[Senate Hearing 112-]
[From the U.S. Government Publishing Office]
AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2013
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THURSDAY, MARCH 29, 2012
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:03 p.m., in room SD-192, Dirksen
Senate Office Building, Hon. Herb Kohl (chairman) presiding.
Present: Senators Kohl, Pryor, Brown, Blunt, Cochran,
Moran, and Hoeven.
DEPARTMENT OF AGRICULTURE
Office of the Secretary
STATEMENT OF HON. THOMAS VILSACK, SECRETARY
ACCOMPANIED BY:
KATHLEEN MERRIGAN, DEPUTY SECRETARY
JOSEPH GLAUBER, CHIEF ECONOMIST
MICHAEL YOUNG, BUDGET OFFICER, OFFICE OF BUDGET AND PROGRAM
ANALYSIS
OPENING STATEMENT OF SENATOR HERB KOHL
Senator Kohl. The subcommittee will come to order. Today,
we begin our first hearing on the fiscal year 2013 budget
request for the U.S. Department of Agriculture (USDA).
Secretary Vilsack, we thank you for being here. We also want to
welcome Deputy Secretary Kathleen Merrigan, USDA Chief
Economist, Joseph Glauber, and Budget Officer, Michael Young.
We look forward to hearing from you today.
The fiscal year 2013 budget request for the USDA is $18.3
billion. This represents a 7-percent increase over last year.
Some programs are cut, while some programs are eliminated
entirely. Several new initiatives are proposed and substantial
increases are requested in some areas.
The Women, Infants, and Children (WIC) program provides
healthy food for women, infants, and children, and is increased
by $422 million. This is mainly due to higher food prices.
Public Law 480 program is reduced by $66 million. This is
somewhat of a concern, as the humanitarian and food needs
around the world, as we all know, have increased.
Our job is to review all the priorities in the budget
ensure that programs vital to people's health, safety, and
livelihoods are adequately funded. We also need to make sure
that tax dollars are spent wisely, as we all know we need to do
more with less.
The USDA is broad in scope and affects the lives of every
American. Now, more than ever, it's essential that we set the
priorities correctly to ensure the Department is both
effective, efficient, and also serves the American people in
the proper way.
We face many challenges this year, as we move through the
appropriations process. I hope to work closely with the
Department, so we can produce a responsible bill.
We also very much look forward to working with Senator
Blunt and all members of the subcommittee. I'd like to thank
Senator Blunt for the helpful and the bipartisan manner in
which we have worked together. This subcommittee has a
tradition of working in a bipartisan manner, and I assure all
members that we will continue that practice as we move forward.
Secretary Vilsack, we thank you again for being here, and
we look forward to your statement. Before that, I would like
ask Senator Blunt for any comments that he may have.
STATEMENT OF SENATOR ROY BLUNT
Senator Blunt. Thank you, Mr. Chairman, and thank you for
holding this hearing. I hope that with your leadership we can
produce a bill again this year, and I'm going to do everything
I can to be helpful in your efforts to get that done, as I
believe others on the subcommittee will. It was good that the
agriculture appropriations bill was the bill that became the
host for the first appropriations bills that passed last year,
and I hope we can do our work in the same manner this year.
The President's budget proposes a net increase in spending
in the USDA. Of course, as our Nation's debt increases, we have
to look carefully at every part of the budget, including this
one. But over the past year, the Agriculture subcommittee has
made difficult and necessary decisions, as the Department has,
including cutting discretionary spending by 15 percent.
This year represents a significant anniversary for the
USDA. It was 150 years ago, in 1862, that President Lincoln
signed into law the bill that created the USDA. And today, the
Department touches the lives of every American, every day.
Activities undertaken by USDA include agriculture research,
conservation, housing and business loan programs for rural
communities, domestic and international nutrition programs,
food safety, and trade promotion.
The same year that President Lincoln signed the bill that
created the USDA, he also signed a bill that was the Morrill
Land Grant College Act. And over the course now of a century-
and-a-half research and extension conducted at those land grant
universities, and now others, has transformed American
agriculture into the most innovative and productive in the
world. As a result, agriculture remains the brightest spot in
our country's economy today.
Last year, American farmers supported record agricultural
exports and earned their highest income since the 1970s. U.S.
farm exports alone helped support more than 1 million U.S. jobs
in 2011. At the same time, however, USDA predicts farm income
will decline by 6.5 percent this year, and recent studies show
that farmers are less optimistic as surging fuel prices and
increases in other inputs increase their costs.
As we look ahead to fiscal year 2013, we have to be mindful
of the important role that agriculture plays in our economic
recovery. We have to make wise investments in those programs
that will increase our agricultural community's competitiveness
here and abroad, and sound agricultural research is the
cornerstone to success in all aspects of the agriculture
industry, whether it's developing more efficient production
methods, eradicating pest and disease, developing biofuels,
maintaining a safe food supply, or enhancing the nutritional
quality of our diets, USDA is and will be involved.
Agriculture research today makes it possible for one
American farmer to feed 155 people. Continued investment in
research will make it possible for us to meet the global food
demand, which is expected to double, a number that always
surprises me, but the global food demand expected to double by
2050.
I'm pleased to see the Department has increases in its
plans for research. These programs and others are critical to
our farmers' ability to increase production, and every $1 spent
on research results in a $20 return to the U.S. economy.
I'm glad the Secretary and his team are here today, and
really believe that they are managing the Department in a
really challenging time in a way that's transparent, and
effective, and forward looking. And Mr. Secretary, glad you
could join us today.
Senator Kohl. Thank you very much.
Secretary Vilsack.
SUMMARY STATEMENT OF HON. THOMAS VILSACK
Secretary Vilsack. Mr. Chairman, and Senator Blunt, and
Senator Moran, thank you very much for the opportunity to
appear today. You have my statement, and I would just simply
ask for an opportunity to amplify on it just a bit.
We want to thank the subcommittee for this opportunity, and
we would like to start with a plea, and the plea is for an
understanding that we need time and flexibility during these
difficult times.
While the budget that we propose does increase over last
year, I would like to point out that it is several billion
dollars less than it was in 2010. And that has resulted in us
at USDA taking a look very carefully at the ways in which we
expend taxpayer resources and are in the process of a variety
of steps to try to make this a more efficient and more
effective USDA.
We need time to absorb the reductions that have taken
place. We need time to fully implement our plans for additional
savings, which includes a very top to bottom review of our
administrative functions. And we need to have the opportunity
and the flexibility to build on the success that we've
experienced at USDA in the recent past.
Senator Blunt mentioned the fact that we had record income
last year. And while it is true that income is expected to be
down just a bit, it will still be one of the best years in farm
income in our history. It is a result of record exports, a
record number of acres enrolled in conservation, a record
number of crop insurance programs, a record amount of credit
extended to producers, homeowners, and businesses, a record
amount of investment in bio-based products, and a bio-based
economy, as well as the expansion of local and regional food
systems, a record investment in business growth in rural areas
and community development, record lows in fraud and in error
rates in many of our nutrition programs, including the
Supplemental Nutrition Assistance Program (SNAP), expanded food
safety efforts, and expanded effort to improve the nutrition of
American families, with a particular emphasis on our school
children. And as Senator Blunt indicated, an expanded effort at
agriculture research, which is extraordinarily important for us
to be able to meet the growing demands, not here just in the
United States, but also globally.
This has required us to make some tradeoffs, and you'll
find that we actually had to make some difficult decisions
concerning programs that were either duplicative, ineffective,
inefficient, unnecessary, or in some cases, just inadequately
funded to make a difference. We also had to take into
consideration the impact of the farm bill discussions, which
have just begun in the Senate and the House.
We have very specific goals, and I'll conclude with that.
We want a Farm Service Agency (FSA) that provides appropriate
credit and maintains a safety net for our producers. We want to
continue to expand trade and to establish food security
globally through our Foreign Agricultural Service. We want to
promote job growth and improve quality of life and energy
security through rural development.
Through our food safety efforts, we want better food safety
more focused on prevention, surveillance, and detection, and
more rapid recovery and response.
Through the natural resources portion of our budget, we
want to expand technical assistance to landowners so that we
can get conservation on the ground sooner, and we want to focus
on some high-priority landscaped areas, so we can improve soil
and water quality, increase wildlife diversity, work with our
friends and neighbors in the sportsmen field to expand outdoor
recreational opportunities.
In the Marketing and Regulatory Programs (MRP) area, we'd
like to continue our efforts at expanding local and regional
food systems, as well as prioritizing animal and plant health.
The research area, we want to continue to focus on our ability
to maintain competitive targeted research towards priorities,
and within the administration of our food programs, we want to
continue to provide access while improving the integrity of
each and every one of the programs.
Finally, in the administration of the Department, we want
to continue the cultural transformation efforts to improve
employee moral, expand on our process improvement efforts,
which is provided for a more efficient use of our time, realign
our workforce through early retirement incentives, and consider
taking a look at our footprint, which has involved some very
difficult and tough decisions concerning office consolidations,
and at the same time, continue, as I indicated earlier, a
fairly extensive process that's looking at our administrative
services.
PREPARED STATEMENT
It has been a busy time at USDA, and we appreciate the
subcommittee's opportunity to appear today, and look forward to
your questions.
Thank you.
[The statement follows:]
Prepared Statement of Hon. Thomas Vilsack
Mr. Chairman and distinguished members of this
subcommittee, I appreciate the opportunity to appear before you
to discuss the administration's priorities for the Department
of Agriculture (USDA) and provide you an overview of the
President's 2013 budget. I am joined today by Deputy Secretary
Kathleen Merrigan, Joseph Glauber, USDA's Chief Economist, and
Michael Young, USDA's Budget Officer.
When I made my first appearance before this subcommittee,
our country and the Department of Agriculture faced historic
challenges. The economy had deteriorated significantly. It was
a crisis that cost the United States more than 8 million jobs
and plunged the economy and the world into a crisis from which
we are still fighting to recover. Three years later, thanks to
the President's bold actions, the economy is growing again and
creating millions of jobs in the private sector. Over the past
22 months, the Nation's businesses have created 3.2 million
jobs. Last year, we added the most private sector jobs since
2005.
I am proud to say that America's farmers, ranchers, and
producers have helped fuel the beginnings of the recovery. The
establishment of the Department 150 years ago underscored the
importance of agriculture and rural America to the country.
What was true then remains true today--agriculture and rural
America matter. Agriculture plays a fundamental role in our
economy--responsible for 1 in 12 jobs. That's not surprising,
because at the time the Department was created, the Morrill Act
established the partnership between USDA and the land grant
universities. Because of this partnership, these institutions
have graduated 20 million people, people who went on to jobs
that built our economy. So, when American producers earn record
income, as they did last year, everyone benefits through the
creation of more jobs and higher wages, whether in food
processing, packaging, or farm equipment manufacturing, the
reduction of our dependence on foreign oil supplies, or the
increased availability of more nutritious food.
On February 10, 2012, I announced another record-breaking
calendar year for farm exports. Total agricultural exports for
calendar year 2011 were a robust $136.3 billion. We saw a rise
in both the value and volume of U.S. agricultural exports
worldwide in 2011, as international sales rose $20.5 billion
over the previous record set in calendar year 2010.
Agricultural exports have supported the creation of over a
million jobs. USDA has expanded markets for American goods
abroad by working aggressively to break down barriers to trade
and provide U.S. businesses with the resources needed to reach
consumers around the world. Last year, we exported an all-time
high of $5.4 billion worth of beef and beef products,
surpassing the previous record by more than $1.6 billion. The
volume of shipments also surpassed the 2003 levels, the last
year before a detection of bovine spongiform encephalopathy
(BSE) disrupted U.S. trade. The return to pre-2003 levels marks
an important milestone in USDA's steadfast efforts to open and
expand international markets. The ratification of the trade
agreements with South Korea, Colombia, and Panama will increase
U.S. farm exports by an additional $2.3 billion--supporting
nearly 20,000 American jobs--by eliminating tariffs, removing
barriers to trade and leveling the playing field for U.S.
producers.
Agriculture has also led the development of our bio-based
economy, where what we grow and raise is used to make fuel,
chemicals, and polymers to complement our traditional
production of food, feed, and fiber. Resilient, hard-working
rural residents provide a model for creating economically
thriving communities, which underscores why the unemployment
rate is dropping more quickly in rural America than anywhere
else in the country.
At USDA we have been working to fulfill President Obama's
vision for a Nation where everyone gets a fair shot and an
economy that makes, creates and innovates. We have been working
to implement the President's vision by laying a foundation for
sustainable economic growth and job creation. USDA is at the
forefront of developing the technology and tools necessary to
transform rural America so that it can create and take
advantage of new economic opportunities.
We have generated rural wealth with our conservation and
rural development programs. These programs help create green
jobs, improve recreation and tourism, and facilitate the
production of renewable energy. We have maintained a strong
agriculture safety net through a system of income support,
disaster mitigation, and a record number of farm loans.
The Department has programs to help people in need by
ensuring that they have access to a plentiful supply of safe
and nutritious food. This is fundamental to the healthy
development of every child in America and to the well-being and
productivity of every family. In recent years, the Supplemental
Nutrition Assistance Program (SNAP) has helped millions of
families meet basic nutritional needs. The program currently
serves as a bridge to recovery for over 46 million Americans
who are at risk of being hungry when they face challenging
economic times. More than half of those who rely on the program
are children, elderly, or the disabled, and many participants
are newly unemployed who may have never thought they would need
this assistance.
While SNAP has increased steadily since its last low point
in 2000, and sharply during the recent economic downturn, the
rate of increase has been declining since January 2010. And
now, we estimate that rising employment and household income
will reduce participation in SNAP in 2013, even as the program
serves a larger share of those eligible. This is how the
program is designed to work; participation rises during
difficult economic times and falls in better times. Even under
this period of rapid growth in participation, this
administration has achieved historically high accuracy rates in
SNAP, saving the taxpayer billions of dollars. We will continue
to make improvements that protect program integrity, even as
Federal and State budgets for oversight of the program are
declining.
We have accomplished a critical step on the road to deliver
healthier, more nutritious food to our Nation's schoolchildren
and to help them develop healthy eating habits for life. On
January 26, 2012, we published the final rule that refines and
improves the standards for meals available to over 51 million
school children across the country every day. The new rule
implements provisions of the Healthy, Hunger-Free Kids Act of
2010 that are simpler and less burdensome than the ones they
replace. The rule substantially increase offerings of fruits,
vegetables, and whole grains; reduce saturated fat, trans fats
and sodium; and set sensible calorie limits based on the age of
children being served. Our understanding of the nutritional
quality of food is built upon USDA science. We have seen the
connection between what our kids eat and how well they perform
in school. And we know that America's success in the 21st
century is dependent on having the best-prepared and best-
educated workforce in the world. So it is critical that that
all children have the basic nutrition they need to learn, to
grow, and to pursue their dreams.
These are just a few of the ways that USDA is helping to
create jobs and work towards an economy built to last. But it's
going to take more to keep moving forward, and that's the goal
of President Obama.
I share the President's vision for investing in activities
that promote economic growth, while reducing our deficits over
the long-term. We need to cut what we can't afford in order to
pay for what really matters, but in a way that does not hamper
growth or prevent us from helping businesses and American
families that need assistance. At USDA we recognized, like
families and businesses across the country, that we could not
continue to operate as we did in the past and that we must
innovate, modernize, and be better stewards of the taxpayers'
dollars.
Over the past decade, USDA has seen an increase in program
complexity and demand for services while staffing has
decreased. Therefore, for fiscal year 2012, I led a Department-
wide review of operations to make USDA work better and more
efficiently for the American people. Agency leaders took a hard
look at all their operations, both in headquarters and field
offices. The result was our Blueprint for Stronger Service. The
plan identifies administrative efficiencies, office closures,
and targeted staffing reductions, to help us deal with
reductions in funding. This plan will create optimal use of
USDA's employees, better results for USDA customers, and
greater efficiencies for American taxpayers.
Under the Blueprint for Stronger Service, USDA is reducing
expenditures for certain IT products, supplies, travel,
printing, and other services. The Blueprint also calls upon
USDA to strengthen its administrative services. Under this
initiative, the Department identified 379 recommendations for
improving USDA's office support and operations, which includes
ways to streamline the provision of administrative services,
such as civil rights, information technology, finance, human
resources, homeland security, procurement, and property
management. Twenty-seven initial improvements have been
identified for first-phase implementation of this project that
will realize efficiencies through improved administrative
services, such as leveraging USDA's size through strategic and
volume purchases as is demonstrated by the consolidation of
over 700 cell phone plans down to approximately 10.
To realize further efficiencies, USDA has proposed closure
of 259 domestic offices, facilities, and labs across the
country, as well as seven foreign offices while ensuring that
the vital services they provide are not diminished. In some
cases, the offices being closed are no longer staffed or are
staffed by one or two people; many are within 20 miles of other
USDA offices. In other cases, technology improvements, advanced
service centers, and broadband service have reduced the need
for brick and mortar facilities.
Last year, many agencies put hiring controls in place,
followed by voluntary early retirement programs and targeted
separation incentive programs. We have offered these programs
on a broader basis in fiscal year 2012. Over the last 15
months, nearly 7,800 people have elected to take advantage of
regular and early retirement opportunities. These departures
have provided agencies the flexibility to eliminate or
restructure positions to be more relevant to customer needs.
Many of the vacated positions will not be refilled, and many of
those refilled will be at lower grades than before. We opted to
manage change rather than implement reductions-in-force or
furloughs, which would have disrupted services that matter to
the public.
When fully implemented, these immediate actions along with
other recommended changes will generate efficiencies valued at
about $150 million annually. Further improvements are expected
based on the realignment of the workforce. Most important,
these actions will ensure that USDA continues to provide an
optimal level of service to the American people within
available funding levels. Ultimately, the Blueprint for
Stronger Service will allow us to manage change in a way that
allows us to provide a high level of services despite reduced
operating budgets.
I have made it a priority to transform USDA into a high-
performing and diverse organization. Under our Cultural
Transformation initiative, we are focusing on improving several
aspects of employee culture, including leadership
accountability, employee development, talent management, labor
relations, customer focus, and diversity of the workforce. By
strengthening management operations and engaging employees,
USDA will also improve customer service; increase employment
satisfaction; and implement strategies to enhance leadership,
performance, diversity, and inclusion.
This in-depth evaluation and improvement of our operations
provided a firm foundation for us to develop the fiscal year
2013 budget. For 2013, the budget we are proposing reflects the
difficult choices we are making to control spending, while
maintaining investments that are critical to long-term economic
growth and job creation.
In total, the 2013 budget we are proposing before this
subcommittee is $141 billion, an increase of $6.9 billion above
the 2012 estimate. Of the increase, $6.4 billion is for
mandatory programs, due primarily to a one-time shift in the
timing of certain crop insurance costs mandated by the 2008
farm bill. The budget also increases funding for the nutrition
assistance programs to fully fund estimated participation
levels. As we continue to create jobs and grow the economy,
fewer families will need nutrition assistance.
For discretionary programs, our budget proposes $19.3
billion, approximately $478 million above the 2012 level. The
majority of the increase is for the Special Supplemental
Nutrition Program for Women, Infants and Children (WIC) and
agricultural research. The discretionary funding request
reflects the Department's continued efforts to innovate,
modernize, and be better stewards of the taxpayers' dollars.
Discretionary spending is partially offset through about $1
billion of proposed limits on selected mandatory programs and
other adjustments. For 2013, further administrative
efficiencies, realignment of staff, and other actions are
proposed to reduce costs. In addition, the budget proposes to
reduce or terminate selected programs and reallocate resources
to fund targeted investments in priority programs and
infrastructure to provide a foundation for sustainable economic
growth.
This budget provides the resources we need to effectively
deliver the level of service our customers and your
constituents expect from USDA--whether it is applying for a
farm operating loan, enrolling more acres into conservation
programs, supporting business creation, seeking nutrition
assistance, or any of the multitude of services provided by our
dedicated workforce. Any further reduction in funding for our
back office operations would significantly impair our ability
to deliver critical services and would imperil our efforts to
manage an increasingly complex workload with less money and
fewer workers.
Reducing the deficit is a critical part of the President's
economic plan. The long-term stability of the economy depends
on whether we have the will to act now. Farmers and ranchers
know the importance of a healthy economy, which raises incomes
and increases demand for their products. Therefore, the 2013
budget reflects the President's Plan for Economic Growth and
Deficit Reduction. The President's plan reduces the deficit by
$32 billion over 10 years by eliminating direct farm payments,
decreasing crop insurance subsidies, and better targeting
conservation funding to high-priority areas.
As Congress initiates its deliberations on the
reauthorization of the farm bill, we must remember that
American agriculture has achieved its success today because of
the policies and the investments that have been made over many
decades. We are here because we've maintained a strong safety
net so there is adequate financial help when times are tough
and disaster strikes. We have supported research that has led
to a significant increase in agricultural productivity and
promoted vibrant markets. We are also here because policies in
the farm bill for research, renewable energy, and broadband are
providing rural America the tools to take advantage of new
economic opportunities. Statutory authority for all disaster
programs expired on September 30, 2011; accordingly, USDA
cannot provide assistance through these programs to producers
for losses due to natural disasters occurring after that date.
As the farm bill is drafted, I encourage Congress to provide
USDA the tools and the flexibility needed to address the
challenges faced by American producers.
Our 2013 budget protects the farm safety net, while
achieving the President's goal for deficit reduction. Income
support programs, including 2012 direct payments, 2013 counter-
cyclical payments, and Average Crop Revenue Election (ACRE)
payments, are expected to total about $4.9 billion and outlays
under the Federal crop insurance program are projected to reach
$9.3 billion. Despite a strong farm economy, demand for USDA
farm loans remains strong due, in part, to tighter private
credit standards including higher down-payment requirements.
The 2013 budget provides nearly $4.8 billion for loans to meet
the expected demand for financing. The requested loan levels
will serve nearly 30,000 farmers.
In order to better serve producers with faster and simpler
service, the budget continues to fund IT modernization
activities of our Farm Service Agency (FSA). This investment
will improve the Agency's ability to deliver increasingly
complex farm program benefits, securely, reliably, and rapidly.
Since 2003, staffing levels at FSA have declined over 30
percent, making investments in IT infrastructure even more
important.
One of USDA's most important objectives is to protect our
abundant natural resources. Over the last 3 years, we enrolled
a record number of acres of private working lands in
conservation programs. These programs help to preserve the
soil, improve water quality, and promote wildlife diversity and
add hundreds of millions of dollars to local economies in rural
areas. For 2013, the budget provides approximately $6.2 billion
to support approximately 358 million acres in farm bill
conservation programs.
For the Natural Resources Conservation Service (NRCS), the
2013 budget proposes $828 million for conservation operations.
NRCS will continue efforts to leverage technical assistance
funds through agreements with its traditional partners, such as
conservation districts, as well as with nonprofit organizations
and State and local agencies. This approach of voluntary
conservation works. That is why we are embracing locally driven
conservation programs and entering partnerships that focus on
large landscape-scale conservation programs, such as the
Chesapeake Bay, the Bay-Delta region in California, the
Mississippi River Basin, Gulf Coast, and the Great Lakes.
Our budget for 2013 contributes significantly to the
economic growth goals of the White House Rural Council by
continuing to fund programs that promote renewable energy, job
training, infrastructure investment, access to capital, and
green jobs throughout rural America. Approximately $6.1 billion
in direct loans will be made available to support the
transformation from fossil fuels to cleaner technologies.
Allowing financing for environmental upgrades will support the
continued development of a national clean energy strategy.
Almost $1 billion in loans will be used to support rural
business and entrepreneurs, which will put more people back to
work. USDA's efforts, including a regional approach to wealth
and job creation, is one reason why the unemployment rate is
dropping more quickly in rural America than anywhere else in
the country. We are giving renewed opportunity to the nearly 50
million people who live in those areas who don't necessarily
farm.
Cutting edge research remains key to the United States
retaining its competitive edge and global leadership in
agricultural productivity--estimated to need to increase 70 to
100 percent by 2050 to meet growing global demands for food.
The correlation between research and improved productivity
could not be clearer. As a result of research at USDA, our land
grant universities, and the private sector, American
agriculture ranks second in productivity gains of all segments
of the U.S. economy since 1980. Over the past 60 years, yields
per acre of major crops--corn, soy, wheat, and cotton--have
doubled, tripled, and in some cases even quadrupled. At the
same time, livestock production and specialty crop production
have become far more efficient. These incredible productivity
gains were achieved through a sustained investment in research.
We will continue to support a robust research program that will
ensure sustainable agricultural production, economic growth for
growers and greater choice for consumers. The 2013 budget
proposes funding of $325 million for the Agriculture and Food
Research Initiative (AFRI), an increase of $60.5 million, and
$1.1 billion for our Agricultural Research Service (ARS). We
will continue to focus additional research dollars in key
areas, such as biofuel feedstocks, livestock and crop
production and protection, and enhancing American agriculture's
ability to meet growing global demand sustainably.
Because we are still in a recovering economy, USDA
recognizes the need to support those in need by ensuring access
to safe and nutritious food, which is essential to the healthy
development of every American child and to the well-being and
productivity of every American family. The budget fully funds
the expected requirements for the Department's three major
nutrition assistance programs--WIC, the National School Lunch
Program, and SNAP.
The Department has had great success in promoting healthy
eating habits and active lifestyles. Too many adults and
children have poor diets and gain excessive weight contributing
to poor health and increased medical costs. The Centers for
Disease Control and Prevention data show that the prevalence of
obesity among children tripled from 1970 to 2008 and it doubled
among adults. However, data for 2009-2010 show the obesity rate
for both children and adults has stopped increasing. Policies
aimed at increasing access to more nutritious diets, promoting
eating habits consistent with the Dietary Guidelines and
encouraging healthy lifestyles are partly responsible for this
change.
One of the key challenges for providing healthier school
meals is to modernize cafeteria equipment appropriately so
schools can prepare attractive, wholesome meals with more whole
grain, fruit and vegetables, and less fat and saturated fat.
Helping schools to upgrade the nutritional quality of meals
served is essential. So an important part of the budget request
is $35 million to continue competitive grants to help schools
purchase equipment to serve healthier meals as well as to
expand the breakfast program. These grants will help about
10,000 schools across America.
The budget not only supports domestic food assistance, but
also provides $1.4 billion to support programs that further the
administration's global food security objectives, including
those supporting preschool and school feeding programs carried
out under the McGovern-Dole International Food for Education
and Child Nutrition Program. In fiscal year 2013, the McGovern-
Dole program is expected to benefit more than 4 million women
and children. Through the U.S. Government's leadership in
global food security, we advance global stability and
prosperity by improving the most basic of human conditions--the
need that families and individuals have for a reliable source
of quality food and sufficient resources to purchase it.
The Obama administration and USDA are committed to
partnering with rural communities to increase their economic
competitive by helping them provide residents access to quality
healthcare services, modern library facilities and school
buildings, and reliable emergency equipment and services.
Financing totaling $2 billion, an increase of approximately
$700 million, will provide assistance to over 1,700 rural
communities. Investing in rural communities is essential for
growth and job creation.
Helping rural residents obtain safe and affordable housing
is also a key to maintaining stable communities and creating
jobs. The 2013 President's budget requests a significant level
of funding for housing programs. USDA continues to request that
single family housing assistance be provided primarily through
loan guarantees. The 2013 budget includes funding to support
$24 billion for guaranteed loans. USDA's single family housing
direct loan program is funded at $653 million, and will be
targeted to teachers in rural areas, and very-low-income
recipients of mutual and self help grants. These funds will
create job opportunities and make the dream of home ownership a
reality for over 184,000 families in rural America.
Since the founding of President's Obama's Food Safety
Working Group in 2009, USDA has collaborated extensively with
other Federal partners to safeguard the food supply, prevent
foodborne illnesses and improve consumers' knowledge about the
food they eat. USDA is working to strengthen Federal efforts
and develop strategies that emphasize a three dimensional
approach to prevent foodborne illness: Prioritizing prevention;
strengthening surveillance and enforcement; and improving
response and recovery. Between 2000 and 2010, USDA reached a
national goal of reducing E. coli rates by 50 percent, largely
because of strengthened beef safety policy and enforcement. In
2011, stricter Salmonella and Campylobacter performance
standards were implemented to reduce these pathogens in turkeys
and young chickens, which are expected to prevent as many as
25,000 foodborne illnesses annually.
Despite this success, we can and must do a better job of
ensuring the safety of meat and poultry products regulated by
USDA, but we need to do it more efficiently and effectively.
The Food Safety and Inspection Service (FSIS) recently
published a proposed regulation that will prevent thousands of
food-borne illnesses, streamline poultry inspections, and
reduce spending by approximately $90 million over the first 3
years of implementation. We will revise current procedures and
remove outdated regulatory requirements that do not help combat
foodborne illness. The new procedures will use taxpayer dollars
more effectively and efficiently; even with these program
efficiencies, the budget includes approximately $1 billion for
FSIS.
The economic vitality and quality of life in rural America
and the U.S. economy at large depends on a competitive,
efficient, and productive agricultural system. In an era of
market consolidation and intense competition, producers rely on
fair and open access to markets and control over their
decisions to thrive. Producers also rely on animal and plant
resources being protected against the introduction of foreign
agricultural pests and diseases. For 2013, the budget includes
over $880 million in discretionary funding to improve
agricultural market competitiveness and production for the
overall benefit of consumers and producers.
We have taken a close look at the budget for the Animal and
Plant Health Inspection Service and have proposed a number of
program reductions and implemented identified program
efficiencies to ensure that scarce resources are being used
efficiently. The budget achieves savings through a variety of
means. It includes decreases for activities where eradication
campaigns have been successful, such as boll weevil, and for
pests and diseases where management is currently more prudent
than eradication, such as emerald ash borer. Savings are also
possible in animal disease testing while still meeting
international standards. Further, the budget achieves other
savings by acknowledging the role of the producer and other
cooperators to directly reduce certain pests and diseases, such
as Johne's disease. The budget also proposes modest increases
to improve overall animal disease traceability and to provide
protections against animal diseases that could impact human
health. At the requested budget level, we estimate we will
prevent and mitigate about $1.18 billion in damages as a result
of selected plant and animal health monitoring and surveillance
efforts.
USDA's central Departmental Management provides human
resource, procurement, information technology, and financial
management oversight and services to agencies. Departmental
staff offices provide legal and economic support,
communications coordination, and program appeal hearings for
the Department's program activities. These activities are vital
to USDA's success in creating opportunities for America's
farmers, ranchers, and rural communities. The 2012
appropriations act made deep cuts in funding for these offices.
Under these reduced funding levels, we took prudent actions to
maintain critical functions needed to support the agencies'
effective delivery of program operations. But further
reductions in these areas cannot be sustained without
deterioration in service. For 2013, the budget proposes funding
to ensure that these offices maintain the staffing levels
needed to provide leadership, oversight, and coordination.
These efforts are critical to making the Department an
efficient and effective organization.
