[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

                               __________

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41-239 PDF                       WASHINGTON : 2008 

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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.
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    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.
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    \3\ Public Law 110-038, enacted May 25, 2007. The U.S. Troops 
Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability 
Appropriations Act, 2007.
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    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.
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    \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.
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    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.)
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    \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.
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            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.
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    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.
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    \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.&
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    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.
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    \15\ An unqualified opinion means USDA and standalone agencies' 
financial statements fairly presented their financial position and 
related reporting.
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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.
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    \16\ Office of Civil Rights--Management of Employment Complaints. 
OIG report 60801-3-HQ, issued March 10, 2000.
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    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.
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    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.
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    \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.
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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\
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    \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.
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    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.
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    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 [email protected].
                                 ______
                                 

 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 ([email protected], [email protected], or 
[email protected]).
                                 ______
                                 

           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 [email protected] 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: 
[email protected].
    Grant Disclosure.--The Red River Valley Association has not 
received any Federal grant, sub-grant or contract during the current 
fiscal year or either of the 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 [email protected].
                              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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