[Senate Hearing 111-]
[From the U.S. Government Publishing Office]


 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2010 

                              ----------                              


                         THURSDAY, JUNE 4, 2009

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 1:05 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Herb Kohl (chairman) presiding.
    Present: Senators Kohl, Harkin, Johnson, Nelson, Reed, 
Pryor, Specter, Brownback, Bennett, Cochran, Bond, and Collins.

                       DEPARTMENT OF AGRICULTURE

                        Office of the Secretary

STATEMENT OF THOMAS VILSACK, SECRETARY
ACCOMPANIED BY:
        DR. KATHLEEN MERRIGAN, DEPUTY SECRETARY
        DR. JOSEPH GLAUBER, CHIEF ECONOMIST, U.S. DEPARTMENT OF 
            AGRICULTURE
        DR. SCOTT STEELE, BUDGET OFFICER, U.S. DEPARTMENT OF 
            AGRICULTURE

                 OPENING STATEMENT OF SENATOR HERB KOHL

    Senator Kohl. Good afternoon to everybody. We would like to 
welcome Secretary Vilsack back to this subcommittee at this 
time to present the administration's fiscal year 2010 budget 
request for USDA. The Secretary is accompanied by Dr. Kathleen 
Merrigan, Deputy Secretary; Dr. Scott Steele, the USDA Budget 
Officer; and Dr. Joseph Glauber, the USDA's Economist. We thank 
you all for being here with us today.
    The fiscal year 2010 budget for discretionary programs at 
USDA is $21.25 billion. This is an increase of $1.9 billion 
from last year, or nearly 10 percent. At first glance, this 
appears to be a very robust budget and in many important ways, 
it indeed is.
    The WIC program, which many of us consider essential, has 
been underfunded in recent executive budgets. By contrast, this 
budget includes an increase of $917 million so that we can deal 
with increased food costs and maintain participation.
    The rental assistance program would see an increase of $189 
million to prevent a large number of poor rural residents, many 
of them elderly, from losing their homes.
    And funding for humanitarian food aid has increased by $564 
million.
    These three changes alone make up nearly 90 percent of 
USDA's total budget increase. Just to repeat that, these three 
items alone make up nearly 90 percent of the total increase in 
the budget.
    The rest of the money goes quickly. Information technology 
at the Department would see an increase of $117 million. These 
funds are necessary to improve USDA data security and make sure 
computer systems do not fail. Without them, we run a 
significant risk of delayed farm payments and deferred farm 
bill implementation.
    USDA energy programs, which we hope will help lead our 
Nation toward a renewable energy future, receive an $80 million 
increase.
    The Food Safety and Inspection Service budget includes an 
increase of $47 million to provide more inspections and improve 
information systems.
    There are obviously more increases, but I will leave those 
for the Secretary to discuss. I would like to point out, 
however, that a portion of these increases are made possible 
only by reducing mandatory farm bill spending to the tune of 
$678 million. This is nearly $200 million more in cuts than we 
took last year. While I appreciate the Department's mandate to 
find offsets to fund the President's initiatives, I am certain 
you understand the precarious situation these farm bill cuts 
create in Congress.
    Mr. Secretary, our Nation has significant challenges ahead, 
and this budget lays out a plan to begin addressing them, but I 
have feared for some time that many do not fully appreciate the 
breadth of USDA's mission or why these investments are 
important.
    All of us enjoy greater food safety because of USDA. Nearly 
one in five Americans participate in USDA nutrition programs. 
USDA research is developing better crops and energy systems 
whose benefits are widely spread across our society.
    Rural development programs bring safe drinking water, 
affordable housing, and essential community facilities to 
regions that would otherwise almost certainly be overlooked. 
These are all important tasks that demand thoughtful, 
deliberative treatment in the appropriations process.
    So, Secretary Vilsack, I--and I am sure everybody else--am 
very pleased that you're here. We all believe that you will do 
an outstanding job, and we look forward to working with you in 
the coming years.
    After other opening statements from Senators, Mr. 
Secretary, the floor will be yours.
    Senator Brownback.

                   STATEMENT OF SENATOR SAM BROWNBACK

    Senator Brownback. Thank you very much, Mr. Chairman.
    Welcome, Mr. Secretary. Good to have you here and good to 
have a good fellow Midwesterner in that position of Secretary 
of Agriculture.
    I also think it is very, very, very helpful to the Midwest 
that Iowa is the first caucus. It drives a lot of Senators to 
travel through Iowa and get to know our issues throughout the 
Midwest. So I think that is a very good thing. They formed a 
caucus in the U.S. Senate of Members of the U.S. Senate who 
would never, ever, ever run for President, and there is like 
two people in it. So it means 98 have got some passing interest 
of going through your State. And I am delighted you are hearing 
about them.
    I am glad you are at USDA. USDA touches each American's 
life multiple times a day, food, housing programs, research and 
assistance. My State of Kansas is a great beneficiary of USDA 
programs. It got the first land grant university in the country 
at Kansas State University. We have got valuable USDA research. 
We provide valuable USDA research. My State produces a lot of 
food and agricultural products, and we are dependent upon that 
research. We want to see it continue.
    I want to highlight two quick areas. I really want to hear 
from you today about your targets that you want to hit as 
Secretary of Agriculture. You have a great position and a 
period of time in which you get to drive the ship, and I want 
to hear where you want to take it.
    A couple that I am very concerned about, food insecurity 
around the world. I think this is a big problem for us. It is a 
big opportunity for us in both providing food for people, and 
then I think getting back on agricultural development programs 
globally.
    I have been doing a fair amount of research and meeting 
with experts on this. In the mid-80s, we pulled out of 
agricultural development work in a lot of places around the 
world, and I think it has been quite harmful to us. I think 
there was a trend at that point in time, it is not really 
working, we do not need to do this, so let us pull out of it 
and let us just go to emergency food assistance programs. And I 
think we have suffered consequences because of it. I am going 
to go through that some more in questioning.
    But particularly what Senator Bond has pushed in 
Afghanistan on some of the ag development work to help us 
stabilize Afghanistan I think is good in a fighting region, but 
there is also chronic places like Malawi and others where 
agricultural developments continue to decline. I think we need 
to figure out ways we can use our food assistance, again, to 
get us back in the agricultural development game, and I think 
it is important to do it.
    Another one is in bioenergy. I do not think there is an 
area that the rural States are more excited about than 
bioenergy. Certainly grain-based ethanol is having some 
difficulty now and there is some consolidation taking place in 
that business. But it is providing a key portion of our energy 
equation. Our efforts in cellulosic ethanol are very intriguing 
and I hope will be quite successful. Biomass. I just came from 
an Energy meeting markup and we are looking more and more at 
biomass for meeting renewable energy standards and needs. Wind 
energy, although not in your purview, is one that generated a 
lot of interest and support across many areas of the Midwest. I 
cannot think of probably a better area for rural development 
than in the bioenergy field, and I want to hear what you want 
to try to do more in that particular area.
    The final point is on rural development programs. I have 
been around this for a long time. There are 90 different grant, 
loan, or standalone programs in the rural development area, and 
you have got to really question whether we need all 90 of those 
or if you would be better off with three big, well-funded ones 
or five maybe. But it just has made it so complicated that 
people cannot access it or they get a little piece here and 
they find another piece there. You have got to hire somebody to 
find the program. I would think it would really be one you 
could break into.
    So I am delighted to have you at that position. Welcome 
here.
    I want to welcome Susan Collins, new to the subcommittee, 
as well. Mr. Chairman, she is going to do a great job and 
educate us about Maine agriculture and potatoes and all sorts 
of other things I am sure. Lobster, a great Maine dish. So 
thank you very much for the hearing. Welcome, Susan.
    Senator Collins. Thank you.
    Senator Kohl. Thank you very much, Senator Brownback.
    Other statements from Senators? Senator Pryor, Senator 
Cochran, Senator Bond, Senator Johnson, and Senator Collins.
    Senator Cochran.
    Senator Cochran. Mr. Chairman, I ask unanimous consent that 
my statement be printed in the record.
    [The statement follows:]

               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, thank you for holding this hearing to review the 
Administration's fiscal year 2010 budget request. I welcome Secretary 
Vilsack and other officials from the U.S. Department of Agriculture on 
the witness panel.
    Mr. Secretary, I commend you for working aggressively to implement 
the 2008 farm bill. The enactment of this new law followed many hours 
of debate, and it should be implemented so as to reflect the intent of 
Congress. I also want to highlight the fact that production agriculture 
views the farm bill as a multi-year commitment from the government. In 
other words, I ask you to resist the urge to re-open farm bill 
provisions that impact the farm safety net.
    In addition, I want to mention the importance of the Natural 
Resources Conservation Service and its role in administering 
conservation programs. Programs such as the Environmental Quality 
Incentive Program, Wetlands Reserve Program and Wildlife Habitat 
Incentive Program are important to farmers and land owners across the 
United States. These conservation programs are limited by either 
funding caps or acreage caps, so it is important to wisely administer 
these funds to as many producers and landowners as possible.
    An important aspect of the Agriculture Appropriations bill is the 
annual funding provided for agricultural research. This research helps 
enable U.S. producers to remain the leaders in food and fiber 
production. We need to work toward providing adequate funding to 
continue important research initiatives.
    Mr. Secretary, I am concerned about your recent comments suggesting 
that agriculture may benefit from cap-and-trade offsets. It is more 
likely that crop producers will face increased input costs if Congress 
enacts cap-and-trade legislation. As you review the impact of climate 
change legislation on agriculture, I ask you to remember that those 
producing the food we eat are important to our way of life. We should 
fully consider the consequences of further increasing input costs.
    Thank you again for appearing before the subcommittee. I look 
forward to your testimony.

    Senator Kohl. Thank you so much.

                    STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Mr. Chairman, I ask unanimous consent that 
my full statement be entered into the record.
    I have a couple other things to comment about. I am pleased 
that with the targeting of farm program payments with the 
$250,000 payment limitations cap. I am pleased that Secretary 
Vilsack has worked so hard at implementing country-of-origin 
labeling.
    I am also concerned for some parts of the budget, including 
a $500,000 annual sales limit for direct payments which does 
not reflect actual farm income.

                           PREPARED STATEMENT

    And I look forward to working with you on issues important 
to our ag communities and to fund priorities important to South 
Dakota. Thank you.
    [The statement follows:]

               Prepared Statement of Senator Tim Johnson

    Chairman Kohl and Ranking Member Brownback, thank you for holding 
today's hearing to discuss the President's fiscal year 2010 proposed 
agriculture budget. Thank you, Secretary Vilsack, for coming to the 
Hill today. I'd also like to especially thank you for the work you've 
done to implement mandatory Country of Origin Labeling properly, which 
has been a priority of mine for nearly 17 years, since I introduced my 
first meat labeling bill in 1992.
    Agriculture has a $21.3 billion per year impact in South Dakota, 
and the Federal government's agriculture spending priorities impact the 
success of our rural communities and our national food security. I am 
pleased to see an emphasis on many important ag priorities in the 
President's proposed budget, including a targeting of farm program 
payments with a $250,000 commodities payment limit cap, Commodity 
Supplemental Food Program funding, and money for the implementation of 
COOL.
    I am also, however, concerned for some parts of the budget, 
including the $500,000 annual sales revenue limit for direct payments, 
which does not reflect actual farm income, and a plan to cut funding 
for the Resource, Conservation and Development Councils, which generate 
over five local dollars for every dollar of Federal investment.
    I look forward to working with you on issues important to our 
agricultural communities and to fund priorities important to South 
Dakota. Thank you.

    Senator Kohl. Thank you, Senator Johnson.
    Senator Bond.

                STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Thank you, Mr. Chairman. I will pass up the 
opportunity to be as brief as some of my colleagues.
    I do want to mention one area that I think is of overall 
concern. The Food, Conservation and Energy Act of 2008 
established the new National Institute of Food and Agriculture, 
or NIFA, to provide enhanced support for research, extension, 
higher education programs, dealing with all of the challenges 
not only that we face but the world faces. Research under this 
would encourage better land use management, provide efficient 
nutrition and nutrient and pesticide application, increase 
domestic energy production, increase nutrition awareness, many, 
many things.
    I am disheartened that the administration in this initial 
budget proposal places little emphasis on ag research and, 
instead of increasing our capabilities, would cut $237 million 
from the research, education, and economics portion of the USDA 
budget. I think that is a cause for concern. I will ask a 
question on it, but I hope, Mr. Chairman and Senator Brownback, 
that we will be able to have a discussion on that.
    Senator Kohl. Good.
    Senator Collins.

                   STATEMENT OF SENATOR SUSAN COLLINS

    Senator Collins. Thank you very much, Mr. Chairman. Let me 
just say that I am delighted to be a new member of this 
subcommittee.
    I just want to express some concern also about the 
President's budget in the area of the zeroing out of the rural 
empowerment zones and Enterprise Communities Grants Program. 
There is no funding for resource conservation and development 
programs. As my colleague has mentioned, the agricultural 
research has taken a hit. Particularly, the USDA ARS Buildings 
and Facilities account is zeroed out as well as the Healthy 
Forest program. There are a lot of concerns that I have about 
the priorities set in this budget.
    I am very pleased to be a new member of this subcommittee 
and to work with you, Mr. Chairman, and the ranking member, 
Senator Brownback. Thank you.
    Senator Kohl. Thank you, Senator Collins. It is great to 
have you with us.
    Senator Collins. Thank you.
    Senator Kohl. Mr. Secretary, we would love to hear from 
you.

                 STATEMENT OF SECRETARY THOMAS VILSACK

    Secretary Vilsack. Thank you, Senator, and Mr. Chairman, 
thank you very much for the opportunity. I appreciate the 
comments.
    I am going to depart from what traditionally would take 
place, which is to read a statement that is a part of what we 
would submit for the record, and just simply talk very briefly 
about the priorities of USDA.
    Let me, first and foremost, say that the budget that we are 
going to discuss today was fashioned in a fairly rapid time 
period, at a time when USDA was obviously not fully staffed and 
manned because we were in the process of transitioning to the 
new administration. So it is important, I think, for the 
committee to know precisely what our priorities are and how 
they might be reflected in this budget.
    Let me, first and foremost, say that we believe the USDA is 
an every-day, every-way Department. As Senator Brownback 
indicated, this is a Department that intersects American lives 
every single day in multiple ways.
    In order for us to reflect that role and that 
responsibility, we have a set of agenda items and priorities 
that really cover the wide range of USDA's portfolio.
    We are very concerned about rural development and economic 
development in rural communities, and we believe that the time 
has come for a wealth creation approach to rural development 
that focuses on regional and coordinated investment, not only 
coordinating investments within USDA, but also coordinating 
those investments with other Federal investments as well as 
what State and local government is investing in economic 
development. We think there are synergies and opportunities for 
coordination.
    We think there are opportunities to create wealth and 
repopulate rural America. We believe that will require us to 
target our resources, to focus on building the infrastructure 
for high-paying jobs, starting with an expansion of broadband 
to unserved areas. This committee, this Congress, through the 
American Recovery and Reinvestment Act, saw fit to provide 
additional resources, and I will assure the committee during 
the course of questions that we are intending on putting those 
resources to work very quickly to expand that very important 
technology to unserved areas in rural America.
    We want to aggressively implement the energy title 
provisions of the 2008 farm bill. We want to focus on expanding 
local and regional food systems for local wealth creation. We, 
obviously, want to continue a focus on value-added local 
commodity agriculture, and we want to make community facility 
investments that result in rural areas being great places to 
live, work, and raise families.
    We also want to make sure that we continue to promote 
nutrition and food safety. It is the goal of the President. It 
is the goal of USDA, and I suspect it is the goal of this 
committee to significantly reduce childhood obesity and hunger 
in this country. At the same time, we will work with our 
partners at Health and Human Services to develop a modern and 
coordinated food safety system.
    Our forests are extraordinarily important not only in and 
of themselves, but also for the significant role they play in 
preserving the quantity and quality of water, particularly in 
the Western United States. We want to develop an ecologically 
sustainable forest and private working land system with a focus 
on conserving water resources and improving water quality, 
while at the same time restoring our natural forests and 
linking that work with our conservation work on private working 
lands.
    We want USDA to be a modern workplace and a modern 
workforce. That will require working with this committee to 
modernize, stabilize, and securitize our technology so that we 
may be able to provide services more quickly and more 
conveniently to people in rural communities.
    We will focus on expanded trade promotion, particularly 
through a coordinated strategy for exporting biotechnology 
crops.
    We will work very hard to advance the notion of food 
security worldwide based on the principles of expanding the 
availability of food, the accessibility of food, and the 
utilization of food. Our focus initially will go on Afghanistan 
and Pakistan and sub-Saharan Africa.
    We also want to maintain an appropriate farm safety net. We 
will, obviously, have conversations about the proposal relative 
to direct payments, but our commitment is to work with this 
Congress to maintain a strong and adequate and appropriate farm 
safety net. We think there are opportunities for reform in crop 
insurance, and we do believe it is appropriate to focus on a 
$250,000 hard cap, but we will be glad to work with this 
committee on other ideas and other thoughts.
    Finally, we want to be a Department that makes a true 
commitment to civil rights, a commitment that reflects the 
culture and diversity of this country that is also reflected in 
rural communities. We are committed to a fair resolution of 
outstanding and longstanding civil rights cases against the 
Department, as well as a reduction and resolution of equal 
employment opportunity complaints that are currently within the 
Department.

                           PREPARED STATEMENT

    Mr. Chairman, this is an aggressive agenda. We believe that 
this budget, as presented to you, is a start. By no means will 
it finish the job. We look forward to working with this 
committee and responding to questions that you might have. 
Thank you.
    [The statement follows:]

                  Prepared Statement of Thomas Vilsack

    Chairman Kohl and distinguished members of this subcommittee, it is 
a pleasure to come before this subcommittee today to discuss the 
details of the President's 2010 budget request for the Department of 
Agriculture. I would also like to take this opportunity to provide you 
an update on our efforts to eliminate wasteful and inefficient spending 
and to implement the American Recovery and Reinvestment Act (ARRA) of 
2009.
    I am joined today by Deputy Secretary Kathleen Merrigan; Scott 
Steele, our Budget Officer; and Joseph Glauber, our Chief Economist.
    When I accepted this position, the President outlined three key 
goals for the Department of Agriculture. First, he is very concerned 
about the health and welfare of America's children and wants to make 
sure our children have access to nutritious food. Second, he wants to 
make sure we do everything we can to expand the capacity of our farms, 
ranches, and rural communities to produce alternative forms of energy. 
Third, he wants to make sure we aggressively pursue the research 
necessary to allow agriculture to transition away from its significant 
dependence on fossil fuels. Fulfilling these goals will be a great 
challenge, particularly in the context of meeting challenges in the 
Department's other responsibilities including food safety, 
conservation, trade, and administering the farm safety net. The current 
economic situation and difficulties of drought and other severe weather 
faced by large areas of farm country add another level of complexity to 
the work we have before us.
    But, with these challenges come historic opportunities for 
agriculture and rural America. I look forward to working together with 
this subcommittee to fulfill the President's goals and our key 
responsibilities for the long term benefit of producers and all 
Americans. We intend to capitalize on these opportunities quickly 
through a much more effective effort to coordinate programs within the 
various parts of the Department and with other Federal, State, and 
local entities.
    Over the first 100 days of this administration, USDA has set out on 
a new course to promote a sustainable, safe, sufficient and nutritious 
food supply, to ensure that America leads the global fight against 
climate change, and to revitalize rural communities by expanding 
economic opportunities. We have moved quickly to respond to these 
difficult economic times by creating jobs, increasing food aid to those 
in need, and revitalizing rural communities. We have also made civil 
rights a top priority with definitive action to improve the 
Department's record and move USDA to be a model employer and premier 
service provider.
    I look forward to working with you, Mr. Chairman, and the members 
of this subcommittee as we continue our hard work to ensure that USDA 
is at the forefront of change.
                     improving financial integrity
    In order to improve financial integrity of the Department, I 
directed Subcabinet officials to review their agency's financial 
activities for wasteful and inefficient spending, and report on 
``savings'' each week. This has been a productive effort, which has 
resulted in the implementation of more efficient procedures and cost 
avoidance measures. The Terminations, Reductions and Savings volume of 
the fiscal year 2010 budget identifies annual savings of $19.5 million 
from a sample of the actions USDA agencies have taken. In addition, we 
will achieve a cost avoidance of $62 million in lease costs over 15 
years as a result of consolidating seven leased facilities located 
throughout the DC metropolitan area into one location.
    As we move forward in implementing the President's agenda, we will 
continue to root out inefficient management practices and improve our 
use of funds.
                              recovery act
    Before I delve into the specifics of the 2010 budget, I would like 
to provide an update on our efforts to implement the American Recovery 
and Reinvestment Act (ARRA) of 2009.
    USDA received $28 billion of ARRA funding. Of this amount, almost 
$20 billion, or approximately 70 percent, is for increasing the monthly 
amount of Supplemental Nutrition Assistance Program (SNAP) benefits 
currently assisting over 32 million low-income people and increasing 
the block grants to Puerto Rico and American Samoa.
    The remaining funds are for: supporting nutrition assistance 
programs that primarily target low-income women, infants, and children; 
expanding opportunities for broadband service in rural areas; improving 
community facilities, such as firehouses, libraries, schools, and rural 
medical clinics; improving drinking water and wastewater treatment; 
increasing farm assistance; promoting rural economic development; and 
supporting conservation projects to protect our Nation's forests and 
farm land.
Since Enactment of the Recovery Act, we Have
  --Worked with State partners to increase maximum SNAP benefits by 
        13.6 percent, which translates to an additional $80 each month 
        for a family of four. We also allocated $100 million in 
        emergency food assistance through TEFAP, and $25 million in 
        administrative funds for the Nation's emergency food assistance 
        network;
  --Distributed all of the $173 million in Recovery Act funding for 
        direct farm operating loans that has provided assistance to 
        2,636 farmers, of which approximately half were to beginning 
        farmers and 22.8 percent were to socially disadvantaged 
        farmers;
  --Announced a national signup for up to $145 million in floodplain 
        easements and extended the deadline to ensure landowners 
        impacted by flooding in States like North Dakota and Minnesota 
        are given an opportunity to apply. This will restore and 
        protect an estimated 60,000 acres of flood-prone lands;
  --Provided $45 million for the rehabilitation of watersheds, many of 
        these projects are nearing the end of their 50-year design 
        life. Recovery funds will be used to upgrade structures to 
        current safety standards, thereby protecting life, property and 
        infrastructure downstream for more than 90 years. USDA has also 
        provided $85 million for 53 new flood prevention project 
        efforts in 21 States and territories;
  --Made available about $760 million in funding to provide safe 
        drinking water and improved wastewater treatment systems for 
        rural towns in 38 States. USDA also received $2.5 billion for 
        expanding rural broadband into communities that otherwise might 
        not have access. USDA has begun implementation in concert with 
        the U.S. Department of Commerce and is determining the best 
        targeted utilization of the funding. These efforts will create 
        jobs and revitalize rural communities;
  --Provided approximately $60 million in essential community 
        facilities and emergency responder projects to help communities 
        in 39 States; and
  --Made approximately $4.4 billion in guaranteed and direct single 
        family housing loans for over 37,000 loans.
    I want to assure this subcommittee that the Subcabinet, agencies 
and the Department will be held accountable for not just swift 
implementation, but also for ensuring the funds are used efficiently 
and effectively. You should be confident that we are working hard to 
achieve the President's goals to revitalize the economy.
2010 Budget
    The President's 2010 budget, released on May 7, 2009, proposes 
$21.3 billion for discretionary programs under the jurisdiction of this 
subcommittee, an increase of nearly $2 billion over the 2009 levels 
provided in the Omnibus Appropriations Act. This increase is primarily 
associated with the Special Supplemental Nutrition Program for Women, 
Infants, and Children (WIC), international food assistance, rural 
development and other priority programs.
    The 2010 budget reflects the President's commitment to be 
transparent to the American people. Our budget accounts fully for the 
costs to operate the government. In addition, as I had mentioned, we 
have reviewed all of our operations for wasteful and inefficient 
spending. Therefore, the 2010 budget reflects a reduction of over $450 
million for the elimination of earmarks and funding for programs that 
are not as high a priority as others, or programs that provide services 
that can be supported by other means.
    I would now like to focus on some specific program highlights.
Nutrition
    Consistent with the President's commitment to present an honest, 
transparent budget, we are including sufficient resources to support 
estimated participation in the nutrition assistance programs.
    For WIC, the budget proposes $7.8 billion in budget authority to 
support an average monthly participation of 9.8 million in 2010. This 
is a total increase of over $900 million in USDA's largest 
discretionary program. The budget provides $225 million in WIC 
contingency funds, for a total contingency fund of $350 million with 
carryover from fiscal year 2009, should costs increase beyond current 
estimates. Additionally, the budget includes $30 million to assist 
States in modernizing and upgrading their management information 
systems.
    On the mandatory side, the budget includes over $1.8 billion in 
increases for Child Nutrition Programs, to support the increased level 
of school lunch participation and food cost inflation. School lunch 
participation is estimated to grow to about 32.1 million children each 
school day, with free meal participation increasing from about half of 
the total meals in fiscal year 2008 to almost 53 percent in fiscal year 
2010. The budget includes $5 million for Hunger-Free Community Grants 
authorized by Section 4405 of the 2008 farm bill and $0.7 million to 
expand the HealthierUS School Challenge program. In addition, the 
administration is proposing an increase of $10 billion over 10 years 
for reauthorization of the Child Nutrition Programs. These increases 
will support the President's efforts to reduce childhood hunger and 
obesity by improving access to nutritious meals, to encourage children 
to make healthy food choices, and to enhance services for participants 
by improving program performance and integrity.
    For the Supplemental Nutrition Assistance Program (SNAP), the 
budget includes $67 billion, including $5.9 billion in Recovery Act 
funds, to fully fund estimated monthly participation and provides $3 
billion in contingency funds, for a total contingency fund of $6.0 
billion with carryover from fiscal year 2009, should actual costs 
exceed the estimated level. Participation in SNAP is estimated to be 
about 32.6 million per month in 2009, and is projected to increase to 
35.0 million in 2010. The Recovery Act benefit increase will remain in 
place until the normal cost of living adjustment catches up to the 
higher benefit levels.
    The budget proposes discretionary funding for the Commodity 
Supplemental Food Program (CSFP) at a level needed to maintain the 
current participation and continues funding for The Emergency Food 
Assistance Program (TEFAP).
    In order to improve the administration of nutrition programs, the 
budget includes increases in the Nutrition Programs Administration 
account to improve payment accuracy, advance the use of technology in 
benefit delivery, and enhance nutrition education.
    In 2010, we look forward to issuing the revised Dietary Guidelines 
for Americans, which are the cornerstone of Federal nutrition policy 
and the foundation on which all Federal nutrition education, diet and 
physical activity guidance, and nutrition assistance programs are 
built. The process of establishing the Dietary Guidelines requires an 
investment in assessing the most current and credible scientific 
evidence on which to base them, a function that USDA created and 
employs through its Nutrition Evidence Analysis Library. USDA will be 
working to update the nutrition assistance programs to reflect the 
latest science found in the 2010 Dietary Guidelines. Further, the 
Department will build upon its enormous success in promoting healthy 
eating habits and active lifestyles with MyPyramid, including 
enhancements of the interactive and personalized tools, such as the 
recent MyPyramid for Pregnant and Breastfeeding Women, and MyPyramid 
for Preschoolers. MyPyramid is an important investment in the fight on 
obesity and much more needs to be done in this area, and to increase 
the level of physical activity that Americans engage in on a daily 
basis.
Food Safety
    A key responsibility I have is to make sure Americans have safe and 
sufficient and nutritious food. Although we have a strong food safety 
system, we need to continue to work to do a better job. We must focus 
on eliminating hazards before they have an opportunity to make anyone 
sick, developing technologies that will help us discover risks and 
allocate resources to reduce this risk, and during outbreaks rapidly 
identify and respond to incidents of foodborne illness. I am committed 
to modernizing the food system, focusing on preventing rather than 
mitigating the consequences of food-borne illness.
    For 2010, the budget requests over $1 billion for the Food Safety 
and Inspection Service. Not only will this funding will ensure that the 
demand for inspection is met as it provides for increased investments 
that will improve prevention, early detection, and mitigation that will 
reduce the adverse health impacts related to foodborne illness.
    The budget includes an increase of $23 million to improve the food 
safety Public Health Infrastructure. These improvements will strengthen 
and secure FSIS' ability to target food safety inspections and 
investigate food safety outbreaks. In addition, the budget includes an 
increase of $4 million for additional food safety assessments. These 
assessments are conducted by a team of investigators with a broad array 
of skills necessary to conduct a comprehensive evaluation of an 
establishment's food safety control system and potential public health 
risks associated with meat, poultry, and egg products.
    The budget estimates that $153 million in existing user fees for 
voluntary inspection will be collected. For 2010, we will submit 
legislation to Congress that would authorize the collection of fees to 
cover the cost of additional inspection activities necessary for 
establishments with performance failures such as retesting, recalls, or 
inspection activities linked to an outbreak.
    As a member of the President's Food Safety Working Group, I look 
forward to working with Secretary Sebelius and others to develop a 
strategy that will achieve the President's goals to upgrade our food 
safety laws for the 21st century and ensure that we are not just 
designing laws that will keep the American people safe, but enforcing 
them. The working group will improve coordination between USDA and the 
Department of Health and Human Services and other Federal food safety 
agencies. These activities will strengthen our capacity to reduce 
foodborne illnesses and deaths resulting from foodborne illness.
Trade
    USDA has an important role in expanding exports for our 
agricultural products. It is significant that, while the country as a 
whole has a trade deficit, agriculture has a trade surplus. USDA 
estimates that the trade surplus for agricultural products will be $13 
billion in fiscal year 2009. To encourage further export expansion for 
our products, we need to work hard both in Washington and in our 
offices overseas to ensure continued access to overseas markets. I 
appreciate the subcommittee's support in providing additional resources 
in 2009. Our 2010 budget builds on this foundation with $16.4 million 
in additional funds to meet critical needs in the Foreign Agricultural 
Service. The budget places particular emphasis on maintaining FAS's 
overseas presence so that its representation and advocacy activities on 
behalf of U.S. agriculture can continue and on upgrading FAS' 
information technology infrastructure. These funds are critical to 
continue our efforts to break down trade barriers that limit our 
capacity to export, such as the imposition of sanitary and 
phytosanitary barriers that are not in accord with international 
standards or science-based. As world market conditions deteriorate 
under the current financial crisis, we must be especially vigilant to 
ensure that we keep markets open as we move forward.
    Expanding our access to world markets and developing long-term 
trade relationships continue to be vital components of our strategy to 
improve the vitality of the farm sector and quality of life in rural 
areas. Due to the global credit crisis, we have seen a significant 
increase in demand for export credit guarantees provided through the 
GSM-102 program. To help meet this demand, the budget provides a 
program level of $5.5 billion for CCC export credit guarantees for 2009 
and 2010. This is a noteworthy increase in programming from as recently 
as 2007, when the program registered sales of $1.4 billion.
International Food Assistance
    An important focus of the Department's international work is 
providing foreign food assistance and promoting agricultural 
development overseas. The administration has established the goal of 
renewing the U.S. leadership role in global development and diplomacy, 
and fostering world food security. The international food aid programs, 
such as the McGovern-Dole International Food for Education and Child 
Nutrition and Public Law 480 Title II programs, contribute to that goal 
by addressing food insecurity throughout the world and supporting 
development, health, and nutrition.
    In support of those objectives, the 2010 budget increases 
appropriated funding for the McGovern-Dole program to nearly $200 
million, a doubling of the 2009 enacted level. We estimate the program 
will assist over 4.5 million women and children during 2010 at that 
funding level. This is a valuable program that promotes education, 
child development, and food security for some of the world's poorest 
children.
    For the Public Law 480 Title II program, the budget provides a 
program level of nearly $1.7 billion, an increase of $464 million above 
the 2009 enacted level. The increase will reduce our reliance on the 
need for future emergency supplemental funding. Supplemental 
appropriations for the Title II program have been requested repeatedly 
in recent years in response to a substantial growth in emergency food 
assistance needs. In that regard, we appreciate the Committee's 
favorable action on the supplemental request submitted by the President 
on April 9.
Environmental Services Markets
    The President has made clear his priorities in addressing climate 
change and expanding our capacity to produce renewable energy. These 
priorities create significant new opportunities for farmers and 
ranchers to succeed. The agriculture and forestry sectors hold the 
potential to deliver substantial emissions reductions, including carbon 
sequestration, under a national climate change policy and the 
establishment of environmental services markets. The budget reflects 
the new course the administration has set to ensure that America leads 
the global fight against climate change, and to revitalize rural 
communities by expanding economic opportunities, while maintaining a 
sustainable, safe, sufficient and nutritious food supply. To create 
additional economic opportunities for America's farmers and ranchers, 
the administration is pursuing new initiatives that reward producers 
for sequestering carbon and limiting greenhouse gas emissions by 
providing mechanisms for producers to generate income through 
environmental services markets. By seizing the opportunities presented 
by environmental services markets, producers will be able to transition 
away from a dependence on traditional farm programs.
    To this end, the budget includes an increase of $15.8 million to 
develop markets that reward producers for sequestering carbon and 
limiting greenhouse gas emissions. This includes $1.8 million to 
develop the metrics and certifications associated with the 
environmental services related to conservation and certain land 
management activities. We are also requesting an increase of $9 million 
to enhance the research and analytical capabilities of the Department 
related to global climate change and $5 million to conduct Government-
wide coordination activities that will serve as the foundation for the 
establishment of markets for these ecosystem services.
    We need to ensure that farmers and ranchers capitalize on emerging 
markets for clean renewable fuels and help America reduce its 
dependency on foreign oil by helping establish the demand necessary to 
support increased production of biofuels.
Renewable Energy
    The 2008 farm bill provided significant mandatory funding to 
support the commercialization of renewable energy. The 2010 budget 
builds on this investment in renewable energy and biobased activities 
by requesting discretionary funding to support almost $780 million in 
investments, approximately a net increase of about $275 million from 
2009. This includes increases of $218 million for loan guarantees and 
$32 million in grants to support renewable energy and energy efficiency 
projects under the Rural Energy for America Program (REAP). This 
request would more than double the amount of funding made available for 
REAP under the farm bill for 2010. In addition, the budget supports an 
increase of $49 million in loan guarantees for the Biorefinery 
Assistance Program.
    The emphasis on renewable energy research will be on production of 
energy crops. The 2010 budget proposes an increase of $11 million for 
the development of new varieties and hybrids of feedstocks with traits 
for optimal production and conversion to biofuels. The funding will 
also be used to develop a new data series on the supply and location of 
commodity production for renewable fuels.
Rural Development
    USDA's Rural Development (RD) programs provide essential support to 
rural America by providing financial assistance for broadband access, 
housing, water and waste disposal and other essential community 
facilities, electric and telecommunication facilities, and business and 
industry.
    The 2010 budget includes funding to support over $21 billion for 
loans, loan guarantees, and grants for the Rural Development on-going 
discretionary programs, an increase of $825 million over 2009. This 
makes Rural Development one of the largest lenders in the country.
    The budget will support over $7.3 billion in direct and guaranteed 
single family housing loans that will provide more than 59,000 rural 
homeownership opportunities. In addition, the budget includes $1.1 
billion, an increase of $188 million over 2009, to provide for rental 
assistance payments for 248,000 low-income households that reside in 
USDA financed multi-family housing and receive such assistance. This is 
sufficient for the renewal of all expiring rental assistance payment 
contracts. Rental assistance payments protect the rents of low-income 
rural residents who live in USDA financed multi-family housing 
projects. By maintaining these payments, we not only provide support to 
recipients, but also provide financial stability for multi-family 
projects that provide affordable housing to 460,000 families who live 
in these projects.
    The 2010 budget maintains significant support for infrastructure 
programs, such as the Water and Waste Disposal program and the Electric 
program. The budget funds approximately $1.6 billion in on-going direct 
loans and grants, an increase of $80 million over 2009, for essential 
water and waste disposal services. This program received an additional 
$3.7 billion under the Recovery Act and $300 million under the 2008 
farm bill to reduce the backlog of applications. These investments will 
help bring increased economic benefits to rural America by providing 
needed water and waste disposal systems and by creating jobs. For the 
Electric program, the budget provides $6.6 billion in funding for loans 
for the construction of electric distribution and transmission systems 
and to maintain existing generation facilities. This level of funding 
is sufficient to meet the expected demand for these loans.
    Increasing access to broadband service is a critical factor in 
improving the quality of life in rural America and in providing the 
foundation needed for creating jobs. The 2010 budget includes funding 
to support $1.3 billion for telecommunications loans and grants, 
including broadband. This funding level, coupled with the additional 
funding provided for USDA's broadband programs in the Recovery Act, 
will significantly accelerate the deployment of broadband access in 
rural America. These investments will increase access to quality 
broadband service, which is essential to keeping pace in a world that 
relies on rapid telecommunications.
    The 2010 budget also supports $546 million in direct loans, loan 
guarantees and grants for essential community facilities, such as 
health care and public safety facilities; as well as $993 million in 
business and industry loan guarantees and $34 million in zero-interest 
direct loans for intermediary relending.
    To spur the development of small business and value-added 
agriculture in rural America, the 2010 budget provides a $63 million 
increase for rural small business development in the Rural 
Microentrepreneur Assistance Program (RMAP), which is in addition to 
the $4 million in mandatory funding provided by the 2008 farm bill. An 
increase of $18 million is requested for Value-Added Producer Grants 
and nearly an $8 million increase for Rural Cooperative Development 
Grants.
    In keeping with the President's direction to eliminate spending 
that is no longer needed, the 2010 budget does not provide any funding 
for the EZ/EC grants for which the statutory authority expires, high 
energy cost grants which serve a narrow interest that can qualify for 
USDA assistance under several Rural Development programs, and grants 
for public broadcasting digital conversion, which is due to be 
completed in June 2009.
Diversity of Agricultural Production
    Consistent with President Obama's desire to invest in the full 
diversity of agricultural production, the budget focuses greater 
attention on assisting the organic sector, providing greater assistance 
to producers of specialty crops, and supporting independent livestock 
producers.
    The budget includes an additional $2.9 million, a 74-percent 
increase, in funding for the National Organic Program, which will 
support enhanced outreach and education and ensure program compliance 
to maintain labeling credibility.
    The budget also includes additional funding for USDA to work with 
the fruit and vegetable industry to develop, establish, and operate 
Federal marketing agreements or orders that will involve quality 
factors affecting food safety for U.S. leafy greens or other fruits and 
vegetables.
    In an era of market consolidation, the administration will support 
policies to ensure that family and independent farmers have access to 
markets, control over their production decisions, and transparency in 
prices. This includes implementation of farm bill-related regulations 
to enhance enforcement of the Packers and Stockyards Act, which 
prohibits unfair, deceptive, and fraudulent practices. For 2010, 
additional funding is included to strengthen enforcement of the Packers 
and Stockyards Act. Proper enforcement will ensure a level playing 
field that fosters fair competition, provides payment protection, and 
guards against deceptive and fraudulent trade practices in the 
livestock and meat sectors.
Research
    USDA's science agencies have been successful in developing 
innovative research technologies and solutions to deal with the highest 
priority issues facing American agriculture. Today we are confronted 
with national and global challenges that will require both an educated 
workforce and pioneering scientific research to effectively address. 
The 2010 budget includes proposals to revitalize rural education and 
confront the challenges of global climate change, bioenergy production 
and childhood obesity.
    Consistent with the President's pledge to make math and science 
education a national priority at all grade levels and revitalize rural 
economies, the 2010 budget for the National Institute of Food and 
Agriculture includes an increase of $70 million for research, education 
and extension activities. These funds will be used to provide 
incentives for educators in rural areas to enhance their teaching 
skills by establishing Rural America Teaching Fellowships, which will 
encourage qualified teachers to pursue professional development 
activities. The additional funding will allow secondary, 2-year 
postsecondary, and higher education institutions serving rural areas to 
update and revise their curricula and coordinate research and extension 
activities in the food and agricultural sciences. This initiative will 
also help strengthen the teaching, research, and extension programs in 
the food and agricultural sciences at 1890 and 1994 Land Grant Colleges 
and Hispanic-Serving Institutions. Finally, a new competitive grant 
program, utilizing the existing infrastructure of 1862 and 1890 land-
grant institutions, will be implemented to support rural 
entrepreneurship and sustain jobs in rural communities through training 
and the creation of web-based tools.
    The budget for the Agricultural Research Service (ARS) includes $37 
million in increases for high priority research in areas such as 
childhood obesity, bioenergy, world hunger, and global climate change. 
This includes an increase of $13 million for a major ARS initiative to 
develop effective sustainable practices to help reduce childhood 
obesity through preventative measures. As past attempts at treating 
obesity have proven unsuccessful, research will seek to determine the 
barriers to individuals in following the healthful eating and physical 
activity recommendations set forth in the Dietary Guidelines as well as 
study family centered interventions to determine their ability in 
preventing obesity in children. In conjunction with this effort, ARS 
will work to develop new healthier foods which increase satiety, 
decrease caloric density, and increase dietary fiber.
    The 2010 budget for ARS also includes an increase of $11 million to 
conduct research on the development of new hybrids and varieties of 
bioenergy feedstocks that have the traits necessary for the optimal 
production and conversion to biofuels. ARS is uniquely suited to lead 
this research, because it maintains the National Plant Germplasm 
Collection, the world's largest seed collection, and administers 
important genetic improvement and breeding programs. Research will also 
focus on developing strategies and technologies that will result in the 
sustainable, efficient and economic production practices of energy from 
forestry and agricultural products in ways that maintain the quality of 
the natural resource base.
    As I mentioned earlier, the budget supports research for global 
climate change aimed at developing mitigation and adaptation strategies 
through science. The budget proposes increases of $9 million within ARS 
to assess and manage the risks of global climate change to agricultural 
production and $1.8 million within the Economic Research Service budget 
to support research on the economics and policies for reducing 
greenhouse gas emissions.
    For the National Agricultural Statistics Service (NASS), the budget 
includes an increase of $1.8 million to establish a data series on key 
elements of bioenergy production and utilization which will be 
instrumental in developing a renewable energy infrastructure. The 
budget also includes an increase of $5.75 million to restore the 
chemical use data series which will allow the collection of data on 
major row crops on an alternating year basis. This data series will 
enable USDA, EPA and others to respond adequately to questions about 
agricultural chemical use and its possible effects on the environment.
    These program increases are offset by reductions in research and 
extension earmarks and lower priority projects that total about $260 
million.
Farm Safety Net
    The President's Budget includes proposals to improve fiscal 
responsibility, while supporting a robust safety net for producers that 
provide protection from market disruptions, weather disasters, and 
pests and diseases that threaten the viability of American agriculture. 
I want to reassure you that the President's Budget maintains the three-
legged stool of farm payments, crop insurance, and disaster assistance. 
However, in keeping with the President's pledge to target farm payments 
to those who need them the most, the budget proposes a hard cap on all 
program payments of $250,000 and to reduce crop insurance subsidies to 
producers and companies in the delivery of crop insurance. Crop 
insurance costs have ballooned in recent years from $2.4 billion in 
2001 to a projected $7 billion in 2009. The President's 2010 budget 
would rein in these costs by saving over $5.1 billion over the next 10 
years. While the budget includes a proposal to phase out direct 
payments to the largest producers, the Department is prepared to work 
with Congress and stakeholders as these proposals are considered.
Farm Programs
    To better respond to the Nation's economic troubles, USDA took 
swift action to implement the farm bill, and we will continue to move 
rapidly to implement the remaining portions of the farm bill. To that 
end, the 2010 budget requests an increase of $67.3 million to continue 
the Farm Service Agency's IT modernization effort and activities 
necessary to stabilize its legacy computing environment. This funding 
will supplement the $50 million provided in the Recovery Act for FSA's 
IT needs. The combined funds from the Recovery Act and the 2010 budget 
will allow us to continue to make progress in improving the delivery of 
farm program benefits, the security of producer information, and the 
integrity of taxpayer dollars by reducing the potential for erroneous 
payments. However, additional funding will be required in subsequent 
years to complete the stabilization and modernization efforts.
Farm Credit
    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. ARRA provided 
substantial assistance to address the tightening of credit in rural 
areas as a ripple effect of the Nation's overall credit crisis. Because 
the demand for credit is still high, the 2010 budget requests funding 
to support $4.1 billion in direct and guaranteed farm loans, an 
increase of $0.7 billion over the 2009 on-going level.
Crop Insurance
    For the Risk Management Agency (RMA), the budget requests $80 
million, an increase of $3 million over 2009. RMA manages the Federal 
crop insurance program in partnership with private sector insurance 
companies. This partnership has been very successful in increasing 
participation; however, potential instances of fraud and abuse within 
the crop insurance program continue to be identified. The President's 
budget includes an increase of $1.8 million to provide RMA the 
resources necessary to address critical compliance needs identified by 
the Government Accountability Office, the Office of Inspector General, 
and others. This funding will help to improve the transparency of the 
crop insurance program and identify those producers, agents, and other 
program participants who would knowingly defraud the Government.
Conservation
    The administration fully supports partnering with landowners to 
conserve land, protect wetlands, improve wildlife habitat, expand 
hunting and fishing opportunities, and promote other conservation 
initiatives. In this vein, the proposed budget includes several vital 
conservation programs, including the Conservation Reserve Program 
(CRP), Conservation Stewardship Program (CSP), the Environmental 
Quality Incentives Program (EQIP), and the Wetlands Reserve Program 
(WRP) that were authorized in the 2008 farm bill.
    These programs provide a special opportunity to address not only 
the Nation's most serious natural resource needs but also to facilitate 
the administration's goals of increasing energy conservation, improving 
renewable energy production, and reducing carbon emissions. These 
programs have also been instrumental in establishing and maintaining 
USDA's unique partnership with land owners and operators that will be 
vital to our success in solving or mitigating these serious 
environmental and energy concerns through voluntary actions.
    The 2010 budget reflects a continued commitment to conservation by 
including nearly $4.7 billion in mandatory funding for those 
conservation programs authorized in the 2008 farm bill. This will 
support cumulative enrollment of more than 281 million acres in these 
programs, a 10 percent increase over 2009. CRP, which accounts for more 
than 41 percent of total funding for conservation programs, is funded 
at just under $2 billion in 2010. This level of funding will support a 
cumulative enrollment level of 30.4 million acres. The budget proposes 
spending $1.2 billion for EQIP, which will support enrollment of an 
additional 16.8 million acres through cost-share contracts.
    Further, the Conservation Stewardship Program (CSP) and the 
Wetlands Reserve Program (WRP) are funded in the 2010 budget. This 
includes $447 million for CSP that will be used to enroll 12.8 million 
additional acres, and $391 million for WRP to enroll a projected 
152,600 acres. While the projected WRP enrollment in 2010 is slightly 
below the 2009 level, it is considerably higher than enrollment levels 
in recent years including more than double the level enrolled in 2008.
    The 2010 budget also includes $907 million in discretionary funding 
for on-going conservation work that provides high quality technical 
assistance to farmers and ranchers and addresses the most serious 
natural resource concerns. This includes discretionary savings of $75 
million from the elimination of duplicative programs and programs that 
are not as high a priority of other programs, including the Resource 
Conservation and Development Program and the Watershed and Flood 
Prevention Operations Program.
Civil Rights
    Ensuring equitable treatment of all of our employees and clients is 
a top priority for me. The 2010 budget includes increased resources to 
improve our efforts to ensure that all USDA employees and constituents 
are treated fairly. For too long, the Department has been known for 
prejudice and discrimination in its employment practices and program 
delivery. Such practices will not be tolerated while I am Secretary of 
Agriculture. By holding each USDA employee accountable for their 
actions and through the implementation of my recently announced civil 
rights plan, we will strive to make the Department a model agency for 
respecting civil rights. In support of these efforts, the 2010 budget 
includes funding to address program and employment complaints of 
discrimination and to increase the participation of small, beginning, 
and socially disadvantaged producers in USDA programs.
Outreach to Underserved Constituents
    Another key initiative is expansion of outreach to underserved 
constituents. The 2010 budget includes funding to support establishment 
of the Office of Advocacy and Outreach authorized in the 2008 farm 
bill. This office will increase the accessibility of programs to 
socially disadvantaged producers, small-scale producers, and beginning 
farmers and ranchers and will provide them an avenue for input into the 
programmatic and policy decisions to improve their viability and 
profitability.
    The budget also provides the funding necessary to support enhanced 
government-to-government relations and improve Tribal consultation and 
outreach activities related to USDA programs. This will enhance USDA's 
understanding of the diverse needs of Indian Tribes and the impacts of 
programs on Tribal organizations and communities.
Department Management
    In addition, the budget also supports efforts to improve the 
management and oversight of Departmental programs. Increased funding is 
being sought for management priorities, including:
  --Instituting a Department-wide cyber security initiative to 
        eliminate critical vulnerabilities that threaten the integrity 
        of the USDA network and the security and privacy of 
        Departmental systems and information. The budget includes an 
        increase of $45.8 million to ensure that USDA can reliably 
        deliver its broad portfolio of programs in a secure IT 
        environment.
  --Providing oversight of program delivery by conducting audits and 
        investigations and limiting fraud, waste, and abuse throughout 
        USDA.
  --To make USDA more open and its processes more transparent, the 
        budget includes funding for enhanced communications 
        capabilities; tools for improved public access to the appeals 
        process; and additional oversight to improve USDA reporting to 
        the public on programmatic spending.
Conclusion
    We have begun the process of making tough decisions about where our 
priorities lie and have made some tough choices about where we spend 
our resources. These choices reflect the new direction the President 
wants to take the country at this historic time--a track that takes the 
Nation on the path to recovery and provides the foundation and diverse 
opportunities for farmers and ranchers to succeed.
    That concludes my statement. I will be glad to answer questions you 
may have on our budget proposals.

    Senator Kohl. Thank you, Mr. Secretary.
    We will start our round of questioning with 5-minute 
events.

              AMERICAN RECOVERY AND REINVESTMENT ACT FUNDS

    Mr. Secretary, the Economic Recovery Act included 
substantial resources for USDA, including $11 billion for 
housing loans, $3 billion for business loans and grants, $3.75 
billion for water and wastewater loans and grants, as well as 
other funds. We know this placed a huge burden on the 
Department to quickly identify and fund the good projects.
    Do you foresee impediments to effectively utilizing all of 
the Recovery Act funds in a timely manner, and does this effort 
complicate the effective use of your annual appropriations?
    Secretary Vilsack. Mr. Chairman, we appreciate the 
opportunity that the American Recovery and Reinvestment Act has 
given us to invest in appropriate investments across the wide 
spectrum that you have identified with your question.
    Let me simply report to you and to the committee that we 
have been very aggressive in our efforts to implement the 
Recovery and Reinvestment Act. To date, USDA has provided 
37,057 home loans, single family housing loans, which has 
allowed us to reduce a significant backlog. To date, with the 
recovery and reinvestment resources, we have provided 2,636 
direct operating loans to farmers and ranchers in need.
    At the same time, we have begun the implementation of the 
expanded Supplemental Nutrition Assistance Program benefits 
which has on average provided an additional $80 a month for a 
family of four. For the benefit of the committee, these 
resources are expended by those families, 97 percent of them, 
within 30 days, and the reality is that for every $5 we invest 
in that specific program, we get $9.20 of economic activity. It 
is, indeed, a direct stimulus.
    We have provided over $615 million for safe drinking water 
and improved wastewater treatment facilities in rural 
communities in 34 States.
    We have announced $357 million in funding for Forest 
Service projects.
    We have fully obligated the $100 million that you all 
provided for the National School Lunch Program.
    We have also obligated $100 million for The Emergency Food 
Assistance Program. I was recently in Kentucky at a food bank. 
I cannot tell you how appreciative the food banks of this 
country are for the commitment that you have made. In that one 
facility alone, an additional 172,000 meals will be served as a 
result of the commitments and resources they received, and I am 
pleased to say that many of those meals will be high-protein 
meals with pork and poultry being two particular commodities 
that they were able to purchase.
    We have awarded $85 million--I think we have committed $145 
million for available watershed operations projects. We have 
awarded $45 million for watershed rehabilitation programs to 
rehabilitate dams and critical public health and water quality 
issues.
    And we have provided over $60 million in funding for 
community facilities in 39 States, including a number of fire, 
police, and medical vehicles.
    So we have rapidly implemented, as best we can, a 
substantial portion of the recovery and reinvestment proceeds.
    To your question in terms of its impact, this has, 
obviously, placed some stress on our staff, but I would suggest 
it has probably placed a greater stress on the staff of OMB, 
which sometimes makes it difficult for us working with those 
hard-working folks at OMB to get all of the rules and 
regulations out for the many programs that the USDA has 
responsibility for. I am sure we will touch on a few of those 
by the time the questions are finished today.
    Senator Kohl. Very good.
    Senator Brownback.
    Senator Brownback. Thank you, Chairman.

                 NATIONAL BIO AND AGRO-DEFENSE FACILITY

    A couple questions in some broad areas. One, I want to 
start off with, though, narrowly is the NBAF facility was 
recently announced in Manhattan, Kansas, the National Bio and 
Agro-Defense Facility. The physical plant is owned by Homeland 
Security. It is operated by USDA.
    Do you know USDA's plans to transition it from Plum Island, 
as far as when the actual personnel will be moved to expand 
this expanded mission at NBAF?
    Secretary Vilsack. Senator, I am not sure that we have a 
specific time table for transition. We are aware of the fact 
that this is an important step for us to take in terms of our 
homeland security and biosecurity.
    This new facility will provide us expanded space. It will 
also provide us BSL-4 capabilities which we currently do not 
have.
    We are working with the Department of Homeland Security, 
and we have identified with the Department of Homeland Security 
a variety of research opportunities at that facility once it 
gets in place. We are concerned, obviously, as I am sure you 
are, about foot and mouth disease, classical swine fever, 
African swine fever, Rift Valley fever, and a variety of other 
diseases. We will be working very closely with Homeland 
Security to get this transition done as quickly as we can 
because it is an important facility.
    Senator Brownback. Good.

                     HUMANITARIAN FOOD AID DOLLARS

    I want to show a quick chart we had done up on food aid. 
The big area that I have got concern with in food aid--I have 
worked in this region for some period of time, worked with a 
number of experts on it, a very important program that we have. 
I think it is a critical diplomatic program. I think it is a 
critical humanitarian program. I think it is critical for us in 
making our new efforts on HIV/AIDS in Africa and malaria work 
because if we are going to treat people and they have got a 
poor diet, they do not do very well. They need a good diet to 
go along with it.
    The troubling aspect of this chart is that we have 
increased funding substantially over the past 8 years and our 
tonnage has gone down dramatically in that same period of time. 
We are at a point now where roughly 65 percent of our food aid 
dollars go for two areas, administration and transportation. I 
am hopeful we start looking at ways that we can get people well 
fed and try to get that piece of it in a more controlled 
fashion, if possible.
    I do not know if you are aware of this. These are GAO 
studies. This chart is from the GAO. They are very engaged on 
this. I know the chairman cares deeply about food aid. It has 
got to be done right, but a 65 percent number just seems way 
high to me on those two areas.
    Do you have any comments?
    Secretary Vilsack. Several. First and foremost, we 
recognize the important role that food aid plays in terms of 
America's role internationally, which is one of the reasons why 
we have suggested and proposed, as you know, an increase in the 
McGovern-Dole program. That has been a very successful program.
    Senator Brownback. It has broad bipartisan support. People 
like that one. It is good.
    Secretary Vilsack. Broad bipartisan support and for good 
reason. We can assist over 4 million children in 19 countries. 
In fact, it has been so successful that some countries have 
actually taken that model and adopted it for themselves and 
have actually moved away from a reliance on our program.
    As you well know, there are certain restrictions and 
limitations in terms of how resources that we do provide in 
food aid are transported to countries. I would say that we are 
focused on a----
    Senator Brownback. Can I get right at that? My time has run 
out. I am not going at that. That is an old fight around these 
places, and I do not think we ought to engage that fight. I 
just think we have got to somehow get our pencils sharper on 
the amount that we are going at the administration and 
transportation number. But to go at that fight, I have been 
around this one too long, and it will not get us anywhere.
    Secretary Vilsack. Well, I am not disagreeing with you. I 
am just pointing out that that is one of the explanations for 
the chart that you have placed up there.
    Let me suggest a different way, Senator, if I might.
    Senator Brownback. Please.
    Secretary Vilsack. Let me suggest that one way that we 
could perhaps move this process forward is to focus on how we 
might be able to use not just the food resources of this 
country but the knowledge and the technical assistance that 
this country can provide. I think that there is enormous 
opportunity, as I mentioned earlier in my opening statement, in 
Afghanistan and Pakistan to model an effort on the part of 
America to empower people to be more self-sufficient.
    One of the problems is that most of the world farms on 
relatively small farms, and most of what we do in this country 
and most of the research that we do is focused on larger farms. 
I believe that we can provide technical assistance. I believe 
that we can focus our efforts on 1 to 2 hectare-sized farms and 
create an even more effective international effort to 
supplement what we are currently providing in the way of 
emergency food.
    In order for there to be food security, not only do folks 
have to be able to grow the food, not only do they have to be 
able to trade and have an economy that will allow them to 
trade, but there is, obviously, a role for emergency food 
assistance.
    So it is all three of those aspects. If you focus simply on 
one or two of the three, then you are not going to make the 
food available. Even if it is available, you also have to focus 
on creating the infrastructure, the roads, the transportation 
systems that allow it to get to people. And even if it is 
accessible to people, you also have to make sure that there is 
adequate information about how to properly utilize food.
    So all three of these components have to be part of what 
USDA does and what the United States does relative to food 
security. It is, in my view, not just one. I think you have to 
do all three, and I think you have to focus on all aspects of 
this.
    Senator Brownback. Thank you.
    Senator Kohl. Thank you very much, Senator Brownback.
    Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman.

                  DIRECT FARM PAYMENTS LIMITATION CAP

    Let me start, if I may, with another issue. As Senator 
Brownback alluded to on his issue, you know, we fight this 
fight sometimes around here. But I do want to get your thoughts 
on it, and that is the administration's proposal to phase out 
direct payments to farms that, I guess, have sales revenues 
above $500,000. Could you talk a little bit about that please?
    Secretary Vilsack. Senator, I think, first of all, I want 
to make it very clear that the administration, the President, 
myself, USDA understands and appreciates the important role 
that the safety net provides in rural America. That is the 
reason why we moved rapidly with the preceding administration 
and our administration to implement the farm bill rules as it 
relates to direct payments and counter-cyclical payments, why 
we have proposed the rules relating to ACRE and extended the 
sign-up for the ACRE program, and why we are currently working 
very hard and hopefully in the next 30 days to be able to put 
some of the livestock disaster payment rules out and to be in a 
position to have SURE, the disaster program, available in the 
fall.
    It is also one of the reasons why we do support reform but 
understand the important role that crop insurance plays in 
creating that safety net. So there is a commitment to the 
safety net.
    The proposal relates to a relatively small percent, 3 
percent, of the farmers who essentially receive 30 percent of 
the benefits. There may be and there probably are better ways 
to do this, Senator, and we are happy to work with you.
    We were challenged to focus on the priorities of increasing 
funding for child nutrition so we could end childhood hunger in 
this country and address the obesity issue at the same time. We 
were compelled, and I think appropriately so, to also take a 
look at the bottom line. We tried to respond to the priorities, 
made a proposal, but are certainly willing to work with you. If 
there is a better way to do this, we are certainly open to it.
    Senator Pryor. Well, I look forward to that. I think one of 
the things we should look at is the cost involved in producing 
the product and getting it out to the market because that 
varies widely depending on the product you are growing and also 
what region of the country you happen to be farming in. So I 
look forward to working with you on that. If we can do that 
fairly soon, that would be great.

                       POULTRY IMPORTS FROM CHINA

    My second question deals with trade, specifically trade 
with China and even more specifically with poultry. There is an 
amendment that was attached to the fiscal year omnibus 
appropriation bill section 727. Are you familiar with that?
    Secretary Vilsack. Yes, sir.
    Senator Pryor. What is your opinion on section 727? And I 
guess more specifically, it seems to me that--well, anyway, I 
would like to hear your opinion on that.
    Secretary Vilsack. Well, I think it is fair to say that the 
opinion of USDA is that we are, obviously, very interested in a 
science-based and rule-based trading system. That is one of the 
reasons why we have expressed concern recently on the H1N1 
circumstance and some of the decisions that countries have made 
to ban pork products.
    Having said that, we understand and appreciate the 
importance of concerns that are expressed in Congress and 
throughout the country about food safety relative to imported 
food. So what we are doing now is we are working with Members 
of Congress and a number of other folks to try to figure out 
precisely what the concerns are and see ways in which USDA can 
specifically respond to those concerns as quickly as possible 
so that whatever barriers exist can be removed and we can open 
up as much trade in all products as quickly as we possibly can.
    The commitment to you and to this Congress and to this 
committee is to work as quickly as we can to figure out 
precisely what we can do better than we are currently doing, 
and I think, hopefully, we will, within the next several 
months, have a better, clearer understanding of precisely what 
we can do better. Once we know that, we are committed to making 
that happen.
    Senator Pryor. Great. That is music to my ears. I would 
love to be part of those discussions with you and try to figure 
out how we can proceed from here. My impression of section 727 
is it ends up hurting American agriculture, specifically the 
poultry part of that. But we can talk about that more offline 
and have more discussions.

              RESEARCH FUNDING AT LAND GRANT UNIVERSITIES

    The last question I have for you is about the traditional 
land grant colleges and the research that is being done there. 
I believe it was Senator Brownback--I am sorry--Senator Bond--
one of those two referred to that. Could you tell us about the 
funding there? There is a core element of that research. Then 
there are a lot of other things that get done. Could you tell 
us about your vision for how we should prioritize those 
research dollars?
    Secretary Vilsack. Thank you for that question. And I 
certainly appreciated Senator Bond's comments, and I understand 
his concerns.
    Let me simply say, alluding to the fact that we had a 
relatively short period of time to put this budget together, 
that I did not feel comfortable knowing fully and completely 
all aspects of the Department's activities. So what I decided 
to do was in hiring the Under Secretary for Research, 
Education, and Economics to challenge and to charge Dr. Shah, 
recently confirmed by the Senate, to take a look at all of our 
research activities to make sure that we properly prioritize, 
we properly fund, we properly understand the intersection of 
those research opportunities at USDA and at the land grant 
universities and the private sector so that we can make sure 
that we are spending and investing our resources as wisely as 
possible. Only then would I feel comfortable in terms of 
committing to a budget of additional resources or different 
resources directed in a different way.
    I understand the importance of research. I clearly 
understand the importance of land grant universities. I worked 
at one before I came here. I worked on the Seed Center at Iowa 
State University, and I understand precisely the work that it 
does and that land grant universities throughout the country 
do.
    I will tell you that in discussions with the Afghan and 
Pakistani minister, the one topic that came up repeatedly was 
the Extension Service, the important role that extension plays. 
They would like to be able to replicate that in their 
countries.
    So I do understand it. I would just like to have the 
opportunity to better understand the details and the specifics 
and to be able to prioritize appropriately so that I could then 
be able to justify precisely what we are doing and why we are 
doing it.
    Senator Pryor. Thank you.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you very much, Senator Pryor.
    Senator Cochran.

                       2008 FARM BILL PROVISIONS

    Senator Cochran. Mr. Chairman, thank you. I find myself in 
agreement with the distinguished Senator from Arkansas about 
the possible implications with changes in the farm bill or 
administration actions with respect to implementing the farm 
bill that might make it more and more difficult for southern 
agriculture producers along the Mississippi River where 
traditionally the crops have been cotton and rice and, to some 
extent, soybeans and others, that they will likely suffer more 
than any other segment of agriculture if this administration's 
proposals are actually codified by the Congress.
    So I just mention that. You know it already, but it is a 
serious concern. It could likely lead to support for cap and 
trade legislation. I never have understood exactly why we have 
that language to describe that legislation, but it is going to 
reduce prices paid to farmers. It is likely to increase input 
costs as well. I do not know who benefits from that except 
those who want major changes made in the farm bill.
    We spent a year in hearings and working to try to develop a 
consensus for writing a new farm bill, and now to have this 
administration come in and immediately start attacking major 
provisions that were the objects of a lot of debate and a lot 
of difficulties in getting included in the bill set aside, I am 
concerned about that.
    I hope that we will support the administration's efforts in 
developing more aggressive trade policies. We think that is a 
very important step in the right direction, and we encourage 
you to use the tools that Congress has placed in the farm bills 
in the past that have worked, and we hope you can be successful 
in increasing our share of world markets with the use of those 
provisions.

                  DIRECT FARM PAYMENTS LIMITATION CAP

    Let me ask you if you could give us an update on the 
Department's farm bill implementation activities with respect 
to payment limitations.
    Secretary Vilsack. Senator, the direct payment and counter-
cyclical rules are out. The ACRE rules are out. The time period 
for sign-up is extended to August 14 to give folks the capacity 
to determine what is in their best interest. So those rules are 
out, and we are waiting for farmers across the country to make 
decisions which are important to their operations. Once those 
decisions are made, we will certainly honor them.
    We are also in the process, this month, of working 
diligently with OMB to try to complete work on a number of the 
disaster provisions, particularly as it relates to livestock. 
We know the circumstances particularly in the upper Midwest and 
other parts of the country with reference to livestock and 
storms and the impact of floods. So we are working very hard to 
get those rules out so people understand how they can sign up.

                SUPPLEMENTAL REVENUE ASSISTANCE PROGRAM

    We also appreciate the SURE program, which was part of the 
2008 farm bill, a new disaster program. It is a complex program 
to develop, made more so by the changes that were made to it as 
a result of the American Recovery and Reinvestment Act. It is 
also highly tied to the technology challenges that we have 
within the USDA. Operating with very antiquated technology and 
software, it sometimes becomes very cumbersome and time-
consuming to write the software to implement these programs. 
But we believe we are on track to have SURE rules out, at least 
in some form, in the fall. Then we will have to collect data 
concerning losses and hopefully we will be in a position to 
respond with payments in the following year.
    Senator Cochran. Thank you very much.
    Senator Kohl. Thank you, Senator Cochran.
    Senator Johnson.

                 NATIONAL ANIMAL IDENTIFICATION SYSTEM

    Senator Johnson. Thank you, Secretary Vilsack, for 
conducting an animal ID listening session in South Dakota. Are 
there any parts of the current plan you are absolutely 
committed to moving forward?
    Secretary Vilsack. Senator, this is, among many issues, a 
very contentious and difficult one. It not only creates 
different attitudes in different parts of the country, it 
creates different attitudes within the livestock family 
generally, poultry and pork having different views about it 
than cattle, and within the cattle industry, different views 
depending upon whether you graze on public lands or private 
lands or a combination.
    We have not completed the listening sessions, and so the 
candid answer to your question is I have not made any specific 
decisions relative to the program and improvements to the 
program because I want to give everyone an opportunity to have 
input.
    I will say that the reason why we are doing these listening 
sessions is because there has been concern expressed by some 
Members of Congress about whether or not the investment that is 
being made today by the Federal Government, now in excess of 
$130 million, is money well spent. That concerns me from a 
market standpoint. A recent study suggested that one incident 
could cause the livestock industry as much as $13 billion in 
losses. We know one head of cattle coming across the border 
from Canada caused us significant problems in our cattle which 
we still yet have to recover from in terms of our trading 
partners, and we also know that our trading partners are 
looking very closely at the safety and security systems that we 
have.
    There have been a number of concerns that have been raised, 
which I am sensitive to. One is the cost. Two is the 
technology, whether or not the Government is going to address a 
specific technology or a range of technologies that could be 
used. Three, obviously, whether it is voluntary or mandatory. 
Four, who bears the cost? There is a significant difference 
between cattle, pork, and poultry in terms of the overall cost 
to the industry. And there are deep concerns about who gets the 
information, who uses it, how is it accessed, and whether the 
public through the media would have the capacity through the 
Freedom of Information Act to access information. All of those 
issues and I suspect a whole lot more have been identified, as 
we look for improvements, we are going to have to think 
creatively and innovatively about.
    Senator Johnson. Could you provide me with a timeline on 
all this to take place and when your decisions will be made?
    Secretary Vilsack. Well, we expect and anticipate that it 
will take another month to two to complete the listening 
sessions, and then, hopefully, not very long after that, we 
would be in a position to make some recommendations and 
suggestions to see what reaction we get.
    The one thing I do not want to have happen is I do not want 
this Congress to lose confidence in the system, not provide 
funding, and then send I think what would be a very poor 
message to our trading partners and would, I think, negatively 
potentially affect our trading opportunities.

                       COUNTRY OF ORIGIN LABELING

    Senator Johnson. Given your excellent dedication to the 
COOL program, how have you been working with the USTR to ensure 
COOL is implemented properly?
    Secretary Vilsack. We have had very good conversations with 
Ambassador Kirk and his staff. We have had two face-to-face 
meetings between USDA staff and the Trade Representative's 
staff. I appreciate the working relationship that we have 
developed. Ambassador Kirk and I were friends before we had 
this opportunity in the administration, and we have built on 
that friendship.
    We continue to provide information and resources concerning 
COOL to the Trade Representative so that there is a clear 
understanding and appreciation that we are committed to COOL. 
We are committed to following the intent of Congress, as you 
all have outlined it, that we do not think that what we have 
proposed or suggested or that what you all have passed is 
necessarily trade-distorting. We think it is within the 
guidelines provided by the WTO. We know that our trading 
partners may have disagreements about that.
    Just one observation. A recent report suggested that 
livestock activities in Canada have been a bit more robust than 
they have been in this country, which would suggest that 
perhaps COOL is not having the impact or effect that some might 
believe.
    We will continue to work with USTR, continue to work with 
our Canadian and Mexican friends to make sure that they fully 
understand what this is and more importantly what it is not.

                  DIRECT FARM PAYMENTS LIMITATION CAP

    Senator Johnson. I have been an enthusiastic supporter of a 
cap on $250,000 for a payment limitations cap. But I am 
concerned about the $500,000 gross sales limit approach for 
direct payments also included in the budget. I want to point 
out that I am in favor of the $250,000 cap, unlike some of my 
colleagues, but I am opposed to the sales revenue cap because 
it is a gross number and not net.
    Secretary Vilsack. Well, Senator, in one respect I guess 
the USDA can be congratulated for developing such a strong 
bipartisan reaction to this idea. When I was Governor of Iowa, 
I often said that I would propose but the legislature would 
perfect, and I suspect that that strategy is in play here.
    Senator Johnson. Where do you propose to have an offset for 
the change if we make it?
    Secretary Vilsack. Well, Senator, we are pledged to working 
with you, with this committee, and with your counterparts in 
the House to make sure that this budget squares itself. We are 
committed to working with you. We were sure of one thing when 
we proposed this budget that you all would not just say, well, 
this is great, all in favor, say aye. You would have a lot to 
say about this budget. We are committed to working with you.
    I think it is important for me to reemphasize the 
priorities that the President has and that I share. We think it 
is important for a multitude of reasons that we address 
aggressively child nutrition. We think it is important for a 
variety of reasons, not to mention national security and 
economic security, that we continue to invest in bioenergy and 
rural development. And we do believe that there are ways in 
which we can have a strong, adequate safety net, as perhaps you 
have suggested with the cap, that do not necessarily make it 
more difficult for people to survive. And we are committed to 
that set of priorities.
    Senator Johnson. Thank you, Mr. Secretary.
    Senator Kohl. Thank you very much, Senator Johnson.
    Senator Bond.
    Senator Bond. Thank you, Mr. Chairman.
    Mr. Secretary, being a fellow former Governor, we have had 
a lot of experience on the legislative branch disposing of what 
we have proposed.
    I appreciate your answers to my colleague from Arkansas on 
research. We want to work with you on that.
    When you were speaking about Afghanistan, agriculture 
there, we have talked about the National Guard ag development 
teams, and we want to work it to the point where USDA is 
participating as security advances on that area because there 
is a tremendous opportunity.

                           CHILDHOOD OBESITY

    I want to move into another area. In one of the answers to 
one of the questions, you mentioned the priority of dealing 
with obesity, and you also testified initially about serving 
very nutritious food. As you know, the SNAP program is getting 
a $7.3 billion increase to over $61 billion, and we are all 
aware that this extra investment in taxpayer money can legally 
be used to buy sugar-sweetened drinks and empty-calorie food.
    Now, I am concerned. Are we doing well by taxpayers but, 
most importantly, by the recipients of assistance and their 
families when we subsidize poor and unhealthy diets? It seems 
to me that there is an opportunity with the electronic benefits 
card and point-of-sale displays or information to make sure 
that more of the assistance that is received is used in the 
healthy pyramid food type purchases. What are your views on 
that?
    Secretary Vilsack. Well, Senator, first of all, I want to 
acknowledge that you feel very strongly about this, and I 
appreciate the passion that you have about this. We have talked 
about it in your office and I know that you are committed to 
it.
    Let me, first and foremost, say that food is an 
extraordinarily complicated set of issues. Until I got this 
job, I did not realize that there were over 300,000 food 
products sold in grocery stores around this country, and that 
over 12,000 new products were introduced in the last 10 or 15 
years.
    We have made a concerted effort to, one, work diligently to 
try to improve the food pyramid so that it reflects modern 
science; two, that we do a much better job of promoting through 
educational tools the need for more nutritious food. We have 
begun a process of working particularly focusing on young 
children and young families to assure that moms and dads are 
aware of the important responsibility they have in making 
choices for their children. We are committed to working with 
our schools to make sure that not only are the school lunches 
and school breakfasts more nutritious, but what is in our 
vending machines at schools reflects that same attitude. So we 
think we are aggressively pursuing an education effort, and we 
think that over time it will make a difference.
    Senator Bond. But you are not willing to go down the road 
with me and cause a little bit of firestorm. I understand that.

                         AGROFORESTRY RESEARCH

    In the time I have remaining, we have had an opportunity to 
discuss agroforestry which is done--I am sorry my colleague 
from Arkansas has left. The University of Missouri School of 
Agroforestry works with the Booneville Agroforestry. It is a 
regional approach to assisting agriculture and particularly 
small farmers in using plants and trees for environmental 
benefits, providing better income. We are developing new crops 
like, I might just mention, chestnuts for example, as a second 
source of income. I had a minimum amount of happiness when I 
understand that the money for Booneville had been proposed for 
rescission. I hope that you all will consider that.
    But most importantly, I hope that we will have an 
opportunity to work with you and your staff with people who are 
interested here in Washington about the opportunities we have 
to do so many of the things you are talking about through 
agroforestry research.
    Secretary Vilsack. Senator, we are excited about the 
opportunities that forests present. As I explained earlier in 
my opening statement, we see a new opportunity for us to link 
our forests with our private working lands with our urban 
centers so that there is a full appreciation across the country 
of what trees and forests mean.
    I know that there are concerns about specific proposals 
relative to things that you all designate and specify. Again, I 
think it is a reflection of the budget process. We will 
certainly work with folks, but please do not take from whatever 
we propose the belief that we do not understand and appreciate 
the importance of forests because we do. We are very excited 
about what we see as a new day for the U.S. Forest Service and 
NRCS and linking those two important components of USDA to all 
of America.
    Senator Bond. Well, I thank you for that. We will look 
forward to working with you. I also appreciate your work and 
the discussions we have had on biotechnology, a complicated 
area. We will discuss that later.
    Thank you, Mr. Chairman, and Mr. Secretary, thank you. We 
have got a lot of exciting and interesting things to work on.
    Senator Kohl. Thank you very much, Senator Bond.
    Senator Nelson.
    Senator Nelson. Thank you very much, Mr. Chairman. Thank 
you for holding this hearing.

                     RECOVERY ACT BROADBAND PROGRAM

    Mr. Secretary, welcome. Let me first say as both former 
Governors from rural States, neighboring States, we learned 
about the importance of communication extending out to the 
rural areas into farmsteads and to small schools, as well as to 
the major metropolitan areas.
    As we set forth in the stimulus package for broadband 
deployment, it is my understanding that there may have been 
some slowdown, not necessarily intentionally, but as a result 
of trying to establish rules to move forward with the 
distribution of money to expand that broadband deployment. 
Knowing that the construction season is a little bit earlier 
for our States than it may be for some of the other States that 
do not enjoy the cold weather, is there anything that can be 
done to move the development of some of those rules along maybe 
a little bit more quickly?
    Secretary Vilsack. Senator, we have been working very 
closely with Secretary Locke and his team at Commerce. We are 
confident that by the end of this month we will have an outline 
of rules and regulations relative to how folks might be able to 
qualify for the grants and loans under the broadband program 
that you all have put into the Recovery and Reinvestment Act, 
and we anticipate that the first set of resources will go out 
in probably one of three different deliveries in the fall of 
this year. So we are aggressively working to get that done. We 
appreciate the importance of distance learning, of 
telemedicine.
    But I would also suggest to you that it is an extremely 
important strategy for rural development in terms of economic 
development. Small businesses currently that have a unique 
service or product are able to perhaps sell locally, but with 
broadband, they may be able to expand their market globally. 
This is part of the wealth creation strategy that we are trying 
to implement at USDA. So we are very cognizant. We are moving 
forward.
    And I would say we are also moving in a streamlined way. We 
will not have separate applications. We will have a single 
application, single process. We will make it as easy as 
possible for folks to apply for these resources.
    Senator Nelson. That is very encouraging because I was 
concerned where you have a couple of agencies trying to work 
together, that there might be some bifurcation as opposed to 
unification of the process. So that is extremely encouraging.

                  DIRECT FARM PAYMENTS LIMITATION CAP

    The discussion earlier from my colleague from Arkansas, 
Senator Pryor, regarding the payment limitations issue--I am 
concerned that what has been proposed by the administration on 
two occasions, the $500,000 direct payment limitation is not 
appropriate. I look forward to being able to work with you to 
design something more in line with what Senator Johnson and 
Senator Grassley and others have done in the past to try to 
limit the direct payments to large farm and ranching operations 
that just simply do not require the same kind of assistance 
from time to time or the same kind of a safety net that you 
would expect for smaller farms to be able to protect and keep 
agriculture from becoming all mega-farms. So I hope that we can 
look forward to working together on that.
    Secretary Vilsack. You have my commitment to do that, 
Senator.

                   NATIONAL DROUGHT MITIGATION CENTER

    Senator Nelson. The final question I have deals with water. 
The University of Nebraska in Lincoln has been established as 
the base for watching water management but also in predicting 
drought. The National Drought Mitigation Center provides a lot 
of background and data on drought, including what is now 
referred to as and cited as the drought monitor. One of the 
reasons that we focused on that and perhaps one of the reasons 
why it is housed in Nebraska is that now, according to the Ag 
Census of 2007 by your agency, Nebraska is the number one 
irrigating State based on acreage.
    What we have determined is that you cannot, obviously, 
prevent drought. You cannot necessarily always predict drought. 
But the more data that you have on drought, the better you are 
able to predict and prevent against some of the most adverse 
consequences of drought, in other words, changing the mix of 
crops that are used or changing the approach to agriculture 
during a period of dryness.
    I hope that the USDA sees this as a valuable tool for 
agriculture in those areas that are most directly affected by 
continuing dry periods. The old saying I think is true. When 
you are in the middle of a drought and it rains, the question 
is whether that is the end of the drought or the beginning of 
the next drought. So I am hopeful that there will be a lot of 
support for the efforts in the National Drought Mitigation 
Center.
    Secretary Vilsack. Well, Senator, thank you for those 
comments. We are acutely aware of the growing concern about 
water generally and see that there are a number of different 
strategies that we need to focus on in addition to those that 
you have identified.
    Just yesterday I had the opportunity to visit with the CEO 
of a seed company. They are, obviously, working very diligently 
on seed technology that might result in drought-resistant 
crops. That would certainly be helpful.
    Interestingly enough, I would expect that we will learn, 
even more than we already know, about these issues in terms of 
our work overseas. In meeting with the Afghan and Pakistani ag 
ministers, one of the big concerns they have is water and 
proper irrigation techniques. So I think there are a wide 
variety of ways in which we need to address this holistically 
and comprehensively.
    Senator Nelson. Thank you.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you so much, Senator Nelson.
    Senator Bennett.
    Senator Bennett. Thank you, Mr. Chairman.
    Mr. Secretary, welcome and thank you for your service, your 
willingness to put up with all of this, having been in charge 
for a while. Now you are discovering that nobody is in charge.
    Secretary Vilsack. I thought you were, Senator.
    Senator Bennett. Sometimes we think we are.

                     RECOVERY ACT BROADBAND PROGRAM

    Senator Nelson has covered most of the items that I wanted 
to cover with respect to broadband, and I am delighted that you 
are as committed as you are to pushing this forward. Let us 
just drill a little deeper into your methodology of trying to 
get the money out to the rural areas.
    I understand that you are hiring 40 new people with respect 
to the expanded RUS program. Is this to replace a contractor? 
Is this in addition to the contractor? Will this help get money 
out faster? Just share with us the particulars of how that is 
all going to work.
    Secretary Vilsack. Senator, as you know, USDA has been 
criticized in the past for the way in which it has handled some 
of these resources in rural communities. We are sensitive to 
those criticisms and want to respond to those criticisms and 
want to make sure when you all invest in us one more 
opportunity to promote broadband access in unserved rural areas 
that we actually deliver. So this is a decision on our part to 
try to make sure that we have sufficient outreach and 
sufficient information and sufficient evaluation to actually 
get the job done properly.
    I would also say that you have given us parameters, 
suggesting that at least 75 percent of what we have available 
from the Recovery and Reinvestment Act needs to be focused on 
these unserved rural areas.
    Senator Bennett. Right.
    Secretary Vilsack. And that is the intent. I come from a 
State, when I was Governor, where we made a really concerted 
effort to advance this technology without identifying which 
specific technology we would use. There are many options and it 
depends on what part of the country you are in. It depends on 
what has already been done. It depends on whether or not you 
are talking about funding the last mile, the middle mile, 
precisely what you are going to do. I think what you will see 
from us is a comprehensive approach. In some parts of the 
country, a middle mile is more important for us to finance than 
the last mile. In some parts of the country, it may be that the 
last mile is most important. It may be that we work with 
private contractors. It may be that we work with cities and 
communities. It may be that we are working with an individual 
locality or a group of localities.
    So there is no one-size-fits-all, and so you really have to 
have a lot of people working diligently to make sure that you 
are making the right set of decisions. We are going to work 
very hard to make that happen. We do not want to be subject to 
the same criticisms, appropriately so, that we have been in the 
past.
    Senator Bennett. Thank you.

                       COUNTRY OF ORIGIN LABELING

    Let me switch to another issue that was raised by Senator 
Johnson, and that is COOL. I do not know of any one issue that 
has been more contentious in this subcommittee over the years 
than COOL. All right, you are moving forward. You are 
complying, et cetera. Do you have any ideas--or any data is a 
better way of putting it--as to whether or not the consumer is 
paying any attention? Is it really making any difference in the 
supermarket?
    Secretary Vilsack. Senator, I do not know that we have 
specific data that I would be comfortable suggesting a specific 
response to your question. I do know that we are monitoring. We 
will probably likely monitor during the fiscal year 
approximately 5,000 locations to make a determination of 
compliance.
    From a general proposition--this is not data-driven, but 
from a general proposition I think there is a growing 
appreciation in this country for wanting to know your farmer, 
wanting to know where your food is coming from, wanting to know 
more about your food. I think we are going to continue to see 
more of that. Especially as we focus on nutrition, especially 
as there is a health care debate in this country and prevention 
and wellness become critical components of that, I think you 
are going to see a rising awareness.
    Senator Bennett. I agree, but I do not think personally 
that location is going to make any difference to a customer as 
to what he or she will buy in the supermarket.
    Secretary Vilsack. My only caveat to what would normally, I 
think, be an accurate observation on your part, I think price 
is obviously pretty significant.
    Senator Bennett. Yes.
    Secretary Vilsack. We had a program called Taste of Iowa 
when I was Governor, and people kind of liked the idea of 
purchasing food that was produced in Iowa. I will tell you I 
found it interesting that Lay's potato chips has decided to 
specifically identify the State in which the potato is coming 
from so that you can actually buy Georgia Lay's potato chips if 
you are of a mind to buy Georgia Lay's potato chips or Idaho. 
So they are giving consumer choice. They must be doing it 
because their marketing advice----
    Senator Bennett. That I agree with. I have always been in 
favor of voluntary COOL. It is the required Federal label that 
I have always doubted. If I can just share this with you, the 
one experience we have had before in this country has been the 
drive by the United Auto Workers to make sure that North 
American content would be listed on every car, and there was a 
great fight about that in the Congress for a long time. 
Finally, the union won, and then a few years later, people went 
back and started asking customers if they paid any attention to 
it. The vast majority of customers said, no, we didn't notice. 
But there was a small group who said, yes, we read the label 
very carefully, and if there is a high Japanese or German 
content, we are more likely to buy the car. So that did not 
necessarily work in the way that the sponsors of the 
legislation had in mind.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you, Senator Bennett.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.

            RECOVERY ACT WATERSHED PROJECTS IN RHODE ISLAND

    Mr. Secretary, thank you not only for being here, but this 
week you approved a commitment under the Recovery Act for four 
flood plain projects in Rhode Island, and we really appreciate 
it. It will not only get people to work, but it is critical to 
the homes along the Pawcatuck River, part of this watershed. At 
this moment, the Natural Resources Conservation Service is 
completing their overall watershed plan, and it should be 
before you very quickly. I would ask for your expeditious and, 
in the same spirit that you used this week, approval of the 
plan. Thank you very much.
    Secretary Vilsack. Yes, Senator.
    Senator Reed. It is more of a thank you than anything else.
    Secretary Vilsack. I made a note of that.
    Senator Reed. If it's the first one today, then----
    Secretary Vilsack. I am sure it is not. It better not be.
    Senator Reed. It better not be.

                  WILDLIFE HABITAT INCENTIVES PROGRAM

    There is one program that has been very useful to my State. 
It is the Wildlife Habitat Incentives Program, the WHIP 
program, and it has been significantly reduced in the budget. 
It is about a 50 percent cut. I recognize you have to make very 
difficult decisions.
    But the other aspect of this is that through changes in the 
last agricultural bill and through limited funding, it has 
posed real practical problems to use in Rhode Island. We have 
been very successful in removing old dams that are part of our 
industrial history. The whole Industrial Revolution began up in 
Rhode Island with the Slater Mill. But taking those dams out 
allows the fish to begin to propagate again. We have done it 
generally through partnerships with the State and not-for-
profits. Also, it has been made possible because the NRCS has 
been able to put up-front cost in place.
    The changes in the legislation, the cap on annual contract 
payments, that limit their ability to put money up front and 
also restricting sort of who can participate with them is a 
problem. I understand this is an issue that is both an 
authorization and appropriations issue. But I wondered if you 
could give some thought to ways in which other programs might 
be available, other methods might be used to continue to help 
us in Rhode Island to restore these riverways and restore fish 
to the riverways.
    Secretary Vilsack. Senator, that is a challenge that we 
will take up. If I might, I think it is necessary for me to 
respond to where we are headed in terms of conservation.
    The overall budget relative to conservation, at least from 
our perspective, will result in a total of $4.7 billion being 
committed in a variety of programs, both in technical and 
financial assistance. This is a $374 million increase over the 
2009 level and a $744 million increase over 2008.
    What we attempted to do--and we have asked, I guess, some 
understanding on the part of this committee and the Congress--
was to try to match up as best we could the resources in 
individual programs with what we see as the historical need and 
desire for those programs, together with the fact that with the 
new program, the Conservation Stewardship Program, we have some 
things to learn about how best to implement, how complicated or 
easy it will become. So we made our best-guess estimate on a 
relatively short time frame about how best to do this.
    But there is no question there is a commitment to private 
working lands. There is no question there is a commitment to 
trying to figure out how to help landowners, property owners 
protect their land. There is no question that we understand the 
significant role that these programs can play in providing that 
protection, and we are committed to it. As I said earlier, what 
we hope to be able to do is to integrate it with what we are 
doing with the Forest Service in other parts of the country to 
preserve water, both quality and quantity of water. So we are 
committed.
    Let me also say that I have not had an opportunity yet to 
institute this, but we have just begun starting a process of 
taking a look at how we make decisions and whether or not there 
are ways in which we can streamline, reduce the steps necessary 
in making decisions without reducing the appropriateness or the 
correctness of the decision we make. I cannot tell you that 
that is going to be done tomorrow, but I can tell you that it 
will be done, and hopefully some of these programs will be 
easier to administer and easier to understand than they have 
been.
    Senator Reed. Well, thank you, Mr. Secretary. Just a quick 
point. You have a national mandate, and some of these programs 
are particularly useful in some parts of the country and we 
found this with the WHIP program because we are trying to 
really reverse hundreds of years of industrial use along our 
rivers, and that is not the same challenge in many parts of the 
country. So any help you could give along these lines, we would 
appreciate. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you, Senator Reed.
    Senator Harkin.
    Senator Harkin. Mr. Chairman, thank you very much and, 
Ranking Member Brownback, thank you for your great stewardship 
of this committee and also for having this hearing today.
    I am sorry I am late, Mr. Secretary, but I was chairing a 
hearing on the authorizing committee on derivatives. And we had 
Mr. Gensler, the new head of the Commodity Futures Trading 
Commission, and it went on for a long time. So I apologize for 
being a little bit late.

                    STATEMENT OF SENATOR TOM HARKIN

    Mr. Chairman I hope, that you and other members of the 
committee are now getting to know the Tom Vilsack that those of 
us in Iowa have known for a long time, a very dynamic, smart, 
and progressive leader who is not afraid of change. As 
government and a State Senator he has shown that he has the 
requisite managerial expertise to guide and direct change for 
very positive ends and I am certain he will continue that as 
secretary of agriculture.
    Three areas in which I note that you have been such a great 
leader on just since you have taken over down there, Mr. 
Secretary, are your great leadership, on renewable energy, 
which trails what you did as Governor of Iowa; your leadership, 
of course, on nutrition and looking ahead on that. We have to 
reauthorize our child nutrition bill this year, and we look for 
your and Deputy Secretary Merrigan's help and input on getting 
that through.
    I do want to commend you and the President for putting that 
extra billion dollars a year in the President's budget request 
for child nutrition programs. This funding is vitally 
important. It is my belief that we need to get better food for 
our kids in schools, such as fresh fruits and vegetables, and 
meats. Well, those may cost a little more money, but if we 
really want our kids to eat well, we are going to have to 
provide the needed funding. So I am really glad that you have 
put in your budget an extra billion dollars a year for child 
nutrition programs.
    Secretary Vilsack, I would also like to mention your 
leadership in conservation and I civil rights since being 
confirmed you have taken the bull by the horns on civil rights, 
and I congratulate you for that and ask that you do not let up 
in addressing civil rights concerns at the department.

                           PREPARED STATEMENT

    I want to thank you and Deputy Secretary Merrigan both for 
your great leadership at the Department.
    Mr. Chairman, I ask that my full statement be made a part 
of the record.
    Senator Kohl. We will do that.
    [The statement follows:]

                Prepared Statement of Senator Tom Harkin

    Thank you, Chairman Kohl and Ranking Member Brownback, for holding 
this timely hearing on the President's fiscal year 2010 budget proposal 
for the U.S Department of Agriculture.
    I welcome Secretary Vilsack back to the subcommittee. I have always 
known that he is deeply committed to farm families, rural economic 
development, and strong Federal nutrition programs. But, in his first 
months in office, he has really been a breath of fresh air here in 
Washington. Secretary Vilsack has charted an ambitious, reform agenda 
for the Department. And I look forward to continuing to support him in 
every way I can.
    As we all know, our economy continues to face extraordinary 
challenges. The downturn has taken its toll on farm country, and it is 
also placing an enormous strain on our Federal nutrition programs. But 
farmers and ranchers are a great strength of this economy. And I am 
confident that they will help lead the way to recovery.
    The President's fiscal year 2010 budget proposal for USDA builds on 
investments made by the 2008 farm bill, the fiscal year 2009 Omnibus 
Appropriations bill, and American Recovery and Reinvestment Act of 
2009. Together, these bills are putting people to work, supporting our 
agricultural producers, and spurring rural economic development. I 
appreciate that the President's budget proposal is the product of tough 
choices during difficult times.
    Mr. Secretary, you and I share President Obama's vision of 
transforming America's energy future by vastly expanding our reliance 
on domestically produced, renewable energy. I was pleased to see that 
the President's budget builds strongly on investments made USDA energy 
programs in the 2008 farm bill. The President's budget request, along 
with mandatory funding provided in the farm bill, will accelerate the 
development and commercialization of advanced biofuels and other forms 
of alternative energy.
    In addition, I enthusiastically welcome the President's request for 
$1 billion annually in new funding for Federal child nutrition 
programs, including the School Lunch and Breakfast Programs, the Summer 
Food Service Program, and the Child and Adult Care Food Program. These 
are enormously effective programs, but they are under great strain, 
right now, because of the recession.
    We need more aggressive efforts to ensure that that all eligible 
children are receiving the benefits to which they are entitled under 
the law. This is especially important as we seek to make good on 
President Obama's commitment to end childhood hunger in America by 
2015.
    I commend the administration for giving strong priority to child 
nutrition programs in the proposed budget. As a member of this 
subcommittee and as Chairman of the Senate Committee on Agriculture, 
Nutrition, and Forestry, I look forward to working with the Secretary 
to pass a strong, reform-minded reauthorization of our child nutrition 
programs.
    On a less positive note, I am very disappointed with the amount 
allocated in the President's budget for conservation programs. The 2008 
farm bill--which passsed by overwhelming bipartisan margins in Congress 
less than a year ago--authorized significant new investments to promote 
conservation and sustainable use of our natural resources.
    I worked hard to include a robust conservation title. In my view, 
these programs are now more important than ever, especially as we work 
to address significant environmental concerns like climate change, 
nutrient runoff, loss of wildlife habitat and biodiversity, and loss of 
critical wetlands.
    I hope that the Chairman and Ranking Member, along with other 
members of this subcommittee, will work with me to maintain the 
investments provided in the farm bill for conservation programs.
    Again, I thank the Chairman and Ranking Member for holding this 
hearing. And I look forward to the Secretary's testimony. Thank you.

    Senator Harkin. I have a few questions I will submit in 
writing, but do have a question I would like to ask you.

                       WRP 2008 FARM BILL PROGRAM

    During the last farm bill we fought very hard for 
conservation funding. This was a long, drawn-out negotiation 
both in the Senate and then in conference. We reached 
compromises. As I have often said, the farm bill was not 
exactly the bill that I would have written, and I think 
everybody on the Senate and House Agriculture Committee's would 
say the same thing. Everybody had to make compromises.
    But, in the end we were able to keep a very strong 
conservation title in the 2008 farm bill. I am a little 
concerned, I must note for the record, about the proposed 
cutbacks in the WRP program and the EQIP program in the budget 
proposal. As far as I have been able to discern, there has been 
no reduction in the requests for assistance under programs like 
WRP or EQIP. Again, with increasing demand for food, feed and 
now moving more toward renewable energy and using land for that 
purpose, it may well entail more intensive cropping and demands 
on resources and we are going to need more conservation 
practices on the land.
    I am glad to see that you have kept the mandatory funding 
levels for other programs like the CRP and CSP. But, I am 
concerned about the WRP. Can you just give me some idea of why 
that funding was cut back?
    Secretary Vilsack. Senator, first of all, I am keenly aware 
of your personal commitment to conservation and the work that 
you did not just on the 2008 farm bill, but also the 2002 farm 
bill to really introduce this topic of conservation in a 
meaningful way and creating private working lands conservation 
concepts in the farm bill. We are certainly supportive.
    This may not be an acceptable response to your question, 
but it is the response that I must give, and that is, we have 
overall increased the spending levels over what we spent last 
year and the year before in conservation generally.
    Senator Harkin. That is true.
    Secretary Vilsack. And we have tried in many of the 
programs to match the amount of money that we are asking for 
with the amount of work that we, in fact, have been able to do. 
In other words, even though you may have authorized a 
substantially greater amount, the capacity of USDA in some of 
these programs is limited by the number of people we have that 
are processing these applications, making sure that they are 
processed accurately.
    In response to Senator Reed's question, I have not had an 
opportunity yet to really focus in on the process that we are 
using to determine whether or not it can be streamlined and 
maybe as a result, we can actually process more with the same 
number of people and maybe do a better job in the future of 
meeting those authorized limits as opposed to what we are 
currently proposing.
    But the reason we are proposing what we are proposing is we 
think it is a realistic in many cases--in some cases it is 
actually an increase over what we spent last year. We think it 
is a realistic target in terms of our capacity to actually 
process the work.
    Senator Harkin. Thank you.
    Secretary Vilsack. I do know this. I know that folks are 
working hard over there at NRCS and all the other agencies of 
USDA, but my guess is that there are probably some things we 
could do from a streamlined process. Senator Brownback 
suggested in rural development the need to integrate programs, 
and I think he may have a good point. There may be process 
integration that could take place as well. I just have not had 
a chance to get to that yet.
    Senator Harkin. I appreciate that. I support streamlining 
that could be done over there.
    Mr. Chairman is my time expired?
    Senator Kohl. Go ahead.
    Senator Harkin. Thanks, Mr. Chairman.

                RECOVERY ACT BUSINESS AND INDUSTRY LOANS

    The Recovery Act money for the business and industry loans 
program. Would you tell me the status of obligating this 
funding? It has to be obligated by September of next year.
    Secretary Vilsack. Senator, I think we have done a 
reasonably good job of getting a significant amount of the 
Recovery and Reinvestment Act money out. We were fortunate 
because in most cases you were funding existing programs and we 
could work through the existing structure.
    There is a funnel that is created, as you well know, 
between the vast number of people at USDA that are working on 
proposals that ultimately have to be approved by OMB, and that 
funnels into a relatively small hardworking outfit over at OMB.
    We have put a priority on some of these programs because we 
think it would create the biggest bang for the buck and the 
quickest bang for the buck. The B&I piece of this we are 
working on. We have proposals at OMB I believe, that will allow 
us to proceed forward with those programs in the very near 
future, but the vast majority of the rest of the money has 
actually been obligated or is out the door or is in the process 
of very quickly being obligated.
    I am pleased with what we have done in terms of 37,000 home 
loans. I am pleased with what we have done in terms of all of 
the direct operating loans that have been obligated. I am 
pleased that most of the watershed rehabilitation money has 
been allocated and the watershed easements have been allocated. 
I am pleased that we were able to get the SNAP money out and 
the administrative money to the States and the emergency 
funding and the school lunch monies out to the States. So we 
have been working pretty hard. B&I comes next, and I am 
anticipating that will be very, very soon.
    Senator Harkin. Very good.
    Thank you very much, Mr. Chairman.
    Senator Kohl. Thanks a lot, Senator Harkin.
    Senator Specter.
    Senator Specter. Thank you, Mr. Chairman.
    Mr. Secretary, I join my colleagues in welcoming you here, 
and thank you for taking on this tough job.

                   PHILADELPHIA SCHOOL LUNCH PROGRAM

    A couple of subjects that I would like to discuss with you 
in the short time allotted here. Milk prices.
    I begin with the Philadelphia school lunch program, which I 
see you nodding in the affirmative on familiarity because there 
has been a very strong push by many Members on both the House 
and Senate side on this very important program which feeds 
children at 204 schools. In a big city like Philadelphia, that 
is a very difficult situation, a lot of single-parent families, 
a lot of working mothers, in the economic crunch we are in at 
the present time, very little income to buy the necessities of 
life. Where we have seen so many situations where children go 
to school hungry, no breakfast and no lunch, the educational 
opportunities are very limited.
    That kind of a district has been the recipient of a lot of 
attention over the years, attention on a program called Gear 
Up, especially attuned to at-risk young people, extensive job 
training programs, a very, very difficult situation, mentoring, 
where you find a tremendous movement from truancy to juvenile 
delinquency to crime, extraordinarily difficult. And this lunch 
program is really an indispensable building block on what I 
have seen as a city official and as a Senator.
    There is concern about at least waiting until the nutrition 
authorization bill comes up, consideration on adding an 
amendment to the Agriculture appropriations bill. But is there 
not some way to extend this program to relieve a lot of angst 
that is gripping now parents and children in this very large, 
very difficult city population?
    Secretary Vilsack. Well, Senator, first of all, I certainly 
appreciate your advocacy for this program. It has been 
steadfast and it has been passionate. I know that it is a very 
important program to the city of Philadelphia.
    As you know, the Bush administration made the decision 
before I came into office, before President Obama came into 
office----
    Senator Specter. We corrected all that. We thought we did. 
Or somebody did if not I personally. In fact, now that I think 
about it, I think I had something to do with it.
    Secretary Vilsack. This program has been extended a couple 
of times. But in December 2008, the school district was 
notified of the intention to discontinue the program. We 
recognized that an abrupt discontinuation of the program was 
not an appropriate way for us to respond to the moral challenge 
that you have outlined to these families. And we have been 
searching for a way in which we can not only continue to do 
what needs to be done in Philadelphia, but make sure that every 
inner city, every major city, the children of every working 
family or poor family that has the same kinds of circumstances 
get an opportunity to be well fed. I want to assure you that 
that is an absolute commitment of this USDA, of this President. 
He wants to end childhood hunger by 2015. He is committed to 
it. We are committed to it. I know you are.
    We are anxious to work with you to figure out ways in which 
that program can be a model, a pathway to a national effort 
that enables all of the children similarly situated to have the 
benefit of decent meals. So whether it is in the 
Reauthorization Act or after the Reauthorization Act, we are 
happy to work with you on that. We make that commitment today 
to work with you.
    Senator Specter. Are you saying, in effect, that there is 
some real optimism about our ability to have this program 
continued?
    Secretary Vilsack. I think what I would like to be able to 
say, Senator, is that I would like to see it rolled into a 
program that essentially extends those kinds of opportunities 
all over the country, including Philadelphia, not necessarily 
only Philadelphia, but including Philadelphia. We think that we 
have learned a lot from this program, and the question is can 
we figure out how to take what we have learned in Philadelphia 
and make sure that it is available to cities all across the 
country.
    Senator Specter. Well, if you are talking about rolling the 
Philadelphia program into a broader program, that is terrific. 
I think there ought to be a broader program, and my focus, 
obviously, necessarily is on Philadelphia. But if you think it 
can be rolled into a broader program, that would satisfactory.
    Secretary Vilsack. That is what we hope. I mean, I am from 
Pittsburgh, Senator, so we want to make sure the rest----
    Senator Specter. I am equally concerned about Pittsburgh.
    And also, Secretary/Governor, about Iowa, and about 
children all across the country.
    Secretary Vilsack. As I am as well, Senator.

                            LOW MILK PRICES

    Senator Specter. My time has expired and I will not ask 
another question to take more time of the subcommittee, but we 
will submit in writing the concerns I have about the reduction 
in milk prices, some 36 percent lower from January to April of 
this year compared to last year. We will ask you about what 
might be done under the MILC program or under the Dairy Export 
Incentive Program because the farmers of my State and I think 
the farmers across the country are in very bad shape.
    Secretary Vilsack. If the chairman would allow me 30 
seconds to respond to----
    Senator Specter. You are not restricted on time. It is only 
Senators who are restricted on time. The red light does not go 
on for you.
    Secretary Vilsack. I just simply want to reassure you that 
we are very concerned about the dairy situation, which is why 
we have got the MILC payments out. We anticipate that by the 
time it is all said and done--I want to make sure I get this 
number right--almost $900 million will be paid, we suspect, 
through the MILC program.
    We have also given instructions to our farm service 
agencies to work with our dairy producers to enable them to 
restructure, refinance, reexamine their lending so that they 
are not put in a difficult situation because of these low milk 
prices. We know that they are looking very carefully and 
closely at how they can help.
    We also recently utilized the DEIP program making sure that 
it was WTO-compliant but that we exercised support for exports 
as well.
    So we have taken a number of steps in the last couple of 
months, Senator, to respond because of your advocacy and 
Senator Casey's advocacy and, Senator Kohl, your advocacy in 
particular and those from California. We have been listening 
and we have been trying to respond as best we can.
    Senator Specter. That is very encouraging. Thank you very 
much, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you very much, Senator Specter.

                          GLOBAL FOOD SECURITY

    Mr. Secretary, as you know, global food security is one of 
the most important issues in this subcommittee, and we 
discussed a number of ways to improve agricultural systems in 
developing countries in order to improve stability and to also 
fight world hunger. How is USDA involved in this effort, and 
what more can you do to improve food security around the world?
    Secretary Vilsack. Senator, I would say a couple of things.
    First of all, we think this is an opportunity for us to 
expand the McGovern-Dole program. As I said earlier, this is a 
program that has been enormously successful. We have suggested 
an increase to $200 million. That will allow us to expand the 
program to four African nations, helping about 400,000 
additional children. We are pleased with the fact, again as I 
said, a number of countries have been so impressed with the 
appropriateness of helping feed children and the connection 
that that has had with youngsters' ability to be educated, that 
they themselves have taken up that responsibility.
    We also believe that we need to integrate our efforts with 
the State Department, with USAID, and to develop an overarching 
philosophy that is focused on the three principles of food 
security, which is availability, providing technical assistance 
and help so that countries can raise what they can raise and do 
it in the most productive way possible, assisting those 
countries in utilizing trade to supplement what they cannot 
raise and providing appropriate emergency food assistance when 
that becomes necessary. That is one component.
    The second component is accessibility, the ability to get 
food from where it is being grown to where it is needed. That 
involves infrastructure, and we are specifically, as it relates 
to Afghanistan and Pakistan, hopeful that we can work with 
those two countries to substantially increase the 
infrastructure, to substantially increase productivity, to deal 
with water issues, to create assistance with regulatory 
structures and frameworks so that they can enhance their trade 
opportunities as a model, and then finally utilization, the 
capacity to properly refrigerate, properly handle, properly 
utilize the food that is available and is accessible. All of 
those components have to be part of our overall program.
    USDA is prepared from technical assistance from the 
research component, from APHIS, from the regulatory assistance 
that we can provide and from the fellowships that are funded 
through USDA, the Borlaug Fellowships, the Cochran Fellowships, 
and the land grant university exchanges that take place. All of 
that is part of an overarching program that we are instituting 
with Afghanistan and Pakistan and we hope to be able to extend 
it to sub-Saharan Africa. We think if we can do this and we 
have the resources to do it, we can, I think, profoundly impact 
this food insecurity issue that challenges the world.
    And then finally, we discussed earlier today water. That is 
a very critical issue, and I think we can help provide 
resources in terms of technical assistance of how to utilize 
water.
    The research that is being done today for the most part is 
focused in this country on large farms, but the reality is that 
the vast majority of farms worldwide are very small farms. So 
it may not take a lot of technical assistance. It may be fairly 
rudimentary to provide drip irrigation systems that might be 
very inexpensive.
    We just need to figure out strategies to help these farmers 
be more productive, to help them to be able to access trade 
opportunities, and help them to be able to be self-sufficient, 
and when and if it becomes necessary, we need to be prepared to 
provide emergency assistance and maybe in a more efficient, 
more effective way as was outlined earlier today.
    Senator Kohl. Very good.

                         RURAL COMMUNITY FORUMS

    You have held several rural community forums across the 
country. I understand you may be holding more. What kinds of 
things have you been discovering? What kind of information have 
you been gathering?
    Secretary Vilsack. Well, it somewhat depends on the area of 
the country, but I think that there is a real strong desire on 
the part of rural America to participate in helping reduce our 
dependence and our addiction to foreign oil. I think there is a 
belief that whether it is biomass or whether it is corn-based 
ethanol or whether it is new alternative feedstocks, there is a 
real desire for America to be producing its own energy.
    And there is concern, as you well know--and Senator 
Brownback, I am sure you know as well--about the existing 
infrastructure for the ethanol industry and the biofuel 
industry. So we are working with our credit friends, Farm 
Credit and others, to try to figure out strategies and ways in 
which we can make resources available or restructure the 
resources we have so that we maintain that infrastructure.
    Then the President has provided a directive to us to 
accelerate the implementation of the energy provisions of the 
farm bill. We intend to meet the deadline he has set for us. So 
very, very shortly you will see proposals relative to second-
and third-generation feedstocks, resources for new 
biorefineries, resources to convert existing biorefineries, to 
use these new feedstocks, and assistance for producers to 
produce these new feedstocks. That is one thing that we are 
hearing.
    Then the dairy issue we have discussed is a serious issue, 
and we have tried to outline the fact that we have taken steps. 
Pork producers are feeling stress. Part of our challenge is 
that we have tools to respond to situations like this, but to a 
certain extent, because of decisions that are made to direct 
section 32 resources, sometimes our capacity to respond in as 
large a way as necessary is a bit compromised. So we are trying 
to figure out ways in which we can encourage, for example, 
institutional buyers to focus on purchasing pork to take some 
of the pressure off that industry, and we are obviously working 
hard on trying to reduce trade barriers.
    I think there is a genuine concern in rural communities. 
They are anxious to know that the Recovery and Reinvestment Act 
relates to them. When they hear a water treatment facility 
being funded in their town or they hear a health care facility 
being expanded or equipped because of resources or they hear 
that the river that has flooded every year is not going to 
flood or that they are going to receive some relief from that 
because of what USDA has done, they are appreciative.
    And then we have made an effort to make sure that they not 
only know the resources that are provided from USDA, but they 
have a sense of all the other resources that are being provided 
from other departments of Government. I think that is a 
reassuring message.
    Senator Kohl. Very good.
    Senator Brownback.
    Senator Brownback. Thank you very much.

                         THE NEW HOMESTEAD ACT

    Mr. Secretary, a couple things. You started off talking 
about wealth creation on a regional approach which perked my 
ears up that we need to do that in rural areas, and we 
certainly do. We are losing a lot of population in rural areas.
    May I suggest you or your staff take a look at a bill 
several of us put together and have for a series of years 
called the New Homestead Act? Senator Dorgan, previously 
Senator--well, several from the Midwest, myself have put this 
forward as a way to try to get more investment and growth 
taking place in rural areas. We worked at it a long time. We 
modeled it after what was done in this country in the 1970s to 
get the urban areas to go again. And we put in a series of tax 
incentives in particular that just applied to rural areas in 
counties that had lost population over the last 20 years. So 
you are trying to target just those areas that have lost 
population. I think Iowa had half of its State, as half of 
mine, qualify in that. Then you have got a whole swath. We took 
things that had worked previously in the urban areas to get 
regeneration taking place that we think would work in the rural 
ones. I would hope you would take a look at that. We put a fair 
amount of time in it.
    I want to show you a bag, if I could. We did not fill it, 
but I am sure, if you have not seen one of these, you are going 
to see a bunch of these.
    Secretary Vilsack. I have one in my office.
    Senator Brownback. Good. So you are well aware of this. I 
love these. I see them around the world. I love the American 
flag on it. I love the partnership on it. So that piece of it I 
like.

                             CORN-SOY BLEND

    The point I wanted to make is it is a corn-soy blend. 
Great. All for corn-soy. But this formulation has not been 
changed in 30 years. That was when we developed the corn-soy 
blend for food aid, 30 years ago, and we have not changed what 
we are shipping in 30 years.
    Now, the reason I make that point is that they polled a 
series of Nobel laureates and said, if you were going to put 
money anywhere in the world to improve the status of humanity, 
what would you do? And the top one and third thing were both 
micronutrients that they said. Cheap, effective. If you took 
that corn-soy blend and you added proper levels of iodine, 
zinc, vitamin A, and iron into it for children at the right 
age, you would have dramatic impact. It is not heavy to do 
that, but it does require some reformulation of it to do.
    Tufts University is doing a study right now--maybe you know 
about this--on its reformulation. And I am looking at this and 
going, this is cheap for us to be able to do. We dramatically 
improve lives and we use that adjacent to what we are doing on 
AIDS and malaria in Africa particularly, and our outcomes get 
dramatically better. It is simple and it is cheap. So I would 
hope you could look at this Tufts study in this area just of 
micronutrients.
    Now, you have got to fund it all. That is the trick for 
everybody. One of the things we are looking at is to say, okay, 
if we are spending 65 percent right now on administration and 
transportation for our food aid, what if we could put a hard 
level that we cannot spend anymore than 45 percent for 
administration and transportation? That is pretty generous 
right there. You are going to spend nearly half your budget 
just to administer and get it there. And then use your delta 
difference to get the micronutrients in this and to target it 
so you do not have new funds having to go into it, but you 
dramatically improve your outcomes with it.
    We are researching that. I would love to work with you on 
it. You have far more resources to do this than we would. I 
think the resources are there if we sharpen our pencil on those 
two areas and then look at what we can do in this field.
    I wish you godspeed there at Ag, Secretary. That is a great 
spot, and I am sure you will do a great job at it.
    Senator Kohl. Thank you, Senator Brownback.

                              WIC FUNDING

    Mr. Secretary, would you talk about WIC? Do you think we 
are adequately funded for this year? Are you worried about 
having to come back for more? What do you see for WIC?
    Secretary Vilsack. Senator, we have made our best estimates 
in terms of what we have proposed, and I believe we also have 
some contingency language in the WIC program. We believe 9.8 
million participants is a very good, healthy estimate of what 
the program will be, and I believe we have provided resources 
and funding for that level. This is, obviously, a very 
important program and one that we are fully supportive of and 
one that is consistent with the President's desire to assist in 
ending childhood hunger. So we are committed to it, as we are 
with the SNAP program and as we are with the Child Nutrition 
Reauthorization efforts that will be undertaken this year.
    Senator Kohl. Very good.

                   RENEWABLE ENERGY PROGRAM DIRECTION

    Would you amplify a little bit your vision of USDA's role 
in terms of the administration's renewable energy program in 
years to come?
    Secretary Vilsack. I would be happy to, and it really 
dovetails a little bit with what Senator Brownback was talking 
about earlier in terms of rural development and regional 
development.
    The administration, first and foremost, is committed to an 
expansion of the biofuels industry. The President established a 
working group recently directing myself, Secretary Chu and 
Administrator Jackson to figure out strategies for expanded 
marketing of biofuels. We are in the process of having staff 
meet to try to figure out ways in which that can be done.
    As I said earlier, first and foremost, we have to maintain 
the infrastructure that we have. That is a challenge with the 
current credit circumstances of some of those entities.
    Second, I think we have to continue to--and we will 
continue--invest in research that allows us to be more 
efficient with ethanol and soy diesel and biodiesel and 
biofuels that we are currently producing both in terms of the 
energy that is used and in terms of the natural resources that 
are required, specifically water. There is a lot of 
interesting, exciting research and activity being done to 
reduce the amount of energy and to reduce the natural resources 
in producing those fuels.
    The third thing is to continue to promote--and we will, as 
I indicated earlier--with the energy title of the farm bill, 
all aspects of the energy title of the farm bill identifying 
second- and third-generation feedstocks. There are interesting 
efforts and demonstration projects underway using corn stover, 
the corn cob, the husks of corn. There are interesting 
opportunities potentially with grasses.
    There clearly is an effort in woody biomass. We are trying 
to link that effort up with opportunities with the Department 
of the Interior and Agriculture as we try to maintain our 
forests in an appropriate way and reduce the hazardous fuel 
that currently exists in our forests, to reduce the intensity 
of fires. All of that can create an opportunity for us, and 
there are some resources, you well know, to create 
demonstration projects in that area. We will aggressively 
pursue that.
    We are working hard, once the rules are out, to put 
resources to work creating new biorefineries. We have already 
at least announced one grant, a joint grant between ourselves 
and the Department of Energy, to accelerate research, but we 
are also providing resources to build new biorefineries. We are 
trying to identify biorefineries that want to convert their 
production process. We are able, because of the money that you 
all put in the farm bill, to be able to assist them in making 
that conversion.
    We are looking for farmers who are obviously interested in 
helping us produce the feedstocks of the future and provide 
resources and assistance for them to do so.
    We are also working with communities trying to identify 
communities that will want to convert to using woody biomass to 
produce some of their power.
    That is part of the strategy that wraps around the whole 
notion of renewable fuel and energy which we think is a growth 
opportunity for rural America. Whether it is wind or solar, 
hydro, geothermal, we think that there are enormous 
opportunities in rural communities if we are strategic and if 
we are smart about the transmission challenges that renewable 
energy presents.
    We are currently thinking about and working on how you 
would distribute biofuels, whether it is through the current 
system or through a pipeline system. I know that there are some 
Members of Congress who are interested in looking at the 
possibility of a pipeline that would make it easier to 
transport biofuels that are produced from, say, the Midwest to 
other parts of the country or from other parts of the country 
to the Midwest.
    We are working on strategies to make sure that once we 
produce the biofuel, that it can be adequately marketed. So 
many stations today do not have adequate pumping or tank 
infrastructure. So there are opportunities, I think, for us to 
respond. We are looking at ways in which we can use our rural 
development resources to enhance gas stations, convenience 
stores to be better equipped to handle ethanol.
    We are also continuing to, obviously, articulate the desire 
and hope that we look at the blend rate that is currently at 
E10. We are hopeful that it will be expanded from E10 to 
somewhere between E10 and E15. That, obviously, will expand 
opportunity and send a clear, strong message particularly to 
the market and to lenders that we are in this for the long 
haul.
    So it is a wide variety of those things, and we are, 
obviously, expecting our car industry to respond by producing 
cars that are more amenable to flexible fuels.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Kohl. Very good.
    Well, we thank you for being with us, Secretary Vilsack. I 
am most encouraged with you as a person in terms of your 
knowledge, your enterprise, your energy, your ambition, and I 
am convinced you are and will be a great Secretary of 
Agriculture. Thank you for being with us today.
    We will hold the record open for a week for any additional 
questions.
    [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
                               broadband
    Question. Mr. Secretary, for some years this Committee has 
supported extending high speed broadband service to the most remote, 
unserved areas of rural America. Substantial funds have been made 
available in annual appropriations bills, and $2.5 billion was provided 
to USDA for this purpose in the Recovery Act.
    Please describe the progress that has been made in expanding 
broadband access to unserved rural areas.
    How is USDA working with the Commerce Department to utilize funds 
provided in the Recovery Act?
    When do you expect to start spending Recovery Act funds?
    In addition to the Recovery Act funds and substantial carryover 
from fiscal year 2008, you are requesting a large increase in the 2010 
appropriation. Please explain why you think this increase is needed.
    Answer. The Rural Utilities Service has made substantial progress 
in providing assistance to unserved and underserved rural areas. Since 
1995, we have required all new telecommunications capacity that we 
finance to be broadband capable. We have had great success with our 
Community Connect and Distance Learning and Telemedicine programs, 
providing more than $425 million in funding for these programs. Our 
broadband loan program, created by the 2002 Farm bill, has provided 
over $1.1 billion in loans to more than 90 broadband projects in rural 
communities spanning 42 States.
    The Recovery Act marks a major new chapter in this effort. Since 
its enactment, we have worked side by side with our partners at 
Commerce, the FCC and the White House to fulfill the President's vision 
for promoting broadband access across the Nation. This was an 
unprecedented collaborative process between these two Cabinet level 
agencies.
    Since the Recovery Act was enacted in February, USDA and Commerce 
held six joint public meetings and published and Request for 
Information in the Federal Register to solicit input from the public. 
We determined early on that the two Departments need to join forces and 
make the process as seamless as possible. One application, one Notice 
of Funding Availability (NOFA), and one web portal (broadbandusa.gov) 
were developed.
    Our first joint NOFA is expected to be published in the Federal 
Register in July. This NOFA will be making $4 billion available for 
broadband infrastructure loans, grants, and loan grant combinations 
targeted to underserved and underserved areas.
    Immediately thereafter, USDA and Commerce will hold 10 joint 
Outreach and Training Workshops in 10 States on how to apply for the 
program.
    At the end of the application window, USDA and Commerce is 
expecting to receive applications seeking funding from the $4 billion 
made available under this first NOFA. We expect to begin making awards 
in November.
    With regard to the fiscal year 2010 budget, USDA is seeking the 
same deliverable broadband program level as fiscal year 2009. The 
increase in the appropriation request stems from an increase in the 
budget authority cost.
                              civil rights
    Question. We are pleased, Mr. Vilsack, that you are aggressively 
addressing long-standing civil rights issues at the Department. Because 
the Pigford case remains in litigation, we understand you cannot freely 
discuss it. However, please tell us what you can about progress toward 
resolving those claims. Has the Administration submitted to Congress a 
legislative proposal requesting the $1.25 billion to fund settlements? 
If not, when do you expect that proposal to be submitted?
    Answer. USDA has been working with the Department of Justice, which 
has the lead in negotiating the settlement for the Government. Once 
more details are known, legislation will be submitted to carry out the 
settlement. I have asked that additional information be provided for 
the record.
    [The information follows:]
    On August 28, 1997, a group of African American farmers filed a 
class-action lawsuit against USDA in Federal district court, alleging 
discrimination in USDA farm loan and farm programs (originally Pigford 
et al., v. Ann Veneman, now Pigford et al., v. Tom Vilsack). The court 
certified the class, and entered a Consent Decree on April 14, 1999.
    The certified class was described as all African American farmers 
who: (1) farmed, or attempted to farm, between January 1, 1981, and 
December 31, 1996; (2) applied to USDA during that time period for 
participation in a Federal farm credit or benefit program and who 
believed that they were discriminated against on the basis of race in 
USDA's response to that application; and (3) filed a discrimination 
complaint on or before July 1, 1997, regarding USDA's treatment of such 
farm credit or benefit application. USDA has been implementing the 
Consent Decree since 1999, and the last of the claims were recently 
routed for processing.
    In June of 2008, Congress enacted legislation, Section 14012 of the 
Food, Conservation and Energy Act of 2008 (Act), which affords 
individuals who did not file timely claims under the Consent Decree, 
judicial recourse in the U.S. District Court for the District of 
Columbia, for any Pigford claimant who has not previously obtained a 
determination on the merits of a Pigford claim.
    Consequently, as of September 18, 2009, 17 civil action complaints 
have been filed in the U.S. District Court for the District of 
Columbia, by 29,938 plaintiffs. The U.S. District Court Judge entered 
an order suspending the requirements about USDA providing loan data, 
while the Court considers the class certification issue. The parties 
have been negotiating a resolution of the cases since last year. 
President Obama proposed in his fiscal year 2010 budget $1.15 billion 
for the sole purpose of settling the cases.
           national institute of food and agriculture (nifa)
    Question. What is the status of hiring a NIFA director? The budget 
request includes an increase of $23 million to help rural producers and 
citizens learn to use new technologies. Can you expand on what this 
will do? How many people will receive assistance with this?
    Answer. Dr. Roger N. Beachy, the founding president of the Donald 
Danforth Plant Science Center in St. Louis, MO, has been appointed the 
first director of the National Institute of Food and Agriculture (NIFA) 
by President Barack Obama. Beachy will join the agency on October 5, 
2009.
    NIFA is requesting $23,000,000 to improve rural quality of life to 
support a competitive Smith-Lever 3(d) program focused on developing 
technology based system competencies for agricultural producers and 
food processors, and rural citizens. Mounting this program through 
Smith-Lever 3(d) will take advantage of the powerful existing 
infrastructure of both 1862 and 1890 land-grant institutions. This 
program will enhance the adoption and diffusion of broadband, as well 
as other information access technologies, and other new technologies 
(sensor systems, monitoring and tracking systems, nanotechnology, and 
decision systems). These information and other technologies can support 
rural entrepreneurship, sustain jobs in rural and isolated areas, and 
address a wide range of agricultural and food production and processing 
issues.
    A cornerstone of this program would be the establishment of an 
Extension Rural Technology Corps which would build on the national 
infrastructure of Cooperative Extension which serves every location in 
the country through county and regional offices supported by a Federal/
State/local partnership, and through the nationwide Extension system. 
The Corps could work in collaboration to educate rural citizens to 
fully utilize broadband and other information technology access to 
support entrepreneurship, remote jobs, decision assistance, and 
community linkages. The Corps would complement the expansion of 
broadband to rural areas and support rapid, creative, and effective use 
of the technology.
    Second, the program would expedite the adoption and diffusion of 
new technologies to address rural and agricultural issues, to support 
the vitality of rural areas. For example, sensing, monitoring and 
tracking weather borne crop diseases can both improve production 
efficiency and reduce environmental impacts by minimizing expensive 
pesticide purchases and application. New technologies, properly applied 
and interpreted can help rural communities cost effectively monitor 
environmental conditions, such as water quality. In addition, new 
technologies across a broad spectrum, including energy systems, provide 
opportunities for rural entrepreneurship.
    The Extension system serves citizens in every county in the United 
States. This effort, however, would focus on the needs of citizens in 
rural and isolated areas, helping at least 500,000 households and 
businesses improve utilization of new information technologies.
        mc govern-dole international food for education program
    Question. Mr. Secretary, the McGovern-Dole program is an important 
tool for fighting world hunger. For many children in poor countries, 
the McGovern-Dole meal they get at school is the only one they'll 
receive that day. This program has received around $100 million 
annually in discretionary funds. I am pleased to see a significant 
increase in your budget request. Can you discuss the impact such a 
large increase will have on this program?
    Answer. The 2010 budget request doubles the level of discretionary 
funding for the McGovern-Dole program. The increase will allow USDA to 
augment significantly the number of beneficiaries served as well as 
increase the benefits for those already participating in the program. 
The World Food Program estimates there are 75 million children who do 
not attend school and, for those who do attend, 60 million are hungry. 
The increase will help USDA to reduce these numbers, while at the same 
time support activities that encourage school enrollment and 
attendance, improve health and nutrition, and enhance future economic 
development of the country.
    Question. How many additional children will be served?
    Answer. It is estimated that the number of beneficiaries will 
increase from approximately 3 million in fiscal year 2009 to 4.5 
million in fiscal year 2010.
    Question. Do you envision the program entering new countries with 
this increase? If so, which ones?
    Answer. It is possible that USDA could enter new countries in 
fiscal year 2010 with this increase. However, it is difficult to say 
how many and which countries. That will depend upon the proposals that 
USDA receives in terms of country selection and the level of funding 
requested and approved for the proposed country programs.
                         nifa education request
    Question. The budget includes an increase of $41 million for Higher 
Education Programs, including teacher incentives, curriculum 
development, and other activities. Will USDA be working with the 
Department of Education in this endeavor? Are there overlapping 
activities within USDA and the Department of Education here? This 
request has a significant outcomes associated with it, with a wide 
variety of activities to be undertaken with this money. If you really 
want to meet these outcomes, is this request enough?
    Answer. Yes, opportunities exist for USDA and the Department of 
Education to coordinate resources on this initiative and we will pursue 
those opportunities. Specifically, staff within the Department of 
Education's Fund for the Improvement of Postsecondary Education (FIPSE) 
competitive grants program have the expertise to assist USDA. FIPSE 
grants, like several of USDA's Higher Education grants identified for 
this funding increase, support innovative teaching improvement projects 
that promote revitalizing rural American communities. These grant 
programs already effectively fund academic advancements in education, 
and support new ideas and practices to improve how students learn. 
However, at current funding levels, these grant programs primarily fund 
projects at individual academic institutions. Significant outcomes are 
expected with this additional funding increase. We envision additional 
funding will enable establishment of new, regional Centers of 
Excellence where partnerships between educators and employers establish 
best practices in curriculum content and delivery through a local 
academic collaborative. These regional collaborative models will reduce 
duplication of effort while increasing instructional efficiency.
                                 dairy
    Question. Mr. Secretary and Mr. Glauber, the dairy sector is facing 
enormous challenges and this concerns me a great deal. Economic turmoil 
has diminished demand and prices paid to farmers have plummeted. We 
worked to strengthen the MILC safety net in the Farm bill, and you've 
taken steps by purchasing surpluses and utilizing the Dairy Export 
Incentives Program. What trends do you see ahead for the dairy sector?
    Answer. Prices and farm income are expected to recover to more 
sustainable levels as demand increases with economic recovery over the 
next 2 years. The size of the dairy herd is projected to return to the 
long-term trend of decline that was interrupted from 2005 through 2008 
by rapid worldwide economic growth that brought increased dairy product 
demand.
    Question. When might we begin to see positive outcomes from the 
steps that have already been taken?
    Answer. Milk prices have begun to increase. [Clerk's note: The 
following response is based on information available after the date of 
the hearing.] The all-milk price hit the lowest level in 6 years during 
June and July 2009. Product shipments through the Dairy Export 
Incentive Program and actions taken through the Dairy Product Price 
Support Program brought price increases in August with the all-milk 
price increasing $0.50 per hundredweight. This increase will be 
reflected in the Milk Income Loss Contract Program checks that 
producers receive during September for their August milk production. 
Further increases in the milk price are projected through next year.
         resource conservation and development councils (rc&ds)
    Question. Mr. Secretary, for the past several years, the budget 
request for RC&Ds has been zero. This subcommittee continues to fund 
this program each year. Can you explain what the practical effect would 
be of not funding RC&Ds?
    Answer. As nonprofit organizations, RC&D councils will still exist 
in the short term. However, while some councils may have the financial 
and staff capacity to continue operating, we expect that most councils 
would cease to function effectively without the support of professional 
NRCS coordinators. As a result, the strategic planning and delivery of 
many conservation, renewable energy, and economic development projects 
in local communities would halt.
    Question. There are approximately 451 staff years associated with 
RC&Ds. What will happen to these staff should this subcommittee not 
provide funding? Will anyone lose their job?
    Answer. 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 2010 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 as the overall NRCS budget will support. Skills learned as a 
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. These 
employees can be placed in other NRCS field and State office positions 
such as district conservationist and other natural resource positions.
    Question. Would the current functions of RC&Ds be absorbed within 
NRCS? If so, how?
    Answer. As nonprofit organizations, RC&D Councils will still exist. 
The current functions of the Federal RC&D Program would not be provided 
to assist the Councils. Those functions would not be absorbed within 
NRCS. While NRCS would continue to deliver conservation projects on 
individual agricultural operations through Conservation Technical 
Assistance and the Farm bill conservation programs, NRCS would not 
absorb the valuable strategic natural resource conservation and 
economic development planning and project delivery function of the RC&D 
Program. Likewise, NRCS's remaining conservation planning and delivery 
programs would not support the leveraging of significant State, local, 
and private funding as provided by the RC&D Program. In fiscal year 
2008 alone, the RC&D councils leveraged a total of $189 million from 
non-Federal sources to support 4,500 projects around the country.
                                  wic
    Question. I am pleased to see in your budget a more robust request 
for WIC. As you know, this subcommittee has had to provide significant 
increases for WIC, often times at the expense of other important 
programs. Do you expect to release any contingency funds from fiscal 
year 2009? Taking into consideration the 2009 stimulus and the fiscal 
year 2010 request, what will the total amount available for WIC 
contingency be in fiscal year 2010? Do you anticipate having to use any 
of that contingency to maintain participation in fiscal year 2010? 
Taking into account the current state of the economy, do you see food 
prices and participation increasing over the next few months?
    [Clerks Note: The following response is based on information 
available after the date of the hearing.]
    Answer. The total available in the WIC contingency reserve in 
fiscal year 2009 is $525 million, including $400 million provided in 
the Recovery Act. Of the total available, $38 million will be used in 
fiscal year 2009, leaving $487 million to be carried over into fiscal 
year 2010. Together with the $225 million in the budget request, the 
total contingency reserve available for fiscal year 2010 is $712 
million. Based on current estimates for program participation and food 
costs, the funding levels proposed by the President's 2010 budget 
appear sufficient to ensure that all eligible individuals seeking 
benefits can receive them in fiscal year 2010 without using any of the 
$486.8 million in available contingency funds.
    WIC food package cost estimates are based on monthly food inflation 
forecasts provided to FNS by the Economic Research Service (ERS). Food 
prices over the next few months may begin to increase slightly. FNS 
estimates that the WIC food package cost will increase 3.1 percent 
during fiscal year 2010 from $42.82 to $44.18.
    FNS has typically based its participation projections on trends 
over the past 7 years. However, given the current state of the economy, 
FNS believes that participation is likely to grow at a stronger rate 
through fiscal year 2010, closer to the rate realized in fiscal year 
2008 than to the 7-year average. FNS projects that average monthly 
participation will be 5.6 percent higher in fiscal year 2010 than in 
fiscal year 2009 from 9.1 million to 9.6 million participants.
                            renewable energy
    Question. Mr. Secretary, we are aware that expansion of renewable 
energy production and energy efficiency improvements are high 
priorities of you and this Administration. Those priorities are well 
represented in the increases you are requesting in this budget.
    Over the last several years USDA has provided substantial support 
for the expansion of corn-based ethanol facilities. With the current 
recession and reduced oil prices, what are the short-term prospects for 
these facilities?
    Answer. As the economy begins to stabilize and emerge from its deep 
recession, our hope is that demand for renewable fuels will continue to 
grow along with other sectors of the economy. Our reports show that 
those corn-based facilities that weathered the financial crisis are 
beginning to show profitability.
    Question. Do you think additional support will be needed from the 
Department to sustain these projects?
    Answer. USDA is undertaking an unprecedented effort to provide 
relief to businesses in struggling agricultural industries through the 
American Recovery and Reinvestment Act funding received under the 
Business and Industry Loan Guarantee Program. This program has been put 
to work to partner with lenders in helping to assist processors and 
other businesses connected with the agricultural sector meet their 
current financial needs for capital.
    Question. Is the demand for the Biorefinery Assistance Program and 
the Rural Energy for America Program as strong as you had anticipated?
    Answer. The future of the biofuels industry partially lies in the 
commercialization of second and third generation feedstocks. The 
Section 9003 Biorefinery Assistance Program is a critically important 
investment in that evolution.
    Numerous potential applicants for the Biorefinery Assistance 
Program have expressed their inability to obtain a lending partner in 
order to apply for a loan guarantee to assist with the construction of 
a viable commercial biorefinery under the Section 9003 Program. Based 
on discussions with the lending community and the current economic 
climate, they are reluctant to consider this loan guarantee program 
without the government taking more of the risk than currently is being 
taken under the program. We will not know for certain the true level of 
demand for the Section 9003 Program until regulations are promulgated 
and a new solicitation of applications is conducted. That is expected 
to occur toward the end of fiscal year 2010.
    The 2008 Farm bill authorized the Rural Energy for America Program 
in Section 9007 which expands and renames the program formerly called 
the Section 9006: Renewable Energy Systems and Energy Efficiency 
Improvements Program. Since the enactment of the first-ever Energy 
Title in a Farm bill in 2002, this program has provided grants and loan 
guarantees to rural residents, agricultural producers, and rural 
businesses for more than 1,800 energy efficiency and renewable energy 
projects ranging from biofuels to wind, solar, geothermal, methane gas 
recovery, and other biomass.
    Question. The President's budget requests substantial increases of 
discretionary funding over and above the mandatory funds in the Farm 
bill for these programs. Are these increases still needed?
    Answer. As noted in the answer to the prior question, we will not 
know for certain the true level of demand for the Section 9003 Program 
until the end of fiscal year 2010 when we begin to accept applications 
under new regulations and a new notice of solicitation.
    Preliminary results show that the Rural Energy for America Program 
received 1,887 applications requesting in excess of $120 million. The 
demand for this program far exceeded the funding for fiscal year 2009. 
We anticipate the demand for this program to continue to grow 
significantly in fiscal year 2010.
                        micro-enterprise program
    Question. Mr. Secretary, this Committee is very interested in 
implementation of the new micro-enterprise program authorized in the 
2008 Farm bill. This program will provide loans and technical 
assistance to support job creation and income generation through 
entrepreneurial development in rural areas. The Farm bill makes 
available mandatory funding for this program from 2009 through 2012.
    Please describe the current status of this new program, and your 
vision of its potential to increase economic wellbeing in rural areas.
    Answer. We expect the proposed rule to be transmitted to the Office 
of Management and Budget by September 30, 2009, for review and the 
agency is seeking an expedited review. We anticipate publishing a final 
rule by the end of June 2010, and will then be able to articulate our 
vision of the program's potential to increase economic wellbeing in 
rural areas.
    Question. This budget request includes an increase of $22 million 
over the $4 million of mandatory money provided by the Farm bill. Is 
this large increase merited at this early stage of development of the 
program?
    Answer. The Agency seeks to utilize the funding to help jump start 
rural economies through self employment. We believe there will be 
considerable demand for the increase in funding. The program includes a 
lending component as well as a training and technical assistance 
component which will contribute to the long term success of the 
affected businesses.
                         animal identification
    Question. I understand that in the rural community forums there was 
a lot of talk about the National Animal ID Program. What did you learn 
from those listening sessions? Do you believe this should be a 
mandatory or voluntary program? If it's made mandatory, what would be 
the cost to producers?
    Answer. USDA hosted public listening sessions so that I could hear 
from producers and stakeholders throughout the country--not only their 
concerns but also potential or feasible solutions to those concerns. 
The transcripts of the listening sessions are available on APHIS' 
webpage: http://animalid.aphis.usda.gov/nais/feedback.shtml. USDA also 
invited the public to submit written comments via the website, which we 
received thousands of before the comment period closed on August 3, 
2009. While the analysis continues, several clear themes have emerged 
from the call for feedback.
    One such theme is confidentiality of the business information. Some 
believe that business information must remain confidential to allow for 
fair competition in the marketplace. Another theme is liability, and 
the potential for lawsuits, should something enter the food supply and 
cause harm. We also heard concerns about cost. Some believe the costs 
of identifying and tracing animals are prohibitive. Finally, privacy 
was another significant theme. Some see animal identification as an 
unwelcome intrusion by the Federal Government. USDA is continuing to 
review the transcripts from each session as well as the written 
comments that were submitted by the public.
    Given the public's concerns, USDA must find a way to achieve the 
original and true purpose of the National Animal Identification 
System--animal traceability. The goal is to enhance traceability 
efforts in ways that respond to these concerns, recognizing and seeking 
to overcome the shortcomings of our efforts to implement NAIS in the 
last 5 years. The feedback we received from the public, along with the 
lessons learned over the past several years, will assist in making 
informed decisions about the future direction of animal identification 
and traceability in the United States.
    USDA has not specifically estimated the costs to producers of a 
mandatory system, as the previous Administration had not pursued such a 
system and the Administration is still determining a comprehensive 
approach to traceability.
          watershed flood prevention operations program status
    Question. Mr. Secretary, this subcommittee provided $290 million 
for the Watershed Flood Prevention Operations Program through the 
American Recovery and Reinvestment Act.
    Can you please provide an update on the status of these funds?
    Answer. Of the $290 million appropriated, NRCS has allocated over 
$256 million--$133 million for 80 approved Watershed and Flood 
Prevention Projects, $118 million for 270 approved Flood Plain 
Easements and $5 million for agency-wide support. As of September 18, 
2009, over $103 million has been obligated.
    [The information follows:]
------------------------------------------------------------------------
                                               Total           Total
                  State                     allocations     obligations
------------------------------------------------------------------------
     Watershed and Flood Prevention
               OperationsAlabama.................................        $430,000         $18,411
Arkansas................................         134,000          69,666
California..............................      19,275,000       2,293,104
Colorado................................       3,841,900       1,350,835
Idaho...................................         430,000           9,717
Indiana.................................       3,300,000          28,038
Iowa....................................       2,231,750         732,079
Kansas..................................       1,661,000          50,873
Kentucky................................       4,817,880         217,840
Louisiana...............................       4,470,000       1,044,304
Minnesota...............................         544,000         436,552
Mississippi.............................       7,630,000       2,268,643
Missouri................................       4,900,000         945,818
Montana.................................         822,700         271,458
Nebraska................................       4,209,000       1,524,840
New Mexico..............................       1,440,000          25,555
New York................................       1,000,000         147,438
North Carolina..........................       5,280,858         134,749
Oklahoma................................       3,619,000       1,826,996
Pacific Islands.........................       4,150,000          80,369
Pennsylvania............................      11,900,000      10,379,210
South Carolina..........................       1,040,000          19,912
Tennessee...............................      12,400,000       1,111,862
Texas...................................      21,786,111       8,105,239
Virginia................................         973,000         284,144
Washington..............................         625,000         533,940
West Virginia...........................      10,085,000         150,958
Agency wide.............................       3,684,200       1,117,776
                                         -------------------------------
      Total.............................     136,680,399      35,180,326
                                         ===============================
          Flood Plain EasementsAlabama.................................       2,788,488       1,640,774
Alaska..................................         740,112         151,033
Arkansas................................       1,890,000       1,356,112
California..............................       5,366,400       4,335,977
Colorado................................         111,293          10,834
Connecticut.............................          31,000          31,000
Georgia.................................       3,100,218          31,880
Idaho...................................          19,800          19,739
Illinois................................       3,325,800       2,692,893
Indiana.................................       7,898,693       6,671,586
Iowa....................................      20,855,846      12,586,216
Kansas..................................       2,007,432       1,680,570
Kentucky................................       3,245,582       2,548,135
Louisiana...............................       2,221,769         982,070
Maine...................................          88,294          85,046
Maryland................................          19,963          19,862
Michigan................................         497,100         435,407
Minnesota...............................       1,524,776       1,028,453
Mississippi.............................       2,125,116       1,620,622
Missouri................................       4,171,582       1,189,791
Montana.................................          10,468          10,468
Nebraska................................         350,820         289,646
New Hampshire...........................         407,822         140,025
New Jersey..............................         745,164         578,882
New York................................         782,466          56,078
North Carolina..........................         443,400         322,562
North Dakota............................      10,210,554       3,804,286
Ohio....................................       9,624,170         452,705
Oklahoma................................       2,911,620          35,146
Oregon..................................       2,275,770       1,182,059
Pennsylvania............................         243,383         103,657
Rhode Island............................         757,200          44,182
South Carolina..........................          87,700          87,643
South Dakota............................       1,843,327       1,557,318
Tennessee...............................       1,589,154         182,227
Texas...................................           5,516           5,516
Virginia................................          35,754          36,344
Washington..............................         934,332         461,820
West Virginia...........................         749,426         448,497
Wisconsin...............................      22,057,287      18,619,779
Agency wide.............................       1,583,726         550,048
                                         -------------------------------
      Total.............................     119,678,323      68,086,889
------------------------------------------------------------------------

                        food safety assessments
    Question. The budget proposes an increase of $4 million for 
additional food safety assessments. How is a ``food safety assessment'' 
different from the regular inspections done by FSIS on a daily basis? 
How many food safety assessments does USDA currently perform, and how 
many additional assessments will be completed with this money? How will 
you determine which establishments will receive these additional 
assessments?
    Answer. A Food Safety Assessment (FSA) is a comprehensive look at 
the design and implementation of an establishment's food safety system. 
FSAs cover the HACCP plan and supporting documentation, sanitation 
standard operating procedures (SSOPs), prerequisite programs, 
microbiological testing procedures, sanitation performance standards 
(SPS), establishment documentation, and other information that relates 
to the establishment's products and processes. These assessments are in 
addition to the regular inspection verification activities performed by 
inspection program personnel daily at operating establishments. FSAs 
are performed by specially trained Enforcement Investigation and 
Analysis Officers (EIAOs). According to the USDA Office of Inspector 
General's 2007 audit report, FSAs yield the Department's best evidence 
about the design and implementation of an establishment's food safety 
system.
    There are two types of FSAs, routine and for cause. The Department 
has committed to complete at least one routine FSA in each of the 5,400 
establishments subject to the HACCP regulation every 4 years. In 
addition, the Department conducts for cause FSAs in establishments that 
have a higher probability of causing human illness. These are 
determined by assessing whether the establishments have produced 
product that tested positive for pathogens known to cause human 
illness, are found not to be in compliance with specific Federal 
regulations, or are performing worse than their peers with respect to 
FSIS verification activities. FSIS initiates approximately 300-400 for 
cause FSAs every year to address enforcement activities resulting from 
findings of E. coli O157:H7, Salmonella, Listeria monocytogenes (Lm) 
sampling and product recalls.
    The complexity of an establishment's food safety system and the 
need for urgent reporting may result in more than one EIAO being 
involved in an individual food safety assessment. In the future, once 
the Public Health Information System is fully implemented, 
establishments meeting the criteria for a cause FSA will be more 
quickly identified through an automated process.
    In fiscal year 2008, the most recent year for which complete data 
is available, approximately 1,352 FSAs were conducted, both routine and 
for cause. The FSAs, primarily those conducted for cause resulted in 28 
suspensions of operations and 135 notices of intended enforcement 
action. With the Department committed to conducting a routine FSA in 
each establishment every 4 years, the annual number of total number of 
FSAs, including routine and for cause, will increase to approximately 
2,000. The $4 million budget increase includes hiring 20 additional 
EIAO full time staff and the laboratory costs associated with these 
additional FSAs.
                       food safety infrastructure
    Question. Mr. Secretary, in your statement, you mention the 
proposed FSIS increase of $23 million to improve food safety ``Public 
Health Infrastructure'', noting that it will strengthen FSIS' ability 
to target inspections and investigate outbreaks. Those goals are 
impressive, but what exactly will this funding be used for?
    Answer. The Public Health Information System (PHIS) will protect 
public health through food safety and food defense inspection of the 
production and distribution of domestic and imported meat, poultry and 
processed egg products; ongoing and real time assessment, analysis and 
surveillance of public health data; and implementation of incident 
command procedures to address outbreaks of foodborne illness or 
contamination of food products.
    Specifically, the $23 million increase to the public health 
infrastructure is divided into two categories as described below.
    First, $13.5 million will be used for the scheduling of food safety 
and food defense inspection verification and sampling in 5,400 Federal 
domestic establishments, 134 ports of entry and 1,900 State-inspected 
facilities; nationwide reporting of inspection verification and 
sampling results; integration of inspection and sampling data as well 
as other public health data into a data warehouse for real time 
assessment and analysis; and operation of an emergency response systems 
(particularly, the FSIS Incident Management System, Consumer Complaint 
Monitoring System and Recall Management System) on a 24/7 operational 
basis with full failsafe/redundancy capability at the USDA Data 
Centers.
    Second, the remaining $9.5 million will provide for systems, 
technical and telecommunication implementation and support for 9,500 
FSIS and 1,400 State employees and enactment of Cyber Security controls 
to meet mandated authentication procedures and security policies, 
encrypt data and systems, perform vulnerability assessments and 
remediation to block and prevent evolving national and international 
threats and intrusions, and maintain system certification and 
accreditation necessary for the enablement and function of public 
health inspection and emergency response systems.
                                research
    Question. Mr. Secretary, although you have stated several times 
that a top goal of the Administration is to pursue research regarding 
renewable fuels, the overall research accounts actually receive a net 
decrease in this budget. Although there are requested increases in the 
research accounts regarding renewable fuels, are you concerned that 
overall this is coming at a cost to more traditional agricultural 
research, important for increasing yields and expanding agricultural 
production?
    Answer. The Administration is committed to developing homegrown 
energy to end our dependence on foreign oil and revitalizing rural 
America. Therefore the President's 2010 Budget continues to 
aggressively provide the resources needed to help bring greater energy 
independence to America and includes $88.63 million for bioenergy/
renewable energy research and development. This is an increase of $9.68 
million over the Department's 2009 budget and also eliminates $8.09 
million in bioenergy earmarks.
    Much of the research related to bioenergy, such as functional 
genomics, resource management, productivity, and sustainability issues 
also address problems faced by traditional agriculture and will 
directly and indirectly promote the goals of increasing yields and 
expanding agricultural production.
                           animal antibiotics
    Question. Some experts estimate that as much as 70 percent of all 
antibiotics sold in this country are used in food animals for purposes 
other than treating diseases and that this contributes to the rise in 
antibiotic-resistant bacteria.
    What research has USDA undertaken or funded to evaluate this 
threat? What work is being done to support development of alternatives 
for producers in the event that sub-therapeutic use of antibiotics is 
restricted in animal agriculture?
    Answer. Collaboration in animal health and food safety epidemiology 
(CAHFSE) is a joint effort among three agencies of the U.S. Department 
of Agriculture: the Animal and Plant Health Inspection Service (APHIS), 
the Agricultural Research Service (ARS), and the Food Safety and 
Inspection Service (FSIS). The mission of this important surveillance 
effort is (1) to enhance overall understanding of bacteria that pose a 
food-safety risk by monitoring these bacteria on-farm and in-plant over 
time, and (2) to provide a means to routinely monitor critical diseases 
in food-animal production. A particular emphasis of CAHFSE is to 
address issues related to bacteria that are resistant to antibiotics.
    In March 2009, ARS contributed to the development of the Public 
Health Action Plan to Combat Antimicrobial Resistance, developed 
jointly by the Food and Drug Administration (FDA), Centers for Disease 
Control and Prevention (CDC), and National Institutes of Health. ARS, 
in collaboration with the FDA Center for Veterinary Medicine and the 
(CDC), is an integral member of the National Antimicrobial Resistance 
Monitoring System (NARMS). This system was implemented in 1996 with a 
goal of monitoring trends in antimicrobial resistance in humans, 
animals, and retail meats. ARS is responsible for the animal sampling 
arm of NARMS and collects samples from slaughter plants, diagnostic 
laboratories, and healthy animals. As part of this effort, ARS is also 
conducting research to develop more sensitive detection methods to 
identify resistance-associated genes. NARMS has provided preliminary 
data on antimicrobial use, although this information is not yet linked 
to data on resistance. ARS has also conducted some pilot studies to 
monitor resistance in potentially emerging pathogens, such as 
methicilin-resistant staphylococcus aureus (MRSA), enterococci, and C. 
difficile. I will provide additional information for the record.
    [The information follows:]
    ARS is evaluating processing technologies that minimize foodborne 
pathogen contamination and determining what effect contamination levels 
have on the development of antimicrobial resistant pathogens. ARS also 
models the gene flow of certain antibiotic resistance factors and is 
developing strategies to extend the useful life of antibiotics in both 
animal and human medicine.
    ARS is currently using metagenomic (and also cultural) approaches 
to evaluate the effects of feeding subtherapeutic (growth promoting) 
and therapeutic antibiotics on swine intestinal microbiota. The goal of 
this effort is to identify changes in microbial composition associated 
with performance enhancement, and to define how growth promotants work 
to support the identification of alternatives with similar growth-
promoting effects. Specifically, researchers are looking for changes in 
the gene content of swine exposed to one or more antibiotics. Also 
underway are plans to conduct field trials to test whether or not 
growth promoting antibiotics (such as carbadox) still work in swine and 
to investigate the utility of metagenomics for detecting changes in 
intestinal microbiota caused by marketed probiotics.
    ARS develops and evaluates non-traditional products or alternatives 
to antibiotics (e.g., probiotics, other natural products) and assesses 
what effect they may have in decreasing resistance. ARS is evaluating 
the role of antibiotic resistance in creating enhanced virulence or 
pathogenicity in bacteria (Salmonella in cattle). Researchers are also 
developing microarrays for the detection of antimicrobial resistance 
genes in bacteria and as a method to track the different genes 
responsible for virulence in bacteria.
                      dairy price support program
    Question. Economic turmoil and plummeting prices have hit the dairy 
sector very hard. This administration has taken several welcome steps 
in an effort to mitigate the impact, but the strain on American dairy 
farmers is enormous. One further administrative step which I'd ask you 
to review involves the Dairy Product Price Support Program (DPPSP).
    In the past, USDA has purchased pasteurized processed cheese 
product, and paid a premium for it because it comes in consumer-ready 
packages. Cheese manufacturers in my area of the country typically sold 
pasteurized processed cheese as the first line of defense against 
rapidly falling milk prices. Unfortunately, that option is no longer 
available.
    What flexibility does the Department have to adjust the directive 
issued by the previous administration which eliminated pasteurized 
processed cheese purchases under the dairy support program?
    Answer. The Department has no flexibility to adjust the directive 
because the elimination of pasteurized process cheese was based on 
changes to the milk price support program in the Food, Conservation, 
and Energy Act of 2008 (2008 Farm bill). The Secretary is now directed 
to specifically purchase cheddar cheese under this program, rather than 
previous legislation directing the Secretary to purchase cheese.
                     animal improvement laboratory
    Question. The Animal Improvement Program Laboratory (AIPL) in 
Beltsville, MD, conducts research to discover, test, and implement 
improved genetic evaluation techniques for economically important 
traits in dairy cattle. Due in part to their work, the United States is 
a world leader in dairy genetics and last year exported more than $105 
million in bovine genetic material. Please describe current Federal 
support for bovine genetic and genomic work at AIPL and elaborate on 
steps being taken to ensure that the United States maintains its 
leadership role in dairy genetics.
    Answer. Genetic evaluation techniques for economically important 
traits have undergone a revolution in the past 2 years and the Animal 
Improvement Program Laboratory (AIPL) has led the way with increasing 
involvement of the Bovine Functional Genomics Laboratory (BFGL), a 
sister Agricultural Research Service (ARS) laboratory in Beltsville, 
MD. I have asked ARS to provide a progress report for the record.
    [The information follows:]
    USDA-ARS and its collaborators have developed a process to 
incorporate genomic information into the traditional genetic merit 
information based upon trait measurement (i.e. lbs. of milk, fertility, 
health) which dramatically improves the genetic merit evaluation. This 
current genetic evaluation scheme depends critically on incorporation 
of genomic data to predict genetic merit in dairy bulls. The 
effectiveness of these new techniques, and thus the rate of adoption of 
this technology in the U.S. dairy industry, has been astounding. In 
January of this year, less than 1 year from the delivery of the first 
preliminary research results using this technology, USDA-ARS scientists 
have incorporated this completely new information derived from DNA 
testing into the official national dairy cattle genetic evaluation. 
This technology transfer success was the result of a highly 
collaborative effort led by USDA-ARS scientists with collaboration 
among academic groups, artificial insemination organizations, and breed 
associations. Financial support was provided through competitive 
grants, collaborative agreements, and USDA base funds. To date, over 
35,000 animals have been genotyped, and that number continues to grow 
rapidly. Collection and use of performance data, improved record 
keeping and enhanced capability to associate performance with genomic 
markers continue to be cornerstones of the USDA-ARS efforts.
    The aggressive adoption of this technology in the U.S. dairy 
industry has outpaced implementation around the world, and as a result 
the ability to predict genetic merit in the U.S. dairy industry is more 
accurate than in any other country. A corresponding increase in the 
genetic level of U.S. dairy germplasm is a direct result of this 
technology adoption. The cost of progeny testing to determine a bull's 
value could be as high as $50,000 per bull, whereas the genomic 
evaluation gives comparable accuracy at a cost of approximately $300 
per bull. Using this DNA information, we are now able to generate 
genetic predictions for males much earlier in life with high accuracy 
and a dramatically lower cost. This technology is expected to increase 
the rate of genetic improvement by at least 50 percent. Some estimates 
suggest a doubling of the genetic gain to be more realistic. Because of 
this dramatic increase and the implementation lead gained by this rapid 
deployment in the United States, export opportunities for U.S. dairy 
germplasm are expected to increase substantially over time.
    Work to expand this technology is continuing in AIPL and BFGL. 
Scientists there are leading efforts to develop even more sophisticated 
DNA tools that will enable this technology to be implemented in beef 
cattle populations. In addition, these tools are being developed to 
help serve the needs of the developing world by incorporating 
information specific to cattle in tropical and sub-Saharan 
environments.
    To maintain its lead in dairy genetics and extend these tremendous 
results into other cattle populations, close collaboration with 
academic groups, artificial insemination organizations, and breed 
associations will continue. Innovation continues to be spurred by the 
exciting discoveries of implementing genome enhanced genetic 
improvement. Growth in the areas of bioinformatics, quantitative 
genetics and computational biology are needed to maintain and extend 
this lead.
    ARS funding support through AIPL is estimated at $2,893,200 and 
support through BFGL is estimated at $2,294,100.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin
                           advanced biofuels
    Question. As you know, Secretary Vilsack, the 2008 Farm bill placed 
a heavy emphasis on providing support for advanced biofuels, including 
support for biomass feedstock development, support for harvesting 
transport and storage, and support for both pilot plant and commercial 
scale biorefineries for advanced biofuels. However, since the Farm bill 
was passed, credit markets have tightened significantly, so that even 
with assistance provided by the Farm bill programs, I am hearing that 
advanced biorefinery developers are having major difficulties is 
securing financing for start-up plants. This, in turn, is leading to 
the real possibility that the biofuels industry may not be ready to 
meet the requirements of our national renewable fuels standards (RFS) 
for advanced biofuels.
    Do you have a recommendation for how USDA might assist with this 
problem?
    Answer. Numerous potential applicants for the Biorefinery 
Assistance Program have expressed their inability to obtain a lending 
partner in order to apply for a loan guarantee to assist with the 
construction of a viable commercial biorefinery under the Section 9003 
Program. Based on discussions with the lending community and the 
current economic climate, they are reluctant to consider this loan 
guarantee program without the government taking more of the risk than 
currently is being taken under the program. We will not know for 
certain the true level of demand for the Section 9003 Program until 
regulations are promulgated and a new solicitation of applications is 
conducted. That is expected to occur toward the end of fiscal year 
2010.
    Question. Is more funding for the biorefinery support program 
advisable or essential for that?
    Answer. Mandatory funding received under the 2008 Farm bill is 
limited to loan guarantees. The 2010 Budget also requests funding to 
support loan guarantees.
       local foods--business and industry loan and grant program
    Question. The recently passed fiscal year 2009 Omnibus 
appropriations bill and American Recovery and Reinvestment Act provided 
significant funding for the Business and Industry loan program at USDA. 
The 2008 Farm bill modified the Business and Industry Program to allow 
local and regional food enterprises to be eligible for assistance under 
this program and requires that 5 percent of the annual funding under 
this program be reserved for these enterprises.
    Can you tell me what the department is doing in terms of outreach 
to encourage local and regional food enterprises to participate in this 
program?
    Answer. The department has a Know Your Farmer, Know Your Food 
Initiative and will be establishing a website where this program will 
be featured among all of the department's resources to assist this 
effort.
                acre program implementation and training
    Question. Secretary Vilsack, the 2008 Farm bill includes a new 
counter-cyclical option called the Average Crop Revenue Election (ACRE) 
that uses average State-level crop revenue to establish a threshold for 
coverage. Farmers will have to actively elect to participate in this 
new program and agree to forgo a portion of their direct payments and 
to accept lower loan rates. I appreciate that you extended the time for 
farm program signup to give producers additional time to weigh the 
benefits of the program options. I am concerned, however, that local 
county FSA personnel may not have adequate training to help producers 
consider their program options.
    What training has the Farm Service Agency provided on the ACRE 
program and what plans are in place for additional training over the 
next few months?
    Answer. The Farm Service Agency has distributed fact sheets and 
extensive background information to the field staff and has conducted 
training meetings and webinars along with other efforts to ensure staff 
is adequately trained. However, we agree with you that further efforts 
to improve our employees' and producers' understanding of ACRE would be 
beneficial. The agency has set up a special website for DCP/ACRE which 
includes extensive detailed information, and a new program payment 
calculator to help producers evaluate their options. Plans call for 
additional State and county data files to be made available to further 
assist our employees and producers. Further, we are considering 
launching additional efforts to educate producers as well.
    Question. Would you consider targeting training in those States 
where producers are expected to be more interested in the ACRE program?
    Answer. We will attempt to ensure that FSA staff in all States are 
adequately trained and equipped. However, States with higher numbers of 
eligible producers will likely receive priority for our special 
educational meetings.
    Question. Do you anticipate any computer-related problems as 
producers enroll in ACRE?
    Answer. While the FSA computer system remains a concern, we believe 
that the agency will be able to manage the signup process adequately 
with the current system.
                       usda and doe collaboration
    Question. The Department of Energy provides significant support for 
the development of biofuels, as well as USDA. Both agencies are 
supposed to work together in this arena. However, I believe that USDA 
is has a much better track record for supporting commercialization 
efforts, and that suggests that USDA and DOE should be collaborating on 
bioenergy program planning and execution.
    What is your perception regarding USDA and DOE collaboration in the 
area of bioenergy? Do you think it is adequate or optimal?
    Answer. USDA is satisfied with the level of collaboration with DOE 
in the area of Bioenergy, including the Biomass Research and 
Development Board. DOE presently provides USDA technical expertise in 
the review of Section 9003 Biorefinery Assistance and Section 9007 
Rural Energy for America Programs (REAP) applications.
    Question. Do you have suggestions for improvements?
    Answer. One way to augment both programs would be to increase 
partnerships, in the combined issue of grants and loan guarantees to 
second and third generation biorefineries. This would allow both 
departments to leverage commercialization efforts of second generation 
biofuels.
    Question. And do your recommendations have budget implications?
    Answer. In the May 5, 2009, President's Directive on Biofuels and 
Rural Economic Development, the President created a Biofuels 
Interagency Working Group co-chaired by Secretaries of Agriculture and 
Energy and Administrator of EPA to develop the Nation's first 
comprehensive biofuel market development program.
    The two Departments have identified the leadership to co-chair the 
Biomass Board that is authorized under Section 9008, Biomass Research 
and Development, of the Farm bill. This Board will not only coordinate 
bioenergy activities in the two Departments, but will coordinate 
Federal Government wide activities and collaborate with the newly 
created Biofuels Interagency Working Group mentioned above.
                             fsa computers
    Question. The President's budget includes $67.3 million to continue 
modernization and stabilization of the Farm Service Agency's aging 
computer system. In your testimony you state that, ``additional funding 
will be required in subsequent years to complete this process.''
    Can you discuss what the remaining needs will be to complete this 
process?
    Answer. The goal of modernization is to transform the Farm Service 
Agency's (FSA's) computer system to one that delivers information for 
the delivery of program benefits and information at an appropriate 
standard of quality and performance. When all the components of 
modernization have been fit together, FSA will have a streamlined 
information technology (IT) architecture built on business processes 
that are supported by newer, faster, more secure and more reliable web-
based technologies. Given sufficient funding this goal will be achieved 
in fiscal year 2013.
    We greatly appreciate the $50 million made available in the 
Recovery Act as a down-payment for modernization. The primary 
objectives required to achieve that goal include finishing up 
stabilization efforts and completing MIDAS so that all the Farm Program 
Delivery business processes and applications may be moved off of the 
legacy system.
    Additional information is provided for the record.
    [The information follows:]
    The original estimate of total costs planned for the stabilization 
and MIDAS portion of modernization has not changed from the numbers we 
shared with Congress last year. Stabilization is the restoration of 
critical elements of FSA's IT system after it began to crumble in late 
2006. MIDAS is the core of the modernization effort. It is designed to 
streamline FSA's farm program delivery business processes. The costs of 
these initiatives are the same as found in the ``Description of Annual 
and Lifecycle Costs'' table of the MIDAS Report transmitted on July 15, 
2008. This report was a response to a directive in House Report 110-258 
which accompanied H.R. 3161. These costs are $305 million for MIDAS and 
$149 million for stabilization, which sum to a cost of $454 million.
    Most of the expenses of stabilization have been met. The remaining 
$20.4 million needed will come from a portion of the $67.3 million 
request. At this point, the stabilization initiative will be complete. 
However, while stabilization will have mitigated many of the critical 
weaknesses in the legacy Farm Program Delivery system, the system will 
not be modernized.
    The MIDAS initiative has received $19 million of the $50 million in 
Recovery Act funds in fiscal year 2009, so about $286 million more will 
be required. If the $67.3 million request is funded, FSA will apply 
$46.9 million of it to MIDAS, reducing the remaining costs to about 
$239 million.
    Furthermore, we note that substantial investments will be required 
for additional modernization that is above and beyond the MIDAS effort. 
These additional investments would be directed toward the modernization 
of FSA's commodity operation processes, their legacy farm loan system, 
and several Department-wide ``Enterprise Systems'' FSA shares with 
other agencies. These investments will also include a portion of the 
``refreshment'' of hardware in the Common Computing Environment that 
supports the modernized web-based FSA system being developed under 
MIDAS. This refreshment involves the long needed replacement of older 
desktop PCs, telecommunications and computer network equipment at FSA's 
field offices.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                          asian citrus psyllid
    Question. For the past year, the State of California, the 
California County Agriculture Commissioners, and citrus industry--in 
collaboration with APHIS--have been working together to curb an 
infestation of the Asian Citrus Psyllid, taking a proactive approach to 
prevent the spread of Huanglongbing disease.
    Will you commit the Department to working with the industry and 
citrus States to develop a California-type approach nationally?
    Answer. USDA is committed to working with industry and citrus-
producing States to implement the most practical and effective approach 
to control the pest based on the best available science and farm 
practices. The initial infestations of the Asian citrus psyllid (ACP) 
in California were in areas of San Diego and Imperial Counties adjacent 
to infested areas in Mexico. These first infestations were relatively 
sparse and confined to small residential areas. This made it possible 
for the State to conduct an ACP suppression program, focusing on 
treatment of individual properties. More recent ACP infestations, in 
areas such as Los Angeles County, are much more extensive and are 
likely to pose a challenge in responding with the type of suppression 
program carried out in San Diego County. APHIS continues to work with 
the State, county, and the industry in California to contain and 
suppress the ACP populations in Los Angeles County in the most logical 
manner. In addition, APHIS continues to coordinate with the Government 
of Mexico to implement a similar program in the adjacent border region 
of Baja California to reduce the likelihood of ACP incursion into the 
United States from Mexico. At present we are pursuing a model similar 
to that used for Glassy Wing Sharp Shooter which has been successful in 
protecting the grape and wine industries of California from Pierce's 
disease.
    In other States where ACP and Huanglongbing disease (HLB) have 
become established, the strategy is designed to provide safeguarding 
measures as part of the regulatory framework to prevent further spread 
of ACP and HLB. Meanwhile, USDA is dedicated to working with the 
scientific community around the world in the search for long-term 
practical solutions for citrus greening in the United States.
    Question. What support does the Department need from the industry, 
citrus States, and Congress?
    Answer. The citrus industry recognizes that they have a significant 
role in conducting inspections of their groves for ACP and citrus 
greening, and quickly reporting suspected detections to appropriate 
State and Federal officials. In addition, education activities 
conducted by the industry have emphasized the importance of complying 
with State and Federal regulations designed to prevent the spread of 
ACP and citrus greening. States with citrus have been cooperative in 
conducting surveys for ACP and citrus greening, and in establishing 
parallel quarantines in support of Federal regulatory actions. Industry 
and State and Federal governments are making significant investments in 
research.
    Question. What steps is the USDA taking to stop the spread of the 
Psyllid across the border from Mexico? How is USDA working with the 
Mexican government to move the ACP infestation away from the border?
    Answer. USDA is working closely with Mexico, including providing 
technical support and funding to Mexico to conduct survey, regulatory, 
and suppression activities, in particular in areas adjacent to citrus 
growing areas in the United States. We believe that this has been 
effective in reducing the extent of the ACP infestations on the Mexican 
side of the border, and thus reduced the number of infestations in 
adjacent U.S. areas. In addition, APHIS has provided technical training 
and resources to Mexico, enabling that country to conduct testing for 
the presence of citrus greening. A high percentage of ACPs that are 
found are being tested for the disease. These efforts allowed Mexico to 
confirm its citrus greening infestation in Yucatan State and take 
action to prevent its spread. Pest Alerts have been provided to 
Department of Homeland Security, Customs and Border Patrol to heighten 
surveillance for ACP and HLB.
    Question. What resources are being committed by USDA to treat 
citrus greening (HLB)? What are the plans for developing resistant 
plants? What is the Department doing currently to research solutions 
and what are its plans for future research?
    Answer. There is currently no treatment for HLB. There is a 
concerted effort on the parts of industry, citrus States, and USDA 
(APHIS, the Agricultural Research Service, and the Cooperative State 
Research, Education, and Extension Service) to carry out activities 
that range from the development of strategies to suppress Asian citrus 
psyllid populations with the intended purpose of reducing disease 
pressure on the crop to the development of resistant varieties using 
traditional and biotechnology based approaches. Biological control is 
being explored in the United States and in Mexico.
    Question. Can you assure me that Plant Protection and Quarantine 
(PPQ) officers have adequately trained Customs and Border Patrol (CBP) 
inspectors to identify both adult and juvenile Asian citrus psyllids 
(ACP) on citrus trees as well as ornamental nursery plants such as 
Orange Jasmine that potentially host the pest?
    Answer. All plants intended for planting that enter the United 
States are required to go through one of APHIS' 17 plant inspection 
stations where they are inspected by APHIS inspectors. CBP inspectors 
do not inspect live plants. However, APHIS has provided pest alerts to 
CBP for dissemination to all ports containing photographs of both 
juvenile and adult ACPs for use in inspecting shipments of citrus. CBP 
is focusing on citrus shipments from Mexico, where ACP is known to 
exist. However, citrus from Mexico must go through a commercial 
packinghouse to be eligible for import to the United States, and any 
psyllids present are generally removed during the washing process that 
the fruit goes through in the packinghouse. ACP is also associated with 
curry leaves, which are prohibited but sometimes intercepted in 
passenger baggage from India and other Asian countries. APHIS and CBP 
are working to ensure that such products are not overlooked, and APHIS 
will be holding a workshop near the end of calendar year 2009 for CBP 
inspectors on inspection processes and techniques aimed at ACP.
                     california drought assistance
    Question. California is facing a multi-year drought. In the San 
Joaquin Valley, the most productive agricultural area in the Nation, 
over half a million acres of farmland have been fallowed. Unemployment 
in these communities is over 40 percent.
    I commend you and Secretary Salazar for establishing a joint 
Federal Action Team on Drought, and I look forward to working with this 
team to assist the San Joaquin Valley and other drought-stricken areas 
of the country.
    What is the Department doing to assist the farmers and farm workers 
of the San Joaquin Valley suffering due to the drought?
    Answer. USDA has a number of programs that can provide assistance 
during drought situations. These programs include the Federal crop 
insurance program, the non-insured crop disaster assistance program, 
and the permanent disaster programs which were authorized in the 2008 
Farm bill. These programs can provide compensation to producers whose 
farming operations are adversely impacted by drought. In addition, USDA 
programs have proven that with good planning, good management, and good 
information, farms and ranches can reduce the impacts of drought. For 
example, the USDA Joint Agricultural Weather Facility and National 
Water and Climate Center, along with the U.S. Departments of Commerce 
and Interior, and the National Drought Mitigation Center (NDMC) at 
University of Nebraska, Lincoln, help people prepare for and deal with 
drought. Additionally, we are well aware that drought impacts well 
beyond the boundaries of farms and ranches. Programs administered by 
our Rural Development agencies are available to assist communities 
whose drinking water supplies are impacted and can even provide 
assistance for drilling individual wells.
                           frozen food safety
    Question. A New York Times article that appeared on May 15, 
entitled ``For Frozen Entrees, `Heat and Eat' Isn't Enough,'' explains 
that frozen food, such as pot pies, require additional cooking and 
testing on the part of the consumer before they are considered safe to 
eat. Labels on these frozen entrees require that the food be cooked to 
a uniform temperature of 165 degrees as measured by a meat thermometer. 
However, the author of the New York Times article found that this 
temperature was unreachable without burning the crust of the pot pie.
    I am very concerned that producers of frozen entrees are placing 
the burden of food safety on consumers. Consumers of these products 
purchase them for convenience and with the belief that they are safe to 
eat.
    Does the USDA's Food Safety Inspection Service (FSIS) allow frozen 
entrees such as pot pies to contain harmful pathogens at the time of 
purchase by the consumer? What steps does the FSIS take to make sure 
that producers reduce or eliminate the presence of pathogens in frozen 
entrees? Does the FSIS currently conduct inspections of food labels for 
frozen entrees that contain raw or uncooked ingredients, to ensure that 
the labels clearly indicate that the foods may contain pathogens 
without proper preparation?
    Answer. Frozen entrees such as pot pies currently can be sold to 
consumers in either the ready-to-eat (RTE) or not-ready-to-eat (NRTE) 
form. RTE forms of these products must be free of detectable pathogens 
of public health concern at the time that the products are manufactured 
under Federal inspection. Such products may be heated by the consumer, 
prior to consumption, but the heating is only for palatability purposes 
because no pathogens are expected in the product. NRTE products are 
considered the same as a raw product (i.e., presence of microorganism, 
including pathogens, is minimized but non-detectable). Such product 
bears labeling identifying that the products are NRTE and require a 
full lethality treatment by the consumer in order to ensure safety.
    Due to illnesses associated with this type of NRTE product, the 
industry was informed that the Salmonella hazard needs to be better 
controlled and that labeling alone cannot be the control. Labeling of 
such product must be truthful and not misleading. Guidance has been 
issued to manufacturers of this type of product, reminding them that 
the consumer cooking instructions must be validated as accurate and 
practical for the intended use.
    Another type of NRTE product, i.e., NRTE stuffed poultry that 
appears RTE, has been more recently implicated in foodborne illnesses. 
Consequently, FSIS has been working with the industry on this matter 
and is committed to continuing this collaboration before implementing 
action to force more aggressive controls to ensure that detectable 
Salmonella is not present in the finished product. There is no specific 
timeline; however, the industry will have ample time between being 
provided the guidance on addressing and controlling Salmonella in the 
production of these products and regulatory action by the agency.
              agricultural inspectors at homeland security
    Question. Thousands of agricultural products enter California every 
day through the largest international airport on the West Coast, the 
largest seaport in the country, and the busiest international land port 
of entry in the world.
    As you know, I have been very concerned about the transfer of 
agricultural inspections to the Department of Homeland Security.
    APHIS controlled agriculture inspections prior to March 2003. But 
the responsibility was transferred to The Department of Homeland 
Security's Customs and Border Patrol (CBP) as part of the Homeland 
Security Act. Since then, reports indicate that the number and quality 
of inspections have dropped dramatically.
    Although DHS has made a concerted effort to improve the number and 
quality of inspections, I remain concerned that agricultural pest 
detection has taken a back seat to the more traditional homeland 
security activities of counter-gun, drug, and terrorism efforts.
    Are you satisfied with CBP inspections? Will you commit to working 
with Secretary Napolitano to improve the number and quality of these 
inspections for agricultural products entering our country?
    Answer. I am certainly committed to working with Secretary 
Napolitano to ensure the agricultural inspection program at ports of 
entry is working effectively to protect U.S. agriculture. I am pleased 
to report that staffing levels at CBP have never been higher than they 
are at this time, and that APHIS and CBP are working together through a 
variety of mechanisms to improve the Agricultural Quarantine Inspection 
(AQI) program where needed. While the program has overcome many of 
challenges it faced just after the 2003 creation of the Department of 
Homeland Security (such as the large number of vacancies in the 
inspection force), one area that APHIS and CBP have targeted for 
improvement is the inspection of international passenger baggage. 
Through the Joint CBP-APHIS Task Force, APHIS and CBP managers have 
developed an operational action plan focused on passenger baggage 
inspections.
    Additionally, APHIS is holding workshops for agricultural 
inspectors focused on inspection procedures targeting specific pests. 
Two have already been held (focused on gypsy moth and Khapra beetle), 
and a workshop focusing on the Asian citrus psyllid is planned for the 
end of calendar year 2009. APHIS and CBP have also formed a joint task 
force on exotic fruit flies in response to the large number of 
detections of a variety of fruit fly species (including several not 
detected in the United States prior to this summer) in California this 
year. The task force will look at pathways the pest may be using and 
develop inspection policies and techniques to address them. The two 
agencies are also working to increase the number of canine teams 
deployed at ports of entry, primarily focusing on recruiting inspectors 
for canine teams. I believe these and other cooperative efforts 
demonstrate the two agencies' commitment to working together to ensure 
an effective AQI program.
                             downer cattle
    Question. I remain concerned about inhumane practices in slaughter 
houses and the safety of our food supply. In the fiscal year 2009 
Omnibus Appropriations Act, Congress provided funding for 120 full-time 
staff dedicated solely to inspections and enforcement related to the 
Humane Methods of Slaughter Act.
    As of today, how many full-time inspectors does the Food Safety and 
Inspection Service have that are dedicated solely to enforcement of the 
Humane Methods of Slaughter Act? If you have not yet filled all 120 
spots, when will these spots be filled?
    Answer. The fiscal year 2009 Omnibus Appropriations Act maintained 
the number of full-time positions (FTPs) dedicated to inspections and 
enforcement related to the Humane Methods of Slaughter Act (HMSA) to no 
fewer than 120. Because HMSA tasks are not performed by a single person 
at an establishment, FSIS instead measures in full-time equivalents 
(FTEs), which refers to hours spent performing these tasks equivalent 
to 80 hours a pay period, projected out to a year. As of June 2, 2009, 
FSIS has measured 110 FTEs for fiscal year 2009, and estimates that 
there will be at least 140 FTEs by the end of this fiscal year.
                        country of origin labels
    Question. I am concerned about the increasing number of country of 
origin labels (COOL) that identify multiple countries of origin on meat 
products. I fear that by over-using labels that contain multiple 
countries of origin, some producers may be compromising the integrity 
of the COOL label.
    What oversight does USDA intend to conduct to assure the validity 
of these multiple country of origin labels and protect the value of the 
label for consumers?
    Answer. USDA conducts enforcement reviews at retail facilities and 
trace-back audits on individual items observed during the initial 
retail reviews to verify the accuracy of the COOL claim. USDA is now 
conducting the fourth year of enforcement reviews at retail facilities 
nationwide. The first 3 years of enforcement reviews were limited by 
statute to fish and shellfish. As of fiscal year 2009, all covered 
commodities must comply with the regulatory requirements for COOL.
    To ``jump-start'' COOL monitoring of all covered commodities during 
2009 and into 2010, USDA and cooperating State agencies will conduct 
initial enforcement reviews at nearly 12,000 retail facilities and 
perform follow-up reviews at 2,000 retail facilities where significant 
non-compliances are found. In addition, USDA will conduct trace-back 
audits on 400 individual items observed during the initial retail 
reviews. The trace-back audit will track the selected covered commodity 
from retail back to the initiator of the COOL claim to verify accuracy.
    Whenever non-compliances are found at the retail or supply chain 
level, USDA notifies the retailer or supplier in writing and ensures 
appropriate corrective measures are implemented. Complaints filed by 
consumers are also investigated and, if appropriate, action is taken to 
ensure the identified retailer complies with the COOL regulations.
    The results of previous year review and audit findings (fish and 
shellfish only) are as follows:
    Retail Reviews--Conducted by State Cooperators or USDA Reviewers
  --Fiscal year 2006--1,159 retail stores reviewed--59 percent in full 
        compliance;
  --Fiscal year 2007--1,657 retail stores reviewed--67.5 percent in 
        full compliance;
  --Fiscal year 2008--2,000 retail stores reviewed--73 percent in full 
        compliance.
    Supplier Audits--Conducted by USDA Auditors
  --Fiscal year 2007--47 items audited--82 percent in full compliance;
  --Fiscal year 2008--50 items audited--95 percent in full compliance.
    USDA conducted extensive outreach prior to and during the 
implementation of the COOL regulatory requirements to facilitate 
compliance by retailers and their suppliers. For example, during the 
past year, USDA officials have participated in 21 industry sponsored 
conference calls, 3 webinars and provided formal presentations at 33 
trade association meetings and conferences. Additionally, USDA has 
resources in place to respond to telephone, e-mail and regular mail 
inquiries from producers, retailers, suppliers, consumers, media and 
other interested parties concerning the correct labeling of COOL 
covered commodities.
                     all natural labels for poultry
    Question. Under current regulations, poultry bearing the USDA 
approved ``natural'' label can be pumped full of foreign substances, 
such as saline. These birds are weighed after being filled with salt 
water, and the consumer ends up paying for more chicken than they 
receive. This practice also raises health concerns as consumers end up 
eating a product that has a higher salt content than if the poultry had 
not been manipulated. Does USDA intend to revisit the ``natural'' label 
to rein in such practices? Do you believe that a chicken breast pumped 
full of saline is natural?
    Answer. As a required feature of labeling, the Department mandates 
that any addition of water and saline to poultry be included in the 
ingredient statement. Departmental regulations do not prohibit the 
addition of these components when truthfully labeled.
    Regarding ``natural'' labeling, the Department is charged with 
regulating ``natural'' claims in labeling of products under its 
regulatory purview. We are taking the necessary time to carefully 
consider issues related to the use of ``natural'' claims and to decide 
upon the most appropriate course of action. Even though it remains 
unclear as to whether or not it will be possible to reach consensus 
among stakeholders on what ``natural'' should mean, it is our goal to 
make every effort to at least minimize areas of differences by seeking 
a discrete set of alternatives. While we decide how to proceed, 
companies are still free to submit labels for consideration, and each 
label which be judged on a case-by-case basis. The Department plans to 
publish a Federal Register advanced notice of proposed rulemaking on 
the use of the voluntary claim ``natural'' in the fall of 2009.
                   milk income loss contract program
    Question. As you know, the dairy industry has been exceptionally 
hard hit in recent months, and I want to thank you for implementing 
both the Milk Income Loss Contract program (MILC) and the Dairy Export 
Incentive Program (DEIP) to help Dairymen in California and across the 
country. The opening of these programs has been the only bright spot in 
what has been a very tough time for the industry.
    However, I am concerned that the MILC program favors some regions 
of the country over others. In California we have larger farms than in 
other regions of the country, an average of roughly 1,000 cows per 
farm. These large dairies make our State the top milk producing State 
in the country.
    But only the first 2.985 million pounds of milk are eligible for 
assistance from the MILC program per year. For an average California 
Dairy farm, this means that only about 15 percent of their milk output 
is eligible for MILC assistance. This puts California dairymen at a 
comparative disadvantage with other smaller-farm dairy operations 
across the country.
    How do you plan to address this disparity?
    Answer. The Milk Income Loss Contract program limits on eligible 
production are specified by the 2008 Farm bill. Thus, the Department 
has no flexibility to address disparity in regional impacts created by 
the eligible production limits in the MILC. However, California dairy 
farmers, as relatively efficient producers, do clearly and 
substantially benefit from the Dairy Product Price Support program and 
other measures the Department has taken to support the industry. So 
while the Department has little or no flexibility to tailor the 
national dairy programs to favor one region over another, California 
producers are not disadvantaged aside from the MILC production payment 
caps which affect large producers in all regions of the country.
                      revenue caps vs. income caps
    Question. It is my understanding that the President intends to 
begin using revenue caps, instead of the traditional income caps, to 
determine eligibility for direct farm subsidy payments.
    I am concerned that using revenue caps will unfairly disadvantage 
farmers of high revenue, low income crops such as rice and cotton.
    Can USDA structure a revenue cap to ensure that farmers of high 
expense crops will be not be prohibited from receiving direct subsidy 
payments?
    Answer. The President's budget maintains the three-legged stool of 
farm payments, crop insurance, and disaster assistance. However, in 
keeping with the President's pledge to target farm payments to those 
who need them the most, the budget proposes a hard cap on all program 
payments of $250,000 and to reduce crop insurance subsidies to 
producers and companies in the delivery of crop insurance. While the 
budget includes a proposal to phase out direct payments to the largest 
producers, the Department is prepared to work with Congress and 
stakeholders as these proposals are considered.
                         market access program
    Question. In recent years, the Market Access Program has provided 
California farmers with a vital source of monetary and technical 
assistance as they look to sell their products in foreign countries. In 
the 2008 Farm bill, Congress authorized $200 million in mandatory 
spending for this program; however, the President proposes cutting this 
program by 20 percent in his budget. Given this program's proven track 
record of success and widespread industry support, why was it singled 
out to be cut?
    Answer. The President's budget included a series of proposed 
program terminations or funding reductions that would help reduce the 
size of the Federal deficit, one of which would have reduced funding 
for the Market Access Program. Those steps are necessary in order to 
restore fiscal discipline and lay the foundation for long-term growth 
and prosperity. They also would help to pay for other high priority 
initiatives included in the budget, such as healthcare reform, 
investments in education, and the development of alternative sources of 
energy.
    Although annual funding for the Market Access Program would be 
reduced, the program would still provide assistance for overseas market 
promotion of $160 million per year. In addition, other export promotion 
programs, such as the Foreign Market Development Program and the 
Technical Assistance for Specialty Crops Program, would continue at 
their currently authorized funding levels.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed
                       catfish inspection program
    Question. Mr. Secretary, the 2008 Farm bill transferred the 
responsibility for inspecting catfish from the Food and Drug 
Administration to USDA. In doing so, the legislation requires that 
imported catfish come from countries whose inspection standards are 
equivalent to U.S. standards. It is my understanding that although 
USDA's inspection requirements are still being developed, the 
department is nonetheless required by statute to ensure that a foreign 
government has equivalent standards on the date when the USDA 
inspection regulations are finalized if catfish imports are to continue 
from that country. As a result, there is concern among seafood 
importers, including one in my State, that there will not be time for 
foreign countries to achieve formalized USDA equivalence, since that 
process could take years.
    With that as background, do you believe that there is sufficient 
time to allow foreign governments to establish equivalent inspection 
regimes?
    Answer. I believe that the legislation should be administered in a 
fair and equitable fashion that will best achieve the public health 
protection purposes of the legislation. Regardless of how the 
department ultimately defines catfish under the 2008 Farm bill 
provision, we have made it clear from the start UDSA's willingness to 
meet with exporting countries to assist them in initiating the 
equivalence process. Further, USDA is establishing its catfish 
inspection program in a manner that is consistent with our World Trade 
Organization obligations. USDA will notify interested U.S. trading 
partners when the proposed regulation is published to ensure that they 
have the opportunity to provide comments, just as we have already 
provided notification of the changes in the law regarding catfish 
inspection. We will also provide our trading partners with regular 
updates on the progress of the rulemaking process, as well as all 
possible technical and scientific assistance in helping them attain 
compliance and equivalence.
    Question. Are any major catfish exporting countries seeking to 
establish equivalent standards for catfish? If so, will they be able to 
establish equivalence concurrent with USDA's new requirements?
    Answer. To date, no foreign country has requested equivalency 
standards for catfish.
    Question. Are you examining any temporary alternatives, such as 
direct inspection of foreign seafood operations, which might allow 
imports to continue while foreign governments try to achieve equivalent 
standards?
    Answer. USDA's goals in developing the catfish proposed rule is to 
develop a program that maintains, if not improves, the public health 
protections of consumers and that is fair and equitable. In the 
proposed rule, we will lay out our thinking in this regard and seek 
public comment.
    Question. Do you believe such measures would be sufficient to 
ensure the safety of the food supply?
    Answer. The core of USDA's mission is to protect the public health, 
and in no case would we take an action that would not be sufficient to 
ensure the safety of the food supply.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
                       cap-and-trade legislation
    Question. Mr. Secretary, I want to highlight that agriculture 
producers have little ability to negotiate prices for input costs 
required to produce the final product. If enacted, cap-and-trade 
legislation is likely to result in higher costs for fertilizer and 
other inputs. If input costs increase, how do you expect production 
agriculture to benefit?
    [Clerks Note: The following response is based on information 
available after the date of the hearing.]
    Answer. USDA's preliminary analysis of costs and benefits on the 
agriculture sector uses energy price and other information contained in 
EPA's recent analysis of H.R. 2454. In the short term, the economic 
benefits to agriculture from cap-and-trade legislation will likely 
outweigh the costs. In the long term, the economic benefits from 
offsets markets easily trump increased input costs from cap-and-trade 
legislation. Let me also note that we believe these figures are 
conservative because we are not able to model the types of 
technological change that are very likely to help farmers produce more 
crops and livestock with fewer inputs. Second, the analysis does not 
take into account the higher commodity prices that farmers will very 
likely receive as a result of enhanced renewable energy markets and 
retirement of environmentally sensitive lands domestically and abroad. 
Of course, any economic analysis such as ours has limitations. But, 
again, we believe our analysis is conservative, and it is quite 
possible farmers will actually do better if the cap-and-trade 
legislation is enacted.
    Additional information is provided for the record.
    [The information follows:]
    Looking first at the cost side, increases in fuel prices are 
expected to raise overall annual average farm expenses by about $700 
million between 2012 and 2018, or about 0.3 percent. Annual net farm 
income as a result of these higher energy prices is expected to fall by 
about 1 percent. These estimates assume that in the short term farmers 
are unable to make changes in input mix in response to higher fuel 
prices so they likely overestimate the costs to farmers. Fertilizer 
prices will likely show little effect until 2025 because of the H.R. 
2454 provision to help energy-intensive, trade exposed industries 
mitigate the burden that emissions caps would impose.
    The agriculture sector also will benefit directly from allowance 
revenues allocated to finance incentives for renewable energy and 
agricultural emissions reductions during the first 5 years of the H.R. 
2454 cap-and-trade program. Funds for agricultural emissions reductions 
are estimated to range from about $75 million to $100 million annually 
from 2012-2016.
    To evaluate the potential impact on the agricultural sector further 
out in time, we first examine a simple case that allows producers to 
change the crops they grow but not how they produce them. This approach 
is conservative given the observation that energy per unit of output 
has drastically declined over the last several decades. Nevertheless, 
the estimated impact of the cap-and-trade provision of H.R. 2454 
implies a decline of annual net farm income of $2.4 billion, or 3.5 
percent, in 2030 and $4.9 billion, or 7.2 percent, in 2048.
    These estimates are likely an upper bound on the costs, because 
they fail to account for farmer's proven ability to innovate in 
response to changes in market conditions. Our analysis is also 
conservative because it does not account for revenues to farmers from 
biomass production for bioenergy. A number of studies have examined the 
effects of higher energy costs with models that allow for expected 
changes in production management practices and switching to bioenergy 
crops. Based on the analysis of Schneider and McCarl, for example, 
allowing for changes in input mix and revenues from biomass 
production--but without accounting for income from offsets, it is 
estimated that annual net farm income would increase in 2030 by about 
$0.6 billion or less than 1 percent. By 2045, annual net farm income is 
estimated to increase by more than $2 billion or 2.9 percent.
    H.R. 2454's creation of an offset market will create opportunities 
for the agriculture sector to generate additional income. In 
particular, our analysis indicates that annual net returns to farmers 
range from about $1 billion per year in 2015-20 to almost $15-20 
billion in 2040-50, not accounting for the costs of implementing offset 
practices. EPA has conducted its own analysis of returns from offsets 
that takes into account the costs of implementing land management 
practices. EPA's analysis projects annual net returns to farmers of 
about $1-2 billion per year from 2012-18, rising to $20 billion per 
year in 2050. It is important to note that EPA's analysis includes 
revenue generated from forest management offsets while USDA's does not.
                    rhs recovery act implementation
    Question. I understand that Rural Housing Service has a backlog of 
over $2.4 billion in loan requests. Mississippi has a backlog of 
section 502 rural housing home ownership loans totaling $577 million 
and over 700 loan requests. This is the 8th highest in the Nation. The 
economic recovery act provided an additional $1 billion in loan 
authority for section 502. What is the status of implementation of 
recovery funds?
    Answer. As of May 30, 2009, the Rural Development Single Family 
Housing Direct Program obligated $137.1 million of Recovery Act funding 
for 1,073 loans; and, the Guaranteed Program obligated $4.314 billion 
of Recovery Act funding for 36,093 loans. Rural Development is in the 
process of developing and implementing an ``Outreach Initiative'' that 
will provide relief and assistance to field offices in processing 
single family housing loans. Authorities and funding provided by the 
Recovery Act will be utilized to hire temporary employees and deploy 
them in geographic regions based on the population living in poverty in 
the persistent poverty counties of those regions.
    Recovery Act provided an additional $1 billion in funding for the 
direct single family loan program. This funding has aided in reducing 
the backlog in applications that were maintained by the agency. 
However, in light of the first time home buyers tax credit Rural 
Development is currently experiencing a significant increase in demand 
for the single family direct loan program. The current back log totals 
$2.7 billion.
                       affordable rental housing
    Question. For the last several years, Congress has provided funding 
for revitalization of rural rental housing projects. At the same time, 
there is little in the way of funding for newly constructed rural 
rental housing. What is your view of the proper role for Rural Housing 
Service in meeting the need for affordable rental housing for families 
and seniors in rural America?
    Answer. Funding provided by Congress to support revitalization 
efforts has helped us to address the processing demands of a large and 
rapidly aging Multi-Family Housing (MFH) portfolio financed by the 
Rural Housing Service (RHS). We would like to continue and expand those 
efforts.
    However, there is a very real demand for new affordable rental 
housing in rural areas where housing needs are not being addressed by 
the market or other affordable housing funding programs. RHS can use 
the Section 515 direct lending program, coupled with rental assistance 
to assist tenants with the lowest incomes, the Section 538 guaranteed 
program, which has no tenant subsidy, to serve low and moderate income 
families, and our direct farm labor housing loan and grant program 
(Section 514/516) coupled with rental assistance, to serve farm workers 
that support our country's agricultural activities. These RHS MFH 
programs allow local communities to build affordable rental options 
into their housing infrastructure to keep and attract residents.
    It is important to note that most new construction activity 
generated by RHS MFH programs is supplemented by funding from 
affordable housing partners. In many cases, this job creating third 
party capital financing would not be attracted to rural areas without 
the RHS MFH program to serve as a catalyst. In addition, for any 
affordable housing rental program to succeed in reaching those people 
or communities most in need, project based rental assistance is often a 
critical determinant.
                                 ______
                                 
              Questions Submitted by Senator Susan Collins
                             dairy farmers
    Question. Dairy farmers in the northeast are really struggling. I 
continue to hear from many of Maine's hard-working family farms who are 
barely surviving. Many of these families have been involved in the 
dairy industry for generations. The price farmers are receiving for 
their milk has plummeted as compared to just a year ago. The USDA has 
estimated that the average milk price will be $11.55 per hundredweight 
in 2009, as compared to the 2008 average price of $18.32 per 
hundredweight. The 2009 average price estimate of $11.55 would be the 
lowest average annual price received by dairy farmers since 1978.
    I understand that there are a variety of factors affecting the 
price of milk and that the USDA has recently made efforts to assist 
dairy farmers through existing support programs. I know that you 
authorized the transfer of dairy products, purchased under the Dairy 
Price Support program, to domestic feeding groups, and that you 
activated the Dairy Export Incentive Program. I also am aware that the 
USDA began making payments under the Milk Income Loss Contract program 
in May.
    While the steps you have taken thus far may be helpful in the short 
run, I am interested in what actions you are considering as a long-term 
solution. Under Section 1509 of the Farm bill, Congress authorized a 
blue ribbon commission to study Federal milk pricing system and 
recommend changes.
    Have you considered long-term solutions to assist the dairy 
industry?
    Answer. Yes, USDA is considering long-term solutions to the 
problems facing our dairy industry. [Clerk's note: The following 
response is based on information available after the date of the 
hearing.] On August 25, 2009, we announced the establishment of a Dairy 
Advisory Committee to analyze the issues facing the dairy sector. More 
specifically, the purpose of the Committee is to review the issues of 
farm milk price volatility and dairy farmer profitability and to 
provide suggestions and ideas to the Secretary on how USDA can best 
address these issues to meet the dairy industry's needs.
    Question. When will you create the blue ribbon commission to study 
Federal milk marketing orders?
    Answer. Establishment of the commission is subject to 
appropriations that have not been provided.
                           empowerment zones
    Question. In January 2002, USDA Rural Development designated a 
large portion of Aroostook County, Maine, as a Round III Empowerment 
Zone. This designation, based on Aroostook County's population out-
migration, has helped provide applicants with additional points on 
grant applications and funds for economic development projects.
    Economic development organizations and private sector companies in 
Aroostook have joined together to help stabilize, diversify, and grow 
the area's economy. This region's continued designation as an 
Empowerment Zone and the adequate funding of this program are critical 
for making capital investments, which are prerequisites for business 
attraction in distressed communities.
    During these challenging economic times, it is particularly 
important that the Federal Government continue its commitment to our 
most distressed communities.
    I was disappointed that the Administration's budget eliminates 
funding for Empowerment Zones. Can you explain why this effective 
program was cut in the budget?
    Answer. The Department of Agriculture supports rural economic 
development through community infrastructure, utility, and housing loan 
and grant programs. The small Empowerment Zone and Enterprise Community 
(EZ/EC) program duplicates those programs. Communities designated as 
Rural EZ/ECs are qualified for the regular rural development programs, 
such as the Business and Industry Guaranteed Loan Program, the Self 
Help Housing and Development Loans and the Rural Water and Waste 
Disposal Programs which, in many cases, have set asides in those 
programs. The Budget continues to provide funding to the EZ/EC 
communities through set asides from other Rural Development programs, 
totaling $27.6 million. These set asides have been included by the 
Congress in previous appropriations bills and are expected to continue. 
In addition, the authority for the EZ/EC program expires December 31, 
2009.
         resource conservation and development councils (rc&ds)
    Question. Can you explain why this effective program was cut in the 
budget?
    The USDA's Resource Conservation and Development (RC&D) program 
provides important resources for many rural communities in Maine and 
around the country, advancing valuable local resource conservation and 
community development projects. RC&D-sponsored activities have led to 
more sustainable communities, better informed land use decisions, and 
sound management practices of our natural resources.
    Maine's five RC&D councils have proven their effectiveness through 
a number of accomplishments. During fiscal year 2007, 56 new RC&D 
projects were approved and 40 projects were completed. In October 2008, 
the St. John Aroostook RC&D hosted a conference focusing on increasing 
energy diversity and independence and growing wind power generation in 
Maine. In addition, the Bangor RC&D has provided business development 
programs designed to help entrepreneurs create and grow a successful 
business.
    One of the main benefits of the RC&D program is the promotion of 
local economies through the leveraging of Federal dollars. According to 
the National Association of RC&D councils, the RC&D program is one of 
the Federal Government's success stories with its ability to return 
$7.50 for every dollar the Federal Government invests to support 
economic development and resource protection in rural areas.
    I was disappointed that Administration's budget eliminates funding 
for the RC&D program.
    Answer. First begun in 1962, the program was intended to build 
community leadership skills through the establishment of RC&D councils 
that would access Federal, State, and local programs for the 
community's benefit. After 47 years, the program has matured to the 
point that this goal has been accomplished. RC&D councils should have 
developed sufficiently strong State and local ties to secure funding 
for their continued operation without Federal assistance.
                         maine flood assistance
    Question. Last spring, as a result of heavy rains and record 
melting snow in northern Maine, the St. John and Fish Rivers 
overflowed, causing severe flooding in Aroostook County, resulting in 
major evacuations, displacement, and damaged housing for many 
residents. In May 2008, President Bush declared this region a Federal 
disaster after this historic flooding.
    I am particularly concerned about funding needed to rebuild an 
apartment complex for low-income elderly and disabled residents of Fort 
Kent. Funding estimates indicate that rebuilding this critical facility 
will cost between $2-$3 million.
    I worked to include report language in the fiscal year 2009 
Omnibus, which urged USDA to assist with efforts to rebuild multi-
family housing in Fort Kent, Maine, that was destroyed by this severe 
flooding.
    What efforts has USDA taken to assist the community in its efforts 
to rebuild the USDA multi-family housing that was destroyed by the 
flood?
    Answer. We are pleased to say that funding had been approved for 
these critical rehabilitation and replacement efforts during June of 
this year. Currently, all parties are involved with development and 
construction planning.

                          SUBCOMMITTEE RECESS

    Senator Kohl. The subcommittee will stand in recess.
    Secretary Vilsack. Mr. Chairman, thank you for your 
courtesies, and Senator Brownback, be reassured we will find 
out about that Tufts program because the Deputy Secretary comes 
from Tufts. I am hopeful she knows all about that, and if she 
does not, she is going to find out about it.
    Senator Brownback. She better.
    Secretary Vilsack. Thank you.
    [Whereupon, at 2:55 p.m., Thursday, June 4, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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