commodities under the Public Law 480 Title II program. In order to do
    so, in certain years supplemental appropriations have been requested
    for the Title II program to meet the extraordinary levels of emergency
    need.
        Many factors are considered in developing the annual budget request
    for the Public Law 480 Title II program, including what level of
    funding should be included for emergency programming. This effort is
    complicated because development of the annual budget submission begins
    more than a year before the start of the fiscal year. That time frame
    makes it difficult to project with accuracy what the level of emergency
    needs will be during the course of the year and, therefore, difficult
    to budget for them with certainty. As a result, there may be years when
    emergency needs exceed the level provided through the annual
    appropriations, and the administration will need to consider what steps
    are necessary to ensure the United States can respond to extraordinary
    emergencies. One option for doing so is to request supplemental
    appropriations.
        However, in responding to unanticipated emergencies there are
    alternatives to a supplemental appropriations request. For example, one
    option is authorizing a release of commodities or funds from the Bill
    Emerson Humanitarian Trust. The Trust specifically provides for the
    commodities to be programmed through Title II to provide a humanitarian
    response to unanticipated, emergency food aid needs. On April 14, 2008,
    the President directed the Secretary of Agriculture to release
    commodities from the Trust to meet emergency food aid needs abroad this
    year; this action is expected to provide an additional $200 million of
    assistance.
        In addition, in recent years the President's budgets have included
    a request for authority for the Administrator of AID to use up to 25
    percent of annual Public Law 480 Title II funding to purchase
    commodities in countries closer to where they are to be donated. This
    authority would facilitate the donation of a higher level of
    commodities as savings achieved in transportation and distribution
    costs would be available for additional commodity purchases.
    Approximately 60 percent of annual Title II funding is used for non-
    commodity costs for the program, which includes ocean freight
    expenditures. Consequently, the savings achieved through enactment of
    this proposal could be substantial, and those savings would be
    extremely helpful in responding to unanticipated emergency situations.
        All of these factors--the uncertainties inherent in projecting
    emergency response needs, the availability of the Bill Emerson
    Humanitarian Trust, and the proposal for overseas purchases--were
    considered in developing the President's budget request for the Public
    Law 480 Title II program for 2009. At the same time, the resource
    requirements for Title II had to be weighed against competing claims
    for funding from many other worthy programs that assist the American
    public, including through agriculture, rural development, and food and
    nutrition programs.

        Senator Bennett. Yes, that will be fine. But give some
    serious consideration to building it into your regular budget
    because every spring there is a supplemental and every spring
    it is for $350 million. It appears to say that amount regular
    budgeting procedures ought to be able to anticipate that amount
    and put that in the annual budget.

                                COMMODITY PRICES

        Let me go to the issue that I mentioned in my opening
    statement, which is commodity prices. They have shown a drastic
    increase both in the cash prices and in the future market and
    have had a drastic ripple effect across all areas of
    agriculture. The rising prices have made it more expensive to
    feed a family, but it has also driven up the participation
    rates of the various programs that are involved in this, WIC,
    food stamps, et cetera. There are States now where one in six
    people are on food stamps, which is not what we had
    anticipated.
        How is the Department dealing with the unpredictability of
    the costs and the subsequent unpredictability of the
    participation in these programs? And, Dr. Glauber, I would be
    interested in having your take on what the primary cause of
    these increases would be.
        Dr. Glauber. In terms of the underlying cause, there is no
    question there is a number of things going on in world markets.
    People point, one, to the rapid expansion of area devoted to
    biofuel production. That is certainly important.
        But I think in looking at the overall food price picture
    certainly in the United States, there is a number of other
    things to consider. Dairy prices. We have seen very, very high
    dairy prices. Of course, dairy products figure heavily in a
    number of budgets, of food aid program budgets. Most of that
    increase I think could be attributed to declining milk
    production in New Zealand and Australia. They have had very
    serious droughts over the last couple years. World dairy prices
    have been very high as a result.
        So I would attribute that less to sort of high corn prices,
    although there is no question that the sectors themselves are
    feeling the pinch of higher feed prices.
        The other big thing, of course, in a very visible price
    increase both on futures markets but also at the grocery store,
    has been bakery products. There have been underlying wheat
    problems. That too is largely a problem of overseas production.
    There was also a very short crop in Australia. There was also a
    poor crop in Canada this year. There was a poor crop in Europe
    this past year. They are all expected to rebound production,
    but in the meantime, we saw futures prices hit as high as 20
    percent, and not surprisingly, that is being reflected in
    bakery products and other cereals and other sorts of things.
        Now, this past year 2007, we saw inflation, CPI for food,
    around 4 percent, which is certainly higher than the 2.5
    percent or so that we have averaged for a long time over the
    past 5-7 years. This year we are seeing slightly higher
    increases. We are thinking somewhere between 3.5 to 4.5
    percent. Some of that is largely because big components of the
    food price bill are meats. We are seeing flat meat prices. In
    fact, in some cases for pork, we have seen some decline in
    prices.
        Senator Bennett. People in WIC usually do not eat that much
    meat.
        Dr. Glauber. No. That is right.
        Senator Bennett. The grain situation----
        Dr. Glauber. No. You are absolutely right.
        Senator Bennett [continuing]. Hurts them far more.
        Dr. Glauber. That is right.
        So if you focus on individual components, dairy, for
    example, is big. Again, I think that we are seeing dairy prices
    come down and we are likely to see some decline in dairy prices
    this year.
        So you are absolutely right, and that is part of the
    previous question, of course, on food aid overseas. That is
    also a big component there where, certainly in lower income
    countries, the price of the underlying commodity as a
    proportion of the overall price that consumers pay is much,
    much higher than it is in the United States.
        Senator Bennett. Are you anticipating that the price will
    come down? The President's budget projects an increase of 2.3
    percent, which is in line with what you have just said. Are
    conditions in Australia and New Zealand and Europe----
        Dr. Glauber. Yes. We are expecting production to snap back
    in that region. They had 2 years of back-to-back droughts, and
    it looks like conditions are returning more to normal there. We
    are expecting a better crop in Europe.
        But it is important to understand that on the other hand,
    we are looking at a very, very low stock situation, and I do
    not want to minimize that. We have very low wheat stocks. We
    have very low corn stocks, both near historic lows, given the
    size of the economy now compared to, say, 50 years ago, very,
    very low stocks-to-use ratio, which is a critical factor when
    we look at price projections.
        And for that reason, I think the markets will be focused
    very much on weather this year, and what we see in terms of the
    crop progress over the next 4 or 5 months I think will be very
    critical.
        Senator Bennett. So you talk about the wheat price. Is that
    driven in part by the desire to plant more corn and thus take
    up acreage that would otherwise be planted in wheat? We hear
    that theory.
        Dr. Glauber. I would say maybe to a limited degree. There
    is competition there. Understand that a lot of the area that is
    planted to wheat in a lot of the areas is less suitable for
    corn. Now, when corn gets to be $5 to $6 a bushel, a lot of
    areas look a lot better than they might have when corn was
    going at $2. But I think----
        Senator Bennett. Just like oil.
        Dr. Glauber. Yes, that is right.
        But we do expect wheat prices to come down as the world
    crop comes on. Again, I think that a lot will depend on the
    size of the northern hemisphere crop this summer. Our plantings
    are actually up this year for wheat. So people were able to
    plant more wheat despite the competition with corn and very,
    very high soybean prices.
        Senator Bennett. Thank you. That was helpful.

                            AFRICAN WHEAT STEM RUST

        I understand, Mr. Secretary, that you need to do what you
    can to deal with the President's desire to balance the budget
    overall, and I also understand how OMB sometimes can be less
    sympathetic to programs that the Department might think makes
    some sense. I am not going to put you in the position of having
    to argue with OMB, but let me point out one thing to you.
        In the November-December issue of Agriculture Research,
    which is the science magazine that is published by USDA, there
    was an article entitled ``World Wheat Supply Threatened!''
    Whenever a scientific journal uses an exclamation point you
    know they probably mean it. It was about the Department's
    efforts to combat African stem rust with the very interesting
    numerical designation, UG99. It sounds like a really weird Web
    site. But this is a highly virulent and aggressive stem rust.
    It spread rapidly throughout Africa and into the Middle East,
    threatens world barley, wheat production and food security. And
    coming after the answer we have just gotten from Dr. Glauber as
    to the importance of what is happening in the rest of the world
    with wheat production, you would think this is a very big deal.
        Most experts believe it will eventually reach the United
    States where both barley and wheat varieties are highly
    susceptible. And your budget proposes eliminating the funding
    of research at St. Paul, Minnesota that supports the agency's
    lead scientists working on African stem rust. It is not a big
    amount of money. It is $308,000.
        I will not ask the question of whether this is something
    that ended up on the cutting room floor at OMB and that you
    proposed. Deputy Secretary Conner, be careful about your nods.
    They might get noticed somewhere.
        But I simply make the point that I would hope we can find
    that $308,000 and maybe a little more because, again, given the
    answer we got from Dr. Glauber, we could end up spending
    millions, if not billions, if this particular disease gets into
    the American production pattern. And a few hundred thousand
    right now might make some sense.
        Secretary Schafer. Yes, Senator. We estimate that 75
    percent of the wheat strains in the United States are
    susceptible to that rust. Maybe our Deputy Secretary could
    outline the reasons that were taken here and also the approach
    we are taking to consider this issue and its impact on the
    wheat supply in the United States.
        Senator Bennett. I do not need to take any more time of my
    colleagues. You can supply that for the record.
        Secretary Schafer. We will.
        [The information follows:]
                               Stem Rust Research
        The Agricultural Research Service (ARS) is leading a national
    cereal rust research effort and is making key contributions to
    supporting international cooperative efforts through the Global Rust
    Initiative to address the new African wheat stem rust. Fiscal year 2008
    ARS wheat stem rust funding is $1.1 million. ARS scientists are
    developing diagnostic tests for rapid identification of the disease
    should it enter the United States and are contributing to monitoring
    and surveillance. Additionally, ARS is also developing and testing
    several new techniques that show promise in monitoring of wheat stem
    rust epidemics and for characterizing new races of cereal rust
    pathogens. A set of microsatellite DNA markers for the stem rust fungus
    has been developed; these workers are useful in tracing the
    geographical origins of new races of stem rust. Seedling evaluations
    are being conducted against African stem rust races to test the
    susceptibility of U.S. wheat varieties. ARS funding for wheat stem rust
    in fiscal year 2009 is estimated to be $944,000. The 2009 Budget
    proposes to eliminate all ARS earmarked funding, including $308,000 at
    the Cereal Disease Laboratory at St. Paul, Minnesota.
        In fiscal year 2008, the Cooperative State Research, Education and
    Extension Service (CSREES) plans to fund 1-2 competitive grants
    totaling $248,000 for aerobiology modeling of Ug99 for assessing
    potential pathways, timing of incursion and to support rust
    surveillance. An additional $20,000 in Hatch Act funds will support
    wheat stem rust research. In fiscal year 2009, CSREES estimates $20,000
    in Hatch Act funds will support wheat stem rust research.

        Senator Bennett. I will simply indicate that as far as I am
    concerned, I would like the committee to put that $308,000 back
    and help you out.

                           FOOD COSTS FOR WIC PROGRAM

        Finally, let us talk about WIC some more. The food costs
    have increased enormously. Participation has gone up,
    demonstrating the inability of people to find the necessary
    food on the basis of their own salaries. As these costs go up
    along with the signs of the weakening economy, people need help
    with food.
        We have asked for a report from the Department. In the
    report accompanying our fiscal year 2008 appropriations bill,
    we requested monthly reports on amounts necessary to fund WIC
    in fiscal year 2009. We were hoping to avoid the situation we
    had in fiscal year 2008 where the subcommittee had to provide
    $633 million above the President's request when we had not
    previously heard any information from the Department that WIC
    needs had increased. So the $633 million was a surprise.
        The reports were to include projections for food costs and
    participation and clearly explain how those projections
    differed from the assumptions made in the budget request and
    how they would impact the WIC program in 2009.
        Well, we got the first report. It was 2 months late, and
    unfortunately, it was inadequate. The second report was
    significantly better, but still did not provide an assessment
    for what the current participation trends and food costs mean
    for the fiscal year 2009 budget. And I would like to know why
    the report has been delayed, and do you think the level of
    detail in future reports can be adequate to the needs that we
    have talked about?
        Secretary Schafer. Thank you, Mr. Chairman. I would note--
    --
        Senator Bennett. You are promoting me. The chairman is to
    my right.
        Secretary Schafer. I am sorry, Senator Bennett.
        I appreciate all of your concerns about this WIC issue. We
    do use our best estimate of participation of 8.6 million
    participants in this program for the 2009 budget.
        As for the reports, I am going to ask the Deputy Secretary
    to talk about the process of getting you more timely reports
    with the information you need.
        Mr. Conner. Senator Bennett, it is certainly our full
    intention to comply with those monthly requests. Again, I think
    we would acknowledge the first report--, we were ironing out
    some of the kinks, and I think the one we got to you recently,
    I think late last week, I believe is much more in line with
    what the committee has in mind to monitor this.
        We have a little bit of a problem here, as you know,
    Senator Bennett, the development of a Federal budget is a 7-
    month process that we will begin again around the first of
    August for next year's budget. In this last budget, I will tell
    you that during the course of time that we were developing our
    budget, the numbers were changing on WIC pretty substantially
    and we were chasing that number a little bit, if you will.
    There is a 3-month delay in the data in terms of it coming in,
    and so it requires a little bit of time to filter that into the
    process.
        We are going to get you the absolute best data that we have
    got as quickly as we have it available. You do not need bad
    data from us, and obviously, we do not want to give you bad
    data. But as soon as those numbers become available, we are
    going to get that information to you. We want to work with this
    committee. And I will tell you OMB wants to work with this
    committee as well.
        We had excellent cooperation with them in the development
    of this year's budget in that, late in the game, we came in and
    said our numbers show the need for more for WIC. They gave that
    to us, frankly, without asking us to take it out of anywhere
    else. And so we have had good cooperation.
        This is one of those unfortunate circumstances where the
    numbers are changing quicker than what our system oftentimes is
    prepared to deal with. But I think between your work and the
    information we provide, we will get through this and get you
    the information you need to make the right decisions here.
        Senator Bennett. Thank you very much, and thank you, Mr.
    Chairman. You have been very generous with allowing me this
    time. I appreciate it.
        Senator Kohl. Thank you very much, Senator Bennett.
        Senator Craig.
        Senator Craig. Mr. Chairman, thank you very much.
        Mr. Secretary, gentlemen, thank you for being with us.
        Mr. Chairman, let me ask unanimous consent that any opening
    remarks that I prepared become a part of the record.
        Senator Kohl. It will be done.
        Senator Craig. Thank you.

                                COMMODITY PRICES

        Mr. Secretary, I would like to ramble a bit because,
    obviously, the chairman and the ranking member have picked up
    on rising food costs and its impact on poorer people and the
    need to fund those programs.
        Having said that, I am an unabashed supporter of high
    commodity prices because it is doing something to American
    agriculture that you and I and others have fretted and stewed
    about for decades. How do we change the aging trend in the
    American farmer? How do we change the disinvestment in the
    agricultural portfolio and see reinvestment of a kind that will
    keep agriculture modern and aggressive and ongoing?
        And the way you do that is profitability and higher
    commodity prices. For whatever reason, the last few years have
    created some of those trends. There is no doubt about it. You
    go into farm country today. You walk across it. You hear a dad
    saying, you know, my son has just decided to come home and farm
    with me or my daughter has. And 5 years ago, they were not even
    talking about that. Why? Because they can come home to a
    lifestyle and a business that has some dynamics to it today.
    That is very exciting to me.
        I drove by a--I will not give the brand name--an implement
    lot recently, and there were 55 new combines sitting on the
    lot. And I asked a farmer in the area: Who is going to buy all
    those combines? And he smiled and said, Larry, they are already
    sold. There is not a combine available in the market today for
    another 6 to 8 months. The same way with tractors. Farmers are
    reinvesting in the agricultural portfolio of America because it
    is profitable. For what reason? A lot of reasons.
        I just returned from Ottawa yesterday, Mr. Chairman, from
    looking at a cellulosic ethanol plant, knowing that that is
    where we have got to go because some would argue, gee, we have
    disrupted the food chain with corn-based ethanol. And this
    Congress is now aggressively awakening to the reality that we
    have become so dependent on foreign oil, we ought to become
    independent of it. And we are working to get there now. It is a
    good deal. It is a good idea.
        At the same time, on the way back from Ottawa last night, I
    for the first time was spending more time reading the ethanol
    magazine, and I was counting the number of new plants under
    construction as we speak. That represents about 4.2 billion
    gallons annually coming into the market in the next 12 months.
    Now, that is in addition to the current 7.8 billion gallon
    capacity. All of a sudden, we are bumping the 15 billion that
    we thought would be the limit for corn-based, very, very
    quickly. That is pretty exciting. But it also demands that we
    do our part.
        And it is going to be very fascinating, Mr. Chairman, to
    see the land base shift out there and adjust. There are already
    all kinds of reactions going on about how that happens.
        So with all of this new positiveness comes a kind of a
    stress and a need for research and the types of things that
    USDA, in cooperation with its land grant universities, have
    done so very well over the years. And your budget dramatically
    reflects the opposite. And that is very frustrating to me. Yes,
    profitability brings new investment in American agriculture,
    but the kind of research that Senator Bennett was talking
    about, as it relates to that rust, the other kinds of research
    that keep pushing us to the cutting edge in technology to
    advance these causes in American agriculture today is
    phenomenally important. And I do not think your budget
    adequately reflects that.

                                   FARM BILL

        Let me turn to another issue. The week before last, I spent
    a week traveling around Idaho, talking to farmers and ranchers,
    mostly regarding agricultural issues. All are very frustrated
    that we cannot work out this farm bill issue. It is a symbol of
    the inability of a government to function and function in a
    timely and responsible manner. And you can and I can make all
    of the excuses, and it really does not quite fit. It speaks to
    our collective dysfunctionality. And so we ought to really work
    to get it done and not extend it for another period of time in
    my opinion and I think the opinion of American agriculture. I
    think I am reasonably reflective of that.
        We are going to become the third largest dairy State in the
    Nation. We have got about 560,000 cows milking in Idaho right
    now. So we are going to break those numbers very quickly, and
    that brings both opportunity and problems. Research again
    becomes very, very important to us, how you manage large herds
    and how you manage waste and all of that. That is in
    cooperation.
        But the biggest issue that is not, nor can it be, reflected
    by this budget--but I would hope that it would become reflected
    by your rhetoric--is the biggest in Idaho agriculture today,
    and it has been a long time coming because they have been
    hiding behind their combines or hiding behind their cows
    because the issue was so politically charged they did not want
    to deal with it and now they have got to. And that is the hands
    to milk the cows and operate the equipment and work the rows.
    It is labor.
        American agriculture last year guesstimated--and maybe our
    economist can tell us we dropped $8 billion at the farm gate,
    rotted in the fields, could not pick it, could not deliver it,
    could not process it. I have got potato lines in our plants in
    Idaho down right now because we cannot supply them with
    workers. And it is possible, even though we have become very
    good at storing spuds, that some might rot in the cellars
    because we cannot get them into the boxes and out to the
    market. And we talk about prices going up, and yet we cannot
    deliver to the market.
        We have lost maybe a quarter of a million acres of
    vegetables in the San Joaquin Valley in this cropping season.
    It has gone to grains and hays and other things because their
    hands are not there. And those acreages have moved across the
    border into Mexico and gone on to Chile and possibly to Brazil.
        The exportation of American agriculture production today,
    because this Congress cannot get it right about immigration, is
    tragic. And there is a bit of a panic in farm country as to
    what we do because we have not done what we need to do. And our
    borders, which we should secure, are securing.
        Well, that is an extension to my opening remarks, a bit of
    a diatribe, but a very important one I think.
        Am I out of time, Mr. Chairman?
        Let me thank you, now that I have had your ear, for potato
    cyst nematodes and the resources that you have helped provide
    the potato industry in Idaho when we had an outbreak and have
    worked to contain that problem and are doing quite well by it
    now, a potentially ruinous problem to a $2.9 billion potato
    industry. And we need a little more help there. The work that
    has been done I think has been very effective in its
    eradication, at least in its containment and hopefully its
    eradication. A very little amount of money, but $1.8 million
    goes a long way because farmers and researchers know how to
    stretch it. So we cannot compromise. We have got to finish it
    and complete it. We have isolated it and we hope to have your
    help in doing so.
        Lastly, food safety issues are critically important. The
    funding of the National Veterinary Medical Services Act is
    awfully important to us.
        From those standpoints, the budget is inadequate. And I
    understand the squeezes. We will work with the chairman and the
    ranking member to resolve these issues. I did not think that a
    continuing resolution for budget purposes this year, because of
    the politics that America is in right now, would be a good idea
    because it talks about our inability to get things done. But in
    all fairness, Mr. Secretary, when I look at your budget, maybe
    it is not a bad idea, at least for the short term.

                               PREPARED STATEMENT

        I really have no questions of you. We will put the rest in
    writing. But there is a lot of good news and a lot of
    frustration out in farm country today. And I do not mind us
    moving away from a cheap food policy. We just need to simply
    make sure that those who cannot afford food are cared for at a
    time when profitability and investment are returning to the
    agricultural portfolio of America.
        Thank you.
        [The statement follows:]

                   Prepared Statement of Senator Larry Craig

        Thank you for appearing before us today to discuss USDA's fiscal
    year 2009 proposed budget.
        We are in an interesting time given the current status of farm bill
    negotiations. There is a great deal of uncertainty among our Nation's
    farmers and ranchers regarding what the next 5 years of farm policy
    will look like.
        I hope that we can finalize this process and get it to the
    President--and that he will sign it--to give some much-needed certainty
    to our farmers and ranchers that are right now making planning
    decisions in the dark.
        I understand the difficulty of putting together a budget under
    these uncertain circumstances. Couple that uncertainty with an
    extremely tight budget and we have a serious challenge on our hands.
        Without spending too much time parsing over the elements of the
    Department's budget proposal with which I agree or disagree, let me
    just point out a few particular areas of concern.
        The first is in regard to agriculture research. I think we all
    agree that the current status of our domestic agriculture industry is a
    product of decades of innovation--fueled by a strong investment in
    agriculture research.
        Though I appreciate the idea of more collaboration and greater
    ``efficiency'' in research, I become very concerned about the
    consequences of terminating or drastically under-funding critical areas
    of research in this country.
        One of the research units proposed for termination is the ARS Land
    Management and Water Conservation Research Unit in Pullman. This unit
    has played a leading role in the development of science-based solutions
    to agricultural and environmental problems of the Pacific Northwest.
        We must not lose sight of the value of our land grant institutions,
    and the value of the formula dollars that we direct their way. Many of
    our land grant universities--including the University of Idaho--utilize
    those formula dollars to invest in extremely valuable long term, core
    agricultural research programs that cannot be effectively managed or
    supported through multi-state or short term granting mechanisms.
        Switching gears, I believe that your dedication to the areas of
    pest and disease management is extremely vital to the health of our
    domestic agriculture industry.
        Take, for example, our collective efforts over the last year or so
    to eradicate potato cyst nematode. This pest threatened to devastate
    our State's potato industry, and that of the nation.
        Thanks to adequate funding and a rapid response, we have likely
    prevented this pest from becoming even more expensive to control, and
    more devastating to the industry. Our work there is not done yet--we
    need to continue to provide adequate funding for programs like this to
    remain effective.
        Likewise, the USDA has a significant challenge in safeguarding the
    health of our Nation's livestock--for purposes of national security,
    public health, the safety of our food supply and health of our animal
    agriculture industry.
        I am encouraged to see that USDA continues to focus on this area,
    reflected by an increase in the budget for disease monitoring,
    surveillance and response programs.
        However, I fear USDA continues to miss a key priority in bolstering
    the numbers of our ``first responders''--those large animal
    veterinarians willing to practice in rural areas; a breed that is
    largely disappearing.
        Smaller farms in rural areas of Idaho are facing significant--and
    growing--challenges in finding veterinarians to service their herds. We
    have several counties in Idaho without a single food animal
    veterinarian. Several counties have upwards of 50,000 food animals per
    food animal veterinarian. Rural, large-animal veterinarians are
    themselves becoming an endangered species, and we must do something to
    restore their ``population.'' If not, we risk losing the important
    first responders when it comes to disease threats.
        There is immeasurable value in dollars spent to find solutions to
    current and emerging animal diseases. However, if there is no one to
    identify, prevent and treat these diseases once they emerge, our money
    spent on research is much less fruitful.
        I point out only a couple of these issues to highlight the
    difficult job ahead of utilizing limited dollars wisely.
        I look forward to working with you, Mr. Secretary, as we move
    forward on our fiscal year 2009 priorities.

        Senator Kohl. Thank you, Senator Craig.
        Senator Cochran.
        Senator Cochran. Mr. Chairman.
        Thank you, Mr. Secretary, for being here and helping us
    understand the President's budget request for the Department of
    Agriculture and related agencies.
        Let me first ask unanimous consent, Mr. Chairman, that my
    prepared statement be printed in the record.
        Senator Kohl. Without objection.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        Mr. Chairman, thank you for holding this hearing on the fiscal year
    2009 United States Department of Agriculture budget. I welcome
    Secretary Schafer to the committee. I would also like to congratulate
    Dr. Joseph Glauber on his recent appointment to Chief Economist for the
    United States Department of Agriculture and look forward to working
    with you and your staff.
        An important aspect of the Agriculture appropriations bill is the
    funding it provides for agriculture research. This research is a
    critical part of ensuring that U.S. producers remain the leaders in
    food and fiber production. The funding this bill invests in agriculture
    research is a small sum compared to the economic benefit it has on a
    farmer's bottom line. I am concerned about the administration's
    recommendation to reduce agriculture research
        funding by $170 million from last year's enacted level. Agriculture
    Research continues to influence production agriculture by giving
    producers better varieties for quality and yield, identifying new
    methods for treatment of pests and diseases, and developing agriculture
    practices that reduce environmental effects such as sediment runoff and
    carbon release. Congress should continue to make investments in
    agriculture research.
        The requested increase of $480 million for the Women, Infants, and
    Children Program provides evidence that the rising cost of food
    continues to be a problem for both the Department and consumers. This
    problem is not limited to the United States. The United Nations' World
    Food Program announced that from October 1, 2007 through February 1,
    2008, the cost of its program rose 41 percent in that 5 month period.
    Congress has been able to allocate additional funding for the Women,
    Infants, and Children
        Program through previous emergency supplemental appropriation
    bills. It is my hope that the Department will keep the committee
    informed as to whether additional funding will be required above the
    current fiscal year 2009 request.
        Once again, I welcome the Secretary and look forward to his
    comments.

        Senator Cochran. I mention in the statement the importance
    of agriculture research and worry about the fact that the
    budget request is about $170 million below last year's enacted
    level of funding. But this is not unusual for the Department to
    submit a budget request that they know is going to be
    increased. So it will not be a shock to you. And I am proud to
    associate myself with the remarks of the Senator from Idaho
    about the importance of agriculture research. It helps improve
    our profitability in production agriculture. It helps create
    jobs in the processing and exporting industries. And these are
    big factors in our own economic well-being. And I know you
    understand that. So you will not be surprised if you see us
    increasing those numbers a little bit.
        We do need your guidance and observations about offsets
    because we do not want to overspend and injure the economy by
    running up deficits that threaten overall economic health too.
    So we know we need to work together, and I look forward to
    doing that.

                            COLOMBIA TRADE AGREEMENT

        In that connection, I think the administration deserves
    praise for negotiating trade agreements that help enable our
    producers and exporters to realize profits in the international
    marketplace. I know we have coming before the Senate a Colombia
    trade agreement. Let me ask you if the Department of
    Agriculture supports the ratification of that, and what
    comments can you make that would give us some reason to be
    strong advocates of that position?
        Secretary Schafer. We do very much support the ratification
    of the Colombia Free Trade Agreement. I was fortunate to be
    with the President yesterday when he made the announcement that
    he was sending this legislation to the Hill. And I was there
    because of the importance of free trade agreements, bilateral
    agreements and multilateral agreements, to the agriculture
    community.
        We would note that--and I mentioned it earlier--the
    agriculture sector is the positive trade balance sector of our
    economy, and we also note that last year that 40 percent of the
    GDP growth in this country was led by exports. We think exports
    are important. I can tell you from my State, North Dakota, 50
    percent of our agriculture products are exported from this
    country. And that is duplicated State after State after State.
        The issues of national security and combining with an ally
    in South America with a democratically elected government are
    strong, but the issues of agriculture, we think, are most
    important. As that country is moving away from illegal
    production and growth of drugs and crops to make drugs and
    moving into legitimate, honest, and legal products and crops,
    it is important that we support that government. As we import
    our products there, jobs are created. People have better
    opportunity. As they export their products to us, they provide
    economic opportunity for the people there.
        For the people of the United States of America, we are
    already importing 99 percent of the products from Colombia
    duty-free. On the other hand, our products that go down there
    contain levels of duty ranging from 5 percent to well into the
    70 percent range. And I would note that upon ratification of
    this treaty, 70 percent of the products that we currently ship
    to Colombia go duty-free; the rest, over time, those tariffs
    and duties disappear. That provides economic opportunity for
    our current exporting levels.
        Also, if you look at the importance of trade with the Peru
    agreement that was passed, if you add Colombia, Korea, and
    Panama, those four provide $3 billion of annual opportunity for
    agriculture exports. We think it is important for this country,
    and we urge the ratification of this legislation.
        Senator Cochran. Thank you.
        Thank you, Mr. Chairman.
        Senator Kohl. Thank you, Senator Cochran.
        Senator Specter.
        Senator Specter. Thank you, Mr. Chairman.
        Mr. Secretary, we welcome you here and note your
    distinguished record as Governor of North Dakota and thank you
    for undertaking this assignment in the last year of the
    administration.
        In reviewing the proposed budget, I am pleased to see that
    the budget fully funds the Department's three major nutrition
    assistance programs, food stamps, school lunch, and WIC. But
    the funding has been terminated for the Commodity Supplemental
    Food Program. It is a program that I have consistently
    supported, and we are going to try to find a way to put that
    $100 million back in the budget because it is an important
    program. And I would appreciate your taking a look at that.
        Food safety has an increase of $22 million at a funding
    level of $952 million, and I would appreciate it if you would
    take a look to see and give us a written response on the
    adequacy of that amount of money, considering the very serious
    problems there are.
        As you have noted, this is a very busy place. Senators come
    and go. I am due on the floor 6 minutes ago on the housing
    bill. So I am not going to be able to stay to have a dialogue.
    But if you would give an analysis to the subcommittee on that,
    I would appreciate it.

                                  CONSERVATION

        With respect to conservation, I am concerned about the 15
    percent decrease from fiscal year 2008 where there is
    elimination of funding for Watershed and Flood Prevention
    Operations, Watershed Surveys and Planning, Healthy Forest
    Reserve, Resource Conservation and Development. And I would
    like your responses to the impact of that 15 percent decrease
    and your Department's analysis, your analysis, of the
    importance of those programs.
        On agriculture research, I note that the fund is down 10
    percent, or more than $100 million, from last year. And 11 labs
    are closed, including one at University Park, Pennsylvania. I
    know the important work that Penn State does. Here again, I
    would like you to give us an analysis as to whether that
    shortfall could be made up in some other way.
        You have a large budget, but you need a large budget. You
    handle a Department which has more Senator interest, I think,
    than any other Department perhaps, with the exception of the
    Department of Defense. Well, there are many Departments that
    have a lot of concerns, but the Ag bill draws more interest.
    The Department of Justice is very important. I serve as the
    ranking on Judiciary. But we legislate every 5 years on the Ag
    bill, and that draws tremendous, tremendous member interest.
        So if you would take a look at those areas and give the
    subcommittee a written response, I would very much appreciate
    it.
        Again, thank you for taking on this tough job.
        [The information follows:]

                           Food Safety Budget Request

        The President's budget request is adequate to cover the
    cost of Federal meat, poultry, and egg products inspection as
    well as Federal costs for equivalent State inspection programs.
    An increase for the FSIS inspection program is requested to
    maintain our high standards for the safety and wholesomeness of
    meat, poultry and egg products and our continued efforts to
    ensure effective inspection and policy implementation. This
    appropriation request includes funding an increase in pay and
    benefit costs, which make up approximately 80 percent of FSIS'
    budget; an increase for costs of the State Meat and Poultry
    Inspection Programs; and an increase to support Federal
    responsibilities added due to the takeover of the New Mexico
    State program.
                              conservation funding
    Watershed Rehabilitation Program
        The fiscal year 2009 President's Budget proposes a reduction in
    discretionary funding for the Watershed Rehabilitation Program,
    although mandatory funding is available. The Watershed Rehabilitation
    Program addresses the problem of aging dams, especially those with a
    high risk for loss of life and property. This reduction reflects the
    administration's position that the maintenance, repair, and operation
    of these dams are primarily a local responsibility since program
    benefits are highly localized. A reduced level of discretionary funding
    will provide technical assistance to address those dams with the
    greatest potential for damage.
    Watershed Operations and Small Watersheds Programs
        The fiscal year 2009 President's Budget proposes no funding for the
    Watershed Operations and Small Watersheds programs. Through the
    Watershed and Flood Prevention Operations Program, NRCS provides local
    communities with technical and financial assistance to construct flood
    prevention, water supply, and water quality improvement projects. Since
    most program benefits are highly localized, the Agency anticipates that
    those Public Law 534 and Public Law 566 projects not yet completed will
    continue to receive strong local support from project sponsors.
    Watershed Surveys and Planning Program
        The fiscal year 2009 President's Budget proposes no funding for the
    Watershed Surveys and Planning Program. The Watershed Surveys and
    Planning Program authorities are directed toward assessment of natural
    resource issues and development of watershed plans to conserve and
    utilize natural resources, solve local natural resource and related
    economic problems, avoid and mitigate hazards related to flooding, and
    provide for advanced planning for local resource development. With the
    elimination of Watershed and Flood Prevention Operations, continuation
    of the planning component is no longer necessary. Since the benefits
    are highly localized, local sponsoring organizations as well as State
    and local governments are expected to assume a greater role in
    identifying and addressing water resource problems.
    Resource Conservation & Development Program
        The fiscal year 2009 President's Budget proposes no funding for the
    Resource Conservation & Development (RC&D) program. The purpose of the
    RC&D Program is to encourage and improve the capabilities of State and
    local units of government, and local nonprofit organizations in rural
    areas to plan, develop, and carry out programs for resource
    conservation and economic development. The program provides technical
    assistance to local communities to develop strategic area-wide plans
    that address their locally identified natural resource and economic
    development concerns. Many RC&D councils have received Federal
    financial support for at least 20 years. At this point, most of these
    communities should have the capacity to identify, plan, and address
    their identified priorities. In addition, a Program Assessment Rating
    Tool (PART) evaluation determined that the program is duplicative. The
    PART concluded that the program duplicates other similar resource
    conservation planning, rural economic development, and community
    programs provided by other USDA agencies (such as the Forest Service
    and Rural Development) and other Federal departments (such as the
    Department of Commerce's Economic Development Administration).
    Healthy Forests Reserve Program
        The fiscal year 2009 President's Budget proposes no funding for the
    Healthy Forests Reserve Program (HFRP). The HFRP assists landowners in
    restoring, enhancing and protecting forest ecosystems to promote the
    recovery of threatened and endangered species, improve biodiversity,
    and enhance carbon sequestration. The administration's farm bill
    proposal consolidates this program as part of a combined Private Lands
    Protection Program.
                          agriculture research funding
        Many difficult choices were made in developing the Department's
    fiscal year 2009 budget in order to advance the President's goal of
    achieving a balanced budget by 2012, while also encouraging economic
    growth and security.
        The reduction in research funding is primarily due to the
    termination of earmarks consistent with the administration's policy,
    and a reduction in lower priority research in favor of higher priority
    research, including bioenergy research.
        The decision to terminate or close programs and locations was based
    on specific criteria which include whether the facilities have reached
    their useful life span or have such high maintenance and operating
    costs that it is no longer feasible or possible to keep them open;
    closing these locations and moving personnel to newer facilities or to
    those that conduct related research, will enable a larger critical mass
    of Agricultural Research Service (ARS) scientists to address issues in
    a more efficient manner; and finally, some of the research is no longer
    relevant to the mission of ARS or has matured to the point that
    discontinuing it and closing the locations is the best use of limited
    resources.
        In focusing on the need to redirect and reallocate limited ARS
    resources to higher priority research initiatives and to provide
    funding that would support the administration's goal of deficit
    reduction and economic growth, programs were reviewed for relevance,
    quality, impact, and cost effectiveness.

        Senator Kohl. Thank you, Senator Specter.
        Senator Craig.

                                RESEARCH FUNDING

        Senator Craig. Again, Mr. Chairman, thank you.
        Mr. Secretary, one last thought. As we look to budgets and
    we look to consolidating resources but continuing to provide
    quality resources in a variety of areas, especially in
    research, as you know, out in Idaho and Washington we have the
    uniqueness of having two land grant universities 8 miles apart,
    Washington State University and the University of Idaho. And
    there is an increasing cooperative effort between the two as it
    relates to the land grant responsibility and the agricultural
    needs of that whole region of the country. And as a result of
    that, I think the Federal Government gets a lot more bang for
    its buck because when we deal with cold weather crops and we
    deal with large animal science, it is all the more important.
        I mentioned the growth of dairy in Idaho and that is a
    unique phenomenon of location and climate and space and the
    modernness that our dairy industry is moving into. But as a
    result of that, when you go to large, confined operations of
    5,000 and 6,000 and 8,000 and 10,000 animals, the science of it
    becomes awfully important. The health of it becomes awfully
    important.
        Idaho is preparing to invest heavily in a world-class dairy
    science center that will spread beyond that to large animal
    reviews, waste management, anaerobic digestion, a whole
    combination of things. And the State is willing to make that
    investment. ARS will be a player there. They must be a player
    there. It is too good of an opportunity to pass up for that
    kind of world-class science to be revisited and brought modern
    both with facility and location and need.
        So when I look at these research dollars and research
    budgets, whether it is the Land Management and Water
    Conservation Research Unit at Pullman, Washington, extremely
    valuable for that high production cropland in the Palouse
    country in the Pacific Northwest and the work that has been
    done there, and I look at large animal science that the
    University of Idaho in cooperation with world-class animal
    science, as the president of Washington State just spoke to
    recently, your budgets do not serve that very well.
        For example, your proposal would force the University of
    Idaho to eliminate 58 faculty or staff positions. Now, that is
    a phenomenal hit and one that I will make every effort not to
    tolerate. And I say that in a broader sense. I am going to have
    support. I am going to have the Senators from the State of
    Washington supporting me, the Senators from Montana and Oregon
    and surrounding States because the work we do is very
    transparent and very important to the agriculture of that
    region.
        And so, again, I say that--how do we justify? I guess my
    only question because I will be submitting some to you. How do
    we justify this sort of significant departure from traditional
    distribution of Hatch Act funding as it relates to these kinds
    of programs both in the long-term and short-term value that our
    land grant university research has always produced for us?
    Because it is regional. It is national. It fits the need
    locally and area-wide. What do we do?
        Secretary Schafer. Thank you for the question, Senator
    Craig, and it is an important one.
        As you know, we removed about $185 million in research
    funds from the budget in an effort to look at our limited
    resources and how they most wisely can be spent. Most of those
    were earmarks for specific facilities and specific programs.
        As we looked at the budget, recognizing that we do have
    some constraints if we are going to put us on a pathway to
    balance the budget by 2012, we wanted to make sure that we
    played our part in that.
        The administration believes and we at USDA believe that by
    competitive grant sources, we can better focus the research
    where we get the best research and the best outcome, that while
    we are requesting the removal of earmarks for facilities, we
    still have grants available. You mentioned several States, and
    it was mentioned today, closing facilities, I should point out
    that being from North Dakota, one of those facilities for
    proposed closing is in North Dakota. So I am well aware of the
    situation.
        But I think as we look at the grant opportunities, we at
    USDA are going to focus on the priorities, some of which you
    mentioned. But as we look at those priorities, we are going to
    provide the grant dollars on a competitive basis for facilities
    to do that. We think that allows us to wisely use the limited
    dollars that we have.
        Senator Craig. Well, I can appreciate the priorities and I
    can also appreciate the fiscal soundness of decisions. One of
    the great values of land grant systems spread nationwide is
    that it dealt locally and regionally in ways that became
    national in value when oftentimes not seen from the 30,000-foot
    level by USDA. And we all know that has been the case time and
    time again throughout the history of the modernizing of
    agriculture as we worked aggressively to do it over the last
    good while.
        So we will work with you and certainly with the committee
    to help establish some of these priorities.

                         ADDITIONAL COMMITTEE QUESTIONS

        I will submit the balance of my questions in writing. Thank
    you.
        Senator Kohl. Thank you very much, Senator Craig.
        And we thank you, Mr. Secretary, and your colleagues for
    being with us today.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                    Questions Submitted by Senator Herb Kohl

                                humane slaughter
        Question. Can you provide an update on what is happening with
    recalled food that wasn't part of Federal nutrition programs? How much
    is still out there, and how much do you realistically believe we will
    ever collect?
        Answer. It is the responsibility of the recalling firm, and not
    FSIS, to ensure that consignees are notified of the need to retrieve
    and control recalled products. FSIS does conduct effectiveness checks
    for all recalls, and when this case is closed, the agency will report
    to the Committee the amount of product recovered.
        Question. The FSIS budget doesn't include any increased funding,
    other than for employee pay costs and to cover the cost of the New
    Mexico program. Would additional dollars, either for more inspectors or
    more training, be beneficial?
        Answer. The President's budget request is adequate to cover the
    anticipated cost of providing Federal meat, poultry, and egg products
    inspection as well as the Federal costs for equivalent State inspection
    programs. An increase for the FSIS inspection program is requested to
    maintain our high standards for the safety and wholesomeness of meat,
    poultry and egg products and our continued efforts to ensure effective
    inspection and policy implementation.
        Question. What is the status of the proposed rule to permit FSIS to
    list in its recall press releases the names of retail consignees?
    Please provide an explanation for what types of recalls (Class I, Class
    II, etc.) will be included and excluded.
        Answer. USDA submitted a draft final rule to the Office of
    Management and Budget for review under Executive Order 12866 on April
    8, 2008. As a general rule we do not discuss draft content of rules
    currently under review. Upon completion of review, we will publish the
    final rule in the Federal Register. The preamble to the final rule will
    include an explanation of decisions made with respect to the
    rulemaking.
                          fiscal year 2008 wic budget
        Question. Mr. Secretary, does USDA still believe, as Undersecretary
    Johner stated a few weeks ago in front of the House of Representatives,
    that the fiscal year 2008 budget request for WIC was adequate?
        Answer. The information available at the time indicated that this
    was the case. More recent year-to-date WIC participation and food cost
    data suggests that program costs for fiscal year 2008 will exceed
    levels anticipated in the President's fiscal year 2009 budget and
    funded by the fiscal year 2008 Consolidated Appropriations Act. Our
    current analysis of fiscal year 2008 program performance indicates that
    without additional funding there would be a fiscal year shortfall even
    after the release of the remaining $150 million of contingency
    resources. For this reason, I am reviewing options that include
    transferring funds from the Food Stamp Program contingency reserve to
    the Special Supplemental Nutrition Program for Women, Infants and
    Children (WIC) to address funding shortfalls in that program.
        Question. How much of the contingency fund will be released in
    fiscal year 2008?
        Answer. In fiscal year 2008, $258 million of WIC contingency
    reserve funding has been made available to the States. This included
    $108 million of prior year contingency funds and $150 million provided
    by the Consolidated Appropriations Act, 2008 (Public Law 110-161).
        Question. So, all of the funding Congress provided (again, over
    $600 more than the administration requested), including the entire
    contingency fund, will be used. Will there be additional funding
    required and where will it come from?
        Answer. Yes, program data suggests that program costs for fiscal
    year 2008 will exceed levels anticipated in the President's fiscal year
    2009 budget and funded by the fiscal year 2008 Consolidated
    Appropriations Act. Our current estimate indicates that without
    additional funding there would be a shortfall even after the release of
    the remaining $150 million of contingency resources.
        For this reason, I am reviewing options that include transferring
    funds from the Food Stamp Program contingency reserve to the Special
    Supplemental Nutrition Program for Women, Infants and Children (WIC) to
    address funding shortfalls in that program.
        Question. How much is included in the budget request for the
    contingency reserve in fiscal year 2009, and how much of the
    contingency reserve does the budget assume will be needed to fund the
    participation levels estimated in the budget?
        Answer. The President's fiscal year 2009 budget request for the WIC
    Program funds the contingency reserve at $150 million. The budget
    request assumes that the entire $150 million will be needed to support
    the projected 8.6 million person average monthly participation for
    fiscal year 2009. Maintaining the WIC contingency reserve, even when
    its use is anticipated, is important because it preserves USDA's
    ability to quickly and precisely target program resources to States
    experiencing funding difficulties.
                           world/domestic food supply
        Question. Over the last year we have seen dramatic changes in the
    cost of farm commodities and the world food supply in general. There
    have been food riots in many countries, and some countries that used to
    export grains are now keeping them for their own use. Today, the ending
    U.S. stocks of wheat are the lowest in history.
        Can you or Dr. Glauber give us a good overview of the United States
    and world food situation and the implications it has on USDA policy?
    How much of this is driven by shifts to energy production? How much
    have costs increased for livestock producers as a result of rising
    grain costs?
        Answer. I have asked Dr. Glauber to respond to your questions for
    the record.
        [The information follows:]
        One way to provide you with an overview of the United States and
    world food situation is through the prices paid for food commodities.
    In general, higher food prices reflect tighter market conditions either
    through greater demand for food or higher production costs. For
    example, an increase in demand for agricultural commodities due to
    higher global income increases the prices paid for agricultural
    commodities and therefore food commodities. Similarly, higher energy
    prices increase the cost of producing and marketing food commodities.
    Higher production and marketing costs are then passed through to
    consumers in the form of higher food prices.
        Recently, both greater demand and higher production and marketing
    costs have both been working to place upward pressure on the prices
    paid for food commodities. In 2007, the Consumer Price Index (CPI) for
    food increased by 4.0 percent, up from 2.4 percent in both 2004 and
    2005. We are currently forecasting that the CPI for food will increase
    by 4.5 to 5.5 percent in 2008 and by 4 to 5 percent in 2009.
        Retail prices for fruits and vegetables increased 3.8 percent in
    2007, as fresh fruit and vegetable prices rose by 3.9 percent and
    processed fruit and vegetable prices rose by 3.6 percent. Price spikes
    in these commodities are often linked to drought or freeze damage. The
    CPI for fruits and vegetables is projected to increase by 4.5 to 5.5
    percent in 2008 and by 3.5 to 4.5 percent in 2009.
        The CPI for meat, poultry and fish increased by 3.8 percent in 2007
    and is forecast to increase by 2-3 percent in 2008 and 5-6 percent in
    2009. In 2007, prices were particularly strong for cattle and broilers.
    These strong prices generally reflected production adjustments made
    prior to the recent increase in feed costs. U.S. production of meat and
    poultry is expected to be a record 94 billion pounds in 2008. This
    large supply of meat is expected to limit gains in prices for cattle,
    hogs, broilers, and turkeys in 2008, leading to the relatively smaller
    increase in the CPI for meat, poultry and fish in 2008. In addition,
    the demand for red meat and poultry could be affected by consumers'
    economic concerns.
        The CPI for fats and oils and the CPI for cereal and bakery
    products increased by 2.9 percent and 4.4 percent, respectively, in
    2007. The CPI for fats and oils is forecast to increase by 11.5-12.5
    percent in 2008 and 3-4 percent in 2009. The CPI for cereals and bakery
    products are forecast to increase by 9-10 percent in 2008 and 3.5-4.5
    percent in 2009. The relatively large increases in the CPI for each of
    these categories reflect the relatively tight market conditions that
    existed for much of 2008. However, improved growing conditions in many
    parts of the world are expected to ease market conditions somewhat for
    2008/09. Based on the July World Agricultural Supply and Demand
    Estimates (WASDE), global 2008/09 wheat production is projected at a
    record 664 million tons, 53 million tons higher than the weather-
    reduced 2007/2008 crop. Global 2008/2009 coarse grain production is
    projected at slightly over 1 billion tons, similar to the estimated
    2007/2008 crop. Global oilseed production is projected at 417 million
    tons, a 7.8 percent increase over the 2007/2008 estimate.
        Globally, there is no measure that reflects the prices paid by
    consumers for food commodities. One measure that has received
    considerable attention lately is the International Monetary Fund's
    (IMF) global food commodity price index. The IMF global food commodity
    price index includes a bundle of agricultural commodities including
    cereals such as wheat, corn (maize), rice, and barley as well as
    vegetable oils and protein meals, meat, seafood, sugar, bananas, and
    oranges. Over the past 12 months (June 2007 to June 2008), the IMF
    global food commodity price index increased by 44 percent. However, the
    increase in the food commodity price index should be viewed in
    comparison to other prices changes. The IMF overall commodity price
    index rose by 62 percent over the same 12 months while the petroleum
    price index rose by 93 percent.
        Overall, the market for most commodities remains tight by
    historical standards. However, as weather conditions improve in various
    parts of the world and oil prices ease, we would expect to see some
    moderation in the prices consumers pay for food in the next year.
        With respect to shifts in energy production based on the latest
    information prepared at USDA, the expansion in biofuel production in
    the United States would appear to be a relatively modest contributor to
    food price inflation globally and in the United States. Assuming no
    expansion in biofuel production in the United States, we estimate the
    CPI for all food would have increased by 4.55-4.60 percent during the
    first 4 months of 2008, compared with the actual increase of 4.8
    percent. Globally, we estimate the IMF global food commodity price
    index would have increased by over 40 percent from April 2007 to April
    2008, compared with the actual increase of 45 percent.
        Higher grain costs are having an impact on costs for livestock
    producers. The most recent Agricultural Prices report, released on July
    31, 2008 by the National Agricultural Statistics Service (NASS) shows
    that feed price ratios have fallen considerably since last year. The
    feed price ratios measure the pounds of feed equal to the amount of
    production for various types of livestock or livestock products in
    value terms. For example, the broiler-feed price ratio fell from 5.2 in
    July 2007 to 3.2 in July 2008. The reason for the decline is that while
    the price of broilers increased only slightly from 2007 to 2008, the
    price of corn and soybeans increased by 69 percent and 88 percent
    respectively. As listed in the table below, the effects of higher corn
    and soybean prices were reflected in lower feed price ratios across all
    types of livestock.

    ----------------------------------------------------------------------------------------------------------------
                            Feed Price Ratio                             July 2007       June 2008       July 2008
    ----------------------------------------------------------------------------------------------------------------
    Broiler-Feed: Pounds of Broiler Grower Feed equal in value to 1             5.4             3.2             3.2
     pound of broiler, live weight..................................
    Market Egg-Feed: Pounds of Laying Feed equal in value to 1 dozen           10.7             7.2             5.0
     eggs...........................................................
    Hog-Corn: Bushels of Corn equal in value to 100 pounds of hog,             15.7             9.7             9.4
     live weight....................................................
    Milk-Feed: Pounds of 16 percent Mixed Dairy Feed equal in value             3.16            1.88            1.82
     to 1 pound of Whole Milk.......................................
    Steer & Heifer-Corn: Bushels of Corn equal in value to 100                 28.0            17.6            17.8
     pounds of Steer & Heifers, live weight.........................
    Turkey-Feed: Pounds of Turkey Grower equal in value to 1 pound              6.6             4.3             4.2
     of Turkey, live weight.........................................
    ----------------------------------------------------------------------------------------------------------------

        Lower feed price ratios will cause the sector to adjust. Based on
    the July World Agricultural Supply and Demand Estimates (WASDE), poor
    producer returns for broiler and turkey producers are expected to weigh
    on the sector, and 2009 production is expected to dip below 2008. For
    2009, we expect total red meat and poultry production to decline by
    about 1.6 percent from 2008 levels.
                           world/domestic food supply
        Question. How long do you estimate that food costs in this country
    are going to continue to rise? Do you feel that the current Food Stamp
    benefit is adequate to meet the rising demand? What about other food
    assistance programs at USDA and local programs like food banks, what is
    happening there?
        Answer. In USDA's Agricultural Projections to 2017 published in
    February 2008, the Consumer Price Index (CPI) for food is projected to
    increase more than the CPI for all items in 2008 and 2009. For 2010-
    2017, the CPI for food is projected to average 2.28 percent annually,
    less than the 2.5 percent CPI projected for all items.
        The Department believes the benefit levels in the Food Stamp
    Program, which are based on the ability of recipients to use their
    benefits combined with their own income to purchase a low-cost,
    nutritious diet, are adequate to meet the needs of the people that the
    program serves.
        Benefit levels for food stamps, and payments for school meals and
    WIC food packages, are adjusted annually to respond to increased costs.
    Between fiscal year 2007 and 2008, food stamp benefit levels increased
    4.6 percent; school meals reimbursements increased about 3 percent. We
    also budgeted for an 8.7 percent increase in the average cost of WIC
    food packages between fiscal year 2007 and 2008.
        The Department has tools and policies in place to respond to
    changes in projected demand and costs in the domestic nutrition
    assistance programs. Two of the major programs the Food Stamp Program
    and the Child Nutrition Programs are designed to respond automatically
    to annual increased participation when economic or other circumstances
    change. The program's entitlement structure helps to ensure that
    benefits automatically flow into communities, States, or regions of the
    country in which increased numbers of eligible people apply for
    benefits.
        While WIC, as a discretionary program, does not have this same
    structure, the Department monitors participation and food price trends
    closely to ensure that sufficient resources are available for the
    administration to maintain its long standing policy of serving all
    eligible persons seeking WIC services.
        With regard to food banks, we have heard from our cooperators and
    others that the private food bank network, which is supported in part
    by The Emergency Food Assistance Program (TEFAP), is facing increased
    demand. In addition to the $140 million provided in appropriated funds
    for the purchase of TEFAP commodities, USDA began a ``Stocks-for-Food''
    initiative in July 2007 to barter government-owned bulk commodities
    with food processors in exchange for value-added agricultural products
    that can be distributed through USDA's nutrition assistance programs.
    We expect about $90 million in commodity foods to be distributed to
    domestic nutrition assistance programs under this initiative.
        Question. What is the outlook for the near and long term food
    situation? For example, what would happen if the drought in Australia
    continues? What happens if an exotic disease like wheat stem rust takes
    hold in this country? How is USDA preparing the Nation for continuing
    problems like these?
        Answer. USDA forecasts world production, consumption, and trade for
    the major field crops which include the major grain staples. At this
    time, world production prospects for wheat and coarse grains remain
    very favorable for 2008. Additional detail will be provided for the
    record.
        [The information follows:]
        World wheat production is expected at record level with favorable
    weather supporting fall planting and crop development in most of the
    Northern Hemisphere countries including the major producing countries
    of the European Union and Former Soviet Union, and also in India,
    China, and the United States. With higher prices, area expanded
    substantially last fall in most of these countries. Price increases
    since that time have also spurred incentives to increase spring wheat
    plantings in Canada and plantings in key southern hemisphere producers
    such as Australia. The drought in Australia appears to have been
    largely broken with significant rainfall in the eastern portions of the
    country in recent months and very timely rains ahead of 2008 crop wheat
    seeding in the southern and western growing areas more recently. At
    this point, the possibility of a third year of drought remains fairly
    low for Australia; however, even a drought as serious as those in the
    past 2 years would mean a loss of only 10-15 million tons of production
    worldwide, not enough to prevent a record world wheat crop in 2008,
    given all indications at this time.
        World coarse grains production in 2008 is expected to match or
    surpass last year's record level, despite a likely reduction in U.S.
    corn output with lower expected planted area. Although most of the
    world's coarse grains crop remains to be planted, record prices are
    encouraging increases in planted area throughout the major producing
    countries. This suggests record world production again in 2008 with
    normal weather.
        Crop production remains highly dependent on weather with additional
    risks poised by pest and disease problems. Although pests and diseases
    are a serious issue, risk of major crop failures due to these threats
    remains relatively low. USDA will continue to monitor crop health
    issues and reflect the impact of crop problems in its monthly crop
    reporting and supply and demand estimates reports. These reports
    provide the public with a reliable and timely source of information
    about crop production and use in the United States and around the
    world.
                       effect of high commodities demand
        Question. Because of the high demand for commodities, there is a
    large concern that lands that have been placed in conservation
    practices may be moved into farm production and, as a result, a lot of
    environmental benefits will be lost. Do you share that concern? What is
    USDA doing to help maintain the levels of water, soil, and wildlife
    habitat protection that conservation programs have achieved over the
    last 20 years?
        Answer. USDA approaches conservation with the objective of ensuring
    that lands can be productive in concert with a healthy environment and
    that benefits achieved can be maintained.
        For example, USDA cost share programs provide assurances that
    conservation practices are maintained and that taxpayer investments are
    protected. Each conservation practice the Department implements has a
    life span attached to it and if the landowner does not maintain the
    practice, we can recoup our costs.
        There are also pressures from a land retirement perspective that
    sensitive lands may go into production. The 1985 Farm Bill authorized
    the Conservation Reserve Program (CRP) as an option for producers with
    Highly Erodible Land (HEL). Any HEL land coming out of CRP and going
    back into production, must be farmed in accordance with an acceptable
    conservation plan/system in order to be eligible for certain USDA
    benefits.
        The Department is ready to address increased requests from
    producers with expiring CRP contracts for conservation technical and
    financial assistance (cost-sharing) through the Environmental Quality
    Incentives Program, the Conservation Security Program, the Wildlife
    Habitat Incentives Program, and other conservation programs.
        In the Administration's 2007 Farm Bill proposals, the Department
    proposed a forward looking approach in the form of a biomass reserve,
    which would have encouraged energy crop production on suitable lands
    currently enrolled in the CRP.
                     national animal identification system
        Question. Over the past several years, this Subcommittee has
    provided substantial funding to USDA for the National Animal ID
    program. However, this program is still not established in any
    meaningful way and there is a lot of frustration in the farming
    community and within Congress about the way this program has been
    managed.
        What is the current status of this ID program? Do you support a
    voluntary or mandatory program and who do you think should pay the cost
    of it? How have you spent the money that has been appropriated for it
    so far?
        Answer. A great deal of progress has been made with all three
    components of the National Animal Identification System (NAIS).
        Premises registration is the foundation of the NAIS. Progress
    continues at a steady pace. Currently, participating States and Tribes
    have registered 461,846 premises nationwide. This represents
    approximately 33 percent of the estimated national total.
        USDA wants to reach as many producers as possible. Recognizing the
    need for industry groups to be more involved in premises registration
    outreach efforts, USDA has initiated cooperative agreements with
    nonprofit organizations to advance premises registration. USDA has
    finalized eight agreements for this purpose.
        USDA has approved six manufacturers of animal identification number
    (AIN) tags to produce ten devices for official NAIS use including radio
    frequency identification (RFID) eartags that are compliant with
    standards from the International Organization for Standardization.
    Approximately 4.2 million AIN devices have been distributed.
        Last year, USDA purchased 1.5 million NAIS-compliant RFID eartags
    to be used specifically for current animal disease programs--such as
    the cooperative, State-Federal bovine tuberculosis (TB) and brucellosis
    programs. These tags will also be distributed in geographic areas that
    are at increased risk for disease outbreaks. In response to the TB
    detection in California in December 2007, 108,000 AIN tags have been
    provided to support bovine TB testing in California and Nevada. An
    additional 18,900 tags have been distributed to support disease program
    efforts in other States.
        The tracing component of the NAIS continues to advance. In 2007,
    USDA published A Business Plan to Advance Animal Disease Traceability.
    The business plan detailed strategies and actions to more fully utilize
    the NAIS standards in existing animal health programs. The plan also
    works to harmonize animal identification systems with industry
    marketing, management, and performance recording programs to improve
    the overall U.S. animal disease traceability infrastructure. Seven
    specific strategies detailed in the plan include actions that USDA can
    take immediately to make an impact on traceability. While 48-hour
    traceability is a long-term goal, USDA is working now to reduce the
    length of time it takes to conduct an animal disease investigation.
    USDA is cooperating with States, Tribes, and industry groups to
    integrate NAIS standards into existing USDA disease programs and
    further interoperability between technology systems. These short-term
    actions will help significantly in improving traceability and meeting
    our immediate goal for NAIS.
        USDA does not believe that the NAIS needs to be mandatory to be
    effective. USDA believes the goals of the system can be achieved with a
    voluntary program as a result of standard business practices. For
    example, animal identification has many ``drivers'' that provide
    marketing advantages to producers. Other ``drivers'' may become
    requirements for certain markets (e.g., age verification for the
    purposes of international trade). NAIS animal ID has been developed to
    meet the needs of various programs, including both regulatory disease
    control programs and industry programs. Participation in NAIS provides
    marketing and management benefits to producers, as well as the data
    that animal health officials need to respond quickly and effectively to
    animal disease events.
        Producers who choose to participate in NAIS will find many positive
    benefits. Contact information provided during premises registration
    allows State animal health officials to provide participating producers
    with information about disease outbreaks or incidents in their area.
    This will enable producers to rapidly protect their premises and their
    livelihood. Participating producers will also be better positioned to
    protect their market access and expand their marketing opportunities
    because their participation will provide vital information on
    identification and movement of their animals, necessary for animal
    traceability.
        Because the NAIS is a State-Federal-industry partnership, the
    program works best if there is active involvement and feedback from the
    States, industry, and producers. As the NAIS has evolved, USDA has put
    participant feedback to work to adjust the program and address their
    thoughts and concerns. USDA will continue working collaboratively to
    ensure that the NAIS is easy to use and makes sense.
        The following table shows how APHIS has obligated NAIS funding
    through April 2008:

                                    NATIONAL ANIMAL IDENTIFICATION SYSTEM OBLIGATIONS
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal year
                                     -------------------------------------------------------------------------------
                                      2004 CCC funds       2005            2006            2007            2008
    ----------------------------------------------------------------------------------------------------------------
    System funding..................          $1,813          $4,089          $2,466          $6,207          $1,412
    Cooperative agreements..........          13,554          12,838           5,191          19,569           5,728
    Communications and outreach.....           2,132           2,557           2,402           2,980             528
    Staff and materials.............             319           3,928           6,424          14,185           3,819
                                     -------------------------------------------------------------------------------
          Total, Federal Funding              17,819          23,413          16,482          42,941          11,487
           Obligated................
    ----------------------------------------------------------------------------------------------------------------

        Question. What are you hearing from farmers and ranchers about this
    program?
        Answer. Overall, the feedback from producers and industry
    organizations from the commercial animal agriculture industry has been
    positive. However, some groups oppose participation in the program and
    will not register their premises. In addition, in some States (e.g.,
    Missouri and South Dakota) legislation has been periodically introduced
    to restrict participation in the program at the State level. Producers
    in some areas have opted not to participate in the NAIS. However, the
    enhanced communications efforts, which began in May 2006, continue to
    address concerns.
                                 emerson trust
        Question. One of the tools to fight world hunger is the Bill
    Emerson Humanitarian Trust. However, in spite of the recent rising food
    costs and urgent need for food aid in places like Sudan and Somalia,
    the Emerson Trust has not been used since 2005.
        Do you have plans to recommend any releases from the Emerson Trust
    in the near future?
        Answer. Yes, the President directed that the Bill Emerson
    Humanitarian Trust be drawn down to provide emergency food aid through
    the U.S. Agency for International Development, to meet unanticipated
    needs in Africa and elsewhere. This action will provide an estimated
    $500 million of emergency assistance this year.
        Question. Do you think the Emerson Trust plays an important role in
    fighting world hunger and can you explain what the level of commodities
    and cash in the trust are today?
        Answer. The Department of Agriculture and U.S. Agency for
    International Development (USAID) agree that the Bill Emerson
    Humanitarian Trust is an important tool in the battle against world
    hunger. It complements the traditional Public Law 480 food aid
    programs, particularly Title II, by making stocks available during
    periods of tight supply and to meet unanticipated emergency food aid
    needs. The Trust consists of 654,979 metric tons of wheat and about
    $196.4 million in cash.
        Question. Can you describe how the Trust actually works, how much
    do you spend on storage, and how do the commodities actually get from
    the storage facilities to the recipient countries?
        Answer. Bulk commodities in the Bill Emerson Humanitarian Trust
    (wheat) are generally sold to generate funds that are used to acquire
    commodities needed in the recipient country, as determined by the
    USAID. CCC purchases commodities requested by USAID with the sales
    proceeds from the wheat, and arranges for transportation from U.S. port
    locations to recipient countries. Another method is to swap CCC-owned
    wheat for the desired commodities.
        With respect to storage costs, CCC paid more than $936 million for
    wheat in the Trust from 1981 through 2007, averaging more than $34
    million per year. At the current Trust level of 654,979 metric tons,
    CCC will pay about $6.9 million per year in storage costs.
        Because of these costs and other considerations, holding cash
    rather than commodities in the Trust can be a preferred option.
                     colony collapse disorder/varroa mites
        Question. A very large segment of our food supply relies of the
    work of natural pollinators, namely bees. However, we continue to hear
    about serious problems like Colony Collapse Disorder, Varroa Mites and
    other threats to bee species and ultimately, to our food supply.
        What are you doing this year regarding these problems and what
    progress have you made?
        Answer. The Research, Education and Economics mission area reacted
    quickly to lead the Federal response with the formation of a colony
    collapse disorder (CCD) Steering Committee which developed an action
    plan to coordinate Federal research. ARS is conducting research into
    the potential causes of CCD, including pathogens, parasites,
    environmental stress (including pesticides) and management stresses,
    and the Cooperative State Research, Education, and Extension Service
    (CSREES) is coordinating Federal and land grant university efforts. The
    2009 budget requests an additional $780,000 for ARS to research the
    role of pathogens and other stress factors in CCD and develop ways to
    mitigate their effects. In 2008, ARS began a 5-year Honeybee Health
    Areawide Project funded at $1 million per year.
        CSREES awarded $4.1 million to the University of Georgia to study
    the causes of CCD and other diseases affecting bee populations.
        The Protection of Managed Bees Coordinated Agricultural Project
    aims to improve the health of managed bee populations in agricultural
    systems. The research will address genomics, breeding, pathology,
    immunology and applied ecology to explain the causes behind dwindling
    bee populations. Researchers will work closely with the extension
    community and other stakeholders to develop and implement mitigation
    strategies for CCD and other significant problems.
        The Animal and Plant Health Inspection Service (APHIS) will
    undertake a project to examine key honeybee issues. In addition to
    working with the Agricultural Research Service (ARS) on research
    regarding potential causes of Colony Collapse Disorder (CCD), APHIS is
    examining existing risk assessments for queen bees, packages, and
    germplasm from Australia, Canada, and New Zealand. Presently, importing
    bee-collected pollen and royal jelly for bee feed is prohibited.
    However, APHIS is developing a risk pathway analysis for royal jelly
    and bee pollen as bee food.
        Question. Can you describe how your research and regulatory
    agencies plan to deal with these problems in this budget?
        Answer. The 2009 budget requests an additional $780,000 for ARS to
    research the role of pathogens and other stress factors in CCD and
    develop ways to mitigate their effects. In 2008, ARS began a 5-year
    Honeybee Health Areawide Project funded at $1 million per year.
        CSREES awarded $4.1 million to the University of Georgia to study
    the causes of CCD and other diseases affecting bee populations.
        The Protection of Managed Bees Coordinated Agricultural Project
    aims to improve the health of managed bee populations in agricultural
    systems. The research will address genomics, breeding, pathology,
    immunology and applied ecology to explain the causes behind dwindling
    bee populations. Researchers will work closely with the extension
    community and other stakeholders to develop and implement mitigation
    strategies for CCD and other significant problems.
        The Animal and Plant Health Inspection Service (APHIS) will
    undertake a project to examine key honeybee issues. In addition to
    working with the Agricultural Research Service (ARS) on research
    regarding potential causes of Colony Collapse Disorder (CCD), APHIS is
    examining existing risk assessments for queen bees, packages, and
    germplasm from Australia, Canada, and New Zealand.
                                  varroa mites
        Question. Senator Inouye has brought to my attention that the
    varroa mite has suddenly appeared in Hawaii and this poses a special
    threat because many of the honey colonies that are used in this country
    are actually produced in Hawaii.
        Senator Inouye has asked me to submit some questions for the record
    on his behalf, which I will, but can you tell us if you are aware of
    this problem, how serious you think it is, and what you are doing about
    it?
        Answer. Varroa mites were recently found on the island of Oahu and
    appear to be established throughout the island. But so far, there is no
    evidence that the mites are present on any of the other islands. Hawaii
    has strong intra-island quarantine regulations in place. APHIS is
    providing funding to the State to conduct a survey for a variety of
    honey bee pests and diseases, including varroa mites. The survey will
    provide information to officials to help manage the situation, although
    once they are established, it is virtually impossible to eradicate
    varroa mites. There is no record of the mite ever having been
    eradicated.
      rural development and rental assistance--absence of a sound strategy
        Question. Rental assistance provides funding to help very low
    income rural families so they don't have to spend more than 30 percent
    of their incomes on rent. Recipients are typically elderly,
    handicapped, or female-headed households, with average household
    incomes near $12,000. If this assistance is not continued, tenants will
    face rents that they cannot afford and will face eviction.
        Over the past several years this program has reduced from 5 years
    to 1 year the amount of time that families had assurances (through
    formal contracts) this assistance would continue. This reduction was
    done to provide immediate savings, help measure annual cost increases,
    and improve the ability to forecast future renewal needs. It was
    recognized that over time, there would be a large increase in annual
    program costs. That is occurring in fiscal year 2009 as program needs
    jumped from $445.8 million in fiscal year 2008 to $1.02 billion.
        The administration was well aware of this phenomenon. However, in
    spite of ample lead time the administration failed to develop an
    adequate plan. The administration's proposal is to fund these needs by
    program terminations and reductions across Rural Development.
        Besides forcing Rural Development to absorb over $500 million in
    offsets, were other options considered?
        Answer. Rural Development's first priority is to continue tenant
    protections in the form of Rental Assistance renewals. The
    administration is committed to fully meeting the need for renewals
    while meeting the President's goal of reducing spending and achieving
    balance budget. The formulation of the President's budget involved
    discussion of numerous options among multiple participants.
        Question. What were those options and why were they rejected?
        Answer. Any discussions of options are predecisional. We believe
    the fiscal year 2009 President's budget is the best course of action to
    ensure the vitality of the Rental Assistance program. It will allow us
    to be more responsive to program needs and will improve our ability to
    forecast future Rental Assistance renewals.
                 rural housing and the sub-prime housing crisis
        Question. The sub-prime housing crisis has created turmoil in
    housing and financial markets nationwide. But, little attention is paid
    to impacts on rural residents. We want to ensure that rural households
    receive the support and assistance needed to weather the storm.
        How is the fallout in the sub-prime market affecting rural housing
    in general?
        Answer. Information on how rural borrowers have been affected by
    the sub-prime home mortgage crisis is limited. However, there is
    evidence that a significant amount of sub-prime lending has occurred in
    rural areas, particularly where borrowers have limited access to
    traditional credit. Some of these borrowers are likely to be having
    repayment problems. However, the adverse impacts on rural housing
    markets may not be as widespread because there is less concentration of
    housing in rural areas and home prices tend to be lower than those in
    urban areas.
        Question. What Rural Development housing programs are most impacted
    and how?
        Answer. The current situation in the subprime market has had a
    minimal impact on Rural Development's housing programs. Our single
    family housing portfolio remains strong with low delinquency and
    foreclosure rates. In ten of the last 12 months, we have experienced
    historical low delinquencies. Demand for the section 502 guaranteed
    loan program is at record levels as private sources of mortgage credit
    for first-time homebuyers have tightened dramatically.
        Our Single Family Housing programs have seen an increase in
    activity, which is common when the private sector market is
    experiencing difficulties. We have responded accordingly and have been
    able to meet current demands.
        Question. Although the Budget substantially increases the Sec. 502
    guaranteed single family housing program, the increase is coupled with
    a 50 percent fee increase. Why do you believe now is the appropriate
    time for a large fee increase?
        Answer. Most other Federal guarantee programs operate near ``budget
    neutral;'' however, the Section 502 Guaranteed loan program continues
    to require a taxpayer subsidy. By bringing the guarantee fee in line
    with other Federal guarantee programs we will be able to operate near
    budget neutral while providing a much greater amount of program level
    funding. Overall, the subsidy rate for the guarantee program will drop
    from 1.20 percent in fiscal year 2008 to 0.27 percent in fiscal year
    2009, requiring very little credit subsidy.
        Question. This Budget, again, terminates the direct Sec. 502 single
    family housing program. Without this credit source, particularly in the
    current environment, where will very low and low income rural
    households obtain funding for homeownership?
        Answer. The guaranteed program can already provide coverage for
    many of the customers that would traditionally look to the direct loan
    program for financing. In recent years, about 30 percent of USDA's
    guaranteed loans for single family housing have gone to families with
    50 to 80 percent of median family income, which is within the income
    limit for direct loans. The remaining 70 percent of these loans have
    gone to families with incomes between 80 percent and 115 percent of
    median family income. By shifting budget authority to guaranteed loans
    in fiscal year 2009 we will be able to increase program level funding
    for guaranteed lending to over $4.8 billion. Guarantees will allow us
    to leverage a much greater amount of program level funding which in
    turn allows us to assist more rural Americans. Some of the Very Low
    Income applicants, those making less than 50 percent of the Area Median
    Income, would not be served without the 502 direct loan program.
    However, these individuals may be able to qualify under the guaranteed
    program for a more modest sized home.
         farm service agency (fsa) information technology (it) problems
        Question. Last year at this hearing the USDA Secretary acknowledged
    problems with FSA's legacy IT system. The system was unstable and the
    Agency rationed access to guard against comprehensive failure. The
    Secretary promised to provide a plan to develop and implement a
    replacement for the outdated and overloaded legacy systems. Maintenance
    funding was provided in the supplemental bill for short term
    stabilization.
        One year later we remain in essentially the same situation. FSA's
    systems are one year older and availability to users is questionable at
    any time. The specter of a comprehensive system crash remains. Little
    confidence is placed on the replacement cost and scheduling estimates
    that have been provided.
        Given the damage that may result from systems failure, why are we
    not further along regarding implementing a solution?
        Answer. USDA is pleased that our business case for modernization
    has been approved by OMB and reviewed by GAO. All parties agree with
    USDA that modernizing the business delivery systems of the Commodity
    Credit Corporation is a priority. As soon as funding becomes available,
    USDA is ready to proceed.
        Question. Why does this budget not include funding to address this
    problem?
        Answer. The business case was approved by OMB in late November
    2007, by which time decisions on the fiscal year 2009 President's
    Budget had already been made. However, we have been working with the
    authorizing committees to provide for the needed funding through the
    pending Farm Bill. We have proposed amending the Commodity Credit
    Corporation Charter Act to permit the use of up to $400 million in CCC
    funds over the next 4 years, with offsets for collecting user fees.
        Question. Are negotiations underway through the Farm Bill process
    to obtain adequate funding there?
        Answer. Yes. USDA has had multiple meetings with House and Senate
    staff working on the Farm Bill negotiations. We have provided the
    authorizing committees with legislative language to amend the CCC
    Charter Act to allow for the collection of user fees to fund the
    modernization and stabilization projects.
        Question. What is the explanation for the lack of urgency displayed
    by the administration regarding this critical issue?
        Answer. USDA has been diligent in following all the necessary steps
    to gain approval of the modernization business case. OMB and GAO agree
    with USDA that modernizing the business delivery systems for the
    Commodity Credit Corporation is a priority. USDA has developed the
    MIDAS foundational requirements so that USDA is positioned to move
    forward when funding becomes available.
              resource conservation and development program (rc&d)
        Question. Mr. Secretary, the budget proposes reducing the Resource
    Conservation and Development program by nearly $51 million which
    eliminates this program.
        Will the RC&D Councils be folded into other areas of NRCS? If not,
    how many employees will be let go and have these employees been
    notified of your intentions yet?
        Answer. The proposal eliminates Federal technical assistance to the
    375 RC&D councils. As nonprofit organizations, RC&D Councils will still
    exist. At this point, most of these Councils should have the capacity
    to identify, plan, and address their identified priorities. The
    majority of the Councils have increased their partnerships and
    financial portfolios and will continue to bring resources to their
    communities.
        RC&D staffing adjustments are being considered as part of NRCS'
    human capital analysis and plan. Since NRCS is facing significant
    retirements in the future, all appropriate staffing incentives and
    adjustments are being considered. However, specific plans have not been
    finalized. Implementation of any plan for fiscal year 2009 would not be
    initiated until Congressional action on the President's Budget is known
    and necessary decisions have been made. NRCS intends to retain as many
    RC&D staff on NRCS payroll as the overall NRCS budget will support.
    Skills learned as an RC&D Coordinator serve employees well in many
    other NRCS positions. The ability to foster partnerships, collaborate,
    and plan projects is essential to all NRCS field and State level
    technical positions. Many of these employees can be placed in other
    NRCS field and State office positions such as district conservationist
    and other natural resource positions.
        Question. Has the Department ever attempted to measure the benefits
    to rural communities that specific RC&D councils have provided, and if
    so what did you learn?
        Answer. Although no studies to measure the benefits to rural
    communities provided by specific RC&D Councils have been undertaken in
    the last 25 years, reporting provided through the NRCS Program
    Operations Tracking System (POINTS) shows that through the
    implementation of projects, Councils have brought between $6 and $8 for
    each $1.00 invested by the Federal government back to their communities
    in the form of donated materials, professional services and volunteer
    time.
                      commodity supplemental food program
        Question. Mr. Secretary, once again the administration is proposing
    to eliminate the CSFP Program. However, in the budget, the inventory at
    the end of fiscal year 2008 is estimated to be $36,239,000 which is
    $6,065,000 higher than the inventory at the end of fiscal year 2007.
        If this program is slated for elimination, why is USDA allowing
    inventory buildup instead of using it to fund current program needs,
    especially considering that the CSFP caseload was actually decreased in
    fiscal year 2008 from the fiscal year 2007 levels?
        Answer. The ending inventory is essentially a ``rolling'' figure
    that largely represents foods purchased/delivered late in the last
    quarter of one fiscal year for distribution in the first quarter of the
    following fiscal year. This practice is necessary to ensure continuity
    of service to participants as we transition across fiscal years. Until
    such time as the Congress adopts the President's proposal to cease
    program operations in 2009, we plan to carry over sufficient inventory
    from fiscal year 2008 to assure service continuity in fiscal year 2009.
    The increase in the dollar value of projected fiscal year 2008 ending
    inventory is a function of rising food costs and the need to meet
    anticipated delivery demand.
        With the exception of a small volume of foods that are purchased
    for the program through a single annual procurement, there is no
    significant undistributed program inventory held at the Federal level
    at any time during the program year.
        Question. What does USDA intend to do the $36,239,000 at the end of
    fiscal year 2008 if Congress agrees with the administration's proposal
    to eliminate CSFP?
        Answer. Should Congress choose to adopt the President's fiscal year
    2009 budget request, commodities remaining in CSFP inventories next
    fiscal year will be re-donated for use in other domestic nutrition
    assistance programs, including the Emergency Food Assistance Program
    (TEFAP).
                      dairy prices and nutrition programs
        Question. Over a year ago, I wrote USDA out of concern for a
    pending Federal milk marketing order proposal which would raise fluid,
    or Class I milk prices. In that letter I explained how this decision
    would disadvantage dairy farmers in the Upper Midwest, and attached
    documentation showing that the proposal was inconsistent with previous
    department Federal order policies.
        It has been almost 18 months since USDA held an ``emergency
    hearing'' on this issue, and I presume that you must be close to a
    decision. Before you make that decision; however, I would like you to
    advise the subcommittee of any impact your proposed decision would have
    on the costs of the WIC program. I would also like you to consult with
    the Congressional Budget Office on how you estimate the impact of your
    decision on the WIC program, and other USDA nutrition programs,
    including the School Lunch program. I am interested to know if the
    pending decision would add to these costs by arbitrarily increasing the
    Class I differentials throughout the country.
        It is my understanding that, under OMB internal guidance to all
    Federal agencies, any administrative decision that raises outlays or
    the cost of another Federal program must be offset by a reduction
    elsewhere. If you make this decision to raise milk costs, please also
    advise this subcommittee on how you will be offsetting the increased
    costs to WIC and other impacted nutrition programs.
        Answer. OMB does not require offsets for impacts on discretionary
    programs. However, OMB may require an offset for the impact of the
    increase on the Food Stamp Program and other mandatory programs.
                                 tart cherries
        Question. On January 8 USDA announced its intention to purchase up
    to 8.1 million pounds of tart red cherries. This is a matter of some
    importance to producers in my State and others. They point out that
    weather conditions in cherry growing regions have been ideal for a
    large crop this coming year. They fear an unmanageable carryover stocks
    and surplus of cherries in the coming year and would like to see USDA
    take further steps under this announcement by June 2008.
        Could you give the subcommittee and update on your actions in this
    area?
        Answer. The Department will complete the entire 8.1 million pound
    bonus cherry program as announced by June 2008. Thus far, USDA has
    purchased a total of 4.7 million pounds of canned, frozen and dried
    cherries for distribution to child and domestic food assistance
    programs. At present, USDA is in the process of purchasing an
    additional 1.1 million pounds of frozen cherries and will complete the
    program with a purchase of 2.3 million pounds of dried cherries.
                                organic pasture
        Question. One of the central tenets of organically produced
    livestock and livestock products is the requirement that animals be
    given access to pasture. Current USDA National Organic Program
    Regulations require access to pasture for all ruminant animals
    (205.237, 205.239).
        However, in recent years, it has become clear that some organic
    dairies have been permitted to sell milk as ``organic'' even though
    their cows have not had access to pasture. When challenged about why
    they are permitting some dairy operations to skirt the pasture
    standards, USDA's National Organic Program has stated that the
    regulation is too vague for them to adequately enforce.
        Therefore, the agency issued an Advanced Notice of Proposed
    Rulemaking to solicit input from the public about the pasture issue. In
    order to facilitate this process, a Pasture Symposium was convened by
    USDA in April of 2006 in State College, Pennsylvania to hear from
    certifiers, farmers, consumers, and industry regarding pasture
    standards. Based on input received at the Pennsylvania Symposium and
    subsequently, USDA had indicated its intention to issue a Proposed Rule
    in 2006 to update the organic standards to make a more specific pasture
    standard for organic livestock.
        Now nearly 2 years later, no proposed rule has been issued on this
    issue. It is critical to the entire organic sector that USDA move
    forward with rulemaking to establish a strong, enforceable organic
    standard to require access to pasture for ruminant animals.
        Please provide an update on this situation, and explain the delay.
    When can we expect to see a proposed rule out to the public for
    comment?
        Answer. AMS received over 80,000 comments based on the Advanced
    Notice of Proposed Rulemaking (ANPR) issued in April 2006, most urging
    a larger role for pasture in the National Organic Program regulations.
    After analysis of all comments, a proposed rule was drafted, which is
    now in Departmental clearance. AMS plans to publish it by the end of
    this fiscal year.
                                potatoes and wic
        Question. USDA published an interim final rule that expands the
    eligibility for the WIC program to include all fresh fruits and
    vegetables with the single exception of ``white potatoes''.
        Please explain the public policy and nutritional rationale for
    excluding fresh white potatoes from the expanded WIC voucher program.
        Answer. The changes to the WIC food packages were made based on
    scientific recommendations from the National Academies' Institute of
    Medicine (IOM). The IOM was charged with reviewing the nutritional
    needs of the WIC population--low-income infants, children, and
    pregnant, postpartum and breastfeeding women who are at nutritional
    risk--and recommending changes to the WIC food packages.
        The restriction of white potatoes, as recommended by the IOM, is
    based on (1) food intake data indicating that consumption of starchy
    vegetables by the WIC-eligible population meets or exceeds the amounts
    suggested in the 2005 Dietary Guidelines for Americans for consumption
    of starchy vegetables; and (2) food intake data showing that white
    potatoes are the most widely consumed starchy vegetable.
        Question. Please provide a description of the process and an
    estimate of the cost of compliance for the exclusion of a single fruit
    or vegetable from the program.
        Answer. Generally, on an annual or biennial basis, WIC State
    agencies determine what foods to include on their State WIC food lists
    from the list of federally authorized WIC-eligible foods. In making
    their determination, State agencies consider factors such as product
    availability, participant acceptance, and costs.
        There is no compliance costs for the exclusion of a single fruit or
    vegetable from the WIC Program because it is a part of normal business
    practice for State agencies to determine which foods will be eligible
    for the State WIC program.
                               national arboretum
        Question. In reviewing the administration's budget for the U.S.
    National Arboretum, we note a proposed cut of $2 million from the
    Gardens Unit and the Education and Visitor Services Unit.
        Please explain why these cuts have been proposed.
        Answer. The reductions have been proposed to address higher
    research priorities of the administration, such as bioenergy, food
    safety, and obesity prevention.
        Question. Did the specificity of these cuts, i.e., that they must
    come from Gardens and Education and Visitor Services at the National
    Arboretum, originate from an OMB mandate to the USDA, from the senior
    administration of the Department or from within the ARS itself?
        Answer. ARS programs were reviewed for relevance, quality, impact,
    and cost effectiveness in the overall context of competing program
    priorities in the Department and the administration's goal to balance
    the Federal budget by 2012.
        Question. How do you intend to execute these cuts and maintain
    compliance with your legal obligation to provide education at the U.S.
    National Arboretum, a mandate which Congress spelled out in the
    legislation which established the National Arboretum?
        Answer. ARS would continue to provide education at the U.S.
    National Arboretum at a reduced scope.
        Question. If these cuts are implemented, what will be the impact on
    the USNA?
        Answer. The Arboretum would emphasize research activities and
    reduce funding for its non-research activities. The Gardens Unit and
    Education and Visitor Services Unit would be merged. Resources to
    maintain the gardens and plant collections would be reduced and
    educational activities and use of the arboretum by outside
    organizations would be limited.
        Question. Will there be any curtailment of days or hours of
    operation?
        Answer. Yes, public access time would most likely be reduced.
        Question. Will you be able to maintain all of the current Garden
    Displays and Plant Collections currently at the Arboretum?
        Answer. The Arboretum would most likely have to reduce in size
    several of the existing collections and no longer actively maintain
    other collections.
        Question. Will there be a reduction in the number of staff
    positions currently approved for the Arboretum and if so, how many and
    where?
        Answer. Yes, there would be a reduction in staff. The Gardens Unit
    will be reduced from the current level of 26.6 FTE to 13.5 and the
    Education and Visitor Services Unit will be reduced from 11.7 to 3.7
    FTE positions.
        Question. Do you think the ARS is still the appropriate
    administrative home for the National Arboretum in light of the
    Department's desire to focus on research and the fact that the
    Arboretum has become an increasingly popular destination for the
    general public to visit?
        Answer. USDA views the National Arboretum as a national asset and
    has taken pride in its public displays. ARS is committed to research
    supporting the floral and horticultural industries.
                    national organic program reorganization
        Question. The recent announcement of a reorganization of the
    National Organic Program included information on who would head several
    branches of the program, although not the compliance and enforcement
    branch. When will you name the head of this program?
        Answer. AMS is in the midst of staffing the compliance and
    enforcement branch and plans to have it staffed by the end of fiscal
    year 2008, including the announcement of the head of the branch.
                           country of origin labeling
        Question. What steps is USDA taking to ensure that mandatory
    country of origin labeling will be in effect as required by September
    30, 2008?
        Answer. USDA is working with all parties to expedite the
    development and publication of the necessary rulemaking. The rule must
    be published in the Federal Register by July 30 to meet the September
    30, 2008, implementation date for mandatory country of origin labeling
    on all covered commodities. USDA is on-track to meet these deadlines.
        Question. How has USDA spent funds allocated for enforcement of
    existing rules for mandatory country of origin labeling for seafood
    products? What audits or other enforcement actions have been done?
        Answer. The $1.1 million in appropriated funding allocated for the
    country of origin labeling program is used for all regulatory and
    oversight activities, rulemaking, outreach, education, monitoring and
    enforcement-related activities for fish and shellfish. Surveillance
    reviews of randomly-selected retail stores began in August 2006. During
    2006, 1,159 retail surveillance reviews were performed in 19 States.
    During fiscal year 2007, AMS performed 1,657 retail surveillance
    reviews in 23 States. COOL retail surveillance activities have expanded
    to all 50 States for fiscal year 2008, increasing the number of retail
    reviews to 2,000. AMS has entered into reimbursable cooperative
    agreements with 42 States as of March 2008. USDA employees will perform
    retail surveillance in the remaining eight States.
                                   ams audits
        Question. FSIS non-compliance reports can be obtained through
    Freedom of Information requests, although AMS does not make public
    audit reports issued by AMS auditors of the same facilities that sell
    meat and poultry products to the National School Lunch Program. Why is
    this?
        Answer. AMS audit reports of contractors and suppliers to Federal
    food and nutrition assistance programs are available under the Freedom
    of Information Act. However, proprietary information related to a
    firm's business and other sensitive information contained in the
    reports may be withheld, if deemed appropriate by the Agency.
        Question. How often do AMS auditors visit food establishments that
    sell products to USDA feeding programs?
        Answer. An AMS meat grader is present at the facility when ground
    beef is being processed for delivery under Federal contracts.
    Additionally, an AMS auditor performs an unscheduled audit of the
    grinding and slaughter processes once per month (or contract) while the
    facility is producing AMS purchased product. Additionally, AMS is
    cooperatively working with FSIS on cross-utilizing AMS employees to
    provide an enhanced surveillance program for the livestock holding and
    movement areas of slaughter establishments that provide raw materials.
                             risk based inspection
        Question. At the February 5, 2008, meeting of the National Advisory
    Committee on Meat and Poultry Inspection, FSIS distributed a document
    entitled, ``Timeline for Development and Implementation of the Proposed
    Public Health Risk-Based Inspection System, Public Health Information
    System and Poultry Slaughter Rule.'' Please provide a copy of the
    timeline and explain how it was developed.
        Answer. The draft timeline was developed based on the agency's plan
    to strengthen its infrastructure and the continued enhancement and
    evolution of inspection. The timeline was and is still considered to be
    a draft, and is subject to substantial revisions as the agency receives
    input from all stakeholders. The draft is provided for the record.
        [The information follows:]
      timeline for development and implementation of the proposed public
     health risk-based inspection system, public health information system
                           and poultry slaughter rule
        January 28, 2008.--Post the reports listed below on FSIS website
    for public comment:
      --Public Health Risk-Based Inspection Technical Report for Processing
            and Slaughter.
      --Public Health Risk-Based Inspection Technical Report for Poultry
            Slaughter.
        January 28, 2008.--Submit Public Health Risk-Based Inspection
    (PHRBI) reports for peer review.
        February 5-6, 2008.--NACMPI Full Committee meeting on Public Health
    Risk-Based Inspection.
        February 29, 2008.--SAIC to deliver draft requirements document to
    FSIS for Public Health. Information System (PHIS).
        March 22, 2008.--Receive NACMPI, public and peer review comments on
    Public Health Risk-Based Inspection Reports.
        March 2008.--Submit proposed rule on poultry slaughter for FSIS
    Assistant Administrator Review.
        March 31, 2008.--FSIS approves SAIC requirements document for PHIS.
        April 17, 2008.--Complete revision of PHRBI reports according to
    NACMPI, public and peer review comments.
        April 18, 2008.--Send PHBRI report to OIG.
        April 2008.--Submit proposed poultry slaughter rule to OGC for
    review.
        April--Aug. 2008.--Draft directives, notices, and other needed
    documents, based upon approved PHIS requirements.
        Spring 2008.--Submit proposed poultry slaughter rule to OMB.
        Summer 2008.--Publish proposed poultry slaughter rule.
        April-Sept. 2008.--Develop training schedule, detailed training
    plan, and logistics to deliver training to approximately 5,000 FSIS
    employees for the proposed PHRBI System and the PHIS.
        October 2008.--Develop detailed plan to implement and initiate
    training for the proposed PHRBI System and the PHIS to FSIS field
    personnel.
        January 2009.--Conduct User Acceptance Testing and begin field
    testing PHRBI system and PHIS.
        October 2009.--Deploy PHRBI system and PHIS for use in field.
                               fsis vacancy rates
        Question. Please provide a tabular report of the in-plant
    inspection personnel vacancy rate broken down by job title and FSIS
    district for each of the past 6 months.
        Answer. I will provide, for the record, a FSIS in-plant inspection
    personnel report that displays permanent full-time positions for each
    of the past 6 months (using data from the end of the pay-period closest
    to the end of the month).
        [The information follows:]

                                                                                  DISTRICT PFT EMPLOYMENT AND OTP USAGE
                                                                                        [As of October 27, 2007]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                NON-INPLANT                               INPLANT                           FISCAL             FISCAL             OPT USAGE
                                                         --------------------------------------------------------------------------------    YEAR            YEAR 2007 -----------------------------
                          DISTRICT                         DIST                                                                           ALLOCS 4/  DIFFER  ALLOCS 4/               YTD
                                                            OFC     FLS    TOTAL    EGG     VMS     VMO     FI      CSI    EIAO    TOTAL    11/07              11/07     PP USAGE   USAGE    AVAIL
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    ALAMEDA.............................................      13      14      27       6  ......      34     132     235      11     418        427      -9       9.00     0.2034    0.37       8.63
    DENVER..............................................      11      12      23       7       1      45     120     246      17     436        437      -1       6.00     0.1582    0.29       5.71
    MINNEAPOLIS.........................................      13       7      20      10       1      44      93     149      11     308        326     -18       6.00     0.2478    0.55       5.45
    DES MOINES..........................................      11      11      22      29       1      63     299     198      11     601        615     -14      18.00     0.3485    0.69      17.31
    LAWRENCE............................................      12       8      20       5       1      52     258     201      10     527        520       7      16.00     0.4549    0.89      15.11
    SPRINGDALE..........................................      14      10      24       2       1      71     320     297      10     701        713     -12      60.00     1.9458    3.68      56.32
    DALLAS..............................................     113       9      22       2       1      54     257     193       9     516        515       1      35.00     0.9899    1.97      33.03
    MADISON.............................................      12       7      19       7       1      31      65     127       8     239        240      -1       5.00     0.1392    0.32       4.68
    CHICAGO.............................................      12      13      25      12       1      42     104     229      20     408        400       8      11.00     0.5672    0.91      10.09
    PHILADELPHIA........................................      14      12      26       8       1      39      78     242      15     383        400     -17       7.00     0.2790    0.49       6.51
    ALBANY..............................................      13      11      24       4       1      15       5     194      12     231        250     -19       2.00     0.0728    0.12       1.88
    BELTSVILLE..........................................      11       7      18  ......       1      42     201     163       9     416        432     -16      20.00     0.5906    1.12      18.88
    RALEIGH.............................................      10      10      20  ......       1      66     393     229      11     700        670      30      52.00     1.9352    3.60      48.40
    ATLANTA.............................................      12      14      26       3       1      69     399     393      15     779        765      14      33.00     1.1123    2.05      30.95
    JACKSON.............................................      14      10      24       2       1      92     426     317      13     851        855      -4      80.00     2.8497    5.53      74.47
                                                         -------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL.........................................     185     155     340      97      14     759    3150    3312     182    7514       7565     -51     360.00    11.8945   22.57     337.43
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    KEY:
      FLS--Frontline Supervisor
      EGG--Egg Inspection
      VMS--Veterinary Medical Specialist (Humane Slaughter)
      VMO--Public Health Veterinary
      FI--Food Inspector
      EIAO--Enforcement Invest. & Analysis Officer
      CSI--Consumer Safety Inspector

                                                                                  DISTRICT PFT EMPLOYMENT AND OTP USAGE
                                                                                        [As of November 24, 2007]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                NON-INPLANT                               INPLANT                           FISCAL             FISCAL             OPT USAGE
                                                         --------------------------------------------------------------------------------    YEAR            YEAR 2007 -----------------------------
                          DISTRICT                         DIST                                                                           ALLOCS 4/  DIFFER  ALLOCS 4/               YTD
                                                            OFC     FLS    TOTAL    EGG     VMS     VMO     FI      CSI    EIAO    TOTAL    11/07              11/07     PP USAGE   USAGE    AVAIL
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    ALAMEDA.............................................      13      14      27       8  ......      34     132     231      10     415        427     -12       9.00     O.1835    0.81       8.19
    DENVER..............................................      12      12      24       7       1      45     126     246      17     442        437       5       6.00     O.1129    0.55       5.45
    MINNEAPOLIS.........................................      13       7      20      10       1      43      92     151      11     308        326     -18       6.00     O.1961    1.02       4.98
    DES MOINES..........................................      12      11      23      29       1      63     301     200      11     605        615     -10      18.00     0.3691    1.36      16.64
    LAWRENCE............................................      12       8      20       5       1      52     258     203      10     529        520       9      16.00     0.5773    1.99      14.01
    SPRINGDALE..........................................      14      10      24       2       1      71     320     296      10     700        713     -13      60.00     2.0607    7.55      52.45
    DALLAS..............................................      13       9      22       2       1      53     253     194       9     512        515      -3      35.00     0.9025    3.87      31.13
    MADISON.............................................      12       7      19       7       1      30      68     127       8     241        240       1       5.00     0.0805    0.50       4.50
    CHICAGO.............................................      13      13      26      12       1      41     103     231      21     409        400       9      11.00     0.4083    1.82       9.18
    PHILADELPHIA........................................      14      12      26       8       1      39      78     242      15     383        400     -17       7.00     0.2455    1.01       5.99
    ALBANY..............................................      13      11      24       4       1      15       5     193      12     230        250     -20       2.00     0.0536    0.25       1.75
    BELTSVILLE..........................................      11       7      18  ......       1      41     200     163       9     414        432     -18      20.00     0.5407    2.26      17.74
    RALEIGH.............................................      10       9      19  ......       1      65     397     229      12     704        670      34      52.00     1.7605    7.03      44.97
    ATLANTA.............................................      13      14      27       3       1      69     398     292      16     779        765      14      33.00     0.8834    3.91      29.09
    JACKSON.............................................      14      10      24       2       1      95     431     317      13     859        855       4      80.00     2.4688   10.81      69.19
                                                         -------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL.........................................     189     154     343      99      14     756    3162    3315     184    7530       7565     -35     360.00    10.8434   44.73     315.27
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    KEY:
      FLS--Frontline Supervisor
      EGG--Egg Inspection
      VMS--Veterinary Medical Specialist (Humane Slaughter)
      VMO--Public Health Veterinary
      FI--Food Inspector
      EIAO--Enforcement Invest. & Analysis Officer
      CSI--Consumer Safety Inspector

                                                                                  DISTRICT PFT EMPLOYMENT AND OTP USAGE
                                                                                         [As of January 5, 2008]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                NON-INPLANT                               INPLANT                           FISCAL             FISCAL             OPT USAGE
                                                         --------------------------------------------------------------------------------    YEAR            YEAR 2007 -----------------------------
                          DISTRICT                         DIST                                                                           ALLOCS 4/  DIFFER  ALLOCS 4/               YTD
                                                            OFC     FLS    TOTAL    EGG     VMS     VMO     FI      CSI    EIAO    TOTAL    11/07              11/07     PP USAGE   USAGE    AVAIL
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Headquarters........................................      36  ......      36  ......  ......  ......  ......  ......  ......  ......  .........  ......  .........  .........  ......  .........
    ALAMEDA.............................................      13      14      27       8       1      33     131     235      10     418        427      -9       9.00     0.2545    1.53       7.47
    DENVER..............................................      12      12      24       7       1      43     128     243      17     439        437       2       6.00     0.1638    1.14       4.86
    MINNEAPOLIS.........................................      13       7      20       9       1      43      83     162      10     308        326     -18       6.00     0.1851    1.64       4.36
    DES MOINES..........................................      10      11      21      29       1      60     301     199      11     601        615     -14      18.00     0.2692    2.18      15.82
    LAWRENCE............................................      12       8      20       5       1      52     254     206      10     528        520       8      16.00     0.5024    3.52      12.48
    SPRINGDALE..........................................      13      10      23       2       1      69     307     312      10     701        713     -12      60.00     1.5733   13.52      46.48
    DALLAS..............................................      13       9      22       2       1      55     250     196       9     513        515      -2      35.00     0.9564    6.94      28.06
    MADISON.............................................      12       7      19       7       1      30      63     132       8     241        240       1       5.00     0.1073    0.81       4.19
    CHICAGO.............................................      13      13      26      12       1      43      97     238      21     412        400      12      11.00     0.3399    3.03       7.97
    PHILADELPHIA........................................      14      12      26       8       1      39      71     250      15     384        400     -16       7.00     0.1529    1.70       5.30
    ALBANY..............................................      12      11      23       4       1      16       5     196      12     234        250     -16       2.00     0.0383    0.38       1.62
    BELTSVILLE..........................................      11       7      18  ......       1      41     198     166       9     415        432     -17      20.00     0.6036    4.17      15.83
    RALEIGH.............................................      10       9      19  ......       1      63     400     228      12     704        670      34      52.00     1.4529   11.71      40.29
    ATLANTA.............................................      14      14      28       3       1      67     390     300      16     777        765      12      33.00     0.7375    6.27      26.73
    JACKSON.............................................      14      11      25       2       1      94     429     313      12     851        855      -4      80.00     2.4978   19.40      60.60
                                                         -------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL.........................................     222     155     377      98      15     748    3107    3376     182    7526       7565     -39     360.00     9.8349   77.95     282.05
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    KEY:
      FLS--Frontline Supervisor
      EGG--Egg Inspection
      VMS--Veterinary Medical Specialist (Humane Slaughter)
      VMO--Public Health Veterinary
      FI--Food Inspector
      EIAO--Enforcement Invest. & Analysis Officer
      CSI--Consumer Safety Inspector

                                                                                  DISTRICT PFT EMPLOYMENT AND OTP USAGE
                                                                                        [As of February 2, 2008]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                NON-INPLANT                               INPLANT                           FISCAL             FISCAL             OPT USAGE
                                                         --------------------------------------------------------------------------------    YEAR            YEAR 2007 -----------------------------
                          DISTRICT                         DIST                                                                           ALLOCS 4/  DIFFER  ALLOCS 4/               YTD
                                                            OFC     FLS    TOTAL    EGG     VMS     VMO     FI      CSI    EIAO    TOTAL    11/07              11/07     PP USAGE   USAGE    AVAIL
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    ALAMEDA.............................................      13      13      26       7       1      35     144     222      10     419        427      -8       9.00     0.2198    2.11       6.89
    DENVER..............................................      12      10      22       7       1      43     127     240      16     434        437      -3       6.00     0.2027    1.51       4.49
    MINNEAPOLIS.........................................      13       6      19       9       1      42      95     149      10     306        326     -20       6.00     0.1040    1.89       4.11
    DES MOINES..........................................      11      11      22      28       1      62     301     199      11     602        615     -13      18.00     0.2107    2.58      15.42
    LAWRENCE............................................      11       8      19       5       1      52     256     203      10     527        520       7      16.00     0.4594    4.64      11.36
    SPRINGDALE..........................................      11      10      21       2       1      69     358     260      10     700        713     -13      60.00     1.9725   17.89      42.11
    DALLAS..............................................      12       9      21       2       1      56     256     193       9     517        515       2      35.00     0.9389    8.82      26.18
    MADISON.............................................      12       7      19       7       1      31      66     128       8     241        240       1       5.00     0.0966    1.00       4.00
    CHICAGO.............................................      13      13      26      12       1      41     107     227      21     409        400       9      11.00     0.2597    3.62       7.38
    PHILADELPHIA........................................      13      12      25       8       1      39      82     241      15     386        400     -14       7.00     0.1291    2.01       4.99
    ALBANY..............................................      11      11      22       4       1      16       6     193      10     230        250     -20       2.00     0.0383    0.46       1.54
    BELTSVILLE..........................................      11       7      18  ......       1      41     205     154       9     410        432     -22      20.00     0.6251    5.45      14.55
    RALEIGH.............................................      10       9      19  ......       1      61     400     228       9     699        670      29      52.00     1.4623   14.48      37.52
    ATLANTA.............................................      12      14      26       3       1      67     405     236      15     777        765      12      32.00     0.7252    7.75      25.25
    JACKSON.............................................      13       9      22       2       1      94     473     263      11     844        855     -11      80.00     2.9460   25.41      54.59
                                                         -------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL.........................................     178     149     327      96      15     749    3281    3186     174    7501       7565     -64     360.00    10.3903   99.63     260.37
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    KEY:
      FLS--Frontline Supervisor
      EGG--Egg Inspection
      VMS--Veterinary Medical Specialist (Humane Slaughter)
      VMO--Public Health Veterinary
      FI--Food Inspector
      EIAO--Enforcement Invest. & Analysis Officer
      CSI--Consumer Safety Inspector

                                                                                  DISTRICT PFT EMPLOYMENT AND OTP USAGE
                                                                                          [As of March 1, 2008]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NON-INPLANT                                   INPLANT                                                                          OPT USAGE
                                              ----------------        --------------------------------------------------------           FISCAL             FISCAL  --------------------------------
                                                                                         Inplant Inspection                               YEAR            YEAR 2007
                     DISTRICT                   DIST            TOTAL --------------------------------------------------------  TOTAL  ALLOCS 4/  DIFFER  ALLOCS 4/
                                                 OFC     FLS                                           CSI 8-                            11/07              11/07     PP USAGE  YTD USAGE    AVAIL
                                                                         VMO    FI-7    CSI-7    EGG     10      VMS    EIAO
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    ALAMEDA..................................      13      11      24      35     128      19       7     221       1      10     421        427      -6       9.00     0.1674       2.45       6.55
    DENVER...................................      12       9      21      44     127  ......       7     241       1      16     436        437      -1       6.00     0.2998       2.05       3.95
    MINNEAPOLIS..............................      13       7      20      43      87      10       9     148       1       8     306        326     -20       6.00     0.1287       2.17       3.83
    DES MOINES...............................      11      12      23      61     299  ......      30     198       1      11     600        615     -15      18.00     0.2955       3.10      14.90
    LAWRENCE.................................      11       8      19      53     256  ......       5     206       1      10     531        520      11      16.00     0.5001       5.66      10.34
    SPRINGDALE...............................      12      10      22      70     288      69       2     257       1       9     696        713     -17      60.00     2.0443      21.93      38.07
    DALLAS...................................      12       9      21      54     249       3       2     194       1       9     512        515      -3      35.00     1.0341      10.92      24.08
    MADISON..................................      12       8      20      32      59       9       7     130       1       7     245        240       5       5.00     0.0830       1.12       3.88
    CHICAGO..................................      13      13      26      41      96      10      12     230       1      20     410        400      10      11.00     0.3867       4.39       6.61
    PHILADELPHIA.............................      14      11      25      40      76       9       8     240       1      15     389        400     -11       7.00     0.1190       2.29       4.71
    ALBANY...................................      11      11      22      15       4       2       4     194       1      10     230        250     -20       2.00     0.0517       0.58       1.42
    BELTSVILLE...............................      10       7      17      40     196       7  ......     155       1       8     407        432     -25      20.00     0.7408       6.92      13.08
    RALEIGH..................................      11      10      21      61     400       2  ......     228       1      12     704        670      34      52.00     1.7305      17.89      34.11
    ATLANTA..................................      12      14      26      66     392      12       3     284       1      16     774        765       9      33.00     1.0065       9.66      23.34
    JACKSON..................................      13       9      22      94     428      53       2     268       1      11     857        855       2      80.00     3.1773      31.76      48.24
                                              ------------------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL..............................     180  ......     329     749    3085     205      98    3194      15     172    7518       7565     -47     360.00    11.7654     122.88     237.12
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    KEY:
      FLS--Frontline Supervisor
      EGG--Egg Inspection
      VMS--Veterinary Medical Specialist (Humane Slaughter)
      VMO--Public Health Veterinary
      FI--Food Inspector
      EIAO--Enforcement Invest. & Analysis Officer
      CSI--Consumer Safety Inspector

                                                                                  DISTRICT PFT EMPLOYMENT AND OTP USAGE
                                                                                         [As of March 29, 2008]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 NON-INPLANT                                   INPLANT                                                                          OPT USAGE
                                              ----------------        --------------------------------------------------------           FISCAL             FISCAL  --------------------------------
                                                                                         Inplant Inspection                               YEAR            YEAR 2007
                     DISTRICT                   DIST            TOTAL --------------------------------------------------------  TOTAL  ALLOCS 4/  DIFFER  ALLOCS 4/
                                                 OFC     FLS                                           CSI 8-                            11/07              11/07     PP USAGE  YTD USAGE    AVAIL
                                                                         VMO    FI-7    CSI-7    EGG     10      VMS    EIAO
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    ALAMEDA..................................      13      11      24      33     128      19       7     228       1      11     427        427  ......       9.00     0.1678       2.75       6.25
    DENVER...................................      13       9      22      44     125  ......       7     241       1      15     433        437      -4       6.00     0.2657       2.58       3.42
    MINNEAPOLIS..............................      13       7      20      42      85      10      10     150       1       8     306        326     -20       6.00     0.1821       2.48       3.52
    DES MOINES...............................      12      12      24      60     304  ......      30     198       1      11     604        615     -11      18.00     0.4101       3.94      14.06
    LAWRENCE.................................      11       8      19      52     251  ......       5     204       1      10     523        520       3      16.00     0.5708       6.70       9.30
    SPRINGDALE...............................      12      10      22      71     288      70       2     257       1       9     698        713     -15      60.00     2.3359      26.20      33.80
    DALLAS...................................      12       9      21      55     248       3       2     195       1       9     513        515      -2      35.00     1.1638      13.19      21.81
    MADISON..................................      12       7      19      32      59      10       7     130       1       8     247        240       7       5.00     0.1060       1.31       3.69
    CHICAGO..................................      13      12      25      41      90      16      12     228       1      20     408        400       8      11.00     0.3551       5.23       5.77
    PHILADELPHIA.............................      14      12      26      42      73      10       8     243       1      14     391        400      -9       7.00     0.0584       2.51       4.50
    ALBANY...................................      11      11      22      14       4       2       4     194       1      10     229        250     -21       2.00     0.0496       0.68       1.32
    BELTSVILLE...............................      11       7      18      39     182      18  ......     157       1       8     405        432     -27      20.00     0.7300       8.32      11.68
    RALEIGH..................................      10       9      19      61     384      13  ......     231       1      12     702        670      32      52.00     1.9361      21.49      30.51
    ATLANTA..................................      12      14      26      66     388      12       3     287       1      16     773        765       8      33.00     0.9165      11.39      21.61
    JACKSON..................................      13      11      24      93     427      52       2     267       1      12     854        855      -1      80.00     3.0898      37.90      42.10
                                              ------------------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL..............................     182     149     331     745    3036     235      99    3210      15     173    7513       7565     -52     360.00     12.338     146.66     213.34
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    KEY:
      FLS--Frontline Supervisor
      EGG--Egg Inspection
      VMS--Veterinary Medical Specialist (Humane Slaughter)
      VMO--Public Health Veterinary
      FI--Food Inspector
      EIAO--Enforcement Invest. & Analysis Officer
      CSI--Consumer Safety Inspector

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                            colony collapse disorder
        Question. How are Colony Collapse Disorder (CCD) and other pests
    and diseases such as Varroa mites affecting domestic honeybee
    beekeepers and the pollination capacity of U.S. agriculture?
        Answer. CCD is a syndrome of honey bees that strikes colonies in
    fall, winter and early spring, when they are weakest. Forager bees
    leave the hive and do not return. However, CCD is only one of many
    problems beekeepers face in maintaining healthy hives. Surveys of bee
    colony losses over the past 2 years estimated that beekeepers in the
    U.S. lost 31 percent and 37 percent of their colonies in 2006 and 2007,
    respectively. This rate of colony loss is not sustainable for
    beekeepers, and while we are not in a pollination crisis, our ability
    to meet increasing pollination needs in almonds and other crops is
    surely threatened.
        Question. If pollination capacity is seriously compromised, is our
    food security seriously threatened and would this constitute a
    national, if not global, crisis?
        Answer. Bees are responsible for $15 billion in added crop value
    and are as essential to plant reproduction and fruit production as soil
    and water are to plant growth. Due to invasive pests such as mites,
    honey bees were already under tremendous stress even before the
    appearance of CCD. The bee industry and growers cannot absorb yet
    another major cause of bee loss, particularly with demand for honey
    bees continuing to increase dramatically due to increased almond
    acreage, requiring half of the Nation's 2.4 million colonies. Colony
    rental costs have doubled for almond and blueberry producers. Other
    crops with heavy reliance on honey bees include alfalfa (for dairy and
    beef cattle), apples in the East and West, cranberries in the North,
    and citrus and vegetables throughout the South. If bee colony losses
    continue or increase, our ability to produce fruits, vegetables and
    nuts in the United States could indeed be threatened. Similar honey bee
    losses are occurring around the world and many of these losses are as
    yet unexplained.
        Question. As hives are depleted, what is the Department doing to
    assist bee keepers with hive restorations? More specifically, what is
    the Department doing to ensure a long-term supply of queen bees that
    are free of major pests and diseases such as Varroa mites?
        Answer. USDA's-Agricultural Research Service (ARS) is working on
    means to improve colony survival by testing means to recycle beekeeping
    equipment from dead hives including beeswax comb fumigation and
    irradiation to kill pathogens. To insure disease-free queens the
    Department is working with the queen breeding industry to find means of
    queen production that consistently produce quality queens that are long
    lived.
        Question. Are there sources of queen bees free of Varroa mites that
    will play pivotal roles in the restoration of hives and ultimately
    pollination capacity in the United States? What steps need to be taken
    to assure preservation of these supplies of queen bees.
        Answer. The Hawaiian Islands, particularly Kona on the Big Island
    (Hawaii), have represented one of only two locations in the world where
    queens could be produced without the impacts of parasitic varroa and
    tracheal mites, the other being Australia. Thus, the unique pest-free
    nature of the Big Island represents a valuable source of quality
    queens. This is now threatened by the arrival of the varroa mite on
    Oahu. APHIS is working with the Hawaiian Department of Agriculture to
    determine what eradication or management options are feasible for
    limiting the spread of varroa between these islands.
                                     ______

                 Question Submitted by Senator Dianne Feinstein

                                humane slaughter
        Question. Secretary Schafer, over the last 4 months, I have written
    you three letters expressing my concerns about food safety related to
    the incidents exposed at the Hallmark/Westland slaughter facility in
    Chino, California and I also submitted questions for the February 28
    subcommittee hearing. I have not received any satisfactory answers to
    my inquiries.
        As you know, I have introduced bipartisan legislation that will
    establish penalties for those who slaughter or attempt to slaughter
    nonambulatory animals and will require the release of the names of
    establishments where recalled meats are sold or served.
        Mr. Secretary, could you tell me why you have not used the
    authorities Congress gave you in the Farm Security and Rural Investment
    Act Sections 10414 and 10815 to punish violators who treat animals
    inhumanely and process nonambulatory animals outside of regulation for
    human consumption?
        Answer. USDA has used its existing authority, when appropriate, to
    ensure animals are treated humanely. Since January 2004, non-ambulatory
    disabled cattle have been prohibited from the food supply. In July
    2007, FSIS issued a final rule, ``Prohibition of the Use of Specified
    Risk Materials for Human Food and Requirements for the Disposition of
    Non-Ambulatory Disabled Cattle,'' which confirmed this policy and
    stated that such cattle would not pass ante-mortem inspection. However,
    under this rule, if an animal passes ante-mortem inspection and
    subsequently becomes non-ambulatory before slaughter, the FSIS Public
    Health Veterinarian must immediately be notified and will determine, on
    a case-by-case basis, whether the animal was unable to walk due to an
    acute injury, such as a broken leg. In that case, the animal would be
    eligible to move on to slaughter operations as a ``U.S. Suspect.'' Such
    animals are slaughtered separately and receive careful examination and
    inspection by the FSIS Public Health Veterinarian after slaughter. The
    Agricultural Marketing Service has longstanding specification
    requirements for foods purchased for Federal nutrition programs that
    preclude the use of meat and meat products derived from non-ambulatory
    disabled livestock.
                penalties for slaughter of nonambulatory animals
        Question. Could you tell me why you have not finalized regulations
    that require the release of the names of establishments where recalled
    meats are sold or served?
        Answer. The Department is in the process of finalizing the rule.
                            commodity crop payments
        Question. I agree with the position of the United States Department
    of Agriculture that the Federal Government should not give commodity
    crop payments to America's wealthiest people. In recent years, the
    largest recipient of Farm Bill Commodity Payments in California lived
    in San Francisco, demonstrating that the program does not currently
    help the small family farmer it was designed to assist. For this
    reason, I supported reform efforts during consideration of the Farm
    Bill that would have limited payments to individuals with high incomes.
        Efforts to impose an income cap failed because members of the
    Senate believed that reform provisions included in the committee-passed
    bill would address this problem, but I am concerned that America's
    wealthiest people may still receive payments after these reforms are
    adopted.
        Please provide the USDA's best estimate of how many individuals
    with adjusted gross incomes above $250,000 per year will qualify for
    commodity payments under your farm bill proposal.
        Answer. A September 2007 USDA study found that 25,191 farm
    operators and 12,906 share landlords had an adjusted gross income (AGI)
    greater than $200,000 in 2004. In this analysis, no exemption was
    allowed for those with farm related income making up 75 percent or more
    of AGI as is done under current legislation. We have no analysis on a
    cutoff of $250,000 but the USDA study results for $200,000 should be
    quite similar.
        Question. Please compare this to the number of individuals that
    would qualify under an extension of the current Farm Bill.
        Answer. The current AGI cutoff, $2.5 million with an exemption for
    those with 75 percent or more of their AGI stemming from farm-related
    income, likely only affects a few hundred producers each year.
        Question. Please estimate how much money is saved by adopting the
    reform proposals in the Senate and House bills, respectively, as it
    pertains to the adjusted gross income thresholds.
        Answer. USDA has no specific analysis of various AGI cutoffs
    proposed by the House and Senate. The September 2007 USDA study found
    that, in 2004, farmers and share landlords with an AGI of greater than
    $200,000 earned close to $400 million in farm payments. Not all of that
    $400 million should be counted as potential savings as a portion of it
    was conservation payments which likely will not be subject to a
    tightened AGI limit.
        Question. Please estimate how much money would be saved by reducing
    the adjusted gross income limits to $500,000; $400,000; $300,000; and
    $200,000 for farmers regardless of income source.
        Answer. The USDA analysis did not include projected savings for
    limits other than $200,000. Of course, as the limit is raised, fewer
    farmers would be affected. As only a small percentage of farmers are
    affected by the $200,000 limit, the higher limits would be expected to
    have small impacts.
        Question. Please also estimate how much money would be saved if
    Congress exempted farmers from these caps if a certain percentage of
    income is derived from on-farm income.
        Answer. The USDA study found that exempting farmers with 75 percent
    or more of total income from farming and ranching would reduce savings
    from the AGI criteria by about 40 percent.
        Question. As Secretary of Agriculture, can you think of any reason
    why government revenues--collected from the incomes of every American--
    should be spent on commodity payments to Americans whose incomes are in
    the top 1 percent of all Americans?
        Answer. Current commodity program legislation does not contain
    income targeting other than the $2.5 million AGI cutoff. USDA data
    indicate that most payments go to farm households that have large
    incomes compared with other farms and compared with the U.S. average
    household. Payment eligibility limits based on lower AGI levels would
    better help ensure equity among farmers.
        Question. What percentage of America's farmers have an adjusted
    gross income exceeding $200,000? Last year, what percent of total Farm
    Bill spending went to individuals with incomes exceeding $200,000?
        Answer. The USDA study found that 1.2 percent of sole proprietors
    and 2.0 percent of share landlords had AGIs greater than $200,000 in
    2004. Together, they earned about 5 percent of payments. That 5 percent
    includes conservation payments, which likely will not be subject to the
    AGI limit.
        Question. Finally, do Americans in the top income bracket who
    receive commodity payments pay income taxes on their payments?
        Answer. Commodity program payments are taxable income.
                           conservation funding cuts
        Question. California relies on USDA's conservation programs to help
    farmers meet clean air and clean water regulations while still
    producing some of the crops including fresh fruits and vegetables that
    are not produced anywhere else in the United States. The President's
    2009 budget proposes to cut discretionary funding for conservation;
    funding that will provide the needed technical resources for our
    farmers and ranchers to install conservation practices.
        Do you believe funding cuts for Farm Bill programs should come from
    conservation? To preserve conservation funding, where do you think
    funding cuts should come from?
        Answer. Increasing our commitment to conservation programs is
    important to the Department and the Farm Bill is a major vehicle for
    addressing the Nation's conservation needs. The President's budget
    request must be viewed in concert with the Administration's Farm Bill
    proposal which makes a significant investment in conservation. The
    proposal would add $775 million to Farm Bill conservation programs in
    fiscal year 2009 and provides $7.8 billion in new spending over 10
    years in the conservation title.
        In order to provide this level of investment in conservation, the
    administration will continue its efforts to reduce or eliminate
    redundant or lower priority programs and to eliminate Congressional
    earmarks. In addition, wherever possible, the administration's budget
    proposal combines and streamlines program design to improve the
    effectiveness and efficiency of program delivery making even more
    funding available for important conservation efforts.
                      commodity supplemental food program
        Question. More than 530,000 California seniors, over the age of 65,
    receive Supplemental Security Income, making them ineligible for Food
    Stamps. The maximum Supplemental Security Income benefit is $870 per
    month making it extremely difficult for these seniors to afford food.
    There is a significant need to expand the Commodity Supplemental Food
    Program to help more low-income seniors.
        Why did the President's budget deem the Commodity Supplemental Food
    Program as a redundant program and eliminate it in the fiscal year 2009
    proposal?
        Answer. There is significant overlap between CSFP eligible
    populations and areas of operation and those of both the WIC Program
    and the Food Stamp Program. Unlike CSFP, both of these programs are
    available in communities throughout the United States.
        In the administration's view, ensuring adequate funding for
    programs that have the scope and reach necessary to provide access to
    eligible people wherever they may reside is a better and more equitable
    use of scarce resources than to allocate them to programs that cannot
    provide access to many areas of the country. For this reason, the
    administration has placed a priority on funding food stamps, WIC, and
    other nationally-available programs, such as the administration on
    Aging programs for seniors and TEFAP, which provide benefits to
    eligible people wherever they may live, including communities currently
    served by CSFP. All seniors over age 60 are eligible for both
    congregate and home-delivered nutrition assistance provided by one of
    655 Area Agencies on Aging, which are funded through the Administration
    Aging in the Department of Health and Human Services. In addition to
    the Administration on Aging programs for seniors, low-income
    individuals of any age would have access to TEFAP.
                                     ______

                   Questions Submitted by Senator Tim Johnson

              resource conservation and development program (rc&d)
        Question. The RC&D program returns $7.50 to local communities for
    every dollar the Federal Government invests. At a time when we are
    looking at ways to stimulate the economy, why did you cut this program?
        Answer. The proposal eliminates Federal technical assistance to the
    375 RC&D councils. The majority of RC&D Areas have received Federal
    support for at least 10 years. As nonprofit organizations, RC&D
    councils will still exist and most of these should have the capacity to
    identify, plan, and address their identified priorities. In addition,
    the Program Assessment Rating Tool (PART) analysis found the program to
    be duplicative of other similar resource conservation planning, rural
    economic development, community programs provided by other USDA
    agencies (such as the Forest Service and Rural Development), and other
    Federal departments (such as the Department of Commerce's Economic
    Development Administration).
        Question. NRCS has established performance goals for RC&D in jobs
    and businesses created and retained. Has RC&D met those goals? Why cut
    funds for a program that helps create businesses in a time of economic
    downturn?
        Answer. RC&D has met and exceeded the established performance goals
    for jobs and businesses created and retained each year. The proposal
    eliminates Federal technical assistance to the 375 RC&D councils. RC&D
    councils will still exist as nonprofit organizations. The majority of
    RC&D areas have received Federal technical assistance support for at
    least 10 years while obtaining financial support for projects from
    other sources. They can continue to obtain support from other sources
    to provide assistance to their communities.
        Question. It is my understanding the NRCS contracted out for a
    survey to determine customer satisfaction with their programs and that
    RC&D received one of the highest scores. Why did you cut a program that
    the general public is satisfied with and delivered results? Please
    provide for the record the full results of the American Customer
    Satisfaction Index Survey and indicate the rank of RC&D compared to
    other NRCS programs.
        Answer. The American Customer Satisfaction Index (ACSI) is the
    national indicator of customer evaluations of the quality of goods and
    services available to U.S. residents. It is the only uniform, cross-
    industry/government measure of Customer Satisfaction. The RC&D program
    received an ACSI score of 81 compared to the overall Federal Government
    score of 67.8 and the national sector score of 75.2. Although the
    program scored highly, the latest program performance review using the
    Program Assessment Rating Tool (PART) analysis found the program to be
    duplicative of other similar resource conservation planning, rural
    economic development, and community programs provided by other USDA
    agencies (such as the Forest Service and Rural Development) and other
    Federal departments (such as the Department of Commerce's Economic
    Development Administration). It is for this reason that elimination of
    funding has been proposed. The full results of the American customer
    Satisfaction Index Survey for NRCS programs are as follows:

    ----------------------------------------------------------------------------------------------------------------
                                                                                          Federal
                         Program                      Year Conducted       Score        Government       National
                                                                                           ACSI         Sector ACSI
    ----------------------------------------------------------------------------------------------------------------
    Conservation Technical Assistance (CTA).........            2001              81            71.3            72.0
    Environmental Quality Incentive Program (EQIP)..            2004              75            72.1            74.3
    Wildlife Habitat Incentive Program (WHIP).......            2004              77            72.1            74.3
    Conservation Security Program (CSP).............            2005              76            71.3            73.2
    Snow Survey and Water Supply Forecasting........            2005              77            71.3            73.2
    Conservation Technical Assistance (CTA).........            2007              79            67.8            75.2
    National Resources Inventory (NRI)..............            2007              57            67.8            75.2
    Plant Materials Center (PMC)....................            2007              83            67.8            75.2
    Resource Conservation & Development (RC&D)......            2007              81            67.8            75.2
    Soil Survey Program.............................            2007              79            67.8            75.2
    Technical Service Providers (TSP)...............            2007              78            67.8            75.2
    Wetlands Reserve Program (WRP)..................            2007              69            67.8            75.2
    ----------------------------------------------------------------------------------------------------------------

        Question. An earmark in the fiscal year 2008 Senate Committee
    Report for a project in Hawaii was moved by NRCS from the conservation
    operations budget to the RC&D program. The Senate committee has
    included this earmark for the project in Hawaii in the conservation
    operations budget for over 5 years. Why did you move this earmark? The
    net result is that each council nationally lost $1,800 in funding. Did
    you seek permission from the committee to move this earmark?
        Answer. The earmark for Hawaii was funded from the RC&D budget
    rather than the Conservation Operations (CO) Program in 2008 because
    the project scope and intent was more properly aligned with RC&D
    program objectives and authorities than it was with those of the CO
    Program. Conservation operations policy was revised recently to state
    that if an earmark can be appropriately funded through a program other
    than Conservation Technical Assistance (CTA), then funding from that
    program source should be used. With this shift in funds, the essence of
    the earmark (purpose, intent, objectives) did not change.
        Question. RC&D Councils are made of volunteers and the program was
    not designed to move councils to self sufficiency. RC&D Councils are
    dedicated to putting resources on the ground in communities to address
    unmet needs. Councils have prided themselves on using grants to serve
    communities--not for their own administrative costs. What sources of
    funding do you see for Councils to become self-sufficient?
        Answer. Funding needed for RC&D Councils to become self-sufficient
    would need to come from sources such as State and local governments,
    private foundations, and other Federal agencies. Councils can request
    assistance from State governments for funds that are not tied
    specifically to a project, but are used to assist the Council in
    covering other costs. A number of States have provided assistance to
    Councils in the past, such as Alabama, Arkansas, and Georgia.
        Question. The fiscal year 2008 appropriation includes a cap on
    headquarters funding. Are greenbook charges included in the
    headquarters cap? Please provide an allocation chart that includes all
    costs--headquarters, State by State, and any other costs assessed to
    the RC&D program. Please include fiscal year 2007 allocations in the
    chart for comparison purposes.
        Answer. Yes, the agency greenbook charges are included in the
    amount applied to the headquarters funding cap. In the table below, the
    greenbook allocations are considered in addition to the National
    Headquarters allocations and include agency-wide assessments
    (assessments applied at the headquarters level) and state specific
    assessment charges. The fiscal year 2007 and 2008 allocations include
    carryover funds which are considered to be outside of the cap.
        The information is provided for the record.

    ------------------------------------------------------------------------
                                                2007 Final     2008 Initial
                      State                     Allocations     Allocations
    ------------------------------------------------------------------------
    Alabama.................................      $1,112,363      $1,070,781
    Alaska..................................         940,158         962,592
    Arizona.................................         781,445         783,509
    Arkansas................................         901,283         902,792
    California..............................       1,476,699       1,432,353
    Colorado................................         942,084         951,806
    Connecticut.............................         291,801         296,117
    Delaware................................         143,105         145,222
    Florida.................................       1,018,812         990,310
    Georgia.................................       1,307,235       1,313,377
    Hawaii..................................         595,518       1,259,387
    Idaho...................................       1,064,020       1,051,130
    Illinois................................       1,182,516       1,194,401
    Indiana.................................       1,039,433       1,070,782
    Iowa....................................       1,875,868       1,903,612
    Kansas..................................       1,056,396       1,072,020
    Kentucky................................       1,656,085       1,665,661
    Louisiana...............................       1,021,730         919,739
    Maine...................................         649,112         656,956
    Maryland................................         425,494         435,666
    Massachusetts...........................         422,574         435,666
    Michigan................................         903,077         919,739
    Minnesota...............................       1,042,830       1,051,130
    Mississippi.............................       1,000,977         997,706
    Montana.................................         972,773         987,160
    Missouri................................       1,035,580       1,051,130
    Nebraska................................       1,406,903       1,427,709
    Nevada..................................         426,099         435,666
    New Hampshire...........................         306,050         290,444
    New Jersey..............................         286,211         290,444
    New Mexico..............................         960,090         957,413
    New York................................         997,135       1,000,681
    North Carolina..........................       1,107,877       1,189,758
    North Dakota............................         962,746         976,343
    Ohio....................................       1,085,578       1,070,782
    Oklahoma................................       1,098,987       1,085,964
    Oregon..................................         715,527         726,110
    Pennsylvania............................       1,184,056       1,070,782
    Rhode Island............................         148,005         145,222
    South Carolina..........................         918,864         919,739
    South Dakota............................         906,334         919,739
    Tennessee...............................       1,172,418       1,189,758
    Texas...................................       2,608,788       2,617,467
    Utah....................................       1,003,322         944,456
    Vermont.................................         285,772         290,444
    Virginia................................         902,960         919,739
    Washington..............................         959,292       1,016,554
    West Virginia...........................         718,607         729,235
    Wisconsin...............................         906,334         919,739
    Wyoming.................................         717,668         726,110
    Pacific Basin...........................         237,569         303,582
    Caribbean Basin.........................         429,316         435,666
    National Headquarters...................       2,910,065       2,572,253
    Centers.................................         615,516         479,402
    Greenbook...............................       2,047,191         813,932
    Undistributed...........................  ..............         280,621
                                             -------------------------------
          Total.............................      52,884,248      52,266,498
    ------------------------------------------------------------------------

        Question. Please provide for the record the number of new RC&D
    coordinators who have been hired in the last 2 years. Please provide
    for the record the number of training sessions held for new RC&D
    coordinators (RC&D concepts course and area planning course) and the
    number of new coordinators trained in the last fiscal year and
    scheduled for fiscal year 2008.
        Answer. Forty-nine new RC&D coordinators have been hired in the
    last 2 years. One RC&D concepts course and one area planning course was
    held by the NRCS National Educational Development Center (NEDC) in
    fiscal year 2006. In fiscal year 2007, training was provided by the
    national NRCS office through internet ``net meetings.'' Three internet-
    based area planning courses and three internet-based concept courses
    were held. In fiscal year 2008 the NEDC plans to hold one concepts
    course and one area planning course. Twenty-seven of the 49 new
    coordinators have taken the concepts course, with 23 trained in fiscal
    year 2007 through the net meetings. Twenty-one of the 49 new
    coordinators have taken the area planning course with 19 trained in
    fiscal year 2007 through the net meetings. We do not have information
    regarding training requests for fiscal year 2008 broken down by
    position.
        Question. How many RC&D coordinators are eligible to retire in
    fiscal year 2008 and fiscal year 2009? How much does it cost to fill a
    coordinator vacancy on average?
        Answer. Sixty-eight RC&D coordinators are eligible to retire in
    fiscal year 2008 and an additional 23 will be eligible to retire in
    fiscal year 2009. On average, it costs approximately $80,000 in
    relocation costs to fill a coordinator position. This does not include
    the cost of salary, benefits, vehicle, etc.
        Question. What is the average cost to provide a full time
    coordinator to an RC&D area? What is the current level of funding
    provided to an average RC&D area in fiscal year 2008?
        Answer. The average cost to provide a full time coordinator is
    approximately $124,500 and this is the average level of funding
    provided.
        Question. Coordinators no longer serve a council full-time. On
    average how much of a coordinators time is spent on RC&D? What other
    programs are coordinators working on?
        Answer. Although we do not have a national figure for the amount of
    time a coordinator spends on RC&D Program activities at this time, we
    are in the process of obtaining the information for the record.
    Qualitative information from discussions with our State offices shows
    that most Coordinators spend the vast majority of their time on RC&D
    activities. Time spent implementing Farm Bill programs is charged as
    Technical Assistance (TA) to the appropriate Farm Bill program. Program
    and fund integrity is maintained by the agency for the RC&D program and
    all other programs. The other programs coordinators are working on
    include Conservation Technical Assistance, Watersheds and Flood
    Prevention Operations, Watershed Surveys and Planning, and other Farm
    Bill programs such as the Environmental Quality Incentives Program and
    the Conservation Security Program.
        Question. Please provide for the record the program improvements
    that have been made to address the OMB PART score concerns.
        Answer. Since 2004, significant improvements have been made and in
    2006 the program received an increased score performing at an
    ``Adequate'' level. Program improvements include: developed and
    implemented annual, long-term, and efficiency measures; developed and
    implemented a more targeted allocation methodology designed to address
    priority program needs; revised the RC&D policy manual to reflect
    increased emphasis on program performance and linkages to national
    performance goals; and developed and implemented a new reporting system
    to track program performance.
        In addition, the Agency is taking the following actions to improve
    the performance of the program: developing and implementing a 5-year
    comprehensive budget and performance management strategy aligned with
    NRCS's strategic plan; continuing to streamline the program by updating
    the allocation methodology, identifying ways to increase local
    leadership capabilities, and eliminating costs such as those for
    clerical and office support that can be incurred by councils.
        Question. The budget indicates that RC&D duplicates other Federal
    programs but through its area planning it reviews resources in a
    community and assesses and addresses unmet needs. In the most rural
    areas of this country there are often no organizations to act as a
    fiscal agent and deliver Federal programs without the assistance of an
    RC&D council. How do you propose to assist these communities in the
    absence of RC&D?
        Answer. RC&D councils are established nonprofit organizations and
    will continue to play a role in assisting their communities. These
    councils have developed strategic area plans that identify, plan, and
    address their agreed priorities. They have experience in obtaining
    financial support for projects and acting as fiscal agents in their
    communities. Although the technical assistance provided by NRCS will be
    eliminated, the councils can continue to act as a fiscal agent in their
    communities.
        Question. The House report included report language that the
    Committee requests that NRCS work with the Councils to develop
    appropriate measures of effectiveness for both conservation and
    economic development. Can you give us an update on how you worked with
    councils to achieve this? We continue to hear that conservation is the
    priority--what have you done to be sure that economic development
    activities can also be provided?
        Answer. The RC&D Program's short and long-term program performance
    and efficiency measures reflect both conservation and community
    development aspects of the program. These measures were developed in
    conjunction with the National Association of Resource Conservation and
    Development Councils (NARC&DC), representing the 375 councils
    nationwide, to incorporate local council concerns identified through
    the Area Planning process.
        Conservation is a priority for NRCS, but does not exclude Councils'
    ability to continue to work on community and economic development
    projects. We have annual and long-term performance measures to capture
    the community development activities of councils. The annual
    performance measure is: local businesses created or retained in rural
    communities. A number of businesses within the agricultural and non-
    agricultural sectors are eligible. Example businesses include, but are
    not limited to, manufacturing, service, value-added agriculture,
    tourism, home-based, and energy related industries. Performance is
    reported in numbers. This measure is calculated as the sum of new
    businesses created or businesses retained in the current fiscal year.
    The long-term performance measure is: Natural resource-based
    enterprises created or retained that increase employment opportunities,
    the cumulative number of jobs created and/or retained with RC&D
    assistance in natural resource-based industries for fiscal year 2005-
    2010.
        NRCS works closely with local RC&D councils to help them develop
    and implement projects that support their Area and Annual plans with
    programs and services from NRCS, other USDA agencies and other private
    and public entities. By partnering with other entities, NRCS was able
    to help RC&D councils create or retain 10,723 jobs and 3,185 businesses
    in 2007.
                           country of origin labeling
        Question. With respect to Country of Origin Labeling (COOL), the
    President addressed COOL as follows in his proposed fiscal year 2009
    budget:
        Country of Origin Labeling (COOL) becomes mandatory for all covered
    commodities on September 30, 2008. Currently, AMS operates a small COOL
    enforcement program for fish and shellfish compliance (the only
    commodities for which labeling is now required). As part of the 2009
    budget, the agency will propose to charge a mandatory fee for the full
    implementation of a complete COOL enforcement program for the following
    commodities, in addition to the current fish and shellfish items:
    muscle cuts of beef (including veal), lamb, and pork; ground beef,
    ground lamb and ground pork; perishable agricultural commodities;
    peanuts and the current fish and shellfish items. Additional
    commodities may also be considered. The additional funds will be
    deposited into the agency's existing Trust account.
        If the USDA has not yet charged a user fee for the implementation
    of COOL for fish and shellfish, why is the administration now proposing
    to charge a blanket user fee for all commodities for this program?
        Answer. The expansion of mandatory labeling requirements to all
    covered commodities will greatly increase the cost of operating the
    program. USDA believes it appropriate for the regulated entities to pay
    the cost for enforcement-related activities to ensure that covered
    commodities are labeled in conformity with regulations. Approximately
    37,000 retailer locations would be assessed a fee of about $260
    annually per location to finance COOL enforcement costs of $9.6
    million. The proposed fees would be used to: finance surveillance
    reviews on all covered commodities at retail establishments on a random
    basis approximately every 7 years, plus a limited number of supplier
    trace-back audits; provide training for Federal and State employees on
    enforcement responsibilities; and develop and maintain an automated
    web-based data entry and tracking system for records management and
    violation follow-up. Appropriated funding at the current level would be
    used for regulatory and oversight activities including rulemaking,
    outreach and education for suppliers, retailers, and consumers.
        Question. What is USDA's most recent estimate for mandatory COOL's
    implementation cost, for each commodity and for the enforcement of all
    commodities, on a fiscal year basis, and what factors and expenses did
    you take into account to arrive at this conclusion?
        Answer. USDA's fiscal year 2009 budget request identifies ongoing
    appropriated funding at $1.1 million and a legislative proposal for new
    user fee funding at $9.6 million annually for a total of $10.7 million
    to implement and enforce mandatory COOL for all covered commodities.
    The user fee cost estimate was based on an expansion of current
    retailer review activities to incorporate all covered commodities at
    5,000 retailers each year at a cost of $900 per location, performed
    primarily by cooperating State agencies. It also includes more detailed
    supplier trace-back audits of 300 items each year at 100 locations that
    require 40 hours per location, at a cost of $1.3 million; Federal
    personnel to administer these enforcement activities whose salary and
    support costs total $2 million; and a tracking system with an annual
    cost of $1.8 million to handle compliance documentation on the
    approximately 37,000 retail locations.
        Question. How much money has USDA spent on implementing the
    mandatory COOL program for fish and shellfish to date, for each fiscal
    year since the program was enacted?
        Answer. Mandatory country of origin labeling for fish and shellfish
    became effective in fiscal year 2005. The COOL program was first funded
    in fiscal year 2006 at $1.05 million, funding continued at $1.05
    million in fiscal year 2007, and $1.07 million in fiscal year 2008.
        Question. Has USDA requested any money from Congress for COOL
    program implementation in fiscal year 2009, as it has in the past?
        Answer. Congress appropriated $1.05 million for COOL program
    implementation in fiscal year 2006 and delayed expansion of mandatory
    COOL requirements until September 30, 2008. Since fiscal year 2006, the
    funding for COOL program activities has stayed substantially the same.
    The fiscal year 2009 budget includes $1.1 million in appropriated
    funding.
        For fiscal year 2009, the Budget proposes that the appropriated
    funding be used to conduct non-enforcement related COOL activities for
    all covered commodities. The budget proposal also identifies an
    additional $9.6 million needed on an annual basis for enforcement-
    related activities on all covered commodities. This amount is to be
    provided through the proposed user fee.
                      commodity supplemental food program
        Question. CSFP eligibility is based only on income, while the food
    stamp program applies resource tests for household eligibility. These
    eligibility differences will likely prevent many CSFP recipients from
    participating in the food stamp program. What is your plan for
    participants who will no longer be eligible for benefits under food
    stamp guidelines?
        Answer. Elderly participants who are leaving the CSFP upon the
    termination of its funding and who are not already receiving food stamp
    benefits will be eligible to receive a transitional benefit worth $20
    per month ending in the first month following enrollment in the Food
    Stamp Program under normal program rules, or 6 months, whichever occurs
    first. The Department believes the number of CSFP participants who are
    ineligible for food stamps is relatively small. These individuals will
    be treated no differently than anyone else living in similar
    circumstances, who are currently unable to participate in the CSFP due
    to its limited availability.
        Former CSFP participants will have access to TEFAP and other
    government and private non-profit programs that offer community-based
    food assistance opportunities. Eligible women, infants, and children
    will be referred to the WIC Program. Finally, all seniors over age 60
    are eligible for both congregate and home-delivered nutrition
    assistance provided by one of 655 Area Agencies on Aging, which are
    funded through the Administration on Aging in the U.S. Department of
    Health and Human Services.
        Question. Isn't it true that the food stamp program and CSFP are
    supplemental programs that are meant to work with each other to ease
    the burden upon our low income seniors?
        Answer. The Food Stamp Program is the cornerstone of the national
    nutrition safety net, and is the largest nutrition assistance program
    serving the elderly. The Food Stamp Program serves nearly 2 million
    seniors in an average month. Because CSFP operates in limited areas,
    some low-income seniors have access to nutrition assistance through
    commodities as well as food stamps, while almost all other low-income
    seniors throughout the Nation must rely exclusively on food stamps for
    such help.
        In the administration's view, ensuring adequate funding for
    programs that have the scope and reach necessary to provide access to
    eligible people wherever they may reside is a better and more equitable
    use of scarce resources than to allocate them to programs that cannot
    provide access to many areas of the country. For this reason, the
    administration has placed a priority on funding food stamps, WIC, and
    other nationally-available programs that provide benefits to eligible
    people wherever they may live, including communities currently served
    by CSFP. Many elderly CSFP participants are expected to be eligible
    for, and to make use of the Food Stamp Program, from which they may
    receive benefits that can be more flexibly used to avoid conflicts with
    their individual medical issues and other needs.
        Question. What will you do for the 25 percent of the CSFP
    participants who are already enrolled in the food stamp program and
    would be losing a critical benefit?
        Answer. CSFP recipients who are already enrolled in the FSP will
    continue to receive monthly food assistance benefits and have access to
    nutrition education services. They will also have access to The
    Emergency Food Assistance Program and other government and private non-
    profit programs that offer community-based food assistance
    opportunities, including congregate and home-delivered nutrition
    assistance provided by Area Agencies on Aging, which are funded through
    the Administration on Aging in the U.S. Department of Health and Human
    Services.
        The decision to eliminate CSFP reflects the administration's choice
    to make the best use of the resources available to serve all eligible
    people in need of nutrition assistance nationwide, wherever they live.
    Ensuring adequate funding for programs that have the scope and reach
    necessary to provide access to eligible people wherever they may reside
    is a better and more equitable use of these resources than to allocate
    them to programs that cannot provide access in many areas of the
    country. For this reason, the administration has placed a priority on
    funding food stamps, WIC, and other nationally-available programs.
        Question. In years past, CSFP has received bartered commodities
    from USDA. During the second round of bartered commodity purchases,
    none of the bonus commodities are being directed to CSFP. The National
    CSFP Association has asked you why this has occurred and it received
    the response that CSFP will not receive bartered commodities because
    the administration has proposed elimination of the program. However, in
    the first round of bartered commodity purchases, $10 million worth of
    bonus commodities were provided to CSFP and it had been eliminated in
    the administration's fiscal year 2008 budget then, too. Why is there a
    discrepancy between this round of bartered commodity purchases and the
    last round given that the administration's intention to eliminate the
    program has not changed?
        Answer. Under the first round of bartered commodity purchases, the
    Department provided modest amounts of bartered foods to CSFP, a program
    available in only limited areas. This modest support helped maintain
    program participation that was at risk due to funding difficulties. Our
    intention remains to distribute the majority of bartered commodities to
    TEFAP, a program which is available nationally.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

                              rice stock reporting
        Question. It is my understanding that the National Agricultural
    Statistics Service has been asked by the rice industry to require
    additional rice stock reporting dates on June 1 and September 1.
    Further, I understand that NASS has agreed to implement the June date
    for 2008.
        Will the implementation of these dates require additional staff?
        Answer. No. The implementation of each additional quarterly Rice
    Stocks report requires a total of 0.20 FTE positions. This includes
    preparation activities, editing, analysis, estimation, and publication.
    These 0.20 FTEs are current NASS employees and are spread across
    various Federal staff in the rice estimating States and headquarters.
        Question. If not, what are the marginal costs associated with
    adding one or more date? Please provide a detailed breakdown.
        Answer. The marginal out-of-pocket costs associated with
    implementing each date are estimated at $26,000 in data collection
    costs; and $4,000 in miscellaneous costs such as postage and supplies.
    The cost of the 0.20 FTE positions, already in place, is estimated at
    $20,000 for Federal salaries and benefits.
                 public law 480 title ii supplemental requests
        Question. Secretary Schafer, the pending supplemental request from
    the President contains a request for $350 million in additional funding
    for Public Law 480 Title II grants. This marks the third consecutive
    fiscal year the administration has requested exactly $350 million for
    ``emergency'' need in this critical international food aid program.
    Since this is part of an emergency supplemental request, I would assume
    it is based on unanticipated emergency needs in the program. Yet I find
    the consistency in this amount over the past several years somewhat
    interesting.
        Is this request in fact based on unanticipated needs? Is it just
    coincidence that this amount has not changed?
        Answer. Although the supplemental request has remained at the same
    level, the location and nature of the needs have varied by year. The
    relative areas of focus, for example, have shifted among Darfur,
    Southern Africa, the Horn of Africa, and Afghanistan. We anticipate
    changing needs in fiscal year 2009 as well. The President is expected
    to submit a budget amendment to Congress requesting an additional $395
    million for Public Law 480 Title II to provide additional emergency
    food aid to Africa and other regions as well as to address higher
    projected commodity and transportation costs.
        Question. If not, why is this amount not included in the annual
    budget submission?
        Answer. It is extremely difficult to predict the extent of
    emergency needs in advance, particularly when development of the annual
    budget submissions begins over a year before the start of the fiscal
    year. The supplemental requests have been based on emergency needs that
    were previously unanticipated and are formulated once post-harvest
    assessments are complete.
                                commodity prices
        Question. Soaring commodity prices and increased volatility in both
    the cash and futures markets have had drastic ripple effects across all
    areas of agriculture. One glaring instance of these changes is the
    havoc that has been wreaked on the Department's feeding programs, both
    domestic and international. It would seem that the rising prices have
    not only the effect of making it more expensive to feed a person, but
    also drive the participation rates up by adding people who are no
    longer capable of self-sufficiency due to higher food costs.
        How is the Department dealing with the unpredictability of the
    costs and subsequent unpredictability of participation rates in these
    programs?
        Answer. The Department has tools and policies in place to respond
    to changes in projected demand and costs in both the domestic and
    international food assistance programs. The major domestic programs are
    designed to respond automatically to annual increases in participation
    when economic or other circumstances change. The programs' structure
    helps to ensure that benefits automatically flow into communities,
    States, or regions of the country in which increased numbers of
    eligible people apply for benefits.
        In the case of the international programs, we have the Bill Emerson
    Humanitarian Trust (BEHT) which allows the United States to respond to
    unanticipated emergency food aid needs overseas. The administration
    recently announced two releases from the BEHT. Last October, the
    President also requested supplemental appropriations of $350 million
    for the Public Law 480 Title II program for 2008.
        Finally, it is important to note that the Stocks-for-Food
    initiative that was announced in July 2007 is helping to provide
    additional commodities for programming under both the domestic and
    international food aid programs.
        Question. Dr. Glauber, what do you see as the main influencing
    factors in what we are seeing in these markets?
        Answer. Many factors are contributing to increased commodity
    prices. Global economic growth is boosting global demand for food. Real
    foreign economic growth in 2007 was a strong 4.0 percent and is
    expected to decline slightly to 3.9 percent in 2008 but remain well
    above trend, as has been the case beginning in 2004. Asia, excluding
    Japan, will likely grow at over 7 percent in 2008, above trend for the
    fifth consecutive year. Higher incomes are increasing the demand for
    processed foods and meat in rapidly growing developing countries, such
    as India and China. These shifts in diets are leading to major shifts
    in international trade.
        Crop and livestock production depend on the weather. The multi-year
    drought in Australia reduced wheat and milk production and that
    country's exportable supplies of those commodities. Drought and dry
    weather have also adversely affected grain production in Canada,
    Ukraine, the European Union, and the United States.
        Many exporting countries have put in place export restrictions in
    an effort to reduce domestic food price inflation. Exporting countries
    as diverse as Argentina, China, India, Russia, Ukraine, Kazakhstan, and
    Vietnam have placed additional taxes or restrictions on exports of
    grains, rice, oilseeds, and other products. This has further
    constrained food supplies.
        Higher food marketing, transportation, processing costs are also
    contributing to the increase in retail food prices. Record prices for
    diesel fuel, gasoline, natural gas, and other forms of energy affect
    costs throughout the food production and marketing chain. Higher energy
    prices increase producers' expenditures for fertilizer, chemicals,
    fuel, and oil driving up farm production costs. Higher energy prices
    also increase food processing, marketing, and retailing costs. These
    higher costs, especially if maintained over a long period, tend to be
    passed on to consumers in the form of higher retail prices.
        In recent years, the conversion of corn and soybean oil into
    biofuels has been a factor shaping major crop markets. The amount of
    corn converted into ethanol and soybean oil converted into biodiesel
    nearly doubled from 2005/2006 to 2007/2008. The growth in biofuels
    production has coincided with rising prices for corn, soybeans, soybean
    meal, and soybean oil. From 2005/2006 to 2007/2008, the farm price of
    corn has more than doubled and the price of soybeans nearly doubled.
        Question. How much of this can be attributed to the massive amounts
    of our crops now being diverted from the food supply to be used for
    biofuels production?
        Answer. Many factors in addition to biofuels production have
    contributed to lift current commodity prices above long-term averages.
    These factors include: record high petroleum prices; weather-related
    production losses; rapidly rising incomes in large population countries
    such as China and India; and, unprecedented speculative demand for all
    types of commodities.
        With respect to the effects of biofuels on prices, the exact level
    of impact is based upon numerous factors. For example, the United
    States uses about 10 percent of the world's corn production and 1
    percent of the world's vegetable oil production for biofuels. The 10
    percent of global corn used for biofuels represents only 4 percent of
    grain (coarse grains, rice, and wheat) production. Based upon current
    projections, only 1.2 percent of world harvested grain area will be
    required to meet U.S. ethanol corn demand this year. In addition, for
    every bushel of corn used to produce ethanol, 17 pounds of distillers
    dried grains (DDGs) is produced. DDGs can be substituted for corn in
    many livestock rations and when this offset is taken into account, corn
    and its equivalent feed value lost through ethanol production
    represents about 17 percent of current year corn production even though
    a projected 24 percent of the U.S. corn crop will be used by ethanol
    producers in 2007/08.
                                 wic food costs
        Question. For this subcommittee, the increase has been felt
    primarily in the WIC program, which makes up one-third of our
    discretionary budget. The average monthly food cost for the WIC program
    increased 7.05 percent in fiscal year 2008, which is almost a full
    percentage point higher than the increase estimated in the President's
    fiscal year 2008 budget.
        Is this trend likely to continue or have we reached a plateau?
        Answer. The Department is projecting continued, but considerably
    slower inflation in average WIC food package costs for fiscal year
    2009. The Department's latest Monthly Report to Congress on the WIC
    Program contains our most current estimate of WIC food package cost
    inflation for fiscal year 2008.
        Question. Is the estimate in the fiscal year 2009 budget for WIC
    food costs likely to increase? The President's budget only projects an
    increase of 2.3 percent in fiscal year 2009.
        Answer. The Department's projected increase in WIC food package
    costs of 2.3 percent in fiscal year 2009 is based on a 2.08 percent
    projected increase in the Thrifty Food Plan (TFP) index plus an
    adjustment for anticipated changes in some States' infant formula
    rebate contracts. TFP forecasts are updated semiannually.
        USDA plans to revise its fiscal year 2009 WIC food package cost
    projection when the TFP is next re-estimated as part of the upcoming
    Mid-Session Review of the President's budget.
                            food stamp participation
        Question. Food Stamp participation has reached a record high. The
    growth in the program is astounding. For example, recent news reports
    indicate that 1 in 10 New York residents, 1 in 8 Michigan residents,
    and 1 in 6 West Virginia residents are now on food stamps. In addition,
    many States, including Maryland and Florida, have seen a 10 percent
    increase in participation in the last year alone. This is particularly
    troubling because one must be near poverty levels to qualify for food
    stamps. Specifically, an individual or household's net income cannot be
    more than the level of poverty to qualify.
        What do you attribute increases in food stamp participation to?
        Answer. The Food Stamp Program is designed to expand and contract
    as the economy changes. The Department forecasts an increase in
    participation for both fiscal year 2008 and fiscal year 2009,
    consistent with the projected increase in the unemployment rate
    provided by OMB for use in the development of the fiscal year 2009
    budget.
        The number of Americans receiving food stamps has increased by over
    60 percent since 2000 for a number of reasons.
        First, legislative changes made it easier to qualify for food
    stamps and simplified rules improved program access. The major
    provisions that contribute to increases in participation include State
    options for simplified reporting that make it easier for low-income
    families to participate, restoration of eligibility for many legal
    immigrants, and replacement of outdated limits on the value of vehicles
    that participants can own.
        Second, the percent of eligible low-income people who participate
    in the Food Stamp Program has increased in recent years. In 2001, only
    54 percent of those eligible for benefits participated. However, by
    2005, that proportion had increased to 65 percent. Over the last
    several years, USDA has engaged in multiple activities including an
    ongoing outreach campaign to ensure that needy persons are aware of the
    nutrition assistance available to them. Enrolling more eligible people
    can further the Nation's goals for improving the nutrition and health
    of low-income Americans and has been a priority of the Department for
    several years.
                      colombia free trade agreement (fta)
        Question. What are the potential negative effects on American
    agriculture we should expect if the Colombia FTA is not passed by the
    Congress?
        Answer. The effects are many. First, without an agreement, the
    terms of bilateral trade will continue to grow in favor of Colombia,
    contributing to a lopsided agriculture trade imbalance. In 2007,
    Colombia had a positive agricultural trade balance with the United
    States of $300 million. One reason for this is that nearly all of
    Colombia's agricultural products enter the United States duty free,
    under a unilateral trade preference agreement, the Andean Trade
    Preference and Drug Eradication Act.
        However, currently, no U.S. agricultural exports enjoy duty-free
    access to the Colombian market. With the agreement in place, more than
    70 percent of U.S. agricultural product tariff lines--52 percent of the
    value of U.S. agricultural trade to Colombia--will immediately enter at
    zero duty. Most all other tariffs on U.S. agricultural products will be
    reduced to zero within 15 years and all within 19 years.
        Second, without the agreement third-country competitors will gain
    market share at the expense of the United States. Colombia is currently
    negotiating a free trade agreement with Canada. Besides gaining
    immediate market share in our largest market in South America, allowing
    Canada to implement its FTA first will put U.S. exporters at a
    disadvantage, costing them millions of dollars.
        Colombia implements a variable levy known as the price band. Under
    the U.S.-Colombia Trade Promotion Agreement (CTPA) the price band
    system, which affects over 150 products including corn, rice, wheat,
    oilseeds and products, dairy, pork, poultry, and sugar, will be
    immediately eliminated. Tariffs under the current price band system
    vary with world prices and can reach as high as the World Trade
    Organization tariff bindings which range from 15 to 388 percent. Canada
    will be protected from international price fluctuations due to their
    agreement to eliminate the variable duty price band system. As long as
    the United States does not implement the CTPA, U.S. exporters will be
    subject to variable import duties that could change every 2 weeks. In
    addition, Canada will have access to markets for new-to-market products
    in Colombia, such as high quality beef, poultry parts, and select dairy
    products.
        Finally, but no less important, approval of the Colombian agreement
    would acknowledge and support the transformation of the people and the
    democratic government of Colombia. The agreement builds on Colombia's
    revival by enhancing long-term investments in the country. The
    Colombian people have demonstrated their commitment to deepening a
    U.S.-Colombian economic and political relationship when the Colombian
    legislature approved the CTPA last year.
                           african stem rust research
        Question. In the November/December 2007 issue of Agricultural
    Research, a science magazine published by USDA, there was an article
    entitled: ``World Wheat Supply Threatened!'' The article was about
    USDA's efforts to combat African Stem Rust or Ug99, a highly virulent
    and aggressive stem rust, which has rapidly spread through Africa and
    into the Middle East, threatening world barley and wheat production and
    food security. Most experts believe it eventually will reach the US
    where most barley and wheat varieties are highly susceptible. The
    threat to world food security and the US economy from this disease has
    not diminished.
        Why does this budget propose to eliminate ARS funding of $308,000
    at St. Paul, Minnesota which supports the agency's lead scientists
    working on African Stem Rust?
        Answer. The 2009 Budget proposes to eliminate all ($41 million) ARS
    earmarked funding, including $308,000 at the Cereal Disease Laboratory
    at St. Paul, Minnesota. The Department has proposed termination of all
    the ARS earmarks because they lack the programmatic control necessary
    to ensure quality as well as relevance to the core mission of ARS.
    Within the total proposed for ARS, the 2009 Budget includes $944,000 to
    continue priority wheat stem rust research.
        In fiscal year 2008, the Cooperative State Research, Education and
    Extension Service (CSREES) plans to fund 1-2 competitive grants
    totaling $248,000 for aerobiology modeling of Ug99 for assessing
    potential pathways, timing of incursion and to support rust
    surveillance. An additional $20,000 in Hatch Act funds will support
    wheat stem rust research. In fiscal year 2009, CSREES estimates $20,000
    in Hatch Act funds will support wheat stem rust research.
        Question. How does USDA propose to address the African Stem Rust
    threat?
        Answer. USDA-ARS is leading a national cereal rust research effort
    and is making key contributions to supporting international cooperative
    efforts through the Global Rust Initiative to address the new African
    wheat stem rust. ARS scientists are developing diagnostic tests for
    rapid identification of the disease should it enter U.S. borders and
    are contributing to monitoring and surveillance. Additionally, ARS is
    also developing and testing several new techniques that show promise in
    monitoring of wheat stem rust epidemics and for characterizing new
    races of cereal rust pathogens. A set of microsatellite DNA markers for
    the stem rust fungus has been developed. These markers are useful in
    tracing the geographical origins of new races of stem rust. Seedling
    evaluations are being conducted against African stem rust races to test
    the susceptibility of U.S. wheat varieties.
        In fiscal year 2008, USDA-CSREES plans to fund 1-2 grants for
    aerobiology modeling of Ug99 for assessing potential pathways, timing
    of incursion and to support rust surveillance.
                             food aid ``safe box''
        Question. Both the House and Senate versions of the farm bill
    contained language creating a ``safe box'' for developmental food aid
    resources. The language would essentially mandate that a certain amount
    of food aid resources be used for developmental programs and would not
    allow them to be diverted to cover emergency needs.
        In your opinion, what are some issues that may arise if similar
    language is included in a Farm Bill?
        Answer. Adoption of such a proposal would happen at the worst
    possible time as our emergency food aid is being seriously affected by
    rising commodity and transportation costs. Our capacity for emergency
    assistance has already been diminished by about $265 million to meet
    higher-than-anticipated commodity and freight prices in fiscal year
    2008.
        The hard earmark for non-emergency monetization food aid in the
    House and Senate versions of the farm bill will put millions of lives
    at risk and undermine our ability to prevent famine. The average level
    of non-emergency monetization food aid to Private Voluntary
    Organizations over the course of the last two farm bills has been
    approximately $360 million. Reserving a significantly higher level of
    funding to be used solely for non-emergency programs as under
    consideration in the Farm Bill encroaches and effectively cuts funds
    for emergency feeding, where food is used to feed hungry people in dire
    situations.
        This set-aside would create a funding shortfall that cannot be
    filled through other sources. The timing involved in requesting and
    Congressional approval of supplemental appropriations is unpredictable
    and untimely. The Bill Emerson Humanitarian Trust holds much lower
    levels than 5 years ago and does not have sufficient resources to cover
    emergency needs over the 5-year life of the next Farm Bill.
        Question. What would this mean for the emergency needs throughout
    the world?
        Answer. The hard earmarks for non-emergency monetization food aid
    in the House and Senate versions of the Farm Bill will put millions of
    lives at risk and undermine our ability to prevent famine.
        Question. Would the administration support waiving such a
    provision?
        Answer. The administration strongly opposes a hard earmark for non-
    emergency food aid. There is limited funding available to meet the
    highest priority foreign assistance needs, including humanitarian
    assistance. The administration needs to have the flexibility to
    prioritize funding to meet the most critical needs.
                 wic monthly report and fiscal year 2009 budget
        Question. In the report accompanying the final fiscal year 2008
    appropriations bill, the Committee requested monthly reports on the
    amount necessary to fund the WIC program in fiscal year 2009. The
    reason the reports were requested is to hopefully avoid the situation
    we had during the fiscal year 2008 appropriations process where the
    subcommittee had to provide $633 million above the President's request
    and never heard a word from the Department that WIC needs had
    increased.
        The reports were to include projections for food costs and
    participation and clearly explain how those projections differ from the
    assumptions made in the budget request and impact the WIC program in
    fiscal year 2009. The first report the Committee received was not only
    2 months late but woefully inadequate. The second report was
    significantly improved, but still did not provide an assessment of what
    current participation trends and food costs mean for the fiscal year
    2009 budget. For example, the Department leads the Committee to believe
    that the fiscal year 2009 WIC budget may be inadequate by stating that
    ``reported participation estimates are higher than anticipated,'' and
    food costs have increased more than expected. However, the report does
    not go on to explain whether the Department believes these increases
    are an anomaly or a real issue that may need to be addressed. Surely,
    the Department is capable of making a professional judgment about a $6
    billion program. Given that WIC is one-third of this subcommittee's
    discretionary budget, the lack of information being provided is
    disappointing.
        Why has the report been delayed? Do you think the level of detail
    in the report provided to the Committee adequately reflects what was
    requested?
        Answer. I want to assure you that we take seriously our obligation
    to provide reports to Congress. The President's Budget request released
    in February provided participation and food cost data as requested. We
    have also provided reports on March 4 and April 4, 2008. We remain
    committed to working with Congress to provide monthly data regarding
    current participation levels and monthly food costs, as requested.
        Question. What does the statement ``reported participation
    estimates are higher than anticipated'' mean? Is this an anomaly or do
    you think we should be concerned that the fiscal year 2009 request for
    WIC is not adequate?
        Answer. The phrase reported participation estimates are higher than
    anticipated means that year to date reported program participation
    suggests that the annual average participation level for the WIC
    Program will be higher than was projected in, and supported by, the
    fiscal year 2008 budget.
        The President's fiscal year 2009 budget request of $6.1 billion can
    support an average monthly program participation level of approximately
    8.6 million persons in fiscal year 2009. This level of participation
    can be maintained as a result of savings accruing from the proposed cap
    on the WIC administrative grant per participant ($145 million) and an
    increase in estimated available prior year resources from fiscal year
    2008.
        USDA will continue to closely monitor WIC Program performance
    including trends in participation and food costs. This information, in
    conjunction with revised economic projections for fiscal year 2009,
    will permit the Department to assess the adequacy of the President's
    fiscal year 2009 budget request. This assessment will be made in
    conjunction with the annual Mid-Session Review (MSR) of the President's
    budget. Results of this evaluation will be communicated to the Congress
    when the President's MSR review is released and we will keep the
    committee informed through the regular monthly reporting process.
                         farm service agency it system
        Question. Mr. Secretary, at this time last year, I was in this room
    speaking with your predecessor about the major problems with the IT
    system of the Farm Service Agency and the plans to upgrade and maintain
    the system. Can you tell us what work has been done over the past year
    to achieve this?
        Answer. There are two projects that are moving forward in parallel:
    a modernization project and a stabilization project. I will provide a
    description of both of these for the record.
        [The information follows:]
        The modernization project has received business case approval to
    implement a commercial, off-the-shelf software solution. Since last
    year, USDA has developed MIDAS foundational requirements for governing
    an ``enterprise'' software acquisition of this type; USDA has hired a
    full-time program manager; and we are currently conducting Lean Six
    Sigma analysis of our USDA Service Center operations. USDA is
    positioning itself to be ready to move forward into the acquisition
    phase as soon as funding becomes available.
        The stabilization project has focused on reinforcing the elements
    of our Common Computing Environment infrastructure that failed to host
    our Web-based software applications successfully. In January 2007, USDA
    Service Centers experienced a widespread outage with system error
    messages saying ``page cannot be displayed.'' We have taken specific
    action to replace firewall technology, increase telecommunication
    bandwidth capacity, isolate inefficient application software and data
    bases accesses, install modern monitoring tools within the environment,
    and establish independent testing environments. Congress provided $37.5
    million for this project in fiscal year 2007 including funding for the
    costs of implementing an independent data warehouse capability. The
    data warehouse will allow USDA to isolate reporting queries from our
    transactional, production data bases that carry on the day-to-day
    delivery processes in order to improve the speed of transactions and
    improve information security.
        Question. What is the status of the system today?
        Answer. A minimum level of service delivery has been restored to
    Web-based software applications. USDA has been fortunate that the level
    of program activity has been very low due to high commodity prices.
    Even with low demand for the automated systems, we are still
    experiencing about 6 hours of unplanned outages per month. This is down
    considerably from a year ago when unplanned outages approached 16 to 20
    hours per month.
        Question. What are your plans to secure funds to perform the work
    you have outlined?
        Answer. USDA has provided the authorizing committees with
    legislative language to amend the CCC Charter Act to allow for the
    collection of user fees to fund the modernization and stabilization
    projects.
                     national animal identification system
        Question. In the report accompanying the final fiscal year 2008
    appropriations bill, the Committee expressed concern over the direction
    of the National Animal Identification System (NAIS), especially given
    the amount of funding provided for the program. The total amount of
    funding dedicated to NAIS through fiscal year 2008 is more than $127
    million. The fiscal year 2009 budget proposes an additional $24.144
    million. I appreciate the efforts of USDA to finally develop a business
    plan for the system last year. However, the budget does not outline how
    the requested funding will be spent or how the request fits into the
    plan. The budget only States that this is the amount the program needs
    to carry out essential activities, without explaining what those
    ``essential activities'' are. I think we can agree that $24 million is
    a significant budget request that warrants more justification.
        Please explain in detail how the requested funding will be spent
    and how the funded activities fit into the business plan.
        Answer. USDA will use the $24 million included in the fiscal year
    2009 budget request for the following NAIS activities: $3.5 million for
    information technology (IT) maintenance and development, $10.8 million
    for cooperative agreements, $800,000 for communications and outreach,
    and $8.9 million for national program oversight and field activities.
    Specific short- and long-term milestones related to each of these
    categories will be provided to the Committee in the coming weeks.
    Additional information about the plan is provided for the record.
        [The information follows:]
        For efficient, effective disease containment, animal health
    officials need the data required to trace a disease back to its source
    and limit potential harm to animal agriculture. USDA's overall
    objective is to establish an animal tracing infrastructure that will
    retrieve traceback data within 48 hours of disease detection. The speed
    with which animal health officials can access critical animal location
    and movement information determines the timeliness--and effectiveness--
    of the disease control and containment effort. USDA defines the
    retrieval of traceback data within 48 hours as optimal for effective
    disease containment. This type of effective response can result in huge
    cost savings to the government in terms of eradication efforts, and
    producers benefit in terms of property and marketability of livestock.
    USDA will work toward this long-term objective by implementing
    immediate, short-term strategies, as outlined in USDA's Business Plan
    to Advance Animal Disease Traceability. Through the strategies, it is
    USDA's goal to facilitate increased participation in the NAIS, bolster
    the existing animal disease response network, reduce the amount of time
    required to conduct and complete a disease investigation, and continue
    to build critical Federal-State-industry partnerships necessary for
    animal disease control and eradication success.
        Through existing fiscal year 2008 funds and requested fiscal year
    2009 funds, USDA plans to accomplish the following:
      --Nearly 100 percent traceability will be achieved for the commercial
            poultry and swine industries (identification of commercial
            production units in the required radius of a disease event)
            with support and cooperation of the National Poultry
            Improvement Plan and National Pork Board respectively;
      --Through continued integration of the National Scrapie Eradication
            Program with NAIS, over 90 percent of the sheep breeding flock
            will be identified to their birth premises and approximately 90
            percent of the breeding population of goats will be traceable
            to their birth premises within 48 hours of a disease event;
      --Over 90 percent of competition horses will be identified through
            NAIS compliant processes through the integration of equine
            infectious anemia testing requirements and interstate
            certificates of veterinary inspection;
      --Over 70 percent of the commercial cattle population born after 2008
            will be identified with NAIS compliant identification methods;
      --Critical Location Points will be registered in the National
            Premises Information Repository (nearly 90 percent of the 2,750
            county and State fairgrounds and racetracks; 100 percent of the
            98 import/export facilities; 70 percent of the 3,388 markets
            and dealers, including public auctions; nearly 100 percent of
            the 3,097 harvest facilities, including renderers and slaughter
            plants; nearly 100 percent of the 34 semen collection and
            embryo transfer facilities; nearly 90 percent of the 8,000
            veterinary clinics (large animal practices that receive
            livestock); and 100 percent of the 880 licensed food waste
            swine feeding operations);
      --The use of NAIS-compliant animal identification number (AIN)
            devices will be initiated in breed registry programs;
      --The premises identification number will be incorporated in the
            Dairy Herd Improvement Association's administration of the
            National Uniform Eartagging Numbering System;
      --The electronic brucellosis vaccination and testing system will be
            fully developed and implemented;
      --The NAIS-compliant premises identification number format will be
            incorporated into existing Federal disease program activities
            (e.g., vaccination, herd testing, emergency response, etc.);
            and
      --The full integration of approximately 20 animal tracking databases
            maintained by States and private organizations with the Animal
            Trace Processing System will be achieved.
                       conservation reserve program (crp)
        Question. Secretary Schafer, can you please explain how the recent
    increases in commodity prices are affecting enrollment in the CRP
    program? In your opinion, how will the changes you are seeing affect
    the program in the years to come? Are there other conservation programs
    that are showing significant impact from rising commodity prices? What
    if anything is the Department doing to protect these programs?
        Answer. It is still somewhat early to say definitively how recent
    crop price increases have impacted CRP enrollment. First, we did not
    conduct a general sign-up last year and do not plan to conduct one this
    year, so we do not know to what extent interest may have declined.
    However, continuous sign-up enrollment has actually increased. Recent
    continuous sign-up enrollment is as follows:

    ------------------------------------------------------------------------
                                                              For the Fiscal
                   Fiscal Year                 Through March       Year
    ------------------------------------------------------------------------
    2006....................................         110,000         348,000
    2007....................................          88,000         538,000
    2008....................................         148,000         ( \1\ )
    ------------------------------------------------------------------------
    \1\ To be determined.

        It is difficult to assess whether enrollment is up due to re-
    enrollments of expiring contracts or due to continued interest in
    continuous sign-up.
        We are monitoring the extent that participants have been dropping
    out of the program prior to normal contract terminations. Reports from
    States indicate that about 130,000 acres were withdrawn between October
    2007 and March 2008, but we do not know what future dropouts will be.
    About the same number of general sign-up acres were ``lost'' during the
    entire 2007 fiscal year.
        It is also hard to predict enrollment in the years to come. Our
    baselines have projected that enrollment will decline, at least in the
    short term. In the fiscal year 2009 President's Budget, enrollment is
    projected to decline from 36.8 million acres on September 30, 2007 to
    34.8 million acres on September 30, 2008, and to 34.2 million acres on
    September 30, 2009. Because there will not be a general sign-up this
    year, the 2009 enrollment is now expected to be 34.0 million acres, a
    2.8 million acre decline from 2007 levels.
        We anticipate the Conservation Technical Assistance Program and the
    Environmental Quality Incentives Program (EQIP) will see increased
    attention as acres expire from CRP and need working lands assistance.
    Producers who wish to enroll in commodity programs on these expiring
    acres will require a Highly Erodible Land Compliance plan from NRCS.
    They may also need or wish to enroll in EQIP on these acres.
        We anticipate that higher farm income associated with increased
    commodity prices will result in increased conservation investments by
    producers, thus increasing demand for existing working lands programs,
    such as EQIP and the Wildlife Habitat Incentives Program.
        We want producers to have successful farming enterprises in
    conjunction with a healthy environment. In order to prepare for the
    changing economic picture of farming for energy crops, the
    administration has proposed a bioenergy reserve. The idea is to
    encourage production of energy crops such as switchgrass on CRP lands
    that are well suited and thereby mitigate potential shifts from CRP to
    cropping where it may not be advisable.
        CRP is partially protected from rising crop prices through its
    rental rate setting policies. In this process, rental rates are set at
    an average of the 3 most recent years' market rental rates for the
    area, adjusted for each individual soil's productivity. Rates are
    periodically updated.
        CRP also provides incentives for selected high-priority continuous
    sign-up enrollments. Practices such as buffer strips are eligible to
    receive a one-time signing incentive (SIP) of $100 per acre, a practice
    incentive (PIP) equal to 40 percent of the practice's establishment
    costs, and an annual incentive of 20 percent of the annual rental
    payment. Additional incentives are also provided through the
    Conservation Reserve Enhancement Program (CREP). In addition to
    providing SIPs and PIPs, many CREPs pay higher annual incentives.
                          wic fiscal year 2008 budget
        Question. Secretary Schafer, escalating food costs and
    participation has dramatically increased the amount necessary to fully
    fund the WIC program. With the information available to the
    subcommittee at the time, we provided an increase of $633 million above
    the President's request for fiscal year 2008. WIC program funding is
    now over $6 billion annually. Even with the increase, I am concerned
    that funding for WIC in fiscal year 2008 may not be sufficient. Do you
    believe that funding for the WIC program in fiscal year 2008 is
    adequate?
        Answer. Analysis of year-to-date WIC participation and food cost
    data suggests that program costs for fiscal year 2008 will exceed
    levels anticipated in the President's fiscal year 2009 Budget and
    funded by the fiscal year 2008 Consolidated Appropriations Act. Our
    current analysis of fiscal year 2008 program performance indicates that
    without additional funds for fiscal year 2008, the program would have a
    shortfall, even after the release of the remaining $150 million of
    contingency resources.
        Question. If not, are you addressing the shortfall?
        Answer. Yes. I am reviewing options that include transferring funds
    from the Food Stamp Program contingency reserve to the Special
    Supplemental Nutrition Program for Women, Infants and Children (WIC) to
    address funding shortfalls in that program.
                                  fsis budget
        Question. In December 2007, the Office of Inspector General
    released a report on the Food Safety and Inspection Service's plan to
    implement risk based inspection. In the report, OIG questioned whether
    ``FSIS has the systems in place--to provide reasonable assurance that
    risk can be fully assessed.'' OIG identified several specific concerns,
    including FSIS' assessments of establishments' food safety systems,
    security over IT resources, and data management concerns.
        FSIS agreed with all 35 of the recommendations in the report, and
    began work on implementing systems changes, including building a new IT
    system called the Public Health Information System (PHIS). The actions
    proposed by FSIS in response to the report seem to be very costly.
    However, the budget does not propose an increase to implement these
    items, and I'm curious from where the money for the current work on
    PHIS and other programs is coming.
        Is FSIS shifting money from current activities to address the OIG
    recommendations? If so, which activities and how is this affecting the
    performance of those activities?
        Answer. FSIS has not shifted money from current activities to
    address the OIG recommendations on implementing the PHIS. In September
    2007, FSIS awarded a $15 million contract for PHIS that will enhance
    our domestic and international inspection functions, export compliance
    certification functions and our agency-wide predictive analytics
    capability. The funding was made available at the end of the fiscal
    year as a result of delays in the hiring process. This contract will
    cover activities in fiscal year 2008 and fiscal year 2009.
        Question. Annually, how much would it cost to address the OIG
    recommendations and is this amount included in the fiscal year 2009
    budget?
        Answer. The major cost associated with implementing the OIG
    recommendations is for strengthening the infrastructure and the
    development and deployment of PHIS. All fiscal year 2009 funding in
    support of PHIS and the other ongoing activities identified in the
    management response to OIG's recommendations is included in the
    President's budget.
                        fsis humane methods of slaughter
        Question. The Hallmark/Westland meat recall that took place in
    February was the largest meat recall in history and was initiated after
    it became evident that the company was abusing cattle and had
    slaughtered cattle that could not stand or walk, commonly known as
    ``downer'' cattle, without appropriate inspection. Many people are
    concerned how the egregious activities that took place at the Hallmark/
    Westland facility went unnoticed by Food Safety and Inspection Service
    inspectors. It has been suggested that we enhance USDA inspection and
    increase oversight of humane handling at slaughter facilities, perhaps
    by enacting new legislation or more effectively targeting resources.
        What does the Department need to make sure that incidents like the
    Hallmark/Westland don't happen again? Does the Food Safety and
    Inspection Service need more staff, statutory authority, or staff
    training?
        Answer. The investigation being led by OIG with support from FSIS
    and AMS is ongoing. Once the investigation has concluded, we will have
    additional information that, along with the results of the additional
    verification activities, will determine the actions for FSIS oversight,
    inspection and enforcement that may be required.
                        export credit guarantee program
        Question. Mr. Secretary, reports in the press indicate that social
    unrest is building in countries such as Egypt, Morocco, Malaysia, and
    the Philippines over the rising price and declining availability of
    basic foodstuffs such as wheat and rice. The GSM-102 export credit
    guarantee program at USDA is specifically designed to facilitate the
    purchase of US agricultural commodities by these middle income
    countries during periods of challenging commodity markets and credit
    availability.
        Unfortunately, to date USDA has made available only $1.23 billion
    in guarantees for fiscal 2008. This is below the current program need,
    as evidenced by the fact that applications for approximately twice that
    amount were received within days of the guarantees being made
    available. In addition, current law requires that $5.5 billion in
    guarantees be made available each fiscal year. Under the current Farm
    Bill extension through April 18 of this year, it would appear that at
    least $2.86 billion should have already been made available by USDA.
    Given the current environment, even this amount would likely be below
    the actual program need.
        Can you tell the Committee when USDA will make GSM guarantees
    available to meet the rising demand for the program and the statutory
    minimum?
        Answer. The administration has treated GSM-102 the same as other
    programs that are affected by Farm Bill proposals. USDA has made
    resources available on a proportional share basis consistent with
    program levels reflected in the 2008 column of the fiscal year 2009
    President's Budget. The sharp increase in program demand due to
    changing world economic conditions and food shortages was not foreseen
    at the time the 2009 President's Budget was submitted. The
    administration urges Congress to complete action on a Farm Bill the
    President can sign as soon as possible. That action will ensure full-
    year programming for GSM-102.
                                     ______

                  Questions Submitted by Senator Arlen Specter

                      commodity supplemental food program
        Question. This is a follow-up question regarding the Commodity
    Supplemental Food Program (CSFP). It is my understanding that CSFP
    received a 33 percent increase in funding for fiscal year 2008 to
    compensate for increased food prices and to allow more program
    participants. Please provide an analysis on where the increased funding
    was directed. Please also provide a summary of supply vendor invoices
    for CSFP product over the last year, in order to account for the
    increase in food prices and participants? Finally, has USDA used
    bartered items and free/donated items for the program?
        Answer. The $139.7 million appropriation, after rescission, was not
    sufficient to maintain caseload at the 2007 level due to significant
    increases in food costs, a substantial reduction in the level of
    surplus or ``free'' commodities available to support the program, and a
    significant increase in the legislatively mandated administrative grant
    per caseload slot. A total of 473,473 caseload slots were allocated in
    2008, slightly lower than the 485,614 slots assigned last year.
        In agricultural markets, significantly less food has been, and for
    the foreseeable future, will be purchased under agriculture support
    programs and donated for use in domestic nutrition assistance programs,
    including the Commodity Supplemental Food Program (CSFP). Thus, without
    the customary levels of donated, or so-called ``free'' foods, a greater
    proportion of the cost of food packages in fiscal year 2008 was covered
    by appropriated funds than was the case in fiscal year 2007. For women,
    infants, and children, the appropriation must fund $24.27 of the
    average monthly cost of the food package (up from $21.92 for fiscal
    year 2007), and $18.15 of the average monthly cost for seniors (up from
    $16.64), an increase of over 10 percent and 9 percent respectively.
        Two examples illustrate the effect of rising food costs on the CSFP
    food package. In fiscal year 2007, nonfat dry milk was available as
    free to the program due to abundant supplies of surplus. However, as of
    mid-fiscal year 2008, the Food and Nutrition Service (FNS) will have to
    pay an estimated $1.96 per pound to obtain this product. Furthermore,
    in fiscal year 2007, macaroni cost FNS $0.41 per pound. The cost for
    this item has risen to $0.79 per pound in fiscal year 2008, an increase
    of over 90 percent.
        In order to maximize food dollars through economies of scale, USDA
    purchases CSFP commodities in combination with TEFAP and the Food
    Distribution Program on Indian Reservations. Therefore, invoice data
    are aggregated across all three programs, making CSFP-specific invoice
    sheets unavailable.
        With respect to bartered foods available through the Department's
    Stock-for-Food Initiative, approximately $10 million was distributed to
    CSFP in order to maintain program participation that was at risk
    because of funding difficulties.
                            colony collapse disorder
        Question. In the fiscal year 2008 Omnibus Appropriations
    legislation that was signed into law on December 26, 2007, language was
    included that stated: ``Within available resources, the Department is
    encouraged to take appropriate actions, consistent with the directives
    in this explanatory statement, to address areas of crop and livestock
    protection, foods (including food allergens), nutrition, colony
    collapse disorder, and other areas included in the President's budget
    for these research needs.'' Please provide specific information on the
    amount of funds that USDA has directed to colony collapse disorder
    (CCD) research and how these funds were used.
        With agriculture being PA's largest industry, this issue is
    important to my home State. Further, I am aware that the Pennsylvania
    State University has been a key leader and partner with the
    Agricultural Research Service in CCD research. It is my understanding
    that the United States is losing about 35 percent of the bee colonies
    this year as opposed to a 31 percent loss rate last year. There has
    been effort by Congress to help address this major concern in the long-
    term through the Farm Bill. However, how does USDA plan on addressing
    CCD and other pollinator threats in the near future? Does the
    Department plan on utilizing its authority under CCC or Section 32 to
    direct funds to emergency assistance for beekeepers or to provide much
    needed increased funding for research to address this crisis?
        Answer. The Department is aware of the devastating effects of
    colony collapse disorder (CCD) and is utilizing all research funds
    available to address the issue. Currently, the Department does not plan
    to use either CCC or Section 32 funds to provide emergency assistance
    to beekeepers or provide additional funding for research. Information
    on USDA-funded projects is provided for the record.
        [The information follows:]
        For comparison purposes, funding information is provided for fiscal
    years 2006, 2007, and 2008. CSREES provides all funds for multi-year
    competitive grants in the first year of their existence and does not
    show recurring costs.
        In fiscal year 2007, ARS base funding for honey bee health
    increased $41,900. ARS also allocated $200,000 of fiscal year 2007
    temporary funding to CCD research at Beltsville, Maryland. CSREES
    grants awarded in the National Research Initiative (NRI) and the
    Critical and Emerging Issues (CEI) programs for honey bee health
    research increased $463,432.
        In fiscal year 2008, the Agricultural Marketing Service (AMS) will
    begin testing honey for pesticide residues on a fee basis as part of
    its Pesticide Data Program. ARS funding for CCD/honey bee health
    increased $123,400. Additionally to base-funded projects, a critical
    new project is the new ARS Areawide Project on Honey Bee Health, which
    is being supported by temporary funding of $670,000 in fiscal year
    2008. CSREES will initiate several new projects and increase funding by
    $1,497,843.

                                                        FISCAL YEAR 2006, 2007 AND 2008 FUNDING BY AGENCY
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Funding in fiscal  Funding in fiscal  Funding in fiscal
                   Agency                          Name of Project                  Location             year 2006          year 2007          year 2008
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    AMS.................................  Survey of Honey in Consumer Sized  Pesticide Data Program            ( \1\ )           $260,000           $260,000
                                           Containers at the Retail Level.                                                        ( \2\ )            ( \2\ )
    ARS.................................  Preservation of Honey Bee          Beltsville, MD........           $382,200            384,300            381,500
                                           Germplasm.
    ARS.................................  Managing Diseases and Pests of     Beltsville, MD........          1,679,200          1,688,300          1,676,200
                                           Honey Bees to Improve Queen and
                                           Colony Health.
    ARS.................................  Improving Crop Pollination Rates   Tucson, AZ............          1,124,300          1,130,700          1,122,800
                                           by Increasing Colony Populations
                                           and Defining Pollination
                                           Mechanisms.
    ARS.................................  Pests, Parasites, Diseases, and    Weslaco, TX...........          1,879,300          1,890,500          1,877,300
                                           Stress of Honey Bees Used in
                                           Honey Production and Pollination.
    ARS.................................  Breeding, Genetics, Stock          Baton Rouge, LA.......          1,339,700          1,346,100          1,336,800
                                           Improvement, and Management of
                                           Russian Honey Bees for Mite
                                           Control and Pollination.
    ARS.................................  Development and Use of Mite-       Baton Rouge, LA.......            955,000            960,000            953,000
                                           Resistance Traits in Honey Bee
                                           Breeding.
    ARS.................................  Biochemistry of Pest and           Fargo, ND.............             64,600             65,000             64,500
                                           Beneficial Insects and
                                           Interactions with Host Plants
                                           and Natural Enemies.
    ARS.................................  Chemistry and Biochemistry of      Gainesville, FL.......            208,400            209,700            208,200
                                           Insect Behavior, Physiology and
                                           Ecology.
    ARS.................................  Areawide Project on Honey Bee      Various...............            ( \1\ )            ( \1\ )            670,000
                                           Health.
    CSREES, NRI.........................  Time-Memory Control of Honey Bee   East Tennessee State              183,000            ( \1\ )            ( \1\ )
                                           Foraging Behavior.                 Univ.
    CSREES, NRI.........................  Molecular Mechanisms of Honey Bee  North Carolina State              355,000            ( \1\ )            ( \1\ )
                                           Mating.                            University.
    CSREES, CEI.........................  Colony Collapse Disorder:          University of Illinois            ( \1\ )             60,000            ( \1\ )
                                           Initiation of a National
                                           Response.
    CSREES, CEI.........................  Colony Collapse Disorder:          Pennsylvania State                ( \1\ )             51,932            ( \1\ )
                                           Determination of the Roles of      University.
                                           Pathogens in Unique Colony
                                           Losses of Honey Bees and Funding
                                           of Workshop.
    CSREES, NRI.........................  The importance of intracolonial    Cornell University....            ( \1\ )            206,000            ( \1\ )
                                           genetic diversity for foraging
                                           success in honey bee colonies.
    CSREES, NRI.........................  Modulation of social interactions  North Carolina State              ( \1\ )            337,000            ( \1\ )
                                           by disease in honey bees.          University.
    CSREES, NRI.........................  Assessing the mating health of     North Carolina State..            ( \1\ )            346,500            ( \1\ )
                                           commercial honey bee queens.
    CSREES, CEI.........................  Unraveling Impacts on Honey Bee    Pennsylvania State                ( \1\ )            ( \1\ )             89,996
                                           Health of Agricultural and In-     University.
                                           Hive Pesticides.
    CSREES, CEI.........................  Impacts on Honey Bees and          Pennsylvania State                ( \1\ )            ( \1\ )             89,987
                                           diseases from In-hive Miticide     University.
                                           Use.
    CSREES, CEI.........................  Assessment of Miticide Use of      Clemson University....            ( \1\ )            ( \1\ )             90,000
                                           Honey Bee Longevity and Colony
                                           Health.
    CSREES, NRI.........................  Toxigenomics of Apis mellifera...  University of Illinois            ( \1\ )            ( \1\ )            340,000
    CSREES, NRI.........................  Analysis of genes and gene         Purdue University.....            ( \1\ )            ( \1\ )            479,134
                                           regions affecting agronomically
                                           important honey bee behaviors..
    CSREES, NRI.........................  Genome Informatics for             Georgetown University.            ( \1\ )            ( \1\ )            410,158
                                           Agriculturally Important
                                           Hymenoptera Species and Their
                                           Pathogens.
    CSREES, NRI.........................  Undetermined.....................  Undetermined..........            ( \1\ )            ( \1\ )          1,000,000
                                                                                                    --------------------------------------------------------
          Total AMS.....................  .................................  ......................            ( \1\ )            260,000            260,000
          Total ARS.....................  .................................  ......................          7,632,700          7,674,600          7,798,000
          Total CSREES..................  .................................  ......................            538,000          1,001,432          2,499,275
          Total.........................  .................................  ......................          8,170,700          8,936,032         10,557,275
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ N/A.
    \2\ Estimate.

    Additional/Future Projects
        USDA developed a CCD Action Plan in July 2007 based on
    recommendations from the CCD Steering Committee, which is composed of
    academic, private, and Federal scientists. The Action Plan outlines a
    strategy for current and future needs to address the CCD crisis,
    involving four main components:
      --Survey and data collection;
      --Analysis of samples;
      --Hypothesis-driven research; and
      --Mitigation and preventative action.
        Within each topic area, the status of ongoing CCD research and
    future plans are outlined, as well as the organization(s) involved in
    the effort. Both ARS and CSREES are using existing funding authorities
    to support these research, extension, and education projects. The
    accomplishments of current research will be used to gauge the direction
    and prioritization of future research.
        In addition, in 2007 CSREES oversaw the formation of a Multi-State
    Research/Extension Committee titled ``Sustainable Solutions to Problems
    Affecting Honey Bee Health'' which will address CCD-related objectives
    that will complement those of ARS scientists and other CSREES-funded
    projects (e.g., NRI-CAP, and CEI). The Committee is administered by the
    North Central Region, funded by Hatch Multi-State allocations to
    participating States and also supported in part by Federal Smith-Lever
    appropriations to States for the Cooperative Extension System. Future
    research needs to be addressed by this committee are complementary and
    compatible with research priorities outlined in the Action Plan and by
    ARS.
        Looking to fiscal year 2009 and beyond, ARS has identified a number
    of projects, in varying levels of priority, to address CCD and honey
    bee health. Needs include developing artificial diet-based systems to
    increase pollination for specialty crops impacted by CCD (Tucson,
    Arizona); determining the role of pathogens and other stress factors in
    CCD and mitigating their effects (Beltsville, Maryland); reducing
    colony stress through integrated pest management (Tucson); developing
    genetic resistance to CCD (Baton Rouge, Louisiana); and treating and
    mitigating CCD (Beltsville). To fund these efforts, the President's
    2009 budget requests an increase of $780,000 for ARS.
                            food safety regulations
        Question. This is a follow-up to my food safety question. Does USDA
    have adequate authority and resources to implement the food safety laws
    and regulations? Further, it is my understanding that in 2007, there
    were a combined total of more than 70 new rules, notices, directives
    and regulations issued or finalized by FSIS. Please describe what USDA
    is doing to assist meat, poultry, and egg firms with compliance when
    they have problems and when the Department issues new regulations? Is
    USDA effectively training its workforce to implement these regulations?
        Answer. FSIS has adequate authority and resources to enforce the
    food safety laws and regulations under its purview.
        FSIS takes its outreach mission very seriously. In March 2008, FSIS
    announced the formation of the new Office of Outreach, Employee
    Education and Training, to provide consolidated access, resources and
    technical support for small and very small plants to better assist them
    in providing safe and wholesome meat, poultry and processed egg
    products. This program area will also ensure that all FSIS personnel
    have the necessary training to effectively carry out their assigned
    duties.
        For FSIS to ensure public health protection through food safety, it
    not only needs to verify that small and very small plants,
    establishments that comprise over 90 percent of the plants under FSIS'
    jurisdiction, are producing safe food but to reach out to those plants
    to make sure that they fully understand their responsibilities and how
    to achieve them. Thus, for small and very small plants, the agency
    launched a targeted Web page and launched a monthly publication called
    Small Plant News which includes articles with up-to-date technical
    information and guidance, resource materials, and FSIS rules and
    regulations as well as the most common questions asked and answers that
    apply to establishments' operational practices. All of this is in
    addition to outreach visits, net meetings, information sessions, and
    numerous regulatory education sessions.
        In 2007, FSIS launched askFSIS, an outreach effort for
    stakeholders. askFSIS is a Web-based feature designed to help answer
    technical and policy questions regarding inspection and public health
    regulations 24 hours a day. The new interactive feature provides
    answers on technical issues in more depth than the standard list of
    ``frequently asked questions'' available through FSIS' Web site. It
    allows visitors to seek answers on topics such as exporting, labeling
    and inspection-related policies, programs and procedures, as well as
    submit new questions to be added to the system. This new Web-based tool
    has received high customer satisfaction marks from our stakeholders,
    and the system already has nearly 800 questions and answers.
        In the wake of ongoing, progressive policy changes, FSIS ensures
    that inspection program personnel and the industry fully understand
    FSIS rules, regulations, directives, and notices. The agency is
    developing a strong, ongoing strategy to evaluate the success of its
    training program. Through the In-Plant Performance System, AssuranceNet
    management controls, and reports from district analysts, the agency is
    ensuring that inspection program personnel are doing their jobs
    correctly, are held accountable, and have appropriate workloads and
    supervision.
                            hallmark/westland recall
        Question. Further, this question is specific to the Hallmark/
    Westland recall of 143 million pounds of fresh and frozen beef
    products. Was there an alternative response that the Agency could have
    had to address the regulatory concern and not pursue an event that
    potentially confuses consumers? Possibly a market withdrawal? Finally,
    with much of the meat used for the School Lunch Program, can a USDA
    inspected plant sell meat to the program if it tests positive for E.
    coli?
        Answer. The recall action was deemed necessary because the
    establishment did not comply with FSIS regulations. The recall was
    designated Class II because the probability is remote that the recalled
    beef products would cause adverse health effects if consumed. This
    recall designation is in contrast to a Class I recall, which is a
    higher-risk health hazard situation where there is a reasonable
    probability that the use of the product will cause serious, adverse
    health consequences or death. A USDA inspected plant can continue to
    sell raw materials or finished products to the National School Lunch
    Program as long as the raw materials or finished products are not the
    ones that tested positive for E. coli.
                               u.s. beef products
        Question. Several significant beef markets and U.S. trading
    partners are still partially or completely closed to U.S. beef
    products. This stonewalling has persisted for more than 3 years. Having
    open beef markets is important to Pennsylvania's, and the Nation's,
    beef producers. According to the PA Department of Agriculture, the beef
    industry contributes about $1.9 billion annually to the economy. What
    do you plan to personally do as Secretary to address these remaining
    bans on all or part of American beef?
        Answer. USDA is working actively and constructively to re-open many
    international markets that closed as a result of the finding of bovine
    spongiform encephalopathy (BSE) in the United States in late 2003.
    Science and sound risk management principles remain the underpinnings
    of our consistent approach to all trading partners. As evidence of our
    success, U.S. beef and beef product exports rebounded to over $2.6
    billion in CY 2007, equal to almost 70 percent of trade in 2003, before
    BSE was identified in the United States. Last year, the World
    Organization for Animal Health (OIE) designated the United States as a
    ``controlled risk'' Nation for BSE, reaffirming the effectiveness of
    the U.S. regulatory system to protect the food supply from BSE. With
    this rating in hand, we are stepping up our efforts to reopen markets
    for U.S. beef based upon science and internationally recognized
    standards. Indonesia, Barbados, and the Philippines are some of the
    countries that have fully reopened to U.S. beef and livestock since the
    United States achieved ``controlled risk'' status.
                                     ______

                   Questions Submitted by Senator Larry Craig

                        food safety inspection user fees
        Question. I appreciate USDA's dedication to ensuring the safety of
    our food supply. As evidenced by the Hallmark/Westland violation, we
    have some work to do to improve the oversight of our inspection system.
    However, I am concerned about the proposal to add another $92 million
    in new user fees from meat, poultry and egg products establishments.
        Why would USDA propose to have the packers pay for their own food
    safety inspections when this is clearly the role of government? Are you
    concerned that these additional costs would be passed down to cattle
    producers?
        Answer. The legislative proposal to create new user fees would
    transfer a portion of the cost of mandatory Federal inspection services
    to the industries that directly benefit from them, and would result in
    savings to the taxpayer. If any costs were passed down to cattle
    producers, the amount would be extremely small.
                    national veterinary medical service act
        Question. The National Veterinary Medical Service Act (NVMSA) was
    signed into law in December of 2003. This program has been funded
    through appropriations for several years now, yet USDA has failed to
    implement this veterinarian loan repayment program as it was designed.
    If implemented, this program would extend veterinary services to rural
    and other underserved areas that struggle to attract young vets.
        Does USDA recognize that there is a shortage of veterinarians in
    the United States, especially large animal practitioners in rural
    areas? Four years after passage of the National Veterinary Medical
    Services Act, what has USDA done to implement the full veterinarian
    loan repayment program? What do they need to move forward to implement
    it? Please provide for the Committee a timeline for when USDA plans to
    write the full program rules.
        Answer. USDA is aware of the shortage of veterinarians in the
    United States and recognizes that this shortage extends to virtually
    every aspect of the practice of veterinary medicine, including large
    animal practice, epidemiology, and food safety in both private and
    government employment. Further, we accept the validity of studies that
    show this shortage is growing.
        As you note, NVMSA was enacted in 2003. Funds for this program were
    first appropriated in fiscal year 2006. The Cooperative State Research,
    Education, and Extension Service (CSREES) conducted a review of program
    options and considered input from other Federal agencies, veterinary
    associations, and the veterinary educational community. CSREES
    developed an implementation plan that took advantage of already
    existing Office of Personnel Management student loan programs and
    regulations. On March 19, 2007, a final rule was published in the
    Federal Register that permitted CSREES to implement this phase of the
    NVMSA program. This rule specified that the USDA Food Safety and
    Inspection Service (FSIS) would utilize a portion of NVMSA funding as
    hiring incentives, to pay the educational loans of new hires. This
    strategy which included FSIS supplementing the NVMSA incentive by
    contributing a matching recruitment bonus, allowed USDA to reach the
    largest number of eligible veterinarians in the shortest possible time
    frame.
        To address other areas of veterinary shortage, CSREES is
    establishing a work unit that will involve both program and
    administrative employees with new staff hired to administer the NVMSA.
    Similarly, new processes and procedures will need to be developed and
    put in place, since the agency will be dealing with individual
    veterinarians instead of the universities that comprise its normal
    customer base. Simultaneously, CSREES will develop and publish the
    rule(s) necessary to fully implement this program.
        Because CSREES has never delivered a program of this type and
    complexity targeted to individual recipients rather than established
    institutions, it is very hard to judge how much time will be required.
    As an estimate, we believe CSREES may be able to accept applications as
    early as the second quarter of fiscal year 2009 with the repaying of
    educational loans by the end of fiscal year 2009.
                         exclusion of potatoes from wic
        Question. I understand that USDA published an interim final rule
    that expands the eligibility for the WIC program to include all fresh
    fruits and vegetables with the single exception of white potatoes. In
    contrast, I understand that WIC vouchers can currently be used to
    purchase fresh fruits and vegetables, including fresh potatoes, at
    farmer's market programs. It seems to me that fresh white potatoes,
    along with apples, bananas and carrots, are all popular vegetables
    which provide important nutrients critical to the diet of WIC
    participants.
        Can you provide the Committee with the public policy and
    nutritional rationale for excluding fresh white potatoes from the
    expanded WIC voucher program for all other fresh fruits and vegetables?
    What is the rationale for excluding fresh white potatoes from the
    expanded WIC program while allowing the inclusion of other frequently
    purchased fruits and vegetables? Excluding fresh white potatoes from
    the expanded WIC program will require State agencies and retailers to
    develop administrative procedures to exclude those purchases. Can you
    please provide this Committee a description of the process and an
    estimate of the cost of compliance for the exclusion of a single fruit
    or vegetable from the program?
        Answer. The changes to the WIC food packages were made based on
    scientific recommendations from the National Academies' Institute of
    Medicine (IOM). The IOM was charged with reviewing the nutritional
    needs of the WIC population, low-income infants, children, and
    pregnant, postpartum and breastfeeding women who are at nutritional
    risk, and recommending changes to the WIC food packages.
        The restriction of white potatoes, as recommended by the IOM, is
    based on (1) food intake data indicating that consumption of starchy
    vegetables by the WIC-eligible population meets or exceeds the amounts
    suggested in the 2005 Dietary Guidelines for Americans for consumption
    of starchy vegetables; and (2) food intake data showing that white
    potatoes are the most widely consumed starchy vegetable.
        There is no cost of compliance for the disallowance of a single
    fruit or vegetable from the WIC Program. WIC State agencies routinely,
    and as a part of normal business practice, determine what foods to
    include on their State WIC food lists from the list of Federally
    authorized WIC-eligible foods.

                              SUBCOMMITTEE RECESS

        Senator Kohl. Our hearing will end at this time. Next week
    we will be discussing the FDA budget, and we look forward to
    continuing our dialogue. Thank you so much.
        [Whereupon, at 11:15 a.m., Tuesday, April 8, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2009

                                  ----------

                            TUESDAY, APRIL 15, 2008

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Herb Kohl (chairman) presiding.
        Present: Senators Kohl, Dorgan, Reed, and Bennett.

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                          Food and Drug Administration

    STATEMENT OF ANDREW C. VON ESCHENBACH, M.D.,
                COMMISSIONER
    ACCOMPANIED BY:
            JOHN DYER, DEPUTY COMMISSIONER AND CHIEF OPERATING OFFICER,
                FOOD AND DRUG ADMINISTRATION
            RICHARD TURMAN, DEPUTY ASSISTANT SECRETARY FOR BUDGET,
                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                     OPENING STATEMENT OF SENATOR HERB KOHL

        Senator Kohl. Good morning to one and all. Today we welcome
    Dr. von Eschenbach, the FDA Commissioner; Mr. John Dyer, the
    Deputy Commissioner for Operations; and Mr. Richard Turman, the
    Deputy Assistant Secretary for Budget at HHS. We thank you for
    appearing this morning to discuss the FDA's budget for 2009.
        American consumers spend 20 cents of every dollar on
    products that are regulated by the FDA. Food, medicine, medical
    devices, vaccines, the blood supply, cosmetics, and veterinary
    products all fall within FDA jurisdiction. FDA has a
    responsibility to make sure that all of these are safe and
    effective.
        As you appreciate better than anyone else, it is, indeed, a
    daunting task that grows more complex every year.
    Unfortunately, your budget request does not keep pace with
    these huge responsibilities.
        For fiscal year 2009, the administration proposed an
    increase of $54 million, or just over 3 percent. It recommends
    modest increases for food safety and medical products. While
    that is a welcome contrast compared to cuts proposed for HHS
    and USDA, I find it hard to believe that this recommendation
    will achieve anywhere near the goals that FDA has set.
        The budget purports to hire over 200 additional FDA
    inspectors, as well as staff, but in reality, you do not
    request enough money to pay for the staff that you have now.
    Specifically, the budget clearly states that FDA needs $60
    million more than last year simply to maintain current staffing
    levels, but you only request $54 million new dollars.
        What this really suggests to me is that any additional
    money you claim to be for new food and medical safety
    activities will really be used to maintain current staff. There
    is no new money for food safety, medical products safety, as
    well as anything else.
        FDA recently published a food protection plan and import
    safety action plan. Both documents outline important steps
    needed to keep our food supply safe, and those steps will cost
    money. Serious work also needs to take place to ensure that the
    drugs, which FDA approves are indeed safe, and we need
    assurances that necessary follow-up will happen. We have all
    heard that 80 percent of the raw ingredients going into our
    medicines come from overseas. It would take FDA 13 years to
    inspect each of these plants just once.
        I know that you are aware of these issues and many more,
    and I believe you want to move in the right direction. But I
    also feel obliged to address your recent complaint that
    Congress has failed to give FDA the money it needs. That
    complaint seems a little specious to me. Congress gave FDA $90
    million more than you sought for the current year, and we
    provided $17 million more than you sought in fiscal year 2007.
    So I take issue with that complaint and we look forward to your
    comments and explanations.
        We have developed a good working relationship over the past
    several years, and I am sure that will continue this year.
    Although we seem to be far apart on how we would interpret this
    budget right now, we want to work with you to make sure that
    your agency, one that affects every single American every day,
    has the necessary funding to be effective, as we both think it
    should be.
        We will now turn to Senator Bennett for his opening
    statement, and following that, we look forward to hearing from
    you. Senator Bennett.

                     STATEMENT OF SENATOR ROBERT F. BENNETT

        Senator Bennett. Thank you very much, Mr. Chairman. You
    have covered many of the points that I wanted to highlight as
    well.
        The FDA's regulatory authority is vast. It encompasses 80
    percent of the food we eat, all animal and human drugs and
    medical devices, along with some other products, and 20 percent
    of all consumer expenditures go for some product that is
    regulated by the FDA. That is $1.5 trillion worth of
    expenditures. So this is a very important agency.
        And, Dr. von Eschenbach, I want to take this occasion--this
    will be your last appearance in defense of the budget--to thank
    you for the stewardship you have provided at this agency.
        We more often hear about problems connected with the agency
    than we do about the success in making the United States food
    and drug supply the safest in the world, as I believe that it
    is.
        But there have been problems and I expect we will hear
    about some of them, the widely reported recall of heparin
    because of contaminated ingredients that came from the supplier
    in China, the recall of peanut butter tainted by salmonella,
    followed by a massive pet food recall, also having to do with
    contaminated ingredients from China. As we look at those
    problems, we sometimes, as I say, lose sight of the fact that
    overall we do have the safest food and drug supply in the
    world.
        But I agree with the chairman that we need to pay attention
    to the amount of money that is required here and that the
    budget that has been submitted to us by the administration
    appears to me to be inadequate to meet those challenges. I have
    sat on your side of the table. I know the kinds of fights that
    go on in an executive agency between what you feel is your best
    judgment and what OMB feels is its best judgment and the very
    difficult position you get put in when you are sent up here to
    defend OMB's number when in your heart you might prefer a
    higher one. You need not comment on that. I will not put you in
    that box. But I have seen that kind of thing happen before. And
    I feel, with the chairman, it may be our responsibility to fix
    OMB's mistake here. I think you probably have more friends here
    than you might have at other places in town.
        It is not just money, however. You need leadership. You
    need good people. You need to be able to attract the right
    people and hold onto the right people. Those are some of the
    things we will be talking about.
        We have to take into consideration the comments that are
    made by the Science Board that concluded--and I quote--FDA can
    no longer fulfill its mission without ``substantial and
    sustained additional appropriations.'' That is something that
    we, I think, have to pay attention to even if some others do
    not.
        Well, we all benefit from a strong and well-funded FDA. It
    is an area where consumers, industry, and the Congress
    vigorously agree and where all must work together to see that
    we get the results that we want. I look forward to the
    testimony and working together with you, Mr. Chairman, to try
    to solve some of these problems.
        Senator Kohl. Thank you, Senator Bennett.
        Senator Dorgan, do you have a statement?
        Senator Dorgan. No, thank you.
        Senator Kohl. We will now ask Dr. von Eschenbach for your
    statement.

                     STATEMENT OF DR. ANDREW VON ESCHENBACH

        Dr. von Eschenbach. Chairman Kohl and Senator Bennett,
    Senator Dorgan, I am very gratified by your kind remarks and
    certainly your support. It is always an honor for me to appear
    before you.
        But today, it is also a special privilege for me to be
    accompanied by FDA leadership that you see sitting behind me,
    the center directors and the deputies, who provide the day-in-
    and-day-out leadership of this incredible agency and who truly
    epitomize the over 10,000 FDA employees who bring dignity to
    the title and to the words ``public servant.''
        I am pleased to be here today joined by Mr. Turman and Mr.
    Dyer to present to you FDA's fiscal year 2009 budget request.
        As you have already indicated, the beginning of the 21st
    century has already witnessed FDA facing incredible challenges
    emanating from a rapidly and radically changing world. And
    these changes are, in fact, reshaping the way in which we must
    accomplish our mission to protect and promote the public
    health.

                        REQUEST FOR ADDITIONAL RESOURCES

        More than 2 years ago, when I first sat before you, I
    presented my initial request for increased resources that FDA
    needed to address these changes and last year requested even
    more additional resources. I trust you know that I will not
    disappoint you in your expectations that I am here today
    requesting even further increases in the FDA's budget.
        But I hope you will also recognize that this has never been
    for us an exercise simply to ask for more. We have attempted to
    be good stewards of these precious resources and have been
    creating detailed plans that communicate how FDA will deploy
    those resources to overcome the challenges we face and to
    provide regulatory oversight for the food and health products
    we regulate.
        These requests for additional resources and these plans,
    which is our strategic plan and food protection plan, et
    cetera, are part of a trajectory that we have been attempting
    to create that will continue to build over time to modernize
    the Food and Drug Administration of the 21st century.
        But Congress and the American people expect more than just
    plans and budgets. They deserve exceptional performance, and I
    believe we have also delivered. The list of recent
    accomplishments that appear in my written testimony reflects
    the universal determination within FDA to ensure the people we
    serve that they will always have access to safe and effective
    medical products, that we will safeguard the food that they
    eat, and address emerging threats to America's public health.
    What we have done and what we must do is only possible through
    your support, and we are deeply grateful for the support that
    you have provided and continue to provide us.
        I come here today asking for more support because the
    challenges that we are facing tomorrow compared to yesterday
    are, for sure, formidable. Our response to those challenges
    affects our entire enterprise.

                  MODERNIZATION OF INFORMATION TECHNOLOGY (IT)

        For example, a global supply chain of food and medical
    products now requires FDA to expand its presence and reach
    beyond our borders. A complex regulatory pathway that is
    embracing innovative products from their production to
    consumption now requires us to modernize our infrastructure,
    particularly our FDA information technology. The need to always
    be a science-based and science-led agency in our decisionmaking
    now demands that we create the facilities that will support
    that kind of an infrastructure, including the completion of the
    construction of the consolidated campus for FDA at our new
    campus at White Oak. And I present to you a picture of that
    construction of that state-of-the-art facility that is in
    process and must, as a part of this trajectory, continue to be
    supported and completed.

                            BUDGET REQUEST INCREASE

        The 2009 budget request builds on the 2008 appropriation by
    proposing an additional 5.7 percent increase. That will result
    in a total budget of $2.4 billion, of which $1.8 billion would
    be in budget authority and $700 million in user fees.

                                   USER FEES

        Last year, Congress reauthorized the Food and Drug
    Administration Amendments Act which provided direction to the
    agency with 125 new requirements in the bill's 11 titles, but
    it also reauthorized essential user fee programs for
    prescription drugs and medical devices.
        This year, the successful program to support animal drug
    review, the Animal Drug User Fee Act, expires on September 30,
    2008, and this 2009 budget recommends extending that program
    for an additional 5 years, and in addition, includes $48
    million for four new proposed user fee programs relating to
    generic drugs, generic animal drugs, the reinspection of
    facilities, and issuing export certificates for food and animal
    feed.

                       FOOD PROTECTION AND IMPORT SAFETY

        During 2009, we will continue to implement the food
    protection plan and our import safety action plan that we
    announced in 2007. And the subcommittee generously provided $56
    million for food protection in 2008, and we are requesting an
    additional $42 million in 2009, which will provide an
    additional 94 full-time equivalent staff to conduct food
    protection activities, including 68 to support our domestic and
    foreign inspections through our Office of Regulatory Affairs.
    We will continue to expand and support essential programs to
    protect and defend our food supply.

                              RAPID RESPONSE TEAMS

        We will also emphasize a priority that you championed,
    Senator Kohl, in deploying three more rapid response teams
    during fiscal year 2009, in addition to the six that we will
    deploy in 2008. And we will also improve the information
    technology systems that support risk assessment, research,
    inspection, and surveillance.

                        COST OF LIVING AND CRITICAL PATH

        And finally, there will be $12 million for the cost-of-
    living increases for our essential staff.
        In 2008, the subcommittee appropriated increases for drug
    safety, critical path generic drug review, drug advertising
    review, and pandemic preparedness programs at FDA. Thanks to
    the commitment of this subcommittee, specifically Senator
    Bennett, we will commence 50 important critical path activities
    across all medical product programs. This is our effort to
    transform the design, development, testing, and use of medical
    products.

                                 PRODUCT SAFETY

        We continue to address our need for product safety and
    development, including our ability to provide increased staff
    and oversight for targeted increases in blood and blood
    products, human tissue safety, criminal drug investigations,
    and device import safety, as well as animal drug grants under
    the Minor Use and Minor Species Animal Health Act.

                               PREPARED STATEMENT

        This $2.4 million contains essential resources on that
    trajectory to continue to build the FDA of the 21st century
    that will protect and promote the health and safety of the
    American public. And we are deeply grateful for your commitment
    to that continuous, ongoing effort to recreate and redefine and
    modernize the FDA.
        Thank you, Mr. Chairman. I look forward to your questions.
        [The statement follows:]

                 Prepared Statement of Andrew C. von Eschenbach

    Introduction
        Chairman Kohl and members of the subcommittee I am pleased to
    present the President's fiscal year 2009 budget request for the Food
    and Drug Administration (FDA). I am joined by Mr. John Dyer, FDA's
    Deputy Commissioner and Chief Operating Officer, and Mr. Richard
    Turman, Deputy Assistant Secretary for Budget at the Department of
    Health and Human Services.
        At the outset, I want to lay out the trajectory reflected in FDA's
    budgets during my tenure. When I first sat before you on behalf of the
    FDA 2 years ago, I presented a budget that recognized the need for
    additional resources so that FDA can accomplish its mission. Just as
    important, FDA also recognized the need to establish plans that define
    how to use our resources wisely.
        For the past 2 years, we requested additional resources to meet
    important public health challenges. We also developed detailed plans
    that communicate how we will deploy our resources to overcome the
    challenges that we face. However, you also expect performance while we
    are developing plans for the future, and we have delivered.
    Recent FDA Achievements
        Thanks to funding appropriated by this subcommittee, FDA is
    achieving important public health milestones, and we thank you for your
    support. Since I appeared before you last year, FDA worked with
    Congress on the FDA Amendments Act (FDAAA) to extend key user fee
    programs including the Prescription Drug User Fee Act (PDUFA) and the
    Medical Device User Fee Act (MDUFMA), to reauthorize the Best
    Pharmaceuticals for Children Act and the Pediatric Research Equity Act.
    During the past year FDA also:
      --published comprehensive plans for food defense, food safety, and
            import safety
      --negotiated and signed food and medical product safety agreements
            with China
      --expanded FDA's capacity to detect radiological contamination of
            food by 150 percent
      --launched a national initiative to strengthen State food safety
            programs
      --issued a current good manufacturing practices rule for dietary
            supplements
      --approved a second-generation smallpox vaccine to enhance U.S.
            preparedness
      --approved the first U.S. vaccine for humans against H5N1, the avian
            influenza virus
      --approved the sixth seasonal influenza vaccine, allowing
            manufacturers to produce a record number of flu vaccine doses
      --approved a decellularized heart valve, a new drug-eluting stent,
            and the first artificial cervical (neck) disk
      --approved new treatments for hypertension, Crohn's disease, cancer,
            HIV, diabetes, Parkinson's, Fibromyalgia, leukemia, and blood
            clotting disorders, including 22 new molecular entities and 18
            orphan products
      --tentatively approved the 64th anti-retroviral product under the
            President's Emergency Plan for AIDS Relief (PEPFAR)
      --issued more than 680 generic drug approvals or tentative approvals
            during fiscal year 2007--a 30 percent increase from the
            previous year
      --approved new tests for blood typing and to detect malaria, West
            Nile Virus, certain breast cancers, respiratory viruses, and
            other infections
      --identified Critical Path opportunities for generic drugs and
            conducted Critical Path workshops on cancer clinical trials and
            developing anti-cancer agents
      --proposed new standards and a new UVA rating for sunscreen products
      --released a report on science and regulatory issues associated with
            nanotechnology
      --conducted enforcement actions to protect consumers against
            unapproved drugs and devices and from unsafe dietary
            supplements
      --identified 25 drugs products that must submit safety plans under
            Title 9 of FDAAA.
        These are important public health accomplishments, and they
    demonstrate FDA's performance while we also prepare for the future.
        My FDA colleagues and I recognize that we have important work to do
    in all FDA program areas. We also have challenges that cut across all
    FDA programs, such as expanding FDA's reach beyond our borders,
    modernizing our Information Technology, and working with the General
    Services Administration to complete our new campus at White Oak.
    FDA's 2009 Budget Request
        The President's fiscal year 2009 budget request for FDA builds on
    the fiscal year 2008 appropriation by proposing a 5.7 percent increase.
    FDA will focus its increased resources on protecting America's food
    supply and improving the safety of human and animal drugs, medical
    devices, and biologics--including vaccines, blood products, and human
    tissues.
        This increase will provide FDA with a budget of $2.4 billion, which
    consists of $1.8 billion in discretionary budget authority and $0.7
    billion in user fees. FDA user fee programs provide supplemental
    resources that not only allow FDA to review manufacturers' product
    applications but also ensure that Americans have access to safe and
    effective medical products.
        As I mentioned, Congress reauthorized user fee programs for
    prescription drugs and medical devices last year in FDAAA. This year,
    the successful program to support animal drug review, the Animal Drug
    User Fee Act (ADUFA), expires on September 30, 2008. We have engaged
    with stakeholders to develop proposals to extend this program for an
    additional 5 years. FDA published a draft proposal for ADUFA II in the
    Federal Register and conducted a public meeting with stakeholders on
    March 11, 2008.
        Finally, our budget includes $48 million for four proposed user
    fees related to reviewing generic drugs, reviewing generic animal
    drugs, reinspecting facilities, and issuing export certificates for
    food and animal feed.
    FDA Food Protection Plan Investments
        On November 6, 2007, the administration issued the Import Safety
    Action Plan (ISAP), a comprehensive, strategic roadmap to strengthen
    import safety. In conjunction with this release, FDA released its Food
    Protection Plan (FPP), a comprehensive initiative to protect America's
    food supply.
        The FPP is a risk-based, production-to-consumption strategy to
    assure the safety of domestic and imported food. FDA's plan relies on
    three core elements--prevention, intervention, and response--and calls
    for ten new legal authorities. The plan is designed to identify
    potential food defense and food safety threats and to counteract those
    threats before they harm consumers.
        FDA has begun implementing the FPP and ISAP with the resources that
    the subcommittee appropriated in fiscal year 2008. In fiscal year 2009,
    FDA requests an additional $42 million to protect the food supply and
    to continue to implement our plan. These funds will allow FDA to
    advance important food defense and food safety priorities. Fiscal year
    2009 prevention activities include performing essential food research,
    determining the greatest threats of intentional and unintentional
    contamination to the food supply, and expanding food protection
    activities beyond our borders. Our intervention activities include
    conducting more risk-based inspections and surveillance and deploying
    new food defense and food safety screening tools. Fiscal year 2009
    response activities include establishing more rapid response teams,
    strengthening emergency response, and improving our ability to conduct
    food tracebacks.
        To achieve these objectives and safeguard American consumers, FDA
    will also improve IT systems that support our research, risk
    assessment, inspection, and surveillance. Finally, FDA's fiscal year
    2009 food protection initiative includes $12 million for the cost of
    living pay increase for FDA food safety and food defense programs.
    These funds allow FDA to retain its professional workforce that conduct
    food safety and food defense activities. Overall, our food protection
    investments for fiscal year 2009 support an additional 94 full-time
    equivalent (FTE) staff, including 68 FTE to conduct domestic and
    foreign inspections through FDA's field operations in the Office of
    Regulatory Affairs.
    Investments for Safe and Effective Medical Products
        For fiscal year 2008, Congress appropriated increases for drug
    safety, Critical Path, generic drug review, drug advertising review,
    and pandemic preparedness programs at FDA. With these increases, FDA
    will strengthen medical product development, safety, and review
    activities that the subcommittee identified as fiscal year 2008
    priorities. I assure you that FDA will be a good steward of the funds
    you provide and that we will search for effective solutions to the
    public health challenges involving medical products.
        For fiscal year 2009, FDA is proposing a $17 million initiative for
    medical product safety and development, including funds for the cost of
    living pay increase. FDA is also proposing targeted increases for our
    medical product programs.
        With the fiscal year 2009 increase, FDA's Biologics Program will
    strengthen its ability to prevent, detect, and respond to emerging
    safety threats in blood and blood products. FDA will also improve
    tissue safety by expanding our program to educate industry about tissue
    processing and tissue safety technologies.
        In the Human Drugs Program, FDA will improve import safety by
    conducting additional investigations of criminal drug activity. The
    volume of drugs imported into the United States will likely increase by
    12 percent during fiscal year 2009, and the additional import volume
    creates a need for criminal investigators to support drug import
    surveillance.
        In the Device and Radiological Health Program, FDA will strengthen
    import safety by improving the ability of the ORA field operations to
    work on import issues with Customs and Border Protection and other
    agencies. Finally, in the Animal Drugs and Feed Program, FDA will
    provide targeted grants to stimulate the development of new animal
    drugs under the Minor Use and Minor Species Animal Health Act of 2004.
    Implementing FDAAA
        In the fall of 2007, Congress enacted legislation reauthorizing
    prescription drug and medical device user fees, the Best
    Pharmaceuticals for Children Act and the Pediatric Research Equity Act.
    This legislation also grants new authorities to ensure the safety of
    the food supply and the safety and effectiveness of medical products--
    drugs, devices, and biologics. As I mentioned previously, FDAAA also
    reauthorized user fees for prescription drug and medical device review.
        Implementing FDAAA is a formidable challenge. The legislation is
    complex, with eleven titles containing more than 125 new requirements.
        To cope with the breadth of this act, FDA launched a detailed
    implementation plan. And, in the spirit of transparency, the details of
    our progress to implement FDAAA appear on our website. Within FDA, we
    established working groups to confirm the scope of our FDAAA
    responsibilities and identify the actions and timetables necessary to
    conduct our new work. As you might expect, we are giving our first
    attention to FDAAA provisions that have the greatest implications for
    public health.
        The new law is barely 6 months old, but our accomplishments are
    already tangible. As of today, FDA published 20 Federal Register
    notices related to FDAAA. We are methodically working through the new
    law, giving priority attention to new standards that will have the
    greatest public health impact. Achieving all of the goals and
    objectives of this landmark legislation will require a sustained effort
    from many individuals inside and outside of FDA for years to come.
    The Scope of FDA Challenges
        FDA will face many challenges in the 21st century. Thanks to the
    talented professionals who serve the American public at FDA, we are
    addressing many daunting challenges within all areas of our mission. We
    must modernize our workforce, our work plans, and the infrastructure
    that supports our mission to assure that we remain the gold standard
    for food and drug regulation.
        In this era of change, FDA has developed strategic plans to respond
    to high-profile challenges in priority areas. During the past 2 years,
    we presented comprehensive plans to Congress and the American public on
    food and import safety, and responded to the Institute of Medicine
    Report on drug safety.
        My colleagues and I at FDA are committed to our mission and
    committed to the changes necessary to protect America's public health.
    Thanks to your support, the FDA of the future--the near future--will
    better protect the public from the threats that we experience today. At
    the same time, FDA will better promote the discovery, development, and
    delivery of lifesaving products that improve the quality of our lives.
    Conclusion
        The fiscal year 2009 request of $2.4 billion contains essential
    resources to protect and promote the health and safety of the American
    public. The funds that we request will allow FDA to strengthen the
    safety of the food supply, to assess, review, and approve new products,
    and to better predict--earlier and more accurately--the safety and
    effectiveness of drugs, biologics, and medical devices.
        With the fiscal year 2009 resources, FDA will work to ensure that
    Americans enjoy the benefits of personalized medicine, a safe and
    wholesome food supply, and the promise of a better, healthier future.
    Meeting these challenges is only possible with your leadership and with
    the support that you consistently demonstrate for the mission of the
    Food and Drug Administration.

        Senator Kohl. Thank you, Dr. von Eschenbach.
        Dr. von Eschenbach, how do you reconcile your statement
    about Congress not providing you with enough funding when, in
    fact, over the past 2 years, this committee has provided you
    with over $100 million more than you asked for?

                    INCREASED PRODUCTS AND RESPONSIBILITIES

        Dr. von Eschenbach. Mr. Chairman, with great credit to you
    and to other Members of Congress, you have more recently been
    very, very generous in your support of the FDA. I think what we
    are both faced with is the realization that over the past 2
    decades the FDA has been immersed in this rapidly and radically
    changing world that has increased the scale and scope of the
    portfolio of products and responsibilities facing the FDA, as
    well as increasing complexity in the nature of those products
    and the nature of their production and their consumption. And I
    think it is in the context of that rapidly and radically
    changing world that over the past 2 decades the resources
    required have not kept pace with the needs.
        But I certainly commend you and other Members of Congress
    for your recent attention to our need to perhaps accelerate our
    ability to create that trajectory so that we can, in fact,
    bring the FDA up to the level of that we currently anticipate
    will be needed for this modern world.

                                 SCIENCE BOARD

        Senator Kohl. Dr. von Eschenbach, we would be remiss if we
    did not discuss the FDA Science Board's recommendation for your
    budget. Their report states--and I quote--``FDA's resource
    shortfalls have resulted in a plethora of inadequacies that
    threaten our society including, but not limited to, inadequate
    inspections of manufacturers, a dearth of scientists who
    understand emerging new science and technologies, inability to
    speed the development of new therapies, an import system that
    is badly broken, a food supply that grows riskier every year,
    and an information infrastructure that was identified as a
    source of risk in every FDA center and function.'' This is a
    board full of experienced and knowledgeable people that was
    established at your request.
        So let us start with the overall number.
        Your budget requests a $54 million increase this year, but
    the Science Board recommends $375 million. Is your budget
    adequate? How do you respond to the Science Board's
    recommendations?
        Dr. von Eschenbach. Mr. Chairman, I was very gratified by
    the report by the Science Board, which I had convened in order
    to have an external, objective assessment of FDA's scientific
    infrastructure. I think what the report has pointed out is the
    need for change within FDA. We have attempted to address those
    changes based on a strategic plan for implementation of the
    needed changes over a period of time.
        The resources that are required will continuously need to
    be increased. I think the board reflects the fact that if we
    wish to accelerate the time line for that modernization effort
    and the implementation of many of the changes that are
    necessary to align the FDA with the modern rapidly and
    radically changing world around us, that level of support would
    be required.

                            ADDITIONAL $375 MILLION

        Senator Kohl. Could the FDA absorb an additional $375
    million in 1 year?
        Dr. von Eschenbach. No, sir. I do not believe it could
    absorb that in 1 single year. I do believe, however, that we
    have now put in place the trajectory that I indicated before in
    which we have plans which define time lines, outcomes, and
    deliverables so that there is the rational investment of those
    additional resources and the ability to demonstrate a return on
    that investment to the American people.
        I believe we could absorb significant increases in our
    budget and we are prepared to address how they would be applied
    if they were to be available. And we are doing that in the
    context of recognizing that our budget is one part of a larger
    portfolio of responsibilities to the American people that is
    reflected by both the President and the Congress.

                              NECESSARY RESOURCES

        Senator Kohl. Is the FDA underfunded, hugely underfunded,
    grossly underfunded? What would you tell the American people?
        Dr. von Eschenbach. I believe that from the perspective of
    our recognition of the changes that are occurring in the world
    around us, the need for the FDA to significantly change its
    strategies as to how it is addressing those changes, be they
    the incredible opportunities that are emanating from the
    discoveries in science and technology with new products such as
    will occur with regard to our ability to recognize the fruits
    of nanotechnology and regenerative medicine, all the way
    through to the recognition of the threats that are now
    emanating from globalization and the fact of our need to secure
    integrity of supply chain of these medical products from
    production to consumption, be it food or medical products, all
    of this is requiring a change within the Food and Drug
    Administration that is both strategic and a change that is also
    resource-dependent.
        So the answer is I believe that we have been eminently
    successful up to this point in time. We are the world's gold
    standard, but if we wish to continue that record of excellence,
    we must change as the world around us is changing and we must
    change from the perspective that as our portfolio is expanding,
    so are the need for our resources to meet those expectations in
    that portfolio.
        Senator Kohl. So in order to meet those expectations I
    think what you have said--I believe what you said--is that in
    order to discharge those responsibilities to the American
    people, the FDA is underfunded. Hugely underfunded, grossly
    underfunded. One could debate that, but underfunded.
        Dr. von Eschenbach. I believe that we need additional
    resources. I am presenting a budget today that asks for
    additional resources. I have asked for more additional
    resources. I believe we could and would apply any additional
    resources wisely and effectively, given the fact that, as I
    indicated in my opening statement, it is not simply a matter of
    asking for more. It has rather been our responsibility to
    define how we would spend more, spend it wisely and
    strategically, and be able to then assure a return on that
    investment by enhancing the American people's access to safer
    and more effective medical products and food.
        Senator Kohl. Thank you.
        Senator Bennett.

                               FUNDING ABSORPTION

        Senator Bennett. I would like to continue the line of
    questioning that the chairman has started down. You said you
    could not absorb $375 million in a single year. I think that is
    probably right. How much could you absorb? This is not asking
    you to break with OMB. This is just a theoretical question that
    you can answer in a scholarly kind of way. How much could you
    absorb?
        Dr. von Eschenbach. I believe that what we have attempted
    to do, Senator Bennett, in our planning process, both in our
    food protection plan, as well as in our strategic plan, and
    participating even in the larger agenda, like our import safety
    working group, our drug safety initiatives, across the context
    of food and medical products, enhancing safety, as well as
    rebuilding and recreating the infrastructure at FDA, we have
    laid our a series of initiatives, a series of opportunities. If
    additional funding was available, depending upon the level of
    funding, we would apply it to that portfolio of opportunities
    which we have outlined in these plans. We would do that
    initially around those opportunities having to do with assuring
    safety of food and of medical products.

                               BEYOND OUR BORDERS

        So, for example, we have embarked upon initiatives now
    recognizing that FDA must go beyond our borders. And
    establishing an FDA presence in geographic regions around the
    world is a new initiative to which we could apply new dollars
    and accelerate our ability to implement the establishment and
    support of those offices, which would enable us to, one, work
    with our partners in other parts of the world to build
    capacity, to assure quality being built into the production of
    food and medical products, as well as being able to enhance the
    completion of White Oak and our data center.

                               FUNDING ABSORPTION

        Senator Bennett. I am sure you would go through this
    orderly process. I am looking for a number. If we were to, in
    our wisdom, decide that OMB was wrong and we needed to add an
    extra $100 million to the amount that you have taken, just to
    pull a number completely out of the air, could you handle that?
    You said $375 million you could not handle. You said you could
    handle more than $54 million. I am looking for something ball
    park in between as to, yes, we could comfortably absorb and
    handle an extra $50 million, an extra $100 million. You get
    beyond that, we are looking at future years.
        It is an unfair question, but it is not because if we are
    moved to help you, we want to move in an area that is prudent
    rather than extravagant.
        Dr. von Eschenbach. First of all, I would certainly welcome
    an opportunity to present a scenario and portfolio of options
    given additional possible investment. Certainly just as you
    say, today I do believe we could absorb the $100 million that
    you referred to and do that quite rapidly and quite
    effectively. As we would get closer and closer to the larger
    number that you presented, I think it would require greater
    stewardship to be certain that we could implement those dollars
    as rapidly and as effectively as we need to.

                                 CRITICAL PATH

        Senator Bennett. I appreciate your emphasis on safety, and
    I agree with that.
        But as you know, I am very much concerned about the
    critical path activities. You came to the University of Utah
    and testified at a hearing there, and we all got excited about
    the opportunities that are there. We provided $7.5 million in
    2008, and $2.5 million was made available for competitive
    critical path research grants. Is that one area where you are
    expecting, even with what you have asked us for, to make
    additional resources, or is that an area that would benefit
    tremendously if we were to go above the number you have
    suggested?
        Dr. von Eschenbach. Well, again, I think critical path is
    an excellent example of how we have tried to create this
    trajectory. We have, within critical path, 50 areas of
    opportunity for investment. They are a different grain size. As
    dollars are available to us, we can strategically apply them to
    those initiatives but do that in a way that is addressing the
    modernization of our drug development and medical product
    development process and also do it in a way that demonstrates a
    return on investment.

                                    WARFARIN

        Let me give you one quick example of how we have utilized
    some of the resources you have already applied. In taking on
    our ability to look at the drug warfarin and use
    pharmacogenomic testing in order to be able to appropriately
    define the right dose for the right patient, that is now a part
    of FDA's labeling of that particular drug. That enabled us to
    begin to reduce the complications of either under-dosing
    patients experiencing clots or overdosing and having them
    unnecessarily bleed. And by getting that right dose based on
    our understanding of pharmacogenomics, that is projected to
    result in the savings of $1 billion per year for our health
    care system by the elimination of emergency room visits for the
    complications of an inappropriately dosed level of warfarin.
        So I see this as a strategic business plan as well as a
    strategic opportunity to transform the science, and with
    additional dollars, we would expand our investment in a variety
    of those initiatives across the critical path.

                             INFORMATION TECHNOLOGY

        Senator Bennett. And I see it as a business plan too.
    Unfortunately, in the way we structure Federal budgets, unlike
    businesses that I ran or businesses that the chairman ran
    before we came here, we still find things so that we do not
    recognize that there would be a billion dollar benefit, but it
    is in somebody else's budget. So we do not get credit for it as
    we think about it here.
        Let us talk about IT. You are spending roughly what--10
    percent of your budget--on IT right now, and the results are
    less than satisfactory. Talk to us about what has to be done to
    bring your IT capability up to where it needs to be.
        Dr. von Eschenbach. When I arrived at FDA, the two most
    critical areas I believe to address was our workforce
    development and our information technology infrastructure
    because we are, in fact, an information management business.
    With regard to the information technology, we are spending,
    according to benchmarks, about $200 million a year on IT. But
    the problem that we encountered was it was being spent on
    woefully inadequate equipment to kind of attempt to maintain it
    at huge cost, and we did not have the modern information
    systems running on that equipment.
        So we have been engaged in a transformation of our entire
    IT infrastructure, moving to modern servers and equipment,
    increasing their efficiency from what has been around 30
    percent to a 70 percent target, consolidating them so that we
    have shared activities across those servers, as well as
    implementing the Bioinformatics Board to redefine the programs
    that need to be operationalized on that IT infrastructure to
    create integration across the agency and information sharing,
    especially from our field to our centers. That is now an
    investment of about $247 million a year.

                      WHITE OAK AND INFORMATION TECHNOLOGY

        White Oak construction includes plans for our
    implementation and build-out of a data center at White Oak
    which will help us to continue our efforts to put FDA on a
    complete electronic infrastructure and move us away from paper.
        As we had more dollars to invest, we could accelerate the
    implementation of that IT strategic plan.
        Senator Bennett. So that brings us back to White Oak. What
    is your time line, and is the construction of White Oak, which
    is not just bricks and mortar, as you have just indicated, it
    is also massive increases in efficiency as you get the kind of
    data center that you are looking to from your IT investment
    there, proceeding more slowly because we are not putting enough
    money into it? Would it be completed more rapidly if we gave
    you more money? And what is your time line for getting it done?

                                      GSA

        Dr. von Eschenbach. Well, we obviously are dependent upon
    the appropriations that the General Services Administration,
    GSA, receives, and they are responsible for the bricks and
    mortar and maintaining that development on its time line for
    full completion by 2012. If those dollars were to fall off and
    construction slowed, that would create serious problems for us
    in terms of our transition into that consolidated facility from
    what are currently leased and widely dispersed facilities.
        More importantly, as you point out, are opportunities lost
    with regard to consolidation. We see White Oak as our
    opportunity to integrate our science more effectively by virtue
    of having modern state-of-the-art laboratories that are working
    in an interdependent fashion.
        Senator Bennett. Would you see savings if White Oak were
    finished in 2010? And could it be if more money went to GSA?
        Dr. von Eschenbach. I have not done a cost analysis in
    terms of savings by virtue of acceleration. I certainly can
    tell you that there are huge losses--we would sink a lot of
    cost if that time line was slowed down. So how much would we
    gain back?
        Senator Bennett. Yes.

                                  DATA CENTER

        Dr. von Eschenbach. I certainly know by completion of such
    things like our data center would have a significant impact
    across the entire FDA operation, not just the White Oak campus.
        Senator Bennett. We need to do everything we can to get
    that finished in as logical a time as we can.
        Thank you very much. Thank you, Mr. Chairman.
        Senator Kohl. Thank you, Senator Bennett.
        Senator Dorgan.

                          HEPARIN--FOREIGN INSPECTIONS

        Senator Dorgan. Mr. Chairman, thank you very much.
        Dr. von Eschenbach, thank you. I want to ask about the
    issue of inspections of foreign properties, especially about
    the issue of heparin, if I might. Heparin is a blood thinner--
    we are well familiar with it--commonly used by dialysis
    patients, recently pulled from the market after it was linked
    to some 62 deaths. Baxter Health Care, which markets heparin in
    the United States, indicated the allergic reactions appeared to
    be caused by a contaminant that was added in place of the
    active ingredient in heparin somewhere in the manufacturing
    process, they suspect, mostly in China. They have purchased the
    active ingredient for heparin from a company called SPL, which
    is based in Wisconsin, and they purchased pig intestines from
    Chinese pig farms and processed the intestines in China and
    Wisconsin.
        I am going to show you some charts. The Wall Street Journal
    did something about this. It published a series of photos of
    the Yvan Intestine and Casing factory which processes pig
    intestines used to make heparin. Now, I am not tracing this
    heparin to this place because none of us can know that or do
    that. But this shows the types of unsanitary conditions in
    which production maybe taking place. We will go down the list
    of these photographs. This is a place that is processing what
    is an active ingredient in heparin. This is processing pig
    intestines.
        My understanding is that the FDA inspected 1,222 plants in
    the United States in a year and conducted only 17 inspections
    of plants in China. Further, when we met with Baxter, we asked
    Baxter had the FDA ever inspected the plant in China that is
    using pig intestines to create the active ingredient in
    heparin. Baxter said that the FDA had scheduled an inspection
    but actually ended up inspecting the wrong factory.
        So 62 people are dead. We hear about the danger of re-
    importing FDA-approved prescription drugs from Canada, which is
    beyond me, by the way. They do that routinely in Europe under
    something called parallel trading where they move FDA-approved
    drugs from country to country. But even though we hear about
    the danger of that, including from the FDA I might add, it
    appears to be the active ingredient in heparin, which may well
    have caused some 60-some deaths, is coming from areas in China
    where there have been no inspection.
        So tell me about that, 17 inspections in China, 1,100
    inspections in the United States.

                              GLOBAL SUPPLY CHAIN

        Dr. von Eschenbach. Senator, your question is very
    perceptive in that I think the heparin experience points out to
    us many of the principles that we have been discussing this
    morning. Let me try to succinctly address what is a very
    complex issue.
        We are engaged in now a global supply chain, and FDA,
    rather than it being a gatekeeper, is now invested in a
    strategy of being engaged in the total life cycle of products
    from production to consumption. That then requires us to look
    at that comprehensively and look at it from the point of view
    of prevention of problems, building quality in at the outset,
    intervention when there is a suspicion or concern, and response
    when there is evidence of an adverse event. So all parts of
    that equation must be emphasized and enhanced, our ability to
    respond rapidly and efficiently, as well as our ability to
    intervene but, most importantly, to begin to emphasize the
    front end, building quality in at the outset.
        Senator Dorgan. But, Dr. von Eschenbach----
        Dr. von Eschenbach. Inspections are important, and I
    completely concur with our need to enhance our foreign
    inspections.
        But this issue points out the fact that that inspection
    would not have detected the contamination of heparin because
    the contaminant is not detectable by our routine testing
    methods. And it was apparently, we suspect, done by virtue of
    economic fraud and, therefore, we had to devise new testing
    methods which now are being used around the entire world by our
    other agencies to address the problem.

                               ACTIVE INGREDIENTS

        Senator Dorgan. A fair point.
        But, Dr. von Eschenbach, these plants have not been
    inspected. My assumption is even if you could detect the active
    ingredient and the problems there, you would not allow this
    plant to process pig intestines and send an active ingredient
    in the U.S. drug supply. And my understanding is that 40
    percent of the active ingredients in the U.S. drug supply come
    from China and India, and I just described what we have here.
    Seventeen inspections in all of China in 1 year, 1,200
    inspections in this country.
        Now, Senator Bennett asked you the question about the
    resources needed. Is FDA only doing 17 inspections because they
    do not have the resources?

                               BEYOND OUR BORDERS

        Dr. von Eschenbach. FDA inspects all the factories or all
    sites of production for new active pharmaceutical ingredients
    for which an application is being submitted. It is the
    reinspections where we need to begin to expand our capacity. We
    are doing that in terms of, one, our initiative, FDA Beyond our
    Borders. We are in the process of working with the Chinese
    Government and we have signed memorandums of agreement to work
    directly with their regulatory agency. We are anticipating
    opening five FDA offices around the world. China will be our
    first with offices in Beijing, Guangzhou, which is the source
    of major food production, and in Shanghai where we have the
    port. We will work directly through that process to enhance
    inspections but, more importantly, to work to build, with our
    Chinese counterparts, systems that will assure quality in the
    production of these products long before they actually come
    into our supply chain.

                              FOREIGN INSPECTIONS

        Senator Dorgan. This comes from the Congressional
    Quarterly. It says the Food and Drug Administration wanted to
    inspect 3,249 factories overseas and it was able to inspect 212
    in all countries. You were able to inspect 6.5 percent of that
    which you wanted to inspect.
        Again, my point is if 40 percent of the active ingredients
    for prescription drugs comes from China and India and we have
    such a small amount of inspection going on and you say and
    everyone says we are in a global economy. Well, it does not
    look like we are in a global inspection system. Obviously,
    those patients who have died as a result of the heparin
    situation paid the price for that.

                                 CANADIAN DRUGS

        But I want to make one final point that is related to this.
    We are not inspecting these foreign sources of the elements of
    prescription drugs, but here are two pill bottles of Lipitor.
    As you know, the FDA itself has been helpful to the
    pharmaceutical industry in recent years in saying, well, if
    U.S. consumers were allowed to reimport FDA-approved drugs from
    a Canadian drugstore where they are sold at fraction of the
    price, these two bottles--one is the U.S. bottle; the other is
    Canada--both made in the same place, put in the same size
    bottle, a couple different changes in the label. The only
    difference here--the same pill, same bottle, same company, FDA-
    approved--is the U.S. consumer gets to pay twice the price. And
    yet, the FDA says, in assistance to the administration and the
    pharmaceutical industry, there is a problem with allowing the
    reimportation of a FDA-approved drug from Canada even while
    this occurs, such a miserable level of inspections
    internationally.
        Now, I am not laying this all at your feet, Dr. von
    Eschenbach because you have not been there all that long. But I
    do think it relates to the questions asked by the chairman and
    the ranking member about resources and what are we deciding to
    do to protect the health of the American people with respect to
    these issues.
        Dr. von Eschenbach. Senator, I think it is both resources
    and a completely different way of doing business. First of all,
    with regard to the process, we need to work more effectively
    and collaboratively with other regulatory agencies in other
    countries, but also with regard to the developers and suppliers
    of these drugs. They have an integral and important part to
    play in this as well.

                                TRACK AND TRACE

        We are embarking upon this in a more comprehensive way than
    just simply increasing the number of inspections, which we will
    do, but we will do that in a risk-based model. We will do that
    in a very tiered fashion so that electronically we are able to
    be aware of all of the things in a track and trace and then
    define where we need to target those specific inspections where
    we believe there is the greatest potential for risk.

                               ACTIVE INGREDIENTS

        Senator Dorgan. Now, last year I added report language to
    an appropriations bill that directs the FDA to tell us where
    are drugs made and where do the active ingredients come from.
    We have not yet received that. Is that on its way from the FDA
    to the Congress?
        Dr. von Eschenbach. We are in the process of--again, as we
    talked about earlier, our need for revamping and rebuilding of
    our information technology infrastructure to be able to create
    a system where we have product identification and we can
    actually track and determine all things that are coming----

                          UNITED STATES VERSUS CANADA

        Senator Dorgan. But is the report on its way to Congress on
    where active ingredients come from? That is a requirement.
        I have taken more time than I think I am allowed. One final
    question if I might.
        This issue of United States versus Canada. Canada has an
    almost identical chain of control of prescription drugs, as we
    do. Most everyone understands and agrees with that. Europe has
    had a parallel trading program for 20 years. If you are in
    Spain and want to buy a prescription drug from Germany, no
    problem. If you are in Italy and want to buy it from France, no
    problem. Why is it that the FDA seems to think Europe can do
    something that we cannot do?
        Dr. von Eschenbach. First of all, Senator, the report is in
    progress and I cannot tell you exactly when it will be
    delivered to Congress. But it is in process and it is being
    prepared for delivery.
        Let me separate this into two issues. One issue is how do
    we address the integrity of the supply chain of the development
    of that product. The second is how do we address the issue of
    the introduction of counterfeits into the supply chain with
    regard to reimportation. They are two completely different
    problems and require two completely different approaches
    because----
        Senator Dorgan. Europe has done that for two decades.
        Dr. von Eschenbach. I just returned from----
        Senator Dorgan. If they can do it, we can do it.

                                  COUNTERFEITS

        Dr. von Eschenbach. I have just returned from some
    interactions with counterparts in which some of the
    transshipments through countries are detecting a significant
    degree of counterfeits being introduced into that process. We
    are addressing both of these, Senator, because they are both of
    critical importance to assuring the product that Americans use,
    when they take those drugs home and give them to their children
    or to themselves, that they are, in fact, getting the right
    product.
        Senator Dorgan. Mr. Chairman, you have been generous.
        Dr. von Eschenbach, would you be worried if a member of
    your family were taking a prescription drug that was FDA-
    approved and purchased in a Canadian drugstore?
        Dr. von Eschenbach. If I purchased it in a Canadian
    drugstore and----
        Senator Dorgan. A registered pharmacy in Canada. FDA-
    approved, registered pharmacy in Canada. Would you be worried
    about the efficacy of that drug?
        Dr. von Eschenbach. It would depend on the drug, but no, I
    would not. But that is different than me having that imported
    into the United States through a website.
        Senator Dorgan. That was not the question. You said no
    because, I assume, that the drugs for your family you would
    purchase in a registered Canadian pharmacy you feel has the
    same chain of command, almost identical to the United States.
    Is that----
        Dr. von Eschenbach. I have a high degree of respect for the
    Canadian system with regard to their own regulation of drugs.
    Yes, sir.
        Senator Dorgan. Thank you, Dr. von Eschenbach.
        Senator Kohl. Senator Reed.

                             INDOOR TANNING DEVICES

        Senator Reed. Thank you, Mr. Chairman. Thank you,
    Commissioner.
        By September 27, 2008, the FDA must submit a report to
    Congress on its labeling requirements for indoor tanning
    devices. What is your understanding of the science of the risk
    of tanning devices and what progress has FDA made on reviewing
    these labeling requirements that you are required to
    promulgate?
        Dr. von Eschenbach. We have been actively involved in
    preparing that report to Congress, Senator. It really looks at
    the issue of warning labels, as you have requested. Personally
    as a melanoma survivor, I obviously have great interest and
    concern about this even though I am not directly involved in
    the specifics of this issue. But we are addressing this and
    addressing this as a public health need.
        Senator Reed. Your last statement presumes that existing
    scientific evidence suggests this is a public health problem.
        Dr. von Eschenbach. The concern is certainly--the concern
    is always with regard to potential problems for over-exposure
    or over-use.
        Senator Reed. Some individuals and groups are suggesting
    that indoor tanning devices are actually palliative, not
    dangerous at all. For this reason, we are very eager for
    scientific evidence of their effects. Can you be more specific
    as to your progress? I presume if you are working towards this
    labeling, that there is some scientific predicate to labeling.
    Otherwise, you would come back to us and say the labeling is
    unnecessary.
        Dr. von Eschenbach. Well, the labeling needs to address the
    risks, as well as the benefits that may be associated with the
    use of this particular kind of device and the appropriate use
    of the device. And I believe that the Center for Devices and
    Radiologic Health is addressing this, both from the scientific
    perspective as well as from a consumer's understanding and
    appreciation of health messages associated with these products,
    and we will be presenting that report to Congress before
    September.

                                   SUNSCREENS

        Senator Reed. Thank you very much, Commissioner.
        In a related matter, the FDA is in the process of
    finalizing its proposed rule on sunscreen products. Can you
    give us an estimate of when it will be completed? It has been
    pending for a while now.
        Dr. von Eschenbach. Yes, sir. It was a matter of addressing
    the issue of adding the UVA component to the UVB standards with
    regard to the rule so that we now have two test methods for UVA
    and the inclusion of the appropriate warning statements. That
    proposed rule is in process, and I cannot give you an exact
    date of when it will be presented, but it is an issue that is
    being actively worked on for finalization.
        Senator Reed. Can you give an estimate? Within this quarter
    or next quarter?
        Dr. von Eschenbach. I would be reluctant to give you an
    estimate and then not be able to assure that, Senator. But I
    will assure you that this is not something that is being
    ignored. It is being given appropriate attention and the
    expectation is to finish this.

                                 GENERIC DRUGS

        Senator Reed. Thank you.
        We all recognize that generic drugs play an important role
    in the health care system today. I have been told that there
    are about 1,400-1,500 generic drug applications currently
    pending, with 570 or so pending over 180 days. Do you need
    increased funding for these generic reviews? Do you need
    something to expedite their approval?
        Dr. von Eschenbach. We are both blessed and challenged by
    the success that we have achieved with regard to bringing
    generic drugs to the American people. This year we received 880
    applications--in 2007, rather. And we have approved 682, which
    was a 33 percent increase in 2007 over 2006. So the track
    record is extraordinary, but because the funnel has increased
    so significantly, that has continued to create the backlog
    issue.

                                   NEW STAFF

        Now, we have approached that on a variety of fronts. One
    is, as you indicated, applying additional resources. So we have
    hired approximately 40 new staff to address generic drug
    review. We are also beginning to attempt to try to prioritize
    the review process to get the first generics and also beginning
    to address things like process improvement, as well as
    enhancement of our infrastructure, specifically IT, work with
    the people who are creating these drug applications to get
    better quality into the applications so that they go through
    the regulatory process in a lot more efficient way. And I think
    the net effect of all of that would be to continue to enhance
    our productivity and reduce the backlog.
        Senator Reed. Thank you, Mr. Chairman.

                                ADDITIONAL STAFF

        Senator Kohl. Thank you, Senator Reed.
        Dr. von Eschenbach, going back to a comment I made in my
    opening statement, you say that your budget provides funding
    for increased activities for food safety and medical product
    safety and that you will hire several hundred additional staff
    this year. But the budget request is not enough to even pay for
    the staff that you now have. So how do you equate your
    intentions with respect to additional staff when you do not
    have money to even pay for the staff that you now have?
        Dr. von Eschenbach. Well, we are on the trajectory to
    increased staff. We do, in fact, have to absorb additional
    costs associated with that staff over and above what we
    currently have available to us in the budget. So it is perhaps
    slowing it down a little bit, but the trajectory is still very
    positive and we are still increasing the number of staff that
    we have. It is just we will not do it at the rate that we had
    anticipated because of needing to absorb the cost of living of
    $34 million that you indicated.
        So the simple answer to your question, Senator, is we have
    to make accommodations in the pace with which we will bring
    those people on board in order to stay within our budget
    framework, but it will not be a negative. It will not be a
    deficit. It will be just not as rapid an accrual of those
    numbers as we had anticipated. We will just have to push it off
    a little bit.
        Senator Kohl. I appreciate that, but what I think I and
    others are taking from what you are saying is that the lack of
    the necessary funding will, in fact, have a severe impact on
    your ability to do the things that you are saying you want to
    do.
        Dr. von Eschenbach. There are a very large number of
    important initiatives that we have identified that are part of
    what I consider to be the essential modernization of the FDA.
    Depending upon available resources, we would be able to
    implement many of those initiatives in as an effective way as
    possible. So I do agree with you from the perspective that
    there is much to be done and we are prepared to do it, and with
    support, we would implement those programs in a strategic way
    but also with great stewardship, recognizing how precious these
    resources are and how many other needs there are across the
    entire Federal Government.

                                  CHINA OFFICE

        Senator Kohl. Dr. von Eschenbach, can you provide us with a
    status update of the office that you are trying to open in
    China? How many FDA employees do you anticipate working there,
    and what do you intend their focus to be?
        Dr. von Eschenbach. We anticipate a total of 13 individuals
    that will be making up our China office. Eight of those will be
    full-time FDA employees. Five of them will be locally employed
    staff. That will be give us great opportunity with regard to
    our ability to integrate effectively locally.

                             OTHER FOREIGN OFFICES

        We also look forward to offices in India, the Middle East,
    Latin America, and Europe. And I have been engaged in
    conversations with governments and counterparts, as has
    Secretary Leavitt, in all of those areas. It is a balance
    between their willingness to welcome us and accept us at the
    government level. We have not yet secured that welcome from
    China officially, but we certainly have great interest and
    enthusiasm on the part of the ministers and government
    officials in China with whom we have discussed this. So I
    anticipate that it will occur.
        We really look forward to the China office being fully
    implemented within this fiscal year, and we are laying the
    groundwork and would like very much to begin to develop the
    other sites as rapidly as possible.

                               POST-MARKET SAFETY

        Senator Kohl. Dr. von Eschenbach, you noted in your
    statement several new medical devices that FDA approved last
    year. Post-market safety of medical devices obviously is an
    important issue for patients. But the number of staff in the
    FDA devices program is, in fact, decreasing this year. So can
    you comment on how you plan to continue improving these
    important devices, as well as ensuring their safety after they
    have been approved with the very minimal funding increases and,
    in fact, while at the same time losing staff?
        Dr. von Eschenbach. We are doing a number of things,
    Senator, one of which, as I had indicated earlier, is this
    ability to create much greater integration and interdependence
    across programs. For example, in this regard, I believe we
    could effectively enhance the performance in post-market
    surveillance, whether it is drugs or devices, by virtue of our
    information technology infrastructure and our ability to do
    much more effective post-market surveillance. We look forward
    to being able to continue to streamline and enhance the very
    effective programs that are already underway in the Center for
    Devices and Radiologic Health with regard to working with the
    industry in post-market surveillance.
        So I think it is a combination of building the trajectory,
    as I have indicated before, finding ways to leverage currently
    ongoing resources or programs like IT, and continue to make
    strategic investments, especially as user fees contribute to
    this opportunity. And we expect our user fee program to
    increase. In 2009, there will be $52.5 million in this
    particular area. So we do look forward to growth, but it is
    going to come in different ways.
        Senator Kohl. Senator Bennett.

                                CLOSING REMARKS

        Senator Bennett. Thank you very much, Mr. Chairman. I think
    all of the issues I have on my list have been covered either by
    you or Senator Dorgan or in my previous questions.
        So let me again thank Dr. von Eschenbach and his team for
    their willingness to serve in what must occasionally be a
    somewhat contentious atmosphere, and I wish them well.
        Senator Kohl. I want to associate myself with Senator
    Bennett's statements. I think it has been a good hearing. I
    think we have brought out very clearly, number one, the huge
    and expanding responsibilities the FDA has and, number two, the
    lack of satisfactory funding to carry out your
    responsibilities. Clearly, there is a very important job that
    we need to work together to achieve.
        In fact, it is clear to us that you cannot carry out the
    responsibilities you have in a way that I believe would satisfy
    you without the necessary and adequate funding. I think there
    are plenty of professional people on your staff, most
    importantly yourself, who can and would get the job done with
    adequate funding, but without the funding, it is pretty hard to
    do the job that you need to do.
        If you want to respond to that statement, that would be
    fine. You could make a comment or two and then we will close
    the hearing.
        Dr. von Eschenbach. I would just close, Mr. Chairman, with
    echoing what I know is both your sentiments and Senator
    Bennett's sentiments. This country and this agency is truly
    blessed by the people of the Food and Drug Administration. I
    have the privilege every day to witness their sacrifice, their
    commitment, and their unbelievable performance, given the
    nature of the challenges that they are burdened with every
    single day. If we were to talk about resources, it is resources
    that are not about programs. It is resources about people. And
    the Food and Drug Administration's most precious asset, this
    Nation's most precious asset, are these incredible individuals.
        We need more of them. We need more of them with new and
    different skill sets that are going to be aligned with the
    challenges of the 21st century, new science that is emerging,
    new technologies that are emerging, new complexity in the
    production and consumption of products. One needs only to go
    and walk through a supermarket and realize that with the
    exception of meat and chicken, every other thing in that
    supermarket is their responsibility to assure to the American
    people the quality of those products.
        Every dollar that you choose to invest is, I believe, my
    responsibility to use to nurture and support that workforce. We
    need a fellowship program that will be able to create the
    intellectual capital of tomorrow. We need career development
    for the people that are already there. We are going to hire
    over 700 new people, which I believe is a wise use of the
    resources that you will make available to us.
        But if I was to leave you with one final word, it would be
    I do not believe that there is any greater investment the
    American people could make than to invest in the people who
    make up the Food and Drug Administration.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Kohl. Thank you very much. That is a fine
    statement. You made a fine appearance here this morning. We
    thank you, as well as Mr. Dyer and Mr. Turman for being here.
    And at this time we will close the hearing.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                    Questions Submitted by Senator Herb Kohl

                       fda science board recommendations
        Question. If additional funding was provided to FDA this year above
    your request level, what are the top 3 most pressing needs you would
    address?
        Answer. On November 6, 2007, the administration released its Action
    Plan for Import Safety. The Action Plan for Import Safety recognizes
    FDA's central role in ensuring the safety of America's food supply and
    the safety and effectiveness of medical products, regardless of where
    the food and medical products are produced.
        Implementing the Action Plan for Import Safety is a top FDA
    objective, and FDA has three priorities to achieve that objective: FDA
    Beyond Our Borders, building a modern IT infrastructure, and risk-based
    science.
        Beyond Our Borders is a core element of the Action Plan for Import
    Safety. Beyond Our Borders includes establishing offices in China,
    India, and other locations. The FDA Beyond Our Borders initiative also
    relies on greater collaboration with foreign regulators, the use of
    third parties to provide information about the compliance of regulated
    industry with FDA standards, and greater FDA direction to regulated
    industry to ensure that their global activities meet FDA standards.
        FDA foreign inspections and import exams are also an essential part
    of the Beyond Our Borders Initiative. In addition to providing greater
    deterrence, FDA will better target inspections to firms and products
    that pose the greatest risk to consumers.
        Consistent with recommendations in the Action Plan for Import
    Safety, FDA must modernize its IT systems. Improving FDA's IT will help
    the agency target inspections to foreign firms whose products pose the
    greatest risk. IT improvements will allow FDA to better predict the
    firms and products that pose the highest risk imports.
        Under the Action Plan for Import Safety, FDA must also strengthen
    its capacity to conduct the science that supports risk-based
    inspections. FDA risk-based science is essential to assure that imports
    are safe. and to assure that FDA scientists stay ahead of those who
    accidentally or intentionally defeat FDA oversight of imports. The
    Action Plan for Import Safety requires a strong FDA program of risk-
    based science and laboratory support so that FDA can ensure the safety
    of imports for patients and consumers.
        Question. Please provide a professional judgment budget, regardless
    of constraints faced by FDA due to DHHS or OMB, on additional funding
    needed by the Agency that could reasonably be expended, in fiscal year
    20009.
        Answer. The following document is an assessment of immediate
    resource needs based on a professional judgment analysis, without
    regard to the competing priorities that FDA, the President, and the
    President's advisors must consider as budget submissions to the
    Congress are developed. As the response indicates, the amounts
    identified are in addition to amounts appropriated to FDA in fiscal
    year 2008.
        [The information is attached.]

               FDA FISCAL YEAR 2009 PROFESSIONAL JUDGMENT ESTIMATE
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                Fiscal year
                                                   2009             FTE
    ------------------------------------------------------------------------
    Food Protection.........................            $125             259
    Safer Drugs, Devices, and Biologics.....             100             160
    Modernizing FDA Science and Workforce...              50              71
                                             -------------------------------
          Total.............................             275             490
    ------------------------------------------------------------------------

        The amounts identified in this document support three strategic
    investment areas--protecting our food supply, assuring safer drugs,
    devices, and biologics, and modernizing the essential infrastructure of
    FDA's science and workforce. The amounts are in addition to amounts
    appropriated to FDA in fiscal year 2008. Investing in these three
    strategic areas will permit FDA to rapidly achieve important public
    health goals that cut across strategic components of the Agency.
        This document responds to the request for the FDA's professional
    judgment concerning resource needs. The document and was developed
    without regard to the competing priorities that the President and his
    advisors must consider as budget submissions to the Congress are
    developed.

                       FDA FISCAL YEAR 2009 BUDGET AMENDMENT: FOOD PROTECTION PLAN (+$125 MILLION)
    ----------------------------------------------------------------------------------------------------------------
    Core Elements and Strategic Activities                FPP Output                     Amount             FTE
    ----------------------------------------------------------------------------------------------------------------
    Prevention:
        1.1 Promote Increased Corporate     Increase FDA presence beyond our             $16,000,000              24
         Responsibility to Prevent           borders, including increased
         Foodborne Illnesses: FDA will       training for food safety best
         ensure the safety of imports by     practices abroad. Offices in four
         increasing FDA's presence beyond    additional countries with 7/8 FDA             5,000,000               2
         our borders and building capacity   FTE and 4/5 foreign nationals per
         with foreign partners.              country/region. Yields FDA presence           5,000,000               3
                                             in five countries or regions of the
                                             world.
                                            Increase technical assistance on food
                                             standards in at least 3 of the
                                             countries accounting for the major
                                             share of imports.
                                            Develop systems and tools for an
                                             international information exchange
                                             database related to inspections and
                                             quality.
        1.2 Identify Food Vulnerabilities   Increase capacity to collect &                 5,000,000              10
         and Assess Risks: FDA will          interpret data for risk-based
         conduct risk-based prevention to    prevention for products of greatest           7,000,000              20
         better protect America's food       concern.
         supply. FDA will better            Research and develop risk-based
         understand food safety and food     prevention strategies based on
         defense risks and use this          scientific data and protocols.
         understanding to define the
         optimum preventive controls to
         establish.
        1.3 Expand Understanding and Use    Develop and validate rapid detection           5,000,000              10
         of Effective Mitigation Measures:   technologies and assays (see 2.3 for
         FDA will develop and validate       deploying technologies and assays);
         rapid detection tools to quickly    For high risk foods, commence work
         detect and mitigate a potential     to develop two new priority tools
         problem.                            and to validate two test methods for
                                             toxic chemicals or microbes
                                             developed by industry.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         43,000,000              69
                                                                                  ----------------------------------
    Intervention:
        2.1 Inspections and Sampling Based  20,000 more import food exams at the           6,000,000              36
         on Risk: FDA will apply risk        port of entry \1\ ($300 each).               13,500,000              50
         analysis to set priorities for     800 more foreign food production and/
         food inspections and                or processing facility inspections            6,500,000              33
         interventions.                      and support for foreign inspections
                                             \1\ (uc=$16.7K).
                                            800 more domestic food safety
                                             inspections \1\ (uc=$8k).
        2.2 Enhance Risk-Based              Integrate and assimilate risk-based           10,000,000              15
         Surveillance of Imported Foods at   information into data systems.
         the Border: FDA will design and
         build risk-based algorithms to
         conduct inspections and detect
         food risks. Understanding the
         risks defines the number and
         types of inspections and tests
         needed to ensure that preventive
         controls are working.
        2.3 Better Detect Food System       Improve signal detection of                    5,000,000               5
         Signals that Indicate               intentional and unintentional
         Contamination: FDA will deploy      chemical and microbial contamination.         5,000,000               5
         rapid detection technologies and   Deploy 1-2 rapid detection assays to
         assays and build laboratory         test high risk foods. Acquire
         infrastructure for faster           advanced technology and deploy such          11,000,000              10
         testing. FDA will deploy state-of-  equipment to FDA field and conduct
         the-art technology to improve the   technology transfer to industry.
         integration of incoming signals    Build high throughput rapid detection
         and achieve faster mitigation and   technology into laboratory
         response.                           infrastructure.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         57,000,000             154
                                                                                  ----------------------------------
    Response:
        3.1 Improve Immediate Answer. FDA   Develop and implement a system for            10,000,000              20
         will enable real-time               traceback from product consumption
         communication of lab results. FDA   back to the source of production
         will develop protocols to           using, for example, electronic               10,000,000               6
         facilitate tracebacks of            pedigrees and industry applied
         foodborne illnesses. FDA will       technologies of bar coding and radio
         rapidly detect and respond          frequency identification.
         foodborne outbreaks.               Enhance interoperable information
                                             technology networking system between
                                             FDA and Federal, State, and local
                                             testing labs.
        3.2 Improve Risk Communications to  Create a health hazards alert                  5,000,000              10
         the Public, Industry, and Other     communication system using multiple
         Stakeholders: FDA will enhance      media outlets to quickly inform a
         risk communication though           broad cross section of the public.
         aggressive, targeted food safety
         campaigns that disseminate clear
         and effective messages with
         regular updates through a variety
         of media to all target audiences.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         25,000,000              36
                                                                                  ----------------------------------
            GRAND TOTAL, Food Protection    .....................................        125,000,000             259
             Plan.
    ----------------------------------------------------------------------------------------------------------------
    \1\ FDA will hire and train additional field inspectors throughout fiscal year 2009. As a result, by fiscal year
      2010, the proposed investment will allow FDA to increase its inspection and surveillance capacity by the
      number of inspections identified in this FPP output

           FDA FISCAL YEAR 2009 BUDGET AMENDMENT: ENSURING SAFE AND EFFECTIVE MEDICAL PRODUCTS (+$100 MILLION)
    ----------------------------------------------------------------------------------------------------------------
              Strategic Activity                            Output                       Amount             FTE
    ----------------------------------------------------------------------------------------------------------------
    Safer Drugs, Devices, and Biologics:
        1.1 Science to Improve Medical      Establish a unique device                     $7,500,000              17
         Product Safety and Development:     identification system to track
         Use new science and analysis to     devices, facilitate recalls, and             14,000,000              10
         improve the safety of medical       support inventory management during
         products. In some cases, new        disasters and terrorism response.
         science creates opportunities to   Implement FDAAA safety requirements
         leverage advances from one          related to pediatric drugs and
         product area to promote safety in   devices, postmarket study
         a different area.                   commitments, clinical trials, active
                                             drug surveillance, labeling and safe
                                             use of drugs.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         21,500,000              27
                                                                                  ----------------------------------
        1.2 Data Analysis Tools to          Build Regulated Product Information           15,000,000  ..............
         Identify Safety Issues: Develop     Data Warehouse that will enable
         and implement quantitative          intelligence sharing with other              15,000,000               6
         decision-making tools to assess     regulatory agencies.
         the safety and effectiveness of    Data access and analysis for active
         drugs, biologics, and devices       safety surveillance with development
         throughout their lifecycle.         of scientific methods of data mining
                                             for signals of adverse events.
                                                                                  ----------------------------------
          Sub-Total.......................  .....................................         30,000,000               6
                                                                                  ----------------------------------
        1.3 Risk-Based Inspection and       250 more foreign medical product              11,200,000              50
         Compliance: Strengthen field        facility inspections \1\                     10,800,000              18
         operations to better protect        (uc=$45.000).
         public health. The sheer volume    Increase FDA's presence beyond our             4,400,000              14
         of products, manufacturing          borders to five countries or regions          7,500,000               5
         plants, distributors, and           of the world.
         importers demands a more robust    250 more domestic medical product              6,600,000              35
         inspection force with better        inspections (uc=17.7K).                       3,000,000  ..............
         capacity to reach the community    Improve lab infrastructure and tools           5,000,000               5
         that FDA regulates.                 for rapid analysis of product/
                                             ingredient content.
                                            Increase import exams (10,000) and
                                             sampling/laboratory analysis (300).
                                            IT systems to achieve an integrated
                                             inventory database.
                                            Improve risk communications to public
                                             and industry.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         48,500,000             127
                                                                                  ----------------------------------
            GRAND TOTAL, Medical Product    .....................................        100,000,000             160
             Safety and Effectiveness.
    ----------------------------------------------------------------------------------------------------------------
    \1\ FDA will hire and train additional field inspectors throughout fiscal year 2009. As a result, by fiscal year
      2010, the proposed investment will allow FDA to increase its inspection and surveillance capacity by the
      number of inspections identified in this output

               FDA FISCAL YEAR 2009 BUDGET AMENDMENT: MODERNIZING FDA SCIENCE AND WORKFORCE (+50 MILLION)
    ----------------------------------------------------------------------------------------------------------------
              Strategic Activity                            Output                       Amount             FTE
    ----------------------------------------------------------------------------------------------------------------
    Modernizing FDA Science and Workforce:
        1.1 Science Leadership and          Strengthen programs of emerging               $5,000,000              15
         Coordination: FDA will enhance      science in Centers and at the
         science programs across the         National Center for Toxicological            27,000,000              40
         agency, especially in emerging      Research and enhance integration.
         areas such as nanotechnology and   Strengthen capacity to support
         tissue engineering. FDA will        nanotechnology, cell and gene
         establish mechanisms to access      therapies, robotics, genomics and
         the best scientific knowledge and   proteomics, Critical Path
         expertise to modernize its          initiatives, and advanced
         regulatory science. FDA will        manufacturing technologies.
         strengthen its capacity to
         support emerging areas of science
         and manufacturing that are
         essential to regulating FDA
         products.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         32,000,000              55
                                                                                  ----------------------------------
        1.2 Investments to Support Science- Expand science training and                    4,000,000               8
         Based Regulation: FDA will          professional development for career           4,000,000               8
         upgrade its science capacity by     employees.                                   10,000,000  ..............
         providing more training and        Launch Science Fellows Program and
         professional development support    initiate recruitment of first 500
         for FDA science staff. FDA will     fellows.
         create an Agency-wide 2-year       Improve facilities outside of the
         Science Fellows Program intended    Washington region to support FDA's
         to include up to 2,000 trainees     mission and enable these facilities
         to develop a new cadre of           to accept new food and medical
         emerging leaders in regulatory      product technologies.
         science. FDA will upgrade
         facilities that do not adequately
         support FDA's current or future
         mission.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         18,000,000              16
                                                                                  ----------------------------------
            GRAND TOTAL, Modernizing FDA    .....................................         50,000,000              71
             Science and Workforce.
    ----------------------------------------------------------------------------------------------------------------

                                   pay costs
        Question. If you plan to ``absorb'' the pay costs that you haven't
    actually paid for in the budget, what will you cut to do it?
        Answer. The fiscal year 2009 President's Budget for FDA includes an
    increase of $25 million for the cost-of-living increase for FDA
    employees. The cost-of-living increase allows FDA to retain the
    professional workforce that performs FDA's public health mission. FDA
    will cover its fiscal year 2009 cost increases through a combination of
    strategies, reducing operating costs, and adjusting its hiring plan.
                               overseas staffing
        Question. I understand that FDA has also expressed interest in
    opening other overseas offices to deal with the large and continually
    growing number of imported products--including one in India. Again,
    however, I don't see this reflected in the budget. Is this something
    you are considering? If so, where, and what would the cost be?
        Answer. FDA has agreements in place and we are making final
    arrangements for offices in China. FDA is also planning to establish
    additional offices in India, and is exploring the possibility of
    opening offices in three additional regions. The President's fiscal
    year 2009 budget provides $3.1 million to establish the office in
    China. We have not developed specific estimates for additional offices
    by location because developing these estimates requires significant
    discussions with the host countries and the Department of State. The
    cost to establish additional foreign offices will depend on the office
    location, the activities that FDA staff will perform at the location,
    and the number of staff that FDA assigns to the location.
                              food protection plan
        Question. Last year, we provided you with a $56 million increase
    for food safety, and attached some very specific directives, including
    hiring additional inspectors, forming rapid response teams, and
    contracting with the National Academy of Sciences on a food safety
    study. You talked in your statement about what you have planned for
    2009--can you provide us with specifics on how the money we've already
    given you has been spent?
        Answer. With the funding provided in the January 1, 2008 increase,
    FDA has undertaken additional food safety activities. These funds were
    used to support planning and the initial stages of implementation of
    several Food Protection Plan initiatives. These initiatives include the
    FDA hiring surge, the Food Protection Plan, and the Import Safety
    Action Plan.
        FDA was granted direct hire authority in April 2008 and will hire
    161 new FTEs to work in food safety. The Office of Regulatory Affairs--
    ORA--completed a 3-year plan to increase State inspections and will
    hire an additional 77 new FTEs with the fiscal year 2008 appropriation
    and an additional 53 new FTE with the funds from the Consolidated
    Appropriations Act, 2008, which will be available on July 1, 2008 to
    conduct food field exams, inspections, and sample collections. These
    investigators will conduct critical activities such as import food
    field exams and assist senior investigators in performing high risk
    food inspections.
        The Center for Food Safety and Applied Nutrition, known as CFSAN,
    hired one new FTE with the fiscal year 2008 appropriation and will hire
    an additional 28 new FTEs with the funds from the Consolidated
    Appropriations Act, 2008, which will be available on July 1, 2008 to
    assist with food safety work aimed at developing guidance to minimize
    microbial food safety hazards, developing best practices for preventive
    controls that rapidly determine the source of food contamination,
    developing risk ranking models for imported and domestic foods,
    providing technical assistance to foreign countries on Good
    Agricultural Practices, and continuing research to improve
    surveillance, sampling and traceback activities and other tools to
    rapidly detect and minimize the public health impact of foodborne
    pathogens, toxins, and other contaminants that threatens the U.S. food
    supply.
        In addition, CFSAN is working with the Western Center for Food
    Safety at the University of California Davis to focus on the interface
    between food protection and the agricultural production of commodities.
    FDA has met with the National Academy of Sciences and discussed a
    statement of work for a comprehensive study of the gaps in public
    health protection provided by the United States' food safety system. In
    addition, FDA issued a Request for Applications for forming rapid
    response teams. Also, the Office of Crisis Management will hire two new
    FTEs with the fiscal year 2008 appropriation to assist FDA in quickly
    responding to food safety threats.
        Question. You said as part of your statement that during the past
    year that FDA has expanded its capacity to detect radiological
    contamination of food by 150 percent. We discussed at length last year
    the importance of being able to identify contaminants in the food
    supply as quickly as possible and provided money for those activities--
    can you further discuss your achievements in that regard?
        Answer. In fiscal year 2007, FDA, through the Food Emergency
    Response Network, also known as FERN, awarded cooperative agreement
    grants to three additional State FERN radiological laboratories. These
    three labs increased the number of FDA's FERN cooperative agreement
    radiological laboratories to five. This is the basis of the statistic
    that FDA expanded its capacity to detect radiological contamination of
    food by 150 percent.
        These five labs are geographically distributed and uniformly
    equipped with the latest detection equipment for responding to
    radiological contamination in foods. The cooperative agreements also
    provide funds to purchase reagents, supplies, and personnel. The model
    used for the development of these laboratories follows that of the FERN
    chemistry cooperative agreement labs. State FERN chemistry labs are
    fully equipped and trained to run FDA's FERN chemistry methods that are
    used to screen large numbers of samples. FDA used the FERN chemistry
    cooperative agreement labs very successfully to identify melamine
    contamination. FERN labs screened large numbers of plant protein
    samples in a short time frame.
        The radiological labs participate in Federal and State surveillance
    sampling programs to monitor the food supply, and are involved in
    developing and validating contamination detection methods. Using FERN
    rapid screening methods, the labs also serve to dramatically increase
    the surge capacity of the laboratory network to respond to terrorist
    attack or a national emergency involving the food supply. The increased
    capacity to rapidly test large numbers of samples of foods that may be
    radiologically contaminated allows FDA's FERN laboratories to respond
    quickly to food supply events to protect public health and mitigate
    disruption of the distribution of important foods.
                              field exams/samples
        Question. The budget States that FDA plans to perform additional
    20,000 import field exams for food this year, but at the same time, the
    percent of import lines physically examined is going to decrease from
    the 2007 level. I know the number of import lines is growing rapidly,
    but this is a perfect example of your budget not keeping up with your
    mission. What does a ``field exam'' actually entail, and why is the
    percentage of imports physically examined actually decreasing?
        Answer. As displayed in the fiscal year 2009 Congressional
    Justification (CJ), import physical exams are the total of import field
    exams and import laboratory sample analyses. A field exam is a visual
    examination of food to determine whether it complies with FDA
    requirements. The field exam involves actual physical examination of
    the food for admissibility factors such as storage or in transit
    damage, inadequate refrigeration, rodent or insect activity, lead in
    dinnerware, odor, and compliance with labeling requirement. A field
    exam cannot be used to test for microbiological or chemical
    contamination. As a result, FDA also conducts import sampling and
    analysis to test for such contamination.
        In fiscal year 2009, FDA plans to perform an additional 20,000
    import food field exams and an additional 75 food import lab sample
    analyses. In addition, FDA electronically screens all FDA-regulated
    products offered for import into the United States for a variety of
    risk factors. FDA electronically screens 100 percent of human food and
    animal feed prior notice submissions which are required for all food
    and feed imports.
        In fiscal year 2007, the percent of import lines examined was 1.28
    percent. For fiscal year 2008, FDA estimates that it will examine 1.13
    percent of import lines. For fiscal year 2009, the estimate rises to
    1.26 percent. Between fiscal year 2007 and fiscal year 2009, FDA is
    experiencing a decline in the percent of import lines physically
    examined at the same time that the number of import field exams is
    increasing due to the rapidly rising volume of food imports.
        FDA will continue to focus resources on products that pose the
    highest potential risks to the United States. The benefit of physical
    exams comes from the quality and targeting of review activities, not
    from the volume of imports analyzed. The quality of import screening is
    a better measure of FDA's import strategy than simply focusing on the
    number of items physically examined.
                           third party certifications
        Question. The Food Protection Plan mentions in several places FDA's
    interest in expanding third-party certifications for domestic and
    international inspections and examinations. How would these work, and
    why is it cheaper than having FDA employees actually do the work?
        Answer. The universe of domestic and foreign food establishments
    subject to FDA inspection is immense and is expected to see continued
    rapid growth. Third party certification programs, when correctly
    designed and implemented, allow FDA to accredit independent third
    parties, or to recognize entities that accredit third parties. FDA
    plans to use information gathered from third party inspections to
    evaluate compliance with FDA requirements and to allocate inspection
    resources more effectively. This would allow FDA to gather more
    information about manufacturers, especially foreign manufacturers, in a
    much more resource efficient way. Using third party certification
    programs allows FDA to leverage and benefit from the inspections
    conducted by others. FDA is working to develop standards that a
    certification organization must meet to receive FDA recognition.
                                 generic drugs
        Question. In your statement, you note that in fiscal year 2007,
    generic drug approvals or tentative approvals increased by 30 percent
    over the previous year, even though it's taking longer, on average, to
    approve a generic. If the generic drug user fees you propose in your
    budget are not adopted by the authorizing committee, how much of an
    increase in funding for generic drug approval do you think would be
    necessary to continue making gains?
        Answer. The increased resources recently provided by Congress have
    enabled FDA to hire more scientific review staff and achieve a 33
    percent increase in the number of approvals and tentative approvals--
    from a total of 510 in fiscal year 2006 to 682 in fiscal year 2007.
        In both fiscal year 2008 and fiscal year 2009, we hope to remain
    near the fiscal year 2007 performance level with a target of 700 ANDA
    approvals and tentative approvals, a slight increase over the 682
    approval actions in fiscal year 2007.
        A key performance measure of our generic application review process
    is the total number of ANDA actions, which include ``approvals,''
    ``tentative approvals,'' ``not approvables,'' and ``approvable''
    actions. Under the fiscal year 2009 President's budget, we expect to be
    able to increase the number of total ANDA actions to 1900, an increase
    of 7 percent over fiscal year 2008 and fiscal year 2007.
        We expect to be able to continue making performance gains in the
    generic drug review process with additional funding. Additional
    resources, like those envisioned under a user fee program, would give
    us additional staff enabling us to decrease ANDA action time, possibly
    resulting in more actions taken on ANDAs in a given year. Under such a
    program we would establish a new performance measurement structure
    around review performance targets, similar to the user fee program for
    new drug applications. We would also plan to use resources to increase
    our capacity to address other critical activities that are part of a
    complete generic drug review. This includes the scientific and legal
    components, and conduct of pre-approval inspections to ensure that
    manufacturing processes and facilities--often located in foreign
    countries--will deliver drug products that meet our quality standards.
    We recognize, however, that it would take a few years to ramp up such a
    program in order for us to see significant performance gains.
                             medical product safety
        Question. Could you update us on your progress in this area?
        Answer. FDA plans to use the funding increase for the Medical
    Product Safety and Development Initiative to support priority
    activities in the Biologics, Human Drugs, Device and Radiological
    Health, and Animal Drugs and Feed Programs.
        In the Biologics Program, the resources in this initiative will
    allow FDA to strengthen essential infrastructure, including laboratory
    capacity and review expertise to prevent, detect, and respond to
    emerging safety threats in blood and blood products.
        In the Biologics Program, the resources in this initiative will
    also allow FDA to strengthen medical and microbiologic review and
    acquire greater epidemiologic expertise to conduct adverse event
    analysis and safety investigations. FDA will also improve tissue safety
    by conducting workshops to educate industry about tissue processing and
    tissue safety technologies.
        In the Device and Radiological Health Program, FDA will strengthen
    import safety by improving the ability of the ORA field operations to
    work on import issues with Customs and Border Protection and other
    agencies. FDA will also leverage information from other sources to
    conduct stronger risk-based entry review of medical devices.
        In the Animal Drugs and Feed Program, the resources in this
    initiative will allow FDA to provide grants to stimulate development of
    new animal drugs under the Minor Use and Minor Species Animal Health
    Act of 2004.
                              drug safety--imports
        Question. In your statement, you note that the volume of drugs
    imported into the United States will likely increase by 12 percent
    during fiscal year 2009, but your budget for the Human Drugs Program--
    not including user fees--is only increasing by 1.3 percent. If you add
    in user fees, the increase is 8.5 percent. And this money is mostly for
    approving drugs, not monitoring them. How will you keep up?
        Answer. FDA will continue to apply a risk-based approach to
    identify drug production and distribution activities of greatest
    concern, and focus resources on those activities. In addition, FDA is
    working to design an integrated drug registration and listing system
    that provides comprehensive, accurate, and up-to-date information. This
    system must cover each entity that produces and distributes drugs, each
    drug product that these entities produce and distribute, and each
    participant in the product's chain of custody--from manufacturing,
    through shipping and importation, to final distribution. Every
    participant in the drug production and distribution system, including
    excipient and component suppliers, active pharmaceutical ingredient
    suppliers, and finished dosage manufacturers must be known to FDA and
    responsible for the supply chain that precedes them and the quality of
    their products.
                                mercury testing
        Question. Although FDA laboratory tests for element violations,
    including mercury, have declined by about 30 percent between 2003 and
    2006, and the number of positive tests has declined to zero in 2005 and
    2006, FDA issued a warning on eating fish, especially tuna fish,
    because of mercury contamination.
         Why did FDA alert consumers to mercury poisoning risks in fish and
    at the same time reduce the number of tests for mercury and other metal
    in imported fish?
        Answer. FDA's advisory to pregnant women, women who might become
    pregnant, nursing mothers, and young children is designed to ensure
    that fetuses and young children are not excessively exposed to
    methylmercury. According to the Centers for Disease Control and
    Prevention National Health and Nutrition Examination Survey, also known
    as NHANES, more than 95 percent of women of childbearing age are
    exposed to methylmercury below thresholds of safety designed to protect
    the fetus. Per NHANES, the remaining women still retain margins of
    safety. In effect, the advisory recommends that, as a matter of
    prudence, these remaining women increase their margins of safety. FDA
    is completing a risk assessment to better understand the risk to these
    individuals and to the population as a whole.
        Because NHANES data identify the extent to which Americans are
    exposed to methylmercury, FDA's sampling program is primarily designed
    to learn the range of methylmercury concentrations in commercial fish
    species, including the highest and lowest concentrations and the mean
    concentration. We can then compare new results against these known
    values. In recent years, all our samples have been within the known
    ranges.
        FDA uses sampling results to predict how exposures to methylmercury
    would be affected by changes in fish consumption. After the consumer
    advisory published in 2004, FDA increased its annual sampling levels to
    ensure the safety of fish consumption. After FDA completed this
    testing, and based on the results of this testing, FDA testing levels
    returned to levels that reflected the rate of sampling that FDA
    conducted prior to issuing the advisory.
                              food protection plan
        Question. On February 7, 2008, FSIS officials wrote to officials at
    FDA offering to free up FSIS inspection dollars to assist in the FDA
    Food Protection Plan. How did FDA respond to this letter?
        Answer. On February 7, 2008, FSIS officials wrote to officials at
    FDA and stated, ``FSIS personnel may be available to help provide
    coverage as an effective governmental presence in the riskiest FDA
    plants.'' In a February 21, 2008 letter, FSIS officials clarified,
    ``this statement was not meant to suggest the FSIS employees would
    definitely be available to do this work. In point of fact, we have no
    reason to believe at this time, that any of the initiatives that we are
    undertaking will result in employees being available to provide
    inspection at FDA plants.'' In light of the clarification that FSIS
    provided, FDA did not respond to the letter in writing. Instead, FDA is
    conducting regular monthly meetings with FSIS on how to best leverage
    resources and work cooperatively to ensure a safe food supply for all
    Americans.
                                    estriol
        Question. On January 9, 2008, FDA announced that it was banning the
    use of estriol in compounded estrogens prescribed for decades by
    doctors for the treatment of menopause symptoms in women. Please
    provide the committee with documentation of specific adverse events
    from the use of estriol during the past three decades, as well as
    details of specific scientific and medical research supporting the
    FDA's decision to ban estriol.
        Answer. FDA has not banned estriol. Our January 9, 2008 action was
    aimed at false and misleading claims of certain compounding pharmacies
    that offer estriol products without a valid investigational new drug
    application, also known as an IND. Except in rare instances,
    compounding pharmacies do not report adverse events to FDA. However,
    the absence of evidence of a risk does not demonstrate the absence of
    the risk. One of the reasons we are encouraging IND submissions for
    estriol products is so that we will receive any adverse event
    information for these products.
        Question. How many women are potentially affected by the FDA
    decision to ban estriol? What does the FDA estimate it will cost these
    women to return to their doctors and get a prescription for an
    alternative treatment?
        Answer. FDA does not know how many women are potentially affected
    by FDA's decision to require health care practitioners to obtain INDs
    for compound estriol products. This is due, in part, to the fact that
    FDA has imperfect information about both the number of compounding
    pharmacies and the scope of pharmacy compounding operations. In
    general, there is no requirement for pharmacies to register or list
    with FDA.
        We do not have information about the costs that women incur in
    connection with compounded or approved estrogen therapies. However,
    because healthcare providers can continue to treat patients under an
    FDA-sanctioned IND, FDA does not believe there is a need for women to
    return to their health care providers for alternative new prescriptions
    and treatments when they are receiving estrogen therapy under an FDA-
    sanctioned IND.
        Question. I understand that the FDA action on estriol will not
    restrict access to this medication as a doctor can continue to
    prescribe estriol if he or she files an investigational new drug
    application (IND). FDA has further indicated that it is developing a
    simplified or streamlined IND for doctors. Can you give the committee
    specific information on this issue, including detailed information on
    the proposed simplified process, including if the development of this
    simplified process would be subject to notice and comment rulemaking?
        Answer. Your understanding is correct. No drug containing estriol
    has been approved by FDA, and the safety and effectiveness of estriol
    is unknown. Therefore, physicians may not prescribe estriol, and
    pharmacies may not compound drugs under a physician's prescription that
    contain estriol, unless they have an FDA-sanctioned IND application.
        An IND is an application submitted by a physician who both
    initiates and conducts an investigation, and under whose immediate
    direction the investigational drug is administered or dispensed. A
    physician might submit an IND to propose studying an unapproved drug,
    or for an approved product to study use in a new indication or in a new
    patient population.
        Regulations describing the IND requirements can be found at 21 CFR
    312, and detailed instructions for IND applications can be found on the
    FDA website. FDA also provides pre-IND consultations and assistance in
    developing applications.
        An IND must generally contain information in three broad areas:
    Animal Pharmacology and Toxicology Studies, Manufacturing Information,
    and Clinical Protocol and Investigator information. In the clinical
    protocol section, the Investigator must also give a commitment to
    obtain informed consent from the research subjects, obtain review of
    the study by an institutional review board and agree to adhere to the
    IND regulations.
        We would like to clarify that there is no official streamlined or
    simplified IND process; however, we use our discretion in determining
    how much and what type of information is appropriate for an
    application. For example, in the case of estriol, preclinical animal
    toxicology and pharmacology data might not be necessary because the
    product has already been used in humans. INDs can cover research
    involving several patients, so that a physician need not submit
    separate INDs for individual patients. These types of decisions in
    evaluating IND applications would not be made through the rule-making
    process.
        Question. If the FDA's assertion is correct, and an IND process can
    be developed that is simple and that will not discourage physicians
    from writing prescriptions containing estriol, can you estimate how
    many doctors would submit the simplified IND? Since the FDA is required
    to review every application for an IND, can you also estimate the cost
    and time required for the FDA to review these submissions, and the
    effect this would have on the agency's ability to process other INDs?
        Answer. As FDA does not know how many women are potentially
    affected by FDA's decision, we cannot estimate how many doctors would
    submit an IND. Without knowing how many INDs the FDA will receive we
    cannot estimate the total cost and time required for the FDA to review
    these submissions, nor how it would affect FDA's ability to process
    other INDs.
        Question. INDs require well-controlled, randomized clinical studies
    including a placebo or control arm. Is the FDA suggesting that some
    women would receive a placebo without their knowledge?
        Answer. INDs do not require that well-controlled, randomized
    clinical studies be conducted. One of the objectives of the IND
    requirement is to help assure the safety and rights of subjects. There
    are various ways for conducting clinical trials, and not all methods
    require use of placebo controls. FDA is not suggesting that a woman
    would receive a placebo, and certainly not without informed consent
    which would inform her of that possibility.
                                    reports
        Question. Please provide monthly updates on the status of all
    outstanding reports requested as part of the report accompanying Public
    Law 110-161.
        Answer. I will be happy to provide a status report of all
    outstanding reports.
        [The information follows:]

    ------------------------------------------------------------------------
                      REPORT                               STATUS
    ------------------------------------------------------------------------
    BSE.......................................  Transmitted to Congress
                                                 5.20.08
    Diacetyl..................................  Transmitted to Congress
                                                 3.25.08
    Folic.....................................  Transmitted to Congress
                                                 5.20.08
    Food Safety Quarterly (1st Q).............  In Clearance Process
    Food Safety Quarterly (2nd Q).............  HHS Awaiting FDA Draft
    Foreign Drugs (Interim)...................  In Clearance Process
    Foreign Drugs (Final).....................  In Clearance Process
    Front Label Symbols.......................  In Clearance Process
    GAO Recommendations.......................  In Clearance Process
    Ketek.....................................  In Clearance Process
    Mammography IOM Recommendations...........  In Clearance Process
    Med Guide.................................  Not due until Dec 08
    Methamphetamine...........................  Transmitted to Congress
                                                 4.22.08
    Microbial Resistance......................  Transmitted to Congress
                                                 1.2.08
    National Research Initiative..............  In Clearance Process
    OIG Recommendations.......................  In Clearance Process
    Post Marketing Studies....................  In Clearance Process
    Removing Food Safety from GAO High Risk     In Clearance Process
     List.
    Women's Health (Quarter 1)................  Transmitted to Congress
                                                 4.14.08
    Women's Health (Quarter 2)................  HHS Awaiting FDA Draft
    ------------------------------------------------------------------------

              post-market surveillance of silicone breast implants
        Question. When the FDA approved the use of silicone breast implants
    in 2006, I understand that it included a requirement that all women who
    receive these implants must participate in a post-approval study to
    ensure that these implants were safe. However, I understand that
    participation in these studies is now discretionary. What is the status
    of the post-market safety studies of silicone breast implants, and what
    authority does FDA have to require that manufacturers conduct the
    studies?
        Answer. When the FDA approved the use of silicone breast implants
    in 2006, FDA required Mentor Corporation and Inamed Corporation, which
    is now named Allergan, to conduct post approval studies, also known as
    PAS, to answer particular questions. FDA allowed the companies the
    opportunity to develop different study designs and other protocol
    elements to meet this requirement. The goals were to design studies
    that would minimize bias in the study results and in which the subject
    enrollment goals could be achieved. The participation could be
    voluntary or mandatory. The companies proposed the specific study
    designs to answer those questions and submitted them for FDA approval.
    Allergan proposed, and FDA approved, a study with voluntary
    participation. Mentor originally proposed, and FDA approved, a study
    where participation was mandatory in order for women to obtain the
    Mentor product.
        In April 2007 FDA approved Mentor's request to amend the
    MemoryGelTM Large Post-Approval Study protocol to allow for
    voluntary instead of mandatory participation of study subjects to
    address concerns regarding enrollment.
        The status of Allergan's and Mentor's postmarket studies of
    silicone breast implants and conditions is summarized in a table that I
    would be happy to provide for the record.
        [The information follows:]

    STATUS OF ALLERGAN'S AND MENTOR CORPORATION'S SILICONE GEL-FILLED BREAST
                    IMPLANT POSTMARKET STUDIES AND CONDITIONS
    ------------------------------------------------------------------------
           Approval Condition              Allergan             Mentor
    ------------------------------------------------------------------------
    Core Post-Approval Study........  Reporting status:   Reporting status:
                                       On time \2\.        On time 2
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Large Post-Approval Study.......  Reporting status:   Reporting status:
                                       On time \1\.        On time \1\
                                      Study Status:       Study Status: On
                                       Overdue \3\ (12-    time \3\
                                       month patient
                                       enrollment target
                                       was not met).
    Device Failure Studies..........  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Focus Group Study...............  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Informed Decision Process.......  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Adjunct Study...................  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    ------------------------------------------------------------------------
    \1\ Reporting status for Larger Post-Approval Study is ``On time'' if 15-
      month report was received by the February 16, 2008 due date.
    \2\ Reporting status is ``on time'' if 12-month report for a post-
      approval study other than the Larger Post-Approval Study was received
      by November 17, 2007 due date.
    \3\ Study progress status for a post-approval study condition is ``On
      time'' if patient enrollment and follow-up targets have been met and
      ``Overdue'' if the interim enrollment target was not met.

        FDA may require that manufacturers conduct studies under 21 CFR
    section 814.82 or 21 CFR Part 822.
                                     mdufma
        Question. As you know, the President's budget calls for increased
    funding for the medical device user fee program, and the Congress has
    provided inflationary increases to fully fund the program in the past.
    How the agency is doing in regards to meeting the performance goals
    associated with the user fee program with the funding it has gotten to
    date?
        Answer. FDA continues to succeed in improving the process for the
    review of medical device applications and meeting the performance goals
    first established under the Medical Device User Fee and Modernization
    Act of 2002, known as MDUFMA. Title II of the Food and Drug
    Administration Amendments Act of 2007 continued MDUFMA performance
    goals.
        MDUFMA requires close collaboration with stakeholders and increased
    communication with applicants. FDA is working to clarify its regulatory
    requirements and make its decisions more transparent through new
    guidance, educational materials, and meetings. We continually seek to
    enhance the efficiency and flexibility of our review processes. These
    efforts help applicants improve the quality of their submissions, and
    help FDA provide timelier, better-focused reviews. Our ultimate
    objective is to make important new medical devices available to
    patients and healthcare providers earlier, while continuing to ensure
    the quality, safety, and effectiveness of those devices.
        I would be happy to provide for the record a table that summarizes
    FDA's performance on the goals established for the fiscal year 2003-
    fiscal year 2007 receipt cohorts, showing results achieved through
    March 31, 2008. The goals applicable to the fiscal year 2008 receipt
    cohort have been in place for only 6 months, so it is too early for
    statistical measures to provide useful insights into our progress
    towards achieving those goals. FDA has, however, taken action to ensure
    that we are well positioned to achieve the goals for fiscal year 2008-
    fiscal year 2012. FDA is developing and implementing a new interactive
    review process that will contribute to better communication with
    applicants and more rapid resolution of review questions.
        [The information follows:]

                                                     QUARTERLY REPORT ON PROGRESS TOWARDS ACHIEVING MEDICAL DEVICE PERFORMANCE GOALS SUMMARY TABLES
                                                                             [Actions through March 31, 2008--Data for FDA]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Performance Goals and Actual Performance to Date
                                                                                       -------------------------------------------------------------------------------------------------------------
                                                                                          Fiscal Year 2003      Fiscal Year 2004      Fiscal Year 2005      Fiscal Year 2006      Fiscal Year 2007
                        Activity                              Review Time Goal         -------------------------------------------------------------------------------------------------------------
                                                                                                     Actual                Actual      Goal      Actual      Goal      Actual      Goal      Actual
                                                                                           Goal     Percent      Goal     Percent    Percent    Percent    Percent    Percent    Percent    Percent
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    PMAs, Panel-Track Supplements, Premarket
     Reports:
        FDA decision (approval, approvable,          320 days.........................  .........       91.8  .........       91.7  .........       87.7         80       83.7         90        100
         approvable pending GMP inspection, not
         approvable.
        FDA decision--Percent within 180 days......  180 days.........................  .........       44.9  .........       37.5  .........       29.8  .........       36.7         50       41.2
    Expedited PMAs:
        FDA decision (approval, approvable,          300 days.........................  .........        100  .........       92.3         70       83.3         80        100         90  .........
         approvable pending GMP inspection not
         approvable.
    180-day PMA Supplements:
        FDA decision (approval, approvable,          180 days.........................  .........       94.1  .........       95.3         80       95.0         80       97.0         90       92.8
         approvable pending GMP inspection not
         approvable.
    510(k)s:
        FDA decision (SE/NSE)......................  90 days..........................  .........       76.1  .........       83.9         75       91.1         75       91.6         80       92.7
    Biologics Licensing Applications (BLAs):
        Review and act on standard original BLAs     10 months........................  .........  .........  .........        100  .........        100         75       97.7         90       97.7
         (issue ``complete action'' letter).
        Review and act on priority ordinal BLA       6 months.........................  .........  .........  .........  .........  .........  .........         75  .........         90  .........
         submissions (issue ``complete action''
         letter).
    BLA Supplements:
        Review and act on standard BLA efficacy      10 months........................  .........        100  .........  .........  .........  .........         75  .........         90  .........
         supplements (issue ``complete action''
         letter).
        Review and act on priority BLA efficacy      6 months.........................  .........  .........  .........  .........  .........  .........         75  .........         90  .........
         supplements (issue ``complete action''
         letter).
        Review and act on BLA manufacturing          4 months.........................  .........  .........  .........  .........  .........  .........         75  .........         90  .........
         supplements that require prior approval
         (issue ``complete action'' letter).
    BLA Resubmissions, BLA Supplement
     Resubmissions:
        Review and act on a Class I resubmission to  2 months.........................  .........  .........  .........  .........         75        100         80  .........         90        100
         an original BLA or BLA efficacy supplement
         (issue ``complete action'' letter).
        Review and act on a Class 2 resubmission to  6 months.........................  .........        100  .........         80         75        100         80        100         90        100
         an original BLA or BLA efficacy supplement
         (issue ``complete action'' letter).
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. What criteria does the agency use to determine the
    allocation and priority for the distribution of any increase in staff
    across FDA components, including offices, divisions, or branches
    resulting from the medical device user fees and related Congressional
    appropriations?
        Answer. The Food and Drug Administration Amendments Act of 2007,
    known as FDAAA, was signed into law on September 27, 2007. FDAAA
    reauthorized FDA's authority to collect fees from the medical device
    industry under the Medical Device User Fee and Modernization Act, also
    known as MDUFMA. The activities that comprise the medical device review
    process are defined in MDUFMA. Medical device review components within
    FDA receive increased allocations from device user fee collections, as
    defined by MDUFMA.
        FDA allocates medical device user fees and other medical device
    appropriations to best achieve FDA's public health objectives, device
    performance goals, and other expectations established under MDUFMA, as
    amended. The allocation between the Center for Devices and Radiological
    Health (CDRH) and the Center for Biologics Evaluation and Research
    (CBER) is based on the workload balance between the two centers. FDA
    estimates the percent of the device review workload performed by CDRH
    and CBER, and allocates MDUFMA resources accordingly. Field resources
    are allocated among FDA district offices by the Office of Regulatory
    Affairs according to each district's projected workload. The Centers
    and ORA apportion their individual resource allocations to their
    offices, divisions, and branches.
                                additional tools
        Question. Despite the increased funding the FDA has received over
    the last 5 years in appropriations and user fees to hire more FTEs, we
    know the demands on staff remain very high. I am aware that there are
    additional tools, such as third party reviews, third party inspections,
    and the CDRH fellowship program to augment the work of the Agency. Can
    you discuss benefits and/or shortfalls of these programs?
        Answer. These three programs--third-party review of 510(k)
    premarket notifications, third-party establishment inspections, and the
    Medical Device Fellowship Program--provide FDA with important tools
    that can help us better achieve our public health objectives.
        The purpose of the program permitting third-party review of certain
    510(k) premarket notifications is to improve the efficiency and
    timeliness of FDA's 510(k) process. This is the process by which most
    medical devices receive marketing clearance in the United States. Under
    the program, FDA has accredited third-parties that are authorized to
    conduct the primary review of 510(k)s for eligible devices. Persons who
    are required to submit 510(k)s for these devices may elect to contract
    with an Accredited Person and submit a 510(k) directly to the
    Accredited Person. The Accredited Person conducts the primary review of
    the 510(k), then forwards its review, recommendation, and the 510(k) to
    FDA. By law, FDA must issue a final determination within 30 days after
    receiving the recommendation of an Accredited Person. 510(k) submitters
    who do not wish to use an Accredited Person may submit their 510(k)s
    directly to FDA. FDA data shows that third-party reviews are somewhat
    more rapid than an FDA review in some instances. Third-party 510(k)s
    submitted to FDA are also exempt from any medical device user fee that
    would otherwise apply.
        As of April 15, 2008, FDA has accredited 16 third-party
    organizations to conduct quality systems inspections of certain medical
    device establishments. Individuals from eight of these organizations
    have completed FDA's training requirements and FDA has cleared these
    individuals to conduct independent inspections. Through April 15, 2008,
    accredited organizations have conducted six inspections. Although few
    inspections have been conducted to date, changes specified by the Food
    and Drug Administration Amendments Act of 2007, also known as FDAAA,
    have the potential to eliminate certain obstacles to manufacturers'
    participation in FDA's programs for inspections by accredited third
    parties.
        CDRH established the Medical Device Fellowship Program, also known
    as MDFP, to increase the range and depth of collaborations between CDRH
    and the outside scientific community. The MDFP offers short and long-
    term fellowship opportunities for individuals interested in learning
    about the regulatory process and sharing their knowledge and experience
    in the many specialized fields that concern medical devices. Physicians
    with clinical or surgical expertise, engineers in biomedical,
    mechanical, electrical and software areas, and individuals from many
    other scientific disciplines have participated in the fellowship
    program. Opportunities are available for students in many other areas
    as well. This collaboration improves FDA's review processes, postmarket
    surveillance, and science base, all of which contribute to efforts to
    ensure patients and health care professionals have timely and continued
    access to safe and effective medical devices.
                              guidance development
        Question. The rules and processes for FDA regulatory decision-
    making are necessarily complex. Since it is not possible for FDA and
    Congress to anticipate every situation in statute and regulation, the
    issuance of guidance documents by FDA is essential to helping industry
    keep abreast of current agency thinking. Given that lack of adequate
    guidance often results in the need for meetings with submitters, extra
    rounds of submissions, and other inefficiencies, do you believe that
    putting up-front resources into guidance development will reap
    efficiency and provide industry with broad access to FDA thinking on a
    timely and meaningful basis?
        Answer. The agency makes extensive use of guidances to the extent
    possible. FDA's Good Guidance Practices have been in effect for more
    than 7 years. Under Good Guidance Practices, FDA centers made available
    draft and final guidance documents, for comment and use, covering a
    broad spectrum of topics. These guidances include technical guidances
    that may recommend the best means for producing clinical trial data.
    FDA guidances also include non-technical guidances, called Level 1
    guidances that provide more complex scientific information or provide
    initial interpretations of statutory and regulatory requirements.
    During 2007, we published 95 Federal Register Notices alerting the
    public to the availability of draft and final guidances. While the
    recommendations in the guidances are not legally binding, these
    recommendations do provide the agency's current thinking on an issue to
    industry and the public. FDA believes that the guidances that we issue
    are very useful and that resources that FDA devotes to developing
    guidances are a worthwhile investment.
                                     ______

                Questions Submitted by Senator Dianne Feinstein

                                food safety gaps
        Question. As you are well aware, gaps in our food safety system
    have been exposed and people have become sick and worse have died from
    contaminated products like spinach and peanut butter. Yet, the Food and
    Drug Administration has only asked for a slight increase in funding for
    fiscal year 2009. With the increase in food imports, and the changing
    structure of our food supply system in the United States, I am
    concerned that the Food and Drug Administration (FDA) is neither
    prepared nor taking steps to adapt to the changes to be effective in
    protecting our food supply.
        Dr. von Eschenbach, can you tell me how many inspectors are
    currently employed at the Food and Drug Administration? What percentage
    is that of the total FDA workforce?
        Answer. In fiscal year 2008, the Office of Regulatory Affairs, also
    known as ORA, currently estimates that it will have 1,218
    investigators. Investigators represent approximately 12 percent of the
    total 9,975 FTE FDA workforce in fiscal year 2008.
        In fiscal year 2009, ORA currently estimates that it will have
    1,300 investigators. Investigators represent approximately 12 percent
    of the total 10,501 FTE FDA workforce in fiscal year 2009. It should be
    noted that the ORA hiring initiative is on-going in fiscal year 2008
    and that ORA is still developing hiring plans based on the fiscal year
    2009 requested increase. As a result, these figures are estimates and
    may change as hiring is completed.
        Question. Can you tell me how many inspectors currently employed at
    the Food and Drug Administration are dedicated solely to food
    inspection?
        Answer. In fiscal year 2008, ORA estimates 587 investigators will
    perform work in the Foods Program. Many field investigators are cross-
    trained and may perform work in multiple programs as work priorities
    change or emergencies arise. For fiscal year 2009, ORA currently
    estimates that approximately 650 investigators will perform work in the
    Foods program. It should be noted that the ORA hiring initiative is on-
    going in fiscal year 2008 and that ORA is still developing hiring plans
    based on the fiscal year 2009 requested increase. Consequently, these
    figures are estimates and may change as hiring is completed. Additional
    field staff in the foods program will support the fiscal year 2009
    performance increases of 20,000 additional import food field exams and
    50 additional foreign food inspections.
        Question. Where are the FDA inspectors located? Please be specific.
        Answer. ORA field staff are dispersed throughout the United States.
    More than 85 percent of ORA's staff works in five Regional Offices, 20
    District Offices, 13 Laboratories, and 168 Resident Posts and Border
    Stations. As a separate entity within ORA, Office of Criminal
    Investigations personnel are located throughout the field organization
    in 30 Field Offices, Resident Offices, and Domiciles, which are located
    throughout the U.S. FDA maintains offices and staff in Washington,
    D.C., the U.S. Virgin Islands, Puerto Rico, and in all States except
    Wyoming.
        I would be happy to provide a table that highlights this
    information. The information provided in the following table
    specifically provides ORA's geographic distribution of facilities which
    includes the locations of FDA investigators nationwide.
        [The information is attached.]

                                          GEOGRAPHIC DISTRIBUTION OF FACILITIES
    ----------------------------------------------------------------------------------------------------------------
            Building Name           Center              City                   State          OP DIV Subdivision
    ----------------------------------------------------------------------------------------------------------------
    Resident Post--Mobile, AL....  ORA....  2100--MOBILE................  1--AL.........  SOUTHEAST (ATLANTA)
    Resident Post--Montgomery, AL  ORA....  2130--MONTGOMERY............  1--AL.........  SOUTHEAST (ATLANTA)
    Resident Post--Birmingham, AL  ORA....  350--BIRMINGHAM.............  1--AL.........  SOUTHEAST (ATLANTA)
    Resident Post--Anchorage, AK.  ORA....  130--ANCHORAGE..............  2--AK.........  PACIFIC (OAKLAND)
    Border Station--Nogales, AZ..  ORA....  330--NOGALES................  4--AZ.........  SOUTHWEST (DALLAS)
    Border Station--Nogales, AZ..  ORA....  330--NOGALES................  4--AZ.........  SOUTHWEST (DALLAS)
    Border Station--San Luis, AZ.  ORA....  417--SAN LUIS...............  4--AZ.........  SOUTHWEST (DALLAS)
    Border Station--San Luis, AZ.  ORA....  417--SAN LUIS...............  4--AZ.........  SOUTHWEST (DALLAS)
    Resident Post--Phoenix, AZ...  ORA....  490--TEMPE..................  4--AZ.........  SOUTHWEST (DALLAS)
    Resident Post--Tucson, AZ....  ORA....  530--TUCSON.................  4--AZ.........  SOUTHWEST (DALLAS)
    Resident Post--Little Rock,    ORA....  2320--LITTLE ROCK...........  5--AR.........  SOUTHWEST (DALLAS)
     AR.
    District Office W/Lab--San     ORA....  10--ALAMEDA.................  6--CA.........  PACIFIC (OAKLAND)
     Francisco.
    Border Station--Calexico, CA.  ORA....  520--CALEXICO...............  6--CA.........  PACIFIC (OAKLAND)
    Border Station--Calexico, CA.  ORA....  520--CALEXICO...............  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--Fresno, CA....  ORA....  1370--FRESNO................  6--CA.........  PACIFIC (OAKLAND)
    Irvine Regional Laboratory--   ORA....  1713--IRVINE................  6--CA.........  PACIFIC (OAKLAND)
     Security Gate House.
    Resident Post--San Pedro, CA.  ORA....  1970--LONG BEACH/San Pedro..  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--Canoga Park,    ORA....  1970--CANOGA PARK...........  6--CA.........  PACIFIC (OAKLAND)
     CA.
    Resident Post--Nisco Pacific   ORA....  810--COMPTON................  6--CA.........  PACIFIC (OAKLAND)
     Warehouse--Compton, CA.
    Resident Post--LAX (El         ORA....  1980--LOS ANGELES...........  6--CA.........  PACIFIC (OAKLAND)
     Segundo).
    Regional Field Office--        ORA....  2480--OAKLAND...............  6--CA.........  PACIFIC (OAKLAND)
     Pacific--Oakland.
    Resident Post--Ontario, CA...  ORA....  2550--ONTARIO...............  6--CA.........  PACIFIC (OAKLAND)
    Border Station--Otay Mesa, CA  ORA....  2610--OTAY..................  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--Sacramento, CA  ORA....  3150--SACRAMENTO............  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--Otay Mesa, CA.  ORA....  3260--SAN DIEGO.............  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--San Diego, CA.  ORA....  3260--SAN DIEGO.............  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--San Jose, CA..  ORA....  3340--SAN JOSE..............  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--San Francisco   ORA....  3730--SAN FRANCISCO.........  6--CA.........  PACIFIC (OAKLAND)
     Airport, CA.
    Resident Post--Stockton, CA..  ORA....  3770--STOCKTON..............  6--CA.........  PACIFIC (OAKLAND)
    Border Station--Tecate, CA...  ORA....  3835--TECATE................  6--CA.........  PACIFIC (OAKLAND)
    Resident Post--Carson, CA....  ORA....  602--CARSON.................  6--CA.........  PACIFIC (OAKLAND)
    District Office W/Lab--Denver  ORA....  600--DENVER.................  8--CO.........  SOUTHWEST (DALLAS)
    Resident Post--Bridgeport, CT  ORA....  80--BRIDGEPORT..............  9--CT.........  NORTHEAST (NEW YORK)
    Resident Post--Hartford, CT..  ORA....  280--HARTFORD...............  9--CT.........  NORTHEAST (NEW YORK)
    Resident Post--Wilmington, DE  ORA....  490--WILMINGTON.............  10--DE........  CENTRAL (PHILADELPHIA)
    Resident Post--Boca Raton, FL  ORA....  290--BOCA RATON.............  12--FL........  SOUTHEAST (ATLANTA)
    Resident Post--Fort Myers, FL  ORA....  1070--FORT MYERS............  12--FL........  SOUTHEAST (ATLANTA)
    Resident Post--Jacksonville,   ORA....  1510--JACKSONVILLE..........  12--FL........  SOUTHEAST (ATLANTA)
     FL.
    District Office--Florida.....  ORA....  1895--MAITLAND..............  12--FL........  SOUTHEAST (ATLANTA)
    Resident Post--Miami, FL--     ORA....  2010--MIAMI.................  12--FL........  SOUTHEAST (ATLANTA)
     Import.
    Resident Post--Miami, FL--     ORA....  2010--MIAMI.................  12--FL........  SOUTHEAST (ATLANTA)
     Domestic.
    Resident Post--Tallahassee,    ORA....  2940--TALLAHASSEE...........  12--FL........  SOUTHEAST (ATLANTA)
     FL.
    Resident Post--Tampa, FL.....  ORA....  2950--TAMPA.................  12--FL........  SOUTHEAST (ATLANTA)
    District/Region--Atlanta.....  ORA....  280--ATLANTA................  13--GA........  SOUTHEAST (ATLANTA)
    Resident Post--Savannah, Ga..  ORA....  4910--SAVANNAH..............  13--GA........  SOUTHEAST (ATLANTA)
    Resident Post--Tifton, GA....  ORA....  5490--TIFTON................  13--GA........  SOUTHEAST (ATLANTA)
    Resident Post--Honolulu, HI..  ORA....  2400--HONOLULU..............  15--HI........  PACIFIC (OAKLAND)
    Resident Post--Boise, ID.....  ORA....  160--BOISE..................  16--ID........  PACIFIC (OAKLAND)
    Border Station- Eastport, ID.  ORA....  445--EASTPORT...............  16--ID........  PACIFIC (OAKLAND)
    Resident Post--Bensenville,    ORA....  740--BENSENVILLE............  17--IL........  CENTRAL (CHICAGO)
     IL.
    District Office--Chicago.....  ORA....  1670--CHICAGO...............  17--IL........  CENTRAL (CHICAGO)
    Regional Field Office--        ORA....  1670--CHICAGO...............  17--IL........  CENTRAL (CHICAGO)
     Central--Chicago.
    Resident Post--Gurnee, IL....  ORA....  3670--GURNEE................  17--IL........  CENTRAL (CHICAGO)
    Resident Post--Hinsdale, IL..  ORA....  3980--HINSDALE..............  17--IL........  CENTRAL (CHICAGO)
    Resident Post--Mount Vernon,   ORA....  5900--MT VERNON.............  17--IL........  CENTRAL (CHICAGO)
     IL.
    Resident Post--Peroia, IL....  ORA....  6850--PEORIA................  17--IL........  CENTRAL (CHICAGO)
    Resident Post--Springfield,    ORA....  8220--SPRINGFIELD...........  17--IL........  CENTRAL (CHICAGO)
     IL.
    Resident Post--Evansville, IN  ORA....  1480--EVANSVILLE............  18--IN........  CENTRAL (CHICAGO)
    Resident Post--Indianapolis,   ORA....  2210--INDIANAPOLIS..........  18--IN........  CENTRAL (CHICAGO)
     IN.
    Resident Post--South Bend, IN  ORA....  4580--SOUTH BEND............  18--IN........  CENTRAL (CHICAGO)
    Resident Post--Davenport, IA.  ORA....  2080--DAVENPORT.............  19--IA........  SOUTHWEST (DALLAS)
    Resident Post--Des Moines, IA  ORA....  2260--DES MOINES............  19--IA........  SOUTHWEST (DALLAS)
    Resident Post--Sioux City, IA  ORA....  7850--SIOUX CITY............  19--IA........  SOUTHWEST (DALLAS)
    District Office--Kansas City.  ORA....  3080--LENEXA................  20--KS........  SOUTHWEST (DALLAS)
    Resident Post--Wichita, KS...  ORA....  5880--WICHITA...............  20--KS........  SOUTHWEST (DALLAS)
    Resident Post--Louisville, KY  ORA....  2090--LOUISVILLE............  21--KY........  CENTRAL (PHILADELPHIA)
    Resident Post--Baton Rouge,    ORA....  150--BATON ROUGE............  22--LA........  SOUTHEAST (ATLANTA)
     LA.
    Resident Post--Lafayette, LA.  ORA....  1230--LAFAYETTE.............  22--LA........  SOUTHEAST (ATLANTA)
    Mandeville Square Shopping     ORA....  1400--MANDEVILLE............  22--LA........  SOUTHEAST (ATLANTA)
     Center.
    Metairie Center..............  ORA....  1545--METAIRIE..............  22--LA........  SOUTHEAST (ATLANTA)
    Resident Post--Shreveport, LA  ORA....  2130--SHREVEPORT............  22--LA........  SOUTHEAST (ATLANTA)
    Resident Post--Augusta, Me...  ORA....  160--AUGUSTA................  23--ME........  NORTHEAST (NEW YORK)
    Border Station--Calais, ME...  ORA....  1250--CALAIS................  23--ME........  NORTHEAST (NEW YORK)
    Border Station--Houlton, ME..  ORA....  3750--HOULTON...............  23--ME........  NORTHEAST (NEW YORK)
    Border Station--Houlton, ME..  ORA....  3750--HOULTON...............  23--ME........  NORTHEAST (NEW YORK)
    District Office--Baltimore...  ORA....  50--BALTIMORE...............  24--MD........  CENTRAL (PHILADELPHIA)
    Resident Post--Dundalk, MD--   ORA....  50--BALTIMORE...............  24--MD........  CENTRAL (PHILADELPHIA)
     Import.
    District Office--New England.  ORA....  1275--STONEHAM..............  25--MA........  NORTHEAST (NEW YORK)
    Resident Post--Worchester, MA  ORA....  1520--WORCESTER.............  25--MA........  NORTHEAST (NEW YORK)
    Resident Post--Boston, MA....  ORA....  120--BOSTON.................  25--MA........  NORTHEAST (NEW YORK)
    Detroit District Office--      ORA....  1260--DETROIT...............  26--MI........  CENTRAL (CHICAGO)
     Office.
    Border Station--Detroit, MI..  ORA....  1260--DETROIT...............  26--MI........  CENTRAL (CHICAGO)
    Resident Post--Grand Rapids,   ORA....  2010--GRAND RAPIDS..........  26--MI........  CENTRAL (CHICAGO)
     MI.
    Resident Post--Kalamazoo, MI.  ORA....  2520--KALAMAZOO.............  26--MI........  CENTRAL (CHICAGO)
    Border Station--Bluewater      ORA....  4060--PORT HURON............  26--MI........  CENTRAL (CHICAGO)
     Bridge, MI.
    Border Station--Sault Ste      ORA....  4480--SAULT STE MARIE.......  26--MI........  CENTRAL (CHICAGO)
     Marie, MI.
    Resident Post--International   ORA....  3480--INTERNATIONAL FALLS...  27--MN........  CENTRAL (CHICAGO)
     Falls, MN.
    District Office--Minneapolis.  ORA....  4760--MINNEAPOLIS...........  27--MN........  CENTRAL (CHICAGO)
    Resident Post--Jackson, MS...  ORA....  1220--JACKSON...............  28--MS........  SOUTHEAST (ATLANTA)
    Resident Post--St Louis, MO..  ORA....  7080--ST LOUIS..............  29--MO........  SOUTHWEST (DALLAS)
    Resident Post--Springfield,    ORA....  7460--SPRINGFIELD...........  29--MO........  SOUTHWEST (DALLAS)
     MO.
    Resident Post--Helena MT.....  ORA....  590--HELENA.................  30--MT........  PACIFIC (OAKLAND)
    Border Station--Sweetgrass,    ORA....  1125--SWEETGRASS............  30--MT........  PACIFIC (OAKLAND)
     MT.
    Resident Post--Omaha, NE.....  ORA....  3620--OMAHA.................  31--NE........  SOUTHWEST (DALLAS)
    Resident Post--Las Vegas, NV.  ORA....  120--LAS VEGAS..............  32--NV........  PACIFIC (OAKLAND)
    Resident Post--Reno, NV......  ORA....  170--RENO...................  32--NV........  PACIFIC (OAKLAND)
    Resident Post--Concord, NH...  ORA....  70--CONCORD.................  33--NH........  NORTHEAST (NEW YORK)
    Resident Post--Elizabeth, NJ.  ORA....  860--ELIZABETH..............  34--NJ........  CENTRAL (PHILADELPHIA)
    Resident Post--North           ORA....  2140--NORTH BRUNSWICK.......  34--NJ........  CENTRAL (PHILADELPHIA)
     Brunswick, NJ.
    District Office--New Jersey..  ORA....  2498--PARSIPPANY............  34--NJ........  CENTRAL (PHILADELPHIA)
    Resident Post--Voorhees, NJ..  ORA....  3465--VOORHEES..............  34--NJ........  CENTRAL (PHILADELPHIA)
    Resident Post--Albuerque, NM.  ORA....  30--ALBUQUERQUE.............  35--NM........  SOUTHWEST (DALLAS)
    Border Station--Columbus, NM.  ORA....  200--COLUMBUS...............  35--NM........  SOUTHWEST (DALLAS)
    Border Station--Santa Teresa,  ORA....  735--SANTA TERESA...........  35--NM........  SOUTHWEST (DALLAS)
     NM.
    Resident Post--Albany, NY....  ORA....  50--ALBANY..................  36--NY........  NORTHEAST (NEW YORK)
    Border Station--Alexandria     ORA....  90--ALEXANDRIA BAY..........  36--NY........  NORTHEAST (NEW YORK)
     Bay, NY.
    Resident Post--Binghamton, NY  ORA....  540--BINGHAMTON.............  36--NY........  NORTHEAST (NEW YORK)
    Import Office--Buffalo, NY...  ORA....  750--BUFFALO................  36--NY........  NORTHEAST (NEW YORK)
    Resident Post--Long Island,    ORA....  1050--CENTRAL ISLIP.........  36--NY........  NORTHEAST (NEW YORK)
     NY.
    Border Station--Champlain, NY  ORA....  1080--CHAMPLAIN.............  36--NY........  NORTHEAST (NEW YORK)
    Resident Post--New Windsor,    ORA....  4130--NEW WINDSOR...........  36--NY........  NORTHEAST (NEW YORK)
     NY.
    District/Region/Regional Lab-- ORA....  4170--JAMAICA...............  36--NY........  NORTHEAST (NEW YORK)
     New York.
    Border Station--Ogdensburg,    ORA....  4420--OGDENSBURG............  36--NY........  NORTHEAST (NEW YORK)
     NY.
    Resident Post--Rochester, NY.  ORA....  5230--ROCHESTER.............  36--NY........  NORTHEAST (NEW YORK)
    Border Station--Massena, NY..  ORA....  5275--ROOSEVELTOWN..........  36--NY........  NORTHEAST (NEW YORK)
    Resident Post--Syracuse, NY..  ORA....  6010--SYRACUSE..............  36--NY........  NORTHEAST (NEW YORK)
    Resident Post--White Plains,   ORA....  6670--WHITE PLAINS..........  36--NY........  NORTHEAST (NEW YORK)
     NY.
    Border Station--Peace Bridge.  ORA....  750--BUFFALO................  36--NY........  NORTHEAST (NEW YORK)
    Border Station--Lewiston       ORA....  3220--LEWISTON..............  36--NY........  NORTHEAST (NEW YORK)
     Bridge.
    Resident Post--Arden, NC.....  ORA....  131--ARDEN..................  37--NC........  SOUTHEAST (ATLANTA)
    Resident Post--Charlotte, NC.  ORA....  870--CHARLOTTE..............  37--NC........  SOUTHEAST (ATLANTA)
    Resident Post--Greensboro, NC  ORA....  1940--GREENSBORO............  37--NC........  SOUTHEAST (ATLANTA)
    Resident Post--Greenville, NC  ORA....  1950--GREENVILLE............  37--NC........  SOUTHEAST (ATLANTA)
    Resident Post--Raleigh, NC...  ORA....  3750--RALEIGH...............  37--NC........  SOUTHEAST (ATLANTA)
    Resident Post--Wilmington, NC  ORA....  5060--WILMINGTON............  37--NC........  SOUTHEAST (ATLANTA)
    Resident Post--Fargo, ND.....  ORA....  1020--FARGO.................  38--ND........  CENTRAL (CHICAGO)
    Border Station--Pembina, ND..  ORA....  2500--PEMBINA...............  38--ND........  CENTRAL (CHICAGO)
    Resident Post--Brunswick, OH.  ORA....  1085--BRUNSWICK.............  39--OH........  CENTRAL (PHILADELPHIA)
    District Office/Forensic       ORA....  1610--CINCINNATI............  39--OH........  CENTRAL (PHILADELPHIA)
     Chemistry--Cincinnati.
    Resident Post--Columbus, OH..  ORA....  1800--COLUMBUS..............  39--OH........  CENTRAL (PHILADELPHIA)
    Resident Post--Toledo, OH....  ORA....  8120--TOLEDO................  39--OH........  CENTRAL (PHILADELPHIA)
    Resident Post--Oklahoma City,  ORA....  3550--OKLAHOMA CITY.........  40--OK........  SOUTHWEST (DALLAS)
     OK.
    Resident Post--Tulsa, OK.....  ORA....  4780--TULSA.................  40--OK........  SOUTHWEST (DALLAS)
    Resident Post--Beaverton, OR.  ORA....  180--BEAVERTON..............  41--OR........  PACIFIC (OAKLAND)
    Resident Post--Portland        ORA....  1650--PORTLAND..............  41--OR........  PACIFIC (OAKLAND)
     Airport, OR.
    Resident Post--Harrisburg, PA  ORA....  3500--HARRISBURG............  42--PA........  CENTRAL (PHILADELPHIA)
    District Office/Region W/Lab-- ORA....  6540--PHILADELPHIA..........  42--PA........  CENTRAL (PHILADELPHIA)
     Philadelphia.
    Resident Post--Pittsburgh, PA  ORA....  6600--PITTSBURGH............  42--PA........  CENTRAL (PHILADELPHIA)
    Resident Post--Scranton, PA..  ORA....  7460--SCRANTON..............  42--PA........  CENTRAL (PHILADELPHIA)
    Resident Post--Providence, RI  ORA....  57--EAST PROVIDENCE.........  44--RI........  NORTHEAST (NEW YORK)
    Resident Post--Charleston, SC  ORA....  410--CHARLESTON.............  45--SC........  SOUTHEAST (ATLANTA)
    Resident Post--Columbia, SC..  ORA....  520--COLUMBIA...............  45--SC........  SOUTHEAST (ATLANTA)
    Resident Post--Greenville, SC  ORA....  1040--GREENVILLE............  45--SC........  SOUTHEAST (ATLANTA)
    Resident Post--Sioux Falls,    ORA....  2450--SIOUX FALLS...........  46--SD........  CENTRAL (CHICAGO)
     SD.
    Resident Post--Chattanooga,    ORA....  400--CHATTANOOGA............  47--TN........  SOUTHEAST (ATLANTA)
     TN.
    Resident Post--Knoxville, TN.  ORA....  1300--KNOXVILLE.............  47--TN........  SOUTHEAST (ATLANTA)
    Resident Post--Memphis, TN...  ORA....  1620--MEMPHIS...............  47--TN........  SOUTHEAST (ATLANTA)
    District Office--Nashville...  ORA....  1760--NASHVILLE.............  47--TN........  SOUTHEAST (ATLANTA)
    Resident Post--Memphis, TN...  ORA....  1620--MEMPHIS...............  47--TN........  SOUTHEAST (ATLANTA)
    Resident Post--Austin, TX....  ORA....  330--AUSTIN.................  48--TX........  SOUTHWEST (DALLAS)
    Border Station--Brownsville,   ORA....  940--BROWNSVILLE............  48--TX........  SOUTHWEST (DALLAS)
     TX.
    Border Station--Los Tomates/   ORA....  940--BROWNSVILLE............  48--TX........  SOUTHWEST (DALLAS)
     Brownsville, TX.
    Border Station--Los Tomates,   ORA....  940--BROWNSVILLE............  48--TX........  SOUTHWEST (DALLAS)
     TX.
    District/Sw Imports--Dallas..  ORA....  1730--DALLAS................  48--TX........  SOUTHWEST (DALLAS)
    Regional Office--Dallas, TX..  ORA....  1730--DALLAS................  48--TX........  SOUTHWEST (DALLAS)
    Resident Post--DFW Airport,    ORA....  1730--DALLAS................  48--TX........  SOUTHWEST (DALLAS)
     TX (Grapevine).
    Border Station--Del Rio, TX..  ORA....  1820--DEL RIO...............  48--TX........  SOUTHWEST (DALLAS)
    Border Station--Eagle Pass,    ORA....  2030--EAGLE PASS............  48--TX........  SOUTHWEST (DALLAS)
     TX.
    Border Station--Bota, TX (El   ORA....  2190--EL PASO...............  48--TX........  SOUTHWEST (DALLAS)
     Paso).
    Resident Post--El Paso, TX...  ORA....  2190--EL PASO...............  48--TX........  SOUTHWEST (DALLAS)
    Border Station--El Paso, TX..  ORA....  2190--EL PASO...............  48--TX........  SOUTHWEST (DALLAS)
    Border Station--El Paso, TX..  ORA....  2190--EL PASO...............  48--TX........  SOUTHWEST (DALLAS)
    Border Station--Ysletta, TX..  ORA....  2190--EL PASO...............  48--TX........  SOUTHWEST (DALLAS)
    Resident Post--Fort Worth, TX  ORA....  2450--FORT WORTH............  48--TX........  SOUTHWEST (DALLAS)
    Resident Post--Houston, TX...  ORA....  3280--HOUSTON...............  48--TX........  SOUTHWEST (DALLAS)
    Border Station--USBS Columbia  ORA....  3899--LAREDO................  48--TX........  SOUTHWEST (DALLAS)
     Import Dock, Laredo, TX.
    Border Station--USBS J&L       ORA....  3899--LAREDO................  48--TX........  SOUTHWEST (DALLAS)
     Bldg. 2 Admin.
    Border Station--Laredo World   ORA....  3899--LAREDO................  48--TX........  SOUTHWEST (DALLAS)
     Trade Bridge, TX.
    Border Station--Pharr, TX....  ORA....  5330--PHARR.................  48--TX........  SOUTHWEST (DALLAS)
    Border Station--Pharr, TX....  ORA....  5330--PHARR.................  48--TX........  SOUTHWEST (DALLAS)
    Border Station--Rio Grande     ORA....  5780--RIO GRANDE CITY.......  48--TX........  SOUTHWEST (DALLAS)
     City, TX.
    Resident Post--San Antonio,    ORA....  6090--SAN ANTONIO...........  48--TX........  SOUTHWEST (DALLAS)
     TX.
    Resident Post--Salt Lake       ORA....  1700--SALT LAKE CITY........  49--UT........  SOUTHWEST (DALLAS)
     City, UT.
    Border Station--Highgate       ORA....  245--HIGHGATE SPRINGS.......  50--VT........  NORTHEAST (NEW YORK)
     Springs, VT.
    Resident Post--Falls Church,   ORA....  930--FALLS CHURCH...........  51--VA........  CENTRAL (PHILADELPHIA)
     VA.
    Resident Post--Norfolk, VA--   ORA....  1760--NORFOLK...............  51--VA........  CENTRAL (PHILADELPHIA)
     Import.
    Resident Post--Norfolk, VA--   ORA....  1760--NORFOLK...............  51--VA........  CENTRAL (PHILADELPHIA)
     Import.
    Resident Post--Richmond, VA..  ORA....  2060--RICHMOND..............  51--VA........  CENTRAL (PHILADELPHIA)
    Resident Post--Roanoke VA....  ORA....  2100--ROANOKE...............  51--VA........  CENTRAL (PHILADELPHIA)
    Prior Notice Center..........  ORA....  2034--RESTON................  51--VA........  HEADQUARTERS
    Border Station--Blaine, WA...  ORA....  150--BLAINE.................  53--WA........  PACIFIC (OAKLAND)
    District Office/Regional Lab-- ORA....  170--BOTHELL................  53--WA........  PACIFIC (OAKLAND)
     Seattle.
    Resident Post--Oroville, WA..  ORA....  1610--OROVILLE..............  53--WA........  PACIFIC (OAKLAND)
    Resident Post--Seattle, WA...  ORA....  1960--SEATTLE...............  53--WA........  PACIFIC (OAKLAND)
    Resident Post--Spokane         ORA....  2110--SPOKANE VALLEY........  53--WA........  PACIFIC (OAKLAND)
     Valley, WA.
    Resident Post--Tacoma, WA....  ORA....  2230--TACOMA................  53--WA........  PACIFIC (OAKLAND)
    Resident Post--Morgantown, WV  ORA....  1840--MORGANTOWN............  54--WV........  CENTRAL (PHILADELPHIA)
    Resident Post--Green Bay, WI.  ORA....  2000--GREEN BAY.............  55--WI........  CENTRAL (CHICAGO)
    Resident Post--Madison, WI...  ORA....  2780--MADISON...............  55--WI........  CENTRAL (CHICAGO)
    Resident Post--Wauwatosa, WI.  ORA....  5130--WAUWATOSA.............  55--WI........  CENTRAL (CHICAGO)
    Resident Post--Aguada, PR....  ORA....  20--AGUADA..................  RQ--PR........  SOUTHEAST (ATLANTA)
    Resident Post--Ponce, PR.....  ORA....  760--PONCE..................  RQ--PR........  SOUTHEAST (ATLANTA)
    San Juan--New Administration   ORA....  930--SAN JUAN...............  RQ--PR........  SOUTHEAST (ATLANTA)
     Building.
    Resident Post--St. Thomas, VI  ORA....  900--ST. THOMAS.............  VQ--VI........  SOUTHEAST (ATLANTA)
    Parklawn Building--Rockville,  ORA....  5600--Rockville.............  MD............  24--MD HEADQUARTERS
     Maryland.
    ----------------------------------------------------------------------------------------------------------------

        Question. Who inspects FDA regulated products if no FDA inspector
    is present at a port where products are being imported?
        Answer. FDA has commissioned approximately 9,900 Customs and Border
    Protection, also known as CBP, employees to inspect food shipments that
    require prior notice data submission under the provisions of the
    Bioterrorism Act if FDA is not present to do so. However, regarding the
    admissibility of all FDA regulated commodities, much of FDA's work in
    screening and inspecting import shipments occurs at locations other
    than ports of entry.
        Entry data for shipments of FDA-regulated products are transmitted
    electronically by CBP to FDA. FDA screens each entry line
    electronically against certain criteria for admissibility. Many of the
    shipments of FDA-regulated products are designated by the electronic
    screening system for admissibility review by FDA employees.
        Entry reviewers often request additional documentation from the
    importers to determine if a product should be allowed entry or should
    be set up for examination. The reviewers allocate inspectional
    resources to best cover products that appear to pose the highest risk.
    The remaining products are allowed to proceed without examination.
        With the exception of truck ports, most entry reviewers are located
    in district offices and resident posts, not at the port of entry. They
    may review entries for a dozen or more ports. The entry reviewers issue
    assignments to investigators requesting a field examination and/or
    sampling to be conducted on specific import entries.
        If the shipment arrives when FDA is not present, unless
    specifically instructed to hold the shipment at the port for FDA's
    examination, CBP will issue a conditional release of the cargo and
    allow it to move to its destination. Such movement is done under bond
    and is permitted under Section 801(b) of the Food, Drug, and Cosmetic
    Act. If FDA decides to physically examine these goods, the work will be
    performed at the destination of the goods.
        Question. If non-FDA inspectors are conducting inspections, what
    and how much training have they been given to inspect food?
        Answer. By the phrase non-FDA inspectors, we assume that you are
    referring to inspections conducted by State personnel under contract
    with FDA. State personnel that conduct these inspections attend ORA
    sponsored inspection training courses with ORA personnel and receive
    the same training courses as ORA investigators. State personnel also
    receive on-the-job training by FDA. For example, State personnel join
    FDA investigators on FDA inspections as observers. To conduct
    inspections on behalf of FDA, State personnel attend the same training
    courses, participate in joint training inspections, and then perform an
    inspection in which they are audited by FDA. After State inspectors
    pass the initial field audit, they are re-audited over a 3-year cycle.
    In addition, State personnel have access to online training courses
    developed by ORA-University. These courses serve as classroom courses
    and continuing education.
        FDA is also implementing the Manufactured Food Regulatory Program
    Standards under which the State will assess its program against a set
    of uniform standards. The uniform standards are the key elements of a
    State program, such as regulatory foundation, staff training, risk
    based inspections, quality assurance, foodborne illness/defense
    preparedness and rapid response, compliance and enforcement, education
    and outreach, resource management, and laboratory resources.
        In addition to receiving FDA provided training, the State
    inspectors must also meet their individual State requirements to
    conduct food inspections.
        Question. According to the Congressional Research Service, the FDA
    inspects only about 1 percent of all FDA regulated imports. Does this 1
    percent include both paper and physical inspections? If not, how much
    of FDA regulated imports get physical inspections?
        Answer. As displayed in the fiscal year 2009 Congressional
    Justification, or CJ, import physical exams are the total of import
    field exams and import laboratory sample analyses. A field examination
    is a visual examination of the product to determine whether the product
    complies with FDA requirements. It involves actual physical examination
    of the product for admissibility factors such as storage or in transit
    damage, inadequate refrigeration, rodent or insect activity, lead in
    dinnerware, odor and label compliance. A field exam cannot be used to
    test for microbiological or chemical contamination. As a result, FDA
    also conducts sampling and analysis to test for such contamination.
    Based on the fiscal year 2009 CJ, 0.82 percent of imports will be
    physically examined in fiscal year 2009.
        In addition, FDA electronically screens all FDA-regulated products
    offered for import into the United States. FDA also electronically
    screens 100 percent of human food and animal feed import prior notice
    submissions and, as targeted, based on risk, performs intensive manual
    reviews on a subset of those prior notices.
        FDA will continue to focus resources on products that pose the
    highest potential bioterrorism risks to the United States. The benefit
    of physical exams comes from the quality and targeting of review
    activities, not from the volume of imports analyzed. The quality of
    import screening is a better measure of FDA's import strategy than
    simply focusing on the items physically examined.
        Prior Notice Security Reviews are only performed on human food and
    animal feed imported products and are performed as a requirement of the
    Bioterrorism Act which requires human food and animal feed importers to
    give FDA ``prior notice'' of their imported product being offered for
    entry into the U.S. Prior Notice Security Reviews are performed by
    Prior Notice Center Reviewers using electronic databases, law
    enforcement data and other information sources to determine whether or
    not the shipment poses a significant security risk to the United States
    food supply. A significant difference between a field exam and the
    Prior Notice Security Review is that the Prior Notice Security Review
    is conducted on food and animal feed products ``only'' while a field
    exam is conducted on all FDA regulated products. Field exams are
    physical examinations of an imported product while Prior Notice
    Security Reviews use electronic data bases to assess security threats.
        Question. What is the budget in FDA for food safety oversight and
    how is that broken down between the budget spent on domestic and
    imported food safety oversight and inspection?
        Answer. Rather than trying to inspect all imports, FDA recommends
    targeted risk-based inspections to focus resources where they are most
    needed and will provide the greatest benefit to American consumers. ORA
    resources for food safety oversight in the fiscal year 2009
    Congressional Justification include $358.1 million in the Field Foods
    program and $37 million in the Field Animal Drugs and Feeds program.
    These figures represent ORA's food protection resources for both human
    and animal food. In the Field Foods program, approximately 45 percent
    of these resources are allocated to domestic food safety oversight and
    inspection. The remaining 55 percent are allocated to import and
    foreign food safety oversight and inspection. In the Field Animal Drugs
    and Feeds program, approximately 78 percent of these resources are
    allocated to domestic food safety oversight and inspection. The
    remaining 22 percent of these resources are allocated to import and
    foreign food safety oversight and inspection.
        Question. How many inspectors are needed to handle the volume of
    foods being imported? What would that cost?
        Answer. The fiscal year 2009 Congressional Justification estimates
    that ORA will physically examine approximately 1.26 percent of food
    imports. The physical exam percentage is a combination of import field
    exams and import laboratory samples analyzed. In fiscal year 2009, ORA
    estimates allocating approximately 305 FTE and $50 million to perform
    the import food field exams and collect food import samples for
    analyses. This estimate does not include laboratory resources to
    analyze the import samples. Also, this figure does not include
    resources to electronically review the imported products that are not
    physically examined, as well as resources for the Prior Notice Center.
    Finally, these numbers do not include Center or Agency overhead costs.
        Funding increases requested in the fiscal year 2009 CJ will allow
    ORA to perform an additional 20,000 import food field exams, as well as
    50 additional foreign food inspections, and an additional 75 food
    import lab sample analyses.
        Question. How many inspectors are needed by product line to handle
    the volume of all FDA regulated imports?
        Answer. Rather than trying to inspect all imports, FDA recommends
    targeted risk-based inspections to focus resources where they are most
    needed and will provide the greatest benefit to American consumers.
    Because FDA recommends a targeted risk-based approach to inspections
    rather than inspecting 100 percent of FDA-regulated products, we have
    not estimated the cost of inspecting all imported foods. The fiscal
    year 2009 Congressional Justification (CJ) estimates that ORA will
    physically examine approximately 0.82 percent of all FDA-regulated
    imported products. This includes foods, cosmetics, human drugs,
    biologics, animal drugs and feeds, and medical device and radiological
    health imported products. The physical exam percentage is a combination
    of import field exams and import laboratory samples analyzed. In fiscal
    year 2009, ORA estimates allocating approximately 351 FTE and $57.5
    million to perform the import field exams and collect import samples
    for analyses across all field program areas. This estimate does not
    include laboratory resources to analyze the import samples. Also, this
    figure does not include resources to electronically review the imported
    products that are not physically examined, as well as resources for the
    Prior Notice Center. Finally, these numbers do not include Center or
    Agency overhead costs.
        Question. What level of funding is needed to handle all the volume
    of FDA regulated imports?
        Answer. Rather than trying to inspect all imports, FDA recommends
    targeted risk-based inspections to focus resources where they are most
    needed and will provide the greatest benefit to American consumers.
    Because FDA recommends a targeted risk-based approach to inspections
    rather than inspecting 100 percent of FDA-regulated products, we have
    not estimated the cost of inspecting all FDA-regulated imports. The
    fiscal year 2009 Congressional Justification estimates that ORA will
    physically examine approximately 0.82 percent of all FDA-regulated
    imported products. This includes foods, cosmetics, human drugs,
    biologics, animal drugs and feeds, and medical device and radiological
    health imported products. The physical exam percentage is a combination
    of import field exams and import laboratory samples analyzed. In fiscal
    year 2009, ORA estimates allocating approximately 351 FTE and $57.5
    million to perform the import field exams and collect import samples
    for analyses across all field program areas. This estimate does not
    include laboratory resources to analyze the import samples. Also, this
    figure does not include resources to electronically review the imported
    products that are not physically examined, as well as resources for the
    Prior Notice Center. Finally, these numbers do not include Center or
    Agency overhead costs.
        Funding increases requested for fiscal year 2009 in the Field Drugs
    Program will increase the Office of Criminal Investigations capacity to
    investigate criminal import violations. Funding increases requested in
    the Field Device Program will be directed towards the improvement of
    strategic information-sharing between FDA and regulatory partners, such
    as U.S. Customs and Border Protection. This activity directly supports
    intervention recommendations made by the Interagency Working Group on
    Import Safety in the Import Safety Action Plan.
        Question. What level of funding is needed to handle all other FDA
    regulated activities outside of imports?
        Answer. Rather than trying to inspect all imports, FDA recommends
    targeted risk-based inspections to focus resources where they are most
    needed and will provide the greatest benefit to American consumers.
    Because FDA recommends a targeted risk-based approach to inspections
    rather than inspecting 100 percent of FDA-regulated products, we have
    not estimated the cost of inspecting FDA-regulated products that are
    not imported. With the requested funding in the fiscal year 2009
    Congressional Justification, the Office of Regulatory Affairs estimates
    that it will allocate $200.7 million and 1,224 FTE for FDA domestic
    inspections in fiscal year 2009 and award $15.7 million to the States
    for State contract inspections. These resources will allow ORA to
    inspect approximately 24 percent of the domestic inventory for which
    the Field has a recurring inspectional obligation. The domestic
    inventory estimate includes firms in all five field program areas:
    Foods, Human Drugs, Biologics, Animal Drugs and Feeds, and Devices and
    Radiological Health. The inventory estimate includes firm types such as
    manufacturers, repackers, relabelers, warehouses, blood banks, and
    bioresearch monitoring facilities. This estimate does not include
    mammography facilities because all mammography facilities are inspected
    annually using user fee funds. Finally, these funding estimates do not
    include Center or Agency overhead costs.
        Question. Why does the OASIS database not accurately track volume
    or make it easily to ascertain the volume of goods coming from a given
    country?
        Answer. There are three primary ways to measure the amounts of
    imported goods: declared value, quantity, as measured by weight,
    volume, or piece count, and count of entry lines. None of these
    measures is ideal. Importers are not required to provide FDA with
    either the value or the quantity of goods in an entry line, and often
    they do not. When quantity data are provided, entry filers sometimes
    make significant errors. Those errors can badly distort aggregate data.
    Entry lines can be counted precisely, but the value and quantity of the
    goods in any given line can vary enormously.
        FDA uses the count of entry lines as the best available option. For
    the reasons given above, aggregation of data on declared value or
    quantity is not feasible.
        Question. To protect the public from food borne illness from both
    domestic and imported products, what is the FDA doing to change the way
    it does business?
        Answer. In November 2007, FDA released the Food Protection Plan,
    also known as the FPP, to address both food safety and food defense for
    domestic and imported products. The plan is integrated with the
    Administration's Import Safety Action Plan. The FPP is an integrated
    strategy that focuses on risks over a product's life cycle from
    production to consumption. The FPP targets resources to achieve maximum
    risk reduction and address both unintentional and deliberate
    contamination. The FPP relies on science and modern technology systems.
        FDA was granted direct hire authority in April 2008 and will hire
    161 new FTEs to work in food safety. The Office of Regulatory Affairs
    has completed a 3-year plan to increase State inspections and will hire
    77 new FTEs with the fiscal year 2008 appropriation and an additional
    53 new FTE with funds from the Consolidated Appropriations Act, 2008,
    which will be available on July 1, 2008 to conduct food field exams,
    inspections, and sample collections. The Center for Food Safety and
    Applied Nutrition will hire one new FTE with the fiscal year 2008
    appropriation and will hire an additional 28 new FTEs with the funds
    from the Consolidated Appropriations Act, 2008, which will be available
    on July 1, 2008 to assist with food safety work aimed at protecting the
    Nation's imported and domestic food supply from both unintentional and
    deliberate contamination. The Office of Crisis Management will hire two
    new FTEs with the fiscal year 2008 appropriation to assist FDA in
    quickly responding to food safety threats. In addition, FDA is focusing
    on the interface between food protection and the agricultural
    production of commodities. FDA officials have also met with the
    National Academy of Science and discussed a statement of work for a
    comprehensive study of the gaps in public health protection provided by
    the United State's food safety system.
                                breast implants
        Question. The Food and Drug Administration approved silicone gel
    breast implants, manufactured by Mentor, in November 2006. This
    approval came with rigorous post approval conditions, including
    mandatory enrollment in longitudinal studies.
        Following the approval of silicone gel breast implants manufactured
    by Allegan, the FDA made this enrollment in longitudinal studies
    optional.
         What is the reason for this change? What specific data was
    presented to justify this change?
        Answer. In November 2006, both Allergan and Mentor Corporation
    received FDA approval to market their silicone gel-filled breast
    implants in the United States, subject to requirements to conduct post
    approval studies, also known as PAS, to answer particular questions.
    FDA allowed the companies the opportunity to develop different study
    designs and other protocol elements to meet this requirement. The goals
    were to design studies that would minimize bias in the study results
    and in which the subject enrollment goals could be achieved. The
    participation could be voluntary or mandatory. The companies proposed
    the specific study designs to answer those questions and submitted them
    for FDA approval. Allergan proposed, and FDA approved, a study with
    voluntary participation, while Mentor originally proposed, and FDA
    approved, a study where participation was mandatory in order for women
    to obtain the Mentor product.
        In April 2007 FDA approved Mentor's request to amend the
    MemoryGelTM Large Post-Approval Study protocol to allow for
    voluntary instead of mandatory participation of study subjects.
    Mentor's request reported that the company received many complaints
    from Institutional Review Boards--IRBs, hospitals, and other
    institutions, questioning the appropriateness of requiring patients to
    become subjects in a PAS in order to receive an approved device. Mentor
    indicated that mandatory PAS participation might not be consistent with
    standard PAS practice, and that several complainants indicated that in
    keeping with good clinical practice, patient participation should be
    voluntary. The concerns had also made it difficult for Mentor to obtain
    the IRB approval required to commence the study at a number of sites,
    slowing overall progress of the study.
        Based on FDA's assessment of the supplement and principles of good
    study design, FDA approved the amendment to the MemoryGelTM
    Large Post-Approval Study protocol which changed the enrollment type
    from mandatory to voluntary and thus allows women access to this
    approved device without requiring participation in a research study.
    The change increases participation of women who meet the PAS inclusion
    criteria by eliminating barriers to IRB approval and patient
    enrollment.
        The key points underlying FDA's decision are as follows. First,
    there is no scientific rationale for requiring mandatory subject
    participation. Mandatory and voluntary subject participation were
    acceptable alternative approaches to design the PAS. Second,
    participation in the post-approval study for Allergan's comparable
    silicone gel-filled breast implants is voluntary. Third, Mentor's
    request to allow voluntary participation of women who receive the
    MemoryGelTM implant is acceptable as an alternative study
    design and is justified to allow women access to this approved device
    without requiring participation in a research study and to potentially
    increase participation of women who meet the PAS inclusion criteria.
    Fourth, IRB participation and support is critical for the success of
    the Post-Approval Studies Program. In the silicone breast implant
    studies, the role of IRBs is even more important because the studies
    are long-term and involve tens of thousands of subjects.
        Question. How many patients are currently enrolled in longitudinal
    studies of silicone gel breast implants made by Allegan and Mentor?
    What percentage of women who have received implants since the November
    2006 approval are enrolled in these studies?
        Answer. FDA believes this information about enrollment in ongoing
    studies is confidential commercial information protected from public
    disclosure by statute and regulation. It cannot be disclosed for the
    record absent permission from the companies. We apologize for any
    inconvenience this may cause. FDA does not have information regarding
    the percentage of women who have received implants since the November
    2006 approval that are enrolled in these studies.
        Question. What other changes have been made to the post approval
    study requirements?
        Answer. In May 2007, FDA approved a protocol change for the Large
    Post-Approval Study, requested by Mentor, that allows the company to
    enroll Canadian patients who receive the MemoryGel silicone breast
    implant in addition to the U.S. study participants. The November 17,
    2006, approval order states that Mentor will enroll in this study.
    Mentor requested this protocol change to meet Health Canada's post-
    approval conditions for the MemoryGel Silicone gel-filled Breast
    Implant. Mentor will use the FDA MemoryGel PAS protocol for the
    Canadian MemoryGel participants. The sponsor plans to perform the
    analysis twice, once on all study participants and a second time based
    only on U.S. study participants.
        Question. Are Mentor and Allergan currently in full compliance with
    the post approval requirements?
        Answer. The status of Allergan's and Mentor's postmarket studies of
    silicone breast implants and conditions is summarized in a table that I
    am pleased to provide for the record. Both Mentor Corporation and
    Allergan started enrolling patients in February 2007 as required by
    their respective approval orders and both firms have complied with the
    reporting requirements. The table below identifies the status of
    individual approval conditions that Allergan and Mentor must meet.
        [The information follows:]

    STATUS OF ALLERGAN'S AND MENTOR CORPORATION'S SILICONE GEL-FILLED BREAST
                    IMPLANT POSTMARKET STUDIES AND CONDITIONS
    ------------------------------------------------------------------------
           Approval Condition              Allergan             Mentor
    ------------------------------------------------------------------------
    Core Post-Approval Study........  Reporting status:   Reporting status:
                                       On time \2\.        On time 2
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Large Post-Approval Study.......  Reporting status:   Reporting status:
                                       On time \1\.        On time \1\
                                      Study Status:       Study Status: On
                                       Overdue \3\ (12-    time \3\
                                       month patient
                                       enrollment target
                                       was not met).
    Device Failure Studies..........  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Focus Group Study...............  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Informed Decision Process.......  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    Adjunct Study...................  Reporting status:   Reporting status:
                                       On time \2\.        On time \2\
                                      Study Status: On    Study Status: On
                                       time \3\.           time \3\
    ------------------------------------------------------------------------
    \1\ Reporting status for Larger Post-Approval Study is ``On time'' if 15-
      month report was received by the February 16, 2008 due date.
    \2\ Reporting status is ``on time'' if 12-month report for a post-
      approval study other than the Larger Post-Approval Study was received
      by November 17, 2007 due date.
    \3\ Study progress status for a post-approval study condition is ``On
      time'' if patient enrollment and follow-up targets have been met and
      ``Overdue'' if the interim enrollment target was not met.

        Question. Based on the post approval data already reported by
    Mentor and Allergan, what findings has the FDA made regarding the
    safety of silicone gel breast implants?
        Answer. FDA's review of the 12-month reports submitted by Allergan
    and Mentor for the six conditions of approval indicates that the
    results regarding the safety of the silicone gel breast implants
    presented in these reports are consistent with the data available at
    the time of approval. The studies are continuing to allow FDA to
    evaluate long-term device safety.
        Question. Does the FDA have the necessary resources to enforce
    these post-approval requirements?
        Answer. In 2005, CDRH transferred the responsibility for post-
    approval study oversight from the premarket staff of the Office of
    Device Evaluation and the Office of In Vitro Diagnostics to the
    postmarket staff of the Office of Surveillance and Biometrics, also
    known as OSB.
        The fiscal year 2003-2005 cohort approval commitments for the
    silicone breast implants focuses on three areas: ensuring the
    timeliness of the study execution, ensuring that the FDA-approved
    protocols are properly implemented, and making sure that the studies
    are progressing well and provide meaningful results that can guide
    regulatory actions.
        OSB has two project managers who are fully dedicated to overseeing
    manufacturer compliance with post-approval study commitments. They
    enable OSB to acknowledge receipt of study reports, monitor compliance
    with reporting requirements, and contact the manufacturer when the
    reports are not received as scheduled.
        In 2006, OSB instituted an automated tracking system to monitor PAS
    study commitments. The project managers use this tracking system to
    make sure manufacturers send PAS study progress reports on time and
    that we review these reports in a timely manner.
        Two OSB epidemiologists serve as the lead reviewers for post-
    approval commitments and review the study reports to make sure the
    studies are progressing well. A multi-disciplinary post market team of
    scientists is available as consultants to the epidemiologists.
        The FDA Post-Approval Studies Website went live in April 2007. The
    site documents the status of PAS studies for the two implants. A user
    can search for information by the device name or manufacturer and view
    a description of the study, the reporting schedule, and status of the
    studies--such as whether the study is On Time or Overdue. The site is
    maintained by the project managers for Post-Approval Studies and
    updated once a month. I would be happy to provide the website address.
        [The information follows:]
        http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPMA/
    pma_pas.cfm.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

                     heparin and drug facility inspections
        Question. Dr. von Eschenbach, the recent recall of the blood
    thinning drug Heparin has opened our eyes to some possible gaps in the
    agency's inspection processes. The recall has been particularly
    troubling because FDA has tied 62 deaths directly to the use of
    contaminated Heparin. The Chinese company that prepared the
    contaminated ingredient should have been inspected by FDA before
    product approval, but it was not. FDA stated that the agency thought
    the company had been inspected, but realized after the recall started
    that it had not received the required pre-approval inspection. The
    reason the company was not inspected is because the company's name is
    similar to another facility in China that had passed FDA inspection.
    FDA admits that the agency confused the names of the facilities on the
    drug application.
        Can you help me understand how something like this could happen? I
    understand that manufacturers of active drug ingredients must be
    inspected prior to drug approval, how does FDA miss one?
        Answer. Under section 505 of the Federal Food, Drug, and Cosmetic
    Act, prior to approval of a new drug application, abbreviated new drug
    application, or certain manufacturing supplements, FDA determines that
    the methods used in, and the facilities and controls used for, the
    manufacture, processing, and packing of the applicant's drug are
    adequate to preserve the drug's identity, strength, quality, and
    purity. Our policy has been, and continues to be that we approve drugs
    after verifying that this standard is met based upon a recent
    inspection of the manufacturing facility or facilities named in the
    application. If we have a recent, satisfactory inspection on record for
    a given facility named in the application, we generally will not
    conduct a new pre-approval inspection of that facility prior to
    approving the application. However, even if there is a recent
    inspection, we will inspect again if we determine that the
    circumstances warrant it.
        In this situation, FDA learned in January 2008 that Baxter received
    FDA approval to use the active pharmaceutical ingredient (API)
    manufacturer, Changzhou SPL in Changzhou, China, although FDA did not
    conduct a pre-approval inspection of the plant. The plant subsequently
    shipped product to Baxter. As FDA has acknowledged, FDA's failure to
    inspect the plant was the result of human error. FDA staff entering
    data into a database confused the name of the Changzhou plant with
    another plant that had a similar name and had been previously
    inspected.
        Question. What are you doing to make sure this doesn't happen
    again?
        Answer. Process improvements in CDER are already underway that will
    prevent future data entry errors like this. These improvements include
    additional training for those who perform data entry on which
    inspection assignments hinge, hiring new staff dedicated to this data
    entry, and putting procedures in place that will provide FDA with the
    necessary data from drug manufacturers in a user-friendly way. In
    addition, efforts are underway to centralize all FDA's Information
    Technology, or IT, systems to meet the challenges of the FDA in the
    21st century. Coupled with resource planning and development
    activities, FDA's Office of Information Management has undertaken
    detailed succession planning to ensure that the IT organization that
    FDA is building for the 21st century remains reliable in support of
    FDA's mission and is sufficiently flexible to accommodate the science
    and technology advances of the future.
        Question. In media calls, the agency stated that the mix-up
    occurred because the company in question has a name similar to another
    Chinese company that had previously passed FDA inspection. From what
    I've heard, it appears that manufacturers of active drug ingredients
    are identified by name and not by some standardized system, for
    instance, numerically. Why? Do you think they should be identified
    using a standardized system?
        Answer. A unique numerical identifier for each registered facility
    can be helpful for assuring FDA that the firm is the same entity of
    record in FDA databases, that the physical location of the facility is
    valid, and that the firm is still engaged in FDA-regulated business.
    Unique identifiers already in use at FDA, such as the Firm
    Establishment Indicator number, or FEI, could be used for these
    validation purposes. However, the FEI falls short of providing high-
    quality validation because it is not implemented with a rigorous
    validation protocol. For example, inter-agency computer applications
    can lead to the creation of new FEIs during importations when
    information is conflicting or missing. Having a unique identifier is
    useful only if the software and policy procedures use it for rigorous
    validation.
        Although FDA has an ongoing effort to strengthen its own identity
    validation software, there are benefits of partnering with third party
    organizations that are in the business of uniquely identifying and
    collecting business information on companies. First, the commercial
    firms succeed by maintaining high-quality firm identifiers (including
    address) and business information. When a firm terminates business, the
    identifier is no longer valid. Second, the third party business
    databases offer rapid validation tools electronically. Finally, the
    third party databases provide business relationships not routinely
    visible to FDA that are often an aid during supply chain and other
    investigations.
                           fda international offices
        Question. Currently, close to 15 percent of the food consumed in
    the United States is imported and the percentage is rising every year.
    In addition, the volume of prescription drugs imported into the United
    States is expected to increase by 12 percent during fiscal year 2009.
    It is clear that the global marketplace is having a significant impact
    on the products regulated by FDA. And, FDA currently does not have any
    staff located abroad.
        In the fiscal year 2009 budget, FDA States that it will establish
    an office in China to better protect consumers from unsafe products. In
    addition, the fiscal year 2008 appropriations bill provided funding to
    increase domestic and import food inspectors, including international
    inspectors. I understand you've been working with the Chinese
    government to have employees stationed there.
        What is the status of these discussions? When do you believe the
    first FDA employees will be stationed in China? And, how many employees
    do you expect will be stationed there?
        Answer. The discussions with the Chinese Government concerning
    stationing FDA employees there are being handled by the U.S. Embassy.
    However, Secretary Leavitt and I have had discussions with their
    Chinese counterparts, who have signaled support. At this point, we are
    waiting for the Ministry of Foreign Affairs to endorse the proposal.
        FDA has received approval from the Department of State to station
    eight employees in China. FDA expects that it will station the first
    FDA employee, the Country Director for the FDA Office, in Beijing by
    the end of calendar year 2008. FDA also plans to make additional hires
    for China offices during 2009.
        Question. You have mentioned in public statements that China is not
    the only country FDA would like to place employees. In what other
    countries are you looking to locate employees, and have you begun
    negotiations with those countries?
        Answer. FDA has agreements in place and we are making final
    arrangements for offices in China. FDA has conducted general
    discussions about FDA foreign offices with India and Jordan.
                              overall fda funding
        Question. Many people have said that FDA needs more money,
    including FDA's own Science Board. Specifically, the Science Board said
    that ``FDA can no longer fulfill its mission without substantial and
    sustained additional appropriations.'' The Science Board suggested that
    an increase of $375 million in fiscal year 2009 is necessary to help
    FDA fulfill its mission.
        Dr. von Eschenbach, you appear to agree with the notion that FDA
    needs more money. In an interview with the Wall Street Journal earlier
    this year, you said ``to do what [FDA] needs to do requires
    substantially more dollars than what has been invested in the FDA thus
    far.'' You also go on to state you wanted more out of the budget
    process this year than what finally ended up in the budget request.
        While $375 million in 1 year may be more than we can come up with,
    this subcommittee is determined to help FDA in any way it can.
        What do you think of the Science Board's assessment?
        Answer. On December 3, 2007, the FDA Science Board accepted the
    report of its subcommittee entitled, ``FDA Science and Mission at
    Risk.'' The subcommittee report reveals a number of areas that
    recommend increased investment. FDA takes this report seriously. The
    need to improve science at FDA is not in question. Nor is there any
    question that we must make a significant investment in improving the
    science.
        FDA is keenly aware that we must develop comprehensive solutions to
    face an ever-changing scientific and technological landscape. We look
    forward to working with Congress and other stakeholders to strengthen
    the scientific base at FDA and ensure that in the next 100 years, FDA
    retains its reputation and preeminence as the gold standard through the
    use of cutting edge science and technology.
        Question. Does FDA need more money than is requested in the
    President's budget?
        Answer. FDA's fiscal year 2009 budget request of an additional
    $50.7 million in budget authority and $78.9 million in user fees for
    programs to protect America's food supply and for medical product
    safety and development reflects the competing priorities the President
    and the President's advisors must consider as budget submissions to the
    Congress are developed. In light of these competing priorities, FDA's
    fiscal year 2009 budget request is the amount designated to allow FDA
    to achieve its public health priorities.
        Question. How much would you suggest is necessary in fiscal year
    2009 to help FDA meet its demands and which program areas would benefit
    most from additional resources?
        Answer. The following document is an assessment of immediate
    resource needs based on a professional judgment analysis, without
    regard to the competing priorities that the agency, the President, and
    the President's advisors must consider as budget submissions to the
    Congress are developed. As the response indicates, the amounts
    identified are in addition to amounts appropriated to FDA in fiscal
    year 2008.
        [The information is attached.]

               FDA FISCAL YEAR 2009 PROFESSIONAL JUDGMENT ESTIMATE
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                Fiscal year
                                                   2009             FTE
    ------------------------------------------------------------------------
    Food Protection.........................            $125             259
    Safer Drugs, Devices, and Biologics.....             100             160
    Modernizing FDA Science and Workforce...              50              71
                                             -------------------------------
          Total.............................             275             490
    ------------------------------------------------------------------------

        The amounts identified in this document support three strategic
    investment areas--protecting our food supply, assuring safer drugs,
    devices, and biologics, and modernizing the essential infrastructure of
    FDA's science and workforce. The amounts are in addition to amounts
    appropriated to FDA in fiscal year 2008. Investing in these three
    strategic areas will permit FDA to rapidly achieve important public
    health goals that cut across strategic components of the Agency.
        This document responds to the request for the FDA's professional
    judgment concerning resource needs. The document and was developed
    without regard to the competing priorities that the President and his
    advisors must consider as budget submissions to the Congress are
    developed.

                       FDA FISCAL YEAR 2009 BUDGET AMENDMENT: FOOD PROTECTION PLAN (+$125 MILLION)
    ----------------------------------------------------------------------------------------------------------------
    Core Elements and Strategic Activities                FPP Output                     Amount             FTE
    ----------------------------------------------------------------------------------------------------------------
    Prevention:
        1.1 Promote Increased Corporate     Increase FDA presence beyond our             $16,000,000              24
         Responsibility to Prevent           borders, including increased
         Foodborne Illnesses: FDA will       training for food safety best
         ensure the safety of imports by     practices abroad. Offices in four
         increasing FDA's presence beyond    additional countries with 7/8 FDA             5,000,000               2
         our borders and building capacity   FTE and 4/5 foreign nationals per
         with foreign partners.              country/region. Yields FDA presence           5,000,000               3
                                             in five countries or regions of the
                                             world.
                                            Increase technical assistance on food
                                             standards in at least 3 of the
                                             countries accounting for the major
                                             share of imports.
                                            Develop systems and tools for an
                                             international information exchange
                                             database related to inspections and
                                             quality.
        1.2 Identify Food Vulnerabilities   Increase capacity to collect &                 5,000,000              10
         and Assess Risks: FDA will          interpret data for risk-based
         conduct risk-based prevention to    prevention for products of greatest           7,000,000              20
         better protect America's food       concern.
         supply. FDA will better            Research and develop risk-based
         understand food safety and food     prevention strategies based on
         defense risks and use this          scientific data and protocols.
         understanding to define the
         optimum preventive controls to
         establish.
        1.3 Expand Understanding and Use    Develop and validate rapid detection           5,000,000              10
         of Effective Mitigation Measures:   technologies and assays (see 2.3 for
         FDA will develop and validate       deploying technologies and assays);
         rapid detection tools to quickly    For high risk foods, commence work
         detect and mitigate a potential     to develop two new priority tools
         problem.                            and to validate two test methods for
                                             toxic chemicals or microbes
                                             developed by industry.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         43,000,000              69
                                                                                  ----------------------------------
    Intervention:
        2.1 Inspections and Sampling Based  20,000 more import food exams at the           6,000,000              36
         on Risk: FDA will apply risk        port of entry \1\ ($300 each).               13,500,000              50
         analysis to set priorities for     800 more foreign food production and/
         food inspections and                or processing facility inspections            6,500,000              33
         interventions.                      and support for foreign inspections
                                             \1\ (uc=$16.7K).
                                            800 more domestic food safety
                                             inspections \1\ (uc=$8k).
        2.2 Enhance Risk-Based              Integrate and assimilate risk-based           10,000,000              15
         Surveillance of Imported Foods at   information into data systems.
         the Border: FDA will design and
         build risk-based algorithms to
         conduct inspections and detect
         food risks. Understanding the
         risks defines the number and
         types of inspections and tests
         needed to ensure that preventive
         controls are working.
        2.3 Better Detect Food System       Improve signal detection of                    5,000,000               5
         Signals that Indicate               intentional and unintentional
         Contamination: FDA will deploy      chemical and microbial contamination.         5,000,000               5
         rapid detection technologies and   Deploy 1-2 rapid detection assays to
         assays and build laboratory         test high risk foods. Acquire
         infrastructure for faster           advanced technology and deploy such          11,000,000              10
         testing. FDA will deploy state-of-  equipment to FDA field and conduct
         the-art technology to improve the   technology transfer to industry.
         integration of incoming signals    Build high throughput rapid detection
         and achieve faster mitigation and   technology into laboratory
         response.                           infrastructure.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         57,000,000             154
                                                                                  ----------------------------------
    Response:
        3.1 Improve Immediate Answer. FDA   Develop and implement a system for            10,000,000              20
         will enable real-time               traceback from product consumption
         communication of lab results. FDA   back to the source of production
         will develop protocols to           using, for example, electronic               10,000,000               6
         facilitate tracebacks of            pedigrees and industry applied
         foodborne illnesses. FDA will       technologies of bar coding and radio
         rapidly detect and respond          frequency identification.
         foodborne outbreaks.               Enhance interoperable information
                                             technology networking system between
                                             FDA and Federal, State, and local
                                             testing labs.
        3.2 Improve Risk Communications to  Create a health hazards alert                  5,000,000              10
         the Public, Industry, and Other     communication system using multiple
         Stakeholders: FDA will enhance      media outlets to quickly inform a
         risk communication though           broad cross section of the public.
         aggressive, targeted food safety
         campaigns that disseminate clear
         and effective messages with
         regular updates through a variety
         of media to all target audiences.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         25,000,000              36
                                                                                  ----------------------------------
            GRAND TOTAL, Food Protection    .....................................        125,000,000             259
             Plan.
    ----------------------------------------------------------------------------------------------------------------
    \1\ FDA will hire and train additional field inspectors throughout fiscal year 2009. As a result, by fiscal year
      2010, the proposed investment will allow FDA to increase its inspection and surveillance capacity by the
      number of inspections identified in this FPP output

           FDA FISCAL YEAR 2009 BUDGET AMENDMENT: ENSURING SAFE AND EFFECTIVE MEDICAL PRODUCTS (+$100 MILLION)
    ----------------------------------------------------------------------------------------------------------------
              Strategic Activity                            Output                       Amount             FTE
    ----------------------------------------------------------------------------------------------------------------
    Safer Drugs, Devices, and Biologics:
        1.1 Science to Improve Medical      Establish a unique device                     $7,500,000              17
         Product Safety and Development:     identification system to track
         Use new science and analysis to     devices, facilitate recalls, and             14,000,000              10
         improve the safety of medical       support inventory management during
         products. In some cases, new        disasters and terrorism response.
         science creates opportunities to   Implement FDAAA safety requirements
         leverage advances from one          related to pediatric drugs and
         product area to promote safety in   devices, postmarket study
         a different area.                   commitments, clinical trials, active
                                             drug surveillance, labeling and safe
                                             use of drugs.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         21,500,000              27
                                                                                  ----------------------------------
        1.2 Data Analysis Tools to          Build Regulated Product Information           15,000,000  ..............
         Identify Safety Issues: Develop     Data Warehouse that will enable
         and implement quantitative          intelligence sharing with other              15,000,000               6
         decision-making tools to assess     regulatory agencies.
         the safety and effectiveness of    Data access and analysis for active
         drugs, biologics, and devices       safety surveillance with development
         throughout their lifecycle.         of scientific methods of data mining
                                             for signals of adverse events.
                                                                                  ----------------------------------
          Sub-Total.......................  .....................................         30,000,000               6
                                                                                  ----------------------------------
        1.3 Risk-Based Inspection and       250 more foreign medical product              11,200,000              50
         Compliance: Strengthen field        facility inspections \1\                     10,800,000              18
         operations to better protect        (uc=$45.000).
         public health. The sheer volume    Increase FDA's presence beyond our             4,400,000              14
         of products, manufacturing          borders to five countries or regions          7,500,000               5
         plants, distributors, and           of the world.
         importers demands a more robust    250 more domestic medical product              6,600,000              35
         inspection force with better        inspections (uc=17.7K).                       3,000,000  ..............
         capacity to reach the community    Improve lab infrastructure and tools           5,000,000               5
         that FDA regulates.                 for rapid analysis of product/
                                             ingredient content.
                                            Increase import exams (10,000) and
                                             sampling/laboratory analysis (300).
                                            IT systems to achieve an integrated
                                             inventory database.
                                            Improve risk communications to public
                                             and industry.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         48,500,000             127
                                                                                  ----------------------------------
            GRAND TOTAL, Medical Product    .....................................        100,000,000             160
             Safety and Effectiveness.
    ----------------------------------------------------------------------------------------------------------------
    \1\ FDA will hire and train additional field inspectors throughout fiscal year 2009. As a result, by fiscal year
      2010, the proposed investment will allow FDA to increase its inspection and surveillance capacity by the
      number of inspections identified in this output

               FDA FISCAL YEAR 2009 BUDGET AMENDMENT: MODERNIZING FDA SCIENCE AND WORKFORCE (+50 MILLION)
    ----------------------------------------------------------------------------------------------------------------
              Strategic Activity                            Output                       Amount             FTE
    ----------------------------------------------------------------------------------------------------------------
    Modernizing FDA Science and Workforce:
        1.1 Science Leadership and          Strengthen programs of emerging               $5,000,000              15
         Coordination: FDA will enhance      science in Centers and at the
         science programs across the         National Center for Toxicological            27,000,000              40
         agency, especially in emerging      Research and enhance integration.
         areas such as nanotechnology and   Strengthen capacity to support
         tissue engineering. FDA will        nanotechnology, cell and gene
         establish mechanisms to access      therapies, robotics, genomics and
         the best scientific knowledge and   proteomics, Critical Path
         expertise to modernize its          initiatives, and advanced
         regulatory science. FDA will        manufacturing technologies.
         strengthen its capacity to
         support emerging areas of science
         and manufacturing that are
         essential to regulating FDA
         products.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         32,000,000              55
                                                                                  ----------------------------------
        1.2 Investments to Support Science- Expand science training and                    4,000,000               8
         Based Regulation: FDA will          professional development for career           4,000,000               8
         upgrade its science capacity by     employees.                                   10,000,000  ..............
         providing more training and        Launch Science Fellows Program and
         professional development support    initiate recruitment of first 500
         for FDA science staff. FDA will     fellows.
         create an Agency-wide 2-year       Improve facilities outside of the
         Science Fellows Program intended    Washington region to support FDA's
         to include up to 2,000 trainees     mission and enable these facilities
         to develop a new cadre of           to accept new food and medical
         emerging leaders in regulatory      product technologies.
         science. FDA will upgrade
         facilities that do not adequately
         support FDA's current or future
         mission.
                                                                                  ----------------------------------
            Sub-Total.....................  .....................................         18,000,000              16
                                                                                  ----------------------------------
            GRAND TOTAL, Modernizing FDA    .....................................         50,000,000              71
             Science and Workforce.
    ----------------------------------------------------------------------------------------------------------------

                                   pay costs
        Question. The budget request includes a net increase request of $54
    million in budget authority. The increase is supposed to fund pay costs
    and increases in food safety and medical product safety. However, the
    budget also states that the pay and benefits need for fiscal year 2009
    is slightly more than $59 million, approximately $5 million more than
    the request.
        It is apparent that maintaining current staff levels will consume
    your entire request amount in fiscal year 2009. Since this is the case,
    how will you accomplish the food safety and medical product safety
    activities promised in the budget? Will you be forced to cut back in
    other areas?
        Answer. The fiscal year 2009 President's Budget provides staff for
    FDA to perform its public health mission and provide inspectors,
    medical and consumer safety officers, food safety technologists,
    medical product reviewers, postmarket safety experts, and other public
    health experts to safeguard the American public and implement the food
    and medical product safety activities outlined in the budget.
        The President's fiscal year 2009 budget contains $25 million to pay
    the cost of living increase for FDA employees. FDA will cover fiscal
    year 2009 cost increases through a combination of strategies, including
    reducing operating costs and the design of its hiring plan.
                                 it investments
        Question. Dr. von Eschenbach, in a recent speech to the Food and
    Drug Law Institute you mentioned that FDA's information technology
    infrastructure is ``adequately funded at $200 million a year, but [it]
    remains antiquated, unreliable, and beset by high-cost maintenance.''
    You said that FDA's IT infrastructure is essentially ``a quilt of
    patched-together hardware, and fragmented software packages.''
        In addition, one of the findings in the recent Science Board report
    was that ``FDA lacks information technology capability and capacity to
    support monitoring of drug and food safety and is particularly
    challenged in the regulation of products based on new science.'' The
    Science Board goes on to recommend the development and execution of a
    comprehensive IT modernization plan.
        FDA's budget for fiscal year 2008 is about $2.2 billion. According
    to your numbers, the agency is spending about 10 percent of its budget
    on IT.
        How is it possible that your IT systems are in such shambles if the
    agency is regularly spending about 10 percent of your budget on IT?
    Based on your statement, you appear to agree that $200 million a year
    is ``adequate''.
        Answer. We concur that FDA faces many challenges maintaining its
    current management information system while also upgrading its IT
    services to meet the challenges of the 21st century. However, FDA has
    made great strides since fiscal year 2004, and has accelerated its
    progress during fiscal year 2007 to centralize FDA-wide IT resources.
    FDA activities will result in strengthening FDA's base operations,
    eliminating duplicative systems, standardizing processes and
    procedures, and generally improving the efficiency of FDA IT systems.
        Starting in 2004, the FDA Business Framework established and
    implemented the Bioinformatics Board, also known as the BIB. The BIB
    provides strategic direction, coordinates FDA business processes, and
    harmonizes information management initiatives. The BIB governance
    structure operates with five Business Review Boards to harmonize FDA
    business processes across strategic lines of business. The five
    Business Review Boards address Pre-Market Activity, Post-Market Safety,
    Product Quality and Compliance, Administrative Services, and Scientific
    Computing and Computational Science.
        FDA progress coordinating the management of information systems
    matured in 2007 with the creation of the Chief Operating Officer
    position and the elevation of the Chief Information Officer. These
    actions signified the importance and criticality of Information
    Management at FDA. At the same time, the Business Review Board
    identified 5-year goals and strategic objectives for five FDA-wide
    Information Technology initiatives.
        The first initiative is the Information and Computing Technologies
    for the 21st Century, which is designed to provide modernized servers
    and analysis mechanisms to meet Bioinformatics requirements.
        The second initiative is updating MedWatch, which is a system
    created to provide a portal for adverse event reporting and consumer
    complaints.
        The third initiative is the Harmonized Inventory Project, an
    exciting endeavor to clean up legacy data and provide one source of
    truth for registration and listing information.
        The fourth initiative is the creation of a Common Electronic
    Document Room to facilitate data sharing across all of the FDA business
    lines.
        Finally, the FDA Advanced Submission Tracking and Review System,
    upon completion, will move data across applications throughout the
    continuum of the product lifecycle, from pre-approval through
    consumption, creating a close loop system encompassing all FDA business
    lines.
        In summary, these initiatives not only lay the foundation for
    integrating disparate existing systems across the FDA, but they also
    align with recently enacted legislation and action plans.
        Continuing in 2008 and beyond, FDA will achieve business driven IT
    that is managed as an FDA IT investment portfolio. FDA will standardize
    approaches to developing systems to increase interoperability, minimize
    redundancy by centralizing IT and obtain economies of scale across FDA.
    FDA will deliver the systems and functionality to implement FDA
    Amendments Act, Import Safety Action Plan, and the Food Protection
    Plan.
        These advances at FDA have raised Information Technology to a
    corporate level resource that is being directed, governed, and managed
    across FDA by the Bioinformatics Board and the CIO. This approach
    enables business driven IT support and services that allow FDA to
    achieve its mission of promoting and protecting public health.
        Question. If you were to prioritize areas where IT investment could
    be made, what would those areas be and how much would you invest?
        Answer. FDA's Business Review Board identified 5-year goals and
    strategic objectives for five FDA-wide Information Technology
    initiatives. The five initiatives are Information and Computing
    Technologies for the 21st Century, MedWatch, the Harmonized Inventory
    Project, a Common Electronic Document Room, and the FDA Advanced
    Submission Tracking and Review System. These are long-term IT projects
    and FDA is still evaluating the resource requirements to accomplish
    these IT priorities.
                            critical path activities
        Question. Last year, you joined us in Utah for a subcommittee
    hearing on FDA's critical path initiative. During the hearing we
    discussed ways that FDA can work with universities and non-profit
    organizations to optimize drug dosing for certain patients, thus
    minimizing adverse events and helping people get the drug that is right
    for them. In the fiscal year 2008 appropriations bill, the Committee
    provided $7.5 million for the critical path initiative, of which $2.5
    million was made available for competitive critical path research
    grants.
        Could you update us on your progress in this area?
        Answer. FDA has awarded more than $3 million in grants and
    contracts so far this year to external organizations to support a
    variety of critical path activities, including efforts in support of
    personalized medicine.
        For example, we renewed and extended our contract with the Critical
    Path Institute, C-Path. As you know, C-Path was co-founded by the
    University of Arizona and Stanford Research Institute, International,
    as a neutral ground for supporting collaborations on education and
    training in applied research and regulatory sciences. FDA and C-Path
    executed a memorandum of understanding that lays out the general
    parameters for these collaborations. One of these collaborations, the
    Predictive Safety Testing Consortium--PSTC--was announced in March 2006
    to develop and qualify preclinical safety biomarkers. Although that
    effort will continue, significant progress already has been made. FDA
    and our European counterpart, the European Medicines Agency (EMEA)
    currently are reviewing the validity of seven new tests, or biomarkers,
    to detect drug-induced kidney damage. The PSTC was able to bring
    together 190 international scientists to share scientific data and
    generate a novel simultaneous submission to both regulatory bodies.
        We look forward to the possibility of further transatlantic
    cooperation for safer medical products. We hope for similar, continued
    advancements from our five working groups: Kidney Toxicity, Liver
    Toxicity, Blood Vessel Toxicity, Carcinogenicity, and Muscle Toxicity.
        Question. Are there any particularly promising critical path
    projects that you would like the Committee to know about?
        Answer. We would like to share four important projects with you
    today.
        FDA is developing and implementing a single electronic portal for
    the receipt of all adverse event reports coming into the Agency--
    MedWatchPLUS. A 5-year contract was awarded to SRA International, Inc.
    in early 2008 for the integration of the MedWatchPlus portal and the
    FDA Adverse Event Reporting System, our new harmonized adverse events
    reporting system. This effort is critical for public health; it will
    greatly improve the quality and consistency of the adverse event
    reports that we receive. We are also working on a related effort with
    the National Institutes of Health to develop an electronic reporting
    questionnaire that will greatly reduce the burden on the healthcare
    community and the public when they report to us through the new portal.
        FDA is working to explore the possibility of collaborating to
    create a national, integrated, electronic system for monitoring medical
    product postmarket safety. This Sentinel System would enable FDA to
    capitalize on the capabilities of multiple, existing data systems to
    augment the Agency's current postmarket monitoring capability.
        C-Path is helping launch a large collaboration dedicated to
    advancing progress against major diseases, initially Alzheimer's and
    Parkinson's. The Coalition Against Major Diseases, CAMD, will enable
    FDA, industry, academic scientists, government agencies, and healthcare
    providers to share pooled data on the natural history of diseases. With
    these data we will generate a quantitative disease progression model
    that can be made available for all to use in designing clinical trials
    to more efficiently evaluate new therapies. This effort will be similar
    to our collective attack on HIV/AIDS.
        Finally, the Clinical Trials Transformation Initiative, CTTI, is a
    collaborative endeavor with Duke University and other academic and
    industrial Critical Path partners. The aim is to improve the efficiency
    and safety of clinical trials by incorporating new information
    technology and monitoring systems.
                              food safety research
        Question. In the fiscal year 2008 appropriations bill, the
    Committee provided $3 million for food safety research under the
    National Research Initiative at USDA. We directed the Department of
    Agriculture and FDA to work together to develop food safety research
    priorities that benefit both USDA and FDA.
        How is this effort progressing? Have you identified research
    priorities and started the process of awarding research grants?
        Answer. The FDA and USDA's Cooperative State Research, Education,
    and Extension Service, also known as CSREES, have met on several
    occasions to discuss FDA's broad food safety research priorities in
    relation to how these priorities would benefit USDA. FDA's priorities
    from these discussions are incorporated in two of the current
    priorities that CSREES announced in their request for proposal, also
    known as an RFP. Fiscal year 2008 research priorities will address
    human enteric viruses or microbial toxins in the areas associated with
    seafood and in the areas of fresh fruits, nuts, and vegetables.
        For fiscal year 2008, CSREES' Food Safety Program's review panel
    met April 22 through 24, 2008, to rank proposals received. One FDA
    scientist participated as a member of the review panel. Awards will be
    made based on normal CSREES extramural and contract procedures. FDA has
    had additional discussions with CSREES regarding establishing a more
    formal process for seeking FDA's input into the development of next
    year's RFPs, and FDA is currently moving forward with those
    arrangements.
        Question. What are the food safety research priorities for FDA?
        Answer. FDA's Food Protection Plan emphasizes the need to know the
    science underpinning how and where food becomes contaminated and the
    associated risks. The Food Protection Plan also highlights the use of
    science to determine optimal interventions to reduce the likelihood of
    contamination and harm. The Center for Food Safety and Applied
    Nutrition, known as CFSAN, the Center for Veterinary Medicine, known as
    CVM, and the National Center for Toxicological Research, known as NCTR,
    work collaboratively to advance research in the food safety arena.
        The following information describes the CFSAN food safety research
    priorities. FDA periodically updates its research priorities to reflect
    the changing needs of food programs. CFSAN is currently updating its
    research priorities since the center successfully completed a cycle of
    research focused on food defense issues. The center is initiating
    research to support our Food Protection Plan. These priorities include
    addressing issues related to the prevention, intervention and response
    components of the Food Protection Plan. Priority regulatory activities
    that will require substantial research support are likely to include
    work in chemical and microbiological sampling and detection methods,
    interventions to prevent the contamination of produce and dairy
    products, assessing the safety of dietary supplements, research to
    support dietary guidelines, conducting of evidenced-based evaluation of
    health claims, and developing and disseminating guidance to
    stakeholders for food safety concerns. CFSAN will address these
    research needs through intramural and extramural research, Centers of
    Excellence partnership programs, and our established interactions with
    research agencies such as USDA's Cooperative State Research, Education,
    and Extension Service, USDA's Agricultural Research Service, and the
    National Institutes of Health.
        The following information describes the CVM food safety research
    priorities. In the area of antimicrobial safety, CVM is developing
    rapid methods such as microarray and biomarkers to screen foodborne
    pathogens for genetic relatedness. CVM is also developing rapid methods
    to screen for the carriage of resistance genes in order to measure the
    migration of resistance genes from the animal production environment to
    humans where they can cause intestinal illness. This information will
    help assess the risk associated with antimicrobial use in food-
    producing animals. CVM's National Antimicrobial Resistance Monitoring
    System, or NARMS, provides ongoing monitoring data on the antimicrobial
    susceptibility patterns in common foodborne bacteria. This information
    can be used to alert the veterinary medical community and regulatory
    officials about emerging resistance problems that may compromise drug
    efficacy.
        In the area of animal feed safety, CVM is developing and validating
    methods for detecting prohibited proteins from the United States and
    European Union sources in animal feeds. The methods will provide
    Federal and State investigators with rapid and sensitive tools for
    enforcing the FDA Feed Ban, thus preventing the spread of BSE in cattle
    and the possible outbreak of variant Creutzfeldt-Jakob disease in
    humans. We are also conducting residue depletion and toxicity studies
    associated with melamine and cyanuric acid in animal feeds. Information
    from these investigations will aid in assuring the safety of animals
    consuming contaminated feed and humans consuming animal products.
        In the area of drug residues and chemical contaminants, CVM is
    developing methods for use in Federal and State regulatory laboratories
    to detect illegal drug residues in animal-derived foods such as
    aquaculture products and honey. Methods are being developed to detect
    illegal residues, natural toxins, and dangerous contaminants in animal
    feeds. Significant progress has been made in developing methods to
    detect melamine and cyanuric acid in feeds, and to develop methods
    capable of testing for a variety of contaminants in distillers' grains,
    a byproduct of the ethanol industry frequently used as a component of
    animal feeds.
        NCTR provides research that supports FDA's food safety priorities
    in three specific areas. NCTR is conducting research to develop,
    validate, and implement test methods to rapidly detect chemical and
    microbial contamination of food. The results of this research are
    evaluated for application in the FDA Office of Regulatory Affairs field
    laboratories as well as in commercial food facilities. NCTR research
    also assesses the biological activity of food contaminants. This
    research includes determining the toxic effects of the contaminants,
    evaluating methods to neutralize the contaminant, and investigating
    pathways of antimicrobial resistance. NCTR develops tools that assist
    FDA to identify high-risk products, and thereby facilitate optimal use
    of inspection resources. These tools include statistical models and
    methods to evaluate the risk potential of imported and domestic
    products. NCTR is also collaborating to develop a database that
    contains genetic information about bacterial strains that can be used
    to differentiate between pathogens and nonpathogens and facilitate
    tracing pathways of contamination.
                         generic drug citizen petitions
        Question. Dr. von Eschenbach, you've mentioned in public statements
    that one significant challenge posed by the Food and Drug
    Administration Amendments Act is the 180-day deadline for FDA to take
    final action on certain citizen petitions related to the approval of
    generic drugs. You've stated that meeting this new deadline will
    require significant new efforts and additional resources.
         For the past 2 years, this subcommittee has provided FDA with more
    money than was requested in the budget for generic drug review. Is it
    possible to use these resources to assist with the review of citizen's
    petitions?
        Answer. FDA recognizes the value of the subcommittee's interest and
    support for the Generic Drug Review program, as represented by the
    additional resources provided for generic drug review during the last 2
    years. The increased funding has been instrumental in ensuring that FDA
    can continue its performance in expanding the availability of high-
    quality generic drug products and providing consumers and healthcare
    providers with information on the safety and effectiveness of generic
    drugs.
        The staff hired with the new funding that FDA received in recent
    years is not specifically focusing on reviewing citizen petitions.
    However, increased staff helps to ensure that the Office of Generic
    Drugs has the expertise necessary to reviewing citizen petitions.
        Question. Do you have an estimate of how much would be necessary to
    meet this new deadline? If so, how much?
        Answer. Review of Citizen Petitions subject to Section 914 of the
    Food and Drug Administration Amendments Act of 2007 involves the work
    of experts in several offices throughout FDA, including CDER's Office
    of Regulatory Policy, Office of Generic Drugs, and the Office of New
    Drugs, as well as the Office of Chief Counsel. We estimate that a total
    of 40 additional FTEs would be needed to adequately staff all of these
    offices for this purpose.
                implementation of the fda amendments act of 2007
        Question. Congress passed, and the President signed into law, the
    Food and Drug Administration Amendments Act last September. The act is
    very broad. It reauthorized and expanded FDA's drug and device user
    fees and included provisions related to food safety, drug safety,
    research on pediatric products, and advisory committees. According to
    FDA's implementation plan, the act included 125 separate clauses or
    provisions that require action.
        How are the agency's implementation plans progressing? What would
    you consider the greatest implementation challenge for the agency?
        Answer. FDA efforts to implement the Food and Drug Administration
    Amendments Act, also known as FDAAA, are proceeding well. After FDAAA
    passed last year, we determined that there were approximately 125
    provisions which FDA needed to implement or would have a role in
    implementing. These provisions, however, represent many more individual
    tasks. For example, one provision may take thirty individual tasks to
    accomplish while another provision may require only two or three tasks.
    As we implement the provisions, additional tasks are added as the full
    impact of a provision is not always obvious at the outset of
    implementation.
        There are several challenges in implementing FDAAA. The complexity
    and breadth of the provisions coupled with various specific deadlines
    pose an enormous challenge to FDA--one that I believe agency employees
    are doing their best to meet.
        Question. Are you meeting the deadlines set forth in the
    legislation?
        Answer. At the current time we have been able to meet almost all of
    the specific deadlines required by FDAAA.
                       medical device review performance
        Question. As you know, I've been very interested in the medical
    device user fee program and I have asked many questions about the
    performance of the program since it was enacted. In addition, this
    subcommittee has shown a significant amount of support for this program
    by providing inflationary increases to fully fund the program.
        Can you tell us how the agency is doing in regards to meeting the
    performance goals associated with the user fee program?
        Answer. FDA continues to succeed in improving the process for the
    review of medical device applications and meeting the performance goals
    first established under the Medical Device User Fee and Modernization
    Act of 2002, known as MDUFMA. Title II of the Food and Drug
    Administration Amendments Act of 2007 continued MDUFMA performance
    goals.
        MDUFMA requires close collaboration with stakeholders and increased
    communication with applicants. FDA is working to clarify its regulatory
    requirements and make its decisions more transparent through new
    guidance, educational materials, and meetings. We continually seek to
    enhance the efficiency and flexibility of our review processes. These
    efforts help applicants improve the quality of their submissions, and
    help FDA provide more timely, better-focused reviews. Our ultimate
    objective is to make important new medical devices available to
    patients and healthcare providers earlier, while continuing to ensure
    the quality, safety, and effectiveness of those devices.
        I would be happy to provide for the record a table that summarizes
    FDA's performance on the goals established for the fiscal year 2003-
    fiscal year 2007 receipt cohorts, showing results achieved through
    March 31, 2008. The goals applicable to the fiscal year 2008 receipt
    cohort have been in place for only 6 months, so it is too early for
    statistical measures to provide useful insights into our progress
    towards achieving those goals. FDA has, however, taken action to ensure
    that we are well positioned to achieve the goals for fiscal year 2008-
    fiscal year 2012. FDA is developing and implementing a new interactive
    review process that will contribute to better communication with
    applicants and more rapid resolution of review questions.
        [The information follows:]

                                                     QUARTERLY REPORT ON PROGRESS TOWARDS ACHIEVING MEDICAL DEVICE PERFORMANCE GOALS SUMMARY TABLES
                                                                             [Actions through March 31, 2008--Data for FDA]
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Performance Goals and Actual Performance to Date
                                                                                       -------------------------------------------------------------------------------------------------------------
                                                                                          Fiscal Year 2003      Fiscal Year 2004      Fiscal Year 2005      Fiscal Year 2006      Fiscal Year 2007
                        Activity                              Review Time Goal         -------------------------------------------------------------------------------------------------------------
                                                                                                     Actual                Actual      Goal      Actual      Goal      Actual      Goal      Actual
                                                                                           Goal     Percent      Goal     Percent    Percent    Percent    Percent    Percent    Percent    Percent
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    PMAs, Panel-Track Supplements, Premarket
     Reports:
        FDA decision (approval, approvable,          320 days.........................  .........       91.8  .........       91.7  .........       87.7         80       83.7         90        100
         approvable pending GMP inspection, not
         approvable.
        FDA decision--Percent within 180 days......  180 days.........................  .........       44.9  .........       37.5  .........       29.8  .........       36.7         50       41.2
    Expedited PMAs:
        FDA decision (approval, approvable,          300 days.........................  .........        100  .........       92.3         70       83.3         80        100         90  .........
         approvable pending GMP inspection not
         approvable.
    180-day PMA Supplements:
        FDA decision (approval, approvable,          180 days.........................  .........       94.1  .........       95.3         80       95.0         80       97.0         90       92.8
         approvable pending GMP inspection not
         approvable.
    510(k)s:
        FDA decision (SE/NSE)......................  90 days..........................  .........       76.1  .........       83.9         75       91.1         75       91.6         80       92.7
    Biologics Licensing Applications (BLAs):
        Review and act on standard original BLAs     10 months........................  .........  .........  .........        100  .........        100         75       97.7         90       97.7
         (issue ``complete action'' letter).
        Review and act on priority ordinal BLA       6 months.........................  .........  .........  .........  .........  .........  .........         75  .........         90  .........
         submissions (issue ``complete action''
         letter).
    BLA Supplements:
        Review and act on standard BLA efficacy      10 months........................  .........        100  .........  .........  .........  .........         75  .........         90  .........
         supplements (issue ``complete action''
         letter).
        Review and act on priority BLA efficacy      6 months.........................  .........  .........  .........  .........  .........  .........         75  .........         90  .........
         supplements (issue ``complete action''
         letter).
        Review and act on BLA manufacturing          4 months.........................  .........  .........  .........  .........  .........  .........         75  .........         90  .........
         supplements that require prior approval
         (issue ``complete action'' letter).
    BLA Resubmissions, BLA Supplement
     Resubmissions:
        Review and act on a Class I resubmission to  2 months.........................  .........  .........  .........  .........         75        100         80  .........         90        100
         an original BLA or BLA efficacy supplement
         (issue ``complete action'' letter).
        Review and act on a Class 2 resubmission to  6 months.........................  .........        100  .........         80         75        100         80        100         90        100
         an original BLA or BLA efficacy supplement
         (issue ``complete action'' letter).
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. What criteria does the agency use to determine the
    allocation and priority for the distribution of any increase in staff
    across FDA components, including offices, divisions, or branches
    resulting from the medical device user fees and related Congressional
    appropriations?
        Answer. The Food and Drug Administration Amendments Act of 2007,
    known as FDAAA, was signed into law on September 27, 2007. FDAAA
    reauthorized FDA's authority to collect fees from the medical device
    industry under the Medical Device User Fee and Modernization Act, also
    known as MDUFMA. The activities that comprise the medical device review
    process are defined in MDUFMA. Medical device review components within
    FDA that conduct activities that are included in the review process, as
    defined by MDUFMA, receive increased allocations from device user fee
    collections.
        FDA allocates medical device user fees and other medical device
    appropriations to best achieve FDA's public health objectives, device
    performance goals, and other expectations established under MDUFMA, as
    amended. The allocation between the Center for Devices and Radiological
    Health, or CDRH, and the Center for Biologics Evaluation and Research,
    or CBER, is based on the workload balance between the two centers. FDA
    estimates the percent of the device review workload performed by CDRH
    and CBER, and allocates MDUFMA resources accordingly. Field resources
    are allocated among FDA district offices by the Office of Regulatory
    Affairs according to each district's projected workload. The Centers
    and ORA apportion their individual resource allocations to their
    offices, divisions, and branches.
        Question. Even though the devices center has received significant
    increases over the past few years, I understand that the demands on
    staff are very high. Are there additional tools, such as third party
    reviews, third party inspections, or fellowship programs available to
    augment the work of the center? Please discuss the benefits of these
    programs and why they are important.
        Answer. These three programs--third-party review of 510(k)
    premarket notifications, third-party establishment inspections, and the
    Medical Device Fellowship Program--provide FDA with important tools
    that can help us better achieve our public health objectives.
        The purpose of the program permitting third-party review of certain
    510(k) premarket notifications is to improve the efficiency and
    timeliness of FDA's 510(k) process. This is the process by which most
    medical devices receive marketing clearance in the United States. Under
    the program, FDA has accredited third-parties that are authorized to
    conduct the primary review of 510(k)s for eligible devices. Persons who
    are required to submit 510(k)s for these devices may elect to contract
    with an Accredited Person and submit a 510(k) directly to the
    Accredited Person. The Accredited Person conducts the primary review of
    the 510(k), then forwards its review, recommendation, and the 510(k) to
    FDA. By law, FDA must issue a final determination within 30 days after
    receiving the recommendation of an Accredited Person. 510(k) submitters
    who do not wish to use an Accredited Person may submit their 510(k)s
    directly to FDA. FDA data shows that third-party reviews are somewhat
    more rapid than an FDA review in some instances. Third-party 510(k)s
    submitted to FDA are also exempt from any medical device user fee that
    would otherwise apply.
        As of April 15, 2008, FDA has accredited 16 third-party
    organizations to conduct quality systems inspections of certain medical
    device establishments. Individuals from eight of these organizations
    have completed FDA's training requirements and FDA has cleared these
    individuals to conduct independent inspections. Through April 15, 2008,
    accredited organizations have conducted six inspections. Although few
    inspections have been conducted to date, changes specified by the Food
    and Drug Administration Amendments Act of 2007, also known as FDAAA,
    have the potential to eliminate certain obstacles to manufacturers'
    participation in FDA's programs for inspections by accredited third
    parties.
        CDRH established the Medical Device Fellowship Program, also known
    as MDFP, to increase the range and depth of collaborations between CDRH
    and the outside scientific community. The MDFP offers short and long-
    term fellowship opportunities for individuals interested in learning
    about the regulatory process and sharing their knowledge and experience
    in the many specialized fields that concern medical devices. Physicians
    with clinical or surgical expertise, engineers in biomedical,
    mechanical, electrical and software areas, and individuals from many
    other scientific disciplines have participated in the fellowship
    program. Opportunities are available for students in many other areas
    as well. This collaboration improves FDA's review processes, postmarket
    surveillance, and science base, all of which contribute to efforts to
    ensure patients and health care professionals have timely and continued
    access to safe and effective medical devices.
                role of physicians in medical device development
        Question. As you know, I've been very interested in the medical
    device user fee program and I have asked many questions about the
    performance of the program since it was enacted. In addition, this
    subcommittee has shown a significant amount of support for this program
    by providing inflationary increases to fully fund the program.
        The role of physicians in medical device development and
    utilization is often not well understood. Can you comment on the role
    that physicians play in the development of new technologies? Does FDA
    ever require device companies to train physicians in the use of new
    technologies?
        Answer. A physician may play any number of roles in product
    development and use, including developer, researcher, investigator,
    instructor, as well as end user. For example, a physician may identify
    a problem in medical care, which could initiate the development of a
    new device. Physicians may also be involved in the conduct of research
    on a device, including serving as primary investigators, on
    Institutional Review Board committees, or as monitors of large clinical
    trials. A physician serving as an investigator may participate in data
    collection and data analysis for a device premarket submission and may
    also represent the company in presenting this information to FDA. Once
    a device is cleared or approved for marketing, physicians may also have
    a role in teaching other physicians about device use, for example, as a
    means of promoting safe and effective use.
        Yes, FDA has required training as a condition of approval included
    in premarket approval application orders. For example, carotid stent
    approval orders require that labeling specify the training requirements
    that apply to practitioners before they may use these stents. Also,
    many firms voluntarily provide training for physicians.
                      office of generic drugs productivity
        Question. The subcommittee is sympathetic to the workload that the
    Office of Generic Drugs (OGD) is facing. We all understand and
    appreciate that generic drugs are cost-effective alternatives that save
    consumers billions of dollars a year and we appreciate the work that
    OGD is doing.
        With respect to FDA's performance goals, in your most recent budget
    justification, you indicate two factors have served to lower your
    productivity. You said that the move to the White Oak campus is
    ``expected to cause a disruption in productivity.'' You also indicated
    that working under a Continuing Resolution during the First Quarter in
    fiscal year 2008 has caused a delay in hiring and training new staff at
    OGD.
        Given that you have now announced OGD's move to White Oak, please
    provide the Committee with an update on your projected productivity at
    OGD? In addition, we would appreciate your providing an update on the
    number of new staff hired and trained with the funding the Committee
    provided last year.
        Answer. OGD will remain in its current Metro Park North buildings
    for the immediate future. OGD currently occupies three buildings on
    that the Metro Park North complex.
        Overall productivity remains high. However, it is still difficult
    to keep pace both with the incoming applications and with other matters
    requiring OGD resources such as Citizen Petitions, lawsuits challenging
    the approval of generic drugs, and providing guidance to the industry.
        In the period from October 1, 2007 through April 15, 2008, OGD has
    been able to hire 31 new staff representing a variety of scientific and
    clinical expertise. These new hires are undergoing training. Once that
    training is completed, OGD expects them to make significant
    contributions to review performance.
                        generic drug application actions
        Question. You have advised the Committee that the OGD target is
    1,900 actions for fiscal year 2009, including approvals, tentative
    approvals, not approvable, and approvable actions on applications. You
    have also said that your target approval time for the fastest 70
    percent of original generic drug applications approved for the fiscal
    year 2003-2005 cohort is 17.8 months, an increase of 1.8 months from
    the fiscal year 2002-2004 cohort of 16.0 months. This, of course, is
    contrasted with the statutory review time of 6 months.
        Will the new staff you have hired and trained affect these
    projected times?
        Answer. OGD believes that it will make the goal of 1,900 actions in
    fiscal year 2009. The Office is on track to exceed the fiscal year 2008
    goal of 1,780 actions. As recently hired staff becomes fully trained,
    OGD will be more confident in its ability to reach these goals. Current
    performance is based on many overtime hours.
        The fiscal year 2003-2005 cohort approval time is 16.6 months. The
    cohorts for subsequent years are not sufficiently populated to make a
    determination. OGD does know that its yearly median time to approval
    has increased due to the escalating workload. OGD continues to endeavor
    to take first action (approval, not approval, or tentative approval)
    within the statutory timeframe but the volume of applications often
    thwarts OGD efforts.
        As background regarding Abbreviated New Drug Application (ANDA)
    review times, the Food, Drug, and Cosmetic Act states in section
    505(j)(5)(A), ``Within 180 days of the initial receipt of an
    application under paragraph (2) . . . the Secretary shall approve or
    disapprove the application.'' Therefore, either an approval or not
    approval or similar action not resulting in approval is considered by
    FDA to be an action that meets this statutory timeframe. FDA makes
    every attempt to meet this statutory timeframe. However, for a number
    of reasons it is not always possible to do so. After receiving a
    disapproval action, manufacturers frequently resubmit applications that
    address the deficiencies identified in the disapproval action.
        Question. Can you provide the Committee with information on the 30
    percent of generic drug applications that are outside your ``70 percent
    measure'' . . . For example, could you provide us with information on
    the most speedily approved and the most delayed in approval ANDAS (e.g.
    how fast ANDAs outside the 70 percent cohort have been approved, and
    how long others have been delayed)?
        Answer. Generally, the quickest ANDA approvals or tentative
    approvals have been applications submitted under the President's
    Emergency Plan for AIDS Relief (PEPFAR). Traditionally, the review of
    these applications is expedited.
        In general, applications that take longer to review and approve are
    from less experienced manufacturers, cover highly complex products or
    dosage forms, or are related to products that are the subject of
    Citizen Petitions challenging FDA's approval requirements for the
    drugs. Applications can also take longer to approve if concerns are
    raised during facility inspections. For example, applications from one
    firm were on hold for about 2 years because the manufacturer had been
    unable to address inspection issues. These cases can delay a number of
    applications and affect the overall average time to approval. In
    addition, delays are often caused by the applicants themselves. For
    internal business reasons, firms may not place high priority on certain
    applications and may not respond to deficiency letters in a timely
    fashion. This can considerably delay approval time.
        Also, please note that some applications may never be approved
    because the applicant cannot demonstrate to OGD that the proposed
    product meets all of the requirements for approval. It is important to
    understand that part of OGD's mission is fulfilled by preventing
    inferior, unsafe, and dangerous products from entering the market.
    Whether a product is approved and how quickly it is approved is
    controlled by both OGD and other supporting FDA organizations, and the
    applicants themselves. Poor submissions or inadequate proposed products
    can result in substantial delays to approval time or in a proposed
    product never being approved.
        Question. How long have the oldest ANDAs which are still under
    review been pending before the FDA?
        Answer. There are two unapproved applications for a product that
    were submitted 8 and 9 years ago. However, that product has a long and
    complicated regulatory history that has affected the review of the
    applications. The next oldest applications were received about 4 years
    ago. Action on those applications has not occurred because FDA must
    consider issues raised in citizen petitions that relate to the
    approvability of the products.
        Also, please note that some applications may never be approved,
    because the applicant cannot demonstrate to OGD that the proposed
    product meets all of the requirements for approval. It is important to
    understand that OGD's mission is fulfilled by preventing inferior,
    unsafe, and/or dangerous products from entering the market. Whether a
    product is approved and how quickly it is approved is controlled by
    both OGD (and other supporting FDA organizations) and the applicants
    themselves. Poor submissions and/or inadequate proposed products can
    result in substantial delays to approval time or a proposed product
    never being approved.
        Let me now turn to one example of what appears to be an extremely
    long delay in approval of an Abbreviated New Drug Application that has
    been brought to my attention. We are aware that the agency has had
    under review for several years one or more ANDAs with respect to
    enoxaparin, a low molecular weight heparin, which, some scientists
    believe has a better safety profile.
        Question. Given the recent heparin recall, without revealing any
    confidential information, could you outline the efforts the agency is
    making to approve generic substitutes on a priority basis, if any? Is
    the agency close to giving final approval to generic alternatives?
        Answer. OGD has not approved an abbreviated application for
    enoxaparin. Therefore, the Office may not discuss the manner in which
    any review is handled nor may OGD indicate how close any potential
    approval might be. OGD will expedite the review of any new applications
    for heparin in an effort to alleviate a possible shortage situation.
    However, we cannot comment on the existence or status of pending
    applications.
        Question. If a shortage of any drug becomes critical, what steps is
    the agency taking to make certain adequate alternative supplies are
    available to patients? Are generic alternatives included in these
    steps?
        Answer. It has been the practice in OGD to expedite reviews of
    applications for products that may prevent or remedy potential
    shortages or in matters affecting the public health. This practice is
    reflected in a Manual for Policies and Procedures for OGD which states:
    ``Certain applications may be identified at the time of submission for
    expedited review. These include products to respond to current and
    anticipated public health emergencies, products under special review
    programs such as the President's Emergency Plan for AIDS Relief
    (PEPFAR), products for which a nationwide shortage has been identified
    . . . ''
                                     ______

                  Questions Submitted by Senator Arlen Specter

                             generic bioequivalence
        Question. The FDA's Office of Generic Drugs has not provided a
    public process for the development of new bioequivalence methods for
    locally acting drugs. Bioequivalence is used to ensure that a generic
    drug will be equivalent to a brand name drug. FDA should not develop
    new scientific methods without transparency, or use those methods to
    review drug applications until the methods have undergone public and
    peer review.
        In a May 1, 2007 policy statement, the FDA stated that the
    development of ``methods for the assessment of bioequivalence of
    locally acting drugs'' is an area where ``additional discussion and
    collaboration about the science'' are needed. The expected result of
    that statement would be an open public process when developing new
    bioequivalence methods for locally acting drugs. However, the approval
    process for Vancocin and Lidoderm continue to be developed without
    transparency.
        Generic drugs are an important part of our healthcare system.
    Currently, over 60 percent of the prescriptions written in the United
    States are for generic drugs. Critical to ensuring the safety and
    effectiveness of generic drugs is the science used to establish
    bioequivalence of these generic drugs. I have spoken with you on a
    number of occasions regarding the need for a public process for
    development of new bioequivalence methods for locally acting drugs.
    Further, I have sent five letters regarding this issue. They were sent
    on: December 29, 2006, April 3, 2007, September 26, 2007, and March 28,
    2009. On March 28, I sent two letters one regarding locally acting
    drugs the other specifically on Lidoderm.
        Will you commit to developing a process that ensures public review
    of the data and rationale behind new bioequivalence methods for locally
    acting drugs before those new methods are used to review or approve
    generic products?
        Answer. In response to your April 3, 2007 letter, FDA advised that
    notice-and-comment rulemaking is not necessary to ensure that the
    standards applied by FDA to the approval of generic vancomycin products
    are scientifically sound and have been thoroughly reviewed by
    appropriate medical and technical experts. Since the passage of the
    Hatch-Waxman amendments in 1984, FDA determined the bioequivalence
    criteria for hundreds of products without notice-and-comment
    rulemaking. These products included products to treat cancer, HIV/AIDS,
    and other serious diseases. Just as in assessing whether the sponsor of
    an innovator drug has submitted adequate studies to establish that its
    product is safe and effective, FDA relies on the most up-to-date and
    rigorous science available in assessing whether an Abbreviated New Drug
    Application, known as an ANDA, sponsor has submitted adequate evidence
    of bioequivalence.
        FDA can obtain public input regarding applicable bioequivalence
    criteria through a number of mechanisms. Currently, whenever possible,
    FDA is making bioequivalence recommendations available to industry as
    guidance, to assist in the development of new generic products. The
    guidance is initially available in draft and public comment is invited.
    FDA develops guidance based on procedures set forth in regulations
    which establish Good Guidance Practices. As a general matter, these
    regulations provide for a process by which the public can comment on
    draft guidance and suggest alternative methods. FDA has also sought
    input from the Advisory Committee for Pharmaceutical Science on
    recommendations for bioequivalence studies for locally acting drugs
    related to the products you mentioned. We are considering holding an
    additional Advisory Committee meeting in the near future at which these
    issues will be examined. As we have stated in the past, we continue to
    consider your concerns as we address these scientific challenges.
                                  pre-emption
        In recent years, the FDA has made clear in final and proposed
    regulations, and in amicus briefs submitted to courts, the agency
    believes its decisions regarding approval of drugs, medical devices,
    and the labels on the drugs and devices pre-empt State law tort claims
    against manufacturers. On this basis, many courts are dismissing
    negligence and failure to warn claims against drug and device
    manufacturers if the FDA has approved the device, drug or label. Some
    argue that State tort claims are the only means for consumers to seek
    redress for injuries caused by insufficient warnings on drugs or
    malfunctioning devices.
        Question. Given the FDA's unsatisfactory track record of making
    certain that drugs are safe and that consumers or physicians are warned
    of all possible consequences of taking drugs, how can you justify the
    FDA's recent attempts at asserting pre-emption of State tort claims?
    What is the harm in allowing the injured, or families of those who have
    died, from seeking redress based on State law?
        If the courts continue relying on rules and regulations issued by
    the FDA and dismiss cases on pre-emption grounds, the FDA really needs
    to ensure that it is making the correct decisions. The American people
    will be counting on the FDA more than ever before.
        Answer. FDA shares your concerns about drug safety and the ability
    of consumers to seek redress for injuries caused by drugs and devices.
    However, FDA is also concerned that State product liability lawsuits
    that challenge FDA's careful determination of safety, efficacy, and
    appropriate labeling can have detrimental effects on public health in a
    number of ways. Examples of detrimental effects include limiting
    patient and doctor choices, decreasing patient access to beneficial
    drugs, and creating confusion over warnings or statements that can
    deter the use of beneficial drugs.
        It is vital to public health that labeling neither underwarns nor
    overwarns. The public health risks associated with overwarning can be
    as great as the health risks associated with underwarning. Overwarning
    can cause patients not to use beneficial medical products and doctors
    not to prescribe them. Underutilization of a product based on
    dissemination of scientifically unsubstantiated warnings, so as to
    deter patients from undertaking beneficial, possibly lifesaving
    treatment, could frustrate the purposes of Federal regulation as much
    as overutilization resulting from a failure to disclose a drug's
    scientifically demonstrable adverse effects. Further, allowing
    unsubstantiated warnings may also diminish the impact of valid warnings
    by creating an unnecessary distraction and making even valid warnings
    less credible.
        In making these crucial balancing decisions, FDA abides by
    standards set forth in regulations and guidance documents that are
    issued through a public process. FDA is the scientific regulatory body
    that is publicly accountable for effectively executing its mission of
    protecting and promoting the public health. FDA believes that State
    court actions that undermine FDA decisions may have the consequence of
    serving to hinder, rather than help, public health.
        Question. Does the FDA have the resources to adequately protect
    consumers of drugs and medical devices? Given the recent, highly
    publicized safety issues with drugs and medical devices, how can you
    assure the American people that the drugs they are prescribed are safe
    enough to justify pre-empting State law and denying access to the
    courts when people are injured or killed?
        Answer. Congress has charged FDA with the responsibility to ensure
    that drugs, biologics, and devices are safe and effective, and that the
    labeling of these products adequately informs users of the risks and
    benefits of the products. FDA considers not only complex clinical
    issues related to the use of a product in study populations, but also
    practical public health issues about the use of a product in day-to-day
    clinical practice. FDA examines the nature of the disease or condition
    for which the product will be indicated, and the need for risk
    management measures to help assure that the product maintains a
    favorable benefit-risk balance. FDA believes, based on the authority
    that Congress has given it and the scientific expertise that resides in
    the Agency, that it is uniquely qualified to make important judgments
    about the safety, effectiveness, and labeling of medical products.
        FDA extensively reviews drugs and devices for safety and efficacy
    using standards specified in the law. FDA doctors, chemists,
    statisticians, microbiologists, pharmacologists, and other experts
    evaluate whether a product is safe and effective. In addition to its
    comprehensive pre-market review of medical product safety and efficacy,
    FDA engages in post-market surveillance to detect and respond to
    emerging information about products after they have been on the market.
    Manufacturers must review and report to FDA any adverse events
    associated with use of a drug in humans, and must periodically submit
    any significant new information that may affect FDA's previous
    conclusions about the safety, effectiveness, or labeling of a drug.
    Device sponsors have similar obligations. FDA is currently modernizing
    its post-marketing surveillance and risk communication efforts through
    implementation of the Food and Drug Administration Amendments Act of
    2007 and other major initiatives. FDA believes its teams of scientists
    are unsurpassed in ensuring that labeling meets patients' needs.
        On September 27, 2007, the President signed the Food and Drug
    Administration Amendments Act into law, also known as FDAAA. FDAAA
    reauthorized two important user fee programs, the Prescription Drug
    User Fee Act, also known as PDUFA, and the Medical Device User
    Modernization Act, also known as MDUFMA. PDUFA and MDUFMA provide FDA
    with the resources to assure the safety and effectiveness of human
    drugs and medical devices. For fiscal year 2008, FDA will receive
    $459.4 million in PDUFA fees and $48.4 million in MDUFMA fees. These
    additional resources will help FDA to achieve its mission of assuring
    the safety and effectiveness of human drugs and medical devices.

                             CONCLUSION OF HEARINGS

        Senator Kohl. This hearing is recessed.
        [Whereupon, at 11:05 a.m., Tuesday, April 15, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2009

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

        [The following testimonies were received by the
    Subcommittee on Agriculture, Rural Development, Food and Drug
    Administration, and Related Agencies for inclusion in the
    record. The submitted materials relate to the fiscal year 2009
    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 our Nation's food aid programs, including Titles I and II
    of Public Law 480, and therefore strongly opposes the administration's
    repeatedly rejected proposal to divert food aid funding to cash
    assistance programs.
    ---------------------------------------------------------------------------
        \1\ The ad hoc coalition is composed of the America Cargo Transport
    Corp., American Maritime Congress, American Maritime Officers, American
    Maritime Officers' Service, American Soybean Association, Global
    Container Lines Ltd., Global Food and Nutrition Inc., International
    Food Additives Council, International Organization of Masters, Mates &
    Pilots, Liberty Maritime Corporation, Maersk Line, Ltd., 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,
    Seafarers International Union, Sealift, Inc., Tosi Maritime
    Consultants, LLC, Transportation Institute, United Maritime Group, LLC,
    USA Dry Pea & Lentil Council, USA Rice Federation, U.S. Dry Bean
    Council, and U.S. Wheat Associates, Inc.
    ---------------------------------------------------------------------------
                     guiding principles of food aid policy
        The coalition recognizes that American food assistance policy is
    well-established and founded on certain guiding principles, including:
      --Meeting America's humanitarian obligation to sustain international
            aid programs, with U.S. participation in such programs
            constituting more than 50 percent of all food aid worldwide.
      --Employing food assistance programs overseas as stepping stones for
            economic growth and development, helping break the cycle of
            hunger and poverty.
      --Employing food assistance programs to demonstrate American
            compassion for disadvantaged populations, thereby enhancing
            goodwill toward America.
                         the sharp decline in food aid
        Food aid has enjoyed broad, bipartisan support for many decades.
    The strength of our commitment has made the United States the world's
    leading supplier of humanitarian assistance. American food aid has
    saved countless lives while bolstering American agriculture and helping
    aid recipients strengthen and stabilize their economies.
        In recent years, however, food aid shipments have declined sharply.
    Food aid shipments have decreased 71 percent, from 9.1 million tons in
    1999 to a low of 2.7 million tons in 2007, as illustrated in the
    following chart:

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Source: United States Maritime Administration.
        In short, food aid shipment levels are now less than one third of
    what they were a decade ago. Therefore, we respectfully request that
    this steady erosion of food aid be reversed, and that funding be
    restored to sustainable levels to assure the continued effectiveness
    and stability of these important and historically successful programs.
                the administration's budget for fiscal year 2009
        The administration proposes to continue last year's total
    elimination of funding for Title I.
        Over the last several years, as funding for Title I has
    disappeared, the vast majority of food aid donations have been provided
    through the Food for Peace (Public Law 480) Title II program, which the
    administration proposes to further reduce by $439 million from the
    actual fiscal year 2007 levels. Moreover, under the President's budget,
    Title II food aid would be reduced by up to $305 million and converted
    to overseas aid purchases at the discretion of the Administrator for
    USAID. The reduction will almost certainly violate the statutory
    minimum of 2.5 million metric tons of food aid required by Title II.
        The administration has requested $100 million for the McGovern-Dole
    International Food for Education and Child Nutrition Program
    (``IFEP''), representing approximately 70,000 tons of commodities. This
    proposal represents a 22 percent decrease in food shipped from last
    year's proposal of 90,000 tons shipped under McGovern-Dole.
        Lastly, the administration has signaled, once again, that no
    surplus commodities will be made available for donation in fiscal year
    2009 under the authority provided by Section 416(b) of the Agricultural
    Act of 1949. This represents another year of diminished reliance on the
    successful 416(b) program, which is funded through the Commodity Credit
    Corporation (``CCC''). As USAID has explained, the mothballing of
    416(b) has resulted in the decline of overall food aid resources
    available and additional pressures to re-direct Title II non-emergency
    program resources to emergency programs.
        The administration's recommendations, taken together, would lead to
    significant reductions in food aid. For the reasons set forth below,
    the coalition urges this subcommittee to sustain Title II funding,
    reinvigorate the Title I program, and reject, for the fourth time, the
    administration's proposal to divert up to a quarter of Title II
    appropriations into a discretionary account for USAID.
             restoration of overall food assistance program levels
        The coalition recommends that food aid be restored over time to
    sustainable levels in the range of 5 million to 6 million metric tons
    of grain equivalent in each fiscal year. In fiscal year 2009, this
    would require restoration of Title I funding, an increase in funding to
    meet the minimum 2.5 million metric tons required by statute, and
    greater use of existing authorities of the CCC.
        USDA's fiscal year 2009 Budget Summary justifies the elimination of
    Title I as necessary because recipient countries have been more
    interested in direct grants under Title II than concessional sales
    under Title I.
        In order to ensure that countries with the direst need have
    sufficient donated food aid, the coalition recommends that USDA offer
    the Title I concessional sales program to countries that can afford it.
    Among the countries receiving Title II-funded grants in recent years,
    some reasonably could afford to make the transition from grant
    assistance to concessional sales, using the direct loan authority of
    Title I.
        To the extent that the Title I funding truly cannot be used for
    concessional sales, it may be converted to donations on full grant
    terms through the Food for Progress (``FFP'') program. There is strong
    demand for Title I funding channeled through FFP: For fiscal year 2007,
    100 proposals were submitted by PVOs and 16 by governments, but only 11
    new proposals were approved.
             elimination of title ii funding for ``local purchase''
        The coalition is strongly opposed to the administration's attempts
    to eliminate up to 25 percent ($305 million) of Public Law 480 Title II
    funding in favor of an experimental program whereby the USAID
    Administrator will be granted unchecked discretion to divert U.S.
    agriculture appropriations to foreign growers and manufacturers. This
    Committee wisely rejected this proposal during each of the last three
    budget cycles and it should emphatically reject it once more.
        The administration's proposal for a new ``local purchase'' program
    would require new legislative authority. However, after extensive
    consideration, the Agriculture Committees wisely declined to create
    such a program inside Public Law 480 during recent debate on the Farm
    Bill--neither the House nor the Senate versions pending before the
    conference includes such an initiative in Public Law 480.
        Moreover, a local purchase program inside Public Law 480 would be
    redundant. USAID already has existing authority that it uses for local
    purchases through the International Disaster and Famine Assistance
    Program (``IDFA'') pursuant to the Foreign Assistance Act of 1961. The
    Foreign Operations appropriators provided new funds for local purchase
    through the IDFA in 2008 and the administration has proposed continuing
    the program under that existing authority in fiscal year 2009.
        The wisdom of local purchase remains in question. The experts agree
    that relying upon underdeveloped local food markets seriously risks
    destabilizing them by spiking local food prices and widening the circle
    of food insecurity. Local purchase also raises serious food safety
    issues such as aflatoxin poisoning. Lastly, diverting large sums of
    cash into places such as sub-Saharan Africa raises real concerns about
    corruption and abuse.
        In addition to being an unwise policy, the administration's
    proposal is politically unsound. As the Congress admonished the
    administration when it first proposed the 25 percent diversion of
    Public Law 480, the proposal ``place[s] at risk a carefully balanced
    coalition of interests which have served the interest of international
    food assistance programs for well more than 50 years.'' The European
    experience is telling: When the Europeans migrated to local purchase,
    their contributions to world hunger relief dropped dramatically. The
    world's hungry cannot afford for us to follow in their footsteps.
                        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 respectfully recommends the following:
      --Title I program levels should be restored to responsible levels so
            that the unique efficiencies of the program are not lost and
            more people can be fed.
      --The Title II program should be increased to $1.8 billion in order
            to satisfy the 2.5 million MT required by statute, and
            responsibly increased to $2 billion over time.
      --In committee report language, the Committee should reiterate its
            fiscal year 2003 directive to the administration to make
            greater use of existing CCC authorities to expand food aid to
            regions in critical need, and once more explicitly reject the
            administration's proposal to convert Public Law 480 into a
            redundant ``local purchase'' initiative.
        The food aid programs save lives. They have been the bulwark of
    American humanitarian assistance since the days of the Marshall Plan,
    and they deserve the support of your subcommittee, the Congress, and
    the entire Nation.
                                     ______

           Prepared Statement of the American Farm Bureau Federation

        The American Farm Bureau Federation has identified three general
    areas for increased emphasis and funding for USDA programs in the
    fiscal year 2009 agriculture spending bill. They are:
      --Programs that strengthen rural communities.
      --Programs that expand export markets for agriculture.
      --Food safety and protection programs.
        Within these categories, we would like to call your attention to
    specific programs deserving of your support.
    Programs that Strengthen Rural Communities
        Business and Industry (B&I) Direct and Guaranteed Loans finance
    business cooperatives and industry acquisition, construction,
    conversion, expansion, and repair in rural areas. Loan funds can be
    used to finance the purchase, and development of land, supplies and
    materials, and pay start-up costs of rural businesses.
        Broadband Loans and Grants support acquisition and construction of
    broadband facilities in under-served rural areas that are currently at
    a disadvantage in gaining access to these newer technologies, in part,
    because the costs per user are higher than in more urbanized areas.
        The Enhancement of Access to Broadband Service in Rural Areas
    program provides loans, grants, and loan guarantees to construct,
    improve and acquire facilities and equipment to provide broadband
    service to rural areas with less than 20,000 residents.
        Value-Added Agricultural Production Grants provide grants to assist
    farmers and ranchers in creating greater value for agricultural
    commodities. A portion of the funding is reserved for the establishment
    of Agricultural Demonstration Centers, which provide training and
    technical assistance to new or expanding value-added agricultural
    enterprises.
        Distance Learning and Telemedicine Loans and Grants provide
    financial assistance to rural community facilities, e.g., schools,
    libraries, hospitals and medical centers. These programs help rural
    schools and hospitals obtain and use advanced telecommunications for
    health and educational services.
        Community Facility Direct and Guaranteed Loans are made for
    constructing, enlarging or improving essential community facilities in
    rural areas and towns with populations of less than 20,000.
    Applications for health and public safety projects receive the highest
    priority.
        The Renewable Energy and Energy Efficiency Program offers grants,
    guaranteed loans and combination grant/guaranteed loans to help
    agricultural producers and rural small businesses purchase and install
    renewable energy systems and make energy efficiency improvements in
    rural areas.
        The Resource Conservation and Development (RC&D) program supports
    economic development and resource protection. This program, in
    cooperation with rural development councils, helps local volunteers
    create new businesses, form cooperatives, develop marketing and agri-
    tourism activities, improve water quality and flood control, improve
    leadership and other business skills, and implement renewable energy
    projects.
        The Revolving Fund (RFP) Grant Program helps communities acquire
    safe drinking water and sanitary, environmentally sound waste disposal
    facilities. With dependable water facilities, rural communities can
    attract families and businesses that will invest in the community and
    improve the quality of life for all residents.
    Programs that Expand Export Markets for Agriculture
        The Market Access Program, the Foreign Market Development Program,
    the Emerging Markets Program and the Technical Assistance for Specialty
    Crops program are effective export development and expansion programs.
    These programs have resulted in record increases in demand for U.S.
    agriculture and food products abroad.
        Public Law 480 programs serve as the primary means by which the
    United States provides needed foreign food assistance through the
    purchase of U.S. commodities. In addition to providing short-term
    humanitarian assistance, the program helps to develop long-term
    commercial export markets.
        The International Food for Education Program is an effective
    platform for delivering severely needed food aid and educational
    assistance.
        As trade between countries increases, so too does the threat of new
    invasive and noxious pests that can destroy America's agricultural and
    natural resources. Animal Plant Health Inspection Service (APHIS) Plant
    Protection and Quarantine personnel and facilities, especially the
    plant inspection stations, are necessary to protect U.S. agriculture
    from costly pest problems that enter the United States from foreign
    lands.
        APHIS trade issues resolution and management activities are
    essential for an effective response when other countries raise pest and
    disease concerns (i.e., sanitary and phytosanitary measures) to
    prohibit the entry of American products. APHIS must be active at U.S.
    ports and in overseas locations to monitor pest and disease conditions,
    negotiate trading protocols and to intervene when foreign officials
    wrongfully prevent the entry of American imports.
        APHIS Biotechnology Regulatory Services (BRS) play an important
    role in overseeing the permit, notification and deregulation process
    for products of biotechnology. BRS personnel and activities are
    essential to ensure public confidence and international acceptance of
    biotechnology products.
        Foreign Agricultural Service (FAS) staffing is needed to expand
    services to cover all existing and potential market posts. We urge
    continued support for the Office of the Secretary for cross-cutting
    trade negotiations and biotechnology resources.
        The U.S. Codex Office is essential to developing harmonized
    international standards for food and food products. Codex standards
    provide uniformity in food rules and regulations by allowing countries
    to adopt similar levels of safety protection for consumers while
    concurrently facilitating transparency in food trade.
        The Chemical Use Survey conducted by the National Agricultural
    Statistics Service is the only crop-complete, publicly available source
    of information on actual on-farm pesticide and fertilizer usage. In the
    2008 and 2009 budget cycles, USDA chose to not conduct the Chemical Use
    Survey allegedly due to lack of adequate funding. Survey data are
    critically needed by public and private interests to assess real world
    chemical use. The data improve the accuracy and effectiveness of
    analysis of risk and environmental exposures, and are used to defend
    the safety of U.S. farm products in export markets.
    Food Safety and Protection Programs
        The continued safety of food is absolutely crucial to the public,
    production agriculture and the food industry. Agencies responsible for
    food safety lack the resources they need to reasonably establish
    safety, especially food imported from other countries. While food
    imports have increased about 50 percent in the past 5 years, the number
    of FDA food import inspectors has fallen about 20 percent. It is
    essential that the funding for the Food and Drug Administration's food
    protection functions be set at $812 million, $192 million more than
    last year.
        Increased funding for USDA's Food Safety Inspection Service also is
    imperative. Specifically, we urge an increase to at least $952 million,
    up from $930 million, for FSIS with a focus on full staffing and
    training of inspectors. FSIS is in the midst of a 60-day enhanced
    surveillance program to verify and analyze humane animal handling
    activities in all federally inspected establishments. If the
    investigation determines that more welfare inspections are necessary,
    we support increased funding beyond the above request to hire the
    necessary number of additional inspection personnel.
        AFBF has serious concerns about the administration's request for
    new user fees for inspection activities. Food safety is for the public
    good and as such, it is a justified use of public funds.
                                     ______

         Prepared Statement of the American Forest & Paper Association

        On behalf of the American Forest & Paper Association (AF&PA), I am
    pleased to submit the following testimony regarding the fiscal year
    2009 U.S. Department of Agriculture budget. AF&PA is the national trade
    association of the forest products industry, representing forest
    landowners, pulp, paper, paperboard, and wood products manufacturers.
    Our companies are in the business of producing products essential for
    everyday life from renewable & recyclable resources that sustain the
    environment. The forest products industry accounts for approximately 6
    percent of the total U.S. manufacturing output and employs more than a
    million people with an estimated annual payroll exceeding $50 billion.
        AF&PA supports the sustainable management of our Nation's forests
    and encourages increased funding to advance forestry research, combat
    invasive species, and enhance food packaging innovations. The following
    recommendations concern fiscal year 2009 appropriations for the U.S.
    Department of Agriculture.
     cooperative state research, education, and extension service (csrees)
        There is a critical need to focus resources on research and
    outreach that address forest productivity, wood utilization,
    nanotechnology, and conversion of wood to produce bioenergy/
    bioproducts. This practical research and outreach will advance our
    capacity to produce healthier, faster-growing forests and
    environmentally-sustainable products, and will also contribute to the
    stewardship of the Nation's nonFederal forestlands. CSREES and its
    partnering universities play a key role on-the-ground in meeting this
    need.
      --McIntire-Stennis Cooperative Forestry Research Program.--AF&PA is
            concerned with the President's fiscal year 2009 request of
            $19.4 million and recommends instead that the program be
            maintained at the fiscal year 2008 enacted level of $24.8
            million. This program is a Federal-State partnership for
            university research on forest resources and supports cutting-
            edge research on forest productivity, wood utilization, and
            development of new technologies. AF&PA opposes the President's
            proposal to divert 62 percent of existing funds to competitive
            funding, as it would undermine valuable forestry research being
            conducted by our Nation's universities. Instead, we encourage a
            phased approach to building in a competitive grants component
            to the program.
      --National Research Initiative (NRI) Competitive Grants Program.--
            AF&PA supports the President's request of $256 million, but
            with increased focus on forestry research. These grants provide
            a source of funding for basic and applied research on forest
            resources, including their management and utilization. In
            recent years, however, less than 6 percent of available funding
            has been allocated for forestry-related research. Given the
            considerable potential of the program to contribute to the
            Nation's sustainable forestry research needs, that percentage
            should be increased, with specific focus on grants that support
            the Agenda 2020 Technology Alliance, such as the Pine Genome
            Initiative and nanotechnology research. Working in partnership
            with universities and the private sector, Federal funding for
            the Agenda 2020 program supports research to develop and deploy
            wood production systems that are ecologically sustainable,
            socially acceptable, and economically viable, in order to
            enhance forest conservation and the global competitiveness of
            forest product manufacturing and biorefinery operations in the
            United States.
      --Renewable Resources Extension Act (RREA) Program.--AF&PA recommends
            an increase over the President's request of $4 million. RREA
            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.
               animal and plant health inspection service (aphis)
      --Emerging Plant Pests Program.--AF&PA encourages increased funding
            for this program in order to support eradication and control
            efforts targeting the Sirex woodwasp, emerald ash borer, Asian
            longhorned beetle, and sudden oak death pathogen. All four
            introduced organisms have already done significant ecological
            and economic damage and threaten further damage to trees in our
            forests and communities. Without sufficient funding to prevent
            movement of these insects and diseases through infested wood,
            nursery stock, and other materials, the economic cost could
            escalate to hundreds of billions of dollars. Specific funding
            recommendations include:
        --$5 million for Sirex woodwasp (zero was enacted in fiscal year
                2008)
        --$45 million for Emerald ash borer ($15 million over fiscal year
                2008 enacted)
        --$30 million for Asian longhorned beatle ($10 million over fiscal
                year 2008 enacted)
        --$10 million for Sudden oak death ($5 million over fiscal year
                2008 enacted)
                       food and drug administration (fda)
      --Food Contact Notification (FCN) Program.--AF&PA urges Congress to
            support the FDA's proposed fiscal year 2009 budget of $182
            million for the Center for Food Safety and Applied Nutrition
            (CFSAN), which includes the resources needed to continue
            operation of the Food Contact Notification program (FCN). This
            highly successful program provides efficient review and timely
            approval of new food packaging materials and additives. New
            food-contact materials have enhanced the safety and security of
            the U.S. food supply while increasing the availability of
            environmentally friendly products. The elimination of the FCN
            program would be an enormous detriment to manufacturers seeking
            clearances for new food-contact materials to be introduced in
            the U.S. marketplace. The FCN program is essential for
            continued paper and paperboard food packaging innovation, and
            for ensuring the most effective protection of packaged foods
            during transportation, storage, and ultimate use by the
            consumer.
                                   conclusion
        AF&PA appreciates the opportunity to provide the subcommittee with
    testimony regarding the fiscal year 2009 budget for the U.S. Department
    of Agriculture. If implemented, increased funding for the programs
    listed above will help promote the sustainable management of our
    Nation's public and private lands and the products that are produced
    from these lands.
                                     ______

      Prepared Statement of the American Honey Producers Association, Inc.

        Chairman Kohl and Members of the subcommittee, my name is Mark
    Brady from Waxahachie, Texas, and I currently serve as President of the
    American Honey Producers Association (``AHPA''). I am pleased today to
    submit the following statement on behalf of the AHPA, a national
    organization of commercial beekeepers actively engaged in honey
    production and crop pollination throughout the country. The purpose of
    this statement is bring to your attention unprecedented threats to
    American beekeepers and to U.S. agriculture and to request that you
    dedicate significant new funding to expand vitally needed honeybee
    research.
        In early 2007, the National Research Council at the National
    Academy of Sciences characterized the beekeeping industry as having
    serious problems and being in ``crisis mode''--a point echoed and
    emphasized in the USDA action plan regarding recent honeybee threats.
    As you know, the situation for beekeepers has only gotten worse in the
    past year as the still-mysterious condition known as Colony Collapse
    Disorder (``CCD'') continues to devastate large populations of
    honeybees, with no imminent signs of relief. Despite extensive,
    coordinated work over the last year by experts from government,
    academia and the private sector, the causes and solutions for CCD have
    yet to be identified, and funding for research is running out. New
    funding is urgently needed to support the Agricultural Research Service
    (``ARS'') and other Department of Agriculture programs to address CCD
    and other serious threats to honeybee health. In addition, new funds
    are required to support the private and academic sectors in their vital
    and groundbreaking research on CCD and other health-related challenges.
        In past fiscal years, this subcommittee has supported the
    beekeeping industry through funding for agricultural research
    activities. As you know, in the fiscal year 2003 cycle, the
    subcommittee rejected a proposal that would have resulted in the
    elimination of three ARS laboratories that are indispensable to the
    survival of our industry. In the years since then, the subcommittee has
    worked to restore proposed cuts in honeybee research. Such support has
    helped the ARS to address some of the most critical research needs of
    the industry. For this past support, the AHPA and its many members
    thank you sincerely.
        As I speak to you today, U.S. beekeepers are facing the most
    extraordinary challenges. CCD is ravaging bee colonies across the
    United States. In 2007, some beekeepers experienced losses up to 90
    percent of their bee populations. In 2008, preliminary surveys by USDA
    scientists indicate that the impact this year is likely to be even more
    severe. The Department's experts estimate that at least 37 percent of
    U.S. commercial honeybees are likely to fall victim to CCD in 2008. For
    example, one of our AHPA members with significant operations in
    California has already reported losses of 66 percent of his entire bee
    population.
        The causes of CCD are still unknown. CCD may be caused by a
    complicated mix of factors, including the stresses caused by continuing
    infestations of mites and pests, recent imports of foreign honeybees
    and by the high demands of pollination services today. However, CCD's
    effects are well known. Hundreds of news articles and many in-depth
    media reports have chronicled a looming disaster facing American
    beekeepers and the producers of over 90 fruit, vegetable and fiber
    crops that rely on honeybee pollination.
        Over the past year, Congressional leaders and the administration
    have significantly underscored the priority of honeybee health through
    significant new authorizations in the pending Farm Bill and in proposed
    increases for honeybee research in the fiscal year 2009 budget.
    Moreover, experts in the academic and private sectors and U.S. farm
    leaders have repeatedly been emphasizing the need to make research on
    honeybee health a much higher national priority.
        All of these developments point to a reality that all of us can no
    longer afford to ignore--the fact that U.S. honeybee research has been
    substantially under funded for many years. The emergence of CCD shines
    a bright light on the inadequacies of current honeybee research,
    particularly on the lack of capacity to address new challenges and to
    take long-term steps to assure honeybee health. In saying this, we do
    not mean to diminish the vital, ongoing work of ARS and other honeybee
    scientists. They do their job and they do it very well. In recent
    years, however, honeybee research has become largely confined to four
    ARS laboratories. Universities and the private sector have
    substantially scaled back their efforts due to a lack of available
    funds. Moreover, ARS laboratories lack sufficient resources even for
    current honeybee research priorities. For example, we understand that
    ARS currently lacks funds even to test high priority CCD samples that
    ARS scientists have already collected.
        To meet the needs of the American beekeeper and to stave off a
    pending agricultural crisis for growers and consumers, we respectfully
    urge the subcommittee to appropriate $20 million in new research funds
    dedicated toward CCD and other honeybee health research projects. As
    you know, the Senate version of the 2008 Farm Bill includes an
    authorization of $100 million over 5 years for such initiatives. A $20
    million appropriation in fiscal year 2009 would reflect that
    authorization, and would provide government, academic and private
    sector researchers with the vital resources needed to combat CCD and
    other emerging threats and assure long-term honeybee health. Such
    funding would be a prudent investment in the U.S. farm infrastructure,
    which, along with U.S. consumers, derives tens of billions of dollars
    of benefit directly from honeybee pollination.
        Finally, we specifically suggest increased funding in the amount of
    at least $250,000 for promising honeybee genome research at the ARS
    laboratory in Baton Rouge. Genome research is likely to be central to
    resolving mysterious threats such as CCD and to ensuring bee health and
    productivity for generations to come.
        We understand that the administration's fiscal year 2009 Budget
    would make permanent prior funding levels for certain critical honeybee
    research conducted at the four ARS Honeybee Research Laboratories, and
    would add $800,000 in new funding dedicated to combating the grave
    threat posed by CCD. We appreciate and support the administration's
    proposal to make permanent baseline funding for the ARS research
    laboratories. We also support the administration's proposal to increase
    funding for CCD research. However, we believe strongly that an increase
    in $800,000 does not come close to meeting the growing demands imposed
    by CCD and other threats to honeybee health. The significant
    authorizations for honeybee health research in both the House and
    Senate versions of the Farm Bill also show that the authorizing
    committees, as well as Congress as a whole, agree that substantial new
    resources are needed.
        We also understand that the administration proposes to close the
    Honeybee Research Laboratory in Weslaco, Texas. We respectfully but
    strongly oppose the administration's proposal. The four ARS Honeybee
    Research Laboratories provide the first line of defense against exotic
    parasitic mites, Africanized bees, viruses, and brood diseases.
    Equally, the laboratories are needed to respond to new pests, pathogens
    and other conditions such as CCD that pose very serious and growing
    threats to the viability and productivity of honeybees and the plants
    they pollinate. At a time when there is an urgent need to ramp up
    research on honeybee health, it would be unwise to close the Weslaco
    facility.
        Traditionally, each ARS lab has focused on specific research
    disciplines, resulting in expertise that is difficult if not impossible
    to transport to other laboratories. The Weslaco facility specializes in
    essential research on parasites and necessary inter-governmental
    cooperation exercises aimed at preventing the importation of foreign
    born diseases. Although we have been assured that the Weslaco funds
    would be re-distributed among the remaining three ARS laboratories, a
    disruption of this magnitude runs directly counter to the current
    critical needs of the beekeeper industry. In 2009, we need to
    accelerate existing research and substantially ramp up our research
    capacity to address current and emerging threats. Closing Weslaco would
    only reduce honeybee research capacity and distract current scientists
    from important ongoing work.
                the importance of honeybees to u.s. agriculture
        Honeybees are an irreplaceable part of the U.S. agricultural
    infrastructure. Honeybee pollination is critical in the production of
    more than 90 food, fiber, and seed crops and directly results in more
    than $15 billion in U.S. farm output. The role of pollination is also
    vital to the health of all Americans given the dietary importance of
    fruit, vegetables and nuts, most of which are dependent on pollination.
    Honeybees are necessary for the production of such diverse crops as
    almonds, apples, oranges, melons, blueberries, broccoli, tangerines,
    cranberries, strawberries, vegetables, alfalfa, soybeans, sunflower,
    and cotton, among others. In fact, honeybees pollinate about one-third
    of the human diet.
        The importance of this pollination to contemporary agriculture
    cannot be understated. In fact, the value of such pollination is vastly
    greater than the total value of honey and wax produced by honeybees.
    More than 140 billion honeybees, representing 2 million colonies, are
    transported by U.S. beekeepers across the country every year to
    pollinate crops.
        The importance of honeybees--and the U.S. honey industry which
    supplies the honeybees for pollination--is illustrated by the
    pollination of California's almond crop. California grows 100 percent
    of the nation's almond crop and supplies 80 percent of the world's
    almonds. Honeybees are transported from all over the Nation to
    pollinate California almonds, which is the largest single crop
    requiring honeybees for pollination. More than 1 million honeybee hives
    are needed to pollinate the 600,000 acres of almond groves that line
    California's Central Valley. That means nearly half of the managed
    honey-producing colonies in the United States are involved in
    pollinating almonds in California during February and early March.
        Many other U.S. agriculture producers require extensive honeybee
    pollination for their crops, including blueberry, avocado, and cotton
    growers. Cattle and farm-raised catfish industries also benefit from
    honeybee pollination, as pollination is important for growing alfalfa,
    which is fodder for cattle and farm-raised fish. As OnEarth magazine
    noted recently, the fate of California's almond crop rests ``on the
    slender back of the embattled honeybee.''
                           threats to u.s. honeybees
        Since 1984, the survival of the honeybee has been threatened by
    continuing infestations of mites, pests and other conditions for which
    appropriate controls must continually be developed by scientists at the
    four ARS laboratories and other highly qualified research institutions.
    These longstanding and worsening infestations have caused great strain
    on the American honeybee to the point where some U.S. honey producers
    have felt the need--for the first time in over 80 years--to import bees
    from New Zealand and Australia for pollination. The strain exerted by
    infestations has only been exacerbated over the past 2 years by the
    emergence of CCD. Ironically, leading scientists and industry leaders
    have concluded that there is likely a correlation between the
    introduction of foreign bees and the emergence of CCD.
        CCD remains a mystery to both beekeepers and scientists, and ARS
    researchers and other researchers will need significant new resources
    to determine the causes of CCD and to develop effective treatment
    strategies. This research is complex, as there are a wide range of
    factors that--either alone or in combination--may be causes of this
    serious condition. Areas for research include the stress from the
    movement of bees to different parts of the country for extensive
    commercial pollination, the additional stress of pollinating crops,
    such as almonds, that provide little honey to the bees, and the impact
    of certain crop pesticides and genetic plants with altered pollination
    characteristics. Additionally, continuing infestations of the highly
    destructive Varroa mite, combined with other pests and mites, are also
    thought to compromise the immune systems of bees and may leave them
    more vulnerable to CCD. At the same time, researchers will need to
    focus on the many reported instances in which otherwise healthy, pest-
    free, stationary bee colonies are also suffering collapse or problems
    with reproduction.
                       ongoing and new critical research
        AHPA, others in the industry, and leading scientists believe that
    an important contributing factor in the current CCD crisis is the
    longstanding, substantial under funding of U.S. bee research. In recent
    years, the Federal Government has spent very modest amounts at each ARS
    Honeybee Research Laboratory--for a sector that directly contributes
    $15 billion per year to the U.S. farm economy.
        Worse still, funding amounts have not been increased to account for
    growing bee health concerns. USDA honeybee researchers remain under
    funded. As noted above, current funding shortages have caused important
    CCD-related bee samples to go untested. Additionally, despite their
    ability to provide significant and innovative new research on emerging
    bee threats, researchers in the academic and private sectors also lack
    the necessary financial resources for these vital tasks. With the
    emergence of CCD, there is a serious gap between the threats faced by
    U.S. honeybees and the capacity of our researchers to respond. Closing
    this gap will require significant new resources. It is estimated that
    each new scientist, technician and the support materials that they need
    will cost an additional $500,000 per year.
        To address these challenges, the AHPA respectfully requests an
    appropriation in fiscal year 2009 of at least $20 million to be
    dedicated to combat CCD and conduct other essential honeybee research.
    We recommend that such funding be allocated consistent with the
    authorizations provided in the 2008 House and Senate Farm Bills. It is
    particularly noteworthy that, of all the ``high priority'' items listed
    in the Senate Farm Bill, honeybee health research was the only item
    provided with a dedicated authorization amount. Accordingly, the AHPA
    strongly supports Senator Tim Johnson's request that the subcommittee
    make significant dedicated allocations for honeybee research, including
    $5.64 million to ARS facilities (no less than $3.08 million of which
    should be designated for research at the four ARS Honeybee Research
    Laboratories), $1.79 million to an ARS Area Wide CCD Research Program
    divided evenly between the Beltsville, MD and the Tucson, Arizona
    research laboratories, $10.26 million to the Cooperative State
    Research, Education, and Extension Service (``CSREES'') to support
    governmental, academic and private sector research, and $2.31 million
    to the Animal and Plant Health Inspection Service. Together, we believe
    that this funding would represent an appropriate commitment to existing
    research and provide the infusion of necessary new funds to combat CCD
    and assure the long-term health of U.S. honeybee colonies.
        Since the beekeeping industry is too small to support the cost of
    needed research, publicly-funded honeybee research by the four ARS bee
    laboratories is absolutely key to the survival of the U.S. honey and
    pollination industry. For example, the pinhead-sized Varroa mite is
    systematically destroying bee colonies and has been considered by many
    in recent years to be the most serious threat to honeybees. Tracheal
    mites are another contributing factor to the loss of honeybees.
    Tracheal mites infest the breathing tubes 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 for which there is no known treatment.
        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. 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.
        As previously mentioned, the cause or causes of CCD are unknown.
    Thus, pest, viral and bacterial disease research takes on added
    significance. First, pest, viral and bacterial disease research may
    itself provide insight into the discovery of CCD's root causes. Second,
    whether pests and bacterial diseases are directly a factor in CCD or
    not, they nonetheless continue to threaten bee population health and
    vitality. Given CCD's particularly devastating impact on bee
    populations, even greater emphasis must be placed on mitigating known
    threats in order to achieve the overall goal of ensuring adequate honey
    production and pollination capacity.
        In addition to pest and bacterial disease research, the sequencing
    of the honeybee genome in 2006 at Baylor University has opened the door
    to creating highly effective solutions to bee health and population
    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.
    Additionally, this new sequencing capacity may prove central to
    identifying both the cause of and solutions to CCD. New pathogens have
    recently been identified in the United States that are thought to be
    associated with CCD. Genetic research can be utilized to determine
    whether a comparative susceptibility to such pathogens exists among
    various bee populations, and if so, can serve to facilitate breeding
    with enhanced resistance.
        The ARS Honeybee Research Laboratories work together to provide
    research solutions to problems facing businesses dependent on the
    health and vitality of honeybees. The key 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 Honeybee 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 of the four ARS Honeybee Research
    Laboratories 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. Given the multi-factor
    research capacity needed to address the scourge of CCD, it is important
    that each research laboratory is permitted to continue and expand upon
    their unique strengths.
        And while to date the four ARS Research Laboratories have been the
    backbone of American Honeybee research, we do not believe that those
    four facilities alone-even when fully funded-will have the capacity to
    meet today's research needs. This is why last year, after analyzing the
    new and serious threats to U.S. honeybees, Congress, representatives of
    the farm sector and leading researchers developed the research
    priorities that were incorporated into both the House and Senate
    versions of the Farm Bill and in separate House and Senate pollination
    legislation. In addition to increased resources for ARS research, these
    experts pressed for new funding, through CSREES, for government,
    academic and private sector research. They also urged new bee
    surveillance programs through the Animal and Plant Health Inspection
    Service to address the current alarming lack of accurate information
    about the condition of U.S. bee colonies.
        One particularly effective way of adding needed capacity and
    innovative expertise in the effort to ensure honeybee health would be
    to reinvigorate private sector and university bee research initiatives.
    For many years, these sectors played a vital role in honeybee research,
    and many leading Universities have significant bee research
    capabilities. In recent years, non-Federal agency research has
    substantially declined due to a lack of support for such initiatives.
    Funding the 2008 Farm Bill authorization of $10.26 million for the
    Department of Agriculture's Cooperative State Research, Education, and
    Extension Services (CSREES) would go a long way toward achieving this
    goal.
        CSREES is tasked with advancing knowledge for agriculture by
    supporting research, education, and extension programs. Funds may be
    channeled through the Department to researchers at land-grant
    institutions, other institutions of higher learning, Federal agencies,
    or the private sector. The requested funding for CSREES would provide
    important flexibility in allocating badly needed Federal dollars among
    government, private sector and university researchers. The recipients
    would provide more widespread research on honeybee biology, immunology,
    ecology, and genomics, pollination biology, and investigations into the
    effects on honeybees of potentially harmful chemicals, pests, other
    outside influences, and genetically modified crops. The result of such
    funds would be to ensure flexible financing with a comprehensive plan
    for battling CCD, pests, and other ongoing and future honeybee threats.
        Additionally, the same coalition of experts identified a need for a
    honeybee pest and pathogen surveillance program. Although significant
    data exists on American honey production, comparably less and lower
    quality data exists on beekeepers and bees. Providing $2.31 million
    under the 2008 Farm Bill authorizations to the Animal and Plant Health
    Inspection Service at the Department of Agriculture would allow the
    Department to utilize such data to better respond to pest and disease
    outbreaks, and to compile data that may better enable prediction of new
    threats. Given the roughly $15 billion added to the U.S. farm economy
    each year by honeybees, this is certainly a worthwhile investment in
    the honeybee and pollinator industry.
                                   conclusion
        In conclusion, we wish to thank you again for your past support of
    honeybee research and for your subcommittee's understanding of the
    critical importance of these ARS laboratories.
        By way of summary, the American Honey Producers Association
    strongly encourages at least $20 million in new funding for CCD and
    other honeybee research spread among the four ARS Honeybee Research
    Laboratories, other ARS research facilities across the country, the
    Cooperative State Research, Education, and Extension Service at the
    Department of Agriculture, and the Animal and Plant Health Inspection
    Service. In addition, AHPA opposes the proposed closure of the Weslaco
    ARS research laboratory, and supports the administration's proposal to
    make permanent baseline funding levels at each of the ARS Honeybee
    Research Laboratories. Finally, AHPA specifically requests an increase
    of $250,000 for the genome research project at the ARS Baton Rouge
    Honeybee Research Laboratory.
        Only through critical 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. I
    would be pleased to provide answers 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 31 Tribal
    Colleges and Universities (TCUs) that comprise the list of 1994 Land
    Grant Institutions, thank you for this opportunity to share our funding
    requests for fiscal year 2009.
        This statement is presented in three parts: (a) a summary of our
    fiscal year 2009 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 2009 for our land grant programs established within the USDA
    Cooperative State Research, Education, and Extension Service (CSREES)
    and the Rural Development mission area. In CSREES, we specifically
    request: $5.0 million for the 1994 Institutions' competitive extension
    grants program; $3.0 million for the 1994 Institutions' competitive
    research grants program; $3.342 million for the higher education equity
    grants; $12 million payment into the Native American endowment fund;
    and in the Rural Development--Rural Community Advancement Program
    (RCAP), that $5.0 million be provided for each of the next 5 fiscal
    years for the TCU Essential Community Facilities Grants Program. RCAP
    grants help to address the critical facilities and infrastructure needs
    at the colleges to increase our capacity to participate fully as land
    grant partners.
                 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 40 years ago with the
    establishment of Navajo Community College, now Dine College, serving
    the Navajo Nation. Rapid growth of TCUs soon followed, primarily in the
    Northern Plains region. In 1972, six tribally controlled colleges
    established the American Indian Higher Education Consortium to provide
    a support network for member institutions. Today, AIHEC represents 36
    Tribal Colleges and Universities--31 of which comprise the current list
    of 1994 Land Grant Institutions located in 11 States. However, with the
    passage of the Farm Bill reauthorization, the 1994 Institutions expect
    to welcome another AIHEC member institution, Ilisagvik College in
    Barrow, AK, as the 32nd tribal college (1994) land grant institution.
    Our institutions were created specifically to serve the higher
    education needs of American Indian students. They serve many thousands
    of Indian full- and part-time students and community members from over
    250 federally recognized tribes.
        The 1994 Land Grant Institutions are accredited by independent,
    regional accreditation agencies and like all institutions of higher
    education, must undergo stringent performance reviews to retain their
    accreditation status. TCUs serve as community centers by providing
    libraries, tribal archives, career centers, economic development and
    business centers, public meeting places, and child and elder care
    centers. Despite their many obligations, functions, and notable
    achievements, TCUs 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 TCUs. In fact,
    most States do not even provide funds to our institutions for the non-
    Indian State residents attending our colleges, leaving the TCUs to
    assume the per student operational costs for non-Indian students
    enrolled in our institutions, accounting for approximately 20 percent
    of our student population. This is a significant financial commitment
    on the part of TCUs, as they are small, developing institutions and
    cannot, unlike their State land grant partners, benefit from economies
    of scale--where the cost per student to operate an institution is
    reduced by the comparatively large 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 conditions of poverty comparable to those found in
    Third World nations. Through the efforts of Tribal Colleges and
    Universities, American Indian communities are availing themselves of
    resources needed to foster responsible, productive, and self-reliant
    citizens. It is essential that we continue to invest in 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
        In the past, due to lack of expertise and training, millions of
    acres on our reservations lie fallow, under-used, or have been
    developed through methods that have caused irreparable damage. The
    Equity in Educational Land Grant Status Act of 1994 is addressing this
    situation and is our hope for future advancement.
        Our current land grant programs remain small, yet very important to
    us. It is essential that American Indians explore and adopt new and
    evolving technologies for managing our lands. With increased capacity
    and program funding, we will become even more significant contributors
    to the agricultural base of the Nation and the world.
        Competitive Extension Grants 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 education and awareness.
        In the fiscal year 2008, $3,298,000 was appropriated for the 1994
    Institutions' competitive extension grants. Although initially
    appropriated at the same level as fiscal year 2007, due to the
    perennial across-the-board rescission now routinely imposed, our
    programs have a decreased baseline each year. 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. Increased
    funding is needed to support these vital programs designed to address
    the inadequate extension services that have been provided to Indian
    reservations by their respective state programs. It is important to
    note that the 1994 extension program does not duplicate the Federally
    Recognized Tribes Extension Program, formerly the Indian Reservation
    Extension Agent program. 1994 Tribal College Land Grant programs are
    very modestly funded. The 1994 Tribal College Land Grant Institutions
    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. Some examples of 1994 extension programs include:
    United Tribes Technical College in North Dakota is providing health and
    wellness education and outreach to students and their families, with a
    focus on ensuring that young mothers understand the importance of good
    early childhood nutrition. Lac Courte Oreilles Ojibwa Community College
    in Wisconsin is strengthening the household economies of local
    reservation communities by offering financial education curriculum in
    managing budgets, saving for the future, and understanding the credit
    basics. These are just two examples of the innovative programs being
    conducted at 1994 Institutions. To continue and expand these successful
    programs, we request that the subcommittee support this competitive
    program by appropriating $5.0 million to sustain the growth and further
    success of these essential community-based extension programs.
        1994 Competitive Research Program.--As the 1994 Tribal College Land
    Grant Institutions enter into partnerships with 1862/1890 land grant
    institutions through collaborative research projects, impressive
    efforts to address economic development through land use have emerged.
    The 1994 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 severe budget constraints under which Congress is
    currently functioning. However, $1,533,000 appropriated in fiscal year
    2008 is grossly inadequate to develop capacity and conduct necessary
    research at our institutions. The 1994 Research program is vital to
    ensuring that TCUs may finally be recognized as full partners in the
    nation's land grant system. Many of our institutions are currently
    conducting applied research, yet finding the resources to conduct this
    research to meet their communities' needs is a continual 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 secured and sustained. A
    total research budget of $1,533,000, for which 31 institutions compete
    for funding, is clearly inadequate. Priority issue areas currently
    being studied at 1994 Institutions include: sustainable agriculture
    and/or forestry; biotechnology and bioprocessing; agribusiness
    management and marketing; plant and animal breeding and aquaculture
    (including native plant preservation for medicinal and economic
    purposes); human nutrition (including health, obesity, and diabetes);
    and family, community, and rural development. Two examples include: The
    College of Menominee Nation in Wisconsin is collecting and analyzing
    data concerning forest health and sustainability that will help its
    tribal forest managers meet the growing demand for forest products
    while protecting the woodlands environment for future generations. Fort
    Berthold Community College in North Dakota is conducting agricultural
    trials to determine the economic feasibility of local Juneberry
    production. Juneberries are an important source of nutrition in many
    tribal communities. These are two examples of 1994 Research projects.
    We strongly urge the subcommittee to fund this program at a minimum of
    $3.0 million to enable our institutions to develop and strengthen their
    research capacity.
        1994 Institutions' Educational Equity Grant Program.--This program
    is designed to assist 1994 Tribal College Land Grant Institutions with
    academic programs. Through the modest appropriations first made
    available in fiscal year 2001, the TCU Land Grant Institutions have
    begun to support courses and to conduct planning activities
    specifically targeting the unique needs of their respective
    communities.
        The 1994 Institutions have developed and implemented courses and
    programs in natural resource management; environmental sciences;
    horticulture; forestry; and food science and nutrition. This last
    category is helping to address the epidemic rates of diabetes and
    cardiovascular disease that plague American Indian reservations. If
    more funds were available through the Educational Equity Grant Program,
    Tribal College Land Grant Institutions could devote more of their
    endowment yield dollars to supplement other facilities projects needed
    to address their continuing and often critical infrastructure needs. We
    request that the subcommittee appropriate $3,342,000--returning the
    program funding level to the pre-across-the-board rescission level that
    was once again imposed on non-defense appropriated funding--to allow
    the 1994 Tribal College Land Grant Institutions to build upon their
    courses and successful activities that have been launched.
        Native American Endowment Fund.--Endowment installments that are
    paid into the 1994 Tribal College Land Grant Institutions' account
    remain with the U.S. Treasury. Only the annual interest yield, less the
    USDA's administrative fee, is distributed to the 1994 Institutions. The
    USDA has reported the latest gross annual interest yield to be
    $3,209,000. After the USDA's administrative fee of $128,360 is
    deducted, the net interest yield is $3,080,640, which is the amount
    available to be distributed among the eligible 1994 Tribal College Land
    Grant Institutions, by statutory formula. Despite an appropriated
    payment of $11,880,000 into the corpus, the amount available to be
    distributed to the 1994 Institutions in 2008 is $38,988 less than the
    net yield distributed in spring of 2007. In addition to the reduced
    interest yield available, historically USDA's administrative fee
    amounts to a payment that is larger than the amount paid to 75 percent
    of the 1994 Tribal College Land Grant Institutions. While we have not
    yet been provided with this year's distribution breakdown of amounts to
    each of the 1994 Institutions we fully expect similar results. We
    respectfully ask that the subcommittee review the Department's
    administrative fee and consider reducing it for the 1994 Endowment
    Program, so that more of these already limited funds can be utilized by
    the 1994 Tribal College Land Grant Institutions to continue to conduct
    vital 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 Tribal College Land Grant Institutions in establishing and
    strengthening their academic programs in such areas as curriculum
    development, faculty preparation, instruction delivery, and to help
    address critical facilities and infrastructure issues. Many of the
    colleges have used the endowment in conjunction with the Education
    Equity Grant funds to develop and implement their academic programs. As
    earlier stated, TCUs often serve as primary community centers and
    although conditions at some have improved substantially, many of the
    colleges still operate under less than satisfactory conditions. In
    fact, most of the TCUs continue to cite improved facilities as one of
    their highest priorities. Several of the colleges have indicated the
    need for immediate new construction and substantial renovations to
    replace buildings that have long exceeded their effective life spans
    and to upgrade existing facilities to address accessibility and safety
    concerns.
        Endowment payments increase the size of the corpus held by the U.S.
    Treasury and thereby increase the annual interest yield disbursed to
    the 1994 Tribal College Land Grant Institutions. These additional funds
    would continue to support faculty and staff positions and program needs
    within 1994 agriculture and natural resources departments, as well as
    to help address the critical and very expensive facilities needs at
    these institutions. Currently, the amount that each college receives
    from this endowment is not adequate to address both curriculum
    development and instruction delivery, and completely insufficient to
    address the necessary facilities and infrastructure projects at these
    institutions. In order for the 1994 Tribal College Land Grant
    Institutions to become full partners in this nation's great land grant
    system, we need and, through numerous treaty obligations, are due 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 fund
    the fiscal year 2009 endowment payment at $12.0 million--returning the
    payment amount to the pre across-the-board rescission level imposed
    each year on non-defense appropriated funding.
        Rural Community Advancement Program (RCAP).--In fiscal year 2008,
    $4.0 million of the RCAP funds appropriated for loans and grants to
    benefit federally recognized American Indian tribes were targeted for
    essential community facility grants for TCUs. This is a decrease of
    $414,000 from the fiscal year 2007 funding level. Currently, this
    program requires that the TCU Essential Community Facilities Grants be
    subject to the Rural Development graduated scale for determining each
    institution's share of non-Federal matching funds. The scale dictates
    the TCU share to be 25, 45, 65, or 85 percent of the grant award. At a
    minimum, a TCU has to pay a non-Federal match of 25 percent of the
    grant. Tribal colleges are chartered by their respective tribes, which
    are in a government-to-government relationship with the Federal
    Government. Due to this relationship, tribal colleges have very limited
    access to non-Federal dollars making non-Federal matching requirements
    a significant barrier to our colleges' ability to compete for these
    much needed funds. The 2002 Farm Security and Rural Investment Act
    (Public Law 107-171) included language limiting the non-Federal match
    requirement for the Rural Cooperative Development Grants to no more
    than 5 percent in the case of a 1994 institution. We seek to have this
    same language applied to the TCU Essential Community Facilities grants
    so that more 1994 Institutions are able to participate in this much
    needed program. We urge the subcommittee to designate $5.0 million each
    year 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 for
    this program to not more than 5 percent, to help all of the1994 land
    grant institutions to effectively address critical facilities and
    construction issues in their communities.
                                   conclusion
        The 1994 Land Grant Institutions have proven to be efficient and
    effective vehicles for bringing educational opportunities to American
    Indians and the promise of self-sufficiency to some of this Nation's
    poorest and most undeveloped regions. The modest Federal investment in
    the 1994 Tribal College 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 1994 Tribal College Land Grant
    Institutions and their role in the Nation's land grant system and we
    ask you to renew your commitment to help move our students and
    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 with the
    potential to bring equitable educational, agricultural, and economic
    opportunities to Indian Country.
        Thank you for this opportunity to present our funding proposals to
    the subcommittee. We respectfully request your continued support and
    full consideration of our fiscal year 2009 appropriations
    recommendations.
                                     ______

         Prepared Statement of the American Sheep Industry Association

        The American Sheep Industry Association (ASI) is a federation of
    state member associations representing 70,000 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 expanding sheep
    operations and inventory by strengthening the infrastructure of the
    industry primarily through the programs of USDA, APHIS, Veterinary
    Services and Wildlife Services, as well as targeted research and
    education being critical. The industry and the benefits to rural
    communities will be strengthened by fully funding critical predator
    control activities, national animal health efforts, and expanding
    research opportunities.
        We appreciate this opportunity to comment on the USDA fiscal year
    2009 budget.
               animal and plant health inspection service (aphis)
    Scrapie
        The American Sheep Industry Association believes that the
    administration's request of $17.487 million is an inadequate level of
    funding if scrapie eradication is to be achieved in the reasonably near
    future. ASI urges the subcommittee to increase the funding for scrapie
    eradication by at least $11.2 million beyond the administration's
    request for a total of $28.687 million in fiscal year 2009.
        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 4 years ago.
    The plan USDA/APHIS is implementing is designed to eradicate scrapie by
    2010. Through a subsequent monitoring and surveillance program, the
    United States could 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. Through a concerted effort, USDA/APHIS,
    along with industry and State regulatory efforts, is 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 have included expanded slaughter-
    surveillance and diagnostics, the costs are, as expected, escalating.
        ASI has made it clear to USDA that the appropriations requests of
    recent years have been inadequate for successful eradication of
    scrapie. When the scrapie eradication program was first being
    implemented in 2000, USDA/APHIS projected the cost to be $170,259,083
    over the first 7 years of the 10-year eradication program with a peak
    in cost at $31,974,354 in the 5 year and projected funding decreasing
    afterwards. At the end of 2007, $110,283,000 (not counting rescissions)
    has been spent and peak-year funding was only $18.6 million in 2006
    (see exhibit A ``Scrapie Funding Comparisons'').
        The program cannot function properly without sufficient funding for
    diagnostic support, surveillance, and enforcement of compliance
    activities that are dedicated to scrapie eradication as an animal
    health priority. We believe that funding the scrapie eradication
    program at an appropriate level will help provide for an achievable
    eradication program and eventually 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. Without strong, appropriately-funded scrapie
    programs at the State level, eradication will not become a reality.
    Only a fraction of what USDA/APHIS projected for State scrapie
    cooperative agreements has been spent. In addition to recommending
    funding of $28.687 million for fiscal year 2009, we urge the
    subcommittee to send a clear message to USDA to (A) make scrapie
    eradication a top disease eradication priority within USDA and the
    APHIS field staff with a focus on animal identification compliance and
    enforcement; and (B) increase the slaughter-surveillance numbers so
    that the disease can be found and dealt with wherever it resides.
    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 Services' 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 requests the subcommittee to eliminate the administration's
    proposed $2.78 million decrease to Wildlife Services operations for
    ``cost share reduction.'' Such a reduction would place a larger burden
    on the livestock industry, as well as county and State government
    cooperators which already fund far more of the livestock protection
    programs than does Federal sources. ASI also requests the subcommittee
    to either eliminate the proposed $5.34 million increase for Wildlife
    Monitoring and Surveillance and the Oral Rabies Vaccination Program, or
    increase the budget by that amount. As it stands in the administration
    budget, the $5.34 million is an unfunded mandate and will require
    Wildlife Services to redirect the funds from the other operational
    programs such as livestock protection.
        We urge the subcommittee to fund the livestock industry's request
    for the western region of Wildlife Services operations of livestock
    protection at $19 million and the eastern region at $3.6 million.
        The western region requires an additional $8.3 million to meet the
    $19 million Federal sourced level of the livestock protection program.
    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. This increase has
    primarily come from individual livestock producers, associations,
    counties, and States.
        The eastern region requires $3.6 million of increased
    appropriations to meet the need of the eleven states that participate
    in livestock protection programs with only $878,000 in current funding
    ($650,000 of which is non-Federal). The $3.6 million needed for the
    Wildlife Services Eastern Region would help fund livestock predation
    protection programs in Pennsylvania, Virginia, West Virginia,
    Mississippi, Minnesota, Michigan, Florida, Ohio, Tennessee, Kentucky,
    and Wisconsin.
        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.
        We encourage and support continued recognition in the
    appropriations process for fiscal year 2009 of the importance of aerial
    hunting as one of Wildlife Services' 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. ASI is concerned about the recent crash that
    resulted in two fatalities and requests the subcommittee to consider
    including $1 million to replace seven aircraft in the Wildlife
    Services' fleet that are over 35 years of age.
        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. Last year funds were reduced in
    Montana, Idaho, and Wyoming by 25 percent, and the fiscal year 2009
    budget recommends an additional 50 percent reduction. ASI urges the
    subcommittee to restore the wolf control funds in these three States to
    the fiscal year 2007 level of $1.5 million. Mexican wolves in Arizona
    and New Mexico are expanding their ranges and Wildlife Services cannot
    keep pace with the control requirements. We encourage the subcommittee
    to provide an additional $500,000 to these two States for control
    activities. The wolf program of Minnesota, Wisconsin and Michigan was
    also reduced by 25 percent and needs to be restored to the $1 million
    annual appropriation.
        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.
                     wildlife services methods development
        The sheep industry considers control of canid predation on sheep as
    a major concern and believes an array of control tools and
    methodologies, which includes predacides, is critical. Weather
    conditions, topography, different species of predators, vegetation
    cover, and government regulations all pose situations in which one tool
    may not work for a period and another tool must be employed. ASI
    supports the development of additional tools that are effective in
    controlling predation. The USDA, APHIS, Wildlife Services, Methods
    Development Center is currently evaluating a theobromine and caffeine
    mixture as a possible tool for predation management. The mixture
    induces mortality in coyotes with minimal pre-mortality symptoms. The
    mixture is selectively toxic to canids and is present in high
    concentrations in the extract of tea, coffee, and cocoa plants. Because
    theobromine and caffeine are readily available to persons and pets, the
    medical community has developed antidotes. The agency estimates that it
    will cost $1.5 million to complete field studies and other EPA
    registration requirements. ASI urges the subcommittee to recommend
    funding for this research and registration effort in the fiscal year
    2009 budget.
                     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.
                 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 jointly 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 recommend a bold investment in sheep and wool
    research.
    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 industry global
    competitiveness due to animal health and trade issues related to
    endemic, exotic and wildlife interface disease issues. The continued
    and expanded support of animal disease research is urgently needed to
    protect the U.S. livestock industry. Scrapie, the Transmissible
    Spongiform encephalopathy of sheep, remains an industry priority and we
    respectively request that the subcommittee urge ARS to continue
    important research aimed at rapid diagnostic methods and the role of
    other small ruminants as environmental sources of the TSE agent in
    transmission of TSEs within the United States and the world to further
    understand the basis of genetic resistance and susceptibility to this
    devastating disease.
        Due to the extreme importance of Agricultural genomics in enhancing
    the global competitiveness of sheep production and the recent progress
    toward acquiring the sheep genome, we respectively request that this
    initiative be expanded to include sheep genomics. Endemic, exotic and
    domestic agricultural animal--wildlife interface infectious diseases
    continue to impose significant impact on the economy of animal
    agriculture and related food supply. Most recently the presumed
    infectious disease risk associated with contact between domestic and
    bighorn sheep has led to significant economic hardship. Genomics
    represents a unifying tool for many scientific disciplines and is
    capable of providing research resolutions to the most difficult disease
    and resulting economic losses. Genomic research efforts should be
    directed at early determination of which sheep are susceptible to
    disease and responsible for economic losses. High throughput genomics
    has ushered in a new era of unifying research regarding the ability to
    link control of chronic, economically important diseases such as OPPV
    and important production traits. There are a number of infectious
    diseases across domestic and wild animals that will benefit from this
    research focus. It is becoming clear that not all infected animals
    transmit diseases with equal efficiency; in fact it appears that the
    ``super shedders'' are a small portion of an infected population. In
    addition to aiding in the control of chronic infectious diseases such
    as OPPV, caseous lymphadenitis and foot rot, control of Big Horn Sheep
    pneumonia and internal parasitism should be aided by this genomics
    approach. Early detection of susceptibility and resistance will lead to
    practical intervention strategies. With this in mind, we respectively
    request that the subcommittee support a ``Genomics Competitive Global
    Health'' initiative by enhancing the ARS, Animal Disease Research
    Unit's budget by $1 million to use in collaboration with Utah State
    University, the University of Idaho, the United States Sheep Experiment
    Station, Dubois and Washington State University. This initiative is to
    apply the emerging sheep genomic tools to research directed at
    resolving important disease problems and their resulting economic
    losses.
        Research into Johne's disease has received additional funding
    through ARS over the past several years with a focus 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 with an
    emphasis on diagnostics.
        We appreciate and support USDA's strategic goals and note that
    strategic goal (3) ``Enhance Domestic Rural and Farm Economies States
    in part as follows: Work to expand production and market opportunities
    for bioenergy and biobased products''. In response to this strategic
    goal of the USDA, we request that the subcommittee recommend $400,000
    as a targeted increase for the ARS USDA-Eastern Regional Research
    Center (ERRC) at Wyndmoor, Pennsylvania to be directed toward research
    on wool at the molecular level focusing on anti-microbial properties,
    flame retardation and enhancement of fiber properties through enzyme
    treatments targeting high priority military needs and other niche
    market applications for consumers.
     cooperative state research, education, and extension service (csrees)
        A virtual map of the sheep genome has recently been completed. The
    virtual map provides a good low-resolution picture of the sheep genome.
    It is largely a result of genome mapping efforts (human, bovine, and
    mouse) and provides a solid starting place for a higher resolution
    sequence of the sheep genome. A more complete sheep genome sequence is
    now essential because, as expected, there are significant
    inconsistencies in the virtual map that will hinder the use of SNPs in
    animal or population evaluations. The USDA Animal Genomics Strategic
    Planning Task Force recently released a ``Blueprint for USDA Efforts in
    Agricultural Animal Genomics''. In this document, it is stated: . . .
    sheep . . . should have a high quality draft genome sequence
    (approximately 6X). This level of genome sequence quality is necessary
    for accurate functional genomics studies as well as comparative
    analyses''. By investing in sequencing the sheep genome now, the United
    States helps insure our competitive position in the global marketplace
    for sheep, wool and their products. We urge the subcommittee to remind
    USDA/CSREES that sheep genome sequencing should be a high priority for
    the National Research Initiative (NRI) competitive grants program.
        The Minor Use Animal Drug Program 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 for fiscal year 2009 of $582,000 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 urge the subcommittee to recommend that funding
    be restored for this program at the level of $1.5 million in 2009 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 as
    well as the environment.
        On-going research to improve value quantification and marketing of
    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 level of $298,000 for
    fiscal year 2009.
        The Livestock Marketing Information Center (LMIC) is a unique and
    very effective cooperative effort. This is not a state specific effort;
    it operates as a national virtual ``Center of Excellence'' for
    Extension education, research, and public policy. Members of the LMIC
    represent 26 Land Grant Universities, 6 USDA agencies, and a variety of
    associate institutions. In conjunction with the USDA's Economic
    Research Service (ERS), this cooperative effort started in the mid-
    1950's. This effort is an integral part of U.S. livestock marketing and
    outlook programs for cattle, hogs, sheep, dairy and poultry. Demands on
    the LMIC staff continue to increase from other USDA agencies, Land
    Grant Universities, State governments, commodity associations and
    directly from producers. We strongly support funding be continued at
    least at the previously funded level (2006) of $194,000 for the
    Livestock Marketing Information Center (LMIC) in fiscal year 2009. The
    coordinating office for this national Land Grant University directed
    effort is located in Lakewood, Colorado. As in the past, line-item
    funding should be directed through the USDA CSREES.
          food and drug administration, center for veterinary medicine
        The Minor Use & Minor Species Animal Health Act of 2004 included a
    provision to make competitive grants available to fund studies to
    support new animal drug approval for new animal drug products for minor
    use and minor species indications that have already obtained
    ``designated'' status. This grants program parallels the human orphan
    drug grants program. The final rule became effective October, 2007 for
    the administration of this program. All drugs labeled for sheep fall
    under the minor-use category, therefore this program should be very
    helpful to our industry. ASI appreciates the administration's request
    of $1 million for this program and we urge Congress' support.

                     EXHIBIT A--SCRAPIE FUNDING COMPARISONS
    ------------------------------------------------------------------------
                                                   APHIS
                      Year                    projections in  Funds received
                                                   2000        by APHIS \1\
    ------------------------------------------------------------------------
    2000....................................  ..............     $12,991,000
    2001....................................      $6,310,778       3,024,000
    2002....................................      20,000,000       9,122,000
    2003....................................      20,438,943      15,373,000
    2004....................................      30,056,592      15,607,000
    2005....................................      31,974,354      17,768,000
    2006....................................      30,794,507      17,911,000
    2007....................................      26,994,991      18,487,000
    2008....................................      26,994,991      17,980,000
    2009....................................      26,994,991  ..............
    ------------------------------------------------------------------------
    \1\ Does not count rescissions.

                                     ______

        Prepared Statement of the Federation of American Societies for
                              Experimental Biology

        The Federation of American Societies for Experimental Biology
    (FASEB) is grateful for the opportunity to submit testimony for the
    record in support of the vital research programs of the United States
    Department of Agriculture (USDA). FASEB comprises 21 scientific
    societies representing more than 80,000 life science researchers, and
    our mission is to advance biological science through collaborative
    advocacy for research policies that promote scientific progress and
    education and lead to improvements in human health. FASEB enhances the
    ability of biomedical and life scientists to improve--through their
    research--the health, well-being and productivity of all people.
        Greater investment in basic and applied agricultural research is
    essential, as threats proliferate and demands for a more nutritious
    food supply continues to increase. The USDA funds research through its
    intramural arm, the Agriculture Research Service (ARS), and competitive
    grants program, the National Research Initiative (NRI). The ARS support
    allows optimization of the competitive funds offered through the NRI by
    providing essential research facilities via its research centers across
    the country. These symbiotic programs provide the infrastructure and
    continuous generation of new knowledge that allow for rapid progress
    towards meeting national needs.
        A recent report by the Economic Research Service (ERS) found
    ``strong and consistent evidence that investment in agricultural
    research has yielded high returns per dollar spent'' citing mean rates
    of returns of 53 percent.\1\ However, our Nation's investment in
    agricultural research has been declining (Figure 1), threatening our
    ability to sustain the vitality of our research portfolio. The NRI has
    not yet reached even half of its initial authorization of $500 million,
    and ARS funding has been waning. Continuation of this neglect will
    inevitably undermine the success of the USDA's research programs. Thus
    it is imperative that the breadth and competitive nature of the NRI
    portfolio be maintained and expanded to ensure our Nation's excellence
    in agricultural research and the well-being of all Americans.
    ---------------------------------------------------------------------------
        \1\ Fuglie, KO and Heisey PW. (2007) Economic returns to public
    agricultural research. USDA Economic Research Service, Economic Brief
    #10. http://www.ers.usda.gov/Publications/EB10/

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Figure 1.--Research at the USDA has been declining in relation to total
     Federal spending on non-defense research & development (R&D), putting
      our competitive portfolio of agricultural research at serious risk.

        Agriculture and the research which advances it remain of crucial
    importance to our economy and quality of life. Research supported by
    USDA contributes to our understanding of the nutrition that underlies
    our health; it protects human life and our food supply from pandemic
    disease and introduced pathogens; it allows us to respond quickly to
    emerging issues like Colony Collapse Disorder or foot-and-mouth
    disease; and has led the way in development of bioenergy resources.
    Below are a few examples of the important contributions resulting from
    USDA-funded research.
    Human Nutrition, Health, and Policy
        Nutrition is the foundation upon which human and animal health is
    built, and whose mysteries fascinate the American people like no other
    aspect of science. This is perhaps most evident in the daily news
    stories that seek to uncover the optimal diet required to maximize
    health or minimize risk of disease. Research has identified the
    critical role that nutrition plays in a myriad of health conditions,
    from cancer to heart disease to diabetes. Perhaps the most striking
    evidence of the importance of nutrition to health is the alarming
    increase in the rates of obesity in this country, especially in
    children and adolescents. Further research is essential as we seek to
    understand the causes, both innate and environmental, of this public
    health crisis.
        The USDA is uniquely positioned to conduct nutrition and food-
    related research because of its singular perspective on the entire food
    system, from crop to livestock to food supply to human consumption. No
    other agency has the capacity to understand the connections among food,
    the food supply and its production, and the health of our Nation.
    Through its research programs, the USDA is making the connection
    between what we eat and the healthfulness of our lifestyle.
      --Folate and Colon Cancer.--Folate, a B-complex vitamin, is strongly
            implicated in the prevention of colorectal cancer. It has been
            estimated that the risk of developing colorectal cancer in
            people consuming the largest amounts of dietary folate is 30-40
            percent lower than in people consuming less folate. NRI-
            supported scientists are investigating the mechanisms by which
            differences in folate intake can protect against cancer and
            other diseases, which may provide evidence for increasing the
            Dietary Reference Intake values for folate. This is a necessary
            first step in developing effective public health measures which
            would use folate as a cancer preventive measure and improve the
            health of the Nation.
      --Obesity.--Our country is facing a rising storm of health problems
            related to increasing rates of obesity, in both adults and
            children, including diabetes, hypertension, and heart disease.
            The direct and indirect costs of obesity represent a $100
            billion annual burden on the U.S. economy. The USDA is funding
            cutting edge research at universities across the Nation, where
            scientists are examining genetic and metabolic factors that
            influence obesity, including the balance of protein, fat, and
            carbohydrate, dietary calcium and milk intake, the roles of the
            hormones leptin and ghrelin, as well as the effects of
            conjugated linoleic acid, and new and genetically modified
            foods. Unique research projects linked to dietary interventions
            are being carried out in rural towns in three States in the
            West, in African American communities in the South, and in
            Native American communities.
      --Functional Foods for Disease Prevention.--Antioxidants have been
            shown to be of primary importance in preventing age-related
            disease and health problems, including cancer and coronary
            heart disease, two of our Nation's leading causes of death.
            USDA-funded scientists are working to develop functional foods,
            rich in antioxidants, which could provide nutritional benefit
            while protecting against disease. Scientific data suggests that
            processing of wheat could maximize the antioxidant capacity of
            this cornerstone of our food supply. Researchers have developed
            a processing procedure to enhance the antioxidant availability
            in wheat-based food ingredients that involves no chemical or
            organic solvents and generates no waste. These processing
            procedures require no special equipment or operation and may be
            easily scaled up for commercial production.
    Safety of Our Food Supply
        Over the past year, our national attention has focused on food
    safety and the security of our food supply. The research programs of
    the USDA are at the forefront of developing new technologies to protect
    our food supply and discovering new ways to detect and neutralize
    threats to our crops, livestock, and food products. Research activities
    range from food-borne illnesses to microbial resistance to food
    processing safety to biosecurity at our borders. Moreover, projects
    funded by NRI and ARS are addressing concerns not only related to our
    domestic supply of foods, but also those items that we import from
    international partners. As the United States forges new ties and
    reinforces existing relationships in our increasingly global economy,
    it becomes even more critically important to ensure agricultural
    research is delivering the knowledge to protect our citizens and the
    foods they eat.
      --International Food Safety.--Concerns have been raised about the
            safety of food products and goods imported from other Nations.
            Researchers at the University of Minnesota are setting up
            models to examine the role of the role of imported food
            products in the local and global dissemination of food-borne
            pathogens. Using epidemiological data, these models will enable
            development of intervention to reduce the risk of disease
            outbreaks due to food imports. Meanwhile, another team of NRI-
            funded scientists is developing edible food sensors, made of
            luminescent nanoparticles. These tiny sensors will be able to
            screen foods for a host of safety and quality issues, from
            presence of bacteria and toxins to pH, in a rapid, easy-to-use
            and inexpensive manner.
      --Preventing Salmonella Outbreaks.--The multibillion dollar American
            poultry industry loses 10 to 15 percent of its potential income
            to disease annually. Additionally, microbes that infect poultry
            represent a major human health risk, particularly Salmonella
            which causes over one million cases of illness and results in
            500 deaths in the United States each year. Using sophisticated
            DNA technologies, USDA-funded scientists are identifying the
            genes related to disease resistance and response in poultry.
            Understanding the genetic basis for the immune response to
            Salmonella and other diseases may lead to breeding of disease-
            resistant birds, as well as vaccine development.
      --Biohazard Detecting Cloth.--Through use of nanotechnology, NRI-
            funded scientists at Cornell University have created a cloth
            that has the ability to detect bacteria, viruses, and other
            biohazards. When the cloth contacts a contaminant or hazardous
            substance, a dye is released, providing a rapid response test
            that allows visualization of the threat with the naked eye.
            This has applications in detecting foodborne diseases at food
            preparation or manufacturing sites, screening for bioterror
            agents like anthrax, and even confirmation that operating rooms
            or medical facilities are clear of pathogens.
    Responding to Emerging Threats
        When beekeepers across the country began to report the alarming and
    mysterious loss of 50-90 percent of bees from their hives, the USDA
    took the lead in mobilizing research resources to find the source of
    what is now know as Colony Collapse Disorder (CCD). This is only one
    example of how a unique and emerging agricultural threat can swiftly
    challenge our Nation's economy, health or food supply. A new outbreak
    of foot and mouth disease in Europe, the looming specter of pandemic
    avian flu, and the continuing threat of mad cow disease all illustrate
    the need for the research resources required to address new and
    emerging pathogens and diseases. Only with an adequately funded
    agriculture research infrastructure can our Nation be prepared to react
    and rapidly counter threats to our health and food supply.
      --Virus Implicated in Colony Collapse Disorder.--Scientists funded by
            the USDA have recently announced discovery of a virus that may
            be linked to Colony Collapse Disorder (CCD), which has
            decimated bee colonies across the country. Bees are essential
            for the pollination of nearly 100 fruit and vegetable crops
            worldwide, and play an integral role us U.S. agricultural
            products representing an estimated economic value of more than
            $14.6 billion. Identification of Israeli Acute Paralysis Virus
            (IAPV) as a marker for CCD is a breakthrough step in solving
            this major agricultural problem. The USDA has also announced a
            strategic CCD Research Action Plan which will focus, among
            other things, on ways to improve the general health of bees to
            reduce their susceptibility to IAPV, CCD, and other disorders.
      --Avian Influenza.--Avian influenza is a threat to both the
            multibillion dollar U.S. poultry industry and to human health.
            A major challenge in dealing with this disease is being able to
            differentiate between infected birds and vaccinated birds, as
            well as to be able to rapidly differentiate between different
            strains of avian flu. Through DNA microarray technology, USDA
            funded scientists are developing fast and accurate tests that
            will be cost effective for producers and allow more rapid
            response to outbreaks of avian influenza worldwide.
    Bioenergy and Climate Change
        Bioenergy has the potential to not only reduce our dependence on
    foreign oils but to provide a clean, sustainable fuel source that may
    help mitigate global climate change. The USDA funds research projects
    that produce science-based knowledge and technologies supporting the
    efficient, economical, and environmentally friendly conversion of
    biomass, specifically agricultural residuals, into value-added
    industrial products and biofuels. Furthermore, USDA-funded research is
    responding to the issue of climate change by contributing to our
    understanding of the causes and effects of this phenomenon and how to
    best protect our natural resources. Agricultural and forestry resources
    are vitally important to both our development of biobased resources and
    our ability to address the threat of climate change. As such,
    agricultural research is essential to addressing these national
    priorities.
      --From Switchgrass to Biofuels.--Switchgrass has great potential to
            be a major biofuel source for the United States--it grows
            quickly, is readily adaptable to diverse conditions, and it
            efficiently captures the energy of the sun, converting it to
            cellulose which can be used as a clean alternative fuel source.
            Unlike other crops, we know very little about the genetics of
            switchgrass, information that is critical for enhancing
            breeding and maximizing the potential of this important
            bioenergy crop. University of Georgia scientists, funded by the
            NRI, are creating a genetic resource library and mapping out
            genetic traits that will allow producers to select lines with
            higher biofuel potential.
      --Cost effective Biodiesel.--Biodiesel is a clean burning and
            renewable fuel produced from plant oils and animal fats.
            Unfortunately, biodiesel is currently expensive to produce
            because of high feedstock costs, high manufacturing costs, and
            the requirement to dispose of a low-purity glycerol byproduct.
            NRI-funded researchers are seeking ways to improve the
            biodiesel production process and develop alternative approaches
            for the byproduct glycerol. Through use of sophisticated
            distillation technologies and catalysts, they are developing
            manufacturing process that will lower the costs of producing
            biodiesel, lead to a better-quality biodiesel product that
            exceeds current standards, reduce waste formation, and
            eliminate the troublesome by-product.
      --Predicting the Effects of Climate Change.--Global climate change is
            likely to affect the croplands on which we are dependent for
            food. At the USDA's Rainfall Manipulation Plots facility,
            researchers are able to alter temperature and precipitation
            over grasslands to simulate estimated climate change outcomes.
            These long-term studies are providing invaluable information on
            how crops will react to complex ecosystem changes associated
            with climate change. Understanding the impact of this
            phenomenon can greatly enhance the ability of producers and
            policymakers to prepare for or mitigate negative effects.
    A Vision for the Future
        The focus on agricultural research resulting from reauthorization
    of the Farm Bill presents a unique opportunity to strengthen and
    enhance our national system of agricultural research.
      --National Institute of Food and Agriculture.--FASEB fully endorses
            the establishment of a National Institute for Food and
            Agriculture (NIFA), within the USDA, dedicated to funding
            competitive, peer-reviewed basic research in agriculture. This
            is an unparalleled opportunity to enhance our system of
            supporting high quality, fundamental research, allowing
            advancement of current knowledge and bolstering the superiority
            of American agriculture. However, in order to ensure success of
            such an endeavor, NIFA must be fully funded, in contrast to the
            current trend of underfunding that has plagued current
            agricultural research programs.
    The United States is Best Served Through Investment in Agricultural
            Research
        From the critical basic research supported at universities
    throughout the Nation to the important work carried out by the Human
    Nutrition Research Centers, USDA research programs deserve to be
    supported at the highest level possible. We must maintain and magnify
    the breadth and competitive nature of the agricultural research
    portfolio, to ensure the United States' economic vitality and the well-
    being of all Americans.
                      faseb federal funding recommendation
        FASEB supports funding the USDA's National Research Initiative
    Competitive Grants Program in fiscal year 2009 at the $257 million
    level recommended in the President's 2008 budget and the Agricultural
    Research Service at $1.377 billion, which restores the fiscal year 2005
    level, adjusted for inflation.
                                     ______

          Prepared Statement of the American Society for Microbiology

        The American Society for Microbiology (ASM) appreciates the
    opportunity to submit testimony in support of increased appropriations
    for the Food and Drug Administration (FDA) for fiscal year 2009. The
    ASM continues to believe that the FDA budget request is below the
    amount required to ensure that public health is protected through
    research and science based regulatory activities. The FDA regulates
    products worth nearly $1.5 trillion annually, about 20 percent of
    consumer spending in the United States. Repeated reports of
    contaminated or otherwise defective foods and other products, both
    domestic and imported over the past year, illustrate the crucial need
    for a strong FDA.
        The administration's proposed fiscal year 2009 FDA budget requests
    nearly $2.4 billion, a net increase of $130 million, or 5.7 percent
    over fiscal year 2008. The request includes $1.77 billion in budget
    authority and $628 million as industry user fees. The budget plan funds
    a full time equivalent staff increase of 526, a much needed addition to
    the FDA's over extended workforce. It also includes funding increases
    earmarked for food safety activities and for medical product safety and
    development, identified by the Agency as two priority initiatives for
    fiscal year 2009.
        The ASM believes that greater investment in the FDA is required and
    recommends that Congress increase the FDA budget by $375 million.
        Challenges confronting FDA, such as rapidly changing new product
    technologies, recently led Agency leadership to solicit a year long
    evaluation of the science underlying the FDA's broad sweeping directive
    to safeguard consumers. Released last November, the study report
    decries the deteriorating state of FDA science and calls for a doubling
    of agency funding over the next 2 years, conclusions supported by the
    ASM and others concerned by chronic shortages in FDA budgets and
    personnel. The report, FDA Science and Mission at Risk, found that the
    number of appropriated personnel in 2007 was roughly the same as 15
    years earlier. It describes 20 unfortunate years of fiscal neglect,
    during which 123 additional statutes have been enacted increasing the
    FDA's already heavy workload.
        As the Nation's scientific regulatory agency, the FDA must stay at
    the leading edge of science and technology. In 2007, U.S. consumers
    purchased roughly $2 trillion worth of imported products from 825,000
    importers, shipped into the country through more than 300 ports of
    entry, elements of the inexorable shift toward economic globalization.
    The FDA assures the safety, efficacy, and security of many of these
    products, including human and animal drugs, biological products,
    medical devices, and more. Its mission also encompasses regulating vast
    numbers of domestic products and most of the Nation's food supply,
    educating the public with accurate, science based information, and
    encouraging innovation in medicines and other goods for public
    consumption. Each year, FDA review prompts multiple recalls of
    unacceptable or fraudulent products. The agency also evaluates an
    impressive list of new products, which last year included approved
    treatments for HIV infection, breast cancer, and hemophilia.
    Protecting America's Food Supply
        The proposed fiscal year 2009 FDA budget allocates $662 million for
    food protection activities, a $42.2 million increase over fiscal year
    2008, in part to support the Protecting America's Food Supply
    initiative to improve FDA efforts against foodborne illnesses. In
    November 2007, the FDA presented its new food protection plan,
    coordinated with the just released strategic plan of the Interagency
    Working Group on Import Safety. Using a risk based approach to identify
    potential threats to the food supply before problems arise, the FDA
    food protection plan will emphasize early intervention and reprioritize
    food safety issues to better utilize limited agency resources. The
    budget increase also will help facilitate new agreements just reached
    with China that address import safety issues, two Memoranda of
    Agreement on food, feed, drugs and medical devices signed last
    December.
        From production to consumption, the life cycle of the U.S. food
    supply typically involves a series of processes, facilities, and human
    handlers, opening multiple opportunities for contamination and
    foodborne illnesses. Outbreaks associated with fresh leafy greens and
    packaged dairy are recent examples. Last year, peanut butter
    contaminated with Salmonella bacteria in the processing plant sickened
    more than 300, hospitalizing at least 50 patients and forcing costly
    recalls. In March 2007, the FDA released its Final Guidance for Safe
    Production of Fresh-Cut Fruits and Vegetables as one step to address
    the growing problem of microbial contamination of fresh produce. In
    fiscal year 2008, Federal economists expected U.S. agricultural imports
    to reach a record $75 billion. Food imports have risen sharply in the
    past 5 years, increasing by over 10 percent a year at twice the
    historical rate of import growth. Rising food imports and other factors
    guarantee that problems will persist and the FDA must heighten its
    vigilance over the Nation's food supply.
        In January 2007, the Government Accounting Office (GAO) designated
    the Federal oversight of food safety as a high risk area for the first
    time, warning that related Federal programs are ``in need of broad-
    based transformation'' to reduce risks to public health and to the
    economy. In its evaluation report, the GAO pointed out that the FDA,
    responsible for regulating about 80 percent of the U.S. food supply,
    receives only about 24 percent of Federal expenditures for food safety
    inspection. Each month, FDA field inspectors reject hundreds of import
    shipments deemed filthy, decomposing, contaminated with drug residues,
    or otherwise unfit. Unfortunately, inspectors evaluate roughly 1
    percent of the estimated 9 million food and food ingredient shipments
    entering the United States annually, as staff shortages coincide with
    rapidly expanding import numbers.
        In 2006, the FDA's Center for Food Safety and Applied Nutrition
    (CFSAN) regulated an estimated $417 billion worth of domestic food and
    $49 billion worth of imported food, as well as $60 billion in cosmetics
    and $18 billion in dietary supplements. The $182 million proposed for
    CFSAN in fiscal year 2009 is an increase of $10 million over fiscal
    year 2008 and includes an additional 31 full-time employees, for a
    total of 811 FTEs to handle the workload. Increases for CFSAN also will
    target five areas for improvement: preventing contamination, prevention
    through mitigation, import enhancements, surveillance, and prevention
    through research.
    Modernizing Medical Product Safety and Development
        Under the administration's fiscal year 2009 proposal, the FDA's
    Medical Product Safety and Development initiative receives an
    additional $17.4 million to enhance the safety of human and animal
    drugs, blood, human tissues, and medical devices. The broad ranging
    initiative will address both imported products and the need for more
    new product innovation among U.S. industries. The proposed budget
    increase also will help implement the Food and Drug Administration
    Amendments Act enacted by Congress last year that sets new requirements
    for FDA food, drug and medical device programs. The budget increase
    will be distributed among the FDA centers and field activities
    specifically assigned oversight of human drugs, biologics, animal drugs
    and feeds, medical devices and radiological health, or toxicological
    research. Current programs need additional funding for modernizing
    laboratories, hiring more field staff, and improving import safety. The
    total fiscal year 2009 budget authority proposed for initiative related
    programs is $887 million, to be supplemented by $21.5 million in user
    fees.
        The recently released report on FDA science provides compelling
    arguments that the FDA regulatory system responsible for this
    initiative is overloaded and underfunded. The importance of a fully
    funded FDA is clear, based on the statistics. In 2006, the Center for
    Devices and Radiological Health (CDRH) regulated manufacturers with
    sales of $110 billion. The Center for Drug Evaluation and Research
    (CDER) oversaw $275 billion in pharmaceutical sales, 2,500 U.S.
    manufacturers, and 2,500 foreign manufacturers. The Center for
    Biologics Evaluation and Research (CBER) typically reviews more than
    800 new products every year. The Center for Veterinary Medicine is
    responsible for products tied to more than 10 billion food producing
    animals, 200 million pets, and more than 90,000 manufacturers.
        Each year, the FDA reviews new products and evaluates questionable
    consumer goods under its huge mandate to protect and improve public
    health. In 2007, the agency's field force investigated pet food
    contaminated by tainted wheat gluten imported from China, with more
    than 100 brands of food recalled by manufacturers. The FDA also
    approved a unique 2 hour blood test that marks a significant advance in
    rapidly detecting drug-resistant staph infections. CDER approved a
    total of 88 new products, including the first drug to treat all degrees
    of Alzheimer's disease and a new breast cancer drug that can replace a
    current one poorly tolerated by many patients. It also approved or
    tentatively approved 682 new, less costly generic drugs, a 33 percent
    increase over the previous year. This February, FDA advisors endorsed a
    new formula for next year's flu vaccine that, unlike most years'
    vaccines, would include all new influenza virus strains. Through its
    CBER programs, the FDA improves donated blood supplies by assessing
    additional testing as needed, in fiscal year 2007 approving screening
    tests for West Nile virus, Chagas disease, and early detection of
    hepatitis C virus and HIV-1.
    ASM Recommendation for the FDA in Fiscal Year 2009
        The FDA already regulates more than 375,000 facilities worldwide in
    nearly 100 countries. The volume of FDA regulated imports has doubled
    over the past 5 years. Approximately 15 percent of the U.S. food supply
    is imported and for some items like seafood and fresh fruit, market
    share reaches 60 to 80 percent. If current market trends persist, the
    beleaguered agency's workload will continue to expand rapidly inside
    the United States and elsewhere. It is essential that FDA science
    capabilities, research and field personnel, and infrastructures also
    expand to meet these challenges. Although the administration has
    proposed an increase of $130 million for the fiscal year 2009 budget
    for the FDA, this budget increase is still inadequate. The ASM believes
    the FDA could use a $375 million increase based on the professional
    judgment budget of the FDA Science Board. We believe the Science Board
    Report has provided a sound basis for the allocation of new resources
    for the food supply, biological sciences with emphasis on drug safety,
    science reorganization, scientific capability including training and a
    visiting scientist program, and information technology.
                                     ______

          Prepared Statement of the American Society for Microbiology

        The American Society for Microbiology (ASM) is pleased to submit
    the following testimony on the fiscal year 2009 appropriation for the
    U.S. Department of Agriculture (USDA) research and education programs.
    The ASM is the largest single life science organization with more than
    42,000 members. The ASM mission is to enhance the science of
    microbiology, to gain a better understanding of life processes, and to
    promote the application of this knowledge for improved health and
    environmental well-being.
        Agricultural research is vitally important for the improvement of
    animal and plant health, food safety, and the environment. In the
    September 2007 report, ``Economic Returns to Public Agriculture
    Research,'' the USDA Economic Research Service (ERS) reviewed over 35
    economic studies of the social rate of return to investments in
    agriculture. The report shows the average rate of return on public
    investment in agriculture research is 45 percent per every dollar
    invested. These returns are shared by all levels of the agricultural
    continuum, from producers to consumers.
        The ASM is concerned with the President's fiscal year 2009 funding
    proposal for the National Research Initiative (NRI). The NRI is the
    USDA's competitive, peer-reviewed grants program that supports
    extramural research. USDA research efforts in food safety, animal
    disease, alternative fuels, the environment, and other strategic areas
    are producing tangible returns on Federal investments. Although the
    fiscal year 2009 proposal provides an increase of $67 million over
    fiscal year 2008, it directs $61 million of the increase to the
    transferred integrated programs and biofuel research, providing the NRI
    with an actual increase of only $6 million for its base programs if the
    integrated programs are flat funded.
        We urge Congress to provide a 10 percent increase for the NRI in
    fiscal year 2009. The ASM recommends $270 million for the NRI in fiscal
    year 2009. This recommended funding level will provide a 10 percent, or
    $19 million, increase for the NRI base programs, and cover the directed
    funding included in the fiscal year 2009 administration request of $42
    million for the proposed transfer of integrated programs, and $19
    million for bioenergy research.
        The ASM is also concerned with the President's fiscal year 2009
    requested 10 percent cut for the Agricultural Research Service (ARS)
    from fiscal year 2008. The ARS is USDA's primary intramural research
    program, which conducts research to develop practical solutions to
    agricultural problems of high national priority including fundamental,
    long-term, high-risk research that the private sector will not do. The
    ASM urges Congress to provide at least $1.185 billion for the ARS in
    fiscal year 2009, the same level as fiscal year 2008.
    Food Safety
        Strong support for the NRI and ARS is needed to provide the
    fundamental research essential to creating efficient and effective
    technologies for the protection of human health and improving the
    safety of agricultural products. This research is critical to
    developing the interventions needed to substantially reduce the 76
    million cases of foodborne illness in the United States that occur each
    year. Changes in society, technology, our environment, and
    microorganisms themselves are affecting the occurrence of foodborne
    bacterial, viral, and mycotic diseases. For example, E. coli O157 first
    emerged in the 1980s and spread through complex ecologies to
    contaminate a growing variety of foods. Multi-drug resistant Salmonella
    are a growing challenge to human and animal health. Infections of
    animals like anthrax, leptospirosis, and brucellosis can spread to
    humans by direct contact and by less obvious routes. Microbial
    adaptation is leading to the introduction through animals and foods of
    new or previously unrecognized human pathogens.
        According to the Centers for Disease Control and Prevention (CDC),
    approximately 76 million people suffer from foodborne disease per year,
    and in 2006, approximately 1,250 foodborne disease outbreaks were
    reported. Investment in research is necessary for improving the
    identification of these pathogens, for developing a better
    understanding of the pathways by which these pathogens make people and
    animals sick, and using this information to improve prevention.
    Additionally, research finds ways to develop and evaluate better
    methods for surveillance, investigation, and prevention.
        As microbes adapt, there is concern that some food-borne bacterial
    pathogens may become resistant to certain antimicrobial agents. It is
    necessary to have continued support for antimicrobial resistance
    monitoring programs, such as the National Antimicrobial Resistance
    Monitoring System (NARMS) and the Collaboration on Animal Health Food
    Safety Epidemiology (CAHFSE) program to generate data that will guide
    the development of appropriate interventions in the food production
    chain to minimize and contain antimicrobial resistant bacterial
    pathogens in the food supply.
        Through the Food and Drug Administration (FDA), the Food Safety and
    Inspection Service (FSIS) and the Animal and Plant Health Inspection
    Service (APHIS), the government is ensuring the Nation's food quality,
    providing safety interventions, and contributing to pathogen reduction.
    The ASM supports the President's fiscal year 2009 requested increases
    for FSIS and APHIS of 2 percent and 6.3 percent above fiscal year 2008,
    respectively.
        In addition to greater investment in research, it is important that
    the USDA collaborate with other agencies, such as the CDC, FDA, NIH,
    EPA, and NSF to ensure that the best research is funded and contributes
    to the food safety strategies of all the Federal agencies.
    Bio-Based Products
        Agricultural research is a critical component of discovering
    biobased products such as polymers, lubricants, solvents, composites,
    and energy. The ARS and NRI address research related to biobased
    products that focuses on developing biofuels and bioenergy; better,
    more efficient, and environmentally friendly agricultural materials;
    bio-based products that replace petroleum-based products; and new
    opportunities to meet environmental needs. These efforts include
    developing, modifying, and utilizing new and advanced technologies to
    convert plant and animal commodities and by-products to new products
    and by developing energy crops as well as new crops to meet niche
    market opportunities. Microbial research is essential to understanding
    and creating efficient biomass conversion and production methods, to
    developing new crops from which environmentally friendly and
    sustainable products such as paints and coatings can be made, and to
    producing fuels and lubricants, new fibers, natural rubber, and
    biobased polymers from vegetable oils, proteins, and starches.
        Most of the world's energy needs are currently met through the
    combustion of fossil fuels. With projected increases in global energy
    needs, more sustainable methods for energy production must be
    developed, and production of greenhouse gases will need to be reduced.
    There is continued need for fundamental microbial research that will
    improve biomass characteristics, biomass yield, and sustainability;
    energy sources that are environmentally friendly and renewable; and
    that will enhance our understanding of the impact that removing biomass
    for energy and other products has on the sustainability of soils and
    water.
        As the development and use of biofuels and bioenergy expands, other
    aspects of food production will be affected such as increased corn
    prices for livestock production and decreased exports of agricultural
    commodities. The ASM urges the USDA to expand further research programs
    on alternative bioenergy production such as cellulose-based
    fermentation that would identify new resources and methods that would
    not compete with the food system. These fermentation methods will
    require increased investment in identifying and understanding novel
    microbial pathways for cellulosic degradation.
        Greater support for the NRI and ARS is essential to address the
    challenges of the emerging biobased products industry with programs
    that support research, development, and demonstration. The ASM also
    encourages greater collaboration between and support for the USDA and
    the Department of Energy (DOE) Office of Science on biomass research.
    Genomics
        The Microbial Genome Sequencing Program has been supported jointly
    by the NRI and the National Science Foundation (NSF) since fiscal year
    2001. The program supports high-throughput sequencing of the genomes of
    microorganisms and the development and implementation strategies,
    tools, and technologies to make currently available genome sequences
    more valuable to the user community. The availability of genome
    sequences provides the foundation for understanding how microorganisms
    function and live, and how they interact with their environments and
    with other organisms. The sequences are available to and used by the
    investigator community to address issues of scientific and societal
    importance including: novel aspects of microbial biochemistry,
    physiology, metabolism, development and cellular biology; the diversity
    and the roles microorganisms play in complex ecosystems and in global
    geochemical cycles; the impact that microorganisms have on the
    productivity and sustainability of agriculture and natural resources
    (e.g., forestry, soil and water), and on the safety and quality of the
    Nation's food supply; and the organization and evolution of microbial
    genomes, and the mechanisms of transmission, exchange and reshuffling
    of genetic information. This genomic information is also important for
    the development of new strategies for converting cellulosic biofuel
    materials into useful and cost-effective energy sources.
        In fiscal year 2008, as a result of a reduction in funding by the
    NSF, this program received a 30 percent cut, to a total of $10 million.
    The ASM urges Congress to increase support for the USDA genomics
    initiative to restore it to full funding.
    Soil Processes
        Since soil sustainability is intrinsically linked to the microbial
    health of the soil, and the health of soil can directly affect its
    ability to filter and clean water, a greater understanding of soil
    microbiology is essential to ensuring sustainability and protecting the
    Nation's natural resources, soil, water, and the food supply.
        The NRI is currently supporting research that will potentially lead
    to an effective treatment to entrap, remove, or inactivate
    cryptosporidia oocysts, which persist in soil and water. Cryptosporidia
    are a potentially fatal protozoan that infects humans, livestock, and
    wildlife. When an effective control system is developed, it may prove
    to be effective in dealing with a variety of pathogens, including
    Salmonella, enteric parasites, and viruses. The ASM urges Congress to
    increase support for the NRI to continue and expand on opportunities in
    soil processes research that are critical for human and animal health
    and environmental well-being.
    Conclusion
        The ASM urges Congress to increase research funding for the USDA.
    The ASM is concerned that we are losing ground in the important field
    of agricultural research. Research in the biological and agricultural
    sciences is vital to the Nation's ability to meet current and future
    challenges ranging from the food supply and safety, to cost-effective
    solutions for energy and environmental challenges.
        The ASM appreciates the opportunity to provide written testimony
    and would be pleased to assist the subcommittee as it considers the
    fiscal year 2009 appropriation for the USDA.
                                     ______

         Prepared Statement of the American Society for Nutrition (ASN)

        The American Society for Nutrition (ASN) appreciates this
    opportunity to submit testimony regarding fiscal year 2009
    appropriations for the U.S. Department of Agriculture (USDA) and
    specifically, its research programs. ASN is the professional scientific
    society dedicated to bringing together the world's top researchers,
    clinical nutritionists and industry to advance our knowledge and
    application of nutrition to promote human and animal health. Our focus
    ranges from the most critical details of research to very broad
    societal applications. ASN respectfully requests $1.377 billion for
    ARS, with $120 million of the total allocated to the Human Nutrition
    Research program. We request $257 million for the National Research
    Initiative in fiscal year 2009.
        Basic and applied research on nutrition, food production, nutrient
    composition, food processing and nutrition monitoring is critical to
    American health and the U.S. economy. Awareness of the growing epidemic
    of obesity and the contribution of chronic illness to burgeoning health
    care costs has highlighted the need for improved information on dietary
    intake and improved strategies for dietary change. Demand for a safer
    and more nutritious food supply continues to increase. Preventable
    chronic diseases related to diet and physical activity cost the economy
    over $117 billion annually, and this cost is predicted to rise to $1.7
    trillion in the next 10 years. Nevertheless, funding for food and
    nutrition research at USDA has not increased in real dollars since
    1983! This decline in our national investment in agricultural research
    seriously threatens our ability to sustain the vitality of food,
    nutrition and agricultural research programs and in turn, threatens the
    future of our economy and the health of our Nation.
        USDA historically has been identified as the lead nutrition agency
    and the most important federal agency influencing U.S. dietary
    patterns. Through the nutrition and food assistance programs, which
    form roughly 60 percent of its budget, USDA has a direct influence on
    the dietary intake (and ultimately the health) of millions of
    Americans. It is important to better understand the impact of these
    programs on the food choices, dietary intake, and nutritional status of
    those vulnerable populations which they serve. Research is the key to
    achieving this understanding, and it is the foundation upon which U.S.
    nutrition policy is built.
        USDA is in full or in part responsible for the development and
    translation of federal dietary guidance, implementation of nutrition
    and food assistance programs and nutrition education; and, national
    nutrition monitoring. The USDA Human Nutrition Research programs ensure
    nutrition policies are evidence-based, ensure we have accurate and
    valid research methods and databases, and promote new understanding of
    nutritional needs for optimal health.
    ARS Human Nutrition Research Program
        USDA has built a program of human nutrition research, housed in six
    centers (HNRCs) \1\ geographically disperse across the Nation and
    affiliated with the ARS, which links producer and consumer interests
    and forms the core of our knowledge about food and nutrition. These
    unique centers are working closely with a wide variety of stakeholders
    to determine just how specific foods, food components, and physical
    activity can act together during specific life-stages (e.g. prior to
    conception, in childhood, in older adult years) to promote health and
    prevent disease. The HNRCs are a critical link between basic food
    production and processing and health, including food safety issues. The
    center structure adds value by fully integrating a multitude of
    nutritional science disciplines that cross both traditional university
    department boundaries and the functional compartmentalization of
    conventional funding mechanisms.
    ---------------------------------------------------------------------------
        \1\ Of the six HNRCs, three are fully administered by ARS and are
    located in Davis, CA, Beltsville, MD, and Grand Forks, ND. The other
    three are administered through cooperative agreements with Baylor
    University Medical Center in Houston, TX; Tufts University in Boston,
    MA; and, the University of Arkansas in Little Rock.
    ---------------------------------------------------------------------------
        An important basic premise of research in the HNRCs is that many
    chronic diseases, such as diabetes and obesity, can be prevented by
    lifestyle issues, the most important of which are: consuming
    appropriate amounts of a well-balanced, healthful diet; and regularly
    engaging in adequate levels of physical activity. Using state-of-the-
    art facilities and a concentration of critical scientific teams, the
    HNRCs are conducting the highest quality translational research. Also
    of importance are the long-term experiments involving the derivation of
    dietary reference intake values and nutrient requirements of
    individuals. Often compared to the intramural program at the National
    Institutes for Health, these centers tackle projects that are unlikely
    to be funded through other means, such as through competitive grants or
    by industry.
        The proposed 10 percent cut to ARS in fiscal year 2009, coupled
    with flat-funding of the Human Nutrition Research program for over 5
    years, seriously jeopardizes the future of the centers, their important
    research projects, and the critical infrastructure provided by the USDA
    from which the HNRCs and scientists benefit. Specifically, the
    President has proposed eliminating the center located at Grand Forks,
    ND. We are concerned about the proposed elimination of this center, as
    it represents the only HNRC that (1) is located in a major agricultural
    area; (2) focuses on research in rural areas, where obesity and its co-
    morbidities, as well as food insecurity, are most prevalent; and (3)
    partners with Native American communities and tribal colleges to
    address obesity, diabetes, heart disease and depression in high-need,
    under-served communities. At a time when the health of our Nation,
    especially its youth, faces significant challenges largely associated
    with nutrition and physical activity, we cannot afford to lose any of
    our HNRCs. In fact, $9 million in additional funds is needed across the
    six HNRCs to ensure they can continue current research projects and to
    restore purchasing power lost to inflation over years of flat budgets.
        ASN supports the inclusion of $12.2 million in the President's
    fiscal year 2009 budget proposal for health and obesity prevention
    research to address the efficacy of the healthful eating and physical
    activity patterns set forth in the Dietary Guidelines in preventing
    obesity in the U.S. population. However, funding for this research
    should not come at the expense of other important ARS nutrition
    research programs. Rather, this funding should be in addition to that
    which is allocated to existing research programs.
        Another example of the unique nutrition research at ARS is the
    nutrition monitoring program, ``What We Eat in America'' (WWEIA). This
    program allows us to know not only what foods Americans are eating, but
    also how their diets directly affect their health. Information from the
    survey guides policies on food safety, food labeling, food assistance,
    military rations, pesticide exposure and dietary guidance. In addition
    to having an impact on billions of dollars in federal expenditures, the
    survey data leverages billions of private sector dollars allocated to
    nutrition labeling, food product development and production. Despite
    this, WWEIA has been flat-funded at $11.5 million for over 12 years.
    The USDA budget for WWEIA must be increased two-fold to $23 million.
    Otherwise, we risk losing this national treasure if we do not restore
    lost funding and strengthen it for the future.
    National Research Initiative competitive grants program
        The National Research Initiative (NRI) funds cutting-edge,
    investigator-initiated agricultural research, supporting research on
    key issues of timely importance on a competitive, peer-reviewed basis.
    The NRI aims to improve the Nation's nutrition and health through two
    objectives: (1) to focus on improving human health by better
    understanding an individual's nutrient requirements and nutritional
    value of foods; and (2) to promote research on healthier food choices
    and lifestyles. Projects funded by the Human Nutrition and Obesity
    program are leading to a better understanding of the behavioral and
    environmental factors that influence obesity, and to the development
    and evaluation of effective interventions. For example, NRI grants have
    funded nutrition education interventions focusing on the reduction of
    childhood obesity in low-income families.
        Despite an initial authorization of $500 million per year, funding
    for the NRI has yet to reach $200 million, and less than $20 million
    was available in 2007 for the Human Nutrition and Obesity program. If
    America is to maintain the most nutritious, most affordable, and safest
    food supply in the world, funding levels need to be increased towards
    the NRI's authorized amount, lest continued neglect undermine the
    success of these valuable programs. The breadth and competitive nature
    of the NRI portfolio should be maintained and expanded to ensure this
    critical investigator-initiated research continues to improve the
    health of all Americans.
        The NRI and the Human Nutrition Research Program under ARS are
    symbiotic programs that provide the infrastructure and generation of
    new knowledge that allow for rapid progress towards meeting national
    dietary needs. These programs allow USDA to make the connection between
    what we grow and what we eat. And through strategic nutrition
    monitoring, we learn more about how dietary intake affects our health.
        ASN thanks your Committee for its support of the ARS and the NRI
    Competitive Grants Program in previous years. If we can provide any
    additional information, please contact Mary Lee Watts, ASN Director of
    Public Affairs, at (301) 634-71112 or mwatts@nutrition.org.
                                     ______

     Prepared Statement of the American Society of Agronomy, Crop Science
            Society of America, and Soil Science Society of America

        Dear Chairman Kohl, Ranking Member Bennett and Members of the
    Subcommittee, The American Society of Agronomy, Crop Science Society of
    America, and Soil Science Society of America (ASA-CSSA-SSSA) are
    pleased to submit the following funding recommendations for fiscal year
    2009. ASA-CSSA-SSSA understand the challenges the Senate Agriculture
    Appropriations Subcommittee faces with the tight agriculture budget for
    fiscal year 2009. 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
    as well as its intramural research portfolio funded through the
    Agricultural Research Service. We are particularly grateful to the
    subcommittee for funding the National Research Initiative at $191
    million in the fiscal year 2008 Omnibus Appropriations bill. For the
    Agricultural Research Service salaries and expenses, ASA-CSSA-SSSA
    recommend a funding level of $1.124 billion for fiscal year 2009, a 7
    percent increase over the President's recommended fiscal year 2009
    ($1.037 billion) funding level and 8.4 percent above fiscal year 2008
    enacted. ASA-CSSA-SSSA also recommend a total funding level of $46.752
    million (the fiscal year 2008 enacted level) for ARS Buildings and
    Facilities which would prevent closure of the 11 ARS facilities. For
    the Cooperative State Research, Education and Extension Service, we
    recommend a funding level of $753 million, a 5 percent increase over
    fiscal year 2008 ($688 million). We recommend funding levels stay at
    $3.4 billion for the Natural Resources Conservation Service in fiscal
    year 2009. Specifics for each of these and other budget areas follow
    below.
        With more than 25,000 members and practicing professionals, ASA-
    CSSA-SSSA are the largest life science professional societies in the
    United States dedicated to the agronomic, crop and soil sciences. ASA-
    CSSA-SSSA play a major role in promoting progress in these sciences
    through the publication of quality journals and books, convening
    meetings and workshops, developing educational, training, and public
    information programs, providing scientific advice to inform public
    policy, and promoting ethical conduct among practitioners of agronomy
    and crop and soil sciences.
                         agricultural research service
        ASA-CSSA-SSSA applaud the Agricultural Research Services' (ARS)
    ability to respond quickly and flexibly to rapidly changing national
    needs. With more than 22 National Programs, ARS and its 2,100
    scientists located at 100 research locations, including a few
    international facilities, works to ensure that Americans have reliable,
    adequate supplies of high-quality food and other agricultural products.
    ARS accomplishes its goals through scientific discoveries that help
    solve problems in crop and livestock production and protection, human
    nutrition, and the interaction of agriculture and the environment.
    Therefore, ASA-CSSA-SSSA strongly oppose the President's fiscal year
    2009 proposal to cut ARS funding for salaries and expenses to $1.037
    billion, further reducing funding by $91 million (-8 percent from
    fiscal year 2008 enacted -$1.128 billion), as well as the elimination
    of 11 ARS facilities totaling more than 354 staff years (more than 4
    percent of fiscal year 2008 total staff years), an approximate cut of
    $33.5 million. These ARS facilities including--Brawley, CA;
    Brooksville, FL; Watkinsville, GA; Morris, MN; Grand Forks, ND;
    Coshocton, OH; East Lansing, MI: Lane, OK; University Park, PA;
    Weslaco, TX; and Laramie, WY--conduct research critical to the
    development and transfer of solutions to agricultural problems of high
    national priority and provide information access and dissemination to:
    ensure high-quality, safe food, and other agricultural products; assess
    the nutritional needs of Americans; sustain a competitive agricultural
    economy; enhance the natural resource base and the environment; and
    provide economic opportunities for rural citizens, communities, and
    society as a whole. ASA-CSSA-SSSA urge the subcommittee to act
    judiciously and not implement such drastic funding cuts for this
    critical intramural research agency. For total Agricultural Research
    Service budget funding, ASA-CSSA-SSSA recommend a funding level of
    $1.124 billion for fiscal year 2009, a 7 percent increase over the
    President's recommended fiscal year 2009 ($1.05 billion) funding level
    and 8.4 percent above fiscal year 2008 enacted.
     cooperative state research, education, and extension service (csrees)
        ASA-CSSA-SSSA are very concerned with the downward trend in funding
    for the research component of CSREES's Strategic Objective 6.2: Enhance
    Soil Quality to Maintain Productive Working Cropland, which as has seen
    funding cut from $34.53 million in fiscal year 2007 to $30.293 in
    fiscal year 2008, a 12.3 percent decrease! Further, ASA-CSSA-SSSA
    strongly oppose the president's proposal to cut this important research
    program by an additional 15.4 percent (-$4.67 million) in fiscal year
    2009, bringing funding down to $25.62 million.
    Hatch and McIntire-Stennis Formula Funding
        ASA-CSSA-SSSA understand that the shift of earmarked funds to Hatch
    formula funding (Hatch formula funding reached a record $322.6 million)
    and McIntire-Stennis (McIntire-Stennis was funded at $30 million) which
    occurred in fiscal year 2007, would and did not occur again in fiscal
    year 2008, with funding reduced to $195 million for Hatch and $25
    million for McIntire-Stennis. Nevertheless, the need has never been
    greater to enhance funding for Hatch and McIntire-Stennis formula
    funding if we are to maintain the research capacity at our Nation's
    Land Grant Universities and Colleges of Agriculture necessary to keep
    American agriculture competitive. Therefore, ASA-CSSA-SSSA strongly
    oppose the President's fiscal year 2009 budget proposal, which further
    recommends cuts to both Hatch (to $139 million, a decrease of $56.6
    million from 2008 enacted) and McIntire-Stennis (down by $5.3 million
    to $19.5 million from 2008). ASA-CSSA-SSSA proposes a 10 percent
    increase in fiscal year 2009 funding levels from fiscal year 2008
    levels for Hatch (bringing funding to $215 million) and McIntire-
    Stennis ($27 million) programs in order to keep America agriculture
    competitive.
        ASA-CSSA-SSSA also oppose the administration's proposal to change
    the methodology for distributing Hatch formula funds, where 70 percent
    of funding ($98.3 million) versus 25 percent in fiscal year 2008 will
    be directed towards a multistate, competitively awarded grants program.
    As well, we oppose the administration's proposal to change the
    methodology for distributing McIntire-Stennis formula funds where 67
    percent of funding ($13.1 million) versus 25 percent in fiscal year
    2008 will be directed towards the multistate, competitively awarded
    grants program. Such drastic changes would 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 could be compromised if formula funds
    were to be redirected as proposed, and could irreparably damage
    programs housed at each land-grant university. This would mean a huge
    and potentially damaging loss of national infrastructure to conduct
    agricultural research. The private sector depends heavily on the
    agricultural technology and training provided by the U.S. land grant
    system, and the impact of such a drastic transfer of formula funds to a
    competitive grants program would affect not only the viability of U.S.
    industry but also the health and survival of millions of people across
    the globe. Moreover, investments in formula funded research show an
    excellent annual rate of return.
    Cooperative Extension Service
        Extension forms a critical part of research, education and
    extension program integration, the hallmark of CSREES which is not seen
    in other agencies. Unfortunately, the Smith Lever 3(b) and 3(c) account
    has been flat-funded (in constant dollars, this account has seen a
    gradual erosion in funding), in recent years. ASA-CSSA-SSSA support
    $474 million (an increase of $17.6 million or 4 percent over fiscal
    year 2008 enacted, and $42.2 million or 10 percent over the president's
    fiscal year 2009 recommendations) for the continuing education and
    outreach activities of the Extension System. Specifically, ASA-CSSA-
    SSSA support $300 million for Smith-Lever Formula 3(b) & (c), an
    increase of $26.8 million or 10 percent over fiscal year 2008 enacted.
    National Research Initiative
        ASA-CSSA-SSSA strongly endorse the President's proposed fiscal year
    2009 budget increase of $66 million for the National Research
    Initiative Competitive Grants Program (NRI) which would bring total
    funding for this important research program to a record $257 million in
    fiscal year 2009. However, we do not support the President's proposal
    to transfer Hatch funding or $42.3 million in funding from Sec 406
    (Integrated Research, Education, and Extension program) into the NRI.
    This transfer may result in the loss of critical programs such as the
    Organic Transitions Program. ASA-CSSA-SSSA do support the
    administration's proposal to include additional funding of $19 million
    for the Departments' bioenergy and biobased fuels research initiative.
        ASA-CSSA-SSSA request 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.
        Sustainable Agriculture Research and Education Programs.--ASA-CSSA-
    SSSA applaud the subcommittee for the 17 percent increase in fiscal
    year 2008 SARE funding; however we oppose the administration's request
    to cut funding for SARE by more than $5.2 million. At a minimum, the
    subcommittee should continue to fund SARE at the fiscal year 2008
    enacted level of $14.4 million.
        Organic Farming Transition Program.--ASA-CSSA-SSSA urge the
    subcommittee to fund the Organic Farming Transition Program at $5.0
    million in fiscal year 2009, rejecting the President's proposed
    transfer of the program.
        Indirect Costs.--ASA-CSSA-SSSA applaud the administration's
    proposal to eliminate the indirect cost cap on the NRI 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.
    However, we are concerned that new funding was not provided to cover
    this change, which would effectively result in either fewer grants
    being awarded, or actual research monies reduced.
        Agrosecurity.--ASA-CSSA-SSSA endorse the administration's request
    ($2.0 million) for the Agrosecurity Curricula Development, which we
    consider to be a critical new initiative. 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.
        Higher Education.--ASA-CSSA-SSSA urge the subcommittee to fund the
    Institution Challenge Grants at $6.7 million which will restore some of
    the funding lost due to the 2006 rescission and 2007 Continuing
    Resolution. We applaud the administration's budget request of $4.4
    million for the Graduate Fellowships Grants.
                     natural resources conservation service
    Conservation Security Program
        The Conservation Security Program provides financial and technical
    assistance to producers who advance the conservation and improvement of
    soil, water, air, energy, plant and animal life, and other conservation
    purposes on Tribal and private working lands. Since 2004, over 22.4
    million collective acres of soil management activities have resulted in
    an increase of over 11 millions tons of carbon sequestration on over
    22.4 million collective acres. ASA-CSSA-SSSA urge the subcommittee to
    fund this important working lands conservation program as an uncapped
    mandatory program, as intended in the 2002 Farm Bill legislation.
    Environmental Quality Incentives Program
        The Environmental Quality Incentives Program provides technical
    assistance to eligible farmers and ranchers to address soil, water,
    air, and related natural resource concerns on their lands in an
    environmentally beneficial and cost-effective manner. ASA-CSSA-SSSA
    oppose the president's proposed $201 million cut which would bring
    total funding for EQIP down to $1.05 billion.
                        marketing and regulatory program
    Animal and Plant Health Inspection Service
        In a strengthening global economy, it is essential the government
    take action to prevent disease transference from non-native soils. ASA-
    CSSA-SSSA endorse the President's proposed increase of the Plant and
    Disease Exclusion program to $398 million.
    Bioenergy
        Impacts from increased biofuel production will not only impact soil
    and water resources, but also agricultural markets. Therefore ASA-CSSA-
    SSSA commend the President's proposed increase of $0.4 million for the
    Economic Research Service and $1.8 million for the National
    Agricultural Statistics Service to study the potential effects and
    monitoring of biofuel expansion.
        A balance of funding mechanisms, including intramural, competitive
    and formula funding, is essential to maintain the capacity of the
    United States to conduct both basic and applied agricultural research,
    improve crop and livestock quality, and deliver safe and nutritious
    food products, 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 the Agricultural
    Research Service and Cooperative State Research, Education, and
    Extension Service. 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. 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. We must
    also continue support for CSREES-funded education programs which will
    help ensure that a new generation of educators and researchers is
    produced. Finally, we need to ensure support for CSREES-funded
    extension programs to guarantee that these important new tools and
    technologies reach and are utilized by producers and other
    stakeholders.
        As you lead the Congress in deliberation on funding levels for
    agricultural research and conservation, please consider American
    Society of Agronomy, Crop Science Society of America, and Soil Science
    Society of America as supportive resources. We hope you will call on
    our membership and scientific expertise whenever the need arises. Thank
    you for your thoughtful consideration of our requests. For additional
    information or to learn more about the American Society of Agronomy,
    Crop Science Society of America and Soil Science Society of America
    (ASA-CSSA-SSSA), please visit www.agronomy.org, www.crops.org or
    www.soils.org or contact ASA-CSSA-SSSA Director of Science Policy Karl
    Glasener (kglasener@agronomy.org, kglasener@crops.org, or
    kglasener@soils.org).
                                     ______

               Prepared Statement of the Animal Welfare Institute

     animal and plant health inspection service (aphis)/animal welfare act
                               (awa) enforcement
    Administration Request--$21.522 Million--SUPPORT
        Over the past decade, the Committee has responded to the urgent
    need for increased funding for the Animal Care program (AC) to improve
    its inspections of more than 14,000 sites, including commercial
    breeding facilities, laboratories, zoos, circuses, and airlines, to
    ensure compliance with AWA standards. AC now has 105 inspectors,
    compared to 64 inspectors at the end of the 1990s. In 2006, they
    conducted more than 20,000 inspections, involving over 1 million
    animals in research facilities alone. This budget request of
    $21,522,000 will sustain the progress that has been made, as well as
    enable AC to hire more inspectors to handle its burgeoning
    responsibilities as the number of licensed/registered facilities
    continues to increase.
                  aphis/investigative and enforcement services
    Administration Request--$13.694 Million--SUPPORT
        APHIS' Investigative and Enforcement Services division is essential
    to meaningful enforcement of the AWA. Among other things, it
    investigates alleged violations of the AWA and undertakes appropriate
    enforcement action. Of the $13,694,000 for IES in the President's
    budget, $725,000 will be used to improve enforcement of federal animal
    welfare laws. The volume of animal welfare cases is rising
    significantly as new facilities become licensed and registered and AC
    is able to conduct more inspections.
      agricultural research service/nal/animal welfare information center
                                     (awic)
    Administration Request--$0 OPPOSE NEEDED--$1.8 Million Line Item
        It is disturbing that the President's budget proposes elimination
    of the Animal Welfare Information Center. This would be a serious
    mistake that would adversely impact the welfare of animals used in
    research--and the quality of the research produced using animals.
    AWIC's services are vitally important to the Nation's biomedical
    research enterprise because they facilitate compliance with specific
    requirements of the federal animal welfare regulations and policies
    governing animal-related research.
        In fact, the AWIC was established by Congress under the Improved
    Standards for Laboratory Animals Act (the 1985 amendment to the Animal
    Welfare Act) to serve as a clearinghouse, training center, and
    educational resource for institutions using animals in research,
    testing and teaching. The Center is the single most important resource
    for helping personnel at more than 1,200 U.S. research facilities meet
    their responsibilities under the AWA. Supported by a modest funding
    level, its services are available to all individuals at these
    institutions, including cage washers, animal technicians, research
    investigators, attending veterinarians, Institutional Animal Care and
    Use Committee (IACUC) representatives and the Institutional Official.
        AWIC provides data on alleviating or reducing pain and distress in
    experimental animals (including anesthetic and analgesic procedures),
    reducing the number of animals used for research where possible,
    identifying alternatives to the use of animals for specific research
    projects, and preventing the unintended duplication of animal
    experiments. The Center collects, updates, and disseminates material on
    humane housing and husbandry, the functions and responsibilities of
    IACUCs, animal behavior, improved methodologies, psychological well-
    being of primates, and exercise for dogs.
        There is general consensus between the biomedical research industry
    (including the National Association for Biomedical Research) and the
    animal welfare community about the need for increased funding. A number
    of individuals representing these disparate interests have endorsed the
    request for $1.8 million in funding for AWIC, see ttp://
    www.awionline.org/pdf/Senate_AG_AWIC_SignOnMar08.pdf. The AWIC helps to
    improve the conduct of research, including the care provided to the
    animals who are used, thereby ensuring a reduction in variables that
    might skew the research. Better science is the end result.
        The AWIC website (http:www.nal.usda.gov/awic) is one of the most
    accessed sites at the NAL, with over 4 million hits in fiscal year
    2007, a 10 percent increase over fiscal year 2006. It provides valuable
    information on issues of importance not only to the science community
    but also to the agriculture and public health communities, including
    BSE and avian influenza, two of the top areas of inquiry for visitors
    to its website. In fiscal year 2007, in addition to hundreds of
    millions of kbytes of information downloaded from the website, more
    than 70,000 hard copies, paper and CD, were distributed as well. In
    fact, the number of CDs distributed increased 46 percent between fiscal
    year 2006 and fiscal 2007. AWIC staff provided over 1,300 personal
    reference services. They conducted 10 formal ``IACUC 101'' training
    workshops. Twenty-five exhibitions and/or presentations were conducted
    at such venues as the 6th World Congress on the Use of Animals in
    Research, Teaching, and Testing (Japan 2007), American Association for
    Laboratory Animal Science (AALAS) annual meeting, Society of
    Neuroscience, New Jersey Association for Biomedical Research, American
    Veterinary Medical Association, International Conference on
    Environmental Enrichment, American Association for the Advancement of
    Science and, Scientists Center for Animal Welfare meetings, and the
    Public Responsibility in Medicine and Research annual meeting.
        We greatly appreciate Congress' past support for AWIC to carry out
    its programs. Given its indispensability not only to assisting with
    compliance with the AWA but also to providing up-to-date information on
    a range of issues, from BSE to primate enrichment, that are critical to
    the scientific and agricultural communities, we recommend that AWIC be
    listed as a separate line item. We urge Congress to reject ARS' attempt
    to eliminate AWIC. On the contrary, it is essential to provide an
    appropriation of $1.8 million in fiscal year 2008 for desperately
    needed expansion to meet growing demand for AWIC's expertise on two
    fronts.
        First, as evidenced by the findings of an Office of Inspector
    General (OIG) audit, ``APHIS Animal Care Program Inspection and
    Enforcement Activities,'' there has been an increase in apparent
    violations of the AWA by research facilities over the past few years.
    There appears to be a significant problem with the oversight of IACUCs
    and the audit recommends training for IACUC members. In response to
    this need, we are requesting funds to allow AWIC to do the following:
      --Continue to conduct workshops at locations around the country
            rather than being limited to conducting them only from the
            Center's base in Maryland.
      --Hold a symposium on AWA requirements for IACUC nonaffiliated
            members (i.e., members from the community charged with
            representing the communities' concerns for the welfare of the
            animals).
      --Work with Animal Care more closely to identify and assist those
            licensees and registrants that are cited for AWA violations
            most frequently.
        Second, increased funding is also necessitated by the expansion of
    AWIC's mandate to include the broader industry regulated under the
    Animal Welfare Act: animal dealers, carriers and handlers, zoos and
    other exhibitors. Other topics covered by the Center include animal
    diseases, animal models, animal training, and environmental enrichment
    for all species. Animal Care's veterinary medical officers and animal
    care inspectors are able to utilize the full range of services provided
    by the AWIC to better fulfill their responsibilities. The AWIC also
    works closely with both Animal Care and with Emergency Veterinary
    Services on emerging crises such as the highly pathogenic Avian
    Influenza. The Center is focused on transmissible spongiform
    encephalopathy, exotic Avian Newcastle disease, tuberculosis, West Nile
    Virus and microbacterial diseases.
        Among other endeavors, the $1.8 million would be used as follows:
    To support the addition of two much-needed positions whose jobs would
    be to expand the content of the Center's database and make it more
    user-friendly and searchable; exhibitions at major scientific
    conferences, including underserved areas of the country; workshops, in
    conjunction with Animal Care, to assist licensees and registrants
    frequently cited for AWA violations; informational workshops at
    research institutions across the country and locally at the Center;
    training for the NAL staff; acquisition of, including electronic access
    to, data; and the overhead that must be provided to the Agricultural
    Research Service and the National Agricultural Library.
        It is ironic that at the same time as the administration calls for
    eliminating AWIC, it seeks additional funding for the Agricultural
    Network Information Center (AgNIC), which provides ``quick and reliable
    access to quality agricultural information and sources'' and in which
    AWIC is a key partner and participant. The budget also proposes to
    improve information services for veterinary practitioners, but, by
    zeroing out AWIC, it in fact deprives those same veterinary
    practitioners--from those who treat companion animals and farm animals
    to those who are responsible for the welfare of research animals--of a
    vital and heavily utilized resource.
        Overall, ARS seeks ``an increase of $1 million for the continued
    improvement and expansion of products and services delivered by the
    National Agricultural Library . . .'' In fulfilling its Congressional
    mandate, AWIC serves this purpose effectively and efficiently and meets
    Performance Measure 2.1, which requires that the services and
    collections of the NAL continue to meet the needs of its customers.
    AWIC's value to the research community, other entities that must comply
    with the Animal Welfare Act, and the general public justifies not
    elimination but rather this modest proposed increase in its budget and
    its designation as a separate line item in the budget.
       aphis/animal care's enforcement of the horse protection act (hpa)
    Administration Request--$499,000--Support
    Additional Request of $251,000, plus a one-time infusion of $1 million
        More than 35 years ago Congress adopted the HPA, yet soring of
    Tennessee Walking Horses continues to be a widespread problem. Soring
    is defined by APHIS as ``the application of any chemical or mechanical
    agent used on any limb of a horse or any practice inflicted upon the
    horse that can be expected to cause it physical pain or distress when
    moving.'' Horses are sored to produce an exaggerated gait, which is
    considered attractive by certain sectors of the equestrian community,
    despite the pain it causes to the horses in question.
        The most effective method to reduce soring and the showing of sored
    horses are to have Animal Care (AC) inspectors present at the shows
    where sored horses are exhibited to enforce the HPA (under which civil
    and criminal penalties may be assessed). Oftentimes, as soon as an AC
    inspector arrives at such a show, there is a rush to put horses back
    into trailers and haul them away so that any signs of soring cannot be
    detected. If the likelihood that an AC inspector will show up increases
    significantly, this will have a huge deterrent effect on those who
    routinely sore their horses. Yet AC was able to attend just 32 of 865
    events in fiscal year 2004 (the last year for which we have
    comprehensive figures)--less than 4 percent of all shows.
        In fact, lack of financial support has made it necessary for Animal
    Care to rely heavily on the Tennessee Walking Horse industry to assume
    responsibility for enforcement of the HPA. This is the very same
    industry that created the need for the HPA and has turned a blind eye
    to compliance with the law since its passage in 1970. Under the Act
    ``Designated Qualified Persons'' (DQPs) are assigned by USDA as
    ``inspectors'' from industry to assist AC in identifying sored horses
    and pursuing action against the individuals who are responsible. The
    history of the DQPs reveals their failure to achieve the level of
    enforcement of the unbiased, well-trained, professional inspectors who
    work for AC, as illustrated by radically different enforcement rates:
    In 2004 and 2005, the rate of violations cited at a variety of horse
    shows was as much as 23 times higher under USDA inspections versus DQP
    inspections.
        According to USDA, in 2005, of the samples taken by a gas
    chromatography machine (used to test for use of illegal substances to
    sore horses) at the Kentucky Celebration horse show, 100 percent
    indicated the presence of diesel fuel or another similar fuel plus
    numbing agents. Clearly the law is not being taken seriously by the
    industry.
        In September 2006, having ignored repeated warnings from USDA that
    too many horses were showing signs of soring, organizers eventually
    canceled the Shelbyville (TN) Celebration, the prestige event in the
    walking horse industry, after USDA inspectors disqualified seven of the
    ten finalists because of soring. This was an unprecedented action by AC
    and is a testament to USDA's commitment to vigorous enforcement of the
    HPA, despite threats to its inspectors and insufficient resources.
        Currently just eighteen individuals are disqualified from
    exhibiting horses under the HPA. Further, the amount of penalties
    assessed for violations of the law has dropped to a negligible amount.
    In addition to increasing the presence of inspectors, USDA must
    increase the penalties that it assesses or the industry will continue
    to defy the law with impunity. Congress should direct USDA to take this
    step and authorize the funds to enable such enforcement.
        An appropriation of at least $750,000 ($251,000 above the amount
    included in the President's Budget) is essential in fiscal year 2009 to
    permit AC to increase attendance at shows to ensure compliance with the
    Horse Protection Act. USDA also needs a one-time allocation of $1
    million to purchase additional equipment, such as digital radiography
    machines to take radiographs of the hoof to detect changes indicative
    of pressure-shoeing; and algometers, which apply consistent pressure
    during the examination process. Adding these machines to the
    inspectors' tools for verifying the use of soring techniques further
    enhances the objectivity and consistency of the evidence obtained.
     strengthened enforcement of humane methods of slaughter act (hmsa) by
                 the food safety and inspection service (fsis)
        Congress has provided generous support for enforcement of the HMSA
    beginning in 2001. Yet a new report, Crimes Without Consequences: The
    Enforcement of Humane Slaughter Laws in the United States, http://
    www.awionline.org/farm/humane_slaughter_report.htm, demonstrates the
    low priority FSIS places on humane treatment of animals at slaughter.
    Further, it would appear that despite the clear direction that monies
    should be used to hire new staff to work in the slaughter plants
    observing the handling, stunning and slaughter of live animals, FSIS
    has failed to do so. Seventeen veterinarians were hired by FSIS with
    funding from Congress, but the majority of their time is spent on other
    tasks.
        Animals are suffering needlessly because FSIS is not assigning
    individuals the sole responsibility of HMSA enforcement and placing
    them full-time (not full-time equivalent) in the plants where they can
    remain focused on assuring the welfare of live animals and immediately
    respond by stopping the line if they observe any apparent violations of
    the law. Egregious acts are occurring that could be prevented by a
    solid FSIS presence. Live conscious animals are being shackled, hoisted
    and cut or rolled into scalding tanks. An inspector in Missouri noted a
    hog whose feet had been removed, yet the animal was moving and appeared
    to be gasping for breath. Another inspector in an Arkansas plant noted
    that: ``At approximately 1:00 p.m. [a Holstein cow] had a 1 cm hole in
    its forehead from a captive bolt stunner. At 1:10 p.m. the cow had not
    been moved and was breathing regularly. An establishment employee tried
    to re-stun the animal twice but the hand held captive bold stunner did
    not fire.''
        Between 2002 and 2005, only 42 enforcement actions beyond issuances
    of deficiency reports for noncompliances with humane slaughter laws
    were taken. Crimes are going undetected, unrecognized or merely
    unreported--and even in the case of those that are reported,
    appropriate remedial action may not be taken. For the period October 1,
    2006 to September 30, 2007, humane handling and slaughter was the
    subject of only 1.9 percent of all USDA verification procedures, 0.6
    percent of all noncompliance records, and 17 percent of all plant
    suspensions.
        We oppose the installation of cameras in plants as an alternative
    to the presence of inspectors. Cameras cannot possibly catch all of the
    activity including the movement of animals off of trucks and through
    the stunning and slaughter process. Some plants have multiple lines and
    multiple shifts of employees. Who is going to watch all of the footage?
    And if violations occur, by the time they are noted it will be too late
    to help the animals who have already suffered before being killed. This
    proposal sounds more like a desperate attempt to dupe the public into
    believing that the problem has been taken care of, rather than a real
    solution.
        Additional funding might permit the hiring of full-time inspectors
    devoted to ensuring humane treatment of live animals. However, does
    FSIS have the will? We are gravely concerned that it does not.
                                     ______

     Prepared Statement of the Coalition on Funding Agricultural Research
                                    Missions

        The Coalition on Funding Agricultural Research Missions (CoFARM)
    appreciates the opportunity to submit testimony on the fiscal year 2009
    appropriation for the United States Department of Agriculture (USDA).
    CoFARM is a coalition of 24 professional scientific organizations with
    over 200,000 members dedicated to advancing and sustaining a balanced
    investment in our Nation's research portfolio.
        The USDA sponsors research and education programs which contribute
    to solving agricultural problems of high national priority and ensuring
    food availability, nutrition, quality and safety, as well as a
    competitive agricultural economy. 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. We are concerned
    that the NRI has suffered from flat funding since fiscal year 2007. We
    urge the subcommittee to provide a 10 percent increase for the NRI in
    fiscal year 2009. CoFARM recommends $270 million for the NRI in fiscal
    year 2009.
        This recommended funding level will provide a 10 percent, $19
    million, increase for the NRI base programs, and cover the directed
    funding included in the fiscal year 2009 administration request of $42
    million for the proposed transfer of integrated programs, and $19
    million for bioenergy research. A 10 percent increase to the NRI will
    (1) restore funding to this important program; (2) restore lost
    purchasing power that this erosion of funding has caused; and (3)
    provide investments that begin to truly meet the food, energy, and
    environmental challenges facing the Nation.
    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 the
    report, Investing in Research: A Proposal to Strengthen the
    Agricultural, Food and Environmental System, by the National Research
    Council's (NRC) Board of Agriculture. This report called for increased
    funding by USDA of high priority research 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.
        Stakeholders of the research community continue their interest in
    and support of the NRI, which 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, nutritional, physical, and social sciences relevant to
    agriculture, food, health 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 like its current collaborations between NRI and DOE and NSF.
        The NRI funds the most cutting-edge agricultural research within
    the United States. In the September 2007 report, ``Economic Returns to
    Public Agriculture Research,'' The USDA Economic Research Service (ERS)
    reviewed over 35 economic studies of the social rate of return to
    investments in agriculture. The report shows the average rate of return
    on public investment in agriculture research is 45 percent or for every
    dollar spent on agricultural research, the return is approximately $10.
    These returns are shared by all levels of the industry, from producers
    to consumers. However, if America is to maintain the most abundant,
    most affordable, and safest food supply in the world, funding levels
    need to be increased towards the NRI's authorized amount of $500
    million.
        Because of the federal investment made since 1991, we have gained
    valuable new knowledge in areas such as:
    Food Safety and Nutrition
      --USDA funded competitive research has supported studies to
            understand incentives for firms to adopt food safety controls
            and industry response to losses when products are recalled for
            food safety violations.
      --USDA supported scientists identified a safe and effective new
            sanitizer (SANOVA) that achieved a 5-log reduction of E. coli,
            Listeria, and Salmonella on produce even in the presence of
            large organic loads. The researchers optimized sanitation
            treatment procedures to ensure good quality of shredded carrot
            and fresh-cut lettuce while maintaining the effective killing
            power of the sanitizer. This research is critical considering
            there are approximately 76 million foodborne illness cases in
            the United States per year and the findings from this research
            is especially useful to the fresh produce industry as they
            provide practical information in selecting a suitable sanitizer
            to maintain microbial safety and quality of fruits and
            vegetables.
      --Iowa State University researchers have studied fatty acid
            composition in beef and dairy cattle through a NRI funded
            grant. They have discovered a single nucleotide polymorphism
            that is correlated to content of C14-O (myristic acid, the most
            atherogenic of saturated fatty acids) of beef. Thus, the marker
            in the throesterase domain in fatty acid synthase gene can be
            used to select for healthier beef.
      --University of Illinois scientists are involved with the assessment
            of general risk posed from transgenic animals, which is
            important to their future contributions to society.
            Identification of potentially harmful properties of transgenic
            livestock is the initial step in a risk assessment. Direct and
            indirect impacts of potential harmful properties of transgenic
            livestock are being evaluated at three levels: (1)
            characterization of how the transgene, the transgene product,
            and the transgenic livestock behave in their immediate
            environment, that is, in their barn or pen, (2) determination
            of possible impacts of large scale release of transgenic
            livestock, that is, if they were to be integrated into the
            larger population of food animal livestock, and (3)
            determination of the more complex environmental and safety
            consequences of their release into the livestock population.
            This study will determine whether a mammary specific transgene,
            bovine a-lactalbumin (Ba-LA) is expressed in tissues other than
            the mammary gland and whether the transgene (Tg) itself, the
            transgenic RNA or the transgenic protein cross over into non-
            transgenic (C) animals under various physiological and physical
            conditions.
    Renewable Energy and Fuels
      --In a time of volatile gasoline prices, USDA dollars have helped
            provide economic and policy analyses for specific renewable
            energy technologies and will estimate national impacts of
            certain renewable energy policy alternatives.
      --An April 2005 joint study of the U.S. Departments of Energy and
            Agriculture found that with continued advances in research
            there will be enough renewable biomass grown in the United
            States to meet more than one-third of the current demand for
            transportation fuels in the Nation, without diverting from food
            crop production.\1\ With advances in plant and microbial
            research, land in every state in the Nation could be used to
            grow plants that produce clean-burning cellulosic ethanol
            resulting in decreased dependence on foreign oil, reduction of
            the trade deficit, reduced emissions of stored greenhouse
            gases, revitalized rural economies and strengthened national
            security.
    ---------------------------------------------------------------------------
        \1\ ``Biomass as Feedstock for a Bioenergy and Bioproducts
    Industry: The Technical Feasibility of a Billion-Ton Annual Supply,
    April 2005'' http://www1.eere.energy.gov/biomass/pdfs/
    final_billionton_vision_report2.pdf
    ---------------------------------------------------------------------------
    Plant and Animal Health and Well-Being
      --Pennsylvania researchers are developing rapid diagnostic tests to
            curb avian influenza, a disease that could cripple the state's
            $700 million poultry industry.
      --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.
      --Iowa State University researchers studied fatty liver syndrome in
            dairy cattle. They found that daily injections of glucagon can
            be used to prevent and treat fatty liver in transition dairy
            cows. A patent has been issued for this technology.
    Waste Remediation
      --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.
        The NRI supports research on key issues of timely importance
    relevant to agriculture, economics, energy, the environment, food, and
    nutrition on a competitive, peer-reviewed basis. CoFARM encourages you
    to help move American agricultural research forward through your strong
    fiscal support of the USDA NRI program.
        We urge you to provide $270 million for the NRI in fiscal year
    2009, which will help to continue to boost the American agricultural
    enterprise and improve our economy by increasing food safety, boosting
    production, protecting the environment, finding new uses for renewable
    resources, and enhancing food itself so that food and agricultural
    systems contribute to a stronger and more healthful society. Research
    programs in nutrition and food science help to ensure high-quality,
    safe, and affordable food for consumers, and contribute to the success
    of a food and agricultural system that creates jobs and income in the
    United States.
        CoFARM 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.
    Please contact the Chair, Whitney Tull, at wtull@asmusa.org with any
    questions.
                                     ______

    Prepared Statement of the Colorado River Basin Salinity Control Program

        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. Now it is anticipated that
    Congress will this year with the passage of a new Farm Bill further
    define how the Colorado River Basin States can cost share in a newly
    designated ``Basin States Program.''
        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 recent fiscal years, the Natural Resources Conservation Service
    (NRCS) has directed that over $19 million be used for the Program. The
    Colorado River Basin Salinity Control Forum (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 Forum, adopted by the States, and approved by the United States
    Environmental Protection Agency (EPA). The Colorado River Basin
    Salinity Control Advisory Council has taken the position that the
    funding for the salinity control program should not be below $20
    million per year. Over the last 3 fiscal years, for the first time,
    funding almost reached the needed level. State and local cost-sharing
    is triggered by the Federal appropriation. In fiscal year 2008, 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 2008 the State and local contributions
    will be 45 percent of the total program cost.
        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 total EQIP funding nationwide is around
    $1 billion. 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 3 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 3 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 2005 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. 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
    quantified damages and significantly more in unquantified damages 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 now have several years of experience
    with that program.
        The Salinity Control Act designates that the Secretary of the
    Interior provide the coordination for the Federal agencies involved in
    the salinity control program. That responsibility has been delegated to
    the United States Bureau of Reclamation (BOR). BOR administers the
    Basin States cost sharing funds that have been used in the Parallel
    Program. The BOR requested that there be enacted clearer authority for
    the use of these funds. In response, there is a provision in the Farm
    Bill now under consideration that would create a ``Basin States
    Program'' that will replace the Parallel Program.
        With respect to the use of Basin States' cost sharing funds in the
    past, 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
    has expended 40 percent of the funds available on these needed support
    activities made possible by contracts with the NRCS.
                                     ______

          Prepared Statement of the Colorado River Board of California

        This testimony is in support of funding for the U.S. Department of
    Agriculture (USDA) with respect to its on-farm Colorado River Basin
    Salinity Control Program for fiscal year 2009. This program has been
    carried out through the Colorado River Basin Salinity Control Act
    (Public Law 93-320), since it was enacted by Congress in 1974. With the
    enactment of the Federal Agricultural Improvement and Reform Act
    (FAIRA) in 1996 (Public Law 104-127), specific funding for salinity
    control projects in the Colorado River Basin were eliminated from the
    Federal budget and aggregated into the Department of Agriculture's
    Environmental Quality Incentives Program (EQIP) as one of its program
    components. With that action, Congress concluded that the salinity
    control program could be more effectively implemented as one of the
    components of the EQIP.
        The Program, as set forth in the act, benefits both the Upper Basin
    water users through more efficient water management and the Lower Basin
    water users, hundreds of miles downstream from salt sources in the
    Upper Basin, through reduced salinity concentration of Colorado River
    water. California's Colorado River water users are presently suffering
    economic damages in the hundreds of million of dollars per year due to
    the River's salinity.
        The Colorado River Board of California (Colorado River Board) is
    the State agency charged with protecting California's interests and
    rights in the water and power resources of the Colorado River system.
    In this capacity, California along with the other six Colorado River
    Basin States through the Colorado River Basin Salinity Control Forum
    (Forum), the interstate organization responsible for coordinating the
    Basin States' salinity control efforts, established numeric criteria in
    June 1975 for salinity concentrations in the River. These criteria were
    established to lessen the future damages in the Lower Basin States of
    Arizona, California, and Nevada, as well as assist the United States in
    delivering water of adequate quality to Mexico in accordance with
    Minute 242 of the International Boundary and Water Commission.
        The goal of the Colorado River Basin Salinity Control Program is to
    offset the effects of water resources development in the Colorado River
    Basin after 1972 as each State develops its Colorado River Compact
    apportionments. In close cooperation with the U.S. Environmental
    Protection Agency (EPA) and pursuant to requirements of the Clean Water
    Act (Public Law 92-500), every three years the Forum prepares a formal
    report analyzing the salinity of the Colorado River, 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 Colorado River system in 1972 at Imperial
    Dam, and below Parker and Hoover Dams. The latest report was prepared
    in 2005 titled: 2005 Review, Water Quality Standards for Salinity,
    Colorado River System (2005 Review). The plan necessary for controlling
    salinity and reducing downstream damages has been captioned the ``Plan
    of Implementation.'' The 2005 Review includes an updated Plan of
    Implementation.
        Concentrations of salts in the River annually cause about $376
    million in quantified damage in the United States (there are
    significant un-quantified damages as well). For example, 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 fewer opportunities for recycling due to
            groundwater quality deterioration; and
      --Increased use of imported water for leaching and the cost of
            desalination and brine disposal for recycled water.
        For every 30 milligram per liter increase in salinity
    concentrations, there are $75 million in additional damages in the
    United States. 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.
        Enactment of the Farm Security and Rural Investment Act of 2002
    provided an opportunity to adequately fund the Salinity Program within
    EQIP. The Colorado River Basin Salinity Control Advisory Council has
    taken the position that the USDA portion of the effort be funded at 2.5
    percent of the EQIP funding but at least $20 million annually. Over the
    past few years, the Natural Resources Conservation Service (NRCS) has
    designated 2.5 percent of EQIP funds be allocated to the Colorado River
    Salinity Control program. The Forum suggests that this is an
    appropriate level of funding as long as it does not drop below $20
    million. Funding above this level assists in offsetting pre-fiscal year
    2003 funding below this level. The Colorado River Board supports the
    recommendation of the Forum and urges this subcommittee to support
    funding for the Colorado River Basin Salinity Control Program for 2009
    at this level.
        These Federal dollars will be augmented by the State cost sharing
    of 30 percent with an additional 25 percent provided by the
    agricultural producers with whom USDA contracts for implementation of
    salinity control measures. Over the past years, the Colorado River
    Basin Salinity Control program has proven to be a very cost effective
    approach to help mitigate the impacts of increased salinity in the
    Colorado River. Continued Federal funding of this important Basin-wide
    program is essential.
        In addition, the Colorado River Board recognizes that the Federal
    Government has made significant commitments to the Republic of Mexico
    and to the seven Colorado River Basin States with regard to the
    delivery of quality water to Mexico. In order for those commitments to
    continue to be honored, it is essential that in fiscal year 2009, and
    in future fiscal years, that Congress continues to provide funds to
    USDA to allow it to provide needed technical support to agricultural
    producers for addressing salinity control in the Basin.
        The Colorado River is, and will continue to be, a major and vital
    water resource to the 18 million residents of southern California as
    well as throughout the Colorado River Basin. As stated earlier,
    preservation and improvement of the Colorado River water quality
    through an effective salinity control program will avoid the additional
    economic damages to users of Colorado River water in California,
    Arizona, and Nevada.
                                     ______

         Prepared Statement of the Colorado River Commission of Nevada

        Dear Chairman Kohl: As a Nevada representative of the Colorado
    River Basin Salinity Control Forum, the Colorado River Commission of
    Nevada (CRC) is writing in support of full funding of the Department of
    Agriculture's fiscal year 2009 appropriations for the Environmental
    Quality Incentives Program (EQIP) and recommends that this Committee
    advise the administration that 2.5 percent of the EQIP funds be
    designated for the Colorado River Basin Salinity Control Program. The
    CRC believes this is the appropriate future level of funding as long as
    the total EQIP funding nationwide is around $1 billion.
        Salinity remains one of the major problems in the Colorado River.
    Congress has recognized the need to confront this problem with its
    passage of Public Law 93-320 and Public Law 98-569. Your support of the
    current funding recommendations for the Colorado River Basin Salinity
    Control Program is essential to move the program forward so that the
    congressionally directed salinity objectives are achieved.
                                     ______

                       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
    2009. We are also pleased to request a $2 million appropriation for the
    Grants for Expansion of Employment Opportunities for Individuals with
    Disabilities in Rural Areas within USDA Rural Development. We are also
    pleased to share information about other areas where we support USDA
    activity to provide services to rural residents with disabilities.
                                   agrability
    What is AgrAbility?
        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 2008 appropriation of $4.759
    million is funding 21 projects serving 24 States.
        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 U.S. Currently, State-level USDA-funded AgrAbility
    projects serve clients in: California, Colorado, Delaware, Georgia,
    Idaho, Indiana, Kansas, Maine, Maryland, Michigan, Minnesota,
    Mississippi, Missouri, Nebraska, New Hampshire, Oklahoma, Pennsylvania,
    Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin, and
    Wyoming. In addition, previously USDA-funded projects in Illinois,
    Iowa, Kentucky, Louisiana, North Carolina and Texas continue to serve
    agricultural workers with disabilities and their families.
        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 three 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?
        AgrAbility serves people with all disabilities and people of all
    ages. Rick Eberhart of Ogema, Wisconsin is a great example. Growing up
    a city boy, Mr. Eberhart knew farming was in his future thanks to
    summer visits to his uncle's farm. When a banker told an 18-year-old
    Eberhart that he wouldn't be able to own a farm unless he had a
    relative to inherit from, Eberhart took that as a personal challenge to
    prove the banker wrong.
        Eberhart started out with 80 acres that had not been farmed for 18
    years. Through hard work, long hours, an off-farm job and sheer
    determination, Eberhart did prove the banker wrong about his future in
    farming. However, he's experienced many obstacles on the road to owning
    his now 137-acre dairy farm.
        At a glance, Eberhart appears to have no physical ailments, but
    nearly 5 years ago, he was diagnosed with a form of Leukemia. Three
    months later, he received a bone marrow transplant, and doctors gave
    him a 20 percent chance of survival. At the time of his diagnosis,
    Eberhart had no energy to perform even the simplest task on his farm;
    just walking the length of a cattle trailer exhausted him.
        After the transplant, he spent 39 days in the hospital and only had
    about an hour's worth of energy before becoming exhausted after he
    returned home. Eberhart initially called AgrAbility of Wisconsin when
    he was diagnosed, but he was very apprehensive. According to Eberhart,
    ``I thought it was just another bunch of people collecting a
    paycheck.'' When he came home from the hospital he asked himself why he
    was beating his head against the wall trying to farm with his physical
    limitations, and decided to sign up for AgrAbility services.
        After being added to the Division of Vocational Rehabilitation's
    (DVR) waiting list, he was contacted by Carlene Volbrecht, Rural
    Rehabilitation Specialist for the Easter Seals Wisconsin FARM Program
    (ESW). ``When I was finally contacted, I knew there was a light at the
    end of the tunnel,'' Eberhart explained.
        Volbrecht and Gwen Steele, a DVR counselor, worked together to find
    the assistive technology that would work best to help Eberhart with his
    day-to-day activities. Eberhart's rotational grazing program requires
    maintaining and moving fence line, as well as collecting cattle from
    the pasture. He had also developed a higher sensitivity to the weather
    as a result of his cancer. Thus, Volbrecht suggested a utility vehicle
    with a cab. After test-driving several models, Eberhart found the
    Bobcat manufacturer's utility vehicle worked best for entering,
    exiting, and moving around the farm. Eberhart purchased a silo unloader
    at an auction to eliminate the need to climb the silo, but was unable
    to install it himself. With DVR's help, the unloader was professionally
    installed. DVR also helped Eberhart purchase an electric feed cart. The
    electric cart decreases the labor required to feed the cattle inside
    and outside. To further assist Eberhart, a concrete pad will be added
    to the barnyard. This will allow Eberhart to easily move the feed cart
    to feed cattle outside.
        Bedding cattle required Eberhart to climb into the mow, drop bales
    into the barn below and shake the straw out by hand. To reduce the
    amount of energy needed to carry the straw bales and bed, Volbrecht
    suggested fixing the current bedding chopper and installing cow mats in
    the barn to reduce the straw needed on a daily basis.
        With the help of AgrAbility and DVR, Eberhart found it was easier
    to complete his daily tasks. Currently, he can work for about three and
    a half hours before he needs to rest. His goal is to continue to build
    up his strength so he can work longer hours doing what he has always
    loved. Eberhart admits, ``If it hadn't been for Easter Seals [AAW and
    DVR], I probably would have given up.''
    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-SREES 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. More States
    than ever are applying for funding in every competitive grant cycle and
    outstanding State projects are not being funded. Easter Seals is proud
    to contribute to the ongoing success of the USDA-CSREES AgrAbility
    Program. Please support the allocation of at least $5 million for
    AgrAbility in fiscal year 2009 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.
     grants for expansion of employment opportunities for individuals with
                          disabilities in rural areas
        Easter Seals strongly believes that rural residents with
    disabilities need to have access to the services and supports that help
    them live, learn and play in their communities. About one in five
    Americans lives in a rural area. Of that number, an estimated 12.5
    million are people with disabilities. Compared with metropolitan areas,
    the following is true for rural America.
      --The incidence of disability and chronic health conditions is higher
      --Gaps in service delivery systems and infrastructure are more
            prevalent
      --Average incomes are lower and job opportunities fewer
      --The percentage of older adults is higher
      --Service providers often lack capacity to assist residents properly
      --Physical and attitudinal barriers are more wide-spread
        There is also a significant impact on the community when families
    are thrust into the caregiving role. Too often, this results in a
    gainfully employed person leaving the workforce or even leaving a
    community to a more urban or suburban area to find services and
    supports.
        To that end, Easter Seals asks Congress to support all rural
    residents with disabilities by focusing on the needs of rural residents
    with disabilities in all USDA programs and by creating unique resources
    within USDA that will support people with disabilities in rural
    communities. This includes strengthening access to services so that
    rural residents with disabilities can get the services they need to
    contribute to the economy and social success of rural communities.
        The Senate version of the Farm Bill reauthorization, currently
    being debated includes authorization for a new program within USDA
    Rural Development titled ``Grants for Expansion of Employment
    Opportunities for Individuals with Disabilities in Rural Areas'' in
    Section 379E of the bill. This program is greatly needed in rural
    communities and will help enhance the ability of small business owners
    in rural communities to be better equipped to recruit, employ and
    retain employees with disabilities and will enhance self-employment and
    entrepreneurship opportunities for rural residents with disabilities.
    The mechanism to achieve this goal is the development of national
    technical assistance and education resources through grants to national
    nonprofit organizations with a strong history of serving rural
    residents with disabilities and a close relationship with USDA.
    Funding Request
        The need for support to increase employment opportunities for rural
    residents with disabilities is significant and growing. Easter Seals is
    proud to contribute to the increase in attention to services and
    supports that are needed and currently lacking in rural communities for
    residents with disabilities. Please support the allocation of at least
    $2 million for the ``Grants for Expansion of Employment Opportunities
    for Individuals with Disabilities in Rural Areas'' in fiscal year 2009
    to ensure that this valuable public-private partnership can be
    initiated. Thank you.
                                     ______

                 Prepared Statement of Florida State University

        Florida State University is requesting $5,000,000 in fiscal year
    2009 for the Risk Reduction for Agricultural Crops Program and
    $2,000,000 for the Apalachicola River Coastal Watershed/Marine
    Environment Initiative from the from the U.S. Department of
    Agriculture, Cooperative State Research, Education and Extension
    Service (CSREES)/Federal Administration Account.
        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 $190
    million this past year in research awards.
        Florida State University attracts students from 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. Since
    2005, FSU students have won more than 30 nationally competitive
    scholarships and fellowships including 2 Rhodes Scholarships, 2 Truman
    Scholarships, Goldwater, Jack Kent Cooke and 18 Fulbright Fellowships.
        At Florida State University, we are proud of our successes as well
    as our emerging reputation as one of the Nation's top public research
    universities.
        Mr. Chairman, let me summarize two important projects we are
    pursuing this year. The first involves mitigating climate impact for
    agriculture.
        The current drought, which is one of the worst in recent history,
    has had a significant impact on the water resources in Georgia, Alabama
    and Florida. It has reemphasized the vulnerability of the citizens to
    climate variability and climate extremes. The Federal Government can
    reduce these risks by using modern technologies such as climate models,
    which can predict future climate, and decision support tools to help
    mitigate some of these uncertainties and provide adaptation strategies
    for the agricultural and environmental sectors. The Southeast Climate
    Consortium (SECC), which encompasses Florida State University,
    University of Florida, University of Miami, University of Georgia,
    Auburn University, and University of Alabama at Huntsville, has been at
    the forefront of research and extension for the application of climate
    predictions to risk reduction for agriculture and natural resources.
    With support from USDA and NOAA, the SECC has developed new methods to
    predict the consequences of climate variability for agricultural crops,
    forests, and water resources in the southeastern United States. In
    recent real-life tests, these methods have been applied to the problems
    that farmers raising specialty crops face arising from variable
    rainfall, temperature, and wild fires.
        In the SECC, FSU will provide the climate forecasts and risk
    reduction methodology. UF and UG will translate this climate
    information into risks and environmental impacts on agriculture and,
    with Auburn, will work with Extension to provide info to the ag
    community. UM will provide economic modeling. Together we are
    developing new tools to help minimize climate risks to water quality
    and quantity. FSU, on behalf of the SECC, seeks $5.0 million in fiscal
    year 2009 for this activity. These tools and application of agriculture
    and natural resources has strong support of extension programs.
        New tasks this year include developing improved methods to forecast
    droughts for agriculture and forest producers to manage resources to
    reduce risks of losses and environmental damage; developing
    partnerships and methods for incorporating climate forecasts into
    agricultural and water policy decisions; and initiating the development
    of a decision support system for climate forecasts to water resources
    management, especially for agricultural water use. We are requesting
    $5,000,000 in fiscal year 2009 for this important project.
        Our second project involves the health of our Gulf ecosystem.
        FSU is proposing an interdisciplinary research project to
    investigate the linkages between Apalachicola river flow, fishery
    production, and ecosystem health in the northeastern Gulf. By
    establishing ecological linkages between river flow, coastal food webs
    and fisheries, research proposed by the Florida State University will
    inform policies on the conflicting demands on water use that span
    ecological, social, and jurisdictional boundaries. In effect, this
    research will focus on revealing the linkages between the Apalachicola
    River and the immense productivity of the region from inshore to
    nearshore and even offshore regions.
        The proposed research will increase our understanding of linkages
    between coastal watersheds and the marine environment, which will lead
    to an increased capacity to forecast the ecosystem responses to
    anthropogenic stressors and the consequences of those responses. FSU
    proposes to:
      --Characterize Apalachicola river flow and its interactions with
            nearshore and offshore shelf waters in the northeast Gulf of
            Mexico on seasonal, annual, and decadal time scales.
      --Establish ecological linkages between river flow, nutrients, and
            phytoplankton production that support coastal food webs and
            fisheries (e.g., oysters, groupers) in the northeastern Gulf.
      --Develop models that can be used by decision makers to evaluate the
            consequences of altered river flow for fishery production and
            ecosystem health.
      --Systematically inform coastal managers and others charged with
            protecting and regulating water use, water quality, and habitat
            protection of our research findings and their relevance for
            decision making.
        Recent national attention has focused on the management of the
    Apalachicola drainage system because of the current drought conditions
    over the southeastern United States and conflicts over water use in the
    watershed. This debate has highlighted the need for effective science
    than can be used to inform policy decisions. This project will directly
    address these key issues. We are requesting $2,000,000 for this
    project.
        Mr. Chairman, these are projects that will have a great impact on
    our country and I appreciate your consideration.
                                     ______

                    Prepared Statement of Food & Water Watch

        Chairman Kohl, Ranking Member Bennett and members of the
    Subcommittee. My name is Wenonah Hauter and I am executive director of
    the nonprofit consumer organization Food & Water Watch. We were founded
    in November 2005 and we work on food policy and water infrastructure
    issues. I welcome this opportunity to comment on the President's
    proposed fiscal year 2009 budget as it applies to the agencies under
    your jurisdiction.
    USDA--Food Safety and Inspection Service
        We commend the subcommittee for its work to require the Food Safety
    and Inspection Service (FSIS) to submit its proposals on risk-based
    inspection (RBI) for processing facilities to the USDA's Office of
    Inspector General (OIG) for a review before the agency proceeded with
    implementation of the new inspection scheme. As most consumer groups
    suspected, the agency was racing toward implementing RBI without having
    the necessary data upon which to make its policy assessments. As you
    know, the OIG released a 142-page audit report in December 2007 that
    outlined the problems with the agency's current information technology
    infrastructure and made 35 separate recommendations for the agency to
    implement before it could proceed with its RBI program.\1\ While the
    agency and the OIG reached management decision on all of these
    recommendations, FSIS is notorious for not implementing OIG
    recommendations in a timely fashion. It will require intense oversight
    by the subcommittee to ensure that FSIS implements OIG's
    recommendations. Since the implementation of RBI is dependent upon the
    development of the Public Health Information Structure (PHIS), we urge
    the subcommittee to request a detailed accounting of this new IT system
    because the agency has not been forthcoming about the final cost for
    creating PHIS.
    ---------------------------------------------------------------------------
        \1\ See http://www.usda.gov/oig/webdocs/24601_07_HY.pdf
    ---------------------------------------------------------------------------
        With regard to the agency's Public Health Based Inspection System
    in Poultry Slaughter (PHBISPS), we view this as an expansion of the
    pilot project that the agency has conducted since 1999 called the
    HACCP-based Inspection Models Project (HIMP). We urge the subcommittee
    to proceed cautiously with funding PHBISPS for several reasons: (1) the
    agency still has not conducted a full evaluation of HIMP which was
    promised to stakeholders before any expansion; (2) the agency has been
    slow to respond to a 2006 Freedom of Information Act Request by FWW for
    the non-compliance records from the plants enrolled in HIMP; (3) as was
    the case with the agency's RBI in processing proposal, there seems to
    be a data quality issue with PHBISPS which was raised at the February
    5-6, 2008 meetings of the National Advisory Committee on Meat and
    Poultry Inspection; \2\ (4) recently there was a major Class I recall
    involving one of the plants enrolled in HIMP that calls into question
    whether the privatization of poultry slaughter inspection is protective
    of public health.\3\ Associated with PHBISPS is the Salmonella
    Initiative that was announced in February 2006.\4\ The subcommittee
    should scrutinize this proposal from a number of standpoints. First,
    the Salmonella Initiative is designed to reward poultry slaughter
    facilities that exceed the FSIS salmonella performance standard, a
    standard that has not been updated in nearly a decade, by reducing the
    level of pathogen testing. Second, the agency will permit at least five
    facilities to request waivers of certain regulations, such as line
    speeds, if they exceed the salmonella performance standard. The agency
    has not taken into account the impact on inspector plant worker safety
    with these proposals. In 2005, the Government Accountability Office
    issued a report that recommended that line speeds be studied from an
    occupational safety perspective.\5\ To our knowledge, the Occupational
    Safety and Health Administration has failed to do that. In February
    2008, the Charlotte Observer ran a six part series on the plight of
    employees who work in poultry processing.\6\ Yet, FSIS seems to be
    oblivious that what it is proposing with its Salmonella Initiative
    could lead to increased occupational hazards to workers in the poultry
    industry and to their own inspection workforce. We strongly urge the
    subcommittee not to fund this proposal until all of these issues are
    fully evaluated.
    ---------------------------------------------------------------------------
        \2\ See transcripts http://www.fsis.usda.gov/About_FSIS/
    NACMPI_Transcripts/index.asp
        \3\ March 14, 2008 recall of 943,000 pounds of poultry products
    from Cagle's. Inc., http://www.fsis.usda.gov/News_&_Events/
    Recall_010_2008_Release/index.asp
        \4\ See http://www.fsis.usda.gov/News_&_Events/NR_022306_01/
    index.asp
        \5\ See http://www.gao.gov/new.items/d0596.pdf
        \6\ See http://www.charlotte.com/poultry/
    ---------------------------------------------------------------------------
        We would also like to call to the Subcommittee's attention the
    response to a FOIA request we filed last year that details on a monthly
    basis for fiscal year 2007 the level of in-plant inspection vacancies
    broken down by FSIS district.\7\ We commend the subcommittee for
    addressing this issue during the fiscal year 2007 appropriations
    process, yet some FSIS districts still are experiencing double-digit
    vacancy rates--with the Albany district experiencing a 20.25 percent
    vacancy rate at the end of fiscal year 2007. While the agency has
    worked very hard to fill those vacancies, it is also facing an exodus
    of inspection personnel who are either retiring or leaving the agency
    voluntarily.
    ---------------------------------------------------------------------------
        \7\ See http://www.foodandwaterwatch.org/food/foodsafety/meat-
    inspection_1/FOIA.pdf/view
    ---------------------------------------------------------------------------
        We would also like to call to the Subcommittee's attention the
    results of a 2007 survey of FSIS inspectors conducted by Food & Water
    Watch and the National Joint Council of Food Inspection Local Unions. A
    survey was mailed to nearly 5,700 FSIS inspectors in February 2007 and
    we received 1,320 responses. Among the more disturbing results were:
      --Over 70 percent of the inspectors said staffing shortages impacted
            their physical and mental health;
      --Nearly 80 percent of slaughter and combination plant inspectors
            believed that current line speeds were so fast that it made it
            difficult for them to catch adulteration on carcasses;
      --More than half of slaughter and combination plant inspectors
            responded that less than half of the regulatory violations they
            observed were actually recorded on non-compliance reports;
      --Nearly 90 percent of slaughter and combination plant inspectors
            reported that off-line inspectors (those inspectors responsible
            for writing non-compliance reports) have been pulled to cover
            vacancies on the slaughter line (where they cannot write the
            reports);
      --Nearly 40 percent of inspectors who were on patrol assignments
            stated that not all processing plants in their circuit were
            visited at least once per shift and over three-quarters of
            those inspectors stated that those plants were not visited at
            least once daily;
      --Nearly 70 percent of inspectors said that plants were not always
            clean at the start of operations.
        The agency had a very trying year. We are currently in the midst of
    the largest meat recall in the Nation's history involving 143 million
    pounds of beef and beef products that were processed at the Hallmark/
    Westland Meat Company in California. In 2007, there were sixty-one
    recalls or public health alerts issued by the agency. So far in 2008,
    there have been another 10 recalls. It is very troubling to us that in
    spite of this less than stellar track record, top agency personnel
    received over $311,000 in performance bonuses in fiscal year 2007. We
    strongly urge the subcommittee to evaluate how the bonus program is
    administered at FSIS because we believe that the money would be better
    served in addressing staffing shortages in the field.
        We also urge the subcommittee to investigate why the proposed rule
    to list retail consignees on FSIS recall press releases--a regulation
    proposed by FSIS on March 7, 2006 and whose comment period closed in
    June 2006--still has not received final clearance. We strongly believe
    implementation of such a rule would assist the agency in recovering
    recalled meat and poultry products.
        The subcommittee should also be made aware that our organization
    filed a petition with FSIS on January 29, 2008 to revoke Canada's
    equivalency status to export meat and poultry products.\8\ We cited
    repeated food safety violations found by FSIS auditors in their annual
    visits to Canadian meat and poultry plants and an increase in recalls
    of meat and poultry products that originated in Canada and made their
    way into U.S. commerce.
    ---------------------------------------------------------------------------
        \8\ http://www.foodandwaterwatch.org/world/global-trade/
    foodandglobaltrade/usda-petition-against-risky-canadian-meat-and-
    poultry
    ---------------------------------------------------------------------------
        We also request that the subcommittee investigate the status of an
    application made by an Australian beef company to export its products
    to the United States using a controversial privatized inspection
    system. We understand that FSIS approval of that application is
    imminent.
        Lastly, we oppose the imposition of $96 million in licensing and
    performance fees proposed by the administration. The functions
    performed by this agency are of a public health nature and its
    functions should be financed through general Treasury funds.
                         agricultural marketing service
        While the focus of any investigation on the lapses at the Hallmark/
    Westland Meat Company needs to be on the FSIS inspection procedures,
    the audit procedures employed by the Agricultural Marketing Service
    (AMS) also deserve scrutiny. AMS approves vendors who can sell their
    commodities to the various nutrition programs it operates, including
    the National School Lunch Program, and enters into contracts with those
    vendors. For ground beef products, the contract specifications clearly
    state that humane handling practices need to be adhered to and that no
    meat from non-ambulatory animals can be harvested for USDA nutrition
    programs.\9\ It is clear that Hallmark/Westland failed to meet both of
    those requirements. We urge the subcommittee to secure the AMS audit
    reports from Hallmark/Westland. We have attempted to secure AMS audit
    reports in the past and have been denied access on the grounds that
    they are considered to be proprietary information. We also believe the
    subcommittee should evaluate how AMS makes its ``Supplier of the Year''
    awards, since Hallmark/Westland received that award for the 2003-2004
    school year.
    ---------------------------------------------------------------------------
        \9\ See http://www.ams.usda.gov/lscp/beef/LSP_SB_TRS_GB-
    O7%20APPROVED_08_13_07.pdf
    ---------------------------------------------------------------------------
        In addition, we urge the subcommittee to use its oversight to
    ensure that the long-delayed country of origin labeling program is
    finally implemented. We applauded the inclusion of COOL in the 2002
    Farm Bill but have been frustrated by the delays in its implementation.
    We believe that labeling provides consumers with vital information they
    need to make informed choices about where their food is from, in
    addition to giving producers an opportunity to distinguish their
    products in an increasingly international marketplace. Consumer support
    for COOL has been strong for years, and demand for information about
    where food is from has only increased in the wake of scandals about
    imported food.
        The House version of the 2007 Farm Bill included language that
    clarifies the intent of the 2002 Farm Bill and addresses many of the
    concerns expressed by industry that have historically opposed mandatory
    labeling. No matter what the outcome of the current Farm Bill process,
    we urge the subcommittee to instruct the agency to implement mandatory
    COOL for meat and produce on schedule by September 30 and to closely
    follow the COOL provisions and report language from H.R. 2419.
    Consumers have waited long enough to find out where their food comes
    from. Further delays in providing country of origin labeling are
    unacceptable.
                          food and drug administration
        We were disappointed by the paltry increase proposed by the
    administration for the food safety functions of the Food and Drug
    Administration (FDA). The increase barely covers annual inflationary
    costs--in spite of assurances by Health and Human Services Secretary
    Michael Leavitt in December 2007 that FDA would receive a substantial
    increase in the 2008 budget. While we recognize that FDA's food safety
    programs are under-funded, we also believe that there needs to be
    scrutiny of its management structure because we sense that FDA is
    extremely top-heavy and is missing an appropriate sense of urgency for
    the need to put more resources into the field. Agency officials have
    repeatedly stated that putting more inspectors in the field will not
    solve the current food safety crisis.\10\ We do not subscribe to their
    assessment. The agency currently has a staff of over 10,000 employees
    but we do not know what these people do. FWW has attempted to find out
    exactly how many FDA inspectors there are by filing a FOIA request for
    the work plans of the FDA's Office of Regulatory Affairs, but our
    request has been rejected. We are currently exploring legal action to
    obtain those documents.
    ---------------------------------------------------------------------------
        \10\ See http://www.pbs.org/newshour/bb/health/jan-june07/
    foodacheson_06_08.html
    ---------------------------------------------------------------------------
        While the agency has put forth its ``Food Protection Plan,'' we
    believe that it is riddled with problems and it suffers from a lack of
    detail and transparency. The agency claims that it will use a risk-
    based inspection model to conduct food inspections. When pressed about
    the data sources for evaluating risk and constructing their inspection
    system, agency officials admit that FDA has very few from which to
    draw. Second, the agency wants to use ``third party certification'' as
    a way to avoid increasing its own inspection workforce. We are
    adamantly opposed to the privatization of food inspection. This is a
    public health function that should be the government's responsibility--
    not the responsibility of a multi-national corporation that has profit
    as its driving motivation.
        Third, we are especially troubled by the January 29, 2008 testimony
    given by Lisa Shames, Director of GAO's Natural Resources and Resources
    Division, before the House Subcommittee on Oversight and Investigations
    in which she said: ``FDA officials have declined to provide specific
    information on how much additional funding it believes will be
    necessary to implement the Food Protection Plan, saying that finalizing
    the amounts will take place during the budget process. Similarly, the
    Food Protection Plan does not discuss the strategies it needs in the
    upcoming years to implement this plan. FDA officials told us that they
    have internal plans for implementing the Food Protection Plan that
    detail timelines, staff actions, and specific deliverables. While FDA
    officials told us they do not intend to make these plans public, they
    do plan to keep the public informed of their progress. Without a clear
    description of resources and strategies, it will be difficult for
    Congress to assess the likelihood of the plan's success in achieving
    its intended results.'' \11\
    ---------------------------------------------------------------------------
        \11\ See http://energycommerce.house.gov/cmte_mtgs/110-oi-
    hrg.012908.Shames-Testimony.PDF
    ---------------------------------------------------------------------------
        This is truly appalling. How can we trust the same people who
    brought us to the current crisis to develop and execute plans in secret
    without the benefit of public and congressional scrutiny? These are
    some of the same individuals who were advocating the closure of FDA
    laboratories and who received exorbitant bonuses for their outlandish
    proposals. We strongly urge the subcommittee to compel FDA officials to
    make the details of their Food Protection Plan public so that there is
    the benefit of congressional and public scrutiny of their proposals.
        Lastly, as we detailed in our 2007 report, Import Alert,\12\ FDA's
    program to oversee the safety of seafood imports to the United States
    does not live up to the standard that Americans expect from their
    government. Inadequate funding and a poorly designed inspection program
    contributed to FDA physically inspecting less than 2 percent of the
    nearly 860,000 imported seafood shipments in 2006. Only 0.59 percent of
    shipments were tested for contaminants in a laboratory.
    ---------------------------------------------------------------------------
        \12\ See http://www.foodandwaterwatch.org/fish/copy_of_pubs/
    reports/import-alert
    ---------------------------------------------------------------------------
        Physical inspection gives the greatest assurance of detecting
    safety issues in seafood products, so the low rate of inspection raises
    concerns about the safety of imported seafood sold in U.S. restaurants
    and grocery stores. At the same time, in foreign aquaculture facilities
    the use of numerous antibiotics, fungicides, and pesticides, many of
    which are not approved for use in the United States, is on the rise. In
    June 2007 the FDA issued an import alert for five seafood products from
    China due to chemical contamination. However, it is not just China;
    veterinary drug residues are being detected on imports from more
    countries and more types of seafood.
        Seafood products are responsible for 18 to 20 percent of the
    outbreaks of foodborne illness that affect one in four Americans, or 76
    million people every year. Trends in the global production of seafood--
    aquaculture now produces half of the world's seafood--make now the
    critical time for FDA to increase physical inspection of imported
    seafood. There is currently a new bill in the Senate Commerce
    Committee, the Commercial Seafood Consumer Protection Act, which would
    allow the National Oceanic and Atmospheric Administration to ramp up
    efforts on seafood inspections. However, we believe that this is not
    the appropriate focus for an agency that is already over-extended and
    under-funded on its core programs. Rather, FDA, the agency
    traditionally responsible for seafood inspections, needs a better
    inspection regime and adequate resources to implement it. We urge the
    subcommittee to work with the agency to develop an effective seafood
    safety program.
                                     ______

       Prepared Statement of Friends of Agricultural Research--Beltsville

        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 will emphasize these main themes:
        First, we strongly recommend continued funding for certain high-
    value, on-going research that the Congress has previously approved for
    BARC. Yet, this crucially needed on-going research is marked for
    termination in the President's fiscal year 2008 budget. We discuss the
    basis and rationale for our recommendation in Part I, below.
        Second, we recommend and endorse continued full support for
    redirected research in the President's budget. We briefly expand the
    basis of our support in Part II.
        Third, we will offer a brief comment on the proposed relocation
    staff and program from the Grand Forks Human Nutrition Research Center
    to Beltsville in Part III.
    Part I. High-Value Research Marked for Termination
        Animals Biosciences & Biotechnology Laboratory (ABBL)--
    $8,401,123.--ABBL's research mission is to improve the genetic,
    reproductive, and feed efficiency of livestock and poultry. A dedicated
    staff of 32 employees, of which 13 are research scientists, are
    addressing a number of cutting-edge research issues: using pig
    embryonic stem cells to enhance disease resistance in pigs and for
    clinical use in human liver rescue devices; designing novel
    antimicrobial proteins for treatment of human (methicillin-resistant
    staph aureus) and animal (bovine mastitis) diseases; identifying
    genetic markers to reduce fetal pig mortality. This cutting-edge work
    is well regarded in the greater scientific community. Loss of this
    funding will essentially close out the only research of this type in
    ARS. It has been suggested that a reason for the proposed closure is
    inadequacy of facilities. But in the judgment of highly qualified
    scientists, inadequacy of facilities is simply not an issue.
        The research in this laboratory is both basic and applied and is
    valuable to all of the animal industries. The research addresses the
    very issue of genetic improvement of animals for those traits that are
    most desirable to consumers and profitable for producers. In addition,
    this research has proven to be very valuable to the biomedical
    community because the information obtained is useful to promote human
    health. Restoration of funding for this invaluable research is
    critically needed.
        Biomedical Materials in Plants--$1,808,253.--Plants can be used as
    factories to manufacture vaccines and other pharmaceuticals for animals
    and humans. This research focuses on development of tobacco as a crop
    with this beneficial use. We recommend restoring full funding.
        Bioremediation Research--$118,167.--Munitions storage sites and
    bombing ranges in parts of the United States have left huge tracts of
    soils and lands contaminated by highly toxic residues from such
    explosives as TNT. Those soils and lands now are limited
    environmentally for commercial or agricultural purposes. These funds
    support ongoing research to determine if forage plants can remove TNT
    and its metabolites from contaminated sites. Beltsville is a world
    recognized leader in the field of bioremediation. This work is not done
    anywhere else in ARS. We recommend funding for this research.
        Foundry Sand By-Products Utilization--$680,205.--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 that this research continue.
        Poultry Diseases--$434,934.--Coccidiosis, a parasitic poultry
    disease, costs the industry almost $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 prevention
    and control. We recommend that this research continue.
        Potato Diseases--$64,545.--These funds are used for research
    activities on genetic improvement of potato and for diseases of potato.
    While a small amount of money, these funds are used to supplement
    ongoing efforts in this important area. We recommend that this research
    continue.
    Part ll. Redirected Research
        The budgetary items listed here have not appeared in our testimony
    of previous years. In terms of overall BARC funding, they are revenue
    neutral. Essentially, these are ``new'' programs replacing similar but
    lower-priority, on-going programs that would be closed out. Ideally,
    all the research programs, new and old, would continue. All are
    important lines of research, and we would prefer to see new funding
    rather than redirection. Nevertheless, BARC can manage within these
    redirections if there is no option. We strongly support funding for
    this research.
        Crop Health--$947,322.
        Obesity Prevention Initiative--$1,937,649.
        Food Safety--$1,045,629.
        Crop Genetic Improvement--$938,385.
    Part III. Relocation Staff and Program From the Grand Forks Human
            Nutrition Research Center to Beltsville
        The fiscal year 2009 budget also proposes to relocate a significant
    number of staff and program from the Grand Forks Human Nutrition
    Research Center to Beltsville. We are neutral about this redirection.
        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 Izaak Walton League of America

        The Izaak Walton League of America appreciates the opportunity to
    submit testimony concerning appropriations for fiscal year 2009 for
    various agencies and programs under the jurisdiction of the
    subcommittee. The League is a national, nonprofit organization founded
    in 1922. We have more than 36,000 members and nearly 300 chapters
    nationwide. Our members are committed to advancing common sense
    policies that safeguard wildlife and habitat, support community-based
    conservation, and address pressing environmental issues. The League has
    been a partner with farmers and a participant in forming agriculture
    policy since the 1930s. The following pertains to conservation programs
    administered by the U.S. Department of Agriculture.
        The League believes Congress should prioritize investment in
    conservation programs in order to protect natural resources and to meet
    the demonstrated demand for conservation services. Two of every three
    eligible applicants for Federal conservation programs are being turned
    away due to lack of funding. Over the 5-year term of the 2002 Farm
    Bill, $13.5 billion in requests from more than 487,000 farmers and
    ranchers went unfunded. During the same period, Congress cut funding
    for conservation by more than $5 billion below levels authorized by the
    2002 farm bill.
        Prioritizing funding for conservation is even more important in
    light of recent developments in the agricultural economy. Land values
    have skyrocketed more than 50 percent in the past 3 years and continue
    to climb. As land prices rise, the purchasing power of each
    conservation dollar decreases. Record prices for crops are also driving
    a land rush. The push for increased production is threatening the
    conservation gains that have been achieved through the Conservation
    Reserve Program and Wetlands Reserve Program. Additionally, expanding
    production highlights the necessity of boosting the Conservation
    Security Program, which promotes farming practices that protect
    wildlife and natural resources.
        Finally, in the broader scope, USDA researchers have identified
    additional positive opportunities for prioritizing conservation.
    Specifically, natural amenities such as pleasant landscapes and
    opportunities for outdoor recreation generate economic growth in rural
    areas. According to USDA's Economic Research Service: ``Natural
    amenities are highly correlated with population and employment growth--
    they even shape agriculture . . . [The] number of farms has increased
    in counties with high levels of natural amenities.'' The conservation
    programs that protect and enhance natural resources also protect and
    enhance rural economies.
        The League is concerned that the administration has proposed to
    significantly cut funding for critical conservation programs. We
    recognize the challenges and uncertainty the subcommittee faces as
    negotiations over a new farm bill drag on. We profoundly hope that a
    new farm bill will be enacted before the subcommittee marks up its
    bill. As the subcommittee develops the fiscal year 2009 Agriculture
    bill, the League appreciates the opportunity to address funding for
    specific conservation programs.
          usda farm service agency, conservation reserve program (crp)
        The administration requests $1.95 billion for fiscal year 2009 down
    from approximately $2 billion in fiscal year 2008. Grain prices have
    reached record levels and land values are experiencing correspondingly
    dramatic increases. Reducing CRP funding would exacerbate current
    conditions while even level funding will not allow USDA to enroll as
    many acres due to rapidly escalating land prices. In order to maintain
    core acreage, the League encourages the subcommittee to appropriate at
    least $2 billion for CRP in fiscal year 2009.
     usda natural resources conservation service, wetlands reserve program
                                     (wrp)
        The administration requests $181 million down from $455 million
    appropriated for this fiscal year. Furthermore, the budget indicates
    that funds will not be requested for fiscal year 2010 and beyond
    because authority for the program would expire unless a new farm bill
    is enacted. This is a particularly damaging blow because the
    administration provided full funding in the past 2 years to achieve the
    WRP's goal of 250,000 restored wetland and upland acres per year. The
    League urges the subcommittee to provide $455 million in fiscal year
    2009.
      usda natural resources conservation service, conservation security
                                 program (csp)
        The President's budget proposes to cut the program below baseline
    funding. If approved, this would effectively prevent new enrollments.
    CSP applies to the full spectrum of working agricultural lands from
    cropland to pasture to rangeland. In the program's first 3 years,
    contracts were signed with more than 19,000 producers nationwide who
    agreed to implement conservation practices on over 15.6 million acres.
    Moreover, as detailed in League-supported research, CSP pays for
    practices that provide substantial wildlife benefits. In case studies
    from Missouri and Minnesota, for instance, 88 and 85 percent of CSP
    payments, respectively, supported practices that provide wildlife
    habitat benefits. The importance of CSP is growing in direct proportion
    to the current market-driven expansion of agricultural production. The
    League encourages the subcommittee to appropriate $444 million for CSP
    in fiscal year 2009, which is equal to the baseline established by the
    Congressional Budget Office. This level of support would enable the
    program to serve eligible farmers and ranchers nationwide who want to
    participate.
         usda natural resources conservation service, wildlife habitat
                           incentives program (whip)
        Although Congress appropriated $85 million for WHIP in fiscal year
    2008, the administration is proposing to terminate it. WHIP provides
    technical and financial assistance to landowners and others to develop
    upland, wetland, riparian and aquatic habitat areas on their property.
    According to USDA, between 2002 and 2006, the program established 1.8
    million acres of habitat. However, during that same period, eligible
    applications totaling $136 million were turned away due to lack of
    funds. We urge the subcommittee to reject the administration's proposal
    and to appropriate at least $85 million for WHIP in fiscal year 2009.
    usda natural resources conservation service, grassland reserve program
                                     (grp)
        The administration proposes to terminate this program as well.
    Unfortunately, GRP was not funded under the fiscal year 2008 omnibus
    appropriations bill. Like WHIP, demand for GRP is overwhelming. In the
    space of 2 years, USDA had to turn away approximately 16,500 eligible
    participants seeking to protect 11 million acres of crucial grasslands.
    Without a pledge of support from the White House, providing protection
    for grasslands--one of the most threatened ecosystems globally--will be
    entirely up to Congress during the appropriations process. Although
    IWLA supports GRP funding in the farm bill at $240 million annually, we
    urge the subcommittee to provide at least $50 million in its bill to
    maintain the vital service performed by this program.
                                     ______

        Prepared Statement of the National Association of State Energy
                                   Officials

        Chairman Kohl and members of the Subcommittee, I am Dub Taylor,
    Chairman of the National Association of State Energy Officials (NASEO).
    NASEO is submitting this testimony in support of funding of the Energy
    Title (Title IX) of the 2002 Farm Bill, especially Section 9006.
    Section 9006 provides funding for energy efficiency and renewable
    energy efforts for farmers, ranchers and rural small businesses. We
    strongly recommend funding of no less than $60 million for Section
    9006, and we would certainly urge consideration for $5 million of
    funding for the Section 9005 energy audit/assessment program within
    this funding level. NASEO has worked with farmers, our State
    agricultural agencies and rural interests to promote this successful
    program. As we face dramatically increasing energy bills for all
    sectors of the economy, it is critical that we do more to address the
    energy problems of rural America.
        Chairman Kohl, we know that you recognize the importance of the
    agricultural energy programs, as well as the State energy activities.
    All the State energy offices are indebted to you for your contribution
    to a broad-based national energy policy.
        As the debate continues over the new Farm Bill, we strongly urge
    you to fund the critical energy programs within the 2002 Farm, and we
    hope a robust energy title will be passed as part of the new Farm Bill.
    We hope that in calendar year 2009 (and hopefully fiscal year 2009),
    Congress and the administration will jointly push forward with a
    comprehensive energy funding program, including robust appropriations
    for the agriculture sector. Greater energy efficiency and renewable
    energy use in the farm sector will help create jobs, reduce climate
    change, increase agricultural productivity and improve the environment.
    If significantly increased energy funding can be provided for the
    energy title of a new Farm Bill, then we would hope that rural schools
    and other public institutions could be covered by Section 9006. This is
    the approach offered by Senator Harkin in the so-called ``REAP'' bill.
    This could effectively combine with efforts through the Energy and
    Water Development Appropriations Bill, such as the State Energy
    Program, biorefineries, expanded alternative fuels programs,
    alternative fuels infrastructure, etc. On the tax side, a long-term
    extension of the production tax credit and investment tax credit for
    renewable energy, energy efficiency tax credits and deductions and
    other related programs, could combine with these appropriations and
    energy policy changes to bring about significant improvements in our
    Nation's approach to energy.
        In fiscal year 2007, $73 million was requested from applicants for
    Section 9006 loans and grants. In fiscal year 2008 Congress provided
    $36 million for the Section 9006 program. A minimum of $60 million for
    this effort in fiscal year 2009 is necessary to maintain the momentum
    and expand participation. We hope for even more funding in the future.
        The Nation cannot afford any greater lag in funding the energy
    provisions of the Farm Bill. With gasoline prices approaching $4/
    gallon, diesel prices even higher, propane prices used for crop drying
    and rural domestic energy use at historically high levels, this
    appropriations bill must be a vehicle for an aggressive change in
    energy policy to implement the authorization bills. The country cannot
    wait.
                                     ______

     Prepared Statement of the National Association of State Universities
       and Land-Grant Colleges (NASULGC) Board on Natural Resources (BNR)

        We thank you for the opportunity to submit testimony. We request
    the following funds within the Cooperative State Research, Education
    and Extension Service: $30.008 million for McIntire-Stennis Cooperative
    Forestry (McIntire-Stennis); $8 million for the Renewable Resources
    Extension Act (RREA); and $256.5 million for the National Research
    Initiative (NRI). In fiscal year 2008, McIntire-Stennis received $24.8
    million, while the administration's fiscal year 2009 request is $19.5
    million. In fiscal year 2008, RREA received $4.008 million, while the
    administration's fiscal year 2009 request is $4.052 million. In fiscal
    year 2008, NRI received $190.9 million, while the administration's
    fiscal year 2009 request is $256.5 million.
        NASULGC BNR requests funding support for the McIntire-Stennis
    program at $30.008 million, the same level of support provided in
    fiscal year 2007.
        America is blessed with tremendous forest resources--approximately
    one-third of our landmass is forested. In the coming years as we
    develop cellulosic ethanol, the Nation will likely rely more and more
    on our forests for fuel stocks. Sustaining these forests in a healthy
    and productive condition is a national priority demanding a strong,
    continuing commitment to scientific research and graduate education.
        Principal financial support for university-based forestry research
    and graduate education comes from the McIntire-Stennis program.
    McIntire-Stennis funds are currently distributed according to a
    statutory formula to each of the 50 States, Puerto Rico, Guam, and the
    Virgin Islands, with a dollar-for-dollar match required from the
    States.
        Congress has recently recognized the need to expand the McIntire-
    Stennis program and provided funding of $30 million in fiscal year 2007
    and $25 million in fiscal year 2008. The schools and colleges of
    forestry and natural resources responded in 2007 by producing a
    McIntire-Stennis strategic plant. Unfortunately, the President's fiscal
    year 2009 budget would cut McIntire-Stennis funding by $5 million
    (compared to fiscal year 2008) and make $12 million of the remainder
    subject to new competitive multistate procedures.
        If enacted, these changes could result in as much as a 74 percent
    reduction to some universities. We deplore these cuts and ask that you
    reject the administration's proposal.
        As outlined in the 2007 strategic plan, McIntire-Stennis funding is
    critical to:
      --Deliver scientific results and management technologies to forest
            land owners, managers, and policy makers;
      --Prepare the future workforce in forestry and related natural
            resource science for the 21st Century.
        NASULGC BNR requests funding support for the Renewable Resources
    Extension Act (RREA) program at $8 million.
        In the U.S., 58 percent of the forest is held in private
    ownerships--mostly individual and family forests. These ownerships
    total nearly 291,000,000 acres. Given the geographic breadth of private
    ownerships and the astounding 10,000,000+ owners, informed stewardship
    of these forests promotes a secure future for the environmental and
    economic well-being of all our Nation's forests.
        In 1978 Congress recognized that private forest and rangeland
    owners contribute significantly to the Nation's vitality and enacted
    RREA. This decree called for ``expanded extension programs for forest
    and rangeland resources:'' to enhance the sustainability of these
    renewable natural resources.
        Today with the support of RREA, 69 land-grant universities provide
    educational programs to empower private forestland and rangeland owners
    in the many counties and parishes across our Nation. Landowners'
    ability to efficiently manage their properties is strengthened through
    educational workshops and seminars related to the eight RREA strategic
    issues: (1) Forest stewardship and health; (2) Wildlife and fisheries
    resources; (3) Rangeland stewardship and health; (4) Invasive species;
    (5) Economic opportunities; (6) Forestland conversion and
    fragmentation; (7) Diverse audiences; (8) Public policy and
    participation.
        Many landowners are interested and adopt new practices once they
    know and understand them. Education can lead to properly applied and
    sustainable practices.
        Recent reported outcomes from the program include:
      --937 income-generating businesses created or expanded;
      --2,390 new jobs created;
      --27,300 landowners increased their awareness of forest or rangeland
            resources;
      --21,100 landowners implemented at least one new renewable resource
            practice;
      --$17,810,000 estimate dollars earned or saved by landowners;
      --$198,571,756 earned or saved by loggers adopting new harvesting
            technologies.
        Every Federal dollar spent in RREA leverages from $5-15 from State,
    county, and other sources.
        Continued and increased funding will allow for:
      --Equitable funding to the 1890 land-grant institutions and an
            increase in competitive funding;
      --Create virtual centers of excellence with teams of USDA Forest
            Service scientists and Extension educators to develop extension
            programs and applied research for complex forest and rangeland
            ecosystems issues, such as climate change and bioenergy;
      --Implement landscape-scale projects to compliment county- and State-
            based programs;
      --Use of new techniques to segment the audience and use stewardship
            messages that have meaning for them;
      --Continued use of proven educational settings for selected
            audiences: workshops, field days, schools, printed
            publications;
      --Expanded use of new technologies: web-based learning centers,
            webinars, podcasts, eXtension, mobile networking, Web 2.0
            tools, print-on-demand.
        NASULGC BNR requests funding support for the National Research
    Initiative (NRI) program at $256.5 million.
        The United States has a university-based system that integrates
    agriculture, health, and environmental research with higher education
    and public outreach activities. This unique system is a partnership
    between America's land-grant and related universities and the USDA's
    Cooperative State Research, Education, and Extension Service (CSREES).
        Some CSREES programs are administered under formulae that provide
    each State and territory with sufficient funds to underwrite vital
    agriculture and natural resources research stations and extension
    offices. However, many other programs--most notably the National
    Research Initiative--require scientists and professionals from
    universities across the Nation to compete directly against each other
    in peer-reviewed competitions.
        Both Congress and the administration have recognized the enormous
    value of CSREES competitive programs in recent years by providing
    modest increase to the NRI. However, much more must be done:
      --American's farmers and foresters need additional genomic data and
            biotechnology tools to expand food and fiber production,
            process, and international trade;
      --U.S. healthcare professionals need greater insight into the
            relationships between diet and health;
      --Extension specialist and their clients need expanded knowledge
            about water quality to help protect the environment and
            safeguard our food system;
      --University educators need additional funding to train new
            generations of food, agriculture, and natural resources
            scientists (many of whom are turning to better-funded
            disciplines).
        We urge you to support these important forest and natural resources
    programs.
    About NASULGC
        NASULGC is the Nation's oldest higher education association.
    Currently the association has over 200 member institutions--including
    the historically black land-grant institutions . . . located in all 50
    States. The Association's overriding mission is to support high quality
    public education through efforts that enhance the capacity of member
    institutions to perform their traditional teaching, research, and
    public service roles.
    About the Board on Natural Resources
        The Board's mission is to promote university-based programs dealing
    with natural resources, fish and wildlife, ecology, minerals and
    energy, and the environment. Most NASULGC institutions are represented
    on the Board. Present membership exceeds 500 scientists and educators,
    who are some of the Nation's leading research and educational expertise
    in environmental and natural-resource disciplines.
        This testimony was developed for the BNR by the Chair of the BNR's
    Forestry Section, Dr. George Hopper, Dean, College of Forest Resources,
    Director, Forest and Wildlife Center, Mississippi State University.
        Thank you for the opportunity to share our views with the
    Committee.
                                     ______

    Prepared Statement of the National Commodity Supplemental Food Program
                                  Association

        The Honorable Herb Kohl, Mr. Chairman and subcommittee members, I
    am Matt Gassen, President of the National Commodity Supplemental Food
    Program Association (NCSFPA). Thank you for this opportunity to present
    information regarding the Commodity Supplemental Food Program (CSFP).
        CSFP was our Nation's first food assistance effort with monthly
    food packages designed to provide protein, calcium, iron, and vitamins
    A and C. It began in 1969 for low-income mothers and children,
    preceding the Special Supplemental Nutrition Program for Women,
    Infants, and Children known as WIC. Pilot programs in 1983 added low-
    income seniors to the list of eligible participants and they now
    comprise 93 percent all participants.
        CSFP is a unique Federal/State and public/private effort. The USDA
    purchases specific nutrient-rich foods at wholesale prices for
    distribution. State agencies such as the departments of health,
    agriculture or education provide administration and oversight. These
    agencies contract with community and faith based organizations to
    warehouse and distribute food, certify eligibility and educate
    participants. The local organizations build broad collaboration among
    non-profits, health units, and Area Agencies on Aging so that seniors
    and others can quickly be qualified for enrollment and receive their
    monthly supplemental food package along with nutrition education to
    improve their health and quality of life. This unique public/private
    partnership reaches even homebound seniors in both rural and urban
    settings with vital nutrition.
        The foods provided through CSFP include canned fruits and
    vegetables, juices, meats, fish, peanut butter, cereals and grain
    products, cheese, and other dairy products targeted to increase healthy
    food consumption among these low-income populations.
        The CSFP is also an important ``market'' for commodities supported
    under various farm programs, as well as an increasingly important
    instrument in meeting the nutritional and dietary needs of special low-
    income populations.
        In fiscal year 2007, the CSFP provided services through 150 non-
    profit community and faith-based organizations at over 1,800 sites
    located in 32 States, the District of Columbia, and two Indian
    reservations (Red Lake, Minnesota and Oglala Sioux, South Dakota). On
    behalf of those organizations NCSFPA would like to express our concern
    and disappointment regarding the reduction of available CSFP resources
    for fiscal year 2009.
        At a time when many Americans must choose between food or medicine,
    utilities, and other basic expenses, the Federal Government should not
    be reducing benefits for our most vulnerable citizens.
        CSFP's 39 years of service stands as testimony to the power of
    partnerships among community and faith-based organizations, farmers,
    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: young children and low-income seniors.
      --The CSFP provides a monthly selection of food packages tailored to
            the nutritional needs of the population served. Eligible
            participants are guaranteed [by law] a certain level of
            nutritional assistance every month in addition to nutrition
            education regarding how to prepare and incorporate these foods
            into their diets as prescribed by their health care provider.
      --The CSFP purchases foods at wholesale prices, which directly
            supports the farming community. The average food package for
            fiscal year 2008 is $18.57, and the retail value is
            approximately $50.00.
      --The CSFP involves the entire community in confronting the problem
            of hunger. There are thousands of volunteers as well as many
            private companies who donate money, equipment, and most
            importantly time and effort to deliver food to needy and
            homebound seniors. These volunteers not only bring food but
            companionship and other assistance to seniors who might have no
            other source of support. (See Attachment 1)
        The White House proposed budget for fiscal year 2009 would
    eliminate CSFP completely, and would eliminate all of this effort and
    support of those 39 years. This proposal has shocked the entire CSFP
    community as well as legislators, anti-hunger and senior service
    organizations and the concerned citizens as they have become aware of
    it. America's Second Harvest, AARP, and FRAC have all voiced their
    opposition to the elimination of CSFP. It is unconscionable to
    eliminate benefits for some of our most vulnerable citizens and to
    eliminate the hope of those waiting for participation in the program.
    It is the cruelest cut for the greatest generation.
        In a recent CSFP survey, more than half of seniors living alone
    reported an income of less than $750 per month. Of those respondents
    from two-person households, more than half reported an income of less
    than $1,000 per month. Fewer than 25 percent reported being enrolled in
    the Food Stamp Program. Over 50 percent said they ran out of food
    during the month. Also, close to 70 percent senior respondents say they
    use money for medical bills not food.
        The Senate Agriculture Appropriations Subcommittee has consistently
    supported CSFP, acknowledging it as a cost-effective way of providing
    nutritious supplemental foods. Last year this subcommittee and all of
    Congress provided funding for CSFP in direct opposition to its proposed
    elimination. This year, your support is again needed to provide
    adequate resources for the 473,473 mothers, children and seniors
    currently receiving benefits, 20,500 low-income participants currently
    waiting in 5 new States and 104,137 seniors waiting in current States
    for this vital nutrition program.
        There is no discernible plan to address the long-term needs of
    those affected by the elimination of CSFP. The proposed transition plan
    provides that seniors being removed from CSFP will be provided a Food
    Stamp Program (FSP) benefit of $20 per month for up to 6 months, or
    until the participant actually enrolls in the FSP, whichever comes
    first. Simply transferring seniors to the FSP is an inadequate
    solution. It is essential for seniors to have access to services which
    they feel are offered with dignity and respect. Many will outright
    reject the idea of applying for FSP benefits. According to the ERS
    Evaluation of the USDA Elderly Nutrition Demonstrations: Volume I:

        ``The Commodity alternative benefit demonstration in North Carolina
    was popular both among new applicants and among existing FSP
    participants. Clients eligible for low FSP benefits were more likely to
    get the commodity packages, which had a retail value substantially
    greater than their FSP benefits''. ``In particular, seniors described
    the anxiety of using FSP benefits in stores, where they felt shoppers
    and store clerks looked down on them''. ``The demonstrations attracted
    a particularly large share of clients eligible for the $10 benefit
    because the retail value of the commodity packages was worth $60-$70.''

        Depending on their non-cash assets, seniors may not qualify for a
    FSP benefit level equivalent to the CSFP food package. Seniors
    receiving the minimum benefit would not be eligible for the $20/month
    transitional benefit. The 25 percent of current CSFP participants who
    already enrolled in the FSP will lose the benefits of CSFP and those
    benefits will not be replaced at a time when they are struggling to
    make ends meet. CSFP and FSP are supplemental programs. They work
    together to make up the shortfall that many of our seniors are facing
    each month. Both programs need to continue to be available as part of
    the ``safety net'' for our low-income participants.
        USDA reports that the average benefit paid to senior citizens is
    about $67 per month, but in reality, many senior citizens receive only
    the minimum monthly benefit of $10, which has not been updated since
    1975. USDA figures also report households rather than individual
    participants and include households with disabled family members.
        The proposed transition plan for women, infants and children
    enrolled in the CSFP is to transfer them to WIC. However, due to
    increasing coordination between WIC and CSFP at the State and community
    levels, the number of WIC-eligible mothers and children enrolled in the
    CSFP is steadily declining. In some States, this figure is less than 2
    percent of all enrolled women and children, eradicating supplemental
    food and nutrition benefits for that population as well. Also of
    importance is the fact the CSFP covers the non-WIC eligible populations
    of post-partum mothers from 6monts to 1 year and children up to age 6.
        As referenced earlier, CSFP provides a food package that costs USDA
    about $19 per month. It has a retail value of approximately $50. How
    does someone use $20 to purchase $50 worth of nutritious foods? What
    happens at the end of 6 months?
        The National Commodity Supplemental Food Program Association
    respectfully requests that the Senate Agriculture Appropriations
    Subcommittee take the appropriate actions to funding CSFP for fiscal
    year 2009 at $175 million as illustrated below:
        To continue serving the 473,473 needy seniors (93 percent of
    participants), women, infants and children (7 percent of participants)
    currently enrolled in CSFP--$142 Million.
        To meet USDA's commodity procurement expenses--$0.7 Million.
        To begin meeting the needs of 20,500 eligible seniors in the 5
    States with USDA approved plans: Arkansas (5,000), Delaware (2,500),
    Oklahoma (5,000), New Jersey (5,000) and Utah (3,000)--$6.2 Million.
        To serve an additional 104,137 individuals among of our nation's
    most vulnerable individuals in the 32 States with existing programs and
    documented additional needs--$23.4 Million.
        Total Appropriation needed to maximize this program's effectiveness
    in serving 617,251 seniors and women and their infants and young
    children challenged by hunger--$175 Million Total.
        With the aging of America, CSFP must be an integral part of USDA
    Senior Nutrition Policy as well as comprehensive plans to support the
    productivity, health, independence, and quality of life for America's
    seniors.
        Measures to show the positive outcomes of nutrition assistance to
    seniors must be strengthened. A 1997 report by the National Policy and
    Resource Center on Nutrition and Aging at Florida International
    University, Miami--Elder Insecurities: Poverty, Hunger, and
    Malnutrition indicated that malnourished elderly patients experience 2
    to 20 times more medical complications, have up to 100 percent longer
    hospital stays, and incurs hospital costs $2,000 to $10,000 higher per
    stay. Proper nutrition promotes health, treats chronic disease,
    decreases hospital length of stay and saves health care dollars.
        Rather than eliminating the program, the NCSFPA recommends the
    following initiatives to strengthen CSFP:
      --Develop a formal evaluation process to demonstrate individual and
            program outcomes of CSFP with Federal, State, and local CSFP
            managers included in the study design;
      --Set ``greatest need within a project area'' as the priority for
            service or let each State set its priority for service under a
            plan approved by the Secretary of Agriculture;
      --Support and expand the program in those States that have
            demonstrated an interest in the CSFP, including the 5 States
            that already have USDA-approved plans to operate CSFP
            (Arkansas, Delaware, New Jersey, Oklahoma and Utah) or that
            have demonstrated a willingness to continue and expand current
            CSFP services.
        This program continues with committed grassroots operators and
    dedicated volunteers. The mission is to provide quality nutrition
    assistance economically, efficiently, and responsibly always keeping
    the needs and dignity of our participants first. We commend the Food
    and Nutrition Service of the Department of Agriculture and particularly
    the Food Distribution Division for their continued innovations to
    strengthen the quality of the food package and streamline
    administration. We also remain committed to providing quality services
    in collaboration with the community organizations and volunteers that
    contribute nearly 50 percent of the resources used in providing these
    services. We appreciate the continued support from so many diverse
    senators and attach the letter currently being circulated in support of
    our program by Senators Stabenow and Domenici. A final, signed copy of
    the letter should soon be submitted to your committee from your
    colleagues.

                                                      ATTACHMENT 1.--NATIONAL CSFP ASSOCIATION ADMINISTRATIVE EXPENSE VALUE SURVEY FISCAL YEAR 2006
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Goods &                                                       Extra Goods
                                                                           USDA       Not Reimbursed       CSFP          Services        Volunteer     Annual Total    Percent Paid     donated to
                                Programs                                Reimbursed     by USDA Cash    Expenditures     donated to      Labor Hours    Program Value      by USDA          CSFP
                                                                           Cash                            Cash        agency Value        Value                                       participants
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    New Hampshire...................................................        $416,648         $13,227        $429,875          $6,650       $4108,235        $544,760              76          $2,625
    New York........................................................       1,804,443          45,000       1,849,443           1,000         296,307       2,146,750              84          12,755
    Vermont FB......................................................         246,524         300,000         546,524  ..............          90,200         636,724              39           2,000
    Washington DC...................................................         439,098       1,600,000       2,039,098         800,000         172,318       3,011,416              15  ..............
    Pennsylvania....................................................         835,702          53,197         888,899          22,885         186,985       1,098,769              76          92,638
    Kentucky........................................................         898,857         162,681       1,061,538          22,180         704,282       1,788,000              50         714,055
    Mississippi.....................................................         400,448  ..............         400,448         160,370         561,766       1,122,584              36  ..............
    North Carolina..................................................          74,583          30,000         104,583  ..............  ..............         104,583              71           5,000
    South Carolina..................................................         212,744  ..............         212,744  ..............          58,883         271,627              78           2,500
    Tennessee \1\...................................................         804,260  ..............         804,260  ..............  ..............         804,260             100  ..............
    Illinois........................................................         885,767           3,000         888,767  ..............         477,447       1,366,214              65  ..............
    Indiana.........................................................         246,603          28,072         274,675          22,000         396,880         693,555              36             443
    Michigan........................................................       4,490,742         601,805       5,092,547         356,773       2,161,385       7,610,705              59         769,301
    Minnesota.......................................................         802,557         103,225         905,782          19,000         173,068       1,097,850              73         199,000
    Red Lake, MN....................................................           5,841  ..............           5,841  ..............  ..............           5,841             100  ..............
    Ohio............................................................         709,662          94,228         803,890          65,000         368,251       1,237,141              57         302,000
    Wisconsin.......................................................         276,228          56,458         332,686           3,150         300,691         636,527              43          41,845
    Louisiana.......................................................       4,505,386         250,000       4,755,386         452,000         825,330       6,032,716              75  ..............
    New Mexico......................................................       1,009,150         272,139       1,281,289          97,987         350,283       1,729,559              58         446,378
    Texas...........................................................         708,521          70,000         778,521          15,000         405,900       1,199,421              59          12,000
    Colorado........................................................       1,193,799         204,168       1,397,967          30,474         612,151       2,040,592              59         878,389
    Iowa............................................................         222,652         520,767         743,419  ..............          29,712         773,131              29  ..............
    Kansas..........................................................         333,423          45,715         379,138          46,200         209,986         635,323              52          51,400
    Missouri........................................................         532,997          29,000         561,997           2,400         398,455         962,852              55       1,010,950
    Montana.........................................................         385,402          35,525         420,927         107,333       2,163,357       2,691,617              14          78,825
    Nebraska........................................................         756,827          87,486         844,313          21,580         308,475       1,174,369              64          89,709
    North Dakota....................................................         160,216           7,800         168,016  ..............         235,729         403,745              40  ..............
    South Dakota....................................................         160,962          33,520         194,482  ..............          32,842         227,324              71  ..............
    Ogala Sioux, SD.................................................          37,341  ..............          37,341  ..............  ..............          37,341             100  ..............
    Alaska..........................................................         130,334          48,038         178,372          10,000          45,100         233,472              56  ..............
    Arizona.........................................................         883,204         450,000       1,333,204           4,516       1,549,401       2,887,121              31         580,460
    California......................................................       3,078,203       1,265,849       4,344,052          68,600       2,492,966       6,905,618              45         772,308
    Nevada..........................................................         352,044          97,629         449,673  ..............          84,788         534,461              66         113,000
    Oregon..........................................................          78,299          48,000         126,299  ..............          75,768         202,067              39  ..............
    Washington......................................................         132,094          25,000         157,094             250          39,544         196,888              67  ..............
                                                                     -------------------------------------------------------------------------------------------------------------------------------
           Grand Total..............................................      28,211,561       6,581,529      34,793,090       2,335,348      15,916,481      53,044,919              53      6,177,579
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ No information provided.

                                     ______

        Prepared Statement of the National Congress of American Indians

        On behalf of the tribal nations of the National Congress of
    American Indians (NCAI), we are pleased to present our recommendations
    on the administration's fiscal year 2009 budget for Indian programs.
        Agriculture is the second leading employer in Indian Country, and
    is the backbone of the economy for approximately 130 Native American
    Tribes. During the last agriculture census in 2002, American Indians
    operated 56.8 million acres of land and sold $1.64 billion of
    agricultural products, including $781 million of crops and $857 million
    of livestock.\1\ Agriculture will continue to be an economic driver on
    Indian Reservations, and USDA programs and services will continue to
    play a crucial role in the progression of economic development, and
    agriculture and natural resource programs throughout Indian Country.
    ---------------------------------------------------------------------------
        \1\ 2002 National Agricultural Statistics Service (NASS).
    ---------------------------------------------------------------------------
                              nutrition assistance
        The Food Distribution Program on Indian Reservations (FDPIR)
    provides food assistance to nearly 250 tribes across the country in
    lieu of participation in the Food Stamp Program. FDPIR is more than
    simply a supplemental program, in many cases it is the sole source of
    food for low income tribal members living on or near geographically
    isolated reservations.
        Historically, food packages have included what remains of Federal
    commodity programs, such as bleached flour, sugar, potatoes, corn, and
    butter. The immediate and drastic shift from healthy subsistence and
    traditional foods to foods high in sugar, starch and fat created a
    quiet epidemic across Indian reservations: diabetes and obesity. It is
    imperative that food assistance to Indian tribes be improved to deliver
    better foods to improve human health for tribal members receiving foods
    from FDPIR.
        For decades the USDA's answer to Tribal requests for the inclusion
    of healthier and more traditional Native foods in the FDPIR food
    packages has been that the program has insufficient funds. The FDPIR is
    a crucial program for Indian Tribes, and increased funding is needed to
    improve the nutrition content of food packages and offset rising
    transportation and maintenance costs.
        The FDPIR budget includes the costs of program administration by
    the Indian Tribal Organization (ITO) or State agency, food storage,
    food delivery, vehicle maintenance, employee salaries, nutrition
    education as well as the purchase of foods for distribution.
      --NCAI urges Congress to increase funding to FDPIR above $90 million
            to support this essential program for Indian tribes.
                  extension indian reservation program (eirp)
        Congress mandates and funds research and extension services in
    every county in the Nation except on Indian reservations. The Extension
    Indian Reservation Program (EIRP) provides the only Federal source for
    funding to cover the cost of placing extension agents on Indian
    reservations. Indian reservations have only had access to USDA Offices
    since 1990, when EIRP was established to provide Indian farmers and
    ranchers direct access to USDA programs and information. EIRP was
    authorized to deliver USDA offices on 85 large reservations. Funding,
    however, has remained low, at only $3 million for fiscal year 2007-
    2008, and only provides the Federal match for 31 USDA offices, well
    short of the 85 that were intended.
      --NCAI asks that the EIRP program be funded at $8 million a year to
            improve USDA services to Indian tribes by placing more
            extension agents on reservations.
                        indian land acquisition program
        Tribes have been subjected to a myriad of Federal policies that
    have distributed and redistributed our homelands into an often
    confusing array of checkerboard land ownership, which significantly
    stunts efficient agricultural and economic development in Indian
    Country. USDA provides loans to tribal governments to purchase ``highly
    fractionated'' lands under a process delineated in the Indian Land
    Consolidation Act Amendments of 2004. These loans allow tribes to
    purchase parcels of land that are considered ``highly fractionated,''
    defined as lands that have over 100 individual owners or where no one
    owner owns more than 10 percent of the parcel). Fractionated land
    hampers agriculture by taking land out of production while
    simultaneously becoming grounds for invasive species. Moreover,
    tracking fractionated land costs the Federal Government significant
    amounts of money annually, taking away from providing beneficial
    services to Indian communities. It was estimated in 2002 that it would
    cost just over $2 billion to consolidate all fractionated interests.
      --The Indian Land Acquisition Program was authorized at $12 million a
            year, but has never been funded over $2 million. NCAI requests
            that this program be funded at $12 million in order to tackle
            one of the most pressing and longstanding problems in Indian
            Country.
     outreach to socially disadvantaged farmers and ranchers (2501 program)
        The 2501 Program provides outreach and technical assistance to
    Socially Disadvantaged Farmers and Ranchers, including Indian tribes.
    This has been the primary source of outreach from the USDA to many
    minority farmers, and helps to promote agriculture to rural
    communities. Most tribal communities do not have access to USDA
    offices, and the 2501 Program provides an opportunity for small
    communities to participate in agriculture.
      --The 2501 Program, Outreach to Socially Disadvantaged Farmers and
            Ranchers, should be funded at $15 million to improve USDA
            delivery to tribal communities.
         1994 (tribal colleges & universities) land grant institutions
        Tribal Colleges are the heart and soul of higher education in
    Indian Country. They are considered one of the most important steps in
    revitalizing education, culture and language, and the economy in Indian
    Country. Nonetheless, despite their many obligations and roles, TCUs
    remain the most poorly funded institutions of higher education in this
    country.
        Over a dozen years since securing land grant status TCUs have yet
    to be recognized and funded as full partners in the nation's land grant
    system. Funding at the requested levels is a small but critical first
    step in addressing disparities that currently exist in the land grant
    system, and with supporting higher education for Native Americans.
    (Chart adjusted from March 12, 2008 NCAI Budget Recommendations)

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                              Fiscal year   Fiscal year 2009
                 Program name                    2008         NCAI request
    ------------------------------------------------------------------------
    1994 Institutions' Extension Program..          $3.221              $5
    1994 Institutions' Equity Grant                  3.342               3.3
     Program..............................
    1994 Institutions' Endowment Fund.....          11.880              12
    1994 Institutions' Research Program...           1.544               3
    1994 Institutions' Community                         4               5
     Facilities...........................
    Tribal College Essential Community                   4               5
     Facilities Program--(Rural
     Development).........................
    ------------------------------------------------------------------------

                                     ______

          Prepared Statement of the National Corn Growers Association

        The National Corn Growers Association (NCGA) appreciates the
    opportunity to share with the subcommittee our energy and water
    development appropriations priorities for fiscal year 2009, and we
    respectfully requests this statement be made part of the official
    hearing record. In general, our agriculture appropriations priorities
    include support for the Plant Genomic Research, APHIS Biotechnology
    Regulatory Service, FAS SPS Issues Resolution, FAS Market Access
    Program, National Corn to Ethanol Research Center, Ethanol Co-product
    Utilization, and the Value-Added Product Market Development Grant
    program.
        NCGA's mission is to create and increase opportunities for corn
    growers. NCGA represents more than 33,000 members and 48 affiliated
    state organizations and hundreds of thousands of growers who contribute
    to state checkoff programs.
    Genomic Research
        The entire corn industry, including the academic research
    community, grain handlers, growers, industry and seed companies
    strongly believe that research on plant and plant genomes has
    substantial long-term benefits. NCGA supports the plant genome research
    conducted by ARS through its genetic resources, genome sequencing and
    genome bioinformatics programs. Specifically, this research includes
    plant and fungal genomics exploration to determine what drives
    aflatoxin production, what causes susceptibility, and helps us
    understand plant and fungal nutrient and environmental needs.
        NCGA also supports the Cooperative State Research, Education and
    Extension Service's National Research Initiative. Our research policy
    supports competitive grants where appropriate
    APHIS Biotechnology Regulatory Service
        NCGA supports the President's budget request of $16.306 million for
    the Animal and Plant Health Inspection Service's Biotechnology
    Regulatory Service program as well as the separate funding stream
    requested in the budget from the Office of the Secretary that allows
    for additional potential funds towards the same. This funding request
    is $4.578 million more than the fiscal year 2008 enacted BRS budget of
    $11.728 million. These resources are necessary to ensure the agency
    properly manages its functions associated with this expanding
    technology to maintain consumer and customer confidence in our strong
    science-based regulatory structure.
    FAS SPS Issues Resolution
        NCGA supports the President's budget request for the Foreign
    Agricultural Service (FAS) Sanitary and Phytosanitary (SPS) program.
    Unnecessarily restrictive regulations to address plant health risks are
    major impediments to U.S. market expansion. As trade barriers have been
    reduced, there has been a dramatic increase in non-tariff trade
    barriers to trade.
    FAS Market Access
        NCGA supports the President's budget request of $200 million for
    the Market Access Program (MAP) within the Foreign Agricultural
    Service. This program has been successful in maintaining and expanding
    U.S. agricultural exports and strengthening farm income.
    National Corn to Ethanol Research Center
        In 2007, fuel ethanol production from corn generated 6.5 billion
    gallons of ethanol, displacing 5 percent of petroleum imports. Economic
    forecasting estimates that the United States is capable of producing in
    excess of 15 billion gallons of ethanol by 2015. Such production is
    critical to our national economy, energy security and the environment.
    The National Corn-to-Ethanol Research Center (NCERC) at Southern
    Illinois University--Edwardsville is in a perfect position to: continue
    generation of baseline data, serve as training center for Workforce
    Development and expand as a Lignocellulosic Center of Excellence. To
    fulfill these objectives, NCGA is seeking additional funding on behalf
    of NCERC.
        The (NCERC) houses a state-of-the-art pilot plant which mimics the
    commercial production of fuel ethanol. Updated baseline data is
    continuously re.quired to be reflective of industry changes and their
    impact on ethanol yields and efficiencies. The goal of this objective
    is to continue generating baseline data under typical industry
    operating conditions reflective of changing industry practices and
    changes in inputs (e.g. fractionization, corn hybrids, enzymes, yeast
    practices). The baseline data generated by the NCERC is of significant
    interest to academic, government, industry and trade association
    researchers as well as ethanol plant operators. The baseline data
    generated by NCERC provides a critical benchmark for industry and
    institutional comparison testing. We encourage the committee to provide
    $400,000 to NCERC for this purpose.
        A key component to the success of the ethanol industry over the
    next decade is to ensure the industry has a ready and available
    workforce. The rapid growth and expansion of the ethanol industry has
    created a need for thousands of qualified plant process operations
    personnel. The NCERC has created a unique Education and Workforce
    Training Program to address this need. The initial launch of this
    program, in January 2007, saw 24 displaced auto workers and skilled
    trades-people successfully complete a comprehensive 5-day ethanol
    process operator training program. In the past calendar year, the NCERC
    conducted six installments of Workforce Training with 150 persons
    successfully completing 50 hours of training in the ``Fundamentals of
    Applied Ethanol Process Operations''.
        More so, NCERC is well-positioned to train an immediately
    productive workforce as it plays a unique role in serving the
    educational mission of the university NCERC provides a year-long,
    hands-on workforce training program to student interns while conducting
    commercial testing trials. Since opening in late 2003, nearly 45
    interns have helped with the successful operation of the plant and
    labs.
        NCGA requests an additional $1,000,000 to expand the current
    internship program to meet the growing needs of the industry. Through
    this endeavor, NCERC will develop and implement a National Biofuels
    Workforce Training Center.
        For cellulose to be a viable feedstock, the process of converting
    cellulose to ethanol must be optimized. The three ``process points'' of
    optimization in the cellulose to ethanol process are: pre-treatment
    method, enzyme functionality and fermentation organisms (yeast). The
    NCERC is a research leader in the conversion of corn to ethanol and its
    co-product. Therefore, the NCERC is able to more cost-effectively stay
    on the cutting edge of technology as we enter a new era of converting
    cellulose to ethanol.
        The NCERC is well-positioned to work directly with USDA/ARS, the
    Department of Energy, and Academic and Industry researchers who are
    conducting scientific discovery research on the conversion of cellulose
    to ethanol. This work will spur unlimited investment by private
    industry as they will make that crucially important decision to enter
    the cellulose to ethanol market. We encourage the committee to consider
    NCERC as Lignocellulosic Center of Excellence.
    Ethanol Coproduct Utilization
        One of the major benefits of using corn as a feedstock for ethanol
    production is the ability to retain the protein, fat, fiber, vitamins
    and minerals for use as an animal feed. The co-product of ethanol
    production, distillers dried grain with solubles (DDGS), results from
    the concentration and drying of the components remaining after the
    starch portion of corn is converted to ethanol. Strong global demand
    for DDGS will be critical in maximizing the potential and profitability
    of fuel ethanol production from corn while ensuring livestock feed
    needs are met.
        While nearly 16 million tons of DDGS was fed domestically or
    exported in 2007, use of this alternative feed ingredient may be
    limited in the future because of real and perceived issues relating to
    DDGS consistency, quality, flowability and feed efficiency. NCGA
    encourages the committee to dedicate the resources necessary to greatly
    expand ARS's efforts in this area, particularly as they relate to DDGS
    flowability, contaminant mitigation, nutritional value, and nutrient
    and mineral management issues.
    Value-Added Grants
        Since its establishment, the Value-Added Producer Grants Program
    has been a tremendous success. This matching fund program has provided
    grants to over 900 individual producers, producer-controlled
    organizations and farmer cooperatives across the Nation since its
    inception.
        With those funds, recipients are empowered to capitalize on new
    value-added business opportunities that would have otherwise gone
    unexplored. Their successes have translated into greater and more
    stable income for producers from the marketplace. It has also served to
    promote economic development and create needed jobs, especially in
    rural areas where employment opportunities are often limited. Potential
    technologies include processing identity-preserved corn varieties and
    adding value to the non-fermentable components of the corn feedstock.
        The benefits of this program far exceed the cost. Given its track
    record of success, we believe that strong justification exists to
    provide full funding for USDA's Value-Added Producer Grants Program.
        Thank you for the support and assistance you have provided to corn
    growers over the years. Please feel free to contact Jon Doggett at 202-
    628-7001 if you need any additional information.
                                     ______

       Prepared Statement of the National Council of Farmer Cooperatives

        Mr. Chairman, members of the Subcommittee, we would like to thank
    you for your continued 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 2009
    agriculture appropriations bill, and respectfully requests this
    statement be made part of the official hearing record.
        NCFC represents the interests of 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.
        We believe that our farmer cooperative members offer the best
    opportunity for America to realize the farmer-focused ideal of American
    agricultural policy. These farmer cooperatives allow individual farmers
    the ability to own and lead organizations that are essential for
    continued competitiveness in both the domestic and international
    markets.
        America's farmer-owned cooperatives provide a comprehensive array
    of services for their members. These diverse organizations handle,
    process and market virtually every type of agricultural commodity
    produced. They also provide farmers with access to infrastructure
    necessary to manufacture, distribute and sell a variety of farm inputs.
    Additionally, they provide credit and related financial services,
    including export financing.
        In all cases farmers are empowered, as elected board members, to
    make decisions affecting the current and future activities of their
    cooperative. Earnings derived from these activities are returned by
    cooperatives to their farmer-members on a patronage basis thereby
    enhancing their overall farm income.
        America's farmer cooperatives also generate benefits that
    strengthen our national economy. They provide jobs for nearly 250,000
    Americans with a combined payroll over $8 billion. Many of these jobs
    are in rural areas where employment opportunities are often limited.
        Congress faces many challenges in the current budget environment
    and we appreciate the difficulty of your task. However, we want to
    emphasize the continued importance of policies under the current Farm
    Bill that promote an economically healthy and competitive U.S.
    agricultural sector.
        These programs serve a variety of purposes including: meeting the
    food and fiber needs of consumers worldwide, strengthening farm income,
    improving our balance of trade, promoting rural development, and
    creating needed jobs.
        There is a long history of congressional support for farmer
    cooperatives, recognizing that they serve a variety of essential
    functions for American agriculture. Some of these functions include:
    enhancing producers' overall income, managing their risk, capitalizing
    on new market opportunities, and helping individual farmers work
    together to compete more effectively in a global economy.
        Given these vital tasks that farmer cooperatives perform on behalf
    of their members, it is extremely important that they retain the
    flexibility to modernize and adapt to the current and future
    marketplace confronting U.S. agriculture. Accordingly, in addition to
    supporting basic farm and commodity programs under the current Farm
    Bill, we recommend the following:
    USDA's Rural Business-Cooperative Service (RB-CS)
        Several years ago, the Cooperative Service was eliminated as a
    separate agency within USDA. Since that time, the focus of research,
    education and technical assistance for farmer cooperatives has eroded.
    Funding for such purposes has generally been provided through the
    salary and expense budget relating to rural development.
        For fiscal year 2009, the administration's budget proposal provides
    $700 million in both budget authority and program level for salaries
    and expenses for the rural development mission area, compared to $685
    million for fiscal year 2008.
        Since there is no separate line item relating to programs in
    support of farmer cooperatives, we recommend that specific language be
    included, as Congress has approved in the past, relating to farmer
    cooperatives. Those directives should ensure that programs to encourage
    the development and continued competitiveness of farmer cooperatives be
    given a high priority.
    Value-Added Agricultural Product Market Development Grants
        USDA's Value-Added Agricultural Product Market Development Grants
    Program encourages and enhances farmer (and farmer cooperative)
    participation in value-added businesses. These new ventures are
    intended to help producers capture a larger share of the value of their
    production and improve their overall income from the marketplace. These
    activities also promote economic development and create needed jobs in
    rural areas.
        The program is administered on a matching-fund basis, thereby
    doubling the impact of such grants and helping encourage investment in
    rural America. As a cost-share program, it has served as an excellent
    example of an effective public-private partnership. Despite abbreviated
    funding levels, successful applicants have brought a number of self-
    sustaining products to market with the initial help of this program.
        Since the program's inception, NCFC has been a leader of a
    coalition of farmers, cooperatives and related rural interests that
    utilize and strongly support the Value-Added Agricultural Product
    Market Development Grants Program. Given the importance and success of
    the program in promoting efforts by farmers to develop new, higher-
    value products and sustainable increases in farm sector income, the
    coalition is recommending an increase to $60 million annually in
    mandatory spending under the upcoming Farm Bill. We are hopeful that
    the subcommittee will look favorably upon the full level of mandatory
    funds authorized under that upcoming legislation.
    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 products should remain fully eligible for them. Similarly, farmer
    cooperatives should not be limited or excluded from utilizing these
    programs, and must remain fully eligible.
        As you are well aware, decades of public policy has reinforced the
    fact that the cooperative stands in the shoes of its farmer-owners, as
    they act for their mutual benefit. This is consistent with USDA's
    historical mission in support of such cooperative efforts and essential
    to ensure the continued availability of high quality products on a
    competitive basis.
        We urge the committee to again include provisions to ensure
    continued eligibility by farmer cooperatives to the benefit of their
    farmer members.
    B&I Loan Guarantee Program and Farmer Cooperatives
        Access to equity capital is one of the major challenges facing
    farmer cooperatives. A successful resolution of this challenge is
    essential in helping farmers capture more of the value of what they
    produce beyond the farm gate.
        In approving the current 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 2009, the administration's budget proposal provides
    an overall program level of $700 million, which represents a decrease
    from the $993 million in loans estimated to be guaranteed in fiscal
    year 2008. Accordingly, we recommend that resources be increased to at
    least the fiscal year 2008 estimated level.
    Rural Business Investment Program
        The Rural Business Investment Program was authorized under the
    current Farm Bill to help foster rural economic development by
    encouraging and facilitating equity investments in rural business
    enterprises, including farmer cooperatives. Again, providing improved
    access to equity capital is essential if farmers are going to be able
    to capitalize on value-added business opportunities through farmer
    cooperatives. For these reasons, we urge that the program be fully
    funded as authorized and implemented as Congress intended.
    USDA Export Programs
        We would also like to take this opportunity to express our strong
    support for USDA's export programs. These programs are vital to
    maintaining and expanding U.S. agricultural exports, counter subsidized
    foreign competition, meet humanitarian needs, protect American jobs,
    and strengthen farm income.
        NCFC is a longstanding member of the Coalition to Promote U.S.
    Agricultural Exports. That coalition is urging that mandatory funding
    for the Market Access Program be provided at $325 million, together
    with $50 million for the Foreign Market Development program, under the
    upcoming Farm Bill. We urge that the subcommittee support the full
    authorized funding levels for these essential programs.
        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.
    Food Aid
        NCFC is a member of the Food Aid coalition and strongly supports
    their testimony. Public Law 480's long history of success has created
    significant congressional and private sector confidence in the program.
    Farmer cooperatives have seen these benefits first-hand through our
    involvement in agricultural development programs with international NGO
    ACDI/VOCA.
        With that background, we urge the subcommittee to reject any
    proposals to divert funds from Title 1 and Title II of the Public Law
    480 program. Though we recognize that the Europeans maintain a
    different policy in regard to their food aid programs, it is unwise to
    undermine our strong position in the World Trade Organization
    negotiations by unilaterally amending Public Law 480.
    Foreign Agricultural Service
        Additionally, we also want to take this opportunity to urge support
    for needed funding and resources for USDA's Foreign Agricultural
    Service. This funding is crucial if we are 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.
    Research
        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's goal of doubling Federal funding over the next 5
    years.
    Conservation
        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 current 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, involving 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.
        It is important that USDA have the resources to provide these
    important funds and that the Department continues to refine the
    technical service program (TSP).
    Conclusion
        Thank you again, Mr. Chairman and members of the Subcommittee, for
    the opportunity to share our views. We look forward to working with the
    committee to ensure continued benefits for rural communities,
    consumers, American agriculture and our Nation as a whole.
                                     ______

        Prepared Statement of the National Drinking Water Clearinghouse
                    Programs for Small and Rural Communities

    Summary
        The National Drinking Water Clearinghouse (NDWC) asks for your
    continued support for our work to assist small and rural communities in
    the United States in maintaining safe, affordable drinking water. We
    request a total of $2 million in fiscal year 2009 to support our
    regular outreach programs under the NDWC ($1.6 million) and for a
    focused activity called Special Services to Small Communities ($0.4
    million). Our nation-wide services provide information, technical
    assistance, training, education, and outreach to citizens, government
    officials, service providers, and regulators for communities with
    populations of 10,000 or less. The NDWC is supported through the
    Technical Assistance and Training grants administered under the USDA
    account for the Rural Community Assistance Program (RCAP). The first
    two pages of our testimony outline the need and justification for our
    services. The remainder of the testimony provides descriptive
    information about the NDWC and Special Services programs.
                         program need and justification
    Need for Federal Programs
        The recent media attention given to reports of large amounts of
    pharmaceuticals found in our drinking water has lead to a public outcry
    for more stringent treatment of drinking water and wastewater and the
    implementation of higher standards for water quality. The Environmental
    Protection Agency (EPA) drinking water survey conducted in 1999
    indicated the need for drinking water systems and/or system upgrades to
    be $48.1 billion for communities of 10,000 or less, and $31.2 billion
    for communities of 3,300 or less. Regardless of community size, water
    systems are required to comply with regulations mandated by the Safe
    Drinking Water Act to ensure safe drinking water to the populace.
        The expense of upgrading or installing new water systems is a
    progressively heavy financial burden on smaller communities. With their
    limited resources, these communities often lack a solid financial base,
    adequate equipment, and properly trained water system operators. Faced
    with regular turn-over in personnel due to constraints on salaries and
    their lower budgets for installing infrastructure, small and rural
    communities require Federal services such as training for technical
    personnel and community officials and information on low-cost options
    for system designs and maintenance if these communities are to keep
    expenses within their budget. Without adequate water resources, these
    communities are not able to grow and prosper. Safe, affordable water
    infrastructure is an investment in the economic viability and public
    health of rural America.
    Program Justification
        To assist small and rural communities address their drinking water
    challenges, the Technical Assistance and Training [TAT] grants program
    was started under USDA's Rural Community Advancement Program. The TAT
    program makes it possible for small and rural communities to maximize
    their investments in water infrastructure through assistance provided
    to them for technology selection, operation and maintenance, capacity
    development, and asset management.
        Funding for drinking water and waste water assistance is mandated
    through the Farm Bill (e.g. the Consolidated Farm and Rural Development
    Act). The administration requests funding for these assistance programs
    through the TAT account. However, the amount of funding that the
    administration requests for the TAT program has been decreasing each
    year while inflation pressures require the need for more funding just
    to maintain the same level of effort. The programs of the NDWC provide
    cost-effective solutions to help small community water systems meet the
    challenges they face, improve their abilities to comply with the Safe
    Drinking Water Act (SDWA), and protect public health.
        Given the integral role that the NDWC plays in implementing the
    USDA mandate in providing drinking water assistance services, we seek
    continued congressional support to maintain our level of activity and
    are requesting a congressionally directed appropriation through the
    RCAP TAT program for $2 million. By providing Federal funds to support
    the NDWC programs, the U.S. Government benefits through the economy-of-
    scale of supporting one organization (the NDWC) to develop a suite of
    assistance packages offered free to small communities which do not have
    the extensive resources needed to develop such programs and services
    from their own budgets.
                 ndwc and special services program descriptions
    National Drinking Water Clearinghouse Program
        For 17 years, the National Drinking Water Clearinghouse at West
    Virginia University has helped small and rural communities with their
    water infrastructure management. We have provided assistance in utility
    security issues since 2001. The NDWC is currently funded at
    approximately $1 million from fiscal year 2007 funds. fiscal year 2008
    funding is pending and would be allocated in September, 2008.
        The NDWC provides a range of assistance for small and rural
    communities. Telephone callers can obtain toll-free technical
    assistance from our staff of 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. Our comprehensive web site and databases with
    thousands of entries provide round the clock access to contemporary
    information on small water systems. Training sessions customized for
    small and rural areas, teleconferences, web casts and more than 400
    free and low-cost educational products give people the instruction and
    tools they need to address their most pressing water issues. Our
    services are structured to be of assistance to callers from any
    community across the Nation and are well received by small community
    officials and service providers.
    Special Services to Small Communities Program
        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.
    Underserved communities populate rural Appalachia, the Mississippi
    Delta, and the U.S.-Mexico Border communities, or ``Colonias,'' and
    Native American Tribes. The NDWC's funding currently does not provide
    for direct services to underserved communities. To initiate this
    program, West Virginia University has provided internal funding to
    pilot an effort to honor requests for site specific technical support.
    This support has given 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 are requesting
    congressional support for this program which could then be offered free
    of charge on a wider scale to selected communities across the Nation.
        We would appreciate your continued support for the valuable
    services provided by the National Drinking Water Clearinghouse. Thank
    you for the opportunity to offer testimony on the USDA programs.
                                     ______

        Prepared Statement of the National Fish and Wildlife Foundation

        Mr. Chairman and Members of the Subcommittee: Thank you for the
    opportunity to submit testimony regarding fiscal year 2009 funding for
    the National Fish and Wildlife Foundation (Foundation). We appreciate
    the Subcommittee's past support and respectfully request your approval
    of $4 million through the Natural Resources Conservation Service (NRCS)
    fiscal year 2009 appropriation.
        This funding request is well within the authorized levels and would
    allow the Foundation to uphold our mission and expand our successful
    partnership with NRCS. Mr. Chairman, I want to make one very important
    point: we are asking for your support of a well-established
    conservation program with national significance. The Foundation is an
    honest broker for the Federal agencies and we have a remarkable track
    record of bringing private partners together to leverage Federal funds
    and maximize conservation impacts.
        During fiscal year 2000-2006, the Foundation received an average
    appropriation of $3 million annually to further the mission of NRCS
    through a matching grant program focused on private lands conservation.
    We respectfully request that the subcommittee restore the NRCS
    appropriation for the Foundation in fiscal year 2009 to expand our
    partnership with NRCS. Together, NRCS and the Foundation have supported
    nearly 500 grants to conservation districts, universities, Resource
    Conservation and Development Councils, and non-profit organizations who
    partner with farmers, ranchers, and foresters to support conservation
    efforts on private land. Through these efforts, the Foundation
    leveraged $21 million in NRCS funds into more than $85 million to
    conserve fish and wildlife habitat, reduce agricultural runoff, and
    remove invasive species in 49 States, the Caribbean, and the Pacific
    Islands.
        Since the Foundation's establishment by Congress in 1984, the
    Foundation has built strong partnerships with Federal agencies by
    convening cooperative efforts to further the conservation of fish,
    wildlife and plants. In addition to NRCS, the Foundation works closely
    with the U.S. Fish and Wildlife Service and other Department of
    Interior agencies, U.S. Forest Service, National Oceanic and
    Atmospheric Administration, and the Environmental Protection Agency,
    among others. While the Foundation's Congressional charter requires a
    minimum of a 1:1 match for federally appropriated dollars, three or
    more matching dollars are typically leveraged from the non-Federal
    sector for conservation projects. Therefore, a NRCS appropriation of $4
    million in fiscal year 2009 has the potential to turn into $16 million
    or more for on-the-ground conservation. Funds appropriated by this
    subcommittee are fully dedicated to project grants and do not cover any
    overhead expenses of the Foundation.
        The Foundation continues to excel in grant-making while providing
    thought leadership, accountability and sustainable conservation
    outcomes. Our unique ability to organize Federal agencies and private
    partners to work together to achieve mutual conservation goals through
    on-the-ground and in-the-water grant programs is notable and there is
    significant potential to advance these efforts in fiscal year 2009 and
    beyond.
        Renewal of NRCS funding for the Foundation will attract private
    sector interest in conservation through corporate sponsorship and
    direct gifts. With past support from NRCS, the Foundation was
    successful in attracting $750,000 of matching funds through the Kellogg
    Foundation to support innovative and sustainable conservation
    activities on agricultural lands. The Foundation also has strong
    partnerships with Anheuser-Busch, Southern Company, and the McKnight
    Foundation, all of whom have a special interest in conserving habitat
    on private agricultural lands.
        Reinstatement of NRCS appropriations will encourage new corporate
    partnerships to further leverage Federal funds for fish and wildlife
    conservation on private lands. Through our targeted grants, the
    Foundation strategically invests Federal funds entrusted to us to
    achieve measurable success in ``moving the needle'' on collaborative
    conservation objectives over the next 5 to 10-year period.
    Conserving Fish, Wildlife, Plants and Habitats
        Fiscal year 2009 appropriations through NRCS will be focused on
    mutually agreed upon projects across the country according to our
    Keystone Initiatives and the objectives of the Foundation's Special
    Grant Programs, which are specific to a geographic area, group of
    species, or conservation concern. The Keystone Initiatives represent
    the new core portfolio of the Foundation's grant making with clearly
    defined long-term goals, well-articulated strategies, and defined
    budgets to reach desired outcomes. The Foundation continued
    implementing a new strategic plan and developing targeted Keystone
    Initiatives, with the goal of achieving sustainable and measurable
    conservation impacts.
        Four Keystone Initiatives were launched by the Foundation in 2007:
    (1) Birds (2) Wildlife and Habitats (3) Fish and (4) Marine and Coastal
    Conservation. Each grant approved under a Keystone Initiative will be
    designed to provide a measurable outcome that brings us one step closer
    to the final long-term conservation goal of the Initiative. Achieving
    success through our Keystone Initiatives will also help to fulfill the
    objectives of the National Fish Habitat Action Plan, North American
    Waterfowl Management Plan, and Partners in Flight, among others.
        With NRCS appropriations, the Foundation can accelerate our
    collaborative efforts to achieve long-term conservation impacts for
    fish and wildlife through our Keystone Initiatives. Increased funding
    in fiscal year 2009 will also help to strengthen the Foundation's
    Special Grant Programs, a few of which are highlighted below:
      --The Great Lakes Watershed Restoration Fund is a partnership between
            NRCS, U.S. Fish and Wildlife Service, U.S. Forest Service,
            Environmental Protection Agency, and NOAA to promote ecosystem
            restoration in the Great Lakes watershed. Since 2005, the
            Foundation has leveraged $1.9 million in Federal funds with
            $3.8 million in partner contributions and matching funds to
            support 36 projects throughout the watershed. In 2008, the
            program is anticipated to award an additional $1.5 million to
            restore and enhance fish and wildlife habitat in the Great
            Lakes Basin. In January, the Foundation announced a new
            corporate partnership with ArcelorMittal, an international
            steel company, which will provide an additional $2.1 million
            over 3 years for our grant-making in the watershed and help to
            implement the habitat objectives of the Great Lakes Regional
            Collaboration.
      --The Upper Mississippi River Watershed Fund was established in
            partnership with the U.S. Forest Service and NRCS to restore
            and protect the forest ecosystems and watersheds of the Upper
            Mississippi River drainage area. Intensive land use and
            expanding navigation of the river have transformed the river
            and its watershed. Forest restoration and sustainable
            stewardship is critical to the area's fish and wildlife
            populations and the ability to address water quality issues.
            Projects emphasize restoration of bottomland hardwoods,
            wetlands, and riparian areas to benefit migratory birds,
            amphibians, fish and other aquatic species. Since 2006,
            $600,000 in Federal funds was leveraged with $1.4 million in
            non-Federal funds to support eight projects in five States of
            the Upper Mississippi River Watershed.
      --The Chesapeake Bay Stewardship Fund is a partnership among NRCS,
            Environmental Protection Agency (EPA), U.S. Fish and Wildlife
            Service, National Oceanic and Atmospheric Administration, and
            the U.S. Forest Service to restore and protect water quality
            and vital habitats within the Chesapeake Bay watershed. As part
            of the Fund, the Foundation administers EPA's Chesapeake Bay
            Target Watershed Grants and Small Watershed Grants. In 2008,
            the Foundation will also partner with NRCS to manage $5 million
            through their Chesapeake Bay Conservation Innovation Grants
            program. By convening Federal partners through the Fund, the
            Foundation serves as a ``one-stop-shop'' for grantees and plays
            an important role in maximizing conservation outcomes.
        Other Special Grant Programs, including the Pulling Together
    Initiative, Bring Back the Natives, Coral Reef Conservation Fund, and
    the Delaware Estuary Watershed Grant Program, continued positive
    results in 2007 with grantee requests far exceeding available funds. As
    mentioned, the Foundation is successfully building bridges between the
    government and private sector to benefit NRCS's mission. With support
    from this Subcommittee, we can accelerate our investment in common-
    sense, innovative, cooperative approaches that directly benefit diverse
    habitats, water quality and quantity, and a wide range fish and
    wildlife species.
    A Tradition of Successful and Accountable Performance
        Since 1984, the Foundation has awarded nearly 9,500 grants to over
    3,000 organizations in the United States and abroad and leveraged--with
    its partners--more than $400 million in Federal funds into over $1.3
    billion for conservation. NFWF is recognized by Charity Navigator with
    a 4-star rating for efficiency and effectiveness.
        The Foundation has taken important strides to improve our grant
    review and contracting process to ensure we maximize efficiency while
    maintaining strict financial and evaluation-based requirements.
    Interactive tools through our website have improved communication with
    our stakeholders and helped to streamline our grant making process. We
    expect that as of spring 2008, the Foundation will be operating under a
    paperless application system.
        Grant-making through our Keystone Initiatives and Special Grant
    Programs involves a thorough internal and external review process. Peer
    reviews involve Federal and State agencies, affected industry, non-
    profit organizations, and academics. Grants are also reviewed by the
    Foundation's Keystone Initiative staff, as well as evaluation staff,
    before being recommended to the Board of Directors for approval. In
    addition, according to our Congressional Charter, the Foundation
    provides 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 a funding decision.
        Once again, Mr. Chairman, we greatly appreciate your continued
    support and hope the subcommittee will approve funding for the
    Foundation in fiscal year 2009.
                                     ______

              Prepared Statement of the National Organic Coalition

        Chairman Kohl, Ranking Member Bennett, 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 requests
    for fiscal year 2009 funding for several USDA marketing, research, and
    conservation programs of importance to organic agriculture.
        The National Organic Coalition (NOC) is a national alliance of
    organizations working to provide a voice for farmers, ranchers,
    environmentalists, consumers, cooperative retailers and others involved
    in organic agriculture. The current members of NOC are the Beyond
    Pesticides, Center for Food Safety, Equal Exchange, Food and Water
    Watch, Maine Organic Farmers and Gardeners Association, Midwest Organic
    and Sustainable Education Service, National Cooperative Grocers
    Association, Northeast Organic Dairy Producers Alliance, Northeast
    Organic Farming Association-Interstate Policy Council, Rural
    Advancement Foundation International-USA, and the Union of Concerned
    Scientists.
        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: $6 million.
        In fiscal years 2006 and 2007, funding of $2.026 was appropriated
    for the National Organic Program within the AMS budget. For fiscal year
    2008, in keeping with the President's budget request for the program,
    $3.18 million was appropriated for the National Organic Program. The
    President's fiscal year 2009 budget proposes that the National Organic
    Program be funded at $3.98 million.
        With the rapid expansion of the organic market in the United States
    and abroad, the tasks facing the National Organic Program are numerous,
    yet the resources of the agency are few. The responsibilities of the
    NOP staff are exploding, as they attempt to enforce the standards
    governing the growing organic sector. If the funding for this program
    does not expand significantly to meet the growing needs, we fear that
    the important work of the NOP will suffer, the integrity of the organic
    standards will be jeopardized, and public confidence in the USDA
    organic label will be eroded.
        Without a doubt, Congress has been very responsive to the funding
    needs of the NOP in recent years, in most cases fully funding the
    increases proposed by the President's budget each year. However, we
    believe that funding increase requested in the President's budget this
    year may not be adequate to address the exploding growth of the organic
    sector.
        Some of the difficulties that the NOP has faced in implementing and
    overseeing the organic standards can be attributed to budget problems.
    Rulemaking efforts important to organic farmers, consumers, processors
    and retailers are languishing. For example, USDA has been promising for
    nearly 2 years to move forward on the proposal of a new, updated
    pasture standard to govern organic livestock, yet no formal action has
    taken place. Also, a regulation to clarify the standards for origin of
    livestock in organic dairy operations is also greatly needed.
        In addition, some unfulfilled statutory requirements are still
    unanswered, despite Congressional prodding.
        Specifically, the Senate report language in fiscal years 2004,
    2005, 2006, 2007, and 2008 called on the NOP to establish an on-going
    Peer Review Panel, as called for in Section 2117 of the Organic Foods
    Production Act of 1990 and Section 205.509 of the Organic rule, to
    provide oversight and advice to the NOP regarding the accreditation
    process for organic certifiers.
        In recognition of the growing pains that the NOP was experiencing
    in implementing the new organic standards, the agency wisely sought
    outside advice for recommendations for program improvements. The NOP
    contracted with the American National Standards Institute (ANSI) to
    perform an outside audit of the agency, the results of which were
    presented in late 2004. The ANSI audit noted numerous technical and
    procedural deficiencies in the NOP's operations and suggested
    corrective actions in several areas. In addition, USDA's own Inspector
    General's office released an audit report regarding the National
    Organic Program in July of 2005, which was very critical of the
    National Organic Program's operations, and also suggested several
    corrective actions that could be taken by the Agency to resolve the
    problems. The Members of the National Organic Coalition concur with the
    recommendations of the ANSI and Office of Inspector General (OIG)
    audits, and believe that if the NOP were to implement these
    recommendations, it would be a significant step to resolving many of
    the concerns that have been raised by the organic community regarding
    the NOP's operations. However, it is unclear whether these
    recommendations are being implemented. We believe that the House and
    Senate Agriculture Appropriations Subcommittees should be kept informed
    by NOP with regular reports on their progress in complying with these
    recommendations.
        In order to provide the National Organic Program with greater
    resources to fulfill these required tasks, and for certifier training,
    National Organic Standards Board support, enforcement, and rulemaking
    processes, we are requesting $6 million for AMS/National Organic
    Program, and we are also requesting that the following report language
    be included:
        The Committee is aware that an audit performed by the American
    National Standards Institute (ANSI) in 2004 and by the USDA Office of
    Inspector General (OIG) in 2005 made strong recommendations about
    changes needed in the administration of the National Organic Program.
    The Committee expects the Agency to take the necessary actions to
    comply with these recommendations, and to provide a detailed written
    report to the Committee by December of 2008 regarding progress in
    implementing these recommendations. The Committee also notes that the
    agency is long-overdue in publishing regulations for new, updated
    pasture standards for organic ruminants, and that conflicting standards
    governing the origin of livestock used in organic dairy operations may
    require rulemaking on that topic as well. The Committee hopes to see
    action taken by NOP on these matters during fiscal year 2009. Finally,
    the Committee expects the NOP to work closely with the National Organic
    Standards Board to implement the accreditation Peer Review Panel
    requirements of OFPA and USDA's organic regulations.
    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.'' The
    pending 2008 Farm Bill includes draft language continues and enhance
    this data collection effort as well. As the organic industry matures
    and grows at a rapid rate, 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. Because of the multi-
    agency nature of data collection within USDA, the effort to improve
    organic data collection and analysis must also be undertaken by several
    different agencies within the Department:
    Economic Research Service (ERS)
        Collection and Analysis of Organic Economic Data--Request:
    $750,000.
        Since fiscal year 2006, Congress has appropriated $500,000 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.
        Because increased ability to conduct economic analysis for the
    organic farming sector is greatly needed, we request $750,000 to be
    appropriated to the USDA ERS 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: language supporting continued
    funding from RMA to AMS for organic price collection.
        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. During the last couple of years, the Risk
    Management Agency (RMA) has provided some funding to the AMS, through a
    Memorandum of Understanding, to begin the collection of organic price
    data for a few selected commodities. We request that the Committee
    express its support for the continuation and expansion of this MOU
    between RMA and AMS.
    USDA/CSREES
        Organic Transitions Program--Request: $5 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. 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, $1.88 million for
    both fiscal years 2005 and 2006, and $1.855 million for fiscal years
    2007 and 2008. 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 $5 million
    in fiscal year 2009, consistent with the funding providing in the
    House's initial fiscal year 2007 Agriculture Appropriations bill. In
    addition, we are requesting that the Organic Transition Program remain
    a separate program, and urge the Committee to reject the
    administration's proposal to subsume the funding for this program with
    the NRI.
    USDA/CSREES
        National Research Initiative (NRI)--Request: Language directing
    CSREES to add a new NRI program area to foster classical plant and
    animal breeding.
        In recent decades, public resources for classical plant and animal
    breeding have dwindled, while resources have shifted toward genomics
    and biotechnology, with a focus on a limited set of major crops and
    breeds. 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. Without renewed funding in this arena, the public
    capacity for plant and animal breeding will disappear.
        In fiscal years 2005, 2006, and 2007, the Senate Agriculture
    Appropriations Subcommittee included report language raising concerns
    about this problem, and urging CSREES to give greater consideration to
    research needs related to classical plant and animal breeding, when
    setting priorities within the National Research Initiative. Despite
    this report language, research proposals for classical plant and animal
    breeding that have sought NRI funding in the recent years have been
    consistently declined. Further, the shift in NRI toward work on
    genomics and biotechnology continues, to the exclusion of classical
    plant and animal breeding.
        Both the House and Senate versions of the Farm Bill include
    language to make classical plant and animal breeding a priority within
    the CSREES competitive grant process. The House version includes this
    language in the Initiative for Future Agriculture and Food Systems
    (IFAFS) program, whereas the Senate version includes this language
    within the National Research Initiative (NRI). Whichever version of the
    language is enacted in final Farm Bill, it will be very helpful to have
    the point reiterated by the Appropriations Committee.
        Therefore, we are encouraging the inclusion of strong report
    language in the CSREES section of the fiscal year 2009 Agriculture
    Appropriations bill, to reiterate that CSREES should be making
    classical plant and animal breeding a priority.
        The following report language is offered as a suggestion, though it
    may need to be modified based on the outcome of the Farm Bill:
        Section X of the X Act of 2008 (H.R. 2419) specifies that CSREES
    make classical plant and animal breeding activities a priority within
    the (NRI or IFAFS) program. The Committee strongly concurs with the
    intent of this section, and requests a report from the agency as to its
    plans for implementing the intent of this important requirement
    USDA/CSREES
        Sustainable Agriculture Research and Education (SARE)--Request: $15
    million (Chapter 1) and $5 million (Chapter 3).
        The SARE program has been very successful in funding on-farm
    research on environmentally sound and profitable practices and systems,
    including organic production. The reliable information developed and
    distributed through SARE grants have been invaluable to organic
    farmers. We are requesting $15 million for Chapter 1 and $5 million for
    Chapter 3 for fiscal year 2009.
    USDA/Rural Business Cooperative Service
        Appropriate Technology Transfer for Rural Areas (ATTRA)--Request:
    $3 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. We are requesting $3
    million for ATTRA for fiscal year 2009.
    USDA/ARS
        Organic Agricultural Systems Research--Request: Devote ARS research
    dollars commensurate with organic's retail market share.
        USDA research programs have not kept pace with the growth of
    organic agriculture in the marketplace. Although organic currently
    represents roughly 3.5 percent of total U.S. food retail market, the
    share of USDA research targeted to organic agriculture and marketing is
    significantly less. With regard to ARS specifically, efforts have been
    made to devote greater resources to organic research. In fiscal year
    2007, ARS expended approximately $15 million on organic research. While
    this figure is an increase from previous years, a ``fair share'' of
    expenditures would be closer to $40 million annually using organic's
    retail market share as a basis of comparison. In fact, both the House
    and Senate versions of the Farm Bill include Sense of Congress language
    that ARS funding should be dedicated to organic research at a rate
    commensurate with organic's retail market share.
        Not only is organic research not receiving an appropriate share of
    research dollars, but the ARS research location cuts proposed in the
    President's fiscal year 2009 budget would result in a disproportionate
    cut in ARS research. Specifically, much of the flagship organic
    research being conducted by ARS originates from the Orono, Maine,
    University Park, Pennsylvania, Urbana, Illinois and Morris, Minnesota
    research locations. All of these locations are slated for closure under
    the President's budget request.
        Therefore, we are requesting that language be added to the fiscal
    year 2009 Agriculture Appropriations bill to require ARS to devote
    dollars toward organic research at a rate commensurate with organic's
    retail market share, and to reject the President's proposal to close
    the Orono, Maine, University Park, Pennsylvania, Urbana, Illinois and
    Morris, Minnesota research locations.
    USDA/NRCS
        Conservation Security Program--Request: No Funding Limitation.
    USDA/Rural Business Cooperative Service
        Value-Added Producer Grants--Request: $40 million.
        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) have great potential to benefit
    organic and conventional 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 be permitted to
    operate with unrestricted mandatory funding, and that the Value-Added
    Producer Grant Program receive an appropriation of $40 million for
    fiscal year 2009.
        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 Ed Schneider. I am a potato farmer from Pasco,
    Washington 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 2009 appropriations priorities are as
    follows:
                                potato research
    Cooperative State Research Education and Extension Service (CSREES)
        The NPC urges that Congress not support the President's fiscal year
    2009 budget request to eliminate the CSREES Special Grant Programs. The
    Potato Special Grant Program supports and fine tunes important
    university research work that helps our growers remain competitive in
    today's domestic and world marketplace.
        The NPC supports an appropriation of $1,800,000 for the Special
    Potato Grant program for fiscal year 2009. The Congress appropriated
    $1,482,000 in fiscal year 2006 and recommended the same amount in
    fiscal year 2007. However, the program only received $1,112,000 in
    fiscal year 2008 which was further reduced by the across-the-board cut.
    The House Subcommittee recommended $1.4 million while the Senate
    Subcommittee recommended only $750,000. 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 Congress provided funds for a number of important ARS potato
    research 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.
        In addition, the Potato Cyst Nematode Laboratory at Cornell
    University is structurally deficient and may lose its Federal license
    to operate as a quarantine facility. Its demise would not only
    jeopardize New York agriculture but also put the U.S. potato industry
    at risk. Equally important is the risk to the Western United States
    from the Idaho and Alberta outbreaks. There is also a need for a
    similar facility in Idaho. A coordinated National Program is critical
    if export markets are to be maintained and this quarantined pest is to
    be contained.
        The NPC urges that $2.5 million per site be provided for the
    construction and/or the expansion of such a facility at each location.
    As an expansion of the Insect Containment Facility at Cornell
    University (CU), the eastern facility could be operated similarly to
    the current facility. A potential scenario might envisage a new
    facility built on CU-donated land with the State of New York providing
    continued maintenance and utility support and ARS providing research
    program support. The Western facility could be constructed on
    University of Idaho land where an existing nematologist is present and
    a core ARS presence already exists.
        Both species of Potato Cyst Nematode (PCN), Golden and Pale, are
    quarantine pests of potatoes. The Golden nematode was discovered in New
    York in 1941. The Pale Cyst Nematode was discovered in Idaho in 2006.
    The Pale Cyst Nematode has also been detected in potato production
    areas in Alberta, Canada that supply seed potatoes primarily to the
    Northwestern United States, but also to States such as Florida and
    North Carolina. Eradication of PCN is difficult because PCN cysts
    remain viable in the soil for 20 plus years and can be found at soil
    depths up to 40 inches.
        The Quarantine and Management program in New York has confined the
    nematode to limited acreage for 60 plus years due to yearly surveys by
    APHIS and New York State Ag and Markets, and the implementation of
    effective management plans developed by ARS and Cornell University
    scientists. The continued success of the program has been challenged by
    a recent discovery of a new race of PCN in New York and first-time
    discoveries of PCN in Idaho, Quebec and Alberta. If PCN expands into
    other States, the entire U.S. potato industry will be affected, not
    only from direct damage by the pest (up to 80 percent yield loss), but
    more importantly, by embargoes disrupting interstate and international
    trade.
        Breeding nematode resistant potato varieties is the cornerstone of
    the New York PCN research team. Access to resistant varieties allows
    continued production and international marketing of New York potatoes.
    The New York PCN research team, currently the only one in the United
    States, is uniquely positioned to develop potato germplasm with viable
    broad spectrum and durable resistance to PCN and to provide material to
    other breeding programs in the United States and Canada. Already the
    New York PCN team has been a major resource for establishing PCN
    detection programs in Idaho and Quebec, and is providing leadership,
    resources and expertise to a newly established U.S. PCN working group
    and to Canadian provincial agencies. Almost 60 percent of the U.S.
    potato production is in the Pacific Northwest. Without a program to
    test for resistance as part of the Northwest Potato Breeding program,
    to support the current containment and eradication program in Idaho and
    to aggressively survey for possible infections from Alberta, the entire
    U.S. industry is at risk.
        The PCN Laboratory at Cornell is the only U.S. facility that
    conducts laboratory and greenhouse research on PCN. It is structurally
    deficient and in danger of being denied its Federal license to operate
    as a quarantine facility. Constructed as a temporary building prior to
    1960, Cornell University engineers have determined that major
    renovations are not economically feasible. Its demise would put New
    York agriculture and the U.S. potato industry at risk. Similarly,
    without a Western facility to conduct this research under Western
    growing conditions, over 60 percent of the U.S. production is in
    jeopardy.
                           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 the authorized level determined
    by the final version of the new Farm Bill.
    Foreign Agriculture Service (FAS)
        The NPC supports the President's fiscal year 2009 budget request of
    $279 million for salaries and expenses of the USDA Foreign Agriculture
    Service. This level is the minimum necessary for the Agency given the
    multitude of trade negotiations and discussions currently underway. The
    Agency has had to absorb pay cost increases, as well as higher
    operating costs for its overseas offices, such as increased payments to
    the Department of State for services provided at overseas posts. Recent
    declines in the value of the dollar, coupled with overseas inflation
    and rising wage rates, have led to sharply higher operating costs that
    must be accommodated if FAS is to maintain its overseas presence.
    However, this minimal budget request does not allow for expanded
    enforcement activities to assure that various trade agreements are
    being properly implemented. The Congress should consider increasing the
    budget request to allow for more FAS trade enforcement activities.
                               food aid programs
    McGovern-Dole
        The NPC supports the administration's fiscal year 2009 budget
    request of $108 million for the McGovern-Dole International Food Aid
    Program. PVO's have been including potato products in their
    applications for this program.
                          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.
    The administration's request is only $800,000.
        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. Even though DHS
    staffing has increased, agriculture priorities have not yet been
    adequately addressed.
        Pest Detection.--The NPC supports $45 million for fiscal year 2009
    which was the administration's budget request for fiscal year 2008.
    This increase is essential for the Plant Protection and Quarantine
    Service's (PPQ) efforts against potato pests and diseases, such as
    Ralstonia and the Potato Cyst Nematode, and funds many cooperative pest
    and disease programs. The administration's fiscal year 2009 request is
    reduced to $31 million.
        Emerging Plant Pests.--The President requests $145 million in
    fiscal year 2009 which the NPC supports. However, this budget request
    includes only $7.7 million for potato cyst nematode regulatory, control
    and survey activity. The NPC urges that this program be increased to at
    least the fiscal year 2008 level of $9.5 million.
        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.--$12,457,000 appropriated in
    fiscal year 2008 and the President requests $19 million in fiscal year
    2009. 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. The NPC also urges that additional funds be appropriated so
    that the agency can continue its vegetable pesticide use surveys, which
    provide valuable data to the EPA for use in registration and
    reregistration decisions for key chemical tools. NASS has discontinued
    these chemical use surveys for fruits and vegetables.
    USDA IR-4 Program
        For fiscal year 2009 the administration requests $14.795 million
    for CSREES programs and $4.545 million for ARS programs. The NPC
    supports this as a minimum. The Program received $11.3 million for the
    CSREES and $3.8 million for ARS.
                                     ______

       Prepared Statement of the National Telecommunications Cooperative
                                  Association

        The ubiquitous deployment of state of the art communications
    infrastructure that is capable of ensuring all Americans have access to
    the array of communications services that are so essential to our
    national, economic, and personal security remains a critical national
    priority.
        With this in mind, obviously the communications infrastructure and
    community development financing programs that are operated under the
    U.S. Department of Agriculture's Rural Utilities Service (RUS) and
    Rural Business Cooperative Service (RBCS) are without question more
    important today than ever before.
        Congress and the President alike continue to uniformly advocate the
    necessity of making advanced broadband services available to every
    American--including those in the most remote far reaches of our vast
    Nation. Accomplishing this objective will require the ongoing
    dedication and commitment of the industry as well as the continuing
    availability of the strong financing programs that exist within the RUS
    and RBCS today.
        Consequently, NTCA strongly urges policymakers to adopt the
    following specific fiscal year 2009 funding recommendations for these
    critical programs.
    Rural Utilities Service
      --Support the provisions of the President's budget proposal calling
            for the required subsidy to fully fund the RUS
            Telecommunications Loan Program's Hardship Account at a $145
            million level, Cost of Money Account at a $250 million level,
            and the Guaranteed Account at a $295 million level.
      --Support the provisions of the President's budget proposal calling
            for the required subsidy to fund the RUS Distance Learning,
            Telemedicine, and Broadband Program's Broadband
            Telecommunications Loan Account at $297,923,000 and opposing
            the President's proposed rescission of the Account's unexpended
            subsidy amounts from prior fiscal years.
      --Request an additional $15 million over the President's budget
            proposal to maintain funding for the RUS Distance Learning,
            Telemedicine, and Broadband Program's Telemedicine and Distance
            Learning Grants Account at the fiscal year 2008 appropriated
            level of $35 million.
      --Reject the President's budget proposal to zero out the Distance
            Learning and Telemedicine Loan Account under the Distance
            Learning, Telemedicine, and Broadband Program, and instead
            provide a level of subsidy to sustain this loan account at a
            $30 million level.
      --Oppose the President's proposed cut of $804,000, from $38,623,000
            to $37,819,000, for administration and staffing at the agency.
            Considering all the new responsibilities the agency has taken
            on and that policymakers want the loanmaking process to move
            faster, the agency needs more, not fewer, resources.
    Rural Business--Cooperative Service
      --The Rural Economic Development Grants Program and the Rural
            Economic Development Loans Program that are both authorized
            under Section 313 of the Rural Electrification Act are programs
            that should be under the purview of the RUS rather than the
            RBCS as they are authorized by the act established to provide
            financing options for rural telecommunications and electric
            utilities. In addition, these Section 313 programs have
            traditionally been funded in part via interest earnings that
            are associated with loan prepayments by rural
            telecommunications and electric borrowers of the various RUS
            financing programs. The Section 313 loan and grant programs now
            under RBCS were moved there during the mid-1990s reorganization
            of the USDA purely as a means of providing the newly formed
            RBCS with enough programs to administer to legitimize its
            creation. Sadly the impact of this move has been for the
            program to move out of the view of the very borrowers it was
            intended to be available to and who largely fund it via their
            cushion of credit prepayment interest earnings.
      --Preserve the Rural Economic Development Loan Program at an
            appropriate level corresponding to the need and interest that
            exists in RUS borrower communities for such assistance.
      --Oppose the provisions of the President's budget which seek to
            permanently cancel and sweep the funds derived for the Rural
            Economic Development Grant Program Account from the Section 313
            cushion of credit payments.
      --Encourage the Committee to include the following suggested language
            to prohibit the sweeping of interest earned on cushion of
            credit payments to the Treasury or other USDA programs:
            Notwithstanding any other provision of law, none of the funds
            appropriated or otherwise made available in this Act may be
            used to transfer or sweep to the Treasury or other USDA
            programs any funds derived from interest on the cushion of
            credit payments, as authorized by Section 313 of the Rural
            Electrification Act of 1936.
                                     ______

         Prepared Statement of the National Turfgrass Federation, Inc.

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    National Turfgrass Federation (NTF), 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 2009
    budget for turfgrass research within the Agricultural Research Service
    (ARS) at Beltsville, MD. Also, we ask for your support of $450,000 in
    separate continuing funding for ongoing research programs in Beaver,
    WV, and $450,000 for Logan, UT. All funding provided by the Committee
    is requested to go directly to USDA-ARS, not the industry per se.
    Restoration of Funding for the Existing ARS Scientist Position and
            Related Support Activities at Beltsville, MD ($490,000)
        NTF 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 provided by the Committee in the fiscal
    year 2007 budget, and in the five previous budget cycles. We consider
    this funding our Congressional ``baseline'', i.e. that funding which is
    central to and critical for the mission of the National Turfgrass
    Research Initiative. We are very grateful for this support and hope the
    Committee will continue this funding.
        Turfgrass is a 50,000,000 acre, $40 billion per year industry in
    the United States, that is growing exponentially each year. 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 NTF, 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.
    Request Funding of Ongoing Programs and two ARS Scientist Positions at
            two ARS Installations @ $450,000 Each (Total: $900,000)
        The turfgrass industry also requests that the subcommittee
    appropriate an additional $900,000 for funding first allocated in
    fiscal year 2005, and continued in fiscal year 2006 and fiscal year
    2007 bills. As a part of the National Turfgrass Research Initiative,
    the research conducted at Logan, UT and Beaver, WV is vital to the turf
    industry. We are asking for $450,000 at each location. Following is a
    brief description of the research that ARS will conduct with this
    funding:
        Beaver, WV, ($450,000).--The lab at Beaver has significant
    expertise in soils and by-products research. They have excellent staff
    and facilities already in place. For the turfgrass industry, they are
    working on improving soil conditions and management systems to make
    athletic fields softer and with improved turf cover, thereby increasing
    safety. They also are considering the use of local by-products to
    develop improved soil systems for parks, lawns, athletic fields and
    golf courses. Besides being vital to the turf industry, this research
    is very important to the regional economy and many industrial concerns.
        Logan, UT, ($450,000).--Logan, UT is an ideal location for research
    on drought tolerant grasses and how they function. The Logan lab is
    world renowned for its efforts in collecting and improving grasses and
    other native plants for forage and range purposes. With the funding
    that was initiated in fiscal year 2005, they have directed additional
    efforts research on breeding and genetics of turfgrass, with emphasis
    on identifying plant material with superior drought and salt tolerance.
    Reducing water use, through more drought tolerant plant material, is
    the number one priority of the turfgrass industry. This research needs
    to be continued and expanded because of the excellent ongoing research
    as well as the potential for the future.
                   the national turfgrass research initiative
        This Initiative has been developed by USDA/ARS in partnership with
    the turfgrass industry. 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 itself spends about $10 million annually on
            applied and proprietary turfgrass research. However, private
            and university research programs do not have the time nor the
            resources to conduct basic research and 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. Because
            of its mission to conduct the nation's research for
            agricultural commodities, ARS is the proper delivery system for
            this research.
      --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 became available.
        ARS and the turfgrass industry enjoy a special, collaborative
    relationship, and have even entered into a cooperative Memorandum of
    Understanding (MOU). The turfgrass industry has met on numerous
    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:
        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. Last year was the first time ARS has been able to include some
    funding in the President's budget for the Turfgrass Research
    Initiative. However, there are so many issues and needs, that the
    industry is desperate for answers. Thus, to address the critical
    research needs, 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 2008, the
    turfgrass industry requests that the six positions above be established
    within USDA/ARS.
        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 addition, the Committee should be receiving the Members'
    requests for funding of each of the positions described above. We
    appreciate your strong consideration of each individual member request
    for the turfgrass research position in his or her respective state.
        In conclusion, on behalf of the National Turfgrass Federation and
    the turfgrass industry across America, I respectfully request that the
    subcommittee continue in fiscal year 2009 the funding appropriated in
    fiscal year 2008 for Beltsville, MD, ($490,000) within the Agricultural
    Research Service. I also request the Subcommittee's support of ongoing
    research programs at Beaver, WV and Logan, UT @ $450,000 each.
        Thank you very much for your consideration and support.
                                     ______

       Prepared Statement of the New Mexico Interstate Stream Commission

                                    summary
        This Statement is submitted in support of appropriations for the
    U.S. Department of Agriculture's Environmental Quality Incentives
    Program (EQIP) and the 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 EQIP, from which the U.S.
    Department of Agriculture (USDA) funds the salinity program, is needed
    to implement salinity control measures. The President's budget for
    fiscal year 2009 requests an appropriation of $1.05 billion for EQIP,
    with the actual amount to be set by the new Farm Bill. I urge the
    subcommittee to support an appropriation of at least $1.05 billion to
    be appropriated for EQIP. I request that the subcommittee designate 2.5
    percent, but no less than $20 million, of the EQIP appropriation 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.
        Congress authorized the Colorado River Basin salinity control
    program in the Colorado River Basin Salinity Control Act of 1974.
    Congress amended the act in 1984 to give new responsibilities to the
    USDA. While retaining the Department of the Interior as the lead
    coordinator for the salinity control program, the amended act
    recognized the importance of the USDA 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 USDA's authorization
    for the program. Now, Congress is considering enactment of a new Farm
    Bill to further define how the Colorado River Basin States can cost-
    share in a newly designated salinity control program known as the
    ``Basin States Program.''
        Bureau of Reclamation studies show that quantified damages from the
    Colorado River to United States water users are about $376,000,000 per
    year. Unquantified damages are significantly greater. 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 USDA
    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 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 USDA 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 which 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 USDA'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 USDA's responsibilities
    under the Colorado River Basin Salinity Control Act, as amended.
    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.
        Years of inadequate Federal funding for EQIP since the 1996
    enactment of FAIRA and 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 FSRIA in 2002, an opportunity to
    adequately fund the salinity control program now exists. The
    President's budget request of $1.05 billion accomplishes the needs of
    the NRCS salinity control program if the USDA continues its practice of
    designating 2.5 percent of the EQIP funds appropriated. The requested
    funding of 2.5 percent, but no less than $20 million, of the EQIP
    funding 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 2008 has generated about
    $15.8 million in cost-sharing from the Colorado River Basin States and
    agricultural producers, or about an 80 percent match of the Federal
    funds appropriated for the fiscal year.
        USDA salinity control projects have proven to be a most cost-
    effective component of the salinity control program. USDA 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 are awaiting funding for their
    applications to be considered.
        The Basin States expend 40 percent of the State funds allocated for
    the program for essential NRCS technical assistance and education
    activities. Previously, the Federal part of the salinity control
    program funded through EQIP failed to adequately fund NRCS for these
    activities, which has been shown to be a severe impediment to
    accomplishing successful implementation of the salinity control
    program. Recent acknowledgement by the administration that technical
    assistance and education activities must be better funded has
    encouraged the Basin States and local producers that cost-share with
    the EQIP funding for implementation of the essential salinity control
    work. I request that adequate funds be appropriated to NRCS technical
    assistance and education activities directed to the salinity control
    program participants (producers).
        I urge the Congress to appropriate at least $1.05 billion in fiscal
    year 2009 for EQIP. Also, I request that Congress designate 2.5
    percent, but no less than $20 million, of the EQIP appropriation for
    the Colorado River Basin salinity control program.
                                     ______

         Prepared Statement of the Organic Farming Research Foundation

        The Organic Farming Research Foundation (OFRF) appreciates the
    opportunity to present our funding requests for the fiscal year 2009
    Agriculture, Rural Development, FDA and Related Agencies Appropriations
    Bill. OFRF is a grower-directed, non-profit foundation working to
    foster the improvement and widespread adoption of organic farming
    systems. Organic agriculture plays an important and growing role in
    U.S. agriculture. Relatively modest investments in organic research and
    education can significantly increase the economic benefits and
    environmental services provided by organic systems. As a result, we
    urge the subcommittee to provide additional resources for organic
    agriculture in fiscal year 2009.
        As the subcommittee begins to fashion an fiscal year 2009
    Appropriations Bill, we ask that the subcommittee take note of a new
    report and recommendations by the USDA National Agricultural Research,
    Extension, Education and Economics (NAREEE) Advisory Board. The
    Advisory Board has noted and endorsed the initial efforts of the REE
    agencies to address organic research and education needs, and
    ``encourages further development of [these] programs.'' \1\ A number of
    specific recommendations are made, including the creation of a National
    Program Leader for Organic Agriculture within USDA-CSREES. The
    recommendations have been transmitted to Secretary Schafer and the
    Agriculture and Appropriations Committees of both the Senate and House
    for further consideration and action.
    ---------------------------------------------------------------------------
        \1\ ``Report and Recommendations from a Focus Session on Organic
    Agriculture Conducted at the Advisory Board Meeting held in Washington,
    D.C. on October 29-3 1, 2007''. Page 3. National Agricultural Research,
    Extension, Education and Economics Advisory Board. Transmitted to the
    Agriculture Secretary and Senate and House Committees on Agriculture,
    and Appropriations, March 5, 2008.
    ---------------------------------------------------------------------------
        Unfortunately, the President's fiscal year 2009 budget submission
    for emerging organic REE programs is completely at odds with the NAREEE
    Advisory Board's recommendations for greater investigation and
    development of organic agriculture. Not only does the administration's
    budget not include an increase in resources for organic research, but
    it actually proposes severe cuts to current funding levels for organic
    research, including zero funding for the two main organic research
    grant programs. As the current funding levels for organic research are
    already severely inadequate to begin with, we urge the subcommittee to
    reject the administration's proposed cuts and allocate modest increases
    for organic research in fiscal year 2009.
        Organic product sales are rapidly approaching 4 percent of the
    domestic food retail market, yet USDAREE expenditures directed
    explicitly to research and information programs for organic agriculture
    in fiscal year 2007 reached only slightly above 1 percent of total REE
    spending. This discrepancy in the share of research funding spent on
    organics is detrimental to an industry that relies intensively on
    management and information for its success. By rejecting the
    administration's proposed cuts to organic research and providing modest
    increases as outlined below, the subcommittee can help address this
    discrepancy and promote progress towards the ``fair share'' benchmark
    for organic research.
        usda-cooperative state research, extension and education service
    Organic Agriculture Research and Extension Initiative (OREI) \2\
    ---------------------------------------------------------------------------
        \2\ The Organic Agriculture Research and Extension Initiative
    (OREI) is authorized by Section 7218 of the Farm Security and Rural
    Investment Act of 2002 which amended Section 1672B of the Food,
    Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b).
    ---------------------------------------------------------------------------
        Request--Protect mandatory funding.
        OREI is USDA's premier competitive research and education grant
    program specifically dedicated to investigation of organic agriculture.
    Due to its success, the program is slated to receive an increase in
    mandatory funding in the 2008 Farm Bill and we ask that the
    subcommittee protect the funding level prescribed in the final bill.
    Even if OREI were to receive the highest number proposed in the Senate
    Bill ($16 million) the program would still be less than 0.7 percent of
    total USDA-REE expenditures in fiscal year 2007, but would mark an
    important step towards reaching the fair share benchmark.. If the
    program receives a mix of mandatory funding and an authorization for
    appropriations, or receives only an authorization for appropriations we
    ask that the Subcommittee provide discretionary funds to the program.
    Organic Transitions Research Program (ORG \3\)
    ---------------------------------------------------------------------------
        \3\ The Organic Transitions Program (ORG) is authorized by Section
    406 of the Agricultural Research, Extension, and Education Reform Act
    of 1998 (AREERA) (7 U.S.C. 7626).
    ---------------------------------------------------------------------------
        Request: $5 million.
        The Organic Transitions Research Program is one of only two USDA
    competitive grant programs dedicated to organic research and education.
    This competitive grants program funds integrated (research, extension,
    and higher education) projects that specifically focus on helping
    farmers overcome the production and marketing challenges of
    transitioning to organic production. ORG-funded projects are currently
    underway in 15 States. The program is working to deliver the knowledge
    farmers need to successfully transition to organic production, but the
    number of funded projects still falls far short of meeting the needs of
    producers across the country.
        After reaching its highest level of funding of $2.1 million in
    fiscal year 2003, the Organic Transitions Research Program has suffered
    a sustained cut over the last 5 years. The House of Representatives
    recognized this imprudent treatment of the Organic Transitions Program
    by approving $5 million for the program during fiscal year 2007
    appropriations deliberations. The subcommittee should begin with this
    figure in formulating its fiscal year 2009 legislation.
                      usda--agricultural research service
    Organic Agricultural Systems Research
        Request:
      --Restore funding to specific organic research projects proposed for
            elimination.
      --Direct ARS to continue increasing the size and breadth of its
            organic systems research portfolio.
      --Provide $100,000 to disseminate research results through the
            National Agriculture Library's Alternative Farming Systems
            Information Center.
        Although Agricultural Research Service spending on direct organic
    research reached 1.5 percent in fiscal year 2007, it is still far short
    of achieving the fair share goal of matching the organic share of the
    domestic food retail market, which is now approaching 4 percent. In
    fiscal year 2009, instead of closing this gap, the President's budget
    would actually widen it by cutting funding to some of the most
    important ARS research being conducted on organic systems, as part of
    an overall 7.5 percent cut in the ARS budget. Specific organic research
    projects marked for elimination in the President's proposal include:
    the Pasture Systems and Watershed Management Research at University
    Park, PA; Invasive Weed Management Research at Urbana, IL, and the New
    England Plant Soil and Water Research at Orono, ME. We request that the
    Subcommittee include continued funding for the organic research
    projects/units that are slated for cuts; and include strong report
    language directing the agency to continue the growth of its research
    activity directly focused on organic agriculture.
        Subcommittee efforts to direct increased ARS spending on organic
    research will likely be supported by a Sense of Congress provision set
    to be included in the 2008 Farm Bill, encouraging ARS to spend a fair
    share of its research dollars on organic research. Intent to increase
    funding for the National Agriculture Library's Alternative Farming
    Systems Information Center will also likely be part of the provision.
    As a result, we urge the Subcommittee to act upon the intent of
    Congress and include strong report language directing ARS to increase
    its expenditures towards a fair share for organic research, with a
    portion of the increase for usage by National Agriculture Library's
    Alternative Farming Systems Information Center to disseminate research
    results. This recommendation is also included in the NAREEEAB report in
    recommendation #4.
       usda--economic research service/national agricultural statistics
                     service/agricultural marketing service
    Organic Data Initiative \4\
    ---------------------------------------------------------------------------
        \4\ The Organic Data Initiative is authorized by Section 7407 of
    the Farm Security and Rural Investment Act of 2002.
    ---------------------------------------------------------------------------
        Request: $1 Million.
        Data on prices, yields and markets are vital to farmers who are
    planning what to plant, accessing markets, and applying for crop
    insurance. Unfortunately, the organic sector is still without vital
    comprehensive data on par with what is provided by USDA for
    conventional agriculture, putting organic farmers at a great
    disadvantage. Despite the growing demand and need, funding for organic
    data collection has remained stagnant. Although the final 2008 Farm
    Bill may include some mandatory funding for organic data collection, we
    urge the Subcommittee to provide additional discretionary funding to
    help address the large backlog of work that is needed to provide a fair
    playing field for organic producers.
        The data collection and analysis is a cooperative effort among
    various agencies. For purposes of the Organic Data Initiative,
    allocation of funds among agencies should be at the discretion of the
    Secretary.
        Organic agriculture is one of the fastest growing segments of
    American agriculture, but it has not received the level of support that
    it deserves. The 2008 Farm Bill will likely provide important increases
    to organic programs, but it will still fall far short of providing a
    fair share for organic agriculture. It is our hope that the
    Subcommittee will work to close the fair share gap by protecting any
    gains made in the 2008 Farm Bill, rejecting the President's fiscal year
    2009 proposed budgetary cuts to organic programs, and providing long
    overdue increases in the organic programs under the Subcommittee's
    purview for fiscal year 2009.
        Disclosure.--Organic Farming Research Foundation was a
    subcontractor for a grant awarded by the USDA-CSREES Integrated Organic
    Program. Grant #2207-01384. ``Midwest Organic Research Symposium.''
                                     ______

         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 2009 loan levels for the telecommunications loans
    program administered by the Rural Utilities Service (RUS) in the
    following amounts:

                            [In millions of dollars]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Telecommunication hardship loans........................             145
    Treasury telecommunications (cost of money) loans.......             250
    FFB telecommunications (guaranteed) loans...............             300
    ------------------------------------------------------------------------

        In addition, OPASTCO requests that the distance learning,
    telemedicine, and broadband program be funded at sufficient levels.
        OPASTCO is a national trade association of more than 600 small
    telecommunications carriers serving primarily rural areas of the United
    States. Its members, which include both commercial companies and
    cooperatives, together serve over 5.5 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 are
    delivering on the promise of a new ``information age.'' Both Federal
    and State policymakers have made ubiquitous availability of advanced
    communications services a top priority. However, without continued
    support of RUS's telecommunications loans program, rural
    telecommunications carriers will be hard pressed to continue deploying
    the infrastructure necessary to achieve policymakers' goals.
        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 optics, packet
    switching and transmission, and digital subscriber line (DSL)
    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 per square mile than its urban
    counterpart. In the Federal Communications Commission's (FCC) September
    2004 report on the deployment of advanced telecommunications
    capability, the Commission 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.'' More recently, the FCC's
    October 2007 release of statistics on high-speed connections to the
    Internet in the United States illustrated that low population density
    has an inverse association with reports that high-speed subscribers are
    present in an area. Thus, in order for rural telecommunications
    carriers 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 for these citizens. For example, the availability of
    broadband connections can make it possible for rural residents to
    telecommute to otherwise far-away jobs. A modern telecommunications
    infrastructure can also enable existing businesses in rural areas to
    grow and expand as well as attract new businesses to the area.
    Certainly, telecommunications plays a major role in any rural
    community's economic development strategy.
        It is important to note that even after a broadband-capable network
    has initially been deployed in a rural area, the modernization effort
    is not over. Continual investment is crucial, because the broadband
    networks that are deployed today are not the networks that will enable
    rural areas and the rest of the country to compete globally 5 years
    from now. Broadband is an evolving concept, subject to constant changes
    in technology and consumer expectations. As the services and
    applications that ride over the broadband infrastructure become more
    bandwidth intensive, carriers will need to expand their broadband
    network capabilities in order to make these new tools available to the
    businesses and residences in their areas. The evolving nature of
    broadband requires continual investment, and the telecommunications
    loans program will enable rural telecommunications carriers to do so.
        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.
        In addition to RUS's telecommunications loans program, OPASTCO
    supports sufficient 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 specialized health care services without traveling great distances
    to urban hospitals. Furthermore, funding that is targeted to finance
    the installation of broadband transmission capacity 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 2009.
    Conclusion
        The transformation 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 and upgrading 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), minerals, 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 that is encouraged to eat more vegetables. 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 for all economic strata of U.S.
    society.
        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
        The USDA/ARS Vegetable Crops Research Lab 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 Lab 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 genetic resistance for many major vegetable diseases that are
    perhaps the most important threat to sustained production of a
    marketable crop for all vegetables. 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 $670 million per year in
    increased crop production, not to mention environmental benefits due to
    reduction in pesticide use. New research in Madison has resulted in
    cucumbers with improved disease resistance, pickling quality and
    suitability for machine harvesting. New sources of genetic resistance
    to viral and fungal diseases, environmental stress resistance like heat
    and cold, and higher yield 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. 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 found to almost completely
    protect the carrot crop from one major nematode. This group improved
    both consumer quality and processing quality of vegetables with a
    resulting increase in production efficiency and consumer appeal. Baby
    carrots were founded on germplasm developed in Madison, Wisconsin.
    Carrots provide approximately 30 percent of the U.S. dietary vitamin A.
    New carrots have been developed with tripled nutritional value, and
    nutrient-rich cucumbers have been developed 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.
        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, which have helped this industry 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
    safe, high quality, healthful vegetable products.
        We seek additional funding to support two new research initiatives
    for this laboratory that have substantial economic potential for our
    industry and health benefits for the American public. These are: (1)
    Preservation of a variety of high nutrient/high antioxidant vegetables
    using fermentation or acidification techniques so as to maintain the
    natural levels of beneficial phyotochemicals in convenient to use
    value-added products; (2) development of techniques to deliver living
    pro-biotic microorganisms to consumers in fermented or acidified
    vegetable products.
        Certain vitamins (Vitamin C, folic acid) and beneficial
    phytochemicals in vegetables are stabilized by the low pH in acidified
    and fermented foods. In addition, low pH makes it possible to preserve
    vegetables with low heat or, ideally, no heat, which typically
    minimizes nutrient loss. While many high nutrient/high antioxidant
    vegetables are pickled to a very limited extent, traditional processes
    include steps, such as preserving in very high salt or acid followed by
    washing out the excess salt or acid, that result in loss many of the
    health-promoting components that diet authorities emphasize when they
    urge people to increase their consumption of fruits and vegetables. The
    objective will be develop new low acid/low salt preservation techniques
    for broccoli, Brussel sprouts, sweet potato, cauliflower, and peppers
    that will provide high levels of vitamin C, folic acid, carotenoids,
    glucosinolates, and phenolic compounds to maximize the health benefits
    of these vegetables in products that are convenient and attractive to
    consumers.
        Most of what we hear about bacteria in foods concerns the pathogens
    that cause disease. However, lactic acid bacteria are intentionally
    grown in fermented foods because they are needed to give foods like
    sauerkraut, yoghurt, cheeses, and fermented salami the characteristic
    flavors and textures that we desire. There is a growing body of
    research to indicate that certain living lactic acid bacteria are
    ``pro-biotic'' and can improve human health by remaining in the
    intestinal tract after they are consumed. Fermented or acidified
    vegetables may be a good way to deliver such pro-biotic bacteria to
    consumers. The objective will be to identify pro-biotic lactic acid
    bacteria that can survive in high numbers in selected vegetable
    products and investigate the potential for using vegetables as
    healthful delivery vehicles for pro-biotic organisms.
           sugar beet and bean research unit, east lansing, michigan
        The USDA/ARS East Lansing, Michigan location has the only federally
    funded research program that is devoted to developing new and/or
    improved engineering technologies and systems for assessing, retaining,
    and assuring postharvest quality and marketability of pickling
    cucumbers and other vegetable products. The postharvest engineering
    research program currently has a full-time research agricultural
    engineer whose research is primarily focused on tree fruits. Over the
    past few years, the Sugar Beet and Bean Research Unit has developed a
    number of innovative engineering technologies for rapid, nondestructive
    measurement and inspection of postharvest quality of tree fruits and
    vegetables, including a novel laser-based multi-spectral scattering
    technology for assessing the texture and flavor of fruits. The
    technology may be used for inspecting a variety of vegetable crops.
    Recently, an advanced hyperspectral imaging system was developed for
    automated detection of quality/defect of pickling cucumbers.
        Currently the location's cucumber postharvest engineering research
    is grossly under funded. It is crucial that additional funds be
    provided so that the location can hire a research engineer to carry out
    research on postharvest sorting, grading and handling of pickling
    vegetable products at full scale. With the increasing demands from
    consumers and the government's regulatory agencies for high quality and
    safe food products, it is crucial that an effective quality inspection
    and assurance system be implemented throughout the handling steps
    between harvest and retail. While new sensors and automated inspection
    systems are being used in many pickle processing facilities, there
    still exists considerable room for improving existing technologies and
    developing new and more efficient sensors and automated methods for
    postharvest handling and processing of pickling vegetables. Methods
    currently available for measuring and grading quality of cucumbers and
    other vegetables are still ineffective or time consuming. Labor
    required for postharvest handling and processing operations represents
    a significant portion of the total production cost. 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
    postharvest losses of food that has already been produced and ensure
    high quality, consistent final product and end-user satisfaction.
    Research at East Lansing will lead to new inspection and grading
    technology that will help the pickling industry in delivering high-
    quality safe products to the marketplace and achieving labor cost
    savings.
             u.s. vegetable laboratory, charleston, south carolina
        The research program at the USDA/ARS Vegetable Laboratory in
    Charleston, South Carolina, addresses 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 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. Current cucumber varieties are highly susceptible
    to a new strain of the downy mildew pathogen; this new strain has
    caused considerable damage to commercial cucumber production in some
    South Atlantic and Midwestern States during the past 3 years, and a new
    plant pathologist position needs to be established to address this
    critical situation.
                          funding needs for the future
        It remains critical that funding continues the forward momentum in
    pickled vegetable research that 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 was completed in July 2004.
    Construction of the head house was completed in 2006. The initial phase
    of the greenhouse complex is now under construction with an expected
    completion date in late spring 2008. In fiscal year 2005, $2.976
    million was appropriated for construction of greenhouses. In fiscal
    year 2006, an additional $1.980 million was appropriated for
    construction of greenhouses, but $7.794 million is still needed for the
    planned $12.750 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 70 years.
        New funds are needed to establish a plant pathology position to
    address cucumber diseases, especially the disease caused by a new
    strain of the downy mildew pathogen that has caused extensive damage to
    cucumber production in some South Atlantic and Midwestern States during
    the past 2 years. The plant pathologist is needed to characterize
    pathogen strains using molecular methodologies and to develop new
    management approaches and resistant cucumber lines. This new plant
    pathologist position will greatly contribute to the accomplishment of
    research that will provide for the effective protection of cucumbers
    from disease without the use of conventional pesticides. This position
    will require a funding level of $500,000 for its establishment.

    ------------------------------------------------------------------------
               Construction                Current status      Funds needed
    ------------------------------------------------------------------------
    Greenhouse........................  Needed..............      $7,794,000
                                                             ---------------
    Appropriations to Restore.........  ....................       7,794,000
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
        New scientific staff needed        Current status      Funds needed
    ------------------------------------------------------------------------
    Plant Pathologist (cucumber         Needed..............         500,000
     disease).
                                                             ---------------
    New Funds Needed..................  ....................        $500,000
    ------------------------------------------------------------------------

    Food Fermentation Laboratory, Raleigh, North Carolina
        The current funding for the laboratory is $1,274,000. To carry out
    the new research initiatives to maximize retention of beneficial
    components in high nutrient/high antioxidant vegetables and to develop
    systems to deliver pro-biotic lactic acid bacteria in acidified and
    fermented vegetable products, we request additional support for the
    Food Fermentation Laboratory of $200,000 in fiscal year 2009. This will
    provide support for Post-Doctoral or Pre-Doctoral research associates
    along with necessary equipment and supplies to develop these new areas
    of research.

    ------------------------------------------------------------------------
             Scientific staff              Current status      Funds needed
    ------------------------------------------------------------------------
    Microbiologist....................  Active..............        $318,500
    Chemist...........................  Active..............         318,500
    Food Technologist/Biochemist......  Active..............         318,500
    Microbial Physiologist............  Active..............         318,500
    Fiscal Year 2009 Post-doctoral or   Needed..............         200,000
     Predoctoral Research Associates.
                                                             ---------------
          Total Funding Required......  ....................       1,474,000
          Presidential Budget (fiscal   ....................       1,274,000
           year 2009).
                                                             ---------------
          New Funds Needed............  ....................         200,000
    ------------------------------------------------------------------------

    Vegetable Crops Research Laboratory Unit, Madison, Wisconsin
        Current base funding for three scientists is $868,757, of which
    $200,000 was added in fiscal year 2002. Emerging diseases, such as
    downy mildew of cucumber, threaten production of the crop in all
    production areas. Therefore, we request an additional $200,000 to fully
    fund the scientists and support staff, including graduate students and
    post-doctorates for new research searching for genetic resistance to
    emerging diseases.

    ------------------------------------------------------------------------
         Scientific Staff in Place         Current Status      Funds Needed
    ------------------------------------------------------------------------
    Geneticist........................  Active..............        $320,000
    Horticulturist....................  Active..............         320,000
    Geneticist........................  Active..............         320,000
                                                             ---------------
          Total Funding Required......  ....................         960,000
          Presidential Budget (fiscal   ....................         868,757
           year 2009).
                                                             ---------------
          Appropriations to Restore...  ....................          91,243
          New Funds Needed............  ....................         200,000
    ------------------------------------------------------------------------

        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 2009. Thus, the restoration of the funds
    proposed for reduction, is urgently requested. We request a $291,243
    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 $150,000 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..............         150,000
                                                             ---------------
          Total Funding Required......  ....................         350,000
    Current Funding...................  ....................         200,000
                                                             ---------------
          New Funds Needed............  ....................         150,000
    ------------------------------------------------------------------------

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

             Prepared Statement of the Red River Valley Association

        Mr. Chairman and members of the Committee, I am Wayne Dowd, and I
    am pleased to represent the Red River Valley Association as its
    President. Our organization was founded in 1925 with the express
    purpose of uniting the citizens of Arkansas, Louisiana, Oklahoma and
    Texas to develop the land and water resources of the Red River Basin.
    (Enclosure 1).
        The Resolutions contained herein were adopted by the Association
    during its 83rd Annual Meeting in Shreveport, Louisiana on February 21,
    2008, and represent the combined concerns of the citizens of the Red
    River Basin Area as they pertain to the goals of the Association.
    (Enclosure 2).
        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 2009 budget for NRCS indicates a
    decrease of $142,641,000 (15 percent decrease) from what Congress
    appropriated in fiscal year 2008, $943,414,000. In addition, the
    administration eliminated three crucial programs: Watershed & Flood
    Prevention Operations, Watershed Survey & Planning and RC&D. Along with
    drastic reductions in the other programs, NRCS manpower for fiscal year
    2009 would have to decrease by over 1,500 staff years, if the
    President's budget is implemented. This is unacceptable.
        This means that NRCS conservation 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 account has been in steady decline,
    in real dollars, over the past several years. The President's budget
    included $794,773,000, which is a decrease of $45,553,000 million from
    what Congress appropriated in fiscal year 2008. Mandated increases in
    pay and benefits, continuing increases in the ``cost of doing business'
    and budget reductions greatly reduces the effective work that can be
    accomplished in this account. Allocations should be increased not
    decreased.
        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. Experience indicates
    landowners are hesitant to use the program. This program funds projects
    at a level estimated if NRCS conducted the work. Usually the TSP cost
    exceeds this estimate and the landowner is responsible for the
    difference, effectively making the landowner cost share. 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 in the last three fiscal years. 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 continue to hold oversight hearings to understand the
    importance and hear how popular this program is to our communities.
        Over the past 50 years these projects have developed a $15 billion
    infrastructure that is providing $1.5 billion in annual benefits to
    over 47 million people. It is not a Federal program, but a federally
    assisted program. This partnership between local communities, State
    agencies and NRCS has been successful for over 50 years. It would take
    $1.6 billion to fund the existing Federal commitment to local project
    sponsors. This cost only increases every year if adequate funding is
    not provided.
        All ongoing contracts will be terminated, if you allow this program
    to end. This will ultimately lead to lawsuits and tort claims filed by
    both sponsors and contractors, due to the Federal Government not
    fulfilling its contractual obligation.
        We are very appreciative for the funding level of $30 million
    enacted in fiscal year 2008, but we remind you that no funding was
    provided in fiscal year 2007, the year Congress turned over the budget
    to the administration--we can not allow that to happen again. For every
    $1 spent, the Nation realizes $2 in benefits. Congress must take back
    responsibility for this program.
        There are many new projects, which are awaiting funds for
    construction under this program. We strongly recommend that a funding
    level of $190 million be appropriated for Watershed Operations
    Programs, Public Law 534 ($20 million) and Public Law 566 ($170
    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
            2009.
      --Red Bayou Irrigation Project, LA.--The plans and specifications
            have been completed, making this project ready for construction
            in fiscal year 2007. 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 2009.
        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. They protect more people and
    communities from flooding now than when they were first constructed.
    The benefit to cost ratio for this program has been evaluated to be
    2.2:1. What other Federal program can claim such success?
        In the next 5 years over 900 watershed structures will require over
    $570 million for rehabilitation. Each year this number increases as
    more dams reach their 50-year life. 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.
        The President's budget neglects the safety and well being of our
    community needs and only recommends $6 million for this program. This
    is drastically lower than the levels authorized in the 2002 Farm Bill,
    which authorized $600 million for rehabilitation for 2003-2007.
        We request that $65 million be appropriated to provide financial
    and technical assistance to those watershed projects where sponsors are
    prepared (35 percent cost share) to commence rehabilitation.
        Watershed Survey and Planning.--In fiscal year 2006, $6.1 million
    was appropriated to support this extremely important community program.
    Again, no funding was provided in fiscal year 2007 and Congress did not
    provide funding for fiscal year 2008. 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 and Congress has decided not to fund this program. We
    disagree with this and ask Congress to fund this program at the
    appropriate level.
        Proper planning and cooperative efforts can prevent problems and
    insure that water resource issues are addressed. Zeroing out the
    planning process assumes the economy will not grow and there is no need
    for future projects. We do not believe anyone supports or believes
    this. Another serious outcome is that NRCS will lose its planning
    expertise, which is invaluable.
        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 2009 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.
        Resource Conservation and Development (RC&D).--This has
    traditionally been a well-received program by the administration, but
    not this year. Their budget proposal zeroes out this important program.
    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. We are truly surprised the
    administration would do this.
        We request that $51 million be appropriated for this program, at
    the same level as in fiscal year 2008.
        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, 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.
        It has been mandated that a set percent of TA, from the CCC
    Program, must be used for TSPs, approximately $40 million. This is
    equivalent to losing 600 staff years from NRCS manpower. This is
    another unacceptable policy, which will reduce the effectiveness of
    NRCS. This mandate must be eliminated.
        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. Technical Assistance cannot be contracted out to private
    companies.
        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:
    redriverva@hotmail.com.
        Grant Disclosure.--The Red River Valley Association has not
    received any Federal grant, sub-grant or contract during the current
    fiscal year or either of the 2 previous fiscal years.
                   enclosure 1.--red river valley association
        The Red River Valley Association is a voluntary group of citizens
    bonded together to advance the economic development and future well
    being of the citizens of the four State Red River Basin area in
    Arkansas, Louisiana, Oklahoma and Texas.
        For the past 80 years, the Association has done notable work in the
    support and advancement of programs to develop the land and water
    resources of the Valley to the beneficial use of all the people. To
    this end, the Red River Valley Association offers its full support and
    assistance to the various Port Authorities, Chambers of Commerce,
    Economic Development Districts, Municipalities and other local
    governmental entities in developing the area along the Red River.
        The Resolutions contained herein were adopted by the Association
    during its 83rd Annual Meeting in Shreveport, Louisiana on February 21,
    2008, and represent the combined concerns of the citizens of the Red
    River Basin area as they pertain to the goals of the Association,
    specifically:
      --Economic and Community Development
      --Environmental Restoration
      --Flood Control
      --Irrigation
      --Bank Stabilization
      --A Clean Water Supply for Municipal, Industrial and Agricultural
            Uses
      --Hydroelectric Power Generation
      --Recreation
      --Navigation
        The Red River Valley Association is aware of the constraints on the
    Federal budget, and has kept those constraints in mind as these
    Resolutions were adopted. Therefore, and because of the far-reaching
    regional and national benefits addressed by the various projects
    covered in the Resolutions, we urge the members of Congress to review
    the materials contained herein and give serious consideration to
    funding the projects at the levels requested. We can be contacted at
    (318) 221-5233 or redriverva@hotmail.com.
                                  enclosure 2

       RED RIVER VALLEY ASSOCIATION FISCAL YEAR 2009 APPROPRIATIONS--NATURAL RESOURCES CONSERVATION SERVICE (NRCS)
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year      RRVA 2009      Pres. 2009
                         Discretionary Accounts                         2008 Approp       Request         Budget
    ----------------------------------------------------------------------------------------------------------------
    Conservation Operations.........................................         840,326         930,000         794,773
    Watershed & Flood Prevention Operations.........................          30,000         190,000  ..............
        Walnut Bayou Irrigation Project, AR.........................  ..............           4,000  ..............
        Red Bayou Irrigation Project, LA............................  ..............           1,600  ..............
    Watershed Rehabilitation........................................          20,000          65,000           6,000
    Watershed Survey & Planning.....................................  ..............          35,000  ..............
        Maniece Bayou Irrigation Project, AR........................  ..............             200  ..............
        North Wallace Lake Watershed, LA............................  ..............             250  ..............
    Resource Conservation & Development.............................          51,088          51,000  ..............
    Healthy Forest Reserve Program..................................           2,000           5,000  ..............
    ----------------------------------------------------------------------------------------------------------------
    NOTE: The President's fiscal year 2009 budget is 15 percent less than Congress appropriated in fiscal year 2008!

                                     ______

       Prepared Statement of the Society for Women's Health Research and
                       Women's Health Research Coalition

        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 the Food and Drug Administration
    (FDA), and more specifically for the Office of Women's Health, a
    critical focal point within the Agency on women's health.
        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 to give a voice to
    scientists and researchers from across the country that are concerned
    and committed to improving women's health research. The Coalition now
    has more than 650 members, including leaders within the scientific
    community and medical researchers from many of the country's leading
    universities and medical centers, 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 strongly believe that appropriate funding of the FDA by
    Congress is absolutely critical for the Agency to be able to maintain
    basic functions and to assure the American public of the safety of our
    food and drugs. Unfortunately, the present state of the FDA does not
    permit for scientific growth or adequate food and drug protection. In
    reality, the FDA infrastructure is failing and it cannot prepare for
    the future as it is still trying to catch up from the past. It has been
    chronically under funded and lacks strength in areas needed most,
    specifically information technology (IT). The administration's current
    proposed budget of $1.72 billion, a $50 million increase for fiscal
    year 2009 does not even begin to address the major short falls of the
    FDA. Therefore, the Society urges Congress to provide the FDA with an
    increase of $380 million, bringing the FDA's fiscal year 2009 budget to
    $2.1 billion. This increase in funding would be a major stepping stone
    for the FDA to start rebuilding its infrastructure so it may provide
    citizens with the food and drug protection promised in its mission, and
    begin to address the shortage of resources and failing IT systems.
        In addition, many Offices and Centers within the FDA have suffered
    under the chronic underfunding. The Office of Women's Health (OWH) is
    one such example. To address years of flat funding, we recommend that
    Congress increase funding for OWH. OWH's women's health programs, often
    conducted with the Agency centers, are necessary if we are to maintain
    any focus on women's health within the FDA. They are critical to
    improved care and increased awareness of disease-specific impacts to
    women. OWH endeavors to ensure, for example, that sex and gender
    differences in the efficacy of drugs (such as metabolism rates),
    devices (sizes and functionality) and diagnostics are taken into
    consideration in reviews. Therefore, we strongly urge Congress to
    support a $6 million budget for OWH for fiscal year 2009 within the
    budget for the FDA. In addition, we also recommend that the current
    budget is not only increased in the future, but should also never be
    less than the administration's current proposed budget of $5 million
    for fiscal year 2009.
                       fda information technology systems
        Under recent evaluation by the Science Board to the FDA, the FDA's
    IT systems were found to be inefficient and incapable of handling the
    current demands placed on the Agency, thus preventing the FDA from
    fulfilling its mission to protect its citizens. Equipment is outdated,
    often unsupported by maintenance, and regularly breaks down. While 83
    percent of the budget goes towards workforce support, IT is privately
    contracted out to keep costs lower. The IT system simply cannot keep up
    with current scientific data and market trends, and will only continue
    to worsen as server age beyond usefulness increases, and serviceability
    and email networks fail multiple times per day for a system that needs
    to function 24/7.
        The antiquated nature of the IT systems makes the agency unable to
    conduct safety analyses for product marketing applications, track the
    natural history and disease models for rare disorders, and access huge
    amounts of clinical data. In addition, one central database does not
    exist, therefore the system cannot query a centralized repository for
    all relevant facts about a certain product including where, when and
    how the product was made. There is a desperate need to create one
    single database for all relevant information to be stored across
    agencies, so as to maximize functionality not only of FDA but of
    expected research and analysis needed by the American public.
        Estimations have shown that it would take $200 million ($40
    million/year) over the course of 5 years to begin the process of
    improving the IT system. However, with the administration's proposed
    fiscal year 2009 budget of only $50 million for the entire agency, this
    update will be close to impossible. It is up to Congress to address the
    shortfall to the FDA and provide it a $380 increase to begin IT
    transformation among many other improvements.
                            office of women's health
        The Office of Women's Health (OWH) at the FDA, established in 1994,
    plays a critical role in women's health, both within and outside the
    Agency, supporting sex- and gender-based research, areas in which the
    Society has long been a proponent. OWH provides scientific and policy
    expertise on sex and gender sensitive regulatory and oversight issues;
    endeavors to correct sex and gender disparities in the areas for which
    the FDA is responsible--drugs, devices, and biologics; and monitors
    women's health priorities, providing both leadership and an integrated
    approach across the FDA. Despite inadequate funding, OWH provides all
    women with invaluable tools for their health.
        With little difficulty, OWH exhausts its tiny budget each year. For
    the previous 5 years, OWH had been provided a flat budget of $4
    million. That is, in essence, a decrease due to required Federal cost
    of living adjustments, benefit cost increases and other related issues.
    Despite this squeeze, the office has managed to advance its mission
    both within the Agency and externally through it research grants, drug
    and disease pamphlets and outreach programs. OWH's pamphlets are the
    most requested of any documents at the government printing facility in
    New Mexico. (More than 3.5 million pieces are distributed to women
    across the Nation including target populations such as Hispanic
    communities, seniors and low income citizens.)
        Despite the $1 million increase the OWH received for fiscal year
    2008, it has been flat lined for fiscal year 2009. The OWH is in
    desperate need of increased funding so that it may not only continue
    work on current projects, but also expand for the future.
        Since its beginning, OWH has funded high quality scientific
    research to serve as the foundation for Agency activities that improve
    women's health. To date, OWH has funded over 100 research projects with
    approximately $15.2 million intramural grants, supporting projects
    within the FDA that address knowledge gaps or set new directions for
    sex and gender research. Extramural contracts leverage a wealth of
    expertise and other resources outside the FDA to provide insight on
    regulatory questions pertinent to women's health. All contracts and
    grants are awarded through a competitive process. A large number of
    these studies are published and appear in peer reviewed journals.
        OWH funds research to more fully understand heart disease in women.
    Despite being the number one cause of death, women with heart disease
    face misdiagnosis, delayed diagnosis, under-treatment, and mistreatment
    due to their under-representation in heart-related research studies.
    Extramural research funded by OWH is looking into the use of coronary
    stents in women and problems associated with breast interference in
    interpretation of heart catherization studies. Most recently, they
    participated in a Sister-2-Sister Women's Heart Day conference in
    Washington, DC.
        As part of its educational outreach efforts to consumers, OWH
    continues to work closely with women's advocacy and health professional
    organizations to provide clarity on the results of the Women's Health
    Initiative. Due to OWH efforts, an informational fact sheet about
    menopause and hormones and a purse-sized questionnaire to review with
    the doctor were distributed to national and local print, radio, and
    Internet advertisements. OWH's website received over three million hits
    to download campaign materials. This website provides free,
    downloadable fact sheets on over 40 different illnesses, diseases, and
    health related issues.
        In addition, OWH has completed medication charts on seven chronic
    diseases. These are unique within the Agency. These charts list, in one
    place, all the medications that are prescribed and available for each
    disease. Again, the information is available on the website and is
    ideal for women to use in talking to their doctors, pharmacists or
    nurses about their treatment options.
        OWH continues to improve the health of women through new research
    initiatives. Most recently, they have conducted projects addressing the
    participation of women and racial minorities in clinical trials for
    diabetes mellitus medications. They have collaborated with Pharmacy
    Choice, Inc. to create a web portal solely dedicated to FDA consumer
    health education materials, providing access to fact sheets and
    medication guides.
        As a result of the FDA antiquated IT system, combined with the
    inability to keep pace with IT needs due to budget constraints, the OWH
    has been unable to conduct much needed data analysis on women's health
    and sex-related differences. This effort originally started in 2001,
    when the Society submitted testimony on behalf of the OWH in support of
    a centralized FDA database to coordinate clinical trial oversight,
    monitor the inclusion of women in clinical trials, oversee the
    parameters of informed consent, and identify health provider training
    needs. As a result of Society efforts and this Committee's commitment,
    in 2002 Congress provided the OWH with funds to develop an agency-wide
    database focused on women's health activities to include demographic
    data on clinical trials. OWH did begin 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 $500,000 was granted for this
    project, the OWH was unable to design a system to communicate with the
    current IT system and could not access data that remained in a paper/
    manual process. The reason for this and other projects failures is
    attributed to the severely inadequate IT system at the FDA.
        Currently, the FDA receives large volumes of information in
    applications from drug manufacturers for review and evaluation. The FDA
    reviewers must manually 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 uniform system or database, reviewers
    must handpick sex, age, and ethnicity information manually from stacks
    of paper reports and craft their own data comparisons. This is time
    consuming, makes the review process less efficient, is error-prone 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 to OWH for
    the Demographic Information and Data Repository. It is time for us all
    to recognize that the Agency must utilize up-to-date information
    technology and that it sorely needs the resources to maintain them.
        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, with even more information forthcoming as a result of
    the sequencing of the X chromosome.
        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 inclusion of women in study populations by itself is
    insufficient to address the inequities in our knowledge of human
    biology and medicine, and only by the careful study of sex differences
    at all levels, from genes to behavior, will science achieve the goal of
    optimal health care for both men and women. Sex differences play an
    important role in disease susceptibility, prevalence, time of onset and
    severity and are evident in cancer, obesity, heart disease, immune
    dysfunction, 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 must be supported and encouraged.
        Building upon sex differences research, the Society encourages the
    establishment of drug-labeling requirements that ensure labels include
    language about differences experienced by women and men. Furthermore,
    we advocate for research on the comparative effectiveness of drugs with
    specific emphasis on data analysis by sex. When available, this
    information should be on labels.
        Our country's drug development process has succeeded in delivering
    new and better medications to ensure the health of both women and men.
    However, there is no requirement that the data acquired during research
    of a new drug's safety and effectiveness be analyzed as a function of
    sex 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.
        The Society believes the opportunity is now before us to
    communicate sex differences data discovered from clinical trials to the
    medical community and to consumers through drug labeling and packaging
    inserts and other forms of alerts. 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 in
    order to identify important sex differences, as well as to ensure that
    appropriate data analysis of post-market surveillance reporting for
    these differences is placed in the hands of physicians and the patient.
        In conclusion, Mr. Chairman, we thank you and this Committee for
    its strong record of support for the FDA and women's health and your
    commitment to OWH. We recommend that you increase the overall fiscal
    year 2009 budget for the FDA by $380 million, so that it may
    dramatically improve upon current operations while also rebuilding its
    IT infrastructure. Secondly, we urge you to allocate $6 million for the
    Office of Women's Health for fiscal year 2009, and to ensure that
    future budget appropriations for the OWH are never below current
    funding levels. We look forward to continuing to work with you to build
    a healthier future for all Americans.
                                     ______

          Prepared Statement of the Sustainable Agriculture Coalition

        Thank you for the opportunity to present our funding requests for
    the fiscal year 2009 Agriculture, Rural Development, FDA and Related
    Agencies appropriations bill.
        The Sustainable Agriculture Coalition is an alliance of national,
    regional, and local grassroots farm, rural, and conservation
    organizations that together advocate for public policies that support
    the long-term economic, social, and environmental sustainability of
    agriculture, natural resources, and rural communities.\1\ Through our
    member organizations, we work with and represent thousands of farmers
    and other rural citizens who are engaged in creating a more sustainable
    farm and food system.
    ---------------------------------------------------------------------------
        \1\ Our member organizations include: the Agriculture and Land
    Based Training Association, American Natural Heritage Foundation,
    California FarmLink, C.A.S.A. del Llano (Communities Assuring a
    Sustainable Agriculture), Center for Rural Affairs, Community Alliance
    with Family Farmers, Dakota Rural Action, Delta Land and Community,
    Inc., Ecological Farming Association, Future Harvest/CASA (Chesapeake
    Alliance for Sustainable Agriculture), Illinois Stewardship Alliance,
    Institute for Agriculture and Trade Policy, Iowa Environmental Council,
    Iowa Natural Heritage Foundation, Izaak Walton League, Kansas Rural
    Center, Kerr Center for Sustainable Agriculture, Land Stewardship
    Project, Michael Fields Agricultural Institute, Michigan Integrated
    Food and Farming Systems, Michigan Land Use Institute, Midwest Organic
    and Sustainable Education Service (MOSES), The Minnesota Project,
    National Catholic Rural Life Conference, National Center for
    Appropriate Technology, Northern Plains Sustainable Agriculture
    Society, Ohio Ecological Food and Farm Association, Organic Farming
    Research Foundation, Pennsylvania Association for Sustainable
    Agriculture, Practical Farmers of Iowa, Rural Advancement Foundation
    International-USA, Sierra Club Agriculture Committee, Washington
    Sustainable Food and Farming Network, and the Union of Concerned
    Scientists (Food and Environment Program).
    ---------------------------------------------------------------------------
        As you begin work on the fiscal year 2009 appropriations bill, we
    want to applaud the subcommittee for reversing many of the damaging
    proposals made in the USDA budget request for fiscal year 2008 in
    conservation, research, marketing, and rural development. We also
    welcome the subcommittee's decision in the current fiscal year bill to
    keep cuts to a minimum for mandatory farm bill conservation, research,
    and rural development programs. We remain tremendously disheartened by
    the nearly $6 billion that has been gutted from mandatory conservation
    spending since passage of the 2002 Farm Bill, with the majority of cuts
    coming through regular and emergency supplemental appropriations bills
    and some by way of budget reconciliation. While the absolute amount is
    greatest for conservation, the limitations on mandatory spending in
    research and rural development have been even greater on a percentage
    basis. Over a third of total mandatory spending in conservation, rural
    development, and research has been cut and reallocated to other uses,
    despite the underlying programs being meritorious and greatly
    oversubscribed. We, therefore, encourage you to continue the practice
    started in the fiscal year 2008 bill of being modest and discriminating
    in limitations to mandatory spending.
                                csrees programs
        Sustainable Agriculture Research and Education (SARE) Program.--We
    urge you to support an appropriation of $20 million in fiscal year 2009
    for the SARE competitive grants program, divided between research and
    education grants ($15 million) and extension and professional
    development grants ($5 million). SARE is a regionally-delivered
    national competitive grants program that funds farmer-driven, outcome-
    oriented research, education, and outreach on agricultural production
    practices and market-based initiatives that are environmentally sound
    and profitable for farmers and ranchers and their communities. The
    program is responsible for many of the systems and practices being
    utilized by farmers today to farm in concert with the environment while
    increasing farm income and providing consumers with high quality
    nutritious foods. With continued and enhanced investment, the program
    will help create a more sustainable farm and food system for a new
    generation of farmers and consumers.
        We applaud the subcommittee for increasing the SARE budget in
    fiscal year 2008. After 4 years of repeated small cuts, the increase
    could not have come at a more important moment, as the program is now
    in its 20th year of operation and demand for the program continues to
    grow. While we truly hoped the program would reach $20 million for the
    20th year, we also truly appreciate the increase to $19 million in
    fiscal year 2008.
        We urge you to reject the President's fiscal year 2009 proposal to
    severely cut program funding to 20 percent below the lowest level of
    funding the SARE program has received in the last 5 years and urge the
    subcommittee to provide an increase from $19 million to $20 million in
    fiscal year 2009. Over the next few years, we strongly urge an
    increased commitment to SARE in the context of a more balanced approach
    to overall competitive grants funding and consistent with sustainable
    agriculture's expanding role within our food and farming system and
    with the program's award-winning and cost-effective delivery of
    services.
        Organic Research.--Although the organic share of the domestic food
    retail market is currently approaching 4 percent, USDA spent a little
    less than 1.5 percent of its total research budget on organic research
    in fiscal year 2007, representing just the first time USDA spending on
    organic research reached above 1 percent. Despite this discrepancy, the
    President's fiscal year 2009 budget proposes zero funding for the two
    main organic research programs--the Organic Agriculture Research and
    Extension Initiative (OREI) and the Organic Transitions Program (ORG).
        At this writing, it appears likely that OREI will continue to
    receive mandatory funding in the 2008 Farm Bill, in which case we ask
    that the subcommittee protect that funding level and reject any
    limitation provisions. On the other hand, if the program does not
    continue to receive mandatory funding, we urge you to provide
    discretionary funding. The Organic Transitions Program is not dependent
    upon the outcome of the Farm Bill and relies on appropriations. We urge
    the committee to include $5 million in fiscal year 2009 for Organic
    Transitions Research. The combined funding would still be far short of
    a fair share for organic research, but would constitute a strong
    movement in the right direction.
        Furthermore, we oppose the President's request to transfer most
    Section 406 integrated program activities, including Organic
    Transitions, into the National Research Initiative (NRI). While we
    support expanding resources for the NRI and increasing the NRI's
    attention to integrated programs, we do not believe ending important
    existing integrated programs in water quality, organic transition, pest
    management, and other topics and simply consolidating them at NRI
    without a clear plan for enhancing these program functions is good
    policy or good process.
        National Research Initiative (NRI).--We strongly support the
    President's request to increase from 22 percent to 30 percent the set-
    aside within the NRI competitive grants program for integrated and
    applied research supporting the goals and priorities of the Initiative
    for Future Agriculture and Food Systems (IFAFS). We support a funding
    increase in the NRI provided that the percentage for integrated
    projects consistent with IFAFS is raised to at least 30 percent.
        Beginning Farmer and Rancher Development Program (BFRDP).--The
    BFRDP was authorized in the 2002 Farm Bill but unfortunately, to date,
    has not received any appropriations. The House version of the 2008 Farm
    Bill would provide the program with $15 million in annual mandatory
    funding. If the House prevails in conference, we urge you to protect
    this vital new program and keep it clear of limitation provisions. If,
    however, mandatory funding is not provided in the Farm Bill, we urge
    you to provide the program with significant discretionary funding.
        New farm entry rates have decreased dramatically and there are
    twice as many farmers over the age of 65 than under the age of 35. The
    BFRDP, a competitive grants program supporting education, extension,
    and technical assistance initiatives directed at new farming
    opportunities, can help address these challenges. The BFRDP supports
    collaborative local, State, and regionally-based networks and
    partnerships to supply financial and entrepreneurial training,
    mentoring and apprenticeship programs, ``land link'' programs, and
    education and outreach activities to assist beginning farmers and
    ranchers, including targeted funds for socially disadvantaged
    producers. The program would be the very first program for beginning
    farmers at USDA other than debt financing credit programs.
        Outreach and Assistance for Socially Disadvantaged Farmers and
    Ranchers (Section 2501).--For the past 16 years, the Section 2501
    program has provided much-needed technical information and training to
    socially disadvantaged farmers and ranchers. Since its inception, the
    program has served more than 100,000 rural constituents in more than
    400 counties and has effectively reduced the decline in the number of
    minority farmers. In spite of this success, and a 2002 Farm Bill
    authorization of $25 million per year, the program has never received
    more than $7 million in funding in any 1 year. As a result, many
    farmers who qualify for assistance under the program have been unable
    to receive it. For fiscal year 2009, we recommend $10 million in
    funding for Section 2501. The House version of the 2008 Farm Bill would
    provide the program with $15 million in annual mandatory funding. If
    the House prevails in conference, we urge you to protect that funding
    level.
        Rural Entrepreneurship Education and Enterprise Facilitation
    Program.--The 2008 Farm Bill will likely include a new program subject
    to appropriations to provide educational resources and services to
    rural areas to foster entrepreneurial strategies to rural development,
    with the stated goal of creating jobs, spurring community innovation,
    and increasing the start-up rate and reducing the failure rate of small
    businesses. With a goal of creating entrepreneurial networks, providing
    technical training, and conducting applied research, the program will
    also provide a complement to the Rural Mircoenterprise Assistance
    Program, which seeks to target specific individuals who have already
    opened a small business, or are poised to do so. We urge the committee
    to fund this program at $4 million for fiscal year 2009.
                                  ams programs
        Farmers' Market Promotion Program (FMPP).--The FMPP provides grants
    on a competitive basis to agricultural cooperatives, local governments,
    non-profits, economic development corporations and other entities to
    establish, expand, and promote local farmers markets and other forms of
    direct farmer-to-consumer markets. Prior to fiscal year 2006, AMS
    resources for direct marketing were limited to technical assistance,
    with no financial assistance available to expand direct farmerto-
    consumer links that increase farm profitability, consumer health and
    well being, and community development. Bipartisan support for this
    program resulted in Congress providing $1 million in first-year funding
    for fiscal year 2006, and the same for both fiscal year 2007 and fiscal
    year 2008. In just its first year of funding, the program received 367
    applications for grants totaling $19.9 million. An allocation of $5
    million in fiscal year 2009 will begin to fill a major gap in marketing
    assistance and help complete the AMS direct marketing toolbox. It is
    also quite possible that the 2008 Farm Bill will provide mandatory
    funding of an equivalent amount, in which case we urge you to protect
    that funding and to not limit it in any way.
                              farm service agency
        Direct Farm Ownership and Direct Operating Loans.--Direct loans
    play a very significant role in helping beginning farmers and ranchers
    get established in agriculture and deserve continuing support. The
    pending 2008 Farm Bill will modernize and update the loan limitation
    level for both types of loans and also create a parallel increase in
    the authorization for appropriation in order to not have the per loan
    limit increase shrink the number of borrowers served. The new Farm Bill
    will also include expansion and improvement of the conservation loan
    program, a provision sponsored by the chair of this subcommittee. In
    light of those changes in the Farm Bill, we strongly urge you to adopt
    a program funding level of at least $300 million for ownership loans
    and $650 million for operating loans for fiscal year 2009.
                natural resources conservation service programs
        Conservation Stewardship Program (CSP).--In our view, the CSP is
    the most important and innovative of all agricultural conservation
    programs. The CSP is crucial to agriculture's world trade agreement
    objectives and to equalizing support across the whole range of U.S.
    agriculture and orienting that support to the public good. The CSP
    correctly focuses attention on working farm and ranch land
    conservation, and emphasizes conservation systems that also maximize
    off-farm environmental benefits.
        The CSP has unfortunately been made subject to limitation
    provisions in previous appropriations bills as well as in supplementals
    and in budget reconciliation. We thank you for allowing the program to
    move forward in fiscal year 2008 without a limitation. We urge you to
    continue in that new pattern and to reject the President's fiscal year
    2009 request to return to a limitation on mandatory spending which in
    this case would cut the program by $141 million. We strongly recommend
    that the CSP not suffer any limitations in fiscal year 2009 and be
    allowed to fulfill its promise without any further appropriation
    restrictions throughout the term of the new farm bill cycle.
        Wetlands Reserve Program (WRP).--The 2008 Farm Bill will
    reauthorize the WRP and provide it with a new mandatory-funded acreage
    cap. We hope the Farm Bill will continue to provide sufficient
    resources to enroll 250,000 acres of restored wetlands each year. We
    also hope and urge the subcommittee to allow the program to move
    forward without limitations on the mandatory funding provided by the
    Farm Bill. The WRP is the frontline in the Nation's efforts to achieve
    no-net-loss or hopefully positive wetland and associated habitat and
    water quality and conservation gains.
                  rural business cooperative service programs
        Appropriate Technology Transfer for Rural Areas (ATTRA) Program.--
    We recommend $3 million in fiscal year 2009, a slight increase over the
    $2.6 million the program received in fiscal year 2008. Originally
    authorized as part of the research title of the 1985 Farm Bill and
    about to be newly authorized in the 2008 Farm Bill, ATTRA provides
    readily accessible sustainable and organic farming information to
    farmers and ranchers nationwide. ATTRA' professional staff answers a
    wide variety of agronomic, livestock, marketing, and entrepreneurial
    questions from farmers and ranchers. ATTRA launched a National Farm
    Energy Initiative in 2006 to help farmers better understand how they
    use energy, and how to best manage energy use to reduce operating
    costs. Modestly increasing ATTRA's funding will ensure the Energy
    Initiative continues to provide efficient, accurate, and timely
    information to farmers seeking to increase agriculture-based energy
    sources, and create sustainable economic growth in their communities.
        Value-Added Producer Grants Program (VAPG).--We urge you to support
    funding in fiscal year 2009 for the VAPG program at the $40 million
    level provided by the 2002 Farm Bill or whatever mandatory funding
    level is provided in the 2008 Farm Bill. If mandatory funding is not
    provided through the 2008 Farm Bill, we urge you to provide
    discretionary funding at no less than $30 million.
        The VAPG is a competitive grants program administered by the Rural
    Business Cooperative Service. The program makes grants to producers and
    producer-owned entities to develop value-added businesses and thereby
    enhance farm income, rural self-employment opportunities, local
    economic development, better consumer food choices, and natural
    resource protection. Value-added products include those converted from
    raw products through processing to increase market value through higher
    prices, expanded markets, or both. Products are also considered value-
    added if they possess incremental value resulting from inherent
    attributes such as geographical location of production, environmental
    stewardship, food quality or safety, or seek to communicate these
    attributes through labeling or certification activities.
        Rural Microenterprise Assistance Program.--The Rural
    Microenterprise Program is very likely to be authorized in the 2008
    Farm Bill, and may also receive mandatory funding. We urge the
    subcommittee to fund this program at $10 million in fiscal year 2009
    should the Farm Bill fail to provide mandatory funding. The program
    would provide technical and financial assistance to rural ``micro-
    enterprises''--especially economically disadvantaged entrepreneurs not
    otherwise able to access credit. The program would provide direct
    training and technical assistance as well as low interest loans and
    grants to individuals currently operating, or seeking to operate, small
    businesses. Commonly recognized as the single most effective method of
    promoting rural economic development, small business growth will be
    supported through targeting individuals who have already opened a small
    business or are poised to do so.
                                     ______

                    Prepared Statement of The Humane Society

        As the largest animal protection organization in the country, we
    appreciate the opportunity to provide testimony to the Agriculture,
    Rural Development, Food and Drug Administration, and Related Agencies
    Subcommittee on fiscal year 2009 items of great importance to The
    Humane Society of the United States (HSUS) and its 10.5 million
    supporters nationwide.
                       enforcement of animal welfare laws
        We thank you for your outstanding support during recent years for
    improved enforcement by the U.S. Department of Agriculture of key
    animal welfare laws and we urge you to sustain this effort in fiscal
    year 2009. Your leadership is making a great difference in helping to
    protect the welfare of millions of animals across the country. As you
    know, better enforcement will also benefit people by helping to
    prevent: (1) food safety risks to consumers from sick animals who can
    transmit illness, and injuries to slaughterhouse workers from suffering
    animals; (2) 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 bird flu; (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. In order to continue the important work made
    possible by the Committee's prior support, we request the following for
    fiscal year 2009:
      food safety and inspection service/humane methods of slaughter act
                               (hmsa) enforcement
        We Request Funding and Language to Ensure Strengthened HMSA
    Enforcement.--The Nation was shocked by the findings of our recent
    undercover investigation that revealed egregious abuse of ``downer''
    cows too sick and injured to stand and walk on their own--by a company
    that was the #2 beef supplier to the National School Lunch Program and
    had been honored by USDA as ``Supplier of the Year'' for the 2004-2005
    academic year. Unfortunately, the blatant and recurrent violations of
    food safety and humane rules documented in our 6-week hidden camera
    investigation were not reported by 5 USDA inspection personnel at the
    plant. This situation has focused national attention on the urgent need
    for more effective USDA oversight of humane handling and food safety
    rules. We urge the Committee to make this a high priority in order to
    better protect consumers and animals. In particular, we urge your
    consideration of the needed reforms outlined later in this testimony.
                   aphis/animal welfare act (awa) enforcement
        We Request That you Support the President's Request of $21,522,000
    for AWA Enforcement Under the Animal and Plant Health Inspection
    Service (APHIS).--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 more than 14,000 sites,
    including commercial breeding facilities, laboratories, zoos, circuses,
    and airlines, to ensure compliance with AWA standards. Animal Care now
    has 105 inspectors (with 6 positions in the process of being filled),
    compared to 64 inspectors at the end of the 1990s. We are pleased that
    the President's fiscal year 2009 budget recommends an increase of
    $1,024,000 (counting allowance for pay costs) to cover hiring new
    inspectors to handle additional responsibilities as the number of
    licensed/registered facilities continues to grow.
                  aphis/investigative and enforcement services
        We Request That you Support the President's Request of $13,694,000
    for APHIS Investigative and Enforcement Services (IES).--We appreciate
    the Committee's consistent support for this division, which handles
    many important responsibilities, including the investigation of alleged
    violations of the AWA and the initiation of appropriate enforcement
    actions. The President's budget recommends an increase of $1,343,066
    (counting allowance for pay costs) for IES in fiscal year 2009, of
    which $725,000 will be used to improve enforcement of Federal animal
    welfare laws. The volume of animal welfare cases is rising
    significantly as new facilities become licensed and registered.
            office of inspector general/animal fighting enforcement
        We Request That You Support the President's Requested Increase of
    $6,274,852 for the Office of Inspector General (OIG) to Maintain Staff,
    Improve Effectiveness, and Allow Investigations in Various Areas,
    Including Enforcement of Animal Fighting Laws.--We appreciate the
    Committee's inclusion of funding and language in recent years for
    USDA's OIG to focus on animal fighting cases. Congress first prohibited
    most interstate and foreign commerce of animals for fighting in 1976,
    tightened loopholes in the law in 2002, and established felony
    penalties in 2007. We are pleased that USDA is taking seriously its
    responsibility to enforce this law, working with State and local
    agencies to complement their efforts. The Michael Vick case is the
    highest profile example of new Federal efforts that have helped shine a
    spotlight on the barbaric practices of dogfighting and cockfighting.
    Dogs bred and trained to fight endanger public safety, and some
    dogfighters steal pets to use as bait for training their dogs.
    Cockfighting was linked to an outbreak of Exotic Newcastle Disease in
    2002-2003 that cost taxpayers more than $200 million to contain. It's
    also been linked to the death of at least 9 people in Asia reportedly
    exposed through cockfighting activity to bird flu. Given the potential
    for further costly disease transmission, as well as the animal cruelty
    involved, we believe it is a sound investment for the Federal
    Government to increase its efforts to combat illegal animal fighting
    activity. We also support the OIG's auditing and investigative work to
    improve compliance with the humane slaughter law and downed animal
    rules.
         cooperative state research, education, and extension service /
                      veterinary student loan forgiveness
        We Request $1,000,000 to Begin to Fully Implement the National
    Veterinary Medical Service Act (Public Law 108-161), Specifically
    Authorized in 2003, That Received Initial Funding of $500,000 in Each
    of Fiscal Year 2006 and Fiscal Year 2007, and $869,000 in Fiscal Year
    2008.--We appreciate that Congress has begun to address the critical
    shortage of veterinarians practicing in rural and inner-city areas, as
    well as in government positions at FSIS (Food Safety and Inspection
    Service) and APHIS. Having adequate veterinary care is a core animal
    welfare concern. A study released in June 2006 demonstrated the acute
    and worsening shortage of veterinarians working in rural farm animal
    practice, while domestic pets in both rural and urban areas are often
    left without necessary medical care. Veterinarians support our Nation's
    defense against bioterrorism (the Centers for Disease Control estimate
    that 80 percent of potential bioterrorism agents are zoonotic--
    transmitted from animals to human). They are also on the front lines
    addressing public health problems associated with pet overpopulation,
    parasites, rabies, chronic wasting disease, bovine spongiform
    encephalopathy (``mad cow'' disease), and a host of other concerns. To
    ensure adequate oversight of humane handling and food safety rules,
    FSIS must be able to fill vacancies in inspector positions. Veterinary
    school graduates face a crushing debt burden of over $100,000 on
    average, and the lowest pay of any of the medical professions, with an
    average starting salary of $46,000. For those who choose employment in
    underserved rural or inner-city areas or public health practice, the
    National Veterinary Medical Service Act authorizes the Secretary of
    Agriculture to forgive student debt. It also authorizes financial
    assistance for those who provide services during Federal emergency
    situations such as disease outbreaks. We hope you will build on the
    initial funding provided in order to expand this needed program under
    CSREES or such other account as the Committee deems appropriate.
        aphis/emergency management systems/disaster planning for animals
        We Request That you Support the President's Request of $996,000 for
    Animal Care Under APHIS' Emergency Management Systems Line Item.--
    Hurricanes Katrina and Rita demonstrated that many people refuse to
    evacuate if they are forced to leave their pets behind. The Animal Care
    division has been asked to develop infrastructure to help prepare for
    and respond to animal issues in a disaster and incorporate lessons
    learned from previous disasters. These funds will be used for staff
    time and resources to support State and local governments' and humane
    organizations' efforts to plan for protection of people with animals.
    The additional resources will enable the agency to participate, in
    partnership with FEMA, in the newly revised National Response Plan
    without jeopardizing other Animal Care programs.
                     aphis/horse protection act enforcement
        We Hope you will Provide $750,000 (an add-on of $251,000 Above the
    Amount Requested by the President for Fiscal Year 2009) Plus A one-time
    Appropriation of $1 Million for Specialized Equipment, and we Urge the
    Committee to Oppose any Effort to Restrict USDA From Enforcing This law
    to the Maximum Extent Possible.--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
    gait of Tennessee Walking Horses and gain an unfair competitive
    advantage at industry horse shows, unscrupulous trainers use a variety
    of methods to inflict pain on sensitive areas of horses' feet and legs.
    This cruel practice continues unabated by the well-intentioned but
    seriously understaffed APHIS inspection program. The most effective way
    to meet the goal of the Horse Protection Act--to reduce the showing of
    sored horses--is to have Animal Care inspectors present at the shows.
    Owners who sore their horses go to great lengths to avoid detection,
    including leaving a show when USDA inspectors arrive. The greater the
    likelihood of a USDA inspection, the greater the deterrent effect on
    those who routinely sore their horses. Unfortunately, Animal Care is
    able to attend fewer than 10 percent of the 500-plus shows held
    annually. Funding of $750,000 is needed to maintain a modest level of
    compliance with the Horse Protection Act by trained Animal Care
    professionals. Moreover, a one-time infusion of $1 million is needed to
    enable Animal Care to buy specialized equipment, such as thermography
    machines, that would enhance the ability of USDA inspectors to detect
    evidence of soring.
    downed animals and bse--needed reforms to address problems revealed by
                         hsus undercover investigation
        Close Loophole.--An unequivocal, truly comprehensive ban on the
    slaughter of downed animals for human consumption is needed to protect
    food safety and animal welfare. The current protocol that allows
    inspection personnel to ``determine on a case-by-case basis the
    disposition of cattle that become nonambulatory after they have passed
    antemortem inspection'' is unrealistic, unworkable, and reckless. It
    places an impossible expectation on inspectors, who can't accurately
    determine the reason(s) an animal became non-ambulatory. Injury and
    illness are often interrelated--an animal may stumble and break a leg
    because of a disease that causes weakness and disorientation. Of the
    BSE cases identified in Canada and the United States to date, 13 out of
    16 have involved downers, and at least 3 of these were identified as
    downed due to injuries, including the 2003 U.S. case (``calving
    injuries'') and a 2005 case in Canada (``slipped on ice/broken leg'').
    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 it is to rely on inspectors trying to sort out which downers
    are ``safe.'' Besides the heightened incidence of BSE, downers may also
    be at higher risk for other foodborne transmissible pathogens,
    including E. coli and Salmonella, which kill hundreds of Americans
    every year, as these animals often lie in bacteria-laden waste and may
    have higher levels of intestinal pathogens due to stress.
        From an animal welfare perspective, a comprehensive ban is needed
    because a downed animal with a broken leg suffers just as much as a
    sick one if he or she is dragged through a slaughterplant--maybe even
    more, when one considers how painful fractures are. A ban on use of all
    downers for human food would also provide an incentive for producers to
    treat animals humanely and prevent farm animals from going down. Even
    before the 2004 administrative ban, USDA estimated that only 0.4
    percent to 0.8 percent of all cows processed annually were non-
    ambulatory. A clear downer ban would encourage producers and
    transporters to engage in responsible husbandry and handling practices,
    so that this percentage could be reduced to levels approaching zero.
    Temple Grandin--advisor to the American Meat Institute and others in
    the meat industry--has noted that as many as 90 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 pushed by forklifts en route to the
    food supply. When that fact came to light in December 2003, USDA's
    prompt announcement to ban all downer cattle from human food calmed
    consumers. More than 99 percent of the more than 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 of
    downers for BSE surveillance purposes. Surveillance of downers can and
    should be conducted at rendering plants and on farms.
        Unfortunately, as we have learned from a January 2006 audit by the
    USDA Office of Inspector General and further from our late 2007
    investigation, the loophole in administrative policy has substantially
    undercut the agency's so-called ``ban.'' It has created financial
    incentives for precisely the abuses that were documented in our
    undercover footage. A highly visible and vigorously enforced total no-
    downer rule is the right policy. For the animals, removing current
    incentives that encourage workers to try every cruel tactic imaginable
    to move downers to the kill box will alleviate suffering. If crippled
    animals cannot be sold for food, slaughterplants have no reason to
    prolong their misery to try to get them through the slaughter process.
    Closing the loophole will also establish incentives for all involved in
    the production chain to minimize hazards that can cause animals to
    become downed in the first place, and make clear that there is no value
    to sending an already downed animal to a slaughterplant.
        USDA can revise its rule immediately, restoring the language it
    promulgated in January 2004. And the Congress can pass legislation to
    codify a clear no-downer policy.
        Strengthen Enforcement.--The USDA must rework its inspection
    program to ensure meaningful compliance. We recommend a combination of
    measures. More inspectors observing live animals are needed, and all
    inspectors should be trained and directed to monitor the treatment of
    live animals to ensure that they are handled humanely. Inspectors must
    understand that their oversight responsibilities begin at the moment
    animals arrive at slaughter premises, including when the animals are on
    trucks at slaughter facilities. An inspector should meet each truck
    when it arrives on the premises and should order the immediate humane
    euthanasia and condemnation of any cattle who are non-ambulatory.
    Egregious conduct such as forcefully striking an animal with an object,
    dragging an animal, ramming or otherwise attempting to move an animal
    with heavy machinery, or using electric shock, water pressure, or other
    extreme methods should be explicitly prohibited and those policies
    established in a formal rule to take effect immediately. Inspections
    should be unannounced and not on a predictable schedule. They should
    include undetectable inspections through video surveillance accessible
    for viewing by independent third parties. Slaughterplants should be
    required to install video cameras that would allow for viewing of all
    of the animal handling prior to slaughter. Finally, it would be helpful
    to rotate inspectors to ensure that they do not become too close with
    plant personnel.
        Establish Criminal Penalties.--Current Federal law does not provide
    for criminal penalties, even in cases of repeat or egregious offenses,
    for violations of humane handling standards.
        Ensure Humane Federal Procurement.--H.R. 1726, the Farm Animal
    Stewardship Purchasing Act, would set basic animal welfare standards
    for producers who sell food to the National School Lunch Program and
    other Federal programs, including requiring veterinary treatment or
    humane euthanasia for downed animals.
        In addition to the downer and humane slaughter issues, we hope the
    Committee will 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 2009 to meet this challenge.
                    animal welfare information center (awic)
        AWIC was established by the 1985 amendment to the Animal Welfare
    Act (the Improved Standards for Laboratory Animals Act) to serve as a
    clearinghouse, training center, and educational resource for
    institutions using animals in research, testing and teaching. This
    Center is the single most important resource for helping personnel at
    more than 1,200 U.S. research facilities meet their responsibilities
    under the AWA. Supported by a modest funding level, its services are
    available to all individuals at these institutions, from cage washers
    to Institutional Animal Care and Use Committee (IACUC) representatives
    and the Institutional Official. Given its indispensability not only in
    assisting with compliance with the AWA but also in providing up-to-date
    information on issues ranging from BSE to primate enrichment that are
    critical to the scientific and agricultural communities, we recommend
    that AWIC be listed as a separate line item. We respectfully urge
    Congress to reject the ARS plan to eliminate AWIC; rather, it is
    essential to provide an appropriation of $1.8 million in fiscal year
    2009 to support ongoing services as well as critically needed expansion
    and other improvements to meet the growing demand for AWIC's expertise.
        Again, we appreciate the opportunity to share our views and
    priorities for the Agriculture, Rural Development, FDA, and Related
    Agencies Appropriation Act of fiscal year 2009. 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 Wildlife Society

        The Wildlife Society appreciates the opportunity to submit
    testimony concerning the fiscal year 2009 budgets for the Animal Plant
    Health Inspection Service (APHIS), Cooperative State Research,
    Education and Extension Services (CSREES), and Natural Resources
    Conservation Service (NRCS). The Wildlife Society represents over 8,000
    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.
    Animal and Plant Health Inspection Service
        The Wildlife Society is concerned that the fiscal year 2009 budget
    request would decrease the operations subactivity of Wildlife Services
    by $1.66 million and redirect $5.34 million. This would effectively
    reduce by $7 million Wildlife Services' ability to control wildlife
    damage to agriculture, aquaculture, forest, range, and other natural
    resources; control wildlife-borne diseases; and control wildlife at
    airports. The Wildlife Society strongly recommends that Congress
    increase the appropriation for this subactivity by $7.0 million to
    account for these reductions and redirections. We also recommend that
    Congress provide an additional $300,000 to fully fund uncontrollables.
        We appreciate the recognition of the need to safeguard our Nation
    against highly pathogenic avian influenza and applaud the added fiscal
    resources to address this critical issue. The potential for this
    disease to spread to the North American continent and severely impact
    wildlife, domestic poultry, and humans highlights the importance of
    continued surveillance and monitoring during the coming years. The
    fiscal year 2006 supplemental and subsequent appropriations have
    allowed State fish and wildlife agencies to provide much-needed
    resources to ensure a coordinated, continent-wide effort. This effort
    must continue to ensure that America's citizens and resources are
    protected. The Wildlife Society strongly recommends an increase to $10
    million for surveillance and monitoring of avian influenza.
        The Wildlife Society is concerned about the proposed reduction in
    the Brucellosis Program budget. Because of its presence in wild elk and
    bison, brucellosis in the Greater Yellowstone Area will be especially
    difficult to control or eliminate and will require more, not less,
    fiscal resources to accomplish. We recommend Congress restore
    brucellosis funding to $11 million in fiscal year 2009 and that USDA-
    APHIS-Veterinary Services continue to utilize the authorities and
    expertise of the Greater Yellowstone Interagency Brucellosis Committee
    to address domestic livestock interactions with wild elk and bison in
    the region.
        The Wildlife Society commends APHIS-Veterinary Services for
    providing funding to State wildlife management agencies for Chronic
    Wasting Disease (CWD) surveillance and management in free-ranging deer
    and elk. Additionally, The Wildlife Society 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 between 2004 and 2006 would not have been possible without this
    cooperative funding. Additionally, knowledge of the presence and
    prevalence of CWD has been enhanced by this program. Without continued
    funding, States will be unable to maintain the level of CWD
    surveillance necessary to track incidence of the disease. The Wildlife
    Society is very concerned by the proposal to cut this budget by $7.3
    million, and by the proposed State match requirement. Such a
    requirement could result in many States no longer being able to perform
    CWD surveillance of wild cervids, reducing our capacity to prevent the
    spread of the disease. The Wildlife Society recommends increasing
    Chronic Wasting Disease funding to $20 million in fiscal year 2009.
    Cooperative State Research, Education, and Extension Service
        The 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.
        The proposed budget for fiscal year 2009 reflects a decrease for
    the McIntire-Stennis Cooperative Forestry program. The proposal would
    also direct 67 percent of program funding to a multi-State research
    program. 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
    demand for forest products grow, 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 harvested). In the absence of long-term and on-
    going research, such as provided through McIntire-Stennis, the Nation
    could be unable to meet future forest-product needs. Replacement of
    McIntire-Stennis funding with competitive grants will leave long-term,
    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 2009 budget to $25 million, an
    amount more consistent with historic levels.
        The Wildlife Society supports the administration's request of $257
    million for National Research Initiative Competitive Grants. However,
    this includes an increase of $19 million for bioenergy and biofuels
    research and a redirection of $42 million for water quality, food
    safety, organic transitions, and pest management. While The Wildlife
    Society does not oppose this consolidation, Congress should ensure that
    sufficient funding is available to support all of these efforts at no
    less than their fiscal year 2008 levels. The Society also notes, that
    if not done properly, biofuels production could have a negative effect
    on wildlife resources.
    Natural Resources Conservation Service
        Reauthorization of the Farm Bill is expected to be completed in the
    first half of 2008. Until such a reauthorization is passed, we are
    operating under the program and funding levels created or reauthorized
    in the 2002 Farm Bill. The Farm Bill conservation programs are now more
    important than ever given huge backlogs of qualified applicants for
    these programs, increased pressure on farmland from the biofuels boom,
    sprawling development, and the ongoing declines in wildlife habitat and
    water quality. The Wildlife Society recommends that the Farm Bill
    conservation programs be funded at the levels mandated in the 2002 Farm
    Bill until the current Farm Bill reauthorization is completed.
        The fiscal year 2009 budget should anticipate the authorization of
    new enrollments in the Grasslands Reserve Program, a strong
    Conservation Security Program, and should fully fund the remaining
    programs at their mandatory spending levels:
      --Conservation Reserve Program--39.2 million acres
      --Grasslands Reserve Program--$50 million
      --Wetlands Reserve Program--250,000 acres
      --Wildlife Habitat Incentive Program--$85 million
        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.
                                     ______

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

        Mr. Chairman, distinguished Members of the Subcommittee, 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 continued support of the Institute
    and its work. This testimony includes an update of the Institute's
    achievements since my testimony of approximately 1 year ago. Our
    efforts focused principally on two areas for commercialization. One
    involves our novel, agricultural-based inventions in emulsion
    polymerizations, and the second was to produce a commercial quality,
    formaldehyde-free, soybean based adhesive for composite board
    materials, specifically, particleboard. During the past year, we made
    significant advances in emulsion polymerization technology, and in the
    refinement of soy adhesive utility. Particleboards made in our
    laboratory with the soy adhesive (formaldehyde free) exceed all
    required specifications for particleboard manufacture. Both
    technologies described above are ready for commercialization and future
    efforts will focus on movement of each technology into the market
    place. We therefore respectfully request $2.0 million in Federal
    funding to more fully exploit the potential of commercializing the
    technologies described herein. I will discuss the progress for each
    thrust to provide maximum clarity to our past efforts.
        Three patent applications were generated in 2007. Additionally in
    2007, four manuscripts were published, thirteen presentations were
    given, and one student won a research award. We remain energized,
    active, and successful at utilizing funding to increase the value of
    agricultural products and co-products, as they are valuable
    alternatives or supplements to petroleum-derived materials. Both
    technologies noted above depends on use of agricultural materials as
    primary building blocks, and clearly offers opportunities for ag-
    derived materials as a basic feedstock in the polymer industry. Both
    are groundbreaking technologies and one only has to consider the use of
    formaldehyde-free adhesives as the ultimate example. It is well known
    that formaldehyde is a carcinogen and we have developed an alternative
    to formaldehyde in the form of soybeans. The recent focus on FEMA
    trailer contamination simply amplifies what the scientific community
    has known for years; formaldehyde is a carcinogen and should not be
    used in composite board manufacture. Our patented technology remains
    the only performance proven alternative 100 percent formaldehyde free
    based on an agricultural product, i.e. soybeans.
        Our 2007-08 work also included several pilot plant trials and
    statistical validation for commercial scale production of vegetable
    oil-based monomers and polymers. Vegetable oil macromonomers (VOMMs)
    have proven value for the manufacture of zero volatile organic content
    (VOC) paints and coatings. Navy Haze Gray paints, manufactured via our
    novel technology, free of VOC content, and matching and/or exceeding
    all performance requirements will be applied shipboard within weeks of
    this testimonies writing.
        This past year's work has resulted in the discovery of methods to
    tailor polymers with desired use properties, a key to widespread
    utilization in other areas of need.
    Vegetable Oil Macromonomers (VOMM) Research and Development
        In the past year, vegetable oil macromonomer synthesis was moved
    from the traditional laboratory research category to pilot plant
    trials. Specifically, VOMMs of soybean oil, high oleic safflower oil,
    safflower oil, sunflower oil, and coconut oil were scaled, synthesized,
    and evaluated for utility. This work validates the commercial viability
    and amplifies the value of this technology for many vegetable oil
    types. Specifically, our work has shown that it is possible to
    manufacture polymers that flow and level easily at room temperature,
    yet will harden upon ambient conditions and achieve high performance
    characteristics. This is clearly a step change in tailoring polymer
    performance. This technology is now mature enough to take its rightful
    place in commercial markets.
        The example below was provided in past testimonies yet remains
    valid today. It summarizes opportunities and impact potential for
    biobased VOMM polymers. In 2004, sales of low gloss water thinned
    paints (including tinting bases) were 181 million gallons, with a value
    of $1,551 million (www.census.gov.mcd). Only a 1 percent share of this
    market would require manufacture of 1.81 million gallons of low gloss
    paint. A typical flat latex paint contains 1,200 g of latex per gallon.
    With latexes containing 20 percent soybean oil derivatives, this market
    share would consume 950,000 lbs of soybean oil or 89,540 bushels of
    soybeans. It would not be unrealistic to expect that in five years, a
    market share of 5 percent could be achieved and thus require
    consumption of 447,700 bushels of soybeans for high performance, value-
    added decorative and protective coatings. The environmental impact
    potential to reduce volatile organic emissions by 3.6 million lbs per
    year at only a 1 percent market share (data 250 g/L VOC 3.78L/gal, 1.81
    million gallons and 1 percent market share) is magnanimous.
    Formaldehyde-Free Soy Based Adhesives
        During the last year, our efforts increased the amount of soy
    protein in the adhesive formulation from 28 percent to 55 percent. In
    2006-2007, the main barrier to commercialization and processing was the
    soy protein adhesives solids content at less than 28 percent, making it
    difficult to transport, handle, and utilize efficiently, and that
    barrier to commercialization was overcome. As the utility of the
    experimental adhesive increases it is important to keep in mind that
    our platform is the only patented technology to our knowledge that is
    solely based upon soybean protein and is 100 percent formaldehyde free.
    An estimated 150,000 FEMA trailers were distributed in Mississippi,
    Louisiana, Florida, Alabama, and Texas following hurricanes in 2005. In
    May 2006, the Sierra Club, a public interest group conducting indoor
    air testing in Federal Emergency Management Agency (FEMA)-issued
    trailers in Louisiana and Mississippi reported that in Mississippi, 29
    of the 31 trailers (94 percent) tested had indoor levels of
    formaldehyde in excess of that identified by the Environmental
    Protection Agency (EPA) and Consumer Products Safety Commission (CPSC)
    as triggering adverse health effects in humans. In Alabama and
    Louisiana, 83 percent of the 52 trailers were above the OSHA specified
    limit of 0.10 parts per million, 4 were at the limit, while 13 percent
    were below the limit. Formaldehyde concentration as high as 0.34 parts
    per million was found in one trailer--a level nearly equal to what a
    professional embalmer using industry-proscribed safety equipment would
    be exposed to on the job.
        Our efforts remain focused on creation of technology platforms
    facilitating commercialization of alternative agricultural crops for
    use in the polymer industry. The reasons for these efforts are made
    clear when it is realized that the polymer industry maintains its
    position as the single largest consumer of petroleum chemical
    intermediates in the world. The finite supply, and increasingly higher
    costs of petroleum resources, demands alternatives be developed. Thus,
    the theme of our work is to develop high performance and
    environmentally responsible technologies from agricultural
    intermediates. In this way, we as a Nation will 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.
        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. At The University of Southern Mississippi, we are making a
    difference by showing others what can be accomplished if appropriate
    time, energy, and resources are devoted to understanding the immense
    value of ag-based products. For more than 40 years, I have watched the
    evolution of polymers where almost each new product introduced into the
    market place 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. Now is the
    time for agricultural materials to make significant inroads as
    environmentally-responsible, biodegradable, and renewable raw
    materials. Our national needs and economy cannot wait; we must act now.
        U.S. agriculture has made the transition from the farm fields to
    the kitchen tables, but America's industrial community continues to be
    frightfully slow in adopting the use of ag-based industrial materials.
    The prior sentence was included in my last five testimonies but
    continues to ring true, even as I write this report. We are making
    progress and we must persist. We must aggressively pursue this
    opportunity and in doing so:
      --Intensify U.S. efforts to commercialize alternative crops and
            dramatically reduce atmospheric VOC emissions and odor for a
            much cleaner and less noxious air for all Americans.
      --Reduce U.S. 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 jobs that are not easily
            exported to foreign lands
      --Maintain our innovative and developmental competitive edge over
            other less environmentally-responsible countries and less
            competitive economies.
        Mr. Chairman, your leadership and support are deeply appreciated by
    The University of Southern Mississippi community. While I can greatly
    appreciate the financial restraints facing your Subcommittee, I feel
    confident that further support of the Mississippi Polymer Institute
    will continue 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. We are most grateful for the support
    provided by you in the past. The funding you provided has facilitated
    laboratory work to be conducted, manufacturing scale-up to be
    accomplished, and ensured sales (although limited) of products based on
    this technology. However, additional funds are needed to commercialize
    technologies. For instance, pilot scale processes are necessary to move
    this technology into the market place, and will be the principal focus
    of our upcoming work. Of course, while working to achieve
    commercialization, we are committed to continue technology advancement.
        Since our testimony last year, our commercializing efforts have
    shown that sustained work will expand the viability of agricultural
    crops as industrial intermediates. Indeed, the technology is maturing,
    which must be followed by marketing and sales to realize full
    potential. Thus, we are asking for your support to advance these
    technologies to the market place, and to continue our development of
    other useful ag-derived technologies. We therefore respectfully request
    $2.0 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 to optimize the
    potential of the knowledge creation. Our efforts will be recognized as
    instrumental in developing a ``process'' for the commercialization of
    new ag-based products. We have proven that we are successful in
    developing technologies from the ``idea'' stage to scale-up for
    commercialization in several market areas. Thank you, Mr. Chairman and
    Members of the Subcommittee, for your support and consideration.
                                     ______

                 Prepared Statement of the USA Rice Federation

        This is to convey the rice industry's request for fiscal year 2009
    funding for selected programs under the jurisdiction of your respective
    subcommittees. The USA Rice Federation appreciates your assistance in
    making this letter a part of the hearing record.
        The USA Rice Federation is the global advocate for all segments of
    the U.S. rice industry with a mission to promote and protect the
    interests of producers, millers, merchants and allied businesses. USA
    Rice members are active in all major rice-producing states: Arkansas,
    California, Florida, Louisiana, Mississippi, Missouri, and Texas. The
    USA Rice Producers' Group, the USA Rice Council, the USA Rice Millers'
    Association, and the USA Rice Merchants' Association are members of the
    USA Rice Federation.
        USA Rice understands the budget constraints the subcommittees face
    when developing the fiscal year 2009 appropriations bill. We appreciate
    your past support for initiatives that are critical to the rice
    industry and look forward to working with you to meet the continued
    needs of research, food aid and market development in the future.
        A healthy U.S. rice industry is also dependent on the program
    benefits offered by the Farm Bill. Therefore, we oppose any attempts to
    modify the support levels provided by this vital legislation through
    more restrictive payment limitations or other means and encourage the
    subcommittees and committees to resist such efforts during the
    appropriations process, in particular with the Farm Bill
    reauthorization currently underway.
        A list of the programs the USA Rice Federation supports for
    appropriations in fiscal year 2009 are as follows:
                               funding priorities
    Research and APHIS
        The Dale Bumpers National Rice Research Center should receive
    continued funding at the fiscal year 2008 approved level, which was
    $7.775 million, and appropriate additional funding to reflect any
    increased administrative and operations costs. This center conducts
    research to help keep the U.S. rice industry competitive in the global
    marketplace by assuring high yields, superior grain quality, pest
    resistance, and stress tolerance. We urge you to provide full funding
    to the Dale Bumpers National Rice Research Center.
        For the Western Regional Research Center, in Albany, California, we
    support the administration's budget proposal for the Renewable Energy
    Resources project within the Agricultural Research Service (ARS)
    account. We understand a portion of the funding is to be directed to
    the Albany, CA facility for research on modification of plant cell
    walls in energy crops and crop residues for efficient conversion to
    biofuels.
        This research will play a key role in the ability to utilize rice
    straw and other rice crop residues for the production of biofuels. Rice
    straw represents a current and ready-made feedstock that could meet a
    substantial portion of the demand for biofuels production in the
    regions of the country where rice is produced, including the Sacramento
    Valley of California. We urge you to fully fund this request as our
    researchers work to develop the technologies necessary to meet the
    ambitious goals for biofuels production set before us.
        For APHIS-Wildlife Services, we encourage the subcommittees to fund
    the Louisiana blackbird control project at $150,000. This program
    annually saves rice farmers in Southwest Louisiana over $4,000 per
    farm, or $2.9 million total.
    Market Access
        Exports are critical to the U.S. rice industry. Historically, 40-50
    percent of annual U.S. rice production has been shipped overseas. Thus,
    building healthy export demand for U.S. rice is a high priority.
        The Foreign Market Development Program (FMD) allows USA Rice to
    focus on importer, foodservice, and other non-retail promotion
    activities around the world. We support increased funding for FMD as
    being considered in the pending farm bill, but for fiscal year 2009,
    FMD should be fully funded at no less than $34.5 million.
        The Market Access Program (MAP) allows USA Rice to concentrate on
    consumer promotion and other activities for market expansion around the
    world. Again, we support increased funding for MAP as being considered
    in the pending farm bill, but for fiscal year 2009, MAP should be
    funded at no less than $200 million.
        In addition, the Foreign Agricultural Service should be funded to
    the fullest degree possible to ensure adequate support for trade policy
    initiatives and oversight of export programs. These programs are
    critical for the economic health of the U.S. rice industry.
    Food Safety
        Food safety, including the safety of imported food, is one of the
    national issues that deserves significantly more funding. The USA Rice
    Federation appreciates greatly the increased funding that Congress
    appropriated for Food and Drug Administration (FDA) fiscal year 2008
    food safety purposes and accompanying report language directing the use
    of some of the funds to hire more domestic and imported food
    inspectors. We urge Congress to continue this funding direction by
    appropriating significant increases for the agency's fiscal year 2009
    food safety personnel, programs, and related technology, including
    continuing to ensure the safety of imported food.
        Significant funding increases would allow the FDA to help reassure
    consumers and speed innovation in food safety and technology. A
    significant increase would permit FDA to administer its food safety
    inspections and other related activities more fully and effectively,
    speed approvals for safe, new food technologies and products, and
    provide leadership in protecting the food supply from intentional
    threats.
    Food Aid
        We urge the subcommittees to fund Public Law 480 Title I. No Title
    I funding was provided in fiscal year 2008. At a minimum, fiscal year
    2009 funding should be the same as 2006, the last year in which the
    program was funded. Public Law 480 Title 1 is our top food-aid priority
    and we support continued funding in order to meet international demand.
    Food-aid sales historically account for an important portion of U.S.
    rice exports.
        For Public Law 480 Title II, we support funding for fiscal year
    2009 at the increased level of $1.8 billion in order to satisfy the 2.5
    million MT required by statute. We encourage the subcommittees to fund
    Title II at this level to ensure consistent tonnage amounts for the
    rice industry. We oppose any shifting of funds, as all Title II funds
    have traditionally been contained within USDA's budget. We believe all
    food-aid funds should continue to be used for food-aid purchases of
    rice and other commodities from only U.S. origin.
        USA Rice supports continued funding at fiscal year 2006 levels, at
    a minimum, for the Food for Progress Program's Public Law 480 Title I-
    sourced funding and at fiscal year 2008 levels, at a minimum, for the
    program's Commodity Credit Corporation funding component. Funding for
    this program is important to improve food security for food-deficit
    nations.
        The McGovern-Dole International Food for Education and Child
    Nutrition Program is a proven success and it is important to provide
    steady, reliable funding for multi-year programming. USA Rice supports
    funding at the $300 million level for this education initiative because
    it efficiently delivers food to its targeted group, children, while
    also encouraging education, a primary stepping-stone for populations to
    improve economic conditions.
    Other
        Farm Service Agency.--We encourage the subcommittees to provide
    adequate funding so the agency can deliver essential programs and
    services. The Agency has been hard hit by staff reductions and our
    members fear a reduction in service if sufficient funds are not
    allocated.
        Please feel free to contact us if you would like further
    information about the programs we have listed. Additional background
    information is available for all of the programs we have referenced;
    however, we understand the volume of requests the subcommittees receive
    and have restricted our comments accordingly.
        Thank you for your consideration of our recommendations.
                                     ______

          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 RUS loan levels and the associated funding subsidy, as
    required, for the 5 percent direct loan program ($145 million) and cost
    of money program ($250 million) in fiscal year 2009 in the amounts
    requested in the President's budget.
        Supporting Section 306 guaranteed loans in the amount ($295
    million) requested in the President's budget.
        Supporting the President's budget request of $297,923,000 and the
    associated funding subsidy, as required, for broadband
    telecommunications loans.
        Continuation of the general provision contained in previous
    appropriations acts that would prohibit RUS from drafting or
    implementing any regulation or rule requiring recertification of rural
    status for telephone borrowers.
        Supporting the continued elimination of the 7 percent cap on cost
    of money loans.
        Supporting continued funding, as requested in the President's
    budget, in the amount of $20 million for telemedicine and distance
    learning grants in rural areas.
        Seeking language strengthening and improving the operation of the
    broadband loan program in the Committee Report accompanying the bill.
        Supporting provision of sufficient funds for staff, including legal
    staff, to properly administer the telecommunications and broadband
    programs.
        I am Walter B. McCormick, Jr., President and CEO of the United
    States Telecom Association (USTelecom). I submit this testimony in the
    interests of the members of USTelecom and the customers they serve.
    USTelecom represents innovative companies ranging from the smallest
    rural telecoms in the Nation to some of the largest corporations in the
    U.S. economy. Our member companies offer a wide range of services
    across the communications landscape, including voice, video and data
    over local exchange, long distance, Internet and cable networks.
        USTelecom members firmly believe that the targeted assistance
    offered by a strong RUS telecommunications loan and grant 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.
                  rural areas need access to broadband service
        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.
        It is critically important that rural areas be included in the
    nationwide drive for greater bandwidth capacity. In order to provide
    higher speed services, outside plant must be modernized to accommodate
    technologies such as Digital Subscriber Line (DSL) or even fiber optic
    connections to the Internet, and switching must be migrated to new
    platforms. These investments may not be justified by market conditions
    in low density high cost rural areas, so the RUS program provides
    important financial incentives for additional investment which
    encourages rural telecommunications companies to build facilities which
    allow advanced services, including distance learning and telemedicine,
    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.
        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 telecom customers, the true
    beneficiaries of the RUS program. The government's contribution is
    leveraged by the equity, technical expertise and dedication of local
    telecom companies. The small amount of government capital involved is
    more than paid back through a historically perfect repayment record by
    telecom 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 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 2009, 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 also be funded at the level
    requested in the budget.
        Congress and the President have recognized the tremendous potential
    of broadband technology to enhance human and economic development in
    rural areas by establishing as a priority loans for the deployment of
    such technology in rural areas. USTelecom urges the provision of
    funding for these loans sufficient to support $297,923,000, the amount
    recommended 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. Congress should be lauded for its recognition of the
    importance of broadband deployment to our Nation's economy and
    particularly for the recognition, through support of the RUS program,
    of the tremendous impact broadband telecommunications can have on
    economic growth and development in rural America.
        Congress Should Adopt the Farm Bill, H.R. 2419, to Improve the
    Efficiency and Effectiveness of the Broadband Program.--Both the House
    and Senate versions of the Farm Bill better target the scarce resources
    dedicated to extending broadband deployment to high cost rural areas.
    They accomplish this by prioritizing lending to areas with no broadband
    service and by tightening up the definition of rural area for purposes
    of the lending program. Furthermore, both bills increase the
    availability and feasibility of RUS broadband loans, thereby better
    directing loan funds to areas that are more challenging to serve and
    are therefore most in need of government assistance. Both bills modify
    or eliminate the statutory exclusion of companies with more than 2
    percent of that Nation's access lines from the broadband program. The
    language in the current statute is an unfortunate policy decision that
    limits the effectiveness of RUS in targeting funds to unserved areas.
    The RUS telephone program contains no such exclusion. Rural customers,
    the true beneficiaries of the RUS program, should not be denied its
    benefits because of the identity of the carrier from which they receive
    service. Similarly, both bills modify the statutory requirement that
    the term of broadband loans cannot exceed the expected useful life of
    the facilities being financed--a policy change which will decrease the
    size of periodic loan repayments and enhance loan feasibility without
    harming the government's loan security. Since RUS has a lien on all the
    property of the borrower, not just the new facilities, in most
    instances there is more than sufficient security for the loan for the
    broadband equipment. As long as the security of the government's loan
    is sufficient, the term of the loan in relation to the life of the
    facilities financed is irrelevant.
    Improving the Effectiveness of the RUS Broadband Program
        Redirecting Broadband Program Funding to Unserved Areas.--Absent
    adoption of a new Farm Bill this year with reforms to the RUS broadband
    program, RUS could still make substantial improvements to the operation
    of the broadband loan program through adoption of new rules. Since the
    inception of the broadband program, RUS has used a substantial portion
    of the available funds to make loans to areas that already have
    broadband service. RUS justifies these loans for duplicative facilities
    with the contention that service in these areas is inadequate and so
    the areas are ``underserved'', thereby permitting such duplication. For
    purposes of making broadband loans, RUS defines broadband service as
    200 kbps. Yet when determining whether an area is underserved, RUS will
    make a loan to any entity which promises a faster speed than is
    provided by the incumbent, even if the incumbent is providing service
    far in excess of the 200kbps standard RUS has set for new loans. RUS
    should be directed to use the same standard for new broadband loans as
    for the determination that an area is ``underserved''.
        RUS also has determined that an area is underserved if the
    applicant seeking to provide duplicative service will offer a
    substantial price differential relative to the incumbent. RUS has no
    objective standard for determining what constitutes a ``substantial
    price differential''.
        The RUS broadband program should exclusively focus on extending the
    reach of broadband in rural America with a goal of ubiquitous
    deployment. Making loans for duplicative facilities and service, when
    other citizens in rural America reside in areas with no service at all,
    is a waste of scarce government resources. To properly redirect
    government funds to areas unserved by broadband, Congress should
    clarify that loans funds not be used for duplicative facilities, and
    should reaffirm that the non-duplication requirements of Title II of
    the Rural Electrification Act are equally applicable to the Title VI
    broadband program. The Undersecretary for Rural Development should be
    required to make a legal finding that any loan for broadband will not
    result in a duplication of facilities. To assist the Undersecretary in
    making this finding, RUS broadband applications should include the
    identity, list of services and charges as well as the service areas of
    the incumbent provider. Also, to the extent that they do not conflict,
    Congress should reaffirm that all the provisions of Title II, such as
    those relating to area coverage and loan feasibility, are equally
    applicable to the Title VI broadband program.
    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, USTelecom supports continuation of the elimination of the
    7 percent cap on cost-of-money insured loans in fiscal year 2009.
    Recommended Loan Levels
        USTelecom recommends that the telephone program loan levels for
    fiscal year 2009 be set as follows:

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

    ------------------------------------------------------------------------
    Insured 5 percent Direct Loans..........................    $145,000,000
    Insured Cost-of-Money Loans.............................     250,000,000
    Loan Guarantees.........................................     295,000,000
    Broadband Telecommunications Loans......................     297,293,000
                                                             ---------------
          Total.............................................     987,293,000
    ------------------------------------------------------------------------

    Loans and Grants for Telemedicine and Distance Learning
        USTelecom supports the inclusion of $20 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, economic
    development, education and medicine, such funds can help continue the
    historic mission of RUS to support the extension of vital new services
    to rural America.
    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 2009 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 2009 for such a rule change.
                                   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 telecom 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 and Broadband Program through authorization of
    sufficient funding and loan levels.
                                     ______

                 Prepared Statement of the WildEarth Guardians

    Re: Request to cut Funding for the USDA-APHIS-WS's Wild Carnivore-
            Killing Program
        We the 30 undersigned organizations, and on behalf of our 10.9
    million members across the Nation, respectfully submit the following
    request that lethal predator control funding be discontinued for the
    U.S. Department of Agriculture (USDA)--Animal and Plant Health
    Inspection Service (APHIS)--Wildlife Services (WS). Most Americans
    strongly support protection of wildlife, endangered species, and
    carnivores. Several reasons for discontinuing Federal support for
    predator control exist. Predator control activities are (1) generally
    ineffective and ecologically harmful; (2) fiscally irresponsible; (3)
    inhumane and against the public's interest; and (4) a national security
    hazard. It is time for a change that reflects these facts and that
    embodies a more enlightened set of values, the weight of public
    opinion, and public safety.
    The WS's Program is Ineffective, Ecologically Harmful, & Fiscally
            Irresponsible
        Large-scale predator eradication is biologically harmful,
    economically expensive, and inherently non-selective (Treves and
    Karanth 2003, Mitchell et al. 2004, Stolzenburg 2006). In fact, there
    is no correlation between the number of coyotes killed and the number
    of lambs lost (Knowlton et al. 1999, Mitchell et al. 2004). Lethal
    predator controls do little to benefit the sheep industry; market
    forces--primarily the price of hay, wages, and lambs--play a far
    greater role in the decline of the sheep industry than do predators
    (Berger 2006).
        On behalf of agribusiness, over 100,000 native carnivores such as
    coyotes, bobcats, foxes, bears and wolves are killed each year (in
    fiscal year 2006, WS killed 117,113). The numbers of predators killed
    to protect livestock is highly disproportionate--one study showed that
    somewhere on the order of between 1.5 to 9.7 million animals were
    killed for the benefit of agricultural interests ``without cause,'' or
    indiscriminately, by Federal agents during the period 1996 to 2001
    (Treves and Karanth 2003). These high levels of predator killing have
    been aptly dubbed the ``sledgehammer'' approach to wildlife management
    (Logan and Sweanor 2001, Mitchell et al. 2004, Stolzenburg 2006).
    Lethal controls, including poisons, are unselective for specific
    animals, and are used to remove the most individuals from an area
    (Mitchell et al. 2004). Yet carnivores are important ecosystem actors.
    Native carnivores such as wolves, mountain lions, and coyotes increase
    the richness and complexity of animal life and indirectly contribute to
    better ecosystem function.\1\
    ---------------------------------------------------------------------------
        \1\ Prior to 1995 in Yellowstone National Park, elk had decimated
    willow and aspen stands. When wolves were reintroduced, elk were forced
    to be more mobile to avoid predation. With less elk herbivory, willow
    and aspen communities returned. Beavers followed; they used the new
    trees and shrubs to build their dams and lodges. Those structures not
    only brought water from underground to the surface, but made water flow
    more dependable. As a result, neotropical and water-wading birds and
    moose populations increased and diversified (Smith et al. 2003).
    Secondly, the presence of mountain lions in desert ecosystems can have
    the same top-down effects resulting in increased biological diversity
    and functionality of rare riparian systems (Ripple and Beschta 2006).
    Third, coyotes regulate populations of medium-sized carnivores such as
    skunks, raccoons, and house cats. Thus coyotes indirectly benefit
    ground-nesting birds (Crooks and Soule 1999) and make rodent species
    diversity more robust (Henke and Bryant 1999). Mezquida et al. (2006)
    found that coyotes indirectly benefit sage grouse populations--a
    species on the brink.
    ---------------------------------------------------------------------------
        Between 2004 and 2006, WS killed 6,156,223 total animals to protect
    agricultural interests--at an average annual cost of $100 million.
    (Table 1.) Most animals were killed with lethal poisons, others with
    traps and guns. Many were shot from aircraft (see www.goAGRO.org). In
    the past decade, Wildlife Services has killed an increasing number of
    species that are protected under the Endangered Species Act.

                                   TABLE 1.--WILDLIFE SERVICES' ANNUAL BUDGET & KILLS
    ----------------------------------------------------------------------------------------------------------------
                                                       Total animals   Total killed                   Mammals killed
                  Year                    Budget          killed         per hour     Mammals killed     per hour
    ----------------------------------------------------------------------------------------------------------------
    2004............................    $101,490,740       2,767,152             316         179,251              20
    2005............................      99,792,976       1,746,248             199         170,814              19
    2006............................     108,590,001       1,642,823             188         207,341              24
    ----------------------------------------------------------------------------------------------------------------

    Sheep and Cattle Losses from Predators are Miniscule and do Not Justify
            Wildlife Services' Aggressive Killing Schemes
        Despite calls from agribusiness for more WS's funding, Congress
    should consider the tiny effect predators have on livestock; instead, a
    reduction in is justified. The USDA's own data show that few cattle and
    sheep die from predation (see Tables 2 through 5).
        Every year the USDA's National Agricultural Statistics Service
    (NASS) reports on the U.S. cattle and sheep production inventory. Every
    5 years, NASS counts unintended cattle and sheep deaths from predation,
    weather, disease, and other causes. The most recent report released for
    cattle deaths is 2006 and, for sheep, 2005. The reports reflect data
    from the previous calendar year.
        In 2004, sheep producers raised 7,650,000 animals nationwide (USDA
    NASS 2005b) (USDA NASS 2005b). Native carnivores and domestic dogs
    killed 3 percent of the total production, or 224,200 sheep (USDA NASS
    2005c). In comparison, 5 percent of sheep died from illness,
    dehydration, falling on their backs or other causes (USDA NASS 2005c)
    [Tables 2 & 3].

     TABLE 2.--SHEEP AND LAMBS PRODUCED IN 2004 & TOTAL UNINTENDED MORTALITY
                               TOTAL SHEEP & LAMBS
    ------------------------------------------------------------------------
                                                                Percent of
                                               Total number        total
                                                                production
    ------------------------------------------------------------------------
    Total sheep & lambs produced in the U.S.       7,650,000             100
    Total predator-caused sheep deaths......         224,000             2.9
    Total sheep deaths from other causes....         376,100             4.9
    ------------------------------------------------------------------------

                    TABLE 3.--OTHER CAUSES OF SHEEP MORTALITY
    ------------------------------------------------------------------------
                                                                  Number
    ------------------------------------------------------------------------
    Illness/disease.........................................         159,350
    Lambing.................................................          53,400
    Unknown.................................................          48,100
    Old age.................................................          39,900
    Weather.................................................          39,450
    Starve, dehydrate, fire.................................          19,400
    Poison..................................................          10,300
    On their back...........................................           3,800
    Theft...................................................           2,400
                                                             ---------------
          Total.............................................         376,100
    ------------------------------------------------------------------------

        The Colorado Woolgrowers website claims that Colorado is the fifth
    largest sheep producer in the U.S. (CWGA 2008). A report by the
    Colorado Agricultural Statistics Service (July 2007) shows that the
    sheep industry decline 48 percent since 1990. Even Colorado WS admits
    that ``the sheep and wool market had declined making it uneconomical to
    raise sheep'' (WS June 2005 CO PDM EA at 11, emphasis added). Yet, WS
    provides devoted attention to protecting sheep--an industry hammered by
    global markets, not predators.
        In 2005, U.S. producers raised 104.5 million head of cattle (USDA
    NASS 2005a). Of the 104.5 million cattle that were produced in 2005,
    190,000 (or 0.18 percent) died as the result of predation from coyotes,
    domestic dogs, and other carnivores (USDA NASS 2006). In comparison,
    livestock producers lost 3.9 million head of cattle (3.69 percent) to
    maladies, weather, or theft (USDA NASS 2006) [Tables 4 & 5].

     TABLE 4.--CATTLE & CALVES PRODUCED IN 2005 & TOTAL UNINTENDED MORTALITY
                        TOTAL CATTLE (BEEF, DAIRY, ETC.)
    ------------------------------------------------------------------------
                                                                Percent of
                                                  Number           total
                                                                production
    ------------------------------------------------------------------------
    Total cattle (beef, dairy, etc) produced     104,500,000             100
    Predator-caused cattle deaths...........         190,000              18
    Cattle death from other causes..........       3,861,000            3.69
    ------------------------------------------------------------------------

    The Public's Interest in Wildlife & Balancing the Economic Equation
        According to the Bureau of Land Management (BLM) (2004), ``ranching
    tends to be a low- or negative-profit enterprise, and public land
    ranchers are no exception.'' The BLM (2004) adds, ``data show that
    operations in all regions had, on average, negative returns.'' The
    Federal agency charged with managing most of the ranches in the West
    acknowledges that ranching is a poor way to make a living--even when
    grazing fees are enormously subsidized by the government, and even
    though Wildlife Services provides heavily subsidized predator-control
    activities.
        The impulse to ranch, suggests the BLM, is not for profit but for
    social considerations such as ``family, tradition, and a desirable way
    of life'' (USDI BLM 2004). There are roughly 23,000 public lands
    ranching permittees. In one study of Forest Service and BLM ranchers,
    two general groups of ranchers emerged: hobby ranchers, which
    represented 50.5 percent of the total, had diversified income sources,
    and generally had small operations; and, secondly, dependent ranchers,
    who represented 49.5 percent of the total, were more dependent on
    ranching income, and ran larger operations which used public lands
    (USDI BLM 2004). Thus, most ranchers in the West are in the business
    for pleasure and social reasons, or as a hobby, but not to make a
    living. Compare 23,000 ranching permittees, half of which are hobby
    ranchers, with the number of other citizens who appreciate wildlife and
    spend billions to engage in their various recreational pursuits. [Table
    6].

                  TABLE 5.--CATTLE DEATHS FROM ALL OTHER CAUSES
    ------------------------------------------------------------------------
                                                                  Number
    ------------------------------------------------------------------------
    Respiratory problems....................................       1,110,000
    Digestive problems......................................         648,000
    Calving.................................................         572,000
    Unknown.................................................         474,000
    Weather.................................................         275,000
    Other...................................................         271,000
    Disease.................................................         174,000
    Lameness/injury.........................................         132,000
    Metabolic problems......................................          78,000
    Mastitis................................................          67,000
    Poison..................................................          39,000
    Theft...................................................          21,000
                                                             ---------------
          Total.............................................       3,861,000
    ------------------------------------------------------------------------

        The U.S. Department of Interior, FWS et al. (2007) reported that in
    the United States in 2006, 12.5 million people hunted, 30 million
    fished, but 71.1 million people watched wildlife (USDI FWS 2007).
    [Table 6.] The wildlife-watching group increased substantially from the
    2001 study, while the number of hunters and anglers declined (USDI FWS
    2001a). The $100 billion spent annually to pursue these pursuits is
    enormous, especially when compared to the flagging ranching sector.
        The fundamental question with regards to wildlife management in the
    agricultural sector is this: Do taxpayers owe agribusiness a living? If
    so, at what cost to the public's interest in wildlife protection?
        Americans should not be required to further subsidize unnecessary
    predator control activities serving a select segment of the population.
    Given that the entire public lands ranching community is made up of
    23,000 permittees and that more than half of those produce livestock
    for social and not economical reasons, WS's funding should, in fact, be
    reduced, and the predator-control program eliminated.
    Wildlife-Killing Programs are Inhumane
        Humaneness issues vex WS. WS's own agents admit they have had
    ``diminishing acceptance''--even among wildlife colleagues--when it
    comes to ``guns, traps, and poisons'' (US GAO 2001). Muth et al. (2006)
    studied the response of over 3,000 wildlife professionals and found
    that most favor a ban on trapping. That is because these kill methods--
    particularly poisons and traps--are inherently indiscriminate, can be
    excruciatingly painful, stressful, and injurious (Mason and Littin
    2003, Littin and Mellor 2005, Muth et al. 2006, Iossa et al. 2007).
    Wildlife Services is a National Security Hazard
        WS has failed numerous Federal audits that put the public at risk.
        In 2002, the Office of Inspector General (OIG) found that ``APHIS
    could not account for 60 pounds of strychnine-treated bait and over
    2,000 capsules containing sodium cyanide'' (USDA OIG 2002). The
    following year, APHIS-WS could account for these toxins, but failed to
    put in place an ``adequate chemical inventory and tracking system''
    (USDA OIG 2004). In her 2002 statement before Congress, Joyce
    Fleishman, Acting Inspector General for the USDA reported, ``we found
    that APHIS lacks adequate accountability and control over hazardous
    pesticides and drugs maintained by some of its State offices for use in
    wildlife damage control'' (Fleischman 2002).
        In a 2004 OIG report, Assistant Inspector General Robert Young
    found that WS could not ``fully account for its inventories of
    hazardous pesticides and controlled drugs'' and that the materials were
    stored in unsafe and insecure ways leaving hazardous material
    ``vulnerable to undetected theft and unauthorized use, and may pose a
    threat to human and animal safety'' (USDA OIG 2004).

     TABLE 6.--NATIONAL SURVEY OF FISHING, HUNTING, AND WILDLIFE-ASSOCIATED
                                   RECREATION
    ------------------------------------------------------------------------
                                                    No
                                               participants    Expenditures
                                                 (million)       (billion)
    ------------------------------------------------------------------------
    Hunters.................................            12.5           $22.9
    Anglers.................................            30.0            42.2
    Wildlife watchers.......................            71.1            45.7
    ------------------------------------------------------------------------

        In 2005 and 2006, the USDA OIG failed APHIS in two audits because
    the agency was not in compliance with the Bioterrorism Preparedness and
    Response Act. In the first, the OIG found that APHIS had not secured
    ``dangerous biological agents and toxins'' (USDA OIG 2006a). In the
    second, the OIG found that APHIS-WS was not in compliance with
    regulations; unauthorized persons had access to toxicants; individuals
    using toxicants had inadequate training; and that inventories of
    hazardous toxicants were open to theft, transfer, or sale (USDA OIG
    2006b). Of the sites OIG visited, none were in compliance (USDA OIG
    2006b).
        In its November 5, 2007 stakeholder newsletter, WS issued an
    astonishing revelation:
        In the wake of several accidents in WS' programs, WS is conducting
    a nationwide safety review focusing on aviation and aerial operations,
    explosives and pyrotechnics, firearms, hazardous chemicals,
    immobilization and euthanasia, pesticides, vehicles, watercraft, and
    wildlife disease activities. The review will be conducted by subject
    matter experts from WS, Federal and State government, and private
    industry. We expect the review to be completed in the next year.
    (Emphasis added.)
        WS experienced two aircraft crashes in 2007 as part of its aerial-
    gunning program. The June, Utah event ended in two fatalities, and the
    September, Texas one resulted in two serious injuries (see
    www.goAGRO.org). WS's news of a ``wake of several accidents'' comes on
    the heels of several failed Federal audits relative to WS's storage,
    inventory, and access to its toxics supply.
        After WS's November 2007 disclosure, Sinapu (n/k/a WildEarth
    Guardians) and PEER requested that WS conduct the national safety
    review with public transparency. WS dismissed our concerns. In a
    November 14 response, Deputy Administrator William Clay wrote that the
    agency itself would select auditors who ``demonstrated professional
    expertise'' and who were ``unaffiliated'' with the agency. WS plans to
    embed the outside auditors with an agency insider. Mr. Clay told Sinapu
    and PEER that the public would have the opportunity to ``read the final
    [national safety review] document'' upon completion.
    Congressional Precedent for Reform & Conclusion
        Through a plethora of investigations, committee reports and
    attempts at reform over a period of eight decades, the agency that
    kills wildlife to benefit agribusiness has only limited its activities
    when compelled to do so. Congress has played an important role in
    making reform happen.
        In 1964, Secretary of the Interior Stewart L. Udall's Advisory
    Board on Wildlife and Game Management, issued the ``Leopold Report''
    (named for its chairman, Dr. A. Starker Leopold, son of pioneering
    ecologist Aldo Leopold). The Leopold Report described the killing
    agency as a ```semi-autonomous bureaucracy whose function in many
    localities bears scant relationship to real need and less still to
    scientific management''' (Robinson 2005). The Leopold Report offered
    reform recommendations to Congress.
        In 1971, Secretary of the Interior C. B. Morton convened another
    investigative committee, this time, chaired by Dr. Stanley A. Cain. The
    207-page ``Cain Report'' lamented that the predator--control program
    ``contains a high degree of built-in resistance to change'' and that
    monetary considerations that favored the livestock industry served to
    harm native wildlife populations (Cain et al. 1971). The Report called
    for substantive changes to wildlife management regimes by changing
    personnel and control methods, valuing ``the whole spectrum of public
    interests and values'', and asserting protections for native wildlife
    (Cain et al. 1971, Robinson 200).
        Without firm Congressional resolve, the USDA-WS will continue to
    test limits that are beyond the pale. WS's sloppy practices have
    resulted in failed safety audit after failed audit. The agency's
    ``sledgehammer'' approach cannot be justified by its numerous costs and
    risks. Sheep and cattle losses from predators are insignificant, 3
    percent and .18 percent, respectively, and yet $100 million is spent
    each year to kill millions of animals in a way that many find abhorrent
    and disagreeable. It is taxation without representation, to paraphrase
    a founding father. Compare the ranching industry's 23,000 public lands
    permittees to the 71.1 million people who spend $54.7 billion to watch
    wildlife each year. Our request presents Congress with a unique
    opportunity to trim the Federal budget, protect public safety, and
    conserve native wildlife populations.
                                     ______

       Prepared Statement of the Ag Council of California; Agricultural
     Cooperative Council of Oregon; Blue Diamond Growers; CalCot; CoBank;
      Colorado Cooperative Council; Diamond Foods, Inc.; GROWMARK; Kansas
       Cooperative Council; Land O'Lakes; Meadowbrook Farms Cooperative;
         National Corn Growers Association; National Council of Farmer
      Cooperatives; National Grape Cooperative Association/Welch's; Olive
     Growers Council of California; Sunkist Growers, Inc.; SunMaid Growers
     of California; Sunsweet Growers, Inc.; Texas Agricultural Cooperative
                      Council; Valley Fig; and WineAmerica

        Dear Chairman Kohl and Ranking Member Bennett: In advance of the
    fiscal year 2009 Agriculture Appropriations Bill, we are writing to
    urge your strong support for full funding for USDA's Value-Added
    Producer Grants Program.
        Since its establishment, the Value-Added Producer Grants Program
    has been a tremendous success. This matching fund program has provided
    grants to over 900 individual producers, producer-controlled
    organizations and farmer cooperatives across the Nation.
        With those funds, recipients are empowered to capitalize on new
    value-added business opportunities that would have otherwise gone
    unexplored. Their successful, self-sustaining products have translated
    into greater and more stable income for producers from the marketplace.
    It has also served to promote economic development and create needed
    jobs, especially in rural areas where employment opportunities are
    often limited.
        The benefits of this program far exceed the cost. Given its track
    record of success, we believe that strong justification exists to
    provide full resources to this important program.
        Your leadership and support on this issue would be greatly
    appreciated.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Ad Hoc Coalition, Prepared Statement of..........................   171
    Ag Council of California, Prepared Statement of..................   294
    Agricultural Cooperative Council of Oregon, Prepared Statement of   294
    American:
        Farm Bureau Federation, Prepared Statement of................   174
        Forest & Paper Association, Prepared Statement of............   176
        Honey Producers Association, Inc., Prepared Statement of.....   177
        Indian Higher Education Consortium, Prepared Statement of....   182
        Sheep Industry Association, Prepared Statement of............   186
        Society for:
            Microbiology, Prepared Statements of...................195, 197
            Nutrition (ASN), Prepared Statement of...................   199
        Society of Agronomy, Prepared Statement of...................   202
    Animal Welfare Institute, Prepared Statement of..................   205

    Bennett, Senator Robert F., U.S. Senator From Utah:
        Questions Submitted by......................................81, 150
        Statements of................................................2, 100
    Blue Diamond Growers, Prepared Statement of......................   294

    CalCot, Prepared Statement of....................................   294
    CoBank, Prepared Statement of....................................   294
    Coalition on Funding Agricultural Research Missions, Prepared
      Statement of...................................................   208
    Cochran, Senator Thad, U.S. Senator From Mississippi, Prepared
      Statement of...................................................    46
    Colorado:
        Cooperative Council, Prepared Statement of...................   294
        River:
            Basin Salinity Control Program, Prepared Statement of....   211
            Board of California, Prepared Statement of...............   213
            Commission of Nevada, Prepared Statement of..............   215
    Conner, Chuck, Deputy Secretary, Office of the Secretary,
      Department of Agriculture......................................     1
    Craig, Senator Larry, U.S. Senator From Idaho:
        Prepared Statement of........................................    45
        Questions Submitted by.......................................    95
    Crop Science Society of America, Prepared Statement of...........   202

    Diamond Foods, Inc., Prepared Statement of.......................   294
    Dyer, John, Deputy Commissioner and Chief Operating Officer, Food
      and Drug Administration, Department of Health and Human
      Services.......................................................    99

    Easter Seals, Prepared Statement of..............................   215

    Federation of American Societies for Experimental Biology,
      Prepared Statement of the......................................   191
    Feinstein, Senator Dianne, U.S. Senator From California,
      Questions Submitted by........................................72, 137
    Florida State University, Prepared Statement of..................   219
    Fong, Phyllis K., Inspector General, Office of the Inspector
      General, Department of Agriculture, Prepared Statement of......    13
    Food & Water Watch, Prepared Statement of........................   220
    Friends of Agricultural Research--Beltsville, Prepared Statement
      of.............................................................   224

    GROWMARK, Prepared Statement of..................................   294
    Glauber, Dr. Joseph, Chief Economist, Office of the Secretary,
      Department of Agriculture......................................     1

    Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions
      Submitted by...................................................    72
    Izaak Walton League of America, Prepared Statement of............   225

    Johnson, Senator Tim, U.S. Senator From South Dakota:
        Prepared Statement of........................................     3
        Questions Submitted by.......................................    75

    Kansas Cooperative Council, Prepared Statement of................   294
    Kohl, Senator Herb, U.S. Senator From Wisconsin:
        Opening Statements of........................................ 1, 99
        Questions Submitted by......................................52, 121

    Land O'Lakes, Prepared Statement of..............................   294

    Meadowbrook Farms Cooperative, Prepared Statement of.............   294
    Mississippi Polymer Institute, Prepared Statement of.............   282

    National:
        Association of State:
            Energy Officials, Prepared Statement of..................   227
            Universities and Land-Grant Colleges (NASULGC) Board on
              Natural Resources (BNR), Prepared Statement of.........   227
        Commodity Supplemental Food Program Association, Prepared
          Statement of...............................................   229
        Congress of American Indians, Prepared Statement of..........   235
        Corn Growers Association, Prepared Statements of...........236, 294
        Council of Farmer Cooperatives, Prepared Statements of.....238, 294
        Drinking Water Clearinghouse Programs for Small and Rural
          Communities, Prepared Statement of.........................   241
        Fish and Wildlife Foundation, Prepared Statement of..........   243
        Grape Cooperative Association/Welch's, Prepared Statement of.   294
        Organic Coalition, Prepared Statement of.....................   245
        Potato Council, Prepared Statement of........................   248
        Telecommunications Cooperative Association, Prepared
          Statement of...............................................   251
        Turfgrass Federation, Inc., Prepared Statement of............   252
    New Mexico Interstate Stream Commission, Prepared Statement of...   255

    Olive Growers Council of California, Prepared Statement of.......   294
    Organic Farming Research Foundation, Prepared Statement of.......   256
    Organization for the Promotion and Advancement of Small
      Telecommunications Companies, Prepared Statement of............   259

    Pellett, Nancy C., Chairman and Chief Executive Officer, Farm
      Credit Administration, Department of Agriculture, Prepared
      Statement of...................................................    30
    Pickle Packers International, Inc., Prepared Statement of........   260

    Red River Valley Association, Prepared Statement of..............   265

    Schafer, Hon. Ed, Secretary, Office of the Secretary, Department
      of Agriculture.................................................     1
        Prepared Statement of........................................     7
        Statement of.................................................     4
    Society for Women's Health Research and Women's Health Research
      Coalition, Prepared Statement of...............................   269
    Soil Science Society of America, Prepared Statement of...........   202
    Specter, Senator Arlen, U.S. Senator From Pennsylvania, Questions
      Submitted by..................................................90, 168
    Steele, Scott, Budget Officer, Office of the Secretary,
      Department of Agriculture......................................     1
    SunMaid Growers of California, Prepared Statement of.............   294
    Sunkist Growers, Inc., Prepared Statement of.....................   294
    Sunsweet Growers, Inc., Prepared Statement of....................   294
    Sustainable Agriculture Coalition, Prepared Statement of.........   272

    Texas Agricultural Cooperative Council, Prepared Statement of....   294
    The Humane Society, Prepared Statement of........................   276
    The Wildlife Society, Prepared Statement of......................   280
    Turman, Richard, Deputy Assistant Secretary for Budget, Food and
      Drug Administration, Department of Health and Human Services...    99

    USA Rice Federation, Prepared Statement of.......................   284
    United States Telecom Association, Prepared Statement of.........   286
    University of Southern Mississippi, Prepared Statement of........   282

    Valley Fig, Prepared Statement of................................   294

    WildEarth Guardians, Prepared Statement of.......................   289
    WineAmerica, Prepared Statement of...............................   294

    von Eschenbach, Andrew C., M.D., Commissioner, Food and Drug
      Administration, Department of Health and Human Services........    99
        Prepared Statement of........................................   104
        Statement of.................................................   101

                                 SUBJECT INDEX

                                  ----------

                           DEPARTMENT OF AGRICULTURE

                            Office of the Secretary

                                                                       Page

    Additional Committee Questions...................................    51
    AMS Audits.......................................................    64
    African:
        Stem Rust Research...........................................    84
        Wheat Stem Rust..............................................    39
    Agriculture Research Funding.....................................    50
    Audits of Slaughter Plants.......................................    33
    Colombia:
        Free Trade Agreement (FTA)...................................    83
        Trade Agreement..............................................    47
    Colony Collapse Disorder.........................................72, 91
        Varroa Mites.................................................    58
    Commodity:
        Crop Payments................................................    73
        Prices...................................................38, 42, 81
        Supplemental Food Program............................61, 74, 80, 90
    Condition of the Farm Credit System..............................    32
    Conservation.....................................................    48
        Cuts.........................................................    74
        Funding......................................................    49
        Reserve Program (CRP)........................................    88
    Corporate Activities.............................................    32
    Country of Origin Labeling.......................................64, 79
    Dairy Prices and Nutrition Programs..............................    62
    Effect of High Commodities Demand................................    55
    Emerson Trust....................................................    57
    Examination Programs for FCS Banks and Associations..............    30
    Exclusion of Potatoes from WIC...................................    96
    Export Credit Guarantee Program..................................    90
    Farm Bill........................................................    43
    FSIS:
        Budget.......................................................    89
        Humane Methods of Slaughter..................................    89
        Vacancy Rates................................................    65
    Farm Service Agency (FSA) Information Technology (IT):
        Problems.....................................................    60
        System.......................................................    86
    Federal Agricultural Mortgage Corporation........................    33
    Fiscal Year:
        2007 Accomplishments.........................................    30
        2008 WIC Budget..............................................    52
    Food:
        Aid ``Safe Box''.............................................    85
        Costs for WIC Program........................................    41
        Regulations..................................................    94
        Safety:
            Budget Request...........................................    48
            Inspection User Fees.....................................    95
        Stamp Participation..........................................    83
    Hallmark/Westland Recall.........................................    95
    Humane Slaughter.................................................52, 72
    Improving USDA Management........................................    24
    Mission of the Farm Credit Administration........................    30
    National:
        Animal Identification System.................................56, 87
        Arboretum....................................................    63
        Organic Program Reorganization...............................    64
        Veterinary Medical Service Act...............................    96
    OIG:
        Fiscal Year 2009 Budget Request..............................    27
        Report.......................................................    34
    Organic Pasture..................................................    62
    Penalties for Slaughter of Nonambulatory Animals.................    73
    Potatoes and WIC.................................................    63
    Protecting the Integrity of USDA Benefit and Entitlement Programs    18
    Public Law 480 Title II:
        Budget Request...............................................    37
        Grants.......................................................    36
        Supplemental Requests........................................    81
    Recalled Meat....................................................    35
    Regulatory Activity..............................................    31
    Research Funding.................................................    50
    Resource Conservation and Development Program (RC&D).............61, 75
    Rice Stock Reporting.............................................    81
    Risk Based Inspection............................................    64
    Rural:
        Development and Rental Assistance--Absence of a Sound
          Strategy...................................................    59
        Housing and the Sub-Prime Housing Crisis.....................    59
    Safety, Security, and Public Health..............................    14
    Stem Rust Research...............................................    40
    Tart Cherries....................................................    62
    The Stewardship of USDA's Natural Resources......................    26
    Timeline for Development and Implementation of the Proposed
      Public Health Risk-Based Inspection System, Public Health
      Information System and Poultry Slaughter Rule..................    65
    U.S. Beef Products...............................................    95
    Varroa Mites.....................................................    59
    WIC:
        Fiscal Year 2008 Budget......................................    89
        Food Costs...................................................    83
        Monthly Report and Fiscal Year 2009 Budget...................    85
        Program......................................................    35
    World/Domestic Food Supply.......................................53, 54

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                          Food and Drug Administration

    Active Ingredients.............................................113, 115
    Additional:
        Committee Questions..........................................   121
        Staff........................................................   118
        $375 Million.................................................   108
        Tools........................................................   136
    Beyond Our Borders.............................................109, 114
    Breast Implants..................................................   148
    Budget Request Increase..........................................   103
    Canadian Drugs...................................................   114
    China Office.....................................................   118
    Cost of Living and Critical Path.................................   103
    Counterfeits.....................................................   116
    Critical Path....................................................   110
        Activities...................................................   159
    Data Center......................................................   112
    Drug Safety--Imports.............................................   130
    Estriol..........................................................   130
    FDA:
        International Offices........................................   151
        Science Board Recommendations................................   121
    Field Exams/Samples..............................................   128
    Food:
        Protection:
            And Import Safety........................................   103
            Plan...................................................127, 130
        Safety:
            GAPS.....................................................   137
            Research.................................................   160
    Foreign Inspections..............................................   114
    Funding Absorption...............................................   109
    GSA..............................................................   111
    Generic:
        Bioequivalence...............................................   168
        Drugs......................................................117, 129
            Application Actions......................................   166
            Citizen Petitions........................................   161
    Global Supply Chain..............................................   113
    Guidance Development.............................................   137
    Heparin:
        And Drug Facility Inspections................................   150
        Foreign Inspections..........................................   112
    IT Investments...................................................   158
    Implementation of the FDA Amendments Act of 2007.................   162
    Increased Products and Responsibilities..........................   107
    Indoor Tanning Devices...........................................   116
    Information Technology...........................................   111
    MDUFMA...........................................................   133
    Medical:
        Device Review Performance....................................   162
        Product Safety...............................................   129
    Mercury Testing..................................................   130
    Modernization of Information Technology (IT).....................   102
    Necessary Resources..............................................   108
    New Staff........................................................   117
    Office of Generic Drugs Productivity.............................   166
    Other Foreign Offices............................................   119
    Overall FDA Funding..............................................   152
    Overseas Staffing................................................   127
    Pay Costs......................................................127, 158
    Post-Market:
        Safety.......................................................   119
        Surveillance of Silicone Breast Implants.....................   132
    Pre-Emption......................................................   169
    Product Safety...................................................   103
    Rapid Response Teams.............................................   103
    Reports..........................................................   132
    Request for Additional Resources.................................   102
    Role of Physicians in Medical Device Development.................   166
    Science Board....................................................   107
    Sunscreens.......................................................   117
    Third Party Certifications.......................................   128
    Track and Trace..................................................   115
    United States Versus Canada......................................   115
    User Fees........................................................   103
    Warfarin.........................................................   110
    White Oak and Information Technology.............................   111

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