Since coming to USDA, I have made it a priority to resolve
all of the civil rights cases facing the Department which the
administration inherited. During this time, we have resolved
large-scale class action lawsuits involving allegations of past
discrimination by Black and Native American farmers and
ranchers and provided an additional path to justice for women
and Hispanic farmers and ranchers who allege discrimination. We
have corrected past errors, learned from mistakes, and charted
a stronger path for the future where all USDA employees treat
all Americans with dignity and respect. The 2013 budget builds
upon our progress by increasing funding for selected key
priorities that will improve USDA's handling of civil rights
matters and will address claims of potential discrimination in
the delivery of programs.
In conclusion, the President is deeply committed to
reducing the deficit so that the economy can continue to grow
over the longer term. This is a responsible, balanced budget
that continues to meet key priorities and is consistent with
the President's commitment. We will continue to achieve
significant progress in administering more complex programs
with fewer staff and resources by adopting reforms that will
improve our programs and service to our customers.
At this time, I will be glad to answer questions you may
have on our budget proposals.
Senator Kohl. Thank you very much, Secretary Vilsack.
WIC PROGRAM FUNDING
Mr. Secretary, the fiscal year 2013 budget includes $422
million increase for WIC. Do you believe this budget is
sufficient to cover the demand for the WIC program? How will
the Department adjust should cost food costs and participation
increase in 2013?
Secretary Vilsack. Mr. Chairman, we do believe it is
adequate. We do believe it's based on accurate estimates. We're
a bit off this year, and so we wanted to be doubly sure that we
focused on maintaining the WIC program so that there weren't
waiting lines. We know that's something the Congress does not
want us to have. But, also point out that we are expecting and
anticipating that the food inflation will be moderate in
comparison to last year. We saw fairly significant spikes at
various points in time. We don't expect to see quite the high
level of food price increases that we experienced last year.
So, we do believe that that estimate is accurate.
SNAP CONTINGENCY FUND
Senator Kohl. Mr. Secretary, the food stamp program, which
is now called SNAP, saw a $2 billion increase to its
contingency fund. This is not a small amount of money. Why is
this additional amount of money needed, given the current state
of the economy? Do you envision using any of the contingency?
Secretary Vilsack. Mr. Chairman, what we have seen with
reference to SNAP is a plateauing of our SNAP numbers, which is
obviously a good sign, may very well be reflective of the fact
that we're beginning to see an improved economy.
Having said that, as noted earlier, high energy costs could
potentially derail that recovery, and so we want to be in a
position that if things don't continue to proceed in a positive
way that we can respond to the nutritional needs of families,
and also continue to focus on the fact that their nutrition
assistance programs are not just for the struggling families,
but it is, in a sense, part of the overall program to ensure
the safety net for our producers. Sixteen cents of every food
dollar goes into a farmer's pocket. So, as we look at the
totality of our support, and help, and assistance for our
farmers and producers, you have to look at all of the programs,
including SNAP.
SNAP PROGRAM INTEGRITY
Senator Kohl. Mr. Secretary, over the past few months we've
heard a lot about the integrity of the SNAP program. This
program provides a crucial safety net for millions of people.
We certainly need to ensure that this program is managed in the
most effective and efficient manner possible. What is your
Department doing to address waste, fraud, and abuse in this
program?
Secretary Vilsack. Mr. Chairman, let me start off by
pointing out that the fraud rates and the error rates are at
historic lows. We've taken a number of steps.
First, as it relates to individuals, we have in place a
program that will allow us to check against death records,
Social Security records, et cetera, to make sure that people
are not inappropriately using other's identity. We also have a
program for those individuals who live near border States to
ensure that they don't try to collect in a number of States.
I will tell you that in 2010, our latest numbers, nearly
800,000 investigations were conducted by States, in terms of
individuals, and more than 44,000 individuals were disqualified
from the program as a result of being disqualified in those
inspections.
We have looked at approximately 15,000 businesses, stores,
and we have an alert program, which allows us to begin looking
at 18 different demographic factors and demographic pieces of
information and data about how SNAP proceeds are being
processed.
For example, if we see a continuation of even no-cent
purchases, $35, $50 even, that is a tip-off for us to really do
a more thorough investigation of how the program is being
utilized.
We are also making sure that if a location is disqualified
from the program, that there's not a transfer of ownership that
is basically hiding the previous owner, so we're going into
greater detail in terms of looking at the paperwork of these
transfers.
So, we take all of this very, very seriously. We understand
it's important and necessary to maintain the integrity of these
programs. While we are pleased that we are at record lows,
we're not satisfied. We want to continue to work to ensure the
integrity of these programs.
FOOD SAFETY AND INSPECTION SERVICE POULTRY INSPECTION
Senator Kohl. Thank you. The Food Safety and Inspection
Service (FSIS) program, is responsible for ensuring that the
Nation's commercial supply of meat, poultry, and processed egg
products is safe and wholesome. This is done to a large degree
by Federal inspectors and meat processing plants.
However, FSIS's budget includes a $13 million cut in
funding associated with implementing new methods of poultry
inspection and reducing staff by 500 employees. Certain
inspection responsibilities would shift from Federal inspectors
to company employees.
In light of continuing outbreaks of food-borne illness,
we're concerned that this decision may put consumers at risk
solely for budget savings. Do you believe this new inspection
method will keep our food safe? What training will be required
of company employees prior to assuming these new tasks?
Currently, FSIS inspectors can evaluate up to 35 birds per
minute. The new process is supposed to be five times faster,
and is this safe for workers?
Secretary Vilsack. Mr. Chairman, thank you for asking that
question. First of all, let me suggest to you that we believe
that this process will actually make the food safer, not as
safe, but safer. And the reason for this is, based on the fact
that we have had a number of pilot facilities around the
country for a number of years use this new system that we're
proposing, and from that, the data suggests that we can save
5,200 food-borne illness incidences as a result of this new
system.
Second, it's important to know that essentially what we're
doing in terms of company inspection is not so much in terms of
food inspection and in terms of food safety, it has more to do
with the cosmetic appearance of the poultry. At the beginning
of the process, we are currently using individuals to look for
defects in the cosmetic nature of poultry, which we think is
really more about the marketing of the product, not the safety
of it.
What we'd like to be able to do is to have the company
assume that responsibility for cosmetic review, and then shift
the responsibility of the people that we currently have on that
line to taking a look at the locations along the line where the
hazards are greatest, and beef up that effort.
It is true that this will result ultimately over time in
roughly 500 to 800 fewer positions, but it will also result in
more than 1,000 people actually receiving a higher paying job
and a more sophisticated job, for which there will be
additional training. We expect and anticipate that this will be
factored in or phased in over a couple-of-years period in order
to ensure the training is accurate.
As it relates to the worker safety question, we are going
to institute a study at the beginning of this process. We have
a study, but we want to make sure that the results of that
study are verified. And we are going to essentially look at a
very complicated review of the safety of workers. If we see a
problem with the safety, we will obviously adjust accordingly.
The last thing I would say is that this whole process, this
review process, this inspection process has been peer reviewed.
And I think that the review suggests very strongly that this
will actually result in a safer system, a safer food supply. It
just happens to also save money for the Government and for the
companies, but it is primarily for food safety that we're
looking at this.
Senator Kohl. Thank you, Mr. Secretary.
Secretary Vilsack. Thank you.
Senator Kohl. Senator Blunt.
Senator Blunt. Thank you, Chairman.
WIC PROGRAM INCREASES IN CALIFORNIA
Mr. Secretary, in the WIC program, I think there's been,
particularly in California, an increase in costs. It's the
largest program, of course, but it's increased a whole lot
faster than in other States. And I wonder if you could tell us
a little bit about what you're doing to look at that, and what
might be the cause for that.
Secretary Vilsack. Senator, there may be a number of
reasons, but the one that concerns us the most is that there
are very, very small stores that have dramatically overpriced
products in the WIC package. And we have advised the State of
California that this has taken place. We have asked the State
of California to first and foremost stop any further approvals
or permission for those sized stores to continue to participate
in the WIC program. We've asked them to review their protocols
for the analysis of those smaller stores, and we have been
advised by the State of California that they will be coming up
with a new regime this spring that will address in a very
serious way, in a very concrete way, and a very quick way, the
fact that there have been stores that have taken advantage of
folks, and taken advantage of this program.
So, that's one of the concerns that we've had, and we've
notified the State, the State has responded, and they are in
the process of fixing the problem.
Senator Blunt. Just a curiosity here. I'm glad you're
looking at this carefully, and it sounds like you're working
with them to solve it. Do these stores have a different section
for WIC customers, or do they just assume that most people
won't buy the more expensive gallon of milk, the more expensive
loaf of bread, or whatever they're pricing at this higher rate?
Secretary Vilsack. Senator, I'm not sure if they have a
different section. My understanding was, and I could be wrong
about this, that this was sort of mixed in with their overall
operation, and basically taking a fairly significant advantage
of folks. When we're seeing the price of various items being
two, three, four, maybe even higher at times what you would
normally see in a regular grocery store. And I think one of the
keys for us, as this is----
Senator Blunt. Did you say two, three, or four times as
high?
Secretary Vilsack. Or higher.
Senator Blunt. To understand this, if you're a WIC
recipient, you have a coupon that allows you to get this
product that has nothing to do really with the price of the
product where you buy it.
Secretary Vilsack. That's correct. And then the grocery
store or the convenience store puts in a bill, if you will, for
reimbursement for that, and were charging a substantial amount
for that product far, far in excess of what the market was
currently charging for that product, whether it be cereal, or
whatever it might be.
We noticed this in our review of the data, and we contacted
the State and said this is a serious problem. First and
foremost, what we are going to tell you is we don't want any
further businesses of this size, if you will, in these high-
risk areas to basically be permitted, and then second, we want
you to take this very seriously and rethink the way in which
you are providing oversight. As you know, these programs, the
administrative oversight is initially at the State level to
provide oversight so that this doesn't happen.
And, again, I think California did respond. Governor Brown
and his team have looked at this, and they said, yes, you're
right. This is not right. We're going to fix it, and we're
going to fix it quickly.
Senator Blunt. Do you feel like this might be happening on
maybe even a lesser level, but in other places?
NUTRITION PROGRAMS FRAUD DETECTION
Secretary Vilsack. I'm not aware of it happening in other
States, Senator. I know that we're looking at this, and being
careful about it. And the point I would make, with reference to
nutrition programs, generally, is--as we look at the farm bill,
and as we talk about this issue--I think we need to take a look
at the definition of stores that qualify for these various
programs, because right now we see a lot of issues with
relatively small facilities. That's where many of our concerns
are relative to error rates or fraud in many of these nutrition
programs. So, I think we really need to be careful about the
permission we grant. There are more than a quarter-of-a-million
stores, for example, that provide SNAP, and a relatively small
percentage of those stores sell a disproportionate amount of
SNAP food. It's maybe less than 20 percent sells 80 percent of
the food. That type of ratio. So, I think we need to really
take a look at that.
Senator Blunt. I'm going to ask a technology question next,
so it may be the answer.
Is there any way your system can monitor whether some area
is way out of bounds on pricing of specific products?
Secretary Vilsack. I think there is. Certainly, in a couple
of programs we do have that review, and we're continuing to
look at ways in which we can mine data that we collect to be
able to identify problems, as I said earlier.
For example, if we see a store where there are a lot of
even purchases. I mean no one goes into a grocery store and
gets $35 worth of groceries. They get $35.18 or $35.16. We see
a pattern of that. That gives us a tip that there's a problem
there, and that triggers a review and investigation.
Senator Blunt. And you say for both WIC and SNAP this is
something that you're watching carefully.
Secretary Vilsack. Yes. And that's why we had 15,000 store
reviews. That's why we had nearly 800,000 individual
investigations and reviews, in terms of the program. And that's
why several hundred stores were disqualified, and 44,000
individuals were taken off the program. And that's why our
fraud rate and our error rate are at historic lows.
Senator Blunt. On technology, I thought about that. I
thought well, I probably ought to go to this technology
question, too.
FARM SERVICE AGENCY INFORMATION TECHNOLOGY
With the FSA offices, I understand the technology there has
been about as old as any technology anybody's still using, and
to some extent, individual farm records were essentially
captive to whatever machine they were in 1984, or whatever. You
could tell me more about this. The Modernize and Innovate the
Delivery of Agricultural Systems (MIDAS) program is the program
that would upgrade that?
Secretary Vilsack. That's correct. And we spent the last
several years, with the resources provided by this
subcommittee, building the design for the new system. And the
good news, this year we'll begin to see actual on-the-ground
construction or building of the system, starting with acreage
reports, and starting with some of the farm record development
as a strong foundation. And then the following year, we will
build on top of that foundation, and hopefully, within the next
year or 2, our farmers will begin to see a much more convenient
approach from the FSA offices. And hopefully, we will get to a
point in those places where there's sufficient broadband
Internet access that folks can work literally from their homes.
Senator Blunt. From their home. Now, my belief is that the
equipment that the FSA office has been using is like mid-1980s.
Secretary Vilsack. It's not so much the equipment. It's the
software.
Senator Blunt. It's the software system.
Secretary Vilsack. Yes. And so when you have a farm bill
every 5 years, what happens is oftentimes those systems, many
of them have to be manually coded, if you can imagine that. And
that's why it takes a long time to implement things. But, MIDAS
is designed to address that. And it's taken a number of years
to do it right, a lot of feedback from those who work on the
ground, in the field, to make sure that we design it properly,
and to test it properly.
Senator Blunt. And this has almost $12 million in it. Would
that complete MIDAS?
Secretary Vilsack. Oh, no. No. No. It's far more than that,
Senator. This is a very, very significantly expensive
operation.
Senator Blunt. There's a $12 million increase, though.
$11.78 million, I guess.
Secretary Vilsack. We are asking for a substantial increase
this year. Just to give you a sense of this, the
implementation, in fiscal year 2011, we asked for $45 million.
In fiscal year 2012, it's $112 million. And the reason it goes
from $45 million to $112 million is because we're not actually
building the infrastructure to do this. And we're going to
build the foundation this year, and a lesser amount next year
should complete the process.
Overall, we had anticipated and estimated years ago that
this would cost several hundred million dollars, and that
estimate is going to be correct.
Senator Blunt. So, in fiscal year 2012, the budget year
we're in right now, this is the big year for MIDAS.
Secretary Vilsack. This is the big year. And fiscal year
2013, we're reducing it, but it's still a substantial amount of
money. It's nearly $100 million. So, it's less than this year,
but it's still substantially more than the previous years,
because we're now building it, as opposed to designing it and
testing it.
Senator Blunt. And this is more of a software problem than
a hardware problem?
Secretary Vilsack. That's my understanding. I'm not a
technical expert, and maybe someone here on the panel can
amplify on this. But it's primarily----
Senator Blunt. No one's raising their hand on the panel.
Secretary Vilsack. It's primarily.
Secretary Blunt. You're on your own.
Secretary Vilsack. It's, as I understand it, primarily a
software issue. If I'm wrong about that, we will let you know.
But the reality is, it is an expensive proposition, but
eventually, it should get to the point where if you have
Internet access, you will be able to be at your kitchen table,
call up your files, and basically be able to work with FSA
offices online. That's the goal.
[The information follows:]
MIDAS focuses on software, specifically adapting commercial-off-
the-shelf software (COTS) to run Farm Program applications in a Web-
accessible environment. The Department's Common Computing Environment
(CCE) focuses on refreshing the system hardware and upgrading the
network used by the USDA Service Centers.
Regarding MIDAS, the Farm Service Agency (FSA) has completed the
initial design for MIDAS, which includes business requirements
documentation, design of re-engineered processes, improved access to
data, and creation of a network comprised of Service Center employees
to ensure the new software meets the needs of the business. The MIDAS
Program is now in the build phase, during which the system software is
configured to meet the requirements, and all technical components are
set up and tested.
In fiscal year 2012 the emphasis of CCE is network optimization
which is the effort to replace the aging infrastructure--desktop
computers, servers, data storage capacity, bandwidth to support
applications--to ensure that the core network infrastructure meets the
demands of many of USDA's and FSA's IT modernization efforts including
MIDAS. At completion, it will be possible for farmers and ranchers to
access MIDAS online, via Internet access, e.g., ``from your kitchen
table.''
FARM SERVICE AGENCY OFFICE CONSOLIDATION
Senator Blunt. Now, if you go to a new FSA office, based on
consolidation, will your records be there? Do you know that
they're there?
Secretary Vilsack. Not only will the records be there, but
most likely, the person who dealt with you at the previous
office will also be there. There are about 170 people that are
impacted specifically by what we're proposing, and all 170 of
those folks will still be able to work at FSA, if they choose
to do so.
Senator Blunt. Mr. Chairman, do you think we'll have time
for a second round?
Senator Kohl. Yes.
Senator Blunt. If so, I'll go ahead and wait for that
second round for other questions.
Senator Kohl. Thank you very much.
Senator Pryor.
Senator Pryor. Thank you, Mr. Chairman. I thought Senator
Moran was here before me.
Senator Kohl. I thought I'd rotate.
Senator Pryor. Okay. Thank you, Mr. Chairman.
FARM SERVICE AGENCY OFFICE CONSOLIDATION CRITERIA
Mr. Secretary, I think a bad way to start a hearing is when
one of us writes you a letter on February 21, and we don't get
the response until March 28, at 4 p.m., hand-delivered the day
before a hearing. I'd like to follow-up on some of the
questions I asked in that letter, one, in particular, that you
did not answer. And that would be my question No. 2 in the
letter, where I ask you ``to provide all relevant criteria
relating to the closure of offices within specific distances,
along with the formula used to determine mileage between county
offices. I'd appreciate if this included copies of mapping
data, provided by any internal or external source, used to
determine the mileage between all proposed office closures in
Arkansas.''
And the reason I ask that is because you have chosen to use
Euclidean miles, which is defined ``as the crow flies,'' as
compared to road miles. Had you used road miles, 7 of the 10
offices in Arkansas would not be closing now, but you chose to
use Euclidean miles. So, could you tell us why you decided to
use ``as the crow flies,'' instead of the mileage that people
actually have to drive to get to the office?
Secretary Vilsack. Senator, we had a process that involved
not just the offices in DC, but also the State offices that
assisted us in making the calculations. And candidly, we're
confronted and faced with two realities in the farm service
world. One is that over a period of time, we have seen
operating budgets reduced by the Congress. And second, 10 years
ago, there were 18,000 people working for FSA. Today, there are
around 12,000 people. So, we have seen one-third fewer workers.
We've seen an increase in workload. We were faced with a very
difficult decision, whether we would take a look at roughly 130
offices that were within 20 miles ``as the crow flies,'' as you
have indicated, for closure, or whether we would institute
furloughs or layoffs. And I will tell you, sir, from my
perspective, as long as I'm Secretary, the last thing I want to
do is furlough a worker or lay one off. And if I can prevent
it, that's what I'm going to do.
Senator Pryor. Why did you choose to use ``as the crow
flies,'' as opposed to road miles? Was it to close more
offices?
Secretary Vilsack. Not necessarily. It was what the staff
recommended. It was not necessarily to close more offices. It
was basically to make sure that we were operating within the
directive of the Congress. The Congress was not clear, and was
not definitive and specific. It just said 20 miles. So, we felt
that that was the simplest way to do it.
And it's true that there may be situations and
circumstances in your State and other States where it may take
longer, or it may require more of a distance, but again, the
reality is the choices. You either do that, or you basically
create potential chaos in 2,000 offices with furloughs or
potentially chaos in a number of offices with layoffs. We felt
focusing on offices that had no employees, we found that 35 of
the 131 offices had no full-time employees. Offices that had
one employee, where if you were sick or if there was a ballgame
you needed to see, there was no one there to service the needs.
It was a better idea to basically provide for larger staffed
offices, and perhaps within 20 miles or so of where the
previous office was.
BLUEPRINT FOR STRONGER SERVICE
Senator Pryor. Now, I've heard that your proposed savings
on this are going to be $150 million. Is that per year?
Secretary Vilsack. No, sir. That's not accurate.
Senator Pryor. How much do you save on this?
Secretary Vilsack. The office closings themselves are about
$6.5 million. The $150 million figure comes from a combination
of a number of things that we've done. A reduction in travel, a
reduction in supply purchases, a reduction in conferences, and
the administrative services process, in which we've identified
379 recommendations for changes internally within USDA, 27 of
which we're in the process of implementing. An example is
taking over 700 cell phone contracts that we had at USDA and
consolidating them into 10 to 15 contracts, so we get quantity
discounts, things of that nature. When you combine all of those
steps, that's where you get the $150 million number.
Senator Pryor. Yes. That's a helpful clarification. All
right.
FARM SERVICE AGENCY OFFICE CONSOLIDATION
I want to ask you about three offices in Arkansas. I'll
probably have to come back on the second two. But, we have one
in Izard County, in Melbourne, Arkansas, that is 18.5 miles
``as the crow flies,'' but it's 21.8 miles to the nearest FSA
office if you drive it. The problem is, to drive it on those
highways and those roads it's 44 minutes each way. So, it's 1.5
hours roundtrip, if you want to go over to that next county's
office and pick up a form, or whatever it may be.
Now, in the farm bill in 2008, in the closure criteria, we
use the phrase, ``To the maximum extent possible,'' which, to
me, sounds like we gave you discretion on hardship cases like
this, where it may be technically 20 miles away, even though
this is longer than 20 road miles away. It seems like you would
have some discretion to make exceptions or to understand the
hardship that you'd be causing on people to close the office.
Did you make any exceptions for anyone in the country?
Secretary Vilsack. We've not made exceptions as of today,
Senator. And the reality is that I think probably every single
member of Congress and every Senator could probably make a good
persuasive local case for why a particular office should stay
open and not be closed. This is a very difficult set of
circumstances that we're confronted with. We have less money
and we have substantially fewer people.
We've had a substantial increase in the number of
retirements. In order to avoid substantial layoffs and
furloughs, we had to have an early retirement, an early
separation package, which in the last 15 months we've seen
7,000 of our most experienced people leave.
This is not an easy process. We have tried desperately to
avoid furloughs and layoffs. That's basically where I'm coming
from. And I'm not hiding anything here. We're doing everything
we possibly can to try to squeeze out every buck that we can in
a way that allows us to continue a record amount of activity.
Senator Pryor. Thank you, Mr. Chairman.
Senator Kohl. Thank you.
Senator Moran.
Senator Moran. Chairman Kohl, thank you. Mr. Secretary,
thank you for being here.
Mr. Secretary, you're going to be in Kansas in a few days,
a couple of weeks, and I wanted to welcome you to our State.
Very much appreciate you accepting the opportunity to speak at
a Landon lecture in Manhattan, Kansas. Also want to thank you
for your ongoing and continued support for the National Bio and
Agri-Science Research facility and your efforts to see that it
gets built.
I want to ask a couple of questions, and I'm going to try
to ask them so I can get them both in in the 5 minutes that I'm
allowed.
UNIVERSAL SERVICE FUND
Two different topics. First of all, Rural Utilities Service
(RUS), it's a lending agency that you have a jurisdiction over.
It provides loans for electric, water, sewer, and
telecommunications. The telecommunications loan portfolio is
more than $4 billion. In October, the Federal Communications
Commission (FCC) adopted an order that significantly modifies
the Universal Service Fund and inter-carrier compensation
formulas. On February 15, I wrote you a letter. I'm not yet
complaining that it hasn't been responded to, but I've raised
this topic with USDA, with you, in particular, trying to
discover what your analysis is about the impact of the FCC's
Universal Service Fund and inter-carrier compensation order,
what the consequences are to the RUS loan portfolio, as it
relates to telecommunications.
Are you concerned with that order? If so, what's RUS USDA
doing to explain to the FCC and within the administration? I'm
worried that the potential now exists for significant loan
defaults of RUS, because one of the main features by which a
rural telephone company has to repay their loan to RUS is
Universal Service Fund dollars that no longer will be flowing
to those telephone companies.
Secretary Vilsack. Senator, I'm not sure if that's one
question or two.
Senator Moran. That was one question.
Secretary Vilsack. Okay. Do you want to ask the second one?
Senator Moran. Thank you very much for that opportunity, if
the chairman will let me get by with that.
LEAN FINELY TEXTURED BEEF
The second one is certainly a different topic, but Kansas
is certainly a beef State. And lean finely textured beef has
been front and center in the last few weeks. If lean finely
textured beef is no longer used, it will take 1.5 million more
head of cattle to make up for the lost beef, and the cost to
producers is estimated to be about $15 a head.
You said yesterday, and this is your quote, ``Let me
reiterate, without any equivocation, something that we have
said hundreds of times, this product is safe, and there's no
question about it.'' I would like to make certain that that's a
statement that you believe to be true. And isn't it true that
finely textured beef is just beef?
I notice that one of the newspapers today called it filler.
There's nothing to this product except beef. And I would like
to give you the opportunity to have you explain to us, but to
the consumer the safety of this product.
UNIVERSAL SERVICE FUND
Secretary Vilsack. Okay. Senator, let's talk about the
Rural Utilities Service first. That was your first question.
When the FCC proposed its initial order, we did, in fact,
communicate with the FCC about the fact that rural utility
providers count on the Universal Service Fund. They count on
inter-carrier rates. They also count on the infrastructure
assistance that we can provide at USDA. Those three are three
sort of pillars upon which the whole system operates.
And we expressed to them the need for them to consider, as
they put together this proposal, enough flexibility to be able
to address the need for expanded broadband, which we support.
At the same time, recognize that there may be circumstances and
situations where that order may have an impact on a particular
carrier, that we would have to work with those carriers, and
they need to give us the flexibility to do so.
We have asked the folks that we are currently doing
business with to basically give us more information on the
specifics as it relates to their individual operation, so that
we have a better understanding on an individual basis how they
see the potential impact.
We have asked the FCC, as they are flushing out this
process, and it still has not been completed. We've asked them
to take a look at the waiver system that's in place, to give us
that flexibility that we've asked for, and if we have it, then
I think we can make adjustments. We're also aware of the fact
that the regression factor that they're using to calculate
various fees and so forth is also being looked at.
So, this process is not complete. We have weighed in and
asked for an understanding of its impact on individual
operations. We've asked those individual operations to provide
us with information so we could do an appropriate analysis, and
we've also begun our process of figuring out precisely how we
will approach things differently if this ultimately comes to
fruition.
So, we are aware of it. We've engaged in it. We continue to
engage in it. We are sensitive to the concerns that you've
expressed. And we are hopeful that the FCC, with the waiver
process, will give us enough flexibility to be able to address
any anomalies or any concerns that might arise.
LEAN FINELY TEXTURED BEEF
We appreciate the fact that folks are now joining us in a
discussion of lean finely textured beef. We have been talking
about this issue, Senator, for a number of weeks. Sometimes we
have been the only ones talking about it. So, we appreciate
your question.
It is beef. And it is safe. And it's got less fat. It's
something we've been saying for literally almost a month now.
I can't tell you how many times USDA, myself, Dr. Hagen,
and other members of the FSIS family have been quoted or
alluded to in reports, and articles, and broadcasts, and in
news radio interviews about the safety of this product.
We have two issues, two responsibilities to USDA. One is to
attest to the safety of a product. The other is as a purchaser
of items for school lunch and school breakfast programs. In
that context, we have to be responsive to our customers. We're
not in the position to mandate that people do a certain thing
or buy a certain thing, or have a certain thing.
Several hundred school districts have contacted us asking
for choice. We have to be responsive to our customers. We've
provided that choice. But we want to make sure that if they
make that choice, they're making it based on the facts, and
that they're not making it on the assumption or belief that
this product is unsafe, because it is not.
Senator Moran. Mr. Secretary, thank you very much. And if
you'd ask somebody in your office to take a look at my February
15 letter to you in regard to RUS, I'd appreciate it.
Thank you.
Senator Kohl. Thank you very much.
Senator Brown.
Senator Brown. Thank you, Mr. Chairman. Mr. Secretary,
thank you. Again, thank you for your trip to Ohio recently, and
the contribution you made there.
AGRICULTURAL RESEARCH FACILITIES
We've talked a lot about agriculture research, and I
appreciate the work you've done in Wooster to help us after the
tornado there. Agriculture is my State's--as the case in just
about everybody here, I think--number one industry. Both the
Center for Innovative Food Technologies--near Toledo, and you
met some people from there--and Ohio State University's
Agricultural Research Service (ARS) research station in Wooster
have conducted groundbreaking research in many ways.
Last year, several of the ARS stations, including the North
Appalachian Experimental Watershed Research Station in
Coshocton, Ohio, eastern Ohio, were slated for closure. The
facility provides valuable information on how farming practices
affect water quality, data that is important, particularly
important, given the algal blooms in the Western Lake Erie
basin, which we discussed, and you learned even more about than
you already knew the other day.
This subcommittee provided USDA with the option of
transferring the land and the facility slated for closure at
certain other institutions. Could you just give me sort of an
update? To what extent is USDA open to partnering with eligible
institutions to develop and implement a use for these
facilities? How do you plan to move forward on that, inform us,
and let us know sort of every step of the way, as you go
forward?
Secretary Vilsack. ARS basically has got to follow a
certain set procedure, which we are in the process of doing. We
are certainly amenable to working with partnerships, land grant
universities, and others. In fact, in some of the facilities
that are slated for closure, those discussions, negotiations
have already taken place, and are taking place.
BEGINNING FARMERS
I will say that, if I can take your question to a slightly
different place, not only should we think about the
partnerships with universities, but we have a real problem in
terms of beginning farmers in this country, in terms of how
young people, who might be interested in farming, could get
into farming and be able to afford to get into farming.
To the extent that the Federal Government is the owner of
land, or finds itself with land that it needs to dispose of, we
might want to give consideration to expanding the opportunities
available to ARS to basically lease or sell to beginning
farmers, at a reasonable price that land, to make it a little
bit easier to get young people engaged in farming. The average
age of the farmer today, I'm guessing, is close to 60 years of
age now. And I think it's something that we really need to be
sensitive to.
So, Senator, we are following the rules as the statutes and
regulations require. We are making efforts to reach out and
find out if there is interest. And if there is interest, under
what circumstances the arrangements could be made for the
transfer.
We understand that there are restrictions on what that land
can be used for, and we will follow those prescriptions and
those restrictions.
Senator Brown. Thank you. And I think that your point about
beginning farmers will pique a lot of interest in a lot of
places in Ohio, and we've discussed that. I think your idea is
a good one there, and we will pursue that.
BROADBAND ACCESS
Let me follow-up with a slightly different twist on what
Senator Moran said about broadband. Yesterday, I did my fifth
annual, since 2008, my second year in the Senate, I bring
college presidents from around Ohio to the Capitol for a day,
and we had about 50, 55 of them yesterday. At the dinner the
night before, a number of them were talking about broadband
access or the lack of broadband access. One college president
said he believes about 29 out of Ohio's 88 counties don't have
full broadband access. Only one county has none, until a local
community action agency applied for one of the first ever USDA
rural development broadband grant. What you-all did, and what
we did together in the Recovery Act for the $7 billion, and a
good amount of that went to USDA, and that helped a lot in my
State, but it's still not enough.
We must ensure the funding through the rural broadband loan
program; the community connect programs ensure that funding
provides it direct to the most underserved areas in the most
rural communities.
Tell me what you're doing to ensure that the program
integrity there in bringing services, especially to those
underserved low-income and small communities that all of us
represent.
Secretary Vilsack. With reference to the Recovery Act
proceeds, that was the principal effort on the part of USDA,
was to make sure that we had a focus on areas that were remote
and rural. In some cases, those remote rural areas probably
would not be in a position to support full-blown broadband. We
looked at additional ways in which we could enhance technology
and make it fiscally responsible and accountable. Part of the
Recovery Act money was used to create satellite opportunities
and an upgrade of technology. So, whether it's full-blown
broadband or whether it was an upgrade, we did focus on remote
and rural areas.
As it relates to our regular program, which we're now in
the process of instituting, there's a very small part of what
we get from the Congress that is in the form of grants, and it
is specifically directed, and it is roughly $13 million. It's
not a great deal of money. It's specifically directed to trying
to expand opportunities in remote and rural areas.
In addition to that, there's roughly $25 million that's
available for distance learning and telemedicine grant
opportunities. Then, of the $822 million that is in this pot of
money for telecommunications, about $94 million of it will be
made available for loan guarantees for expansion in rural
areas. So, there is a significant effort here, either through
grants, loans, or the Recovery Act.
We have, in the last 3 years, funded roughly 600 projects.
If you take the Recovery Act, the distance learning, the
telemedicine, and the Connect program, we basically have funded
roughly 600 projects. Now, it doesn't anywhere near address
this from a national perspective, which is why the Commerce
Department has a map that shows where the areas are that still
need attention, and that should drive additional decisions and
future decisions.
Senator Kohl. Thank you very much.
Senator Cochran.
Senator Cochran. Mr. Chairman, thank you for convening this
hearing.
WATERSHED REHABILITATION PROGRAM
Mr. Secretary, I notice in the Department's budget request
that we see described a budget summary of the Watershed
Rehabilitation Program. We've had a good many problems in the
lower Mississippi River Valley with flooding and challenges
that have resulted from erosion, and it has been clear that
there's a lot of money that's going to be needed to repair and
refurbish existing watershed programs, dams, and other
impoundments that have reached the end of their design lives.
The budget request doesn't have a specific request for
funding of any activity in this area, and I wonder what your
suggestion is. Is there going to be a supplemental budget
request submitted, or what is the intention of the
administration in providing assistance to local and district-
wide governments and associations to rehabilitate these
structures that are in need of attention?
Secretary Vilsack. Senator, one of the reasons why there is
not an appropriation amount is that at the time these
facilities were constructed, I think there was a basic
understanding that they became a local and State
responsibility. Second, the amount of money that has been
appropriated in that program is relatively small, given what
could very well be a very significant national need.
So, if we're going to do this, I would say two things. One,
it needs to be done on a much larger scale than this budget
conversation we're having today. And two, if we're going to do
it, it needs to be in conjunction with and in partnership with
States and local governments, because they have at least an
equal responsibility, if not a greater responsibility, given
the fact that these structures are theirs.
CONSERVATION PROGRAMS
Having said that, we are investing a substantial amount of
money in conservation and in landscape-scale efforts to try to
avoid and to try to do a better job of controlling water. We
still have a long way to go, but we're working on it. We have a
record number of acres now enrolled in conservation, and the
budget before you would allow us to add another 29-30 million
acres to the 330 million acres that are currently enrolled of
the 1.4 billion acres that could potentially be subject to
conservation programs of the amount of farmland in this
country.
So, I would say we'd be happy to work with you on a much
larger, much, much larger infrastructure discussion. I mean, I
think this is part of why there has been a suggestion for an
infrastructure bank, why there's been a suggestion for a large-
scale infrastructure appropriations, because when you talk
about $20 or $30 or $40 million, it really has very little
impact on the overall problem that you're alluding to.
Senator Cochran. I appreciate your personal attention to
the situation and your willingness to explore possibilities for
providing some Federal assistance in this area.
CATFISH INSPECTION PROGRAM
One area of interest, too, that I wanted to mention at
today's hearing involved our domestic fish program and the
development of what has become a very substantial financial
investment throughout the southern part of the country. Catfish
inspection and expansion of markets, dealing with competition
from overseas in the United States are all parts of this area
of concern and interest.
I know that as we are preparing for this new farm bill
that's being considered, there's an opportunity for defining
some statutory responsibilities for inspection and standards.
Do you have any information that you can provide the
subcommittee giving us a status report of where we are on
developing an inspection program for domestically produced
catfish?
Secretary Vilsack. Senator, can I offer some advice before
I answer your question?
Senator Cochran. Sure.
Secretary Vilsack. If you work on this in the farm bill, to
the extent that you can define what a catfish is, it would be
helpful.
Senator Cochran. You can tell by looking.
Secretary Vilsack. That's what I thought, too, coming from
Iowa, but I found out in this process that there are at least
39 different varieties, and depending upon where you are
domestically, or where you are internationally, catfish is not
necessarily a catfish, which is why we received a substantial
number of comments to the proposal.
As you know, we asked for input from folks to give us a
better understanding of precisely how the world defines
catfish, and we're in the process of evaluating those
responses. And literally, it is a very difficult circumstance
and situation, because depending upon how narrow or how broadly
you define that term, it impacts and affects quite a bit. So,
we're in the process of trying to figure out precisely what was
meant, and there's some conflict in terms of the congressional
history of this. And so, it would be helpful if there was
clarity from the Congress in terms of precisely what variety or
type of catfish you were referring to, or maybe you're
referring to all types of catfish.
Senator Cochran. We look forward to working with you on
this issue. It is very important, and I think it needs our best
efforts.
Secretary Vilsack. I understand, sir.
Senator Kohl. Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman. Mr. Secretary,
good to see you again.
WATER BANK PROGRAM
I want to thank you for your help on the Water Bank
Program, and your folks are working to implement it. We think
that would be very helpful on Devils Lake. So I just want to
thank you for that.
WIC PROGRAM
Also, I want to bring up the WIC program, specifically
regarding potatoes. I and others feel potatoes need to be
included with fruits and vegetables. Your thoughts?
Secretary Vilsack. Senator, the WIC program is basically a
supplemental program. It's designed to supplement and to
encourage nutritious eating. What we do in developing the
package is we take a look at what people are already consuming,
in terms of fruits and vegetables, and then what we try to do
is to amplify or add to that. What we found from the review is
that people are already consuming quite a bit of--the potatoes
are not something that they don't consume. They consume quite a
bit of that. What they don't consume as much of are dark green,
orange vegetables, things of that nature. So, the WIC program
is designed to essentially complement what people are already
deciding to do or already eating.
Senator Hoeven. Are you willing to encourage that potatoes
be included with the WIC supplemental nutrition program? I
think there's a lot of people who feel that it should not have
been left out, and we'd like to see it included. Are you
willing to work towards that objective?
Secretary Vilsack. Senator, again, the purpose of this is
to complement what people are already doing. If they're already
consuming enough of one item, it would basically mean that we
would have to reduce our commitment to some other item that
they're not consuming a great deal of, and probably ought to,
if they want to have a balanced and nutritious opportunity for
their young children. So, this is a complementary. This is not
a situation where people aren't eating any potatoes. These are
situations in which people are eating quite a lot of potatoes,
but they aren't eating a lot of the other types of vegetables
and fruits. So what we want to do is make sure that they have
access to those other options.
Senator Hoeven. All right. I understand your point and
would encourage its inclusion.
BLENDER PUMPS
But, I want to move to blender pumps. I believe that you've
looked at funding blender pumps out of the Rural Energy for
America Program (REAP). Is that correct?
Secretary Vilsack. That's right.
Senator Hoeven. And in the President's budget, there's $4.6
million in REAP funding. Give me your thoughts on what portion
of that can and should go to blender pumps. I know you and I
share a common belief that blender pumps are a good thing, can
help give consumers more choice, better pricing, help stimulate
renewable fuel, production, and distribution. What are your
thoughts in terms of what you can put towards blender pump,
promoting blender pumps and helping gas station owners get
blender pumps on their premises?
Secretary Vilsack. I agree, Senator. And I may be
misstating this, and if I have, I'll correct it. I believe we
received instructions from the House that they were not
particularly interested in us using monies for blender pumps.
I'm not sure if there's a prohibition. I think there was at one
point.
I don't know that I'd necessarily want to commit to a
certain percentage, because there are an awful lot of good
ideas that come out of the REAP program. We were a little
concerned about the fact that it was substantially reduced in
this current budget, which made it more difficult for us to do
everything we'd like to do.
We've had 13,000 different projects, energy efficiency,
anaerobic digesters, energy audits, windmill solar systems, as
well as blender pumps. We've funded, I think, a couple hundred,
maybe 250 blender pumps. We obviously want to do more than
that. And depending upon the amount of resources that the
Congress allocates to this program, we're going to continue to
fund blender pumps, if there's not a prohibition restriction.
Senator Hoeven. I know there's been some legislation
offered that would restrict it. I don't know of any restriction
in place. I mean last year, I think the funding was about
$3.4----
Secretary Vilsack. You mean in terms of what went to
blender bumps, or the overall REAP money, because it was more
than that.
Senator Hoeven. Oh. Blender pumps. I think it was around
$3.4. Does that sound right?
Secretary Vilsack. You're probably right.
Senator Hoeven. In any event, I'd like to work with you to
see what we can do. I know there is some pushback on it, but
look, I think in terms of renewable fuels, we're trying to find
more market-based approaches to continue to develop renewables
from the standpoint of giving customers choice and helping with
pricing. I think blender pumps is the way to do it. So, I'm
interested in working with you in the context of your budget as
to how we can do more of it.
I thought REAP might be the best program. You may have
other ideas. If so, I'd love to hear what they are.
Secretary Vilsack. To me, when you deal with the farm bill,
you deal with rural development programs, and you deal with the
energy title within the farm bill, to the extent that we can
have flexibility, that's the key. We may have to have fewer
programs, but if we have flexibility, we can use maybe the
business and industry loan program to work with a consortium,
for example, of convenience store owners to assist them in
putting blender pumps in, as opposed to an individual grant to
an individual business. Maybe that's a possibility. That's
currently not necessarily a possibility under the business and
industry loan program.
Senator Hoeven. Who would we work with on your staff to
really figure out what makes most sense, in terms of trying to
develop this?
Secretary Vilsack. Sarah Bittleman. We'll get you her
contact information, Senator.
Senator Hoeven. Thanks, Secretary.
Secretary Vilsack. Thank you.
Senator Kohl. Thank you very much.
FOOD FOR PEACE TITLE II GRANTS
Mr. Secretary, we all know that many, many millions of
people around the world suffer from chronic and acute hunger.
We've seen how rising food prices have caused instability to
some of the most vulnerable populations, and yet, the budget
includes a decrease of $66 million in the Public Law 480
program.
What is the rationale for cutting this program when the
need for food assistance around the world is increasing? And if
less funding is provided for this program, is this
administration prepared to respond to an emergency, as we saw
last year in the Horn of Africa?
INTERNATIONAL FOOD ASSISTANCE
Secretary Vilsack. Senator, we work with our sister agency,
the U.S. Agency for International Development (USAID), to make
sure that we're providing the assistance and help that's
necessary. We have the Bill Emerson Humanitarian Trust, as you
well know, that provides some degree of assistance and help, an
entity that may, for example, be utilized when North Korea is
requesting food assistance. There's a possibility of that.
These are difficult times. If you say to add the money back
that you reduced from that, then the question is, where does it
come from? Does it come from the WIC program? Does it come from
rural development programs? Does it come from the food safety
program? Where does it come from? I mean the reality is we're
dealing with constrained budgets. So, tough choices have to be
made.
We think that there's a substantial amount of money that's
committed to these programs. It's $1.4 billion, plus the
McGovern-Dole program, which we did maintain at a status quo
funding. We think we're still in a position to help millions of
people with this. And we also believe it's not just the United
States' responsibility, which is why we've been working with
General Assembly countries and the Group of Twenty (G-20)
Agricultural Ministers to discuss a more coordinated and global
response to these concerns. A discussion, for example, of
developing virtual reserves, grain reserves, so that we're in a
position to be able to respond internationally and in
partnership in a collaborative effort. That's the reason why we
have the Feed the Future initiative, which is not just designed
to provide food assistance, but also to take a look at how we
might make producers in other countries more productive, so
that they can do a better job of meeting their own needs. So,
we reduce the need for this kind of assistance.
So, I think you have to look at the totality of what we're
proposing, and look at what we're doing internationally to try
to stretch and leverage these resources.
ANIMAL AND PLANT HEALTH INSPECTION SERVICE FUNDING AND STAFFING
Senator Kohl. Mr. Secretary, the Animal and Plant Health
Inspection Service (APHIS) promotes the health of animals and
plants and guards against invasive species. The budget proposes
7-percent funding reduction as well as elimination of 151
employees. How do you plan to meet the responsibilities of
APHIS with such severe cuts in funding and staff? Can you
provide assurances that existing safeguards against intrusion
of new invasive pests will not, in fact, be weakened?
Secretary Vilsack. Senator, what we have done is we've,
first of all, engaged in a fairly significant process
improvement initiative within APHIS, so that we can do our job
in a quality way, in a better way, and spending less time.
There are a number of permitting regulatory and licensing
responsibilities that APHIS has, where we have substantially
reduced the amount of time. We can provide you and the
subcommittee with a copy of our process improvement manual that
shows the number of days that we've saved from biotechnology
reviews, et cetera. That's one strategy.
[The information follows:]
Streamline Decisions for Genetically Engineered Plants
While maintaining strong oversight to ensure the safety of
genetically engineered (GE) products, APHIS is reforming its processes
so that the time it takes to consider petitions for deregulating the
use of GE crops will be cut in half, reducing to 13-16 months the
potential adoption of new seeds with traits that can deliver a variety
of improvements such as improved yields or reduced inputs. APHIS
announced the start of this process in November 2011 as part of other
streamlining improvements. APHIS reviewed its approval process using
Lean Six Sigma's business process improvement strategy and identified a
number of areas that could be improved, leading to a more timely,
predictable and higher quality process. APHIS has improved the overall
timeline significantly by standardizing and streamlining process steps.
APHIS will also be soliciting public input on pending petitions earlier
in the review process, enabling the agency to improve the quality of
its environmental analyses. By taking these steps, APHIS believes it
can deliver to its customers and the public a more predictable process
for considering and acting on product deregulations. Once the agency
implements all of these business process improvements, a more
predictable timeframe will enable developers to bring products granted
nonregulated status to market more quickly and provide growers with
more choices and access to new technologies sooner, while enabling
APHIS to maintain its mission to protect U.S. agriculture and the
environment from plant pests. In calendar year 2011, USDA made 10
determinations on petitions for nonregulated status for genetically
engineered crops. That is the most determinations in a single year in
more than a decade.
STREAMLINE VETERINARY BIOLOGICS LICENSING PROCESS
To ensure the best use of resources and work toward meeting the
demand of the biologics industry, APHIS is conducting a business
process improvement review of work flow at the agency's Center for
Veterinary Biologics with the objective of decreasing turnaround times
for veterinary biologics license submissions, reducing the overall time
it takes to process a complete license application by about 100 days, a
savings of 20 percent. Making certain we meet our responsibility of
ensuring that veterinary biologics are pure, safe and effective has
always been the strongest consideration during this process. APHIS
broke the larger licensing process up into smaller, multiple projects
creating a group of projects that will ultimately speed up overall
licensing times. Some of the process improvements include the
electronic workflow of documents and moving from a four-tier labeling
system to a single-tier labeling system. The four-tier labeling system
required a significant amount of information to be printed on product
packages. Rather than have more information on the label, the proposal
is to require a label statement referring the user to a Web site where
basic information regarding efficacy and safety for the product may be
viewed. From this information, the end-user can use personal judgment
in determining which product to use to meet his/her particular
circumstances/needs. The user may also compare efficacy results from
several firms with like products. APHIS projects additional savings
from reductions in reagent/reference production, laboratory testing,
and animal use.
Additional examples of process improvements can be found at USDA's
Web site on the Blueprint for Stronger Service (www.usda.gov/
strongerservice). A summary of some other APHIS actions is included in
the fact sheet for Marketing and Regulatory Programs and a blog on
February 24, 2012, by Administrator Parham.
Secretary Vilsack. The second strategy is that we have
taken a look at the pest and diseases that we are currently
managing and asking the question, Is the strategy that we are
using with reference to specific diseases and pests the
appropriate strategy? Do we have an eradication strategy when,
in fact, a maintenance strategy might be more appropriate and
probably more feasible? Are there circumstances where good
practices by producers will be sufficient to protect against a
reemergence of a particular disease or pest?
As a result of all of those steps, we feel that we can
still do the job that we are required to do and should do in
order to increase and maintain agricultural productivity, even
though we're faced with, again, some difficult budget
discussions and decisions.
The 151 employees, this is basically, we worked our way
through an attrition program. We have a workforce where 50
percent is probably within 5 to 10 years of retirement, and in
many cases, well over the normal retirement age. We're seeing a
lot of folks beginning to retire. So, we're trying to manage
this in a way that allows us to do our job, do it well, but
perhaps do it quicker, more efficiently, and more effectively.
Senator Kohl. All right. Senator Blunt.
BROADBAND PROGRAM RULE
Senator Blunt. Thank you, Chairman. Mr. Secretary, both
Senator Moran and Senator Brown talked about broadband. My
biggest question on broadband continues to be the balance
between the underserved and the unserved. In fact, Senator
Brown used the phrase, ``The most underserved,'' which I assume
the unserved, would be the most underserved.
Talk to me a little about the new rule, and concerns I
would have, without knowing a lot about the rule until you
explain it to me, that we're continuing to encourage
competition, where people have taken their own money and
created a network that somebody's decided is underserved,
because there's no competition, rather than really focusing on
the 15 percent of Missourians that are unserved.
Secretary Vilsack. Senator, I want to make sure I
understand your question. When you talk about the rule, you're
talking about the FCC rule, or are you talking about the rule
that we have for the administration of our broadband program?
Senator Blunt. I'm talking about the new RUS rule.
Secretary Vilsack. Okay. What we are attempting to do is to
respond to the concerns that folks have expressed about the
fact that we are not directing our resources in the appropriate
way and in the right way. I think what you'll see from us is a
focus on those unserved.
Senator Blunt. Unserved is what I want to say.
Secretary Vilsack. Unserved areas. Having said that, there
are times when because of the remoteness of it or the
population of a particular area, it may be difficult to have
the highest level of broadband capacity, because you may not be
able to sustain it with a customer base. So, it is, I think,
important for us to continue to look for ways in which we can
improve access and connection to telecommunications, without
necessarily creating a circumstance where we're setting
somebody up for failure.
I think the FCC rule does have some play here, because I
think the FCC is under the belief that if they empower some of
the larger operators to become more interested in these
unserved areas, that they'll do a better job than they've done
in the past of trying to respond to the needs of those unserved
areas.
Let me also say that I think that there are new technology
opportunities that we haven't had a chance to discuss today. I
should have brought my prop with me today. At USDA, we are
engaged in experimenting in the State of Hawaii with a
technology that basically is about as big as this card, and
it's about that thick, and four or five of these items placed
on a tall building or on a hill will provide access for miles
and miles of coverage, without the necessity of tens-of-
thousands of dollars of infrastructure.
We are operating these units to develop a 4G network in
Hawaii, using it for public safety purposes, and to provide
interoperability. So, a month or so ago, I was sitting in my
office in DC, in the Agriculture building in DC, talking to our
chief information officer, who was on the big island in Hawaii,
and we were talking to an ambulance that was driving on another
island, by virtue of these little square boxes. As I understand
it, they are several hundred dollars, not several thousand
dollars, in cost. So, it is conceivable that we are on the cusp
of new technology that will make it easier to get to those
remote areas, and still make it financially feasible for them
to have the technology. It's a combination of our programs, the
FCC trying to help the Verizons and the AT&Ts of the world be
more responsive to these needs, and new technology advancements
that might make it less expensive to do it.
Senator Blunt. That sounds good. It doesn't surprise me at
all that the technology is getting smaller and more available,
and I encourage you to continue to stay focused, as you
obviously are, on that. It does bother me when we use tax
dollars to create a competitor to somebody that has created a
service without tax dollars, particularly, when there are still
people who have no service of any kind.
Secretary Vilsack. I agree, and I think that's the reason
why when we did the Recovery Act we made a real effort to avoid
that criticism and that concern. So you'll see a lot of where
we're working on the unserved areas, and in some cases, very
remote areas.
RESEARCH LAB CLOSURES
Senator Blunt. Right. I appreciate that. On the extramural
grants, when we close research labs, what's the cost of moving
that program somewhere else? And did the cost in fiscal year
2012 meet your expectations for the fiscal year 2012 cost of
the labs we're currently in the process of closing and moving
that work somewhere else?
Secretary Vilsack. We're still in the process of doing
that, Senator, so it may very well be that a more definitive
response can be given to you in a couple of months.
Senator Blunt. Would you do that?
Secretary Vilsack. Sure.
Senator Blunt. Go ahead and do what you can today, but I'll
just ask right now.
Secretary Vilsack. Absolutely.
Senator Blunt. When you get more information on that, I'd
like to see it.
[The information follows:]
The fiscal year 2012 agriculture appropriations conference report
agreed with the ARS proposal to close 12 laboratories. Research
activities at the 12 laboratories have ceased and were not relocated
elsewhere. The one-time costs associated with the relocation or
separation of affected personnel and the disposal of property are
estimated at $39 million in fiscal year 2012.
Secretary Vilsack. I have requested from ARS an outline of
what their plans are. There are certain timelines, certain
restrictions, certain communication requirements that they are
going through, and they are going through with each individual
location. In some cases, it obviously costs a little bit more
upfront, and the savings occurs down the line.
I don't know that I've been apprised at this point that any
of the estimates are totally inaccurate. Sometimes it does
depend on the relationship and the deal that's made with the
university, in terms of rehabilitation, in terms of
environmental cleanup, that type of thing, but I have not been
advised as of today that there is a significant difference
between our estimates and what we actually will incur.
As far as the programming is concerned, let me say that
what ARS has done, at my request, is they have looked at every
single facility in our portfolio, more than 100 of these
locations, and if you can conceptualize in your mind a grid, it
is basically divided into four quadrants. In this quadrant at
the top right-hand are those facilities that are in very good
shape, from a maintenance standpoint, and are also high-
priority research.
The lower right-hand quadrant are high-priority research,
but in facilities that are not in particularly good shape. The
upper left-hand quadrant are low-priority research and
facilities that are in pretty good shape, and then over here,
low-priority research and facilities that are in bad, bad
shape.
So as we look at this quadrant, we're going to be in a
position to know, as resources get tight, where the priority
research is and where the good facilities are, and we have to
make sure that we do the best job we can to match those up, and
that's essentially what we're doing.
If we close a facility, and the research is high priority,
it gets transferred to another facility. If it's research that
is of a lower priority, it may have to be assumed by someone
else. I mean the reality is we're dealing with a different day
here, a different day, and that day is that we will have and
have had less money in many of these areas, and that's the
consequence of having less money. You've got to prioritize. And
when you prioritize, you basically prioritize, and you draw a
line where the money runs out, and everything below that line
has got to go in some way, or shape, or form.
Senator Hoeven knows about this. Maybe he doesn't, because
he's always dealt with surpluses, but those of us who are not
fortunate enough to have been Governor of North Dakota
understand that. And if you want to take something from the
bottom of the pile and take it to the top of the pile, and then
something from the top of the pile has to come down, because
you've only got so many dollars.
Senator Blunt. My understanding is the surpluses got a lot
greater after Senator Hoeven became Governor, so maybe they
didn't always have them, but they did have them when he left.
On that regard, as long as I don't have to explain what was
in every quadrant, I'm okay, but I think I've kind of followed
the quadrants, as you explained them.
Do you have any idea how ARS, rather, arrived at the
decision as to where to make the cuts? It did seem they fell
very heavily on the research outside of ARS, the extramural,
the campus-based research, as opposed to research that was more
inside the department.
Secretary Vilsack. I think I would have to provide a more
detailed explanation, but I don't want to misstate something,
and I'll be happy to provide that to you, but I will tell you
that given where we see this headed, with various discussions
and decisions you-all have to make about reducing budgets
significantly, we want to be prepared to be able to do this in
a thoughtful and strategic way. As a result of this approach
that I've just outlined, we're now in a position to do that.
And I think, if there are criticisms, I'd be happy to visit
with you about----
Senator Blunt. Yes. If you can get a little more of that
information to our staff, that would be great. I would like to
look at that, because it does seem to me that the campuses,
particularly, have a lot of resources included, and student
labor, and other opportunities that aren't available in other
places. And I think that campus-based research has always been
pretty cost-effective, but these closures appear to be heavily
focused on that kind of research versus research that's fully
funded by the Federal Government.
Secretary Vilsack. It may be the age of the facilities. It
really may be the priority of the research itself. It could be
the fact that it duplicates research that's being done in other
locations more effectively and more efficiently. I mean it
could be a combination of all those factors, Senator.
[The information follows:]
The temporary budget reductions to ongoing ARS programs in fiscal
year 2012 are necessary to finance the one-time costs associated with
the closure of 12 ARS laboratories. ARS sought to balance the impact on
intramural and extramural programs through an across-the-board
reduction of intramural research, a hiring freeze, and extramural
funding reduction. Together, these actions will finance the one-time
costs to ARS for facility closures without terminating other ARS
research projects and continuing research with ARS extramural partners.
Senator Blunt. I want to talk more about that, and we can.
Thank you, Chairman.
Senator Kohl. Senator Pryor.
FARM SERVICE AGENCY OFFICE CONSOLIDATION
Senator Pryor. Thank you, Mr. Chairman. And I would like to
follow-up on something Senator Blunt said a few moments ago
about broadband, and Senator Moran and Senator Brown mentioned
it as well.
In terms of closing some of these offices, these FSA
offices in Arkansas, if you look on a map, where we have the
least amount of broadband, that's where you tend to be closing
these offices. It's in the most rural and sometimes most
challenging parts of the State. And I know a lot of people do
business online today, but these farmers who are out there in
these parts of the State, they're not going to be able to go
online.
Let me ask about another FSA office in Arkansas, and I'm
sure this is true in other places. In Lafayette County, it's
spelled Lafayette, but we pronounce it La-fay-ette in our
State, there's Lewisville, Arkansas. It is 22.86 Euclidean
miles away from the closest FSA office, which is in Hope. And
what I would like to do, if possible, is get an understanding
from you, because your people say it is only 14.9 Euclidean
miles away.
Secretary Vilsack. Senator, if we've made a mistake, we
obviously have to acknowledge that, and we'd be happy to work
with you and your staff to make sure that either we're right or
you're right, and if we're wrong, we'll need to correct that.
Senator Pryor. Here's a map of it right here. Is it
possible that I could send one of my staff members over either
today or tomorrow to sit down with your people and look at your
software? This software that we have right here, we couldn't
get from you. We requested several times to give us a copy of
what you have, and to show us how you're doing it. You wouldn't
do it. We were going on Google. We were going on MapQuest,
whatever else. Finally, we figured out that we actually have
the software that you use at the Geographic Information office
in Little Rock, so we understand we're using the exact same
software you are. Could we send a staff person over there to
sit down with your people and confirm that----
Secretary Vilsack. Sure.
Senator Pryor. We're right on our numbers? Thank you.
In Faulkner County, which is Conway, we have a situation
where there's 136,000 total reported planted acres in Conway.
You have what we call a one-stop shop. I think you guys may
call it a service center, where you have lots of different
government offices there, where everybody can come in, and it's
something that I know in recent years USDA and others have
bragged about, because it makes it very convenient for the
citizens of the State. This is another example where if we were
using the road miles versus the Euclidean miles, this one
wouldn't be closed. Do you take into consideration the
convenience here that, in effect, what you're doing is you're
breaking out of this one-stop shop for people? Did you-all take
that into consideration when you looked at it?
Secretary Vilsack. We were aware of the fact that some of
these facilities were collocated, Senator, but to get back to
the comment that I made earlier, the options are not good. None
of the options are good. And eventually, the options were
creating greater inconvenience for a lot more people and a lot
more offices. I mean, if you furlough people or you lay people
off, that's going to create more concerns in a lot more
offices. So, that's what we're faced with.
BLUEPRINT FOR STRONGER SERVICE
These are not easy decisions, trust me. We did not take
these lightly. Just in the same way that we're not taking
lightly internally what we're trying to do within USDA to
figure out how we might be able to provide more efficient
service, save money, and not have to close offices in the
future. This administrative services process, I'm not sure how
familiar you and your staff are with it, but we'd be happy to
brief you on it. I think you will find that we are looking very
carefully at our own internal activities, taking a look at
whether or not we could be better off with regional centers for
some of the work that we do, figuring out whether or not there
are centers of excellence or shared service centers that might
allow us to do a better job of human resources, or civil
rights, or IT, the things that are common to every mission
area.
We are looking at every aspect of this, because we
recognize you-all have tough decisions to make, you're going to
make those tough decisions, and we're going to have less money.
FARM SERVICE AGENCY OFFICE CONSOLIDATION
Senator Pryor. I mentioned that we have 10 FSA offices in
Arkansas that closed, and I promise you this will be the last
one I mention. This is the fourth out of the 10. And we could
go through all 10, but we won't today.
In Clarksville, Arkansas, there's one, and it's within the
20 miles of Paris, Arkansas. But, you also have Paris on the
closure list. So, that means that there will not be one for the
folks in Clarksville, in that county, so they're going to have
to go to Ozark, which is farther than 20 miles. Did you take
that in consideration when you were doing this? That, to me,
seems inconsistent with the statute.
Secretary Vilsack. Let me say that we asked the State folks
to verify and to weigh in on the decisions that were specific
to the State of Arkansas.
Senator Pryor. Right. But there again, this is another map
of it. That seems inconsistent with the statute, because what
they're left with is, they're left with traveling farther than
the 20 miles that's in the statute to get to an FSA office. I
mean this is more of an interpretative issue, I think, with
USDA rather than your local people in Arkansas issue.
Secretary Vilsack. It isn't, though, sir, because of the
way in which these decisions were developed. They were
developed primarily from instructions in DC, implemented, if
you will, at the State level, so the State folks were the ones
who gave us the recommendations for which offices needed to be
closed. So, if we've made mistakes, we obviously have to own up
to those mistakes.
Senator Pryor. Right.
Secretary Vilsack. There's no question about that.
Senator Pryor. But, wouldn't you say that this might be a
mistake, too?
Secretary Vilsack. I don't know, because--I mean, I don't
know this particular situation. The first example that you gave
me was, I think, a little clearer in my mind, and it may be
that I need to--I can't see that map, frankly, Senator.
Senator Pryor. Okay. We certainly can----
Secretary Vilsack. My eyes aren't that good. I wish they
were.
Senator Pryor. In fact, maybe this afternoon or tomorrow,
when I send my staff person over to meet with your people, they
can talk about this one, too, because basically the bottom line
is, these folks in Clarksville, the net effect is they will
have to drive farther. They will have to drive much farther
than 20 miles to get to an FSA office.
Actually, my last question on this line, Mr. Chairman, is,
I know that you slated 131 of these for closure, and you had
several public meetings. Did any of these public meetings
change your mind at all on these 131?
Secretary Vilsack. Senator, these are tough decisions, and
obviously, people are going to come and they're going to talk
very passionately about the need for their individual office.
And you could basically find a reason to keep every single one
of them open, but the reality is we don't have the resources or
the people to do that. That's number one.
RURAL DEVELOPMENT
Number two, my view of this is that we really need,
perhaps, at USDA to do an even better job than we've done, even
though we've helped more than 50,000 small businesses in the
last 3 years, which is a record number. We really need to
figure out how we can generate a lot of private sector activity
in these communities so that there are options for jobs and for
better incomes. Many of these communities rely, to a great
extent, on publicly supported institutions, and really, we need
to figure out how to do a better job of creating private
enterprise, so that folks have more job opportunities than they
have from trying to keep a post office, or an FSA office, or a
school open. Those are really important, but we haven't done a
good enough job, I guess, in getting factories opened there so
that folks have options.
Senator Pryor. Thank you, Mr. Chairman. I actually have a
few more questions. Are we going to have a third round?
Senator Kohl. Certainly.
Senator Pryor. Thank you.
Senator Kohl. Mr. Hoeven.
Senator Hoeven. Thank you, Mr. Chairman. I can defer, if
you just have a question or two to finish up, Senator. Are you
sure? Okay.
AGRICULTURE RESEARCH FUNDING
I actually want to follow-up on a question that Ranking
Member Senator Blunt asked you, and it's about the agriculture
research funding, and it's the extramural program funding. At
North Dakota State University, they're doing a lot of work on
the U.S. Wheat and Barley Scab Initiative, and also on the Ug99
barley stem rust research program. Both of those have seen
administrative reductions of about 30 percent. And at the State
level we've put a lot of funding into our agriculture research
greenhouse at North Dakota State University, and so I
understand that you have to find ways to save, but could you go
into a little bit of how you're making that analysis?
And I know that Senator Blunt was asking the same question,
but through the university system, and in States like ours,
we're willing to try to design programs to maximize the
leverage on that research. So, we need to understand how you're
approaching that, so that we can, I guess, do the best job
possible of attracting those dollars into programs like these
two, which are very important to us.
Secretary Vilsack. Roughly 51 percent of the resources go
into crop and animal production protection and productivity.
Roughly 18 percent or so goes into environmental stewardship
and the importance of maintaining water quality and quantity. A
percentage goes into some of the other areas that are outside
of agriculture, specifically in terms of nutrition, food
safety, and things of that nature. So, it's a broad base of
responsibilities we have from a research perspective. I get a
little confused, because when we talk at USDA about external
and internal, we often refer to the external as the competitive
grant program.
Our belief is that we have got to do a better job on two
fronts. First, we have to do a better job of continuing to
leverage the resources that we have more effectively. The
competitive grant process allows us that opportunity to fund
the best projects possible, and to really force and compel
people to really think about what research they're doing and
how they're doing it.
Second, as great as the university systems are, and they
are, and I appreciate Senator Blunt's acknowledgement of our
150th anniversary, and that of the Morrill Act, there is no
overarching process that establishes the national research
goals that would allow us to avoid duplication and replication
of research that's taking place in many land grant universities
across the country. So it's going to be important, I think, for
us to have a conversation in a time of limited resources,
either at the State level or at the Federal level, to do what
we're doing at the global level.
We have the Global Research Alliance, where we're dealing
with 30 different countries on climate issues, and we're saying
let's not replicate or duplicate research, let's make sure the
right hand knows what the left hand is doing. I have to feel
that there's probably some duplication that's taking place
across the country, and maybe we're not investing our research
dollars, whether internally or externally, as efficiently as we
can. So, somewhere there's got to be a process, the competitive
grant process is one way of compelling collaboration, and which
is working. We're making grants now to a university, but that
university may have six or seven different other universities
that they're partnering with. So, I think there's a lot of work
in this area.
The last thing I would say, we don't have the advantage
that other research areas have, the National Science
Foundation, the National Institutes of Health. Our funding has
been flat-lined, for the most part. It hasn't been increased
dramatically. We don't have outside foundations or resources
that would allow us to supplement our resources. So, I think
there's a lot of opportunity in this space for us to do a
better job.
Senator Hoeven. I do want to emphasize those two programs
to you, U.S. Wheat and Barley Scab Initiative, also, the Ug99
Barley Stem Rust Research Program, because both saw 30-percent
reduction, administratively applied reduction, which I think is
significant.
Secretary Vilsack. Senator, can I ask, when you say
administrative, so I know what you mean, I think I know what I
would mean by that, but what do you mean by that?
Senator Hoeven. Essentially, reduction in this year's
funding for those programs, for those research programs, in
terms of what came out to the university to deduct.
Secretary Vilsack. I think there has been an effort on our
part to make sure that we're not overfunding the administration
of grants, as opposed to the actual research. There's a
difference between how much money goes to the university to
sort of administer the university versus how much money
actually goes to the research project itself.
Senator Hoeven. No. I'm talking about research for those
specific programs, research dollars for those specific
programs.
Secretary Vilsack. But I'm saying, within that grant,
there's a certain allocation for administration and a certain
allocation for the actual research, and I'm not sure if that's
where we're having a communication issue.
Senator Hoeven. No. When I say administratively reduced, I
mean USDA actually coming in on a discretionary basis, reducing
actual research dollars for that research. And this is
something that I'll be working with Senator Blunt and others
on, because I mean this is something that, obviously, we're
very interested in and think that this is critically important.
The other thing is, in terms of the, and I say this a lot
of times, I've got one more question. I can certainly defer for
the third round. I know that's what Mark did. Maybe it's best I
do that.
Senator Kohl. Go ahead.
CROP INSURANCE
Senator Hoeven. Okay. Just in the overall budget, the
administration's budget, they reduced crop insurance by almost
$8 billion. I'm on the Agriculture subcommittee as well, and
that's not the direction we're going. Clearly, we're not going
to have direct payments. And so, what we're trying to do is
find ways to enhance crop insurance. I'm on legislation with
Senator Conrad, Senator Baucus, and others, and there are other
bills as well. But crop insurance is going to be more
important, in terms of a cost-effective safety net.
Just give me your thoughts here, because my sense is you're
sympathetic to the tremendous importance of crop insurance,
particularly in the situation of tight dollars. That's going
the wrong direction. Just your thoughts.
Secretary Vilsack. It depends. It depends on where the
money is coming from. I mean clearly, let me state
unequivocally that crop insurance is the linchpin of the safety
net. But, there are three components to the crop insurance.
There's the amount the insurance company gets. There's the
amount the agent gets. And there's the amount that the farmer
pays. And all of those are basically supplemented, if you will,
by Government assistance.
We've done an analysis of what insurance companies
currently are getting in terms of the return on investment, and
how much it would take for those insurance companies to be able
to maintain the integrity of crop insurance. What we found was
a 12-percent return on the money would be sufficient to
maintain the integrity.
Even in a year that was extraordinary, last year, crop
insurance companies are still going to net about $1.5 billion,
I'm told, of profit. So right now, they're getting 14 percent.
So, the question is: Is there any adjustment in these tight
times between 14 and 12 that could be made that doesn't
compromise the process of the crop insurance program at all?
Number one.
Number two, I think agents, on average, get somewhere
around $1,000 per policy for selling a policy, a slight
adjustment to that, given the fact that 15 years ago when crop
insurance was sold, it was quite difficult to sell the concept
to farmers. Today, it's not at all difficult, because most
farmers want it, and most bankers require it. Can there be a
slight adjustment there?
Then the third component of the President's proposal is
crop insurance is a partnership between the Government and
farmers. Some commodities, we are actually subsidizing the
premium by 60 to 65 percent. Maybe a 50-50 partnership is fair.
So those three areas do not compromise the capacity for us to
have crop insurance, nor does it compromise our capacity to
expand the number of products available to cover more crops as
we've done. So, I don't know that you necessarily equate
reductions in Government subsidy with not supporting the
program. It depends on where the money comes from.
Senator Hoeven. There was $6 billion taken out of crop
insurance, in terms of what goes to the insurers in the past
year. And crop insurance is going to have to carry a lot more
of the load. So, separate and apart from what you're saying, in
terms of the actual program and how we make sure we have a
safety net for farmers, we're going to need to emphasize crop
insurance, which is going to take more funding in that part of
the program, not less.
Secretary Vilsack. Not necessarily, Senator, because with
the money that was taken, insurance companies were generating
17, in some cases as much as 26-percent return on their money
annually.
Senator Hoeven. But, remember, we took $6 billion out of
the program already.
Secretary Vilsack. This brought it down to 14--$2 billion
went back into various programs to help the farmers.
Senator Hoeven. And now you've got crop insurance picking
up some of the help that was formerly provided by other parts
of the program. Crop insurance is going to have to pick that
up. So, there's a lot more to it than just the one piece you're
talking about.
Secretary Vilsack. Unless you amplify crop insurance with
another program, which a lot of folks are talking about, which
the President recognized in his budget of providing additional
resources for ``a disaster program of one kind of another.''
Senator Hoeven. There'll be some of that, but we're still
going to need to have to emphasize crop insurance.
Thank you.
Senator Kohl. Good. Senator Pryor.
AGRICULTURAL RESEARCH SERVICE LAB CLOSURES
Senator Pryor. Thank you, Mr. Chairman. Let me ask about an
ARS issue, about a 30-percent cut to extramural ARS activities.
As I understand it, in fiscal year 2012, ARS proposed to
close 12 laboratories. However, USDA did not submit a budget
request to the Congress that included all the costs associated
with closing these facilities, including the closure of labs,
relocating employees, et cetera. As a result, ARS was $38
million short for these activities after the appropriation
bills were signed into law. Is that right? Do I have that
right?
Secretary Vilsack. Senator, you may very well be right, and
that's basically what we have to do is when that happens we've
got to figure out how to absorb that cost.
Senator Pryor. And that seems to me to be a budget mistake
on USDA's part for not budgeting properly last year.
Secretary Vilsack. I'd like to think that you-all would
have given us that money, but I'm not sure that's the case,
given the fact that you've been cutting ARS the last couple of
years.
Senator Pryor. My understanding was that it wasn't part of
your request, that you thought you had adequate funds to do the
changes.
Secretary Vilsack. We have to absorb that, Senator.
Senator Pryor. And that's my point. You're absorbing it at
our expense. I mean, in effect, we're paying for the mistake.
Aren't there other ways to find that money to absorb that $38
million?
Secretary Vilsack. There are other ways. You could
appropriate money. I mean a supplemental appropriation. We
could transfer money, but in which case you'd then be asking me
why we were transferring resources from another program that
you like to another program that you like. I mean these are
tough issues, Senator. These are tough issues, and when the
Congress is basically telling us, as we have heard repeatedly,
that we're going to have less money, and when we're talking
about a $1.5 trillion cut that's forthcoming, these are hard
decisions. There's no easy answer.
And I will tell you, I hear a lot of folks talk about
waste, fraud, and abuse is the answer. Well, there's always
going to be better ways to do things, but at the end of the
day, with the kind of cuts we're talking about, and that we've
dealt with, we're dealing with real difficult decisions. I
think it's important for people to understand that.
Senator Pryor. I do have some more questions along those
lines, but I don't want to try the subcommittee's patience. So,
let me ask about one more thing.
AGRICULTURAL RESEARCH SERVICE GRAZING RESEARCH
It seems like Arkansas got a lot of focus over at the USDA
when they looked at cutting their budget this year. You've
decided to close the Dale Bumpers Small Farms Research Center
in Booneville. In light of the closure of the Brooksville,
Florida, facility in 2011, and the expected closures of
Watkinsville, Georgia, and Beaver, West Virginia, by June 1,
2012, where will the ARS conduct grazing research for the
Eastern part of the United States?
Secretary Vilsack. There are three areas that will pick up
some of the work that was done in Arkansas. They are Nebraska,
Oklahoma, and Texas.
Senator Pryor. And they'll be looking at the grazing aspect
of it.
Secretary Vilsack. Yes, sir.
Senator Pryor. Because I know that part of what Booneville
was doing is they were doing long-term, like a 20-year study on
watersheds and the impact livestock have on those.
Secretary Vilsack. The fact is that the priority research
is going to continue. It may continue in a facility where the
maintenance costs over time will be less. It may continue at a
facility that is actually doing this work as well, to avoid
duplication.
Senator Pryor. And actually, this Dale Bumpers facility
actually meets one of the criteria you talked about earlier,
because it is hard for young people to get into farming. And
here, they focus on small farms, and startups, and how you can
get into certain type of farming activities and actually make a
go of it.
AGRICULTURAL RESEARCH
I think that on this, and maybe some of these other
facilities that we've talked about today, they focus on long-
term basic research that actually helps farming, helps
agriculture, and helps that be a core strength in the U.S.
economy. So, are you-all just going to be getting out of the
research business? Is that where you're headed?
Secretary Vilsack. Senator.
Senator Pryor. I'm asking.
Secretary Vilsack. We have over 100 facilities that will
still be operating, and we've asked for additional resources in
the Agriculture and Food Research Initiative (AFRI) portion of
the budget, $60 million-plus additional above and beyond what
was appropriated last year. We've been advocating for more
research opportunities. It doesn't necessarily mean that we
have to have more facilities. It means that there is a number
of different ways in which we can embrace additional research.
So, it's unfair to suggest that we're trying to get out of
the research business. But, it is fair to point out that the
Congress has provided less money in several areas of our
budget, and we have to deal with that. I'm not going to whine
about it. I'm not going to complain about it. I'm going to
manage it. But I have to have the capacity to manage it. I have
to have the capacity to make choices. And sometimes those
choices are difficult.
If it doesn't come from one source, it's got to come from
another source. That's the reality of less money, and we are in
that position and circumstance where every single entity, every
single agency of the Government is going to have to go through
this.
BLUEPRINT FOR STRONGER SERVICE
Frankly, it's a difficult process, but it's an important
process, because it really allows you to think carefully and
very strategically about what we ought to be doing, where we
ought to be doing it, and how we ought to be doing it. Which is
why we just didn't focus on office closings, we just didn't do
what a lot of people do when they're faced with less money, is
just to do a blanket across-the-board cut in workforce, which
would have disrupted services in a lot of different areas. We
took a strategic approach. We said, Less travel, less supplies,
less conferences. We said, Are there ways in which we can do
civil rights, IT, budget and finance, human resources,
security, property management, and procurement more effectively
and efficiently? Yes--379 different set of recommendations that
we're now in the process of implementing.
We looked at a Voluntary Separation Incentive Pay and
Voluntary Early Retirement Authority (VSIP/VERA) process, so
that we didn't have to be unfair to the people who had worked
and dedicated their life to USDA, by giving them an opportunity
for early retirement or for a buyout, so that we could keep a
lot of our young people that we have been hiring over the
course of the last several years, to maintain a good diversity
in our workforce.
We looked at office closings. We looked at lab closings. We
looked at the entire process, which is what you have to do. If
you could tell me we're not going to be faced with tough budget
times in the next couple of years, that's great, but everything
I read suggests that we're going to have to hunker down here.
That's why I managed the change, rather than be managed by the
change.
AGRICULTURAL RESEARCH
Senator Pryor. That's why I asked about research, because
under the Budget Control Act, it's going to be tougher in the
next few years. And I'm trying to get a sense from you. You say
you want to spend more in research, but you're going to have to
be cutting other places. I'm just trying to get a sense of
where you think the USDA is going over the next several years.
Secretary Vilsack. The research that we see is the best way
to use scarce resources, is to do it in a competitive way, that
compels land grant universities and other universities that are
engaged in research to collaborate, to avoid duplication, to
avoid replication of research. That's why we think that the
AFRI process and National Institute of Food and Agriculture
(NIFA) is a good way to approach this and get the biggest bang
and the largest stretch for our dollar.
There have been those that have suggested that we need to
complement that with the establishment of a foundation. I'm all
for that. I think that's great. We don't have that in
agriculture. We have it in a lot of other areas, and those
areas have seen significant improvements in research. So, there
are multiple ways in which we are going to be supportive of
agricultural research. Make no mistake about that. Make no
mistake about that. Because there is a direct correlation
between agricultural productivity and research. The charts are
very clear.
Senator Pryor. I agree. I agree. And that's why I was
asking that. I hope one thing you'll consider is taking these
old facilities and research you're not using, and not going to
fund any more, and possibly see if you can turn those over to
some land grant universities so they can use those for
research.
Secretary Vilsack. We are required to do that, in the sense
that we're required to reach out to our land grant university
partners and say, ``Are you interested in having this facility?
And if you are, what would you be willing to do with it, and
can we enter into an agreement where you would commit it to
agricultural activities for a period of time?'' We're required
to do that, and we will follow through with that.
Senator Pryor. And would there be any funding stream that
would go along with that for research?
Secretary Vilsack. That would, I suppose, depend on whether
or not they'd like to participate in the competitive grant
process under NIFA and the AFRI program.
CIVIL RIGHTS
Senator Pryor. Mr. Chairman, the last thing I will say, and
I'm sorry for trying the subcommittee's patience here. I know
you've made a lot of progress in the last few years on civil
rights, but there is still one major problem, I think, that
exists, and that is USDA has no deadline for civil rights
intake process or responding to civil rights complaints. And we
have several folks in our State, and I'm sure others do as
well, that are hanging out there in limbo for sometimes years
at a time, waiting for responses from USDA.
Secretary Vilsack. Senator, I don't think that's correct. I
just don't think that's correct. In fact, I get a quarterly
report on both internal and external complaints against USDA by
mission area. We have a response time within 180 days. I will
get to your staff the list that I get, and it will show you
that there is no claim that's currently before the USDA that is
over the time period that the statute of limitations has
expired since we started this process and started keeping
track.
[The information follows:]
The attached table is the color coded list that USDA uses to track
the progress of pending complaints that raise claims under the Equal
Credit Protect Act (ECOA). The table tracks the number of days left
before the statute of limitations runs on ECOA claims. USDA's civil
rights managers at every level meet once a week to review progress on
these claims and take steps to expedite or remove road blocks as
necessary.
Most ECOA claims in inventory fall under a 2-year statute of
limitations. This means that 2 years from the date of the incident
alleged to be discriminatory, complainants lose the right to pursue the
claim in court. More recent claims may benefit from the 5-year statute
of limitations extended by the Dodd-Frank Act. This administration
inherited a backlog of over 1,000 uncatalogued complaints that did not
identify ECOA claims or track the date of the applicable statute of
limitations.
USDA civil rights staff inventoried the backlog and identified
complaints raising ECOA claims. Based on that information, USDA created
the attached table to track processing time against the deadline
created by the statute of limitations for each complaint. The table
identifies complainants' names (redacted); the number of days remaining
until a 2-year statute of limitations would expire; the date on which
the 2-year statute of limitations would expire; the status of each
complaint; OASCR staff assigned to process the complaint; and other
relevant information.
An ECOA committee representing staff at every stage of complaint
processing continues to meet regularly to maintain and update the
table. New complaints raising ECOA claims are immediately added to the
list. USDA civil rights managers at every level meet once a week to
review progress on these pending claims and take steps to expedite or
remove road blocks as necessary.
USDA--OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS--OFFICE OF ADJUDICATION--EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT EXPIRED
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Days
2 years elapsed Actual Initial Date ECOA
No. Days remaining until 2 years since USDA rcvd Agency Case # Status Investigator Pending review Program name Corresp (from Current incident incident letter
from incident date incident date adjudicator OASCR date incident date date date mailed
date date)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
---1-32------------------------------4/30/2012.--10/1/2010.--FSA..............--11-4279....--Adjudication..--MB, WS........--OASCR.........--Farm Operating-----9/14/2010.--698.......--3/29/2012.--5/1/2010..--5/1/2010..--10/13/2010--
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2 55 5/23/2012. 5/25/2010. FSA.............. 10-3929.... Adjudication.. SF, WH, EP.... OASCR......... FSA-Guaranteed 5/24/2010. 675....... 3/29/2012. 5/24/2010. 5/24/2010. ..........
Loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3 58 5/26/2012. 7/28/2010. FSA.............. 10-4133.... Adjudication.. RC, HR........ OASCR......... Farm Service 7/22/2010. 672....... 3/29/2012. 5/27/2010. 5/27/2010. 9/23/2010
Agency (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
4 100 7/7/2012.. 7/27/2010. RD............... 11-4412.... Adjudication.. CB, KC........ Adjudication.. SFH--Rural 7/29/2010. 630....... 3/29/2012. 7/8/2010.. 12/21/2010 12/29/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
5 155 8/31/2012. 7/27/2010. RD............... 11-4338.... Investigation. SF............ Investigation. SFH--Rural 9/29/2010. 575....... 3/29/2012. 9/1/2010.. 9/1/2010.. 12/2/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
6 168 9/13/2012. 10/4/2010. FSA.............. 11-4283.... Adjudication.. HR, RC........ OASCR......... Direct Operating 9/27/2010. 562....... 3/29/2012. 9/14/2010. 9/14/2010. 11/5/2010
Loan/Guaranteed
Operating Loan
(FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
7 188 10/3/2012. 1/31/2011. RD............... 11-4704.... Adjudication.. CB, JE........ Adjudication.. SFH--Rural 3/25/2011. 542....... 3/29/2012. 10/4/2010. 10/1/2010. 3/25/2011
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
8 213 10/28/2012 7/27/2010. RD............... 11-4515.... Adjudication.. KCB, LR....... OASCR......... SFH--Rural 10/29/2010 517....... 3/29/2012. 10/29/2010 10/29/2010 12/15/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
9 228 11/12/2012 11/23/2010 FSA.............. 11-4443.... Adjudication.. MB, LR........ Adjudication.. Farm Operating 11/13/2010 502....... 3/29/2012. 11/13/2010 11/13/2010 1/12/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
10 265 12/19/2012 1/10/2011. FSA.............. 11-4609.... Investigation. MB............ Investigation. Farm Operating 12/22/2010 465....... 3/29/2012. 12/20/2010 12/20/2010 2/7/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11 289 1/12/2013. 1/7/2011.. RD............... 11-4606.... Investigation. MP............ Investigation. SFH--Housing 2/24/2011. 441....... 3/29/2012. 1/13/2011. 1/13/2011. 2/24/2011
Repair &
Rehabilitation
Grant/Loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
12 303 1/26/2013. 2/1/2011.. FSA.............. 11-4687.... Investigation. WH............ Investigation. Farm Operating 3/14/2011. 427....... 3/29/2012. 1/27/2011. 1/27/2011. 3/14/2011
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
13 330 2/22/2013. 11/4/2011. FSA.............. 12-5519.... Investigation. TA............ Investigation. Farm Operating 10/17/2011 400....... 3/29/2012. 2/23/2011. 2/23/2011. 11/29/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
14 345 3/9/2013.. 9/22/2011. FSA.............. 11-5359.... Investigation. TA............ Investigation. Farm Ownership 10/19/2011 385....... 3/29/2012. 3/10/2011. 3/10/2011. 10/19/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
15 352 3/16/2013. 4/11/2011. FSA.............. 11-4845.... Investigation. SA............ Investigation. Farm Operating 4/5/2011.. 378....... 3/29/2012. 3/17/2011. 3/17/2011. 6/17/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
16 377 4/10/2013. 10/1/2010. FSA.............. 11-4280.... Adjudication.. AG............ Adjudication.. Farm Operating 9/29/2010. 353....... 3/29/2012. 4/11/2011. 4/11/2011. 10/15/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
17 377 4/10/2013. 4/21/2011. FSA.............. 11-4887.... Adjudication.. JE, MP........ Adjudication.. Farm Ownership 4/14/2011. 353....... 3/29/2012. 4/11/2011. 4/11/2011. 5/13/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
18 395 4/28/2013. 3/2/2011.. RD............... 11-4828.... Investigation. MB............ Investigation. SFH--Rural 4/29/2011. 335....... 3/29/2012. 4/29/2011. .......... 7/18/2011
Housing Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
19 395 4/28/2013. 3/25/2011. FSA.............. 11-5093.... Investigation. EP............ Investigation. Farm Operating 4/29/2011. 335....... 3/29/2012. 4/29/2011. 4/29/2011. 8/15/2011
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
20 412 5/15/2013. 8/19/2011. RD............... 11-5227.... Investigation. TA............ Investigation. SHF-Guaranteed 8/4/2011.. 318....... 3/29/2012. 5/16/2011. 5/16/2011. 10/7/2011
Loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
21 414 5/17/2013. 9/20/2011. FSA.............. 11-5348.... Investigation. AG............ Investigation. Farm Operating 9/30/2011. 316....... 3/29/2012. 5/18/2011. 5/18/2011. 9/30/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
22 421 5/24/2013. 9/7/2011.. RD............... 11-5316.... Investigation. MP............ Investigation. SFH--Rural 8/25/2011. 309....... 3/29/2012. 5/25/2011. 5/25/2011. 10/27/2011
Housing Direct
Loan (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
23 433 6/5/2013.. 6/20/2011. FSA.............. 11-5046.... Investigation. CB............ Investigation. Farm Operating 6/12/2011. 297....... 3/29/2012. 6/6/2011.. 6/6/2011.. 9/26/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
24 442 6/14/2013. 5/4/2011.. RD............... 11-4937.... Investigation. MP............ Investigation. SFH--Rural 4/25/2011. 288....... 3/29/2012. 6/15/2011. 6/15/2011. 6/23/2011
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
25 450 6/22/2013. 7/5/2011.. RD............... 11-5098.... Adjudication.. SA, LR........ Adjudication.. SFH--Rural 6/28/2011. 280....... 3/29/2012. 6/23/2011. 6/23/2011. 7/28/2011
Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
26 456 6/28/2013. 7/19/2011. FSA.............. 11-5132.... Investigation. KCB........... Investigation. Farm Operating 7/14/2011. 274....... 3/29/2012. 6/29/2011. 6/29/2011. 8/8/2011
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
27 475 7/17/2013. 8/15/2011. FSA.............. 11-5215.... Investigation. LJ............ Investigation. Farm Operating 7/18/2011. 255....... 3/29/2012. 7/18/2011. 7/18/2011. 11/9/2011
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
28 500 8/11/2013. 11/8/2011. FSA.............. 12-5524.... Investigation. LJ............ Investigation. Farm Operating 10/19/2011 230....... 3/29/2012. 8/12/2011. 8/12/2011. 11/18/2011
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
29 500 8/11/2013. 9/30/2011. FSA.............. 11-5392.... Investigation. EP............ Investigation. Farm Operating 9/15/2011. 230....... 3/29/2012. 8/12/2011. 8/12/2011. 10/21/2011
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
30 542 9/22/2013. 11/8/2011. RD............... 12-5527.... Investigation. NA............ Investigation. SFH--Rural 10/29/2011 188....... 3/29/2012. 9/23/2011. 1/27/2010. 11/22/2011
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
31 553 8/29/2013. 10/24/2011 RD............... 12-5497.... Fact-Finding.. FF............ Fact-Finding.. SFH--Rural 10/24/2012 177....... 2/23/2012. 8/30/2011. 8/30/2011. 2/13/2011
Housing Loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
32 580 10/30/2013 1/9/2011.. FSA.............. 12-5699.... Fact-Finding.. FF............ Fact-Finding.. Commodity Def. 12/28/2011 150....... 3/29/2012. 10/31/2011 10/31/2011 3/16/2012
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
33 609 11/28/2013 1/18/2012. RD............... 12-5715.... Fact-Finding.. FF............ Fact-Finding.. SFH--Other 12/20/2011 121....... 3/29/2012. 11/29/2011 11/29/2011 2/28/2012
(Moratorium).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
34 616 12/5/2013. 1/20/2012. FSA.............. 12-5740.... Fact-Finding.. FF............ Fact-Finding.. Farm Operating 1/10/2012. 114....... 3/29/2012. 12/6/2011. 12/6/2011. 2/28/2012
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
35 624 12/13/2013 11/23/2011 RD............... 12-5576.... Fact-Finding.. FF............ Fact-Finding.. SFH--Rural 1/23/2012. 106....... 3/29/2012. 12/14/2011 12/14/2011 1/23/2012
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
36 687 2/14/2014. 3/2/2012.. FSA.............. 12-5864.... Fact-Finding.. FF............ Fact-Finding.. Farm Operating 2/21/2012. 43........ 3/29/2012. 2/15/2012. 2/15/2012. 3/16/2012
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
37 950 11/4/2014. 2/26/2010. RD............... 10-3706.... Adjudication.. FF............ Adjudication.. SFH--Other (RD).. 11/19/209. 875....... 3/29/2012. 11/5/2009. 11/5/2009. ..........
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
38 1047 2/9/2015.. 8/16/2010. RD............... 10-4155.... Adjudication.. FF............ OASCR......... Rural Development 4/25/2010. 778....... 3/29/2012. 2/10/2010. 2/10/2010. 10/1/2010
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
39 -103 12/17/2011 5/13/2010. FSA.............. 10-3906.... Adjudication.. OASCR......... OASCR......... Farm Operating 5/27/2010. 833....... 3/29/2012. 12/17/2009 7/15/2010. 5/27/2010
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
40 .......... 6/22/2010. FSA.............. 10-4017.... Adjudication.. OASCR......... OASCR......... Farm Operating 6/16/2010. .......... 3/29/2012. TBD....... TBD....... 8/24/2011
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
41 -412 2/11/2011. 3/4/2009.. FSA.............. 09-2297.... Adjudication.. OASCR......... OASCR NF Farm Operating 2/11/2009. 1142...... 3/29/2012. 2/11/2009. 2/11/2009. 4/16/2010
Proposed OGC Loans (FSA).
Not Signed.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
42 0 1/22/2012. 2/18/2010. FSA.............. 10-3681.... Settlement .............. .............. Farm Operating 2/8/2010.. 797....... 3/29/2012. 1/22/2010. 1/22/2010. 9/1/2010
completed Loans (FSA).
with
complainant.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
43 42 5/10/2012. 5/18/2010. FSA.............. 10-3933.... F 2/29/2012... .............. .............. Farm Operating 5/18/2010. 688....... 3/29/2012. 5/11/2010. 5/11/2010. 6/22/2010
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
44 218 11/2/2012. 2/15/2011. FSA.............. 11-4729.... F 2/29/2012... .............. .............. FSA--Farm 4/8/2011.. 512....... 3/29/2012. 11/3/2010. 4/8/2011.. ..........
Operating Loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
45 93 6/30/2012. 9/22/2010. FSA.............. 10-4242.... F 2/29/2012... .............. .............. Farm Operating 8/27/2010. 637....... 3/29/2012. 7/1/2010.. 7/11/2010. 10/20/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
46 34 5/2/2012.. 6/2/2010.. FSA.............. 10-3988.... NF 3/8/2012... .............. .............. Operating Loan 5/25/2010. 696....... 3/29/2012. 5/3/2010.. 5/25/2010. 7/7/2010
(FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
47 0 2/22/2012. 3/2/2010.. RD............... 10-3719.... Closure .............. .............. SFH--Rural 2/22/2010. 766....... 3/29/2012. 2/22/2010. 2/22/2010. 9/9/2010
Withdrawn 1/ Housing Direct
30/2012. Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
48 0 8/31/2011. 1/20/2010. FSA.............. 10-3593.... NF 3/8/2012... .............. .............. Farm Operating 12/30/2009 941....... 3/29/2012. 8/31/2009. 5/1/2009.. ..........
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
49 0 5/13/2012. 6/8/2010.. RD............... 10-3966.... NF 1/12/2012.. .............. .............. RD (loan)........ 5/24/2010. 685....... 3/29/2012. 5/14/2010. 5/14/2010. 6/25/2010
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
50 0 8/18/2012. 7/27/2010. FSA.............. 11-4445.... Closure 8/19/ .............. .............. Farm Operating 8/22/2010. 588....... 3/29/2012. 8/19/2010. 8/19/2010. 12/15/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
51 0 7/11/2013. 7/20/2001. RD............... 11-5143.... Closure 11/03/ .............. .............. SFH--Rural 7/12/2011. 261....... 3/29/2012. 7/12/2011. 7/12/2011. 8/12/2011
2011. Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
52 0 2/8/2012.. 3/1/2010.. FSA.............. 10-3707.... NF 12/2/2011.. .............. .............. Direct Operating 2/24/2010. 780....... 3/29/2012. 2/8/2010.. 2/8/2010.. 7/19/2010
Loan/Guaranteed
Operating Loan
(FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
53 0 11/9/2011. 4/29/2010. FSA.............. 10-3873.... NF 11/10/2011. .............. .............. Outreach & 4/25/2010. 871....... 3/29/2012. 11/9/2009. 4/7/2010.. 4/30/2010
Assistance for
Socially
Disadvantaged
Farmers.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
54 0 11/9/2011. 4/29/2010. FSA.............. 10-3872.... NF 11/09/2011. .............. .............. Outreach & 4/25/2010. 871....... 3/29/2012. 11/9/2009. 4/7/2010.. 11/5/2010
Assistance for
Socially
Disadvantaged
Farmers.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
55 0 12/2/2011. 3/18/2010. RD............... 10-3766.... NF 10/24/2011. .............. .............. SFH--Rural 3/8/2010.. 848....... 3/29/2012. 12/2/2009. 12/2/2009. 2/11/2011
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
56 0 10/22/2011 9/15/2010. FSA.............. 10-4218.... NF 10/21/2011. .............. .............. Operating Loan 9/7/2010.. 889....... 3/29/2012. 10/22/2009 5/3/2010.. ..........
(FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
57 0 11/1/2011. 5/27/2010. FSA.............. 10-3942.... NF 10/24/2011. .............. .............. Farm Operating 5/21/2010. 879....... 3/29/2012. 11/1/2009. 11/1/2009. Pending
Loan (FSA). discussio
n
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
58 0 2/29/2012. 7/28/2010. RD............... 10-4099.... Closed 10/19/ .............. .............. Rural Development 7/20/2010. 759....... 3/29/2012. 3/1/2010.. 3/1/2010.. 6/1/2010
2011. (502/504 loan
grant).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
59 0 3/9/2012.. 10/28/2010 RD............... 11-4469.... Closed 10/21/ .............. .............. SFH--Rural 2/11/2011. 750....... 3/29/2012. 3/10/2010. 3/10/2010. 6/1/2010
2011. Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
60 0 5/31/2012. 7/20/2010. FSA.............. 10-4102.... Closed 8/15/ .............. .............. Emergency Loan 7/12/2010. 667....... 3/29/2012. 6/1/2010.. .......... 9/27/2010
2011. (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
61 0 11/14/2012 5/4/2011.. RD............... 11-4941.... Closed 10/5/ .............. .............. SFH--Rural 4/12/2011. 500....... 3/29/2012. 11/15/2010 .......... 7/8/2011
2011. Housing Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
62 0 10/9/2011. 10/27/2009 FSA.............. 10-3304.... NF 9/30/2011.. .............. .............. Farm Operating 10/26/2009 902....... 3/29/2012. 10/9/2009. 10/9/2009. 5/5/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
63 0 11/18/2011 1/26/2010. FSA.............. 10-3633.... NF 9/29/2011.. .............. .............. Farm Ownership 1/27/2010. 862....... 3/29/2012. 11/18/2009 11/18/2009 5/18/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
64 0 2/26/2012. 2/26/2010. FSA.............. 10-3689.... Closed--No .............. .............. Farm Ownership 2/26/2010. 762....... 3/29/2012. 2/26/2010. 2/26/2010. 2/11/2011
Jurisdiction. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
65 0 6/30/2012. 8/25/2010. FSA.............. 10-4181.... Adjudication .............. .............. Diaster Loan 8/25/2010. 637....... 3/29/2012. 7/1/2010.. 7/1/2010.. 10/4/2010
Closed--Filed (FSA).
in Federal
Court.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
66 0 9/1/2011.. 7/20/2010. FSA.............. 10-4083.... NF 8/31/2011.. .............. .............. Farm Operating 7/12/2010. 940....... 3/29/2012. 9/1/2009.. 9/1/2009.. ..........
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
67 0 10/14/2011 10/21/2009 FSA.............. 10-3312.... NF 8/26/2011.. .............. .............. Farm Operating 10/14/2009 897....... 3/29/2012. 10/14/2009 10/14/2009 5/20/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
68 -616 7/22/2010. 12/15/2008 FSA.............. 09-2094.... Investigation .............. .............. Farm Operating 12/9/2008. 1346...... 3/29/2012. 7/22/2008. 7/22/2008. 4/15/2010
(Held in Loans (FSA).
Abeyance).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
69 -626 7/12/2010. 7/31/2008. FSA.............. 8-1642..... Investigation .............. .............. Farm Operating 7/31/2008. 1356...... 3/29/2012. 7/12/2008. 7/12/2008. 4/30/2010
(Held in Loans (FSA).
Abeyance).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
70 0 7/4/2012.. 7/27/2010. RHS.............. 10-4092.... Closure 8/23/ .............. .............. Rural Development 7/20/2010. 633....... 3/29/2012. 7/5/2010.. 7/5/2010.. 8/27/2010
2011. (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
71 0 12/2/2011. 1/12/2010. FSA.............. 10-3558.... Adjudication .............. .............. Farm Operating 1/4/2010.. 848....... 3/29/2012. 12/2/2009. 12/2/2009. ..........
Not ECOA. Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
72 0 12/11/2011 12/30/2009 FSA.............. 10-3546.... Removed Not .............. .............. Farm Ownership 12/11/2009 839....... 3/29/2012. 12/11/2009 12/11/2009 9/3/2010
ECOA. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
73 0 9/1/2011.. 4/7/2010.. FSA.............. 10-3827.... Closure 8/17/ .............. .............. Farm Operating 3/21/2010. 940....... 3/29/2012. 9/1/2009.. 9/1/2009.. 5/27/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
74 0 1/1/2012.. 10/6/2010. RD............... 11-4468.... Closure 8/17/ .............. .............. SFH--Rural 2/11/2011. 818....... 3/29/2012. 1/1/2010.. 1/1/2010.. 5/14/2010
2011. Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
75 0 1/14/2012. 4/5/2010.. RD............... 10-3813.... Removed Not .............. .............. Rural Development 3/24/2010. 805....... 3/29/2012. 1/14/2010. 1/14/2010. 5/13/2010
ECOA.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
76 0 7/24/2011. 9/4/2009.. FSA.............. 09-3073.... F 7/25/2011... .............. .............. Farm Operating 8/27/2009. 979....... 3/29/2012. 7/24/2009. 10/1/2009. ..........
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
77 0 7/28/2011. 8/14/2009. RD............... 09-2948.... NF 7/28/2011.. .............. .............. SFH--Rural 8/7/2009.. 975....... 3/29/2012. 7/28/2009. 7/28/2009. 4/16/2010
Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
78 0 7/29/2011. 1/8/2008.. RD............... 8-0907..... NF 7/28/2011.. .............. .............. SFH--Rural 1/6/2010.. 974....... 3/29/2012. 7/29/2009. 7/29/2009. ..........
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
79 0 10/26/2011 10/26/2009 FSA.............. 10-3260.... Removed Not .............. .............. Farm Operating 10/26/2009 885....... 3/29/2012. 10/26/2009 10/26/2009 5/20/2010
ECOA. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
80 -253 7/20/2011. 9/11/2009. FSA.............. 09-3087.... Closure/File .............. .............. Farm Operating 7/20/2009. 983....... 3/29/2012. 7/20/2009. 7/20/2009. ..........
in Federal Loans (FSA).
Court (KCB).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
81 0 7/21/2011. 11/7/2009. FSA.............. 10-3332.... Closure 7/20/ .............. .............. Farm Operating 10/7/2009. 982....... 3/29/2012. 7/21/2009. 7/1/2009.. 5/20/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
82 0 10/31/2011 10/9/2009. FSA.............. 10-3343.... Closure 6/27/ .............. .............. Farm Operating 9/29/2009. 880....... 3/29/2012. 10/31/2009 10/31/2009 7/1/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
83 0 2/26/2012. 4/2/2010.. RD............... 10-3810.... Closure 6/24/ .............. .............. Denial of Loan 2/26/2010. 762....... 3/29/2012. 2/26/2010. 2/26/2010. 9/3/2010
2011. (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
84 0 2/23/2012. 7/27/2010. FSA.............. 10-4090.... Closure 6/23/ .............. .............. Farm Operating 4/27/2010. 765....... 3/29/2012. 2/23/2010. 2/23/2010. 4/30/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
85 0 7/13/2011. 7/30/2009. FSA.............. 09-2919.... NF 7/12/2011.. .............. .............. Farm Operating 7/24/2009. 990....... 3/29/2012. 7/13/2009. 7/13/2009. 5/5/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
86 0 7/8/2011.. 3/5/2009.. FSA.............. 09-2294.... NF 7/5/2011... .............. .............. Farm Operating 2/25/2009. 995....... 3/29/2012. 7/8/2009.. 5/18/2009. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
87 0 7/14/2011. 4/6/2009.. FSA.............. 09-2482.... Removed....... .............. .............. Farm Ownership 4/3/2009.. 989....... 3/29/2012. 7/14/2009. 7/14/2009. 4/30/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
88 0 7/6/2011.. 7/29/2009. FSA.............. 09-2904.... NF 7/1/2011... .............. .............. Farm Operating 7/9/2009.. 997....... 3/29/2012. 7/6/2009.. 7/6/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
89 0 6/26/2011. 7/30/2009. RD............... 09-2899.... NF 6/27/2011.. .............. .............. Rural Business 7/28/2000. 1007...... 3/29/2012. 6/26/2009. 6/26/2009. 7/19/2010
Enterprise Grant
(loan) (RBS).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
90 0 6/17/2011. 5/28/2009. FSA.............. 09-2668.... Closure 5/26/ .............. .............. Farm Operating 5/18/2009. 1016...... 3/29/2012. 6/17/2009. 4/24/2009. 5/20/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
91 0 7/17/2011. 8/20/2009. RD............... 09-3014.... Closure 6/23/ .............. .............. SFH--Housing 8/11/2009. 986....... 3/29/2012. 7/17/2009. 7/17/2009. 5/6/2010
2011. Repair &
Rehabilitation
Grant/Loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
92 0 8/1/2011.. 10/8/2009. FSA.............. 10-3243.... Closure 6/27/ .............. .............. Beginning Farmer 9/28/2009. 971....... 3/29/2012. 8/1/2009.. 8/1/2009.. 6/15/2010
2011. loan.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
93 0 8/8/2011.. 8/17/2009. RD............... 09-2946.... Closure 7/5/ .............. .............. SFH--Rural 8/8/2009.. 964....... 3/29/2012. 8/8/2009.. 8/8/2009.. 5/5/2010
2011. Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
94 0 8/17/2011. 8/25/2009. RD............... 09-2999.... Closure 6/23/ .............. .............. SFH--Rural 8/17/2009. 955....... 3/29/2012. 8/17/2009. 8/17/2009. 5/20/2010
2011. Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
95 0 2/14/2012. 2/26/2010. RD............... 10-3716.... Closure 6/23/ .............. .............. 502 Housing Loan 2/14/2010. 774....... 3/29/2012. 2/14/2010. 2/14/2010. 4/30/2010
2011. (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
96 0 2/22/2012. 9/8/2010.. FSA.............. 10-4260.... Closure 6/23/ .............. .............. Farm Operating 8/23/2010. 766....... 3/29/2012. 2/22/2010. 2/22/2010. 8/3/2010
2011. Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
97 0 6/3/2011.. 10/7/2009. RD............... 10-3337.... Partial .............. .............. SFH--Rural 10/7/2009. 1030...... 3/29/2012. 6/3/2009.. 6/4/2009.. 4/30/2010
Finding 6/03/ Housing
2011. Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
98 0 5/18/2011. 6/9/2009.. FSA.............. 09-2724.... NF 5/18/2011.. .............. .............. Farm Operating 5/1/2709.. 1046...... 3/29/2012. 5/18/2009. 4/14/2009. ..........
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
99 0 5/18/2011. 1/20/2010. FSA.............. 10-3593.... NF 5/18/2011.. .............. .............. Farm Operating 12/30/2009 1046...... 3/29/2012. 5/18/2009. 5/1/2009.. ..........
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
100 0 5/19/2011. 4/7/2009.. FSA.............. 09-2455.... NF 5/19/2011.. .............. .............. Farm Operating 4/1/2009.. 1045...... 3/29/2012. 5/19/2009. 4/2/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
101 0 5/26/2012. 7/15/2010. FSA.............. 10-4089.... Adjudication .............. .............. Farm Operating 7/6/2010.. 673....... 3/29/2012. 5/26/2010. 5/26/2010. 8/3/2010
Admin Close. Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
102 0 5/13/2011. 3/5/2009.. RD............... 09-2311.... NF 5/13/2011.. .............. .............. SFH--Rural 2/16/2009. 1051...... 3/29/2012. 5/13/2009. 5/13/2009. 4/23/2010
Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
103 0 5/5/2011.. 5/27/2009. FSA.............. 09-2646.... NF 5/4/2011... .............. .............. Farm Operating 5/4/2009.. 1059...... 3/29/2012. 5/5/2009.. 5/5/2009.. 5/20/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
104 0 4/30/2011. 6/10/2009. FSA.............. 09-2726.... NF 5/2/2011... .............. .............. Farm Operating 6/5/2009.. 1064...... 3/29/2012. 4/30/2009. 6/5/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
105 0 5/1/2011.. 3/4/2009.. FSA.............. 09-2302.... NF 5/2/2011... .............. .............. Farm Operating 7/7/2009.. 1063...... 3/29/2012. 5/1/2009.. 5/1/2009.. ..........
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
106 0 4/23/2011. 5/6/2010.. RHS.............. 10-3898.... F 4/25/2011... .............. .............. 504 Loan Grant/ 4/28/2010. 1071...... 3/29/2012. 4/23/2009. 4/23/2009. 5/20/2010
Loan (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
107 0 8/1/2011.. 11/17/2009 FSA.............. 10-3367.... Admin Closure. .............. .............. Farm Operating 11/12/2009 971....... 3/29/2012. 8/1/2009.. 8/1/2009.. 5/5/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
108 0 5/7/2011.. 5/27/2009. RD............... 09-2667.... Admin Closure. .............. .............. SFH--Rural 5/7/2009.. 1057...... 3/29/2012. 5/7/2009.. 5/7/2009.. 5/20/2010
Housing
Guaranteed Loan
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
109 0 4/1/2011.. 6/12/2009. RD............... 09-2815.... Admin Closure. .............. .............. Rural Housing.... 6/24/2009. 1093...... 3/29/2012. 4/1/2009.. 4/1/2009.. 4/23/2010
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
110 0 4/8/2011.. 4/21/2009. FSA.............. 09-2501.... F 4/8/2011.... .............. .............. Farm Operating 4/15/2009. 1086...... 3/29/2012. 4/8/2009.. 4/8/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
111 0 4/9/2011.. 5/6/2009.. FSA.............. 09-2580.... NF 4/11/2011.. .............. .............. Farm Operating 4/30/2009. 1085...... 3/29/2012. 4/9/2009.. 4/9/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
112 0 6/1/2011.. 10/14/2010 FSA.............. 11-4379.... Status Change .............. .............. Farm Operating 9/27/2010. 1032...... 3/29/2012. 6/1/2009.. 6/1/2009.. 2/3/2011
No Longer Loans (FSA).
ECoa (RC).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
113 0 4/17/2011. 4/30/2009. FSA.............. 09-2560.... Admin Closure. .............. .............. Farm Operating 4/17/2009. 1077...... 3/29/2012. 4/17/2009. 4/17/2009. Request to
Loans (FSA). withdraw
ltr. Was
mailed to
Comp. on
040610
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
114 0 5/18/2011. 5/27/2009. FSA.............. 09-2651.... Admin Closure. .............. .............. Farm Operating 5/18/2009. 1046...... 3/29/2012. 5/18/2009. 5/18/2009. Need ECOA
Loans (FSA). ltr. Gave
to TMJ on
051910
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
115 0 4/2/2011.. 4/26/2009. RD............... 09-2568.... NF 4/4/2011... .............. .............. SFH--Rural 4/16/2009. 1092...... 3/29/2012. 4/2/2009.. 4/2/2009.. 4/16/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
116 0 4/15/2011. 4/22/2009. FSA.............. 09-2524.... Admin Closure. .............. .............. Farm Operating 4/14/2009. 1079...... 3/29/2012. 4/15/2009. 4/15/2009. ..........
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
117 0 3/19/2011. 6/5/2009.. FSA.............. 09-2729.... NF 3/21/2011.. .............. .............. Farm Operating 5/29/2009. 1106...... 3/29/2012. 3/19/2009. 3/19/2009. 6/15/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
118 0 4/30/2011. 5/13/2009. RD............... 09-2622.... Admin Closure. .............. .............. SFH--Rural 4/30/2009. 1064...... 3/29/2012. 4/30/2009. 4/30/2009. 5/24/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
119 0 3/6/2011.. 4/7/2009.. RD............... 09-2438.... Adjudication .............. .............. RD (loan)........ 3/25/2009. 1119...... 3/29/2012. 3/6/2009.. 3/6/2009.. 6/15/2010
Admin Closure.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
120 0 2/4/2011.. 6/30/2008. FSA.............. 8-1537..... Settlement 2/4/ .............. .............. Farm Operating 6/30/2008. 1149...... 3/29/2012. 2/4/2009.. 2/4/2009.. 4/15/2010
2011. Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
121 0 2/5/2011.. 2/9/2009.. FSA.............. 09-2233.... NF 2/7/2011... .............. .............. Farm Operating 1/15/2009. 1148...... 3/29/2012. 2/5/2009.. 2/5/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
122 0 1/8/2011.. 2/24/2009. FSA.............. 09-2273.... NF 1/10/2011.. .............. .............. Farm Operating 1/27/2009. 1176...... 3/29/2012. 1/8/2009.. 1/8/2009.. 4/16/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
123 0 1/21/2011. 1/6/2009.. RD............... 09-2164.... NF 1/20/2011.. .............. .............. SFH--Rural 12/21/2008 1163...... 3/29/2012. 1/21/2009. 1/21/2009. 4/16/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
124 0 7/7/2011.. 7/22/2009. RD............... 09-2861.... Adjudication .............. .............. SFH--Housing 7/16/2009. 996....... 3/29/2012. 7/7/2009.. 7/7/2009.. 4/30/2010
Admin Closure. Repair &
Rehabilitation
Loan (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
125 0 1/6/2011.. 1/29/2009. FSA.............. 09-2210.... NF 1/6/2011.. .............. .............. Farm Operating 1/8/2009.. 1178...... 3/29/2012. 1/6/2009.. 1/6/2009.. 4/23/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
126 0 12/21/2010 2/2/2009.. RD............... 09-2226.... NF 12/21/10... .............. .............. RBP--Business & 1/20/2009. 1194...... 3/29/2012. 12/21/2008 12/21/2008 4/16/2010
Industry
Guaranteed Loans
(RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
127 0 12/20/2010 11/13/2008 FSA.............. 8-1651..... NF 12/20/10... .............. .............. Farm Operating 11/3/2008. 1195...... 3/29/2012. 12/20/2008 12/20/2008 4/23/2010
Loan (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
128 0 12/20/2010 8/5/2008.. FSA.............. 8-1660..... F 12/20/10.... .............. .............. Farm Operating 8/1/2008.. 1195...... 3/29/2012. 12/20/2008 12/20/2008 4/15/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
129 0 11/29/2010 1/7/2009.. RD............... 09-2129.... NF 11/26/10... .............. .............. SFH--Rural 12/27/2008 1218...... 3/29/2012. 11/27/2008 11/27/2008 4/23/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
130 0 11/13/2010 12/23/2008 RD............... 09-2118.... NF............ .............. .............. SFH--Rural 12/4/2008. 1232...... 3/29/2012. 11/13/2008 11/13/2008 4/23/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
131 0 11/1/2010. 10/29/2008 FSA.............. 09-1973.... NF 10/28/10... .............. .............. Farm Operating 10/18/2008 1244...... 3/29/2012. 11/1/2008. 11/1/2008. 4/15/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
132 0 9/17/2010. 12/15/2008 FSA.............. 09-2095.... NF 9/16/10.... .............. .............. Beginning Farm 12/5/2008. 1289...... 3/29/2012. 9/17/2008. 9/17/2008. 4/23/2010
loan denied
(SOL).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
133 0 8/13/2010. 8/20/2008. RD............... 8-1715..... NF 8/12/10.... .............. .............. SFH--Rural 8/14/2008. 1324...... 3/29/2012. 8/13/2008. 8/13/2008. 4/23/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
134 0 8/19/2010. 8/27/2008. FSA.............. 8-1744..... F 8/19/10..... .............. .............. Farm Operating 8/20/2008. 1318...... 3/29/2012. 8/19/2008. 8/19/2008. 4/15/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
135 0 6/14/2010. 6/21/2008. FSA.............. 8-1269..... NF 6/11/10.... .............. .............. Farm Operating 6/9/2008.. 1384...... 3/29/2012. 6/14/2008. 6/14/2008. 5/27/2010
Loans (FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
136 0 5/16/2010. 5/14/2008. FSA.............. 7-0270..... F 5/17/10..... .............. .............. Farm Storage 5/16/2008. 1413...... 3/29/2012. 5/16/2008. 5/16/2008. 4/27/2010
Facility Loans
(FSA).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
137 0 5/6/2010.. 5/20/2008. RD............... 8-1416..... F 5/10/10..... .............. .............. SFH--Rural 5/15/2008. 1423...... 3/29/2012. 5/6/2008.. 5/6/2008.. 4/19/2010
Housing Direct
Loans (RD).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Current date: 3/29/2012.
Priority 1 =<180 days from 2-year incident date.
Priority 2 =181-365 days from 2-year incident date.
Priority 3 = >365 days from 2-/5-year incident date.
Case SOL TBD.
Case held in abeyance.
Cases resolved prior to SOL expiration.
----------------------------------------------------------------------------------------------------------------
Name Title Initial
----------------------------------------------------------------------------------------------------------------
Tonya Ahmed.......................................................... Investigator........ TA
Sterling August...................................................... Investigator........ SA
Karen Bascombe-Cleaver............................................... Investigator........ KBC
Moses Brown.......................................................... Investigator........ MB
Cinnamon Butler...................................................... Investigator........ CB
Roberto Contreras.................................................... Investigator........ RC
Michele Ferreira..................................................... Investigator........ MF
Shawntey Fox......................................................... Investigator........ SF
Alpha Griffin........................................................ Investigator........ AG
William Henry........................................................ Investigator........ WH
Loretha Johnson...................................................... Investigator........ LJ
Minh Pham............................................................ Investigator........ MP
Edward Profit........................................................ Investigator........ EP
Carletta Watkins..................................................... Investigator........ CW
Kristine Yen......................................................... Investigator........ CY
Barrett Caine........................................................ Adjudicator......... BC
Leila Levi........................................................... Adjudicator......... LL
Carla Quincy......................................................... Adjudicator......... CQ
William Reid Strong.................................................. Adjudicator......... RS
Pilar Velasquez...................................................... Adjudicator......... PV
Millie West-Wigins................................................... Adjudicator......... MWW
Tysan Williams....................................................... Adjudicator......... TW
Keyo & Judy.......................................................... Adjudicator......... K&J
Heather.............................................................. Adjudicator......... H&N
Lawrence Rudden...................................................... Adjudicator......... LR
Neema G.............................................................. Adjudicator......... NG
----------------------------------------------------------------------------------------------------------------
UPDATE STATUS CODES
----------------------------------------------------------------------------------------------------------------
Codes
----------------------------------------------------------------------------------------------------------------
Program Intake Div................................................................ PI
Program Investigations Div........................................................ PID
Program Adjudications Div......................................................... PAD
Fact Finding...................................................................... FF
Transfer.......................................................................... T
Admin Closure..................................................................... AC
Actual Incident Date Change....................................................... AIDC
Finding........................................................................... F
No Finding........................................................................ NF
ECOA Complaint Addition.......................................................... ECA
Assignment........................................................................ ASMT
Pending........................................................................... P
Status Change..................................................................... SC
Closure........................................................................... C
----------------------------------------------------------------------------------------------------------------
Secretary Vilsack. We are now in a process of knowing.
We've got a red, green, yellow system, and if it's a red, it
tells us that within a certain period of time we've got to get
a response, otherwise their claim expires. We have not let that
happen.
Senator Pryor. That's great. I know you have been improving
this, but I met with a fairly large group in Arkansas, 3 or 4
months ago, I don't remember exactly when it was, and that was
one of the concerns that pretty much everybody in the group
had.
Secretary Vilsack. They don't know what the system is,
Senator. I mean that's just not accurate.
Senator Pryor. Okay. We have one claim, apparently, that's
2 years old, that they haven't gotten a response from you guys
yet. I'll tell you what. We'll sit down after this. I'll send
my folks over, or you can send your folks over. We can talk
about it.
Secretary Vilsack. I'm happy to talk to you about it, but
sometimes it turns out that there's more to the story than
either you or I are getting, and if we have a claim that's more
than 2 years old, I'm happy to personally get that rectified.
But, I will tell you that we are very focused on this, because
we are not interested in giving rise to the tens-of-thousands
of lawsuits and claims that I've been working on for the last
couple of years to get resolved.
[The information follows:]
In 2009, USDA discovered more than 14,000 documents that had been
classified as civil rights program complaints filed against the
Department between 2001 and 2008 that had barely been looked into. Many
of these documents in fact turned out to be complaints, alleging
discrimination under a variety of laws, including title VI, section 504
of the Rehabilitation Act, the Food Stamp Act, and the Equal Credit
Opportunity Act (ECOA). The delayed and minimal processing of
complaints during the previous Administration was particularly
troubling for those cases that fell under the ECOA. The ECOA, which
prohibits discrimination in lending, is distinct from other civil
rights laws because under the ECOA, the Government can be held liable
by a court for compensatory damages. In addition, the USDA has the
authority to provide monetary relief to resolve an administrative
complaint of lending discrimination against the Department provided the
complainant could still go to court on that claim (e.g., the statute of
limitations is not expired). For incidents of discrimination that
occurred before July 21, 2009, the statute of limitations for ECOA
claims is 2 years.\1\
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\1\ The Dodd Frank Financial Reform Act extended the statute of
limitations to 5 years, but the extension was not retroactive.
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The administration proposed $40 million in the fiscal year 2013
President's budget request for the purpose of settling written claims
filed under the ECOA from July 1, 1997, to October 31, 2009. This
funding would be subject to authorization by Congress to allow USDA to
waive the statute of limitations to settle these claims.
A farmer or other customer with an ECOA claim does not have to file
a complaint with USDA; they have the right to proceed directly to
court. However, litigation can be a costly alternative to the
administrative process. When the backlog was discovered, the typical
processing time for a civil rights complaint was 4 years, with many
cases taking much longer, which meant that by the time a decision was
rendered on a complaint, no monetary relief could be provided by USDA
where discrimination and resulting economic harm was found. To ensure
that a backlog like the one encountered did not occur again, the
Department set a policy to resolve all ECOA complaints either in formal
closure and/or a settlement before the expiration of the statute of
limitations. To achieve this goal, the Office of Civil Rights doubled
the number of investigators and adjudicators working on program
complaint processing, and instituted a Lean Six Sigma process
improvement initiative to streamline the complaint process and reduce
processing time. Since the new complaint staff have been recruited and
trained, every ECOA complaint filed with the USDA has been resolved
before the expiration of the statute of limitations. The typical
processing time for new civil rights program complaints has been
reduced from 4 years to 18 months. Processing time for one component of
the complaint process, complaint intake, has been reduced from an
average of 90 days to an average of 28 days to determine jurisdiction
and intake a complaint in 2012. Despite the extension of the ECOA
statute of limitations to 5 years in the Dodd Frank Financial Reform
Act, the Office of Civil Rights is pressing forward to further reduce
processing time for complaints. Just this year, the Office of Civil
Rights debuted a single, USDA-wide form that USDA customers and program
participants can use to file a civil rights complaint. By capturing all
of the information needed to accept a complaint, the form will reduce
the time it takes to process complaints. The form helps to simplify and
expedite the process for those who believe they have been discriminated
against. The Department knows how important it can be to customers to
receive a decision on their civil rights case and is committed to
making that happen as quickly as a fair, thorough, and just decision
can be reached.
Senator Pryor. Like I said, I think you deserve a lot of
credit for the progress you've made in that area, because it's
been something that's been neglected for a long time.
Thank you.
ADDITIONAL COMMITTEE QUESTIONS
Senator Kohl. Thank you very much, Senator Pryor, and we
thank you-all for being here today, particularly Secretary
Vilsack, for your very strong testimony.
We'll keep the record open for 1 week.
Secretary Vilsack. Thank you.
[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
FIELD OFFICE CLOSINGS
Question. What is the current status of the Farm Service Agency
(FSA), Natural Resources Conservation Service (NRCS), and Rural
Development office closings that were recently announced?
Answer. As of March 29, 2012, Rural Development (RD) closed 20 of
the 43 offices with plans to close the remaining office by the end of
fiscal year 2012 and NRCS plans to close or consolidate 24 offices by
the end of fiscal year 2012. At this time none of the NRCS offices have
been closed or consolidated. The 2008 farm bill (Public Law 110-246)
requires that FSA take no action toward final approval of the office
consolidation proposal until at least 90 days after the Secretary of
Agriculture notified Members of Congress of his proposal. This
notification occurred on February 27, 2012.
[Clerk's note: Subsequently, on May 29, FSA announced its decision
to consolidate 125 of the 131 offices originally proposed for
consolidation with other USDA Service Centers, consistent with
provisions of the 2008 farm bill.]
Question. What will be the total costs of closing offices in fiscal
year 2012?
Answer. The total estimated costs for the Department in fiscal year
2012 will be approximately $44.5 million.
Question. What do you estimate to be the total savings of these
closings in fiscal year 2013?
Answer. Total annual savings for all closures is approximately
$58.7 million, already reflected in the budget.
FOOD SAFETY AND INSPECTION SERVICE
Question. The Food Safety and Inspection Service (FSIS) is
responsible for ensuring that the Nation's commercial supply of meat,
poultry, and processed egg products is safe, wholesome, and correctly
labeled and packaged. This is accomplished through inspection and
regulation of the products by agency personnel. The budget calls for a
$13 million cut in funding associated with implementing new methods of
poultry inspection and reducing staff by 500 employees.
Have you begun negotiations with your unions on implementation of
the new inspection process?
Answer. We are currently conducting pre-decisional involvement
(PDI) sessions with the union that should be completed by June 2012. In
PDI, we work with representatives of the union by sharing information
about the proposed poultry slaughter process and asking the union to
identify its concerns. We have tried to find solutions to the union's
concerns to limit the scope of bargaining should we decide to go
forward with the final rule. PDI is essentially pre-negotiations.
Question. The $13 million in fiscal year 2013 savings assumes
implementation of the new inspection method by October. Is it realistic
to think you can obtain industry buy-in, successfully complete union
negotiations, and implement new procedures in such a short time?
Answer. Our timeline is very ambitious, and there are of course
some things beyond our control. However, FSIS is committed to
implementing on schedule. We understand that most large and small
plants favor the proposed change, so industry will likely seek to
participate shortly after a final rule is published. As stated above,
we are conducting pre-decisional involvement sessions with the union.
We are hopeful that these sessions will limit the scope of any
necessary bargaining, assuming that the agency decides to finalize the
proposal. When the agency makes a final decision on how to proceed, we
hope to conduct any negotiations with the union, possibly in late
summer. Our experience with the Hazard Analysis and Critical Control
Point (HACCP)-based Inspection Models Project gives us some
understanding of the implementation tasks we face and will help us
manage the conversion should we decide to adopt the rule. Finally, our
estimate was based on spreading implementation over about 9 months, so
FSIS does not expect to have to convert a large number of plants
immediately in order to achieve our estimated savings.
We are currently conducting PDI sessions with the union. In PDI, we
work with representatives of the union by sharing information about the
proposed poultry slaughter process and asking the union to identify its
concerns. We have tried to find solutions to the union's concerns to
limit the scope of bargaining should we decide to go forward with the
final rule. PDI is essentially pre-negotiations.
Question. How do you plan to purge 500 employees from your roles
next year?
Answer. FSIS' goal is to ensure that every employee affected by
this proposed change is given an opportunity to remain with the agency.
We plan to accomplish most of the reductions through attrition and
reassignment to vacancies in other parts of the agency.
NON-O157
Question. In September 2011, FSIS published a ``Final
Determination'' that six additional strains of E. coli would be deemed
adulterants in certain beef products.
Please detail the process and scientific evidence on which this
determination was made.
Answer. FSIS developed a risk profile to examine the risk of non-
O157 Shiga toxin-producing Escherichia coli (STEC) as an emerging food
safety hazard associated with beef consumption in the United States.
This risk profile provides an in-depth review of the relevant science
to assess public health risk. The conclusions reached in the risk
profile include that raw non-intact beef products and raw components of
those products may harbor non-O157 STEC; that pathogenic non-O157 STECs
are injurious to human health; that ordinary cooking practices, which
include rare cooking, may be insufficient to destroy all cells of the
pathogen in beef; and that a low dose of a non-O157 STEC can induce
illness. In fact, the Centers for Disease Control and Prevention
estimate that each year, non-O157 STEC serotypes cause nearly 113,000
foodborne illnesses in the United States. Moreover, while more than 100
STEC serotypes have been associated with human illness, these six
serogroups cause between 70 and 83 percent of the confirmed non-O157
STEC illnesses. Thus, combating these six serogroups can have a
significant beneficial public health impact.
For these reasons, FSIS announced a final determination that raw,
non-intact beef products, or raw, intact beef products that are
intended for use in raw, non-intact product, that are contaminated with
STEC O26, O45, O103, O111, O121, and O145, are adulterated, per 21
U.S.C. 601(m)(1) and (m)(3).
Question. What are the implications on the industry and on our
international beef trading partners of this determination?
Answer. FSIS will launch its non-O157 E. coli testing program on
June 4, 2012, which will allow establishments time to validate their
test methods. FSIS will initially test raw beef manufacturing trimmings
(the major component of ground beef), and then expand testing to other
raw ground beef product components. FSIS will apply the new tests to
samples already being tested for other pathogens, so this policy will
ensure a safer, more reliable food supply with minimal additional cost
to the agency or to industry.
Foreign countries that export FSIS-regulated products to the United
States must maintain a food safety system equivalent to that of the
United States. Therefore, in February 2012, FSIS contacted foreign
governments already approved for the export of raw beef to the United
States and informed them that FSIS would make a limited amount of
reagents used in the FSIS laboratory method for non-O157 STEC
serogroups available to a foreign government if that government wanted
to conduct a comparative analysis of its methods with test kits
assessed by FSIS.
AGRICULTURAL RESEARCH SERVICE
2013 Budget Resource Reallocation
Question. The Agricultural Research Service (ARS) is the flagship
in-house research agency of the Department.
This budget proposes to redirect over $70 million in resources from
``lower priority programs'' to higher priority research activities.
Please explain your process to determine the priority of research
initiatives, and how decisions were made to reallocate resources.
Answer. Focusing on the need to reallocate limited resources to
address high-priority initiatives, all research programs were
systematically evaluated based on relevance, quality, impact and cost
effectiveness. The fiscal year 2013 budget recommends selected high-
priority initiatives which address the administration's science and
technology priorities and the Department's strategic goals. The
reallocation of these resources would allow Congress to fund higher
priority agriculture research identified in the fiscal year 2013
budget.
Question. Is the redirection of $70 million in resources in 1 year
normal for your research portfolio or is this unusually high?
Answer. The reduction of $70 million is not unusually high. In
fiscal years 2009 through 2012, the President's budget for ARS proposed
reductions and/or terminations of research activities ranging from $39
million to $146 million to help offset proposed initiatives.
Agricultural Research Service Lab Closures
Question. This budget proposes to close five laboratories within
existing facilities, and to close one facility entirely. Please explain
how these decisions were made.
Answer. Decisions regarding which programs to propose for
termination or closure are always difficult but necessary, given the
ongoing budget constraints and changing priorities of research
endeavors. These research laboratories proposed for closure met one or
more of the following criteria:
--Considered by the administration to be of lower priority;
--Mature where the research objectives have been mainly accomplished;
--Duplicative or can be accomplished more effectively elsewhere in
ARS;
--Marginal or below threshold funding for program viability or
sustainability;
--Conducted in substandard or inadequate infrastructure and future
costs are prohibitive;
--Lacking a critical mass of scientists/support personnel for an
effective program; or
--Are carried out by other research institutions.
Question. What will happen to the employees at these locations?
Answer. USDA will strive to place all impacted permanent Federal
employees in suitable jobs where ARS position vacancies exist and for
which the employee is qualified. While every effort will be made to
identify a position for all impacted employees, USDA cannot guarantee
that all employees will be placed. In the event that a placement cannot
be identified for an impacted employee, the Department will ensure that
the individual is provided all the entitlements and protections
available under prescribed personnel procedures and programs.
Question. How much will it cost to close these labs in 2013?
Answer. The estimated cost to accommodate the impacted employees
and dispose of the real property ranges from $10 million to $12
million. These costs may be spread over 2 fiscal years, depending on
how quickly the real property assets can be disposed.
Question. When do you expect to begin realizing savings from these
closures?
Answer. Beginning in fiscal year 2013, the $17 million associated
with the research activities at the six laboratories will be
reallocated to high-priority research in other ARS laboratories. After
all costs have been expensed, the closure of these laboratories will
allow ARS to achieve significant cost avoidance in the capital
improvement and repair/maintenance of these facilities beginning in
2014.
ANIMAL AND PLANT HEALTH INSPECTION SERVICE
Budget Reductions
Question. The Animal and Plant Health Inspection Service (APHIS)
promotes the health of animal and plant resources to facilitate their
movement in international markets, and works to ensure abundant
agricultural products for U.S. consumers. These responsibilities
include monitoring plant and animal health, working to eliminate or
control invasive pests, facilitating safely bringing benefits of
genetic research into the market place, providing diagnostic laboratory
activities, assisting developing countries improve their safeguarding
systems, and protecting and promoting animal welfare. However, the
budget proposes a 7-percent funding reduction, and elimination of 151
employees.
How do you plan to meet these responsibilities with such severe
cuts in funding and staffing?
Answer. The 2013 budget identified several ways for APHIS to
operate more efficiently, allowing APHIS to maximize its resources to
carry out its mission. APHIS has implemented a variety of changes in
its operations that will result in cost-savings for fiscal year 2013,
including the consolidation of information technology customer service
support and switching telecommunications technology. In addition, APHIS
has identified other areas where a shift in methodology can allow
savings and still achieve the agency's goals. For example, APHIS has
developed several statistical and epidemiological methods to increase
the efficiency of animal health surveillance while continuing to meet
international standards, saving $9 million. APHIS also is implementing
business process improvements that will result in savings in areas such
as licensing of veterinary biologics products, import and export
reviews, and reviews of petitions to determine the regulatory status of
genetically engineered crops. The agency's budget request reflects the
implementation of the identified efficiencies and changes in strategies
without compromising our mission and services.
APHIS is also proposing further reductions in the agency's
contributions towards domestic and international efforts to allow those
who benefit from our services to contribute, or to scale back the
Federal role when a pest or disease is simply too widespread. We will
continue to place high priority on protecting the health and value of
American agriculture by focusing on those pests or diseases that pose
the greatest risk and facilitating safe agricultural trade.
Question. The Animal and Plant Health Inspection Service promotes
the health of animal and plant resources to facilitate their movement
in international markets, and works to ensure abundant agricultural
products for U.S. consumers. These responsibilities include monitoring
plant and animal health, working to eliminate or control invasive
pests, facilitating safely bringing benefits of genetic research into
the market place, providing diagnostic laboratory activities, assisting
developing countries improve their safeguarding systems, and protecting
and promoting animal welfare. However, the budget proposes a 7-percent
funding reduction, and elimination of 151 employees.
Can you provide assurances that existing safeguards protecting
against intrusion of new invasive pests into the United States will not
be weakened?
Answer. APHIS uses a comprehensive set of measures to safeguard the
United States against the introduction of foreign pests and diseases.
These measures include assessing and reducing threats overseas through
information collection and collaborating with foreign governments, and
implementing regulatory import policies designed to facilitate trade
while excluding high-risk products. The agency also works with the
Department of Homeland Security's Customs and Border Protection to
enforce these regulations, monitoring for introductions of high-risk
pests and diseases in the United States and maintaining emergency
response capabilities to respond when outbreaks occur.
In developing its fiscal year 2013 budget proposal, APHIS carefully
examined its programs and operations to determine where we could gain
efficiencies while maintaining focus on the areas that pose the highest
risks. For example, APHIS has proposed decreases related to changes in
epidemiological methods for swine and cattle disease surveillance.
These changes will allow the agency to realize savings while still
meeting international standards. In other cases, APHIS identified
efficiencies that could be gained in telecommunications and information
technology that will have little or no effect on program operations and
reduce overall costs. Other reductions target programs for pests and
diseases that are already established in the United States, such as
emerald ash borer (EAB), and focus resources on those programs where
they could make a difference. Despite intensive efforts by APHIS and
cooperating States to address this pest, we lack the tools needed to
control it. APHIS will continue to work on tools to manage EAB over the
long term and protect U.S. forests and urban landscapes. The overall
proposed reduction is the result of our efforts to identify targeted
changes and reduce costs while focusing on the highest risk areas.
Question. The Animal and Plant Health Inspection Service promotes
the health of animal and plant resources to facilitate their movement
in international markets, and works to ensure abundant agricultural
products for U.S. consumers. These responsibilities include monitoring
plant and animal health, working to eliminate or control invasive
pests, facilitating safely bringing benefits of genetic research into
the market place, providing diagnostic laboratory activities, assisting
developing countries improve their safeguarding systems, and protecting
and promoting animal welfare. However, the budget proposes a 7-percent
funding reduction, and elimination of 151 employees.
Much of this savings assumes State-cooperating agencies accept
higher costs. Have you discussed with your State partners their
willingness to take on these higher costs? What are the implications of
States being unable to pay more for these activities? Do you have a
back-up plan?
Answer. Most of APHIS' plant and animal health programs are
cooperative efforts with State and local partners, and we understand
that our budget proposal affects them. In developing the agency's
budget request, we had to make difficult choices to enable us to best
protect the health of American agriculture while balancing the
President's priority of reducing the deficit. Under the reality of
current resource limitations, it is reasonable to share with
cooperators the costs of programs for which they will receive a
benefit.
When addressing pests and diseases of national concern, the Federal
Government's role traditionally is to coordinate and manage program
efforts, and ensure that we apply program methods and technologies
consistently in all affected States and areas. Since these pests and
diseases have a direct impact on State and local conditions and since
States and localities are beneficiaries of the actions, it is expected
that all parties will devote available resources to the effort. While
there may not have been agreement to the level of contributions for
each pest and disease program, it is reasonable to expect all parties
to contribute some level of resources towards these cooperative
programs that, in most cases, have been in place for several years.
These decreases will result in a more appropriate allocation of funding
responsibility given the budget realities we face, and a transparent
level of Federal contribution will allow cooperators to plan for future
needs. The agency's budget request is presented more than 6 months in
advance of when it will become effective, which allows time for program
partners to develop their spending plans in the coming year. The agency
will continue to conduct pest and disease programs based on the total
available resources while considering the highest priorities for the
program. We will continue to work cooperatively with our State partners
on these programs and use available resources as effectively as
possible.
ANIMAL WELFARE
Question. Animal Welfare has been a high priority of this
administration. In past years the Department transferred funds from
other accounts to supplement these activities. However, this budget
cuts Animal Welfare funding by over 11 percent (larger than the overall
reduction to the agency). What has caused this change in the
administration's priority toward Animal Welfare responsibilities?
Answer. Animal Welfare still remains a high priority of the
administration. APHIS recognizes that we need to do our part in helping
to reduce Federal spending. As such, we are scaling back operations as
a cost-savings measure, including our priority areas such as animal
welfare inspection and enforcement. Even with the proposed budget in
2013, the Animal Welfare program remains a priority and will be
comparable to the adjusted fiscal year 2011 funding level, including
the reprogramming of $2.5 million in funding.
Additionally, APHIS will continue its focus on the most egregious
violators of the Animal Welfare Act (AWA) while seeking ways to operate
more efficiently in fiscal year 2013. The agency has implemented
measures to enhance its animal welfare inspection and enforcement
efforts in recent years. These measures include identifying potential
regulation changes related to commercial dog breeders and dealers, re-
evaluating the current methodology for calculating the frequency of
inspection, and developing and sponsoring meetings and trainings aimed
at increasing compliance with the AWA. APHIS also conducted a business
process improvement analysis of its enforcement activities, including
animal welfare enforcement. After identifying more than 80
recommendations for streamlining its processes and improving
timeliness, the agency pilot tested several recommendations with
considerable success. These business process improvement efforts will
allow quicker and more effective actions that require fewer resources.
LACEY ACT
Question. One of the rare increases in this budget is for
implementation of Lacey Act responsibilities. In fact, the budget seeks
to double Lacey Act spending by 50 percent, to $1.5 million. Please
describe what the Department is doing this year regarding its Lacey Act
responsibilities. In your view, do you think this USDA effort is
successful? What do you plan to do with the 50-percent increase? Could
these responsibilities be more efficiently handled outside the
Department?
Answer. As amended in the 2008 farm bill, the Lacey Act prohibits
the importation of any plant, with limited exceptions, taken or traded
in violation of domestic or international laws. The amendments were
designed to address illegal logging in other countries. Illegal logging
is environmentally destructive and undermines markets for wood products
produced in the United States, affecting businesses and jobs. Among
other things, the Lacey Act requires a declaration for imported
shipments of regulated products. This declaration must contain the
scientific name of the plant, the importation value, the quantity of
the plant, and name of the country where the plant was taken.
APHIS began phased-in enforcement of the Lacey Act in May 2009 and
currently receives about 10,000 declarations per week. Approximately 10
percent of these are submitted on paper forms that require significant
resources to analyze and store. Currently, electronic declarations can
only be made through licensed Customs brokers. In 2012, APHIS has
$775,000 available for activities conducted under the amendments to the
Lacey Act. The agency is using these funds for a dedicated staff,
secure document storage, and outreach activities to inform the various
industries and importers affected by the Lacey Act amendments. The
program selects 1 percent of the declarations at random for a cursory
review and stores the remaining documents. The Department of Homeland
Security's Customs and Border Protection collects the electronic
declarations and sends them to APHIS on a weekly basis. For 2013, the
agency is requesting an additional $725,000 for a total funding level
of $1.5 million. With these additional funds, the program would work
toward providing an easier electronic means for collecting and
maintaining declarations to help eliminate the need for paper-based
declarations. This will provide another alternative to importers for
filing declarations (as importers currently must go through a licensed
customs broker or fill out a paper declaration) and allow APHIS to be
more responsive to importers' needs. In addition, APHIS would utilize
additional staff to assist with Lacey Act activities and expand
outreach efforts to affected industries so they better understand the
act's requirements. With the requested increase in 2013, the program
anticipates selecting an increased share of the declarations for a
review.
APHIS is working within an interagency group representing the U.S.
Forest Service, U.S. Department of Homeland Security's Customs and
Border Protection (CBP), U.S. Trade Representative, U.S. Department of
Justice, U.S. Department of State, U.S. Fish and Wildlife Service, the
Council on Environmental Quality, and the U.S. Department of Commerce,
to implement the Lacey Act provisions and review the program. The
interagency group represents a broad range of viewpoints on how to
implement the act. Because of APHIS' regulatory role and interaction
with the importing community as well as its ongoing joint efforts with
CBP through the Agriculture Quarantine Inspection program, the agency
is well positioned to implement the act. APHIS will continue working
with its partners to administer the Lacey Act in the most efficient
manner possible given the volume of declarations and products covered.
BIOTECHNOLOGY REGULATORY SERVICES
Question. In the past, this subcommittee has provided increased
funding for Biotechnology Regulatory Services to support an effective
biotechnology compliance program for genetically engineered organisms.
Private sector demands on these services continue to expand. Currently,
the agency currently faces litigation due to its inability meet its
regulatory responsibilities in a timely manner. However, this budget
reduces this funding by 8 percent. How do you plan to improve this
unfortunate situation with a large funding cut?
Answer. I appreciate the subcommittee's support for APHIS'
Biotechnology Regulatory Services (BRS) program. BRS is integral to the
process of ensuring that genetically engineered (GE) crops under
development can be safely tested and brought to market. After a careful
evaluation of the nonregulated status petition review process, APHIS
has identified several process improvements that are expected to
achieve the goal of reducing the overall length and variability of the
time it takes for the petition process. Once complete, this effort is
expected to reduce review time by more than 50 percent (average review
times will decrease from about 3 years to just over 1 year). For
instance, APHIS has eliminated unnecessary steps, clarified and
simplified responsibilities, and put into place time frames for
completion of individual steps while maintaining appropriate
safeguards. Additionally, a portion of the program's $5 million
increase in fiscal year 2012 will be used for one-time legal fees
related to litigation over GE alfalfa. The remaining portion will be
used to hire additional staff and enter into contracts for
environmental analysis to support the improvements to the petition
review process. While we are proposing a small decrease in fiscal year
2013, biotechnology remains a priority for the agency. Even with the
proposed reduction, the BRS funding level would increase more than 25
percent from the fiscal year 2010 level of $13.3 million to the fiscal
year 2013 request of about $16.8 million.
AGRICULTURAL MARKETING SERVICE
Microbiological Data Program
Question. The fiscal year 2012 House report did not include funding
for the Microbiological Data Program. The conference report included
the following statement:
``The statement of the managers remains silent on provisions that
were in both House Report and Senate Report that remain unchanged by
this conference agreement, except as noted in this statement of the
managers.''.
Please explain why this program was zeroed out in the budget even
though no funding was provided in fiscal year 2012.
Answer. The Microbiological Data Program (MDP) was continued in
2012 because the funding reduction in the Consolidated and Further
Continuing Appropriations Act, 2012 for Marketing Services (which
includes MDP) could not be positively identified. While the House
provided $77,500,000 for Marketing Services, accompanied by
Appropriations Committee report language that denied funding for MDP,
the Senate and final Appropriations Act provided $82,211,000. Both the
Senate committee and conference reports were silent on the matter. The
program was zeroed out in the fiscal year 2013 proposed budget due to
budget constraints. In developing the fiscal year 2013 budget, we took
a hard look at activities which support AMS' core mission. The fiscal
year 2013 budget eliminates funding for MDP, which saves about $4.3
million. This reduces discretionary funding while focusing Marketing
Services resources on AMS' core mission. AMS is not a food safety
agency and MDP is not closely aligned with AMS's core mission to
facilitate the competitive and efficient marketing of U.S. agricultural
products.
PESTICIDE RECORDKEEPING PROGRAM
Question. The budget proposes to terminate the Pesticide
Recordkeeping Program. Currently, 27 States and 2 territories are
reimbursed to conduct federally recognized State pesticide
recordkeeping requirements. This program has been in place since 1992.
Please explain the rationale for terminating this program in light
of ever-shrinking State budgets.
Answer. We continue to take practical steps to control expenditures
and optimize organizational structure to more effectively manage
current and future resources. In making budget determinations we are
focusing on AMS' core mission to facilitate competitive and efficient
marketing of U.S. agricultural products.
Question. Since this program has been operating for 20 years, why
does AMS now believe it is no longer central to its core mission?
Answer. We took a hard look at activities that support AMS'
marketing-based mission and Pesticide Recordkeeping is not as closely
aligned with marketing as other AMS activities such as Market News or
Transportation and Market Development. Although Federal monitoring and
advisory services will be discontinued, applicators of restricted use
pesticides will still be required to retain their records and provide
access upon request to Federal and State agency representatives. Since
the Federal program has been operating for 20 years, we have had the
opportunity to educate a large number of private applicators of
federally restricted use pesticides. More than 100,000 pesticide
recordkeeping manuals, brochures and other outreach materials have been
distributed each year by the program to producers.
CONSERVATION
Question. The budget proposes a decrease of $2.5 million and 142
staff years for conservation technical assistance.
How does NRCS plan to provide important technical assistance with
fewer funds and fewer staff?
Answer. NRCS will continue to provide important technical
assistance to landowners in addressing their resource issues and
concerns. This will be accomplished through the use of improved
delivery and streamlining processes such as the Conservation Delivery
Streamlining Initiative (CDSI), expanding the role of Technical Service
Providers (TSPs), and continuing to build strong conservation
partnerships with local, State, and Federal entities as well as with
the private sector.
Question. Please describe what organizational improvements NRCS
plans to implement.
Answer. In coordination with the USDA Blueprint for Stronger
Service, NRCS is taking a holistic look at our entire organization to
ensure we are well prepared to meet our mission now and in the years to
come. NRCS currently has teams working on 17 major efforts that will
result in a streamlined, efficient organization to transform NRCS into
a 21st century, multi-billion dollar agency that can adapt to change
while delivering exceptional conservation assistance to private
landowners. The information is provided below.
The efforts are organized into five categories:
--Conservation Delivery Streamlining Initiative (CDSI).--This effort
will result in new and innovative technology that will support
conservation assistance process online, streamline service
delivery, and will give landowners 24/7 access to their
conservation information. It will allow conservationists to
spend more time in the field while enabling administrative
experts to handle the administrative tasks of programs and
applications.
In fiscal year 2012 through fiscal year 2013, CDSI will implement a
national strategy to realign field positions through the
establishment of program support specialist position. This
position will reduce the administrative burden on the technical
field employees and enable a more streamlined and efficient
approach to the delivery of conservation support.
--Science Efforts.--NRCS launched efforts to gain agency-wide
efficiencies by sharing resources, reducing duplication of
effort, and enhancing our role as a leader in conservation
science while addressing decreased operating budgets. Efforts
include:
--Consolidate Soil Survey offices and provide shared services
across larger geographic regions;
--Reduce duplication of effort and streamline our system of
developing and maintaining conservation practice standards
and associated guidance;
--Improve our capacity to support complex engineering needs across
the country; and
--Create more effective and efficient systems for conservation
technology acquisition, development, and support to the
field.
In fiscal year 2012 and fiscal year 2013, NRCS will implement the
consolidation of the Soil Survey offices, beginning with the 24
office closures identified by Secretary Vilsack.
--State Efforts.--NRCS is also working on State level improvement
efforts to coordinate, centralize, and streamline State
processes and needs.
--States are charged with finding ways to increase direct technical
service and increase resource sharing across State
boundaries. Selected States in each region will test models
where they reduce duplication by sharing services such as
contract management and technical expertise;
--NRCS is also evaluating the benefits of centralizing support for
quality assurance, equitable relief, and legal appeals at
national headquarters to reduce burdens on State and field
staff.
In fiscal year 2012, NRCS kicked off the multi-State servicing
pilot that is testing a comprehensive approach to identifying
areas for State-sharing, analyzing the option, and implementing
long-term strategies for sharing resources.
--Administrative Efforts.--NRCS is taking a comprehensive approach to
analyze administrative efforts; specifically NRCS is focusing
on four key administrative functions or areas:
--Budget and financial management;
--Human resources;
--Procurement; and
--Property functions within NRCS.
NRCS is determining short-term solutions to position NRCS to best
integrate the USDA Administrative Solutions Project and deliver
the best support to the field.
In fiscal year 2012, NRCS will be moving forward with the
development of a new administrative operating model that will
focus on streamlining processes, developing virtual teams, and
enhancing standardization. NRCS will develop and implement the
new operating model throughout fiscal year 2013 and this will
result in increased capacity for administrative services and
will position NRCS for improved performance.
--Modernization Efforts.--Modernization efforts across NRCS will look
at IT, Public Affairs, and Outreach to identify ways to improve
the delivery of communications and information services to our
internal and external customers.
In fiscal year 2012, NRCS began the modernization of the public
affairs and IT organizations. Public Affairs implemented the
redesign of the external Web site and engaged with GovDelivery
for modernization of communications delivery. Public Affairs is
also underway with a comprehensive redesign that is currently
in the baseline assessment stage and will result in fiscal year
2013 with additional improvements to the Public Affairs
function at NRCS. The IT assessment is currently underway as
well; an organization redesign is expected in fiscal year 2013.
This effort will help to improve IT delivery, enhance
oversight, and enable increased service delivery across NRCS.
RURAL DEVELOPMENT
Broadband
Question. This subcommittee has provided substantial support for
expanding high-speed broadband service to remote rural areas. The
Federal Communications Commission (FCC) is now engaged in revising
access to the Universal Service Fund, on which the bulk of Rural
Development broadband loans rely for a portion of their income.
Reducing Universal Service Fund payments to rural providers will place
Rural Development's loan portfolio in severe jeopardy.
Please discuss how USDA is working with the FCC to ensure that
rural broadband providers are not treated unfairly under the new FCC
requirements.
Answer. Throughout the years, Rural Development and FCC have worked
closely to uphold the universal service provisions in the 1996
Telecommunications Act as Congress had intended. Those provisions
ensure that rural America has access to advanced telecommunications
services at rates and at levels of service that are comparable to those
offered in urban America. Prior to implementing the new Universal
Service Fund (USF) Reform Order, Rural Development consulted with FCC
on numerous occasions to help ensure that this important statutory
objective was fulfilled. Rural Development has provided briefings and
data to the FCC on its portfolio and on the impacts of revenue
reductions to RD's borrowers. The USDA also worked with the FCC in
developing a national broadband strategy published in 2009, as required
by the 2008 farm bill.
Question. What is USDA doing in the short run to protect existing
broadband borrowers and their rural customers?
Answer. In the short run, Rural Development is analyzing its
portfolio to determine the impacts of reduced USF and intercarrier
compensation revenues on rural telecommunications providers serving
rural high-cost communities. Rural Development has conducted a series
of listening sessions with borrowers, financial experts, and other
segments of the rural infrastructure sector to fully comprehend the
impact on rural America. Rural Development is keenly focused on making
sure that rural America continues to receive affordable, high-speed
broadband service required for economic development and job creation.
Question. Is the Department experiencing reduced loan demand due to
the uncertainty of looming changes to FCC requirements? If so, does
that affect the Department's broadband loan request for fiscal year
2013?
Answer. The Rural Utilities Service (RUS) and the
telecommunications industry continue to evaluate the impact of the FCC
revisions in USF, ICC, and local rates. While the level of uncertainty
caused by the order may delay project consideration, the agency fully
supports the proposed funding levels for fiscal year 2013. The
broadband infrastructure needs across rural America were demonstrated
by the tremendous response to the Recovery Act's Broadband Initiatives
Program (BIP). There were many valuable projects which simply could not
be funded. We are hopeful that some BIP applicants will apply for
regular RUS loan programs to further extend existing broadband networks
to rural areas. We are also hopeful the FCC will consider the needs of
RUS borrowers who are actively investing in rural broadband networks
made possible through the Recovery Act by reestablishing the regulatory
and financial certainty that is needed for rural telecommunications
investment to continue.
Question. When the FCC announced plans to reform the Universal
Service Fund, what changes did the Department make to its broadband
loan underwriting criteria to reflect this new uncertainty?
Answer. Even before FCC published it proposed USF Reform Order,
Rural Development revised its underwriting criteria in both our
infrastructure and broadband programs to determine reliance on USF and
the impact of reduced revenues. Only loans which meet more rigid
underwriting standards advance through this process to loan approval.
The agency further enhanced its underwriting criteria after the first
USF order was published and will continue to make changes to ensure any
taxpayer investments are secured.
HOUSING
Question. This budget calls for a 27-percent reduction in your
flagship direct single family housing loan program.
Is demand for this program going down?
Answer. The USDA budget proposal reflects the efforts of this
administration to do more with less and to make tough decisions where
necessary. Historically, the direct single family housing program has
helped low- and very-low-income borrowers to obtain homeownership. Our
budget proposal will refocus the direct single family housing program
to serve low- and very-low-income borrowers, and will target a portion
of the funding to help attract a new generation of bright, young
teachers to our rural schools.
Over the past decade, Rural Development has increasingly relied
upon guaranteed loans to cost effectively provide for the credit needs
of rural America. In fact, during this administration alone, funding
for the guaranteed single family housing program (excluding Recovery
Act funding) has quadrupled from about $6.2 billion to $24 billion in
2011. This funding has helped to fill a critical need for credit in
rural America, and importantly, this level of assistance is being
provided at no subsidy cost to taxpayers.
Question. What is the current backlog of applications and pre-
applications for these loans?
Answer. As of March 29, 2012, the total number of Section 502
Direct Loan applications on a waitlist pending processing due to the
lack of available funds is 11,398.
Question. Is there any other Federal direct loan program that
provides home-ownership assistance for low- and very-low-income rural
residents?
Answer. There is no other Federal direct loan program similar to
the Section 502 Direct Loan program. The Section 502 Direct Loan
program provides mortgage financing for low- and very-low-income rural
Americans unable to get credit from other sources. The program includes
a payment assistance feature to reduce the borrower's housing cost for
principal, interest, taxes, and insurance to approximately 24 percent
of income. The other fundamental difference in program administration
between USDA and other Federal housing programs such as Housing and
Urban Development (HUD) programs is USDA's field staff, which allows
USDA to maintain a local presence in the rural communities it serves.
Question. Why are you seeking such a drastic cut in the program?
Answer. Some of the same rural residents with low- and very-low-
incomes who qualify for loans under the single family housing direct
loan program can also qualify for the single family housing guaranteed
loan program. The primary difference between the two programs is that
the direct loans are made and serviced by USDA and in some instances
contain an interest subsidy. The guaranteed loans are made and serviced
by a bank or other commercial lender at the current market interest
rate and guaranteed by the Federal Government. Unlike the direct
program, the guaranteed program is provided at no subsidy cost to
taxpayers.
Question. Please discuss the requested set-asides for rural
teachers and self-help housing program participants. Why did you
elevate the priority of those applicants above others, including
healthcare workers, police and fire workers, daycare workers, etc?
Answer. The budget proposes to set aside a small portion of the
direct single family housing program funding for teachers and
beneficiaries of the Mutual and Self-Help Grant Program for a portion
of the fiscal year, after which the funds will be available for all
applicants.
The decision to set aside funding for the Mutual and Self-Help
Grant Program ensures that adequate loan funds are available to support
the grant funding provided by Congress. Without sufficient loan funding
we would be unable to fulfill the intent of Congress with respect to
self-help housing.
Rural Development remains committed to the support of all low- and
very-low-income families, regardless of their profession. Set aside
funding for teachers, however, would help address the shortage of
teachers willing to work in rural areas that lack affordable housing.
Teachers are a key factor in creating sustainable rural communities. By
targeting a portion of this assistance to teachers, we hope to
encourage many bright, young, and enthusiastic college graduates to
consider returning to rural America to begin their professions as
teachers.
Question. This budget seeks to eliminate the multi-family housing
direct loan program (section 515). The stated justification for this
elimination is that the guaranteed multi-family housing loan program
(section 538) also provides construction financing and more funds are
needed in the multi-housing revitalization program to maintain existing
projects.
How effective is the guaranteed loan program in promoting
construction in small towns and not just in larger communities?
Answer. The Multi-Family Housing (MFH) Guaranteed Rural Rental
Housing Program (section 538) is very effective in promoting
construction and preservation in rural areas. Like the MFH direct loan
program (section 515), the section 538 program is restricted to areas
of no more than 20,000 in population, unless eligible under a statutory
exception. Approximately 50 percent of the loans guaranteed under
section 538 preserve existing affordable properties in rural areas,
most notably section 515 properties. For new construction, financial
tools, including section 515 and section 538 loans, are more efficient
for properties with more units of affordable housing, so nearly all of
the new construction activity is in rural areas with populations
between 10,000 and 20,000.
Question. How effective is the guaranteed program in offering
affordable rents for very-low-income households?
Answer. The MFH Guaranteed Rural Rental Housing Program is very
effective in offering affordable rents to very-low-income seniors,
families, and individuals. The vast majority of tenants are under 80
percent of the area median income. More than 70 percent of all
properties financed in the past several years using the section 538
program also have low-income housing tax credits (LIHTC), which impose
lower income thresholds for tenants to qualify under the LIHTC program.
Under the LIHTC program tenants must be very-low-income (50 percent of
area median income) or low-income (less than 80 percent of area median
income) families. In the last 3 years alone, the MFH Guaranteed Rural
Rental Housing Program provided financing to build or preserve
approximately 200 apartment buildings with 11,100 apartments, of which
more than 9,400 are rented to very-low-income or low-income seniors,
families or individuals.
Question. What is the total funding needed for the revitalization
program?
Answer. We believe the budget request provides adequate funding for
the Revitalization Program.
COMMUNITY FACILITIES
Question. This budget requests a $2 billion Community Facilities
Direct Loan Program (CF) level, up from $1.3 billion in fiscal year
2012.
Is there demand for a $2 billion annual loan program?
Answer. As a result of the credit crisis, one of the biggest issues
facing rural communities today is the lack of access to capital. In
recent years, the agency has seen an increase in funding requests for
projects that are larger in nature, scope, and complexity. Accordingly,
we believe the proposed program level reflects the sizable demand that
exists for infrastructure financing in rural areas.
Question. What is the current backlog of applications and pre-
applications?
Answer. As of May 2, 2012, the Community Facilities Program has a
total backlog of about $1.8 billion. This includes approximately 635
direct loan applications for $1.6 billion, over 900 grant applications
for $51 million, and 27 guaranteed loan applications for $131 million.
Question. Why is the guaranteed loan program eliminated?
Answer. The guaranteed loan program originated as an inexpensive
alternative to the direct loan program and was designed to stimulate
additional assistance to moderate income communities in rural areas.
The default rate for the program, however, has been much higher than
originally projected; in effect, this has made it more expensive than
the direct loan program. The proposed increase in the direct loan
program will more than offset the effects of the guaranteed loan
program termination.
RURAL JOBS ACCELERATOR
Question. We have recently become aware of a new initiative, the
Rural Jobs Accelerator, which apparently will be a joint effort among
USDA, the Economic Development Administration, the Delta Regional
Commission, and the Appalachian Regional Commission.
Please explain the purpose of this initiative and how it is
designed to work?
Answer. The programmatic guidelines and goals of the Rural Jobs and
Innovation Challenge (RJA) are very similar to those of the regular
RCDI; RJA merely emphasizes building regional capacity. To be eligible
for RJA, applicants must be eligible for the regular RCDI program.
RJA is a coordinated interagency funding opportunity designed to
promote accelerated job creation and community and economic development
in rural regions through regional collaboration. The RJA will provide
resources to support economic development in the areas of renewable
energy, food production, rural tourism, natural resources, and advanced
manufacturing. The RJA will also assist distressed rural communities in
accelerating job creation by leveraging local assets, building stronger
economies, and creating regional linkages. The Funding Partners include
USDA, the Department of Commerce's Economic Development Administration
(EDA), the Appalachian Regional Commission (ARC), and the Delta
Regional Authority (DRA). This coordinated, integrated, interagency
initiative offers applicants the opportunity to submit a single project
narrative to access multiple funding sources that collaboratively
support regional development in rural communities.
Question. What are the performance measures you will use to gauge
the initiative's success?
Answer. Applications will be evaluated based on their ability to
satisfy core evaluation criteria. This includes building community and
regional capacity, linking to regional clusters and opportunities,
integrating and building regional partners, and utilizing multiple
resources to meet project objectives and promote substantive economic
growth in the region and rural communities. Grant recipients will
identify project milestones and submit reports throughout the project
period, along with a final project performance report. Success will be
gauged by the degree to which grant recipients achieve their project
milestones.
Question. What administrative and programmatic resources have you
committed in fiscal year 2012, and what resources do you hope to use in
fiscal year 2013, to support the initiative?
Answer. The Rural Jobs Accelerator will be administered using
existing USDA staff for fiscal years 2012 and 2013. Approximately half
($2.49 million) of the funding available for use in fiscal year 2011
and half ($1.81 million) of the funding available for use in fiscal
year 2012 for the Rural Community Development Initiative (RCDI) will be
used to support this initiative. The remaining $4.33 million in RCDI
funding was announced under a separate notice of funding availability
on March 21, 2012.
Question. Will USDA's support in fiscal year 2012 require a
transfer or reprogramming of funds?
Answer. No. USDA is using existing authorities and a portion of the
existing appropriations for the Rural Community Development Initiative
(RCDI) to fund our portion of the Rural Jobs Accelerator. The projects
funded by USDA must meet all existing RCDI funding criteria and would
be eligible for RCDI assistance regardless of their participation in
the Rural Jobs Accelerator. However, by employing a ``whole-of-
government'' approach through the Rural Jobs Accelerator we can
significantly enhance the prospects for job growth in the selected
regions.
NUTRITION
Equipment Grants
Question. In 2009, this subcommittee provided $100 million through
ARRA for grants to allow schools to purchase and renovate their food
service equipment. The fiscal year 2013 budget for Child Nutrition
Programs includes $35 million for this same activity. In February 2012,
USDA's Office of Inspector General (OIG) issued a report criticizing
FNS' management of these ARRA funds. According to the OIG report, FNS
``did not create adequate, proactive controls to ensure that grants
were awarded based on Recovery Act criteria and accurate data.''
If funding is provided in fiscal year 2013, what assurances can FNS
provide to this subcommittee that funds will be managed appropriately?
Answer. USDA believes that the ARRA grant award process in its
totality was highly effective and met the goals set forth by the
Recovery Act to effectively and timely distribute funds to low-income
schools that clearly demonstrated need. The OIG audit did not identify
any instances of improper use of the ARRA funds, but it did identify
some areas for process improvement, and FNS will address these issues
where needed. FNS' oversight of the State agencies which operate the
school meals program will focus on ensuring that the processes used to
distribute grant funds meet all appropriate requirements and ensure
that funds are used for their intended purpose. As the audit report
notes, OIG has accepted FNS' plan to implement additional internal
controls within its standard competitive grant award processes,
identifying areas that can be strengthened for future grant awards. I
am confident that FNS would appropriately manage another round of
school equipment funding.
Moreover, it is critically important to recognize that there
remains significant unmet funding need for schools to replace out-dated
equipment and help schools meet our new, updated standards for school
meals. These standards represent the first update to school meals in
over 15 years, emphasizing fruits, vegetables, and whole grains.
Schools need modern, appropriate equipment to help them serve healthy
meals. Only about 22 percent of the school districts who requested ARRA
funds received them. So, the present $35 million request for the School
Meals Equipment Grants is critical to providing support to help fund
equipment purchases for school districts that did not receive Recovery
Act funding.
Question. How do you envision these grants being allocated?
Answer. FNS would award equipment assistance funding to State
agencies using a competitive process, and the State agencies would then
build on the Recovery Act of 2009 criteria, which targeted low-income
districts with the greatest need. When developing the specific
competitive grant process that States would use when awarding these
grants to school districts, FNS would also consider how to best meet
the needs of school districts as per the requirements associated with
the $35 million school meals equipment grant funding request.
Question. What changes to your grant process will be made in
response to OIG's recommendations and concerns?
Answer. FNS will use management evaluations and/or targeted reviews
to determine State agency compliance with the grant application and
award processes. As part of these reviews, if FNS reviewers determine
that (1) exceptions to the grant application were made during grant
execution; and (2) potential grant awards to the State are pending, FNS
will develop appropriate corrective action plans which could include
submission of documentation for selected future grant awards to FNS for
review and approval prior to implementation. This documentation may
include applications (RFAs) and grant award evaluation processes prior
to the States releasing the applications to potential subgrantees.
CIVIL RIGHTS
Question. Can you explain to the subcommittee the status of the
women farmers discrimination litigation against USDA, along with the
status of the USDA's plans for a Women and Hispanic Farmers Claims
Process?
Answer. I will provide an update of the civil rights discrimination
litigation as well as USDA's plans for a Women and Hispanic Farmers
Claims Process.
[The information follows:]
In 2006, the D.C. Circuit affirmed the district court's denial of
class certification of plaintiffs' ECOA claims. Love v. Vilsack, 439
F.3d 723 (D.C. Cir. 2006). In 2009, the D.C. Circuit affirmed the
district court's dismissal of the claims plaintiffs brought under the
Administrative Procedure Act (APA), 5 U.S.C. sections 701-706, by
female farmers in Love v. Vilsack, and remanded the cases to the
district court on the named plaintiffs' individual claims under ECOA.
Garcia v. Vilsack, 563 F.3d 519 (D.C. Cir. 2009). In January 2010, the
Supreme Court denied plaintiffs' petitions for certiorari on the APA
claims in Love and Garcia. 130 S. Ct. 1138 (Mem.) (2010). All appeals
related to class certification have been decided in favor of USDA and
the Love case is now limited to individual claims of credit
discrimination. Love has been stayed while the voluntary Alternative
Dispute Resolution claims process is being finalized by USDA.
In order to offer relief to female and Hispanic farmers who allege
credit discrimination during the relevant statutory period, USDA
developed an entirely voluntary ADR program to settle those claims
without litigating them individually in court. This non-adversarial
process will be administered by a third-party neutral, who will make
individualized determinations based on the evidence presented by each
claimant. Successful claimants will receive up to $50,000 or $250,000
each depending on the tier of relief chosen by the claimant, plus tax
relief on their award and possible debt cancellation for certain
outstanding farm loans. Whether any individual chooses to participate
in the program is entirely up to the individual. Those farmers who wish
to ignore the ADR process are free to do so.
The claims process has not yet started. On January 25, 2012, after
hearing from members of Congress, community organizations, and farmers,
the Department announced changes to the claims process framework. In
May, USDA selected an independent Administrator/Adjudicator who is now
preparing to implement the claims process. Claimants will not need to
pay any filing fees to participate in the claims process.
Question. What is the USDA's outreach plan to spread the word to
women farmers nationwide about the availability of the claims process?
Who will conduct the outreach, what forms of outreach will be used, and
how much money does the agency plan to spend on outreach? Is the Agency
involving women's and farmers' groups in the development of the
outreach plan?
Answer. USDA has engaged in outreach activities to inform potential
claimants, including women farmers who have alleged past
discrimination, about the claims process. As part of the outreach
process, USDA has held numerous meetings and webinars with farmers and
community organizations, including women's organizations. USDA will
expend up to $75,000 for outreach inclusive of staff travel and meeting
space incidentals. In addition, USDA announced the claims process
(including recent changes) through press releases and media interviews;
and created a dedicated Web site with informational documents about the
process such as a fact sheet and summary notice. USDA currently
operates a toll-free call center to register individuals interested in
participating in the process, allowing them to request a claims
package.
USDA plans to continue to notify women and Hispanic farmers who
allege past discrimination against USDA about the claims process
requirements and the date on which the claims period will commence.
Ongoing outreach to potential claimants will be conducted in a number
of ways. USDA will use media to contact as many women and Hispanic
farmers as possible about the claims process, including social media,
press releases, Web sites, and posters, and USDA will hold additional
webinars summarizing the program to stakeholders. USDA also plans to
mail postcards directly to over 500,000 women and Hispanic farmers
listed in USDA customer information systems about the claims process,
plans to continue to hold meetings with farmers to notify them about
the program, and plans to work with third-party organizations to reach
out to potential claimants. Finally, USDA plans to enter into
cooperative agreements with third-party organizations to educate
potential claimants about the process.
Question. What, if any, specific program reforms is USDA
implementing to prevent future discrimination against women farmers in
particular?
Answer. To prevent future discrimination against women farmers,
USDA has strengthened training, outreach, and policy efforts. At my
direction, every political appointee in the Department has attended
civil rights trainings and USDA has offered civil rights training to
Farm Service Agency, Natural Resources Conservation Service, and Rural
Development leadership and staff at State offices in more than a dozen
select States that have a history of problems in this area. The States
included Oklahoma and Arkansas, two of the States with the highest
concentrations of female producers. The States selected for civil
rights training for the Farm Service Agency State leadership accounted
for a total of 40 percent of FSA program complaints in fiscal year
2008, and the States selected for Rural Development trainings
represented 42 percent of RD program complaints in the same period.
We commissioned an independent assessment of civil rights in USDA's
program delivery. We are working to implement the recommendations of
this Cultural Transformation Assessment to help USDA improve field-
based service delivery to minority and women farmers and ranchers, and
communities that have historically not participated in USDA programs.
The recommendations for the Farm Service Agency in the assessment
included steps to provide better representation of women and minority
farmers on county committees, to take prompt action to hold employees
accountable for discrimination, and to institute outreach as a core
mission of the Agency. To improve USDA programs' ability to serve all
farmers, we analyzed the potential for new policies, rules and
decisions to impact civil rights. Over 3 years the Office of Civil
Rights recommended important changes on about 20 percent of all
policies they reviewed. We also more than doubled the number of
internal compliance reviews of USDA agencies to evaluate their civil
rights policies, procedures and practices.
USDA is committed to reaching out to women farmers and involving
new generations of female farmers in local and State USDA committees.
The Farm Service Agency also recently designed a customer's guide to
improve all producers' knowledge of farm loan programs.
In 2010 and again in 2011, USDA's FSA recorded the fewest number of
customer civil rights complaints since the Department began keeping
track, 37 complaints were filed in 2010 and 37 in 2011. We have also
made changes to improve the processing of the complaints we do receive.
Adding staff and conducting Lean Six Sigma process improvement have
reduced the typical processing time for new civil rights program
complaints from 4 years to 18 months.
______
Questions Submitted by Senator Roy Blunt
DIVERSITY OF RURAL ELECTRIC PROGRAMS
Question. The budget request for the Rural Utilities Service
electric loan program provides specific set-asides for renewable energy
plants and fossil fuel powered facilities that include carbon emissions
reduction. As a result, the budget request puts traditional power
plants sourced by fossil fuels, such as natural gas and coal, at a
disadvantage in participating in the program.
While I appreciate the importance of renewable energy and carbon
sequestration, Americans in rural areas rely on cheap, accessible
electricity that demands a diversification of energy sources for
affordable customer rates. Energy policy should have a balanced
approach and not focus on one particular source.
Does USDA know the potential long-term economic effects if rural
electric cooperatives are unable to utilize the loan program to
construct natural gas and coal-fired power plants or to provide basic
facility upgrades that do not specifically reduce emissions?
Answer. USDA has not calculated the long-term economic effects of
limiting future investment in fossil fuel-fired power plants. However,
by virtue of being located in rural America, the rural electric
cooperatives are ideally situated to invest in many renewable energy
technologies such as solar and wind power. By targeting future
assistance to renewable fuel technologies the rural electric
cooperatives have the opportunity to play a central role in this
administration's ``all-of-the-above'' approach to energy independence.
Question. How will the recent EPA announcement on greenhouse gas
emission limits affect participation in the electric loan program?
Answer. The Rural Utilities Service (RUS) is expecting an increase
in demand for RUS loan funds as borrowers work to comply with the EPA
greenhouse gas emissions limits. At this point in time, RUS does not
know the amount needed for borrowers to comply with EPA. However, the
estimates for environmental upgrades range from $1 billion this fiscal
year and reaching approximately $3.5 billion by 2016 according to the
Electric Program application pipeline and the National Rural Electric
Cooperative Association's 10-year projections.
Question. Because the average natural gas powered electric plant
has a CO2 emissions level below the recently announced EPA
guidelines, what is the reasoning for prohibiting their access to two-
thirds of the funding in the rural electric program unless they include
carbon capture sequestration systems?
Answer. This limitation is one of many ways to achieve energy
independence and improve the environmental health of the Nation. The
proposal does not preclude the ability of rural electric cooperatives
from seeking other sources of financing to build or upgrade fossil
fuel-fired power plants. Rather, it provides an opportunity for the
rural electric cooperatives to be at the forefront of implementing
renewable energy strategies that will power a greener tomorrow.
FREE TRADE AGREEMENTS WITH COLOMBIA AND PANAMA
Question. Last year, Congress approved the trade agreements with
South Korea, Colombia, and Panama. Implementation of all three of the
trade agreements will increase U.S. farm exports by an additional $2.3
billion--supporting nearly 20,000 American jobs.
The agreement with South Korea came into force earlier this month
(March 15). However, the agreements with Colombia and Panama have not
been fully implemented. Full implementation of these two agreements
would increase farm exports by $400 million and support approximately
4,000 jobs. It is important that these agreements are implemented
expeditiously to open up these markets for our agriculture producers.
What is the current status of the free trade agreements with
Colombia and Panama?
Answer. The United States-Colombia Trade Promotion Agreement will
enter into force on May 15, 2012. The Department of Agriculture's
Foreign Agricultural Service (FAS) worked closely with the Office of
the U.S. Trade Representative (USTR) and stakeholders to establish
effective mechanisms for ensuring market access under the terms of the
agreement, particularly for tariff-rate quotas (TRQs). A range of
issues will be resolved prior to implementation, including barriers to
U.S. poultry and rice. Almost 70 percent U.S. exports to Colombia will
become duty-free upon implementation, and most other tariffs will be
reduced and eliminated over 5 to 10 years, with all Colombian tariffs
on agricultural products duty-free in 19 years.
With respect to the United States-Panama Trade Promotion Agreement,
discussions with Panama are currently focused on changes required in
their laws and regulations in order to implement the agreement. FAS is
working closely with USTR to ensure the mechanisms Panama will use to
implement its agricultural TRQs will be ready when the agreement enters
into force. Panama will be adapting its current auction system for some
TRQs and establishing new licensing and first-come, first-served
systems for others. FAS and USTR are working to ensure that these
systems will be implemented in a way that is consistent with the
provisions of the agreement and that will enable U.S. exporters to take
full advantage of new opportunities.
Question. Is there an estimated date for implementation of these
agreements?
Answer. The United States-Colombia Trade Promotion Agreement will
enter into force on May 15, 2012. An implementation date for the United
States-Panama Trade Promotion Agreement will be set once agreement has
been reached on all of the implementation mechanisms. FAS is working
with USTR to ensure the new market access opportunities established in
the agreement will be available as soon as the agreement enters into
force. In an effort to ensure the implementation of the agreement moves
forward expeditiously, a team of FAS, USTR, and Customs officials will
travel to Panama in the first week of May to assist the Panamanian
Government as it develops its TRQ regulations.
AGRICULTURAL RESEARCH SERVICE LAB CLOSURES
Question. Consistent with the budget request, the fiscal year 2012
agriculture bill closed 12 Agricultural Research Service (ARS) labs.
However, the budget request did not adequately budget for the expense
of closing these labs, which turned out to be far more significant than
either USDA or the subcommittee imagined.
How much do you estimate it will ultimately cost ARS to relocate
staff and close all 12 labs in fiscal year 2012?
Answer. The termination of research activities at the 12 ARS
laboratories affected 233 permanent ARS employees. The one-time costs
associated with the relocation or separation of affected personnel and
the disposal of property are estimated at $39 million in fiscal year
2012.
EXTRAMURAL RESEARCH
Question. I understand ARS plans to reduce existing extramural
research funding by 30 percent this year to find the additional funds
necessary to close the labs.
How did ARS arrive at the decision to reduce extramural funding as
opposed to other activities within ARS?
Answer. The temporary budget reductions to remaining ARS programs
in fiscal year 2012 are necessary to finance the one-time costs
associated with the closure of 12 ARS laboratories. The 30-percent
reduction to extramural research supported by ARS resources is one of
several measures necessary to finance the one-time costs. These
measures also include restricted hiring and assessing all remaining ARS
management units. As a result of these actions, only about half of the
one-time costs to close the 12 laboratories will be financed by
reductions to extramural supported research. Although ARS' mission is
to conduct primarily intramural research, ARS along with other USDA
agencies, such as the National Institute of Food and Agriculture
(NIFA), will continue to support high-priority extramural research.
CAPITAL ASSET AND CONSTRUCTION PLAN
Question. The fiscal year 2013 budget includes a proposal to close
six more labs.
Last year, the subcommittee requested a capital assets and
construction plan from ARS. We have not received the capital asset
plan. Without the benefit of this plan, how did USDA determine which
labs would be closed?
Answer. ARS has completed a capital investment strategy for
recapitalization and new research facilities based on facility
condition, needs, and research program priorities. The report
establishes criteria and processes for determining and recommending the
appropriate level of new investments needed for USDA research
facilities. The report's recommendations and overall strategy will
inform and support the development of administration budget requests
for research facilities in the out years.
During the process of evaluating all ARS research programs, and in
conjunction with developing the capital investment strategy, ARS also
developed a conceptual framework to determine its capital investment
needs based on the relation between the condition of a facility to the
priority level of a program. This methodology allowed ARS to determine,
on a scale, which facilities are in the poorest conditions and housed
the lowest priority programs. The six laboratories recommended for
closure were identified after all evaluations were completed. The 2013
budget proposes reallocating these funds to facilities/programs that
support higher priority initiatives.
CLOSING COSTS OF RESEARCH LABORATORIES
Question. Should the subcommittee agree with ARS's plan to close
the labs, does the budget request adequately account for the cost of
closing these labs?
Answer. The estimated cost to accommodate the potentially impacted
employees and dispose of the real property ranges from $10-12 million.
If the fiscal year 2013 proposed budget reallocations are approved, ARS
would be able to utilize the associated program funds to offset the
facility closure costs.
BUDGET IMPACT OF SCHOOL MEALS REGULATIONS
Question. I have received a number of inquiries from schools across
Missouri regarding the Department's new school meal regulations. I am
deeply concerned about the unintended costs on public schools as a
result of the Department's regulations.
With the price of food commodities rising, it looks like the impact
of the regulations will result in an unfunded Federal mandate on
Missouri schools. My constituents have said that the fruit, vegetable,
and whole grain requirements will increase the cost of a school lunch
by as much as $0.28 per meal. The increase in funding provided in the
reauthorization is set at $0.06 per lunch, significantly less than the
estimated actual cost of implementation.
These cost increases will be borne by local school districts, which
will likely be forced to increase prices on paid lunches, resulting in
a reduction in overall participation rates.
How does the Department plan to deal with rising food commodity
costs?
Answer. Beginning October 2012, school food authorities that meet
the new meal patterns will receive a $0.06 lunch reimbursement rate
increase authorized by the Healthy, Hunger-Free Kids Act of 2010
(HHFKA). Furthermore, the HHFKA requires that schools set an adequate
price for paid lunches so that schools receive as much revenue from
paid lunches as the Federal program provides for free lunches. The
HHFKA also requires that schools set competitive prices for foods sold
outside of the reimbursable meal so that revenues received from the
sale of nonprogram foods equal the cost of obtaining them. When taken
together, the additional Federal reimbursement provided for improved
meals and the non-Federal revenue generated by the aforementioned
provisions will, on average, make sufficient resources available for
schools to meet the new meal requirements. Also, it is important to
note that over 3,000 schools receiving the HealthierUS School Challenge
(HUSSC) awards report they have been able to achieve similar standards
without significant cost increases. To date, 61 Missouri schools have
been recognized as HUSSC award winners, including 12 schools that were
recognized at the Silver level.
In addition, one key way that USDA helps schools provide cost-
effective, nutritious meals is by providing agricultural commodities in
the form of USDA Foods. The USDA Foods program helps schools stretch
limited food budgets by providing high-quality fruits, vegetables,
meat, fish, poultry, dairy, and grains. School commodities, which
represent approximately 15-20 percent of the food on the cafeteria
serving line, now include more fruits and vegetables, more whole
grains, and more food that is lower in sugar, salt, and fat than ever
before. For example, USDA purchased nearly $300 million in canned,
fresh, frozen, and dried fruits and vegetables for schools through the
USDA Foods program and the Department of Defense (DOD) Fresh Fruit and
Vegetable Program in fiscal year 2011. The USDA Foods program is well
positioned to help schools meet the new meal requirements and we are
confident that most of the schools will continue to benefit from this
program.
Question. Does the Department have a plan for dealing with
increased costs and the burdens these costs will place on public
schools?
Answer. Careful consideration of cost and logistical issues were an
important part of developing the updated nutrition standards for the
school meals programs. USDA is committed to ensuring that any such
standards are practical and accompanied by extensive guidance and
implementation assistance for our school partners. As part of the
Healthy, Hunger-Free Kids Act of 2010, USDA built the new rule around
recommendations from an Institute of Medicine expert panel, updated
with key changes from the 2010 Dietary Guidelines for Americans.
Getting the science right is critical to better nutrition and health
for our children.
We received unprecedented public participation and input on the
proposed standards, and made modifications to the proposed rule where
appropriate. As a result, the final standards are much less costly than
the proposed standards, provide additional time for implementation of
some key changes, and better accommodate the administrative constraints
facing schools and States. These responsible reforms do what is right
for children's health in a way that is practical and achievable in
schools across the Nation. USDA's estimate shows implementation of the
new nutrition standards for school lunches and breakfasts will cost
$3.2 billion over the next 5 years. This is less than half of the
proposed standards' originally estimated cost of $6.8 billion.
In addition, we believe the $0.06 lunch reimbursement rate increase
authorized by the Healthy, Hunger-Free Kids Act of 2010 along with the
revenue support provisions noted in the previous response such as the
non-Federal revenue generated by schools setting an adequate price for
paid lunches so that schools receive as much revenue from paid lunches
as the Federal program provides for free lunches and the requirement
that schools set competitive prices for foods sold outside of the
reimbursable meal so that revenues received from the sale of nonprogram
foods equal the cost of obtaining them, will make sufficient resources
available for schools to meet the new meal requirements. Finally, we
are working on technical assistance and menu planning materials to help
schools plan and prepare nutritious meals in a cost-effective manner,
and will make those materials available as soon as they are complete.
BUDGET IMPACT OF COMPETITIVE STANDARDS RULE
Question. It's clear from speaking to many of the schools in
Missouri that they depend on revenue from foods sold outside of the
National School Lunch & Breakfast Programs to give them greater ability
to purchase healthier options for school meals.
There is a lot of anxiety in the school foodservice community over
how new competitive foods' standards will impact this revenue stream,
particularly at a time when school cafeterias are being asked to cut
their budgets.
I understand that the Department believes schools should expect
increased revenue from competitive foods lines as a result of the new
standards.
What data you are basing this assumption on?
Answer. The Department projected increased revenue from competitive
foods as a result of regulations implementing section 206 of the
Healthy, Hunger-Free Kids Act of 2010 (HHFKA). The rule, published in
the Federal Register on June 17, 2011 (76 FR 35301), requires school
food authorities (SFAs) to set prices for nonprogram foods purchased
with SFA funds, a subset of competitive foods, at a level sufficient to
generate revenue proportionate to their share of SFA food costs. The
Department estimated that HHFKA section 206 would generate $7.3 billion
in additional SFA revenue over 5 years. The primary source for that
estimate was USDA's school year 2005-2006 School Lunch and Breakfast
Cost Study. That study found that nonprogram foods generated revenue
for SFAs equal to just 71.3 percent of their reported costs of
production. Counter to common perception, on average, the revenue
generated by program meals subsidizes the production of other SFA foods
when labor and overhead costs are properly allocated to all foods
prepared with SFA funds.
Elimination of that subsidy is the source of the revenue generated
by HHFKA section 206--not nutrition standards for competitive foods,
which are still under development. Whatever the ultimate impact of
those nutrition standards on competitive food sales, section 206
ensures that competitive foods will not divert revenue from the
production of reimbursable meals. Reforming SFA accounts in this manner
frees up program revenue for the investments necessary to meet new meal
standards.
Question. Do you plan to perform any sort of assessment on impact
of the competitive foods standards on school cafeteria budgets?
Answer. Yes. The Department will begin data collection in school
year 2014-2015 for a ``School Nutrition and Meal Cost Study''. That
study will examine both the school nutrition environment and school
foodservice operations. The study will assess the impact of nutrition
standards on the content of reimbursable meals and competitive foods,
and will compare the revenues generated by each of these to their
allocated share of SFA costs.
______
Question Submitted by Senator Tom Harkin
LEAN FINELY TEXTURED BEEF
Question. In the light of the large amount of press attention
recently given to a product called lean finely textured beef (LFTB), I
would like to clarify for the record some aspects of the situation. As
I understand it, the Department of Agriculture was informed and
reviewed the process and technology involved in producing lean finely
textured beef and did not raise problems with the process, nor did the
Department indicate a problem with including it in what is sold as
``ground beef'' without any special labeling. It is also my
understanding that the Food and Drug Administration allows the use of
ammonia in food under a designation of ``generally recognized as
safe.'' The factual circumstances seem to show that the company that
developed the process felt it was applying an innovative technology and
addressing food safety risks in doing so, again, with the knowledge of
and effectively an OK from the Department of Agriculture. Now the
company has suspended operations at several plants and jobs of hundreds
of workers are in doubt.
My question is simply, does lean finely textured beef meet the
applicable food safety standards and criteria of the Department of
Agriculture?
Answer. Yes, lean finely textured beef (LFTB) products meet Federal
food safety standards. The process used to produce LFTB is safe, and
adding LFTB to ground beef does not make that ground beef any less safe
to consume.
______
Questions Submitted by Senator Susan M. Collins
FOOD SAFETY
Question. I understand that the Department of Agriculture (the
Department) has announced that it is preparing to propose new
regulations for the grinding of raw beef that would require additional
recordkeeping to help the Department trace outbreaks back to their
source. It has been reported that these new regulations, which have not
yet been published, would require retail stores to keep detailed
records identifying the supplier and the quantities of all source
materials used in raw ground beef products. The Department has long
encouraged retail stores to keep such detailed records, but has not
required them to do so. The Department has indicated that it considers
the use of beef trimmings without detailed recordkeeping as a ``high-
risk'' practice.
What additional actions is the Department taking or proposing to
take to improve its ability to prevent foods containing dangerous
pathogens from ever leaving the slaughterhouse, processing facility, or
entering the retail chain?
Answer. FSIS announced and asked for comment on a new ``test and
hold'' requirement for the meat and poultry industry that, once
implemented, will significantly reduce consumer exposure to unsafe
food. When the policy is finalized, industry will be required to hold
products that FSIS has sampled for microbiological testing until the
test results are received. The product will be released if the results
show that it is safe to move in commerce. This approach could have
prevented 22 recalls during fiscal year 2009 and fiscal year 2010.
Under this policy, FSIS expects fewer recalls by industry, fewer
illnesses, and increased consumer confidence in the safety of the food
supply. The agency is also announcing new procedures for tracing
product that is positive for E. coli O157 to its supplier as well as
actions that will strengthen its implementation of HACCP.
Question. What steps is the Department taking to educate consumers
about the risks of food-borne illness, the dangers and avoidance of
cross contamination, and the need to handle and cook meat properly to
ensure it is safe for consumption?
Answer. On June 28, 2011, FSIS launched a joint national multimedia
campaign with the U.S. Department of Health and Human Services to help
families prevent food poisoning: The Food Safe Families--Check Your
Steps campaign. The campaign urges consumers to remember four key steps
to food safety: Clean (surfaces, utensils, and hands), separate (raw
meat and poultry from other foods), cook (to a safe temperature), and
chill (raw and prepared food). We have reached millions, in English and
Spanish, using a variety of donated media, including television, radio,
print media, social media tools, and the Internet.
On May 5, 2011, FSIS launched the Mobile Ask Karen application
(m.AskKaren.gov on your phone's mobile browser), a Web-based smartphone
application that gives consumers another way to access the only U.S.
Government-sponsored food safety virtual-representative. Consumers can
search by topic and products, send e-mails, or use the chat feature,
all via their mobile devices. Thus, users can get answers to their food
safety questions anywhere: At the grocery store, barbecue grill, and
kitchen stovetop.
During fiscal year 2011, the USDA Food Safety Discovery Zone, a new
and improved USDA Food Safety Mobile, visited grocery stores, schools,
and local community events to educate consumers about food safety and
to promote the Food Safe Families Campaign. The Discovery Zone improves
consumers' awareness of the risks associated with mishandling food and
provides in-depth, hands-on demonstrations of the steps they can take
to reduce their risk of contracting a foodborne illness.
NATIONAL SCHOOL LUNCH PROGRAM
Question. Recently the Department purchased for use in the National
School Lunch Program a product that is commonly referred to as ``pink
slime,'' known in the industry as ``boneless lean beef trimmings'' or
``lean finely textured beef,'' as an additive in ground beef. This
product is reportedly treated with ammonium hydroxide gas, suggesting
that decontamination is necessary to ensure the product is safe to eat.
What analysis has the Department done to determine whether this product
is safe for consumption?
Answer. Ammonium hydroxide is used in the production of lean finely
textured beef (LFTB) as a pH control agent to help reduce harmful
bacteria. Ammonium hydroxide, produced by mixing anhydrous ammonia
(ammonia gas) with the natural moisture in LFTB, was determined to be
Generally Recognized as Safe (GRAS) by the Food and Drug Administration
(FDA) in 1974, after extensive review and a rulemaking process (21 CFR
184.1139). USDA, after consultation with FDA, determined that ammonium
hydroxide is safe and suitable for use in the production of meat and
poultry products (FSIS Directive 7,120.1).
Question. Have there been incidents of food-borne contamination in
products containing pink slime?
Answer. Some ammoniated beef has been shown to be contaminated with
E. coli O157:H7, and such product has been excluded or removed from
commerce under the same procedures FSIS employs for any product it
regulates.
Question. Parents in Maine have contacted school districts to
inquire about the safety and wholesomeness of products containing this
additive. Are there any health implications, particularly for school-
age children, associated with consuming foods that have been treated
with ammonium hydroxide?
Answer. No. Ammonium hydroxide is accepted as GRAS for this use.
Question. Does the Department plan to undertake any additional
studies or actions to ensure that these products are safe for
consumption by the public and by our Nation's school children?
Answer. No. No evidence has been presented or cited that would
raise a question about the GRAS status of this use of ammonium
hydroxide. However, based on requests from school districts across the
country, USDA announced on March 15 that it would offer more choices in
the National School Lunch Program in terms of purchases of ground beef
products.
LEAN FINELY TEXTURED BEEF
Question. I understand that the Department has recently announced
it will give schools the choice of using products that do not contain
pink slime.
What will the Department do with unwanted product that contains
this additive that, in some cases, has already been delivered to school
districts?
Answer. On March 30, a policy memo was sent to State distributing
agencies (SDAs) and school food authorities (SFAs) that not only
reaffirmed the safety of lean finely textured beef (LFTB) but also
outlined the options available for the treatment of their current
inventories if recipients chose not to utilize the product as intended.
USDA does strongly encourage all SDAs and SFAs that have ordered
donated beef products to use them as intended but understands the
desires of certain recipient Agencies not to do so. However, USDA
cannot provide entitlement credit or reimbursement for any processing-
related fees or replacement product. If the SFA does not wish to use
donated beef products that contain LFTB, the SDA must determine if the
donated products can be reallocated to another SFA that is willing to
use them. If donated beef products in SDA inventories cannot be
reallocated to another SFA, the SDA must determine if they can be
transferred to another SDA for distribution to SFAs in the National
School Lunch Program, or if such foods can be transferred for use in
the Emergency Food Assistance Program (TEFAP), or another eligible
charitable institution. SDAs will be responsible for any transportation
costs, and there will be no compensation to an SDA or SFA for lost
entitlements.
USDA continues to affirm the safety of LFTB products. However, the
Department was overwhelmed with inquiries from schools and parents who
did not want it to be allowed as a component in the ground beef that
USDA purchases. The schools are our customers and they were demanding
choices. The decision was driven by customer demand.
Question. What is the estimated cost to the Department and to
schools of choosing not to use products containing this additive?
Answer. AMS estimates that the cost of beef products that do not
allow for the inclusion of LFTB could run 3 percent higher than the
comparable LFTB-allowing beef product specifications. Depending on
whether a school food authority is ordering donated products or using
non-entitlement funds, selecting this option could either result in
them receiving a smaller volume of products or a higher cost. USDA does
not expect there to be any increased direct costs to the Department
from providing the option.
AGRICULTURAL RESEARCH SERVICE PROGRAM REALLOCATION
Question. In fiscal year 2012, and in the 10 previous fiscal years,
ARS and the potato industry, through a potato research initiative, have
cooperated to identify research projects that have scientific merit and
address potato industry priorities. ARS researchers serve as the lead
investigators on all projects and collaborate with land grant
universities and other private entities to conduct this research.
The President's fiscal year 2013 budget request proposes to
reallocate $4.6 million to improve the control of diseases attacking
small fruits, nursery crops, potatoes, and other crops, through the
development of resistant varieties and disease management strategies.
Preventing the damaging effects of pests and diseases requires the
consistent application of sound pest management strategies, including
the development of disease- and pest-resistant crop varieties. These
strategies are the result of years of collaborative efforts among ARS,
research institutions, private industry, and local producers that have
resulted in better pest management, reduced environmental impact,
improved quality, and increased yield. Can you explain how the
Department's proposed reallocation will affect these partnerships? Is
USDA committed to providing adequate funding for pest and disease
management programs, including the development of pest and disease-
resistant varieties through ARS that address the potato industry's
identified research priorities?
How does the Department intend to fund and administer these
programs, and what resources will USDA commit to these programs to
ensure they are able to address evolving pest and disease management
challenges facing producers?
Answer. USDA will maintain its strong partnerships with its
cooperators, customers, and stakeholders, including agricultural
producers and universities. These close working relationships are an
integral part of plant breeding and pathology research programs
nationwide, and the Department will use its dedicated resources to
continue these partnerships that address producer priorities in plant
production and protection.
Public plant breeding programs are crucial in meeting needs
identified by the potato and other industries. Development of improved
germplasm and varieties, as needed, with enhanced disease and pest
protection is a high-priority research initiative within the
Department.
USDA research will continue to address producer needs for plant
health and sustainability. Research priorities will continue to be
established through a continuing dialogue with customers and
stakeholders.
NATIONAL INSTITUTE OF FOOD AND AGRICULTURE CROP PROTECTION PROGRAM
Question. The President's fiscal year 2013 budget proposes to
consolidate several pest management programs into a single ``Crop
Protection'' program and to provide $29.1 million for that program in
the next fiscal year. Integrated Pest Management (IPM) programs allow
research universities to partner with State, local, and regional
producers to conduct critical field work and research, perform field
inspections, and provide producer notifications. These steps are
critical to converting laboratory research into improved pest and
disease management strategies that can be applied in the field to
reduce pesticide application and improve crop quality and yield.
Please describe how the Department intends to administer these
important programs should such a consolidation occur. How would the
proposed consolidation affect ongoing partnerships with States and
research universities to transfer laboratory research to the field? How
much of the $29.1 million that is requested would go to fund IPM
programs, and specifically, potato IPM programs? How much of the
requested funding under this proposed consolidation would go to Minor
Crop Pest Management (IR-4) program efforts?
Answer. USDA is currently soliciting broad stakeholder input on the
appropriate design of the Crop Protection Program in anticipation of
funding in fiscal year 2013. Our goal is to improve the efficiency of
the program and enhance NIFA's ability to support research, education,
and extension activities needed to assist in global food security and
respond to other major societal challenges.
[Additional information is provided below.]
The President's budget for fiscal year 2013 proposed the
consolidation of six pest management budget lines into the Crop
Protection Program. The budget proposal identifies five priority areas
that will be supported by the new program:
--The development of crop protection tactics and tools;
--The development of diversified IPM systems;
--Enhancing agricultural biosecurity;
--Developing IPM for a sustainable society; and
--Developing the next generation of IPM scientists.
These priority areas encompass core research, extension and service
activities supported by the six budget lines that will be consolidated.
As we implement the new program, we will try to minimize disruption to
ongoing efforts that are currently supported by the six budget lines,
which includes the IR-4 program. We value the partnerships that have
developed as a result of the Department's involvement with these pest
management efforts over the past 50 years, and we remain committed to
supporting critical research, extension and service efforts in fiscal
year 2013 and beyond. We believe that the proposed budget consolidation
and creation of the Crop Protection Program will strengthen these
partnerships, and will result in the most effective and efficient use
of Federal funding appropriated to the National Institute of Food and
Agriculture for pest management efforts. Funding allocations for this
competitive program will be determined when 2013 funding is provided.
NORTHEAST REGIONAL AGRICULTURAL RESEARCH
Question. One of the major strengths of American agriculture is the
wide variety of crops grown, and the ability of different geographic
regions to produce high-quality, often unique, agricultural products.
USDA research activities through the ARS play a key role in leveraging
departmental resources, academic expertise, and the input of regional
producers to improve quality and expand production of many crops. The
President's fiscal year 2013 budget proposes to close several ARS
laboratories, including the New England Plant, Soil, and Water Research
Center--the only ARS lab in the six-State New England Region that
conducts crop, soil, water, environmental, and economic research.
The closing of ARS labs represents a significant loss not only for
regional producers, but also for affiliated research universities that
will lose critical staff and resources. These losses can jeopardize the
ability of universities and industry to apply prior research and
develop better pest and disease management strategies. Moreover, the
closure of the only plant, soil, and water ARS laboratory in New
England hardens the impression that the Department does not view the
Northeast's agricultural sector as worthy of growth, improvement, or
investment. Does the Department believe it is important to maintain an
ARS laboratory research footprint in New England and other regions of
the country? Has the Department analyzed the potential economic impacts
of closing these labs on regional producers who may directly benefit
from the applied research that these labs can generate?
Answer. ARS is a national research institution; although many ARS
research laboratories address the needs of local producers, these
laboratories also often serve as model systems. Thus, research
conducted at many ARS locations yields benefits to producers in Maine
and elsewhere. USDA believes that there are significant benefits to
maintaining research facilities across the range of climatic, soil, and
cropping systems represented in the United States. Though the Orono
facility is proposed for closure, ARS is maintaining a comprehensive
set of research laboratories in New York, Pennsylvania, Maryland, and
West Virginia that continue to address the needs of producers in the
northeast. Agriculture in the United States is seldom extremely
location-specific. Although crops usually are particularly productive
in certain combinations of soils and climate, those conditions can
often be found at multiple locations. Taking advantage of the
differences across the country contributes to the important
characteristic of resilience leading to increased food security.
The Department has not undertaken a comprehensive economic analysis
of the impacts on regional producers from the proposed closures. Aside
from Orono, ARS conducts many research projects around the concept of
Agricultural Systems Competitiveness and Sustainability at research
locations in several States. In most instances, these projects address
complete cropping systems relevant to various production areas across
the country. For example, many research findings in sustainable potato
production systems in Washington and Oregon benefit producers in the
northeast. Although the research in those locations is by necessity
conducted on local crops and soils, the principles that are developed
are beneficial in a broad range of crops, soils, and climates.
______
Questions Submitted by Senator Jerry Moran
COMPETITIVE FOOD RULE
Question. Changes to the National School Lunch and Breakfast
Programs have imposed new challenges and costs on schools in Kansas and
across the country. While I am glad the implementation cost of the
final meal pattern rule is lower than what was initially proposed, I am
concerned about what the cost may be of the competitive foods rule USDA
is currently working on. What assurances can you give me and school
nutritionists in Kansas who are already having difficulty planning
menus for next year that the forthcoming rule on competitive foods will
not impose costs and compliance hurdles similar to those that were
proposed in the initial meal pattern rule?
Answer. As you are aware, the Healthy, Hunger-Free Kids Act (HHFKA)
requires that the USDA develop nutrition standards for foods sold in
schools outside the National School Lunch Program (NSLP) and the School
Breakfast Program (SBP). It also requires they be consistent with the
most recent Dietary Guidelines for Americans and take a number of
important issues into consideration, including the practical
application of the nutrition standards in schools. A proposed rule to
establish such standards is currently under development.
We are aware that school districts have concerns regarding the
potential financial and logistical impacts associated with the
implementation of these standards and have received extensive input
from a variety of stakeholders on how to best address those concerns.
As we continue our work to develop the proposed rule, a great deal of
time has been spent analyzing current scientific information and school
practices as well as voluntary standards for food sold outside of the
NSLP and SBP that have been recommended by a number of nongovernmental
organizations. We have also considered the costs associated with
implementation of such standards for all foods sold to students in
school. I am committed to ensuring that any such standards are
practical and accompanied by extensive guidance and assistance for our
school partners as implementation moves forward. In addition, I
understand the need to aim for consistency with the NSLP meal pattern
regulation in areas in which the regulations may overlap, particularly
as a means to ensure the regulations do not place undue burden or
complexity on school staff who operate food service under both
standards. We look forward to receiving public comments once the
proposal is published and want to assure you that such comments will be
most carefully considered as we develop the final rule.
Question. Last year, in the Consolidated and Further Continuing
Appropriations Act (Public Law 112-55), Congress expressed concern
about sodium reduction targets specified in the proposed meal pattern
rule. Is the Department taking these concerns about aggressive sodium
reduction targets into account as it finalizes its proposed rule for
competitive foods?
Answer. We understand the complexity of balancing ambitious
approaches to improving the food intake of children with the needs of
program operators and look forward to receiving public comments once
the competitive foods proposal is published. I want to assure you that
such comments will be carefully considered as we develop the final
rule. We continue to be committed to ensuring a careful review of
current science and technologies before implementing the ambitious, but
important, sodium reduction targets included in the school meal
patterns final rule and will apply these considerations to our work on
competitive foods.
______
Questions Submitted by Senator Tim Johnson
OFFICE CLOSURES
Question. Let me first thank you for your February 13, 2012,
response to the letter I sent with Senator Thune and Representative
Noem concerning your January 9, 2012, announcement to close 259 USDA
offices, facilities, and laboratories across the country, including
four FSA offices in my home State of South Dakota. At the same time, I
was disappointed that several of our questions were not addressed in
your response. I recognize, as you have stated publicly multiple times,
that the Department has been faced with difficult choices given reduced
budgets, and that you faced a choice of either closing offices or
instituting furloughs. The situation in which you find yourself is
certainly unfortunate; the rush to cut Federal spending by some in
Congress without regard for the impact has begun to show the
consequences.
Recognizing these difficult circumstances, I would like to get a
better idea of how you identified offices for closure. The 2008 farm
bill directed you to use a specific set of criteria. Specifically, my
constituents would appreciate a better understanding of why the
Department utilized ``as the crow flies'' rather than driving miles for
determining the mileage between offices; this has been of significant
concern for my constituents, because in multiple cases, the distance
between offices in question is actually greater than 20 miles. As we
stated in our letter, the Department utilizes miles driven when
determining mileage for official Government travel with motor vehicles;
particularly given the unique geographical characteristics of some of
the affected offices, why did the Department utilize the ``as the crow
flies'' standard?
Answer. USDA selected Euclidian miles because it represents a
precise distance between two points which is not subject to
interpretation.
Question. Additionally, some of the offices slated for closure,
though minimally staffed at the time the decisions were made, have
still had a significant workload. As we stated in our letter, using the
actual number of employees in the office at any given time is an
unreliable and inconsistent staffing measure as this number can vary
greatly due to retirements and transfers. Why did the Department use
the actual number of employees for determining whether county offices
met this statutory guideline?
Answer. USDA used the number of staff currently employed in each
office in order to strictly adhere to the criteria laid out in the 2008
farm bill.
HOUSE BUDGET RESOLUTION
Question. Can you outline what the impact will be of the budget
resolution recently passed in the House of Representatives, if enacted
on your ability to operate in the future, and in particular, the degree
to which you may need to consider additional office closures?
Answer. The President's budget request was fiscally responsible and
included reductions in many discretionary programs. For any further
reductions beyond the President's budget we would need to further
review our priorities and make appropriate adjustments.
COUNTRY OF ORIGIN LABELING
Question. Thank you for your continued efforts in defending our
country-of-origin labeling (COOL) program. As you know, I've worked on
this issue for many years, and I am pleased that USDA, under your
leadership, has finally implemented the program. Additionally, I am
very pleased that the administration will be appealing the World Trade
Organization Dispute Settlement Panel's decision concerning our COOL
program. Can you provide a general timeframe for the appeals process
moving forward and the role that USDA will play in the process?
Answer. The parties to the dispute have already filed all their
submissions in the appeal. The WTO Appellate Body will hold the hearing
in this appeal on May 2-3, 2012. A final decision is expected sometime
during the summer of 2012. USDA's COOL team of regulators, economists,
trade policy experts and lawyers has been working closely with United
States Trade Representative's litigation team throughout this dispute,
both at the Panel stage and at the appellate stage.
SUN GRANT INITIATIVE
Question. As you know, the Sun Grant Initiative is an important
university research and education program that addresses national
priorities to develop bioenergy and bioproducts at regional and local
levels. The initiative broadens the role of land-grant universities to
conduct research and educational programs that emphasize renewable
energy systems based on agriculture and renewable resources.
Particularly given the administration's emphasis on the importance of
the development of renewable energy, why does the administration's
budget propose zero funding for this nationally authorized program?
Answer. A decrease is proposed so funding can be redirected to
support higher priority activities, and is consistent with the
administration's policy to redirect available resources, as
appropriate, and consistent with the agency mission, from lower
priority areas to other science and technology activities. Alternative
funding from the Agriculture and Food Research Initiative and/or
formula funding may be used to support aspects of the program deemed to
be of priority at State and/or local levels. For example, the 2013
budget proposes reallocating funding within AFRI towards bio-based
energy technologies, increasing funding towards this initiative by $30
million.
______
Questions Submitted by Senator Mark L. Pryor
AGRICULTURAL RESEARCH SERVICE FISCAL YEAR 2012 FUNDING
Question. It's my understanding that USDA's fiscal year 2012 budget
request for Agricultural Research Service (ARS) underestimated the
funding needed to close the 12 ARS laboratories that were proposed for
closure in fiscal year 2012. As a result I see that ARS has taken
action to find the needed $38 million elsewhere in the budget. I note
three things happened to make up this shortfall:
--All ARS programs were cut an estimated 0.7 percent;
--ARS has frozen all vacancies; and
--ARS has proposed to reduce all extramural activities by 30 percent.
Do these three rounds of cuts fully make up for the budgeting
error?
Answer. I do not believe this was a budgeting error. ARS' fiscal
year 2012 enacted level was $43 million below what was proposed in the
fiscal year 2012 President's budget and $38 million below the fiscal
year 2011 enacted. This permanent reduction eliminated ARS' ability to
offset the costs of the closures with program funds associated with
each of the 12 laboratories. The one-time costs associated with the
relocation or separation of affected personnel and the disposal of
property are estimated at $39 million in fiscal year 2012. These one-
time costs are being financed by temporary reductions to remaining ARS
research programs. The resources accumulated from the temporary
assessments will cover the one-time costs in fiscal year 2012.
Question. Why do these cuts, to make up for an ARS budgetary
mistake, target extramural activities?
Answer. I do not believe this was a budgetary mistake. The
permanent reduction of $38 million from fiscal year 2011 levels
required that all ARS research, not just sponsored extramural research,
needed to be reduced to pay for the closures. USDA sought to balance
the impact on intramural and extramural programs through an across-the-
board reduction of intramural research, a hiring freeze, and extramural
funding reduction. Together, these actions will finance the one-time
costs to ARS for the facility closures without closing other ARS
research projects and let ARS partners continue ARS extramural research
with 70 percent of the funding. USDA will also continue to support
high-priority extramural research through other USDA agencies, such as
the National Institute of Food and Agriculture (NIFA).
Question. Why is the cut not across the board like the earlier 0.7-
percent across-the-board cut and the freeze on all ARS vacancies?
Answer. The approach to financing the one-time costs seeks to
minimize the impact to USDA personnel. Additional temporary reductions
to in-house research supported by ARS personnel would potentially
impact additional ARS employees and require significant reductions in
ARS intramural research.
Question. Was there a measured approach used to evaluate
productivity or performance?
Answer. To fund the one-time costs associated with closing the 12
laboratories, all of ARS research was reduced through an across-the-
board reduction of intramural research, a hiring freeze, and an
extramural funding reduction. This balanced approach to reductions did
not evaluate productivity or performance.
Question. Who made this decision to cut extramural facilities on
their expected fiscal year 2012 funds to cover the closure costs?
Answer. I made the decision to assess the funding for extramural-
supported research, as well as ongoing in-house programs, based on
recommendations from ARS and other staff.
Question. Is there an appeal process?
Answer. USDA has not established a process to appeal the temporary
reductions necessary to finance the one-time costs associated with
closing the 12 laboratories.
Question. What other sources of funding were under discussion to
help cover the unit closure budget shortfall?
Answer. The Department's ability to finance the one-time costs is
limited to the resources appropriated to conduct the agency's research
programs. All funds appropriated to ARS are used to support the
salaries of ARS personnel and other necessary expenses to conduct
research, including cooperative agreements with our extramural research
partners that contribute to specific ARS program objectives. Since
2010, the ARS Salaries and Expenses budget has been reduced by over 7
percent, while the need to invest in research continues to grow. Shared
sacrifice has to be made given limited resources.
DALE BUMPERS SMALL FARMS RESEARCH CENTER
Question. The fiscal year 2013 budget request includes a proposal
to effectively close the Dale Bumpers Small Farms Research Center in
Booneville, Arkansas, by redirecting all its funding elsewhere. I
obviously do not support this proposal. In light of the closure of
Brooksville, Florida, in 2011, and the expected closures of
Watkinsville, Georgia, and Beaver, West Virginia, by June 1, 2012,
where will ARS conduct grazing research for the benefit of the eastern
United States if it closes Booneville, too?
Answer. Grazing research for the Eastern United States is conducted
at ARS locations in University Park, Pennsylvania (Pasture Systems and
Watershed Management Research Unit); Lexington, Kentucky (Forage Animal
Production Research Unit); Madison, Wisconsin (U.S. Dairy Forage
Research Center); Morris, Minnesota (North Central Soil Conservation
Research Laboratory); Mandan, North Dakota (North Great Plains Research
Laboratory); Tifton, Georgia (Southeast Watershed Research Unit); and
El Reno, Oklahoma (Grazinglands Research Laboratory). The research at
these units is done in cooperation with university and industry
partners.
Question. Booneville is the home of unique long-term water quality
research including a 20-year grazing study that began in 2003 using 15
small watersheds in Booneville, and a 10-year study on the effects of
poultry litter application method on nutrient runoff to watersheds.
Both of these studies promise answers to critical issues plaguing the
entire region. What are your plans to continue this highly valuable
research if Booneville is abandoned?
Answer. ARS maintains a nationwide network of research watersheds
at 22 locations. Similar research is being conducted in watersheds at
University Park, Pennsylvania; Beltsville, Maryland; Florence, South
Carolina; Madison, Wisconsin; Tifton, Georgia; Fayetteville, Arkansas;
Bushland, Texas; St. Paul, Minnesota; Mississippi State, Mississippi;
Bowling Green; Kentucky; and Clay Center, Nebraska. The research is
addressing animal production systems for cattle beef and dairy, swine,
and poultry. The mitigation of poultry litter impacts is specifically
addressed by research at University Park, Fayetteville, Mississippi
State, and Tifton.
Question. Additionally, Booneville is home to the only dedicated
ARS sheep and goat research program. Sheep and goats are an ideal
enterprise for small farms for the production of meat, wool, or milk,
and there is an exploding demand for these products in the United
States. What are your plans for conducting research in this area if you
abandon Booneville?
Answer. In addition to Booneville, ARS conducts research in sheep
production at other locations--Clay Center, Nebraska (U.S. Meat Animal
Research Center); Dubois, Idaho (U.S. Sheep Experiment Station); and El
Reno, Oklahoma (Grazinglands Research Laboratory). Research at these
locations is focused on the development of genetic resources for the
sheep industry including an ``easy care'' genetic composite for small
flock producers in the Midwestern and Eastern United States, and
maternal and terminal lines adapted for large Western and Southwestern
range flock production systems. This research program is also
coordinated with the rangeland programs to examine the interaction
between sheep and rangeland ecosystem services with specific focus on
grazing and fire remediation, invasive weeds, and rangeland ecology.
Additional research at the Grazinglands Research Laboratory is focused
on grazing system forage using pastures and winter annual forages to
reduce production costs and environmental impacts associated with
grazing for both small and large animal ruminants. ARS is planning to
initiate grazing goat research at El Reno in cooperation with the
Langston University Goat Research Center. ARS is providing leadership
for an international consortium which is developing a project to
sequence the goat genome. This project is being developed by ARS
scientists in Beltsville, Maryland, at the Beltsville Agriculture
Research Center.
Question. In your fiscal year 2012 budget proposal, this same
Center was proposed to be one of the sites for a major increase in
funding as part of an ARS biofuels feedstock initiative. Now this year
ARS is apparently targeting for elimination grazing research and
research that benefits small producers. I understand the budget
realities the agency faces, but the on-again, off-again, chaotic nature
of selecting funding priorities is out of line with the normal
activities of a research agency focused on long-term, basic research.
Can you explain the rationale behind the changes in ARS priorities from
year-to-year?
Answer. A portion of a President's budget request for $10 million
in 2010, and $6 million in 2011 to the USDA Regional Biomass Research
Centers was designated for Booneville, but these funds were not
appropriated. The Booneville location now has only three scientist
positions. Because of the loss of critical mass of scientists, and
adequate funding to support priority biomass research at Booneville,
small ruminant research will be addressed at other ARS locations
including applications to small scale producers for goats at El Reno,
Oklahoma, and coordination of regional biomass research at Temple,
Texas.
DELTA OBESITY PREVENTION UNIT
Question. USDA's fiscal year 2013 budget request proposes to
eliminate funding for the Delta Obesity Prevention Research Unit in
Little Rock, Arkansas. I am opposed to this proposed elimination. In
previous years, ARS has proposed changing priorities for the Delta
Obesity Prevention Research Unit. It was suggested by ARS that funding
redirected from this unit would be used at AR Children's Nutrition
Center, Tufts, and Houston to augment basic nutrition research that
could be targeted to the Delta region. What happened to that proposal?
This year's budget proposal simply proposes to terminate this funding
and redirect ``to more critical needs.''
Answer. The President's budget for fiscal year 2012 proposed
redirection of funds from the Delta Obesity Prevention Research Unit
(DOPRU) to a study that would evaluate factors affecting adherence to
the Dietary Guidelines for Americans. The funds for that study were to
be reallocated to Beltsville, Maryland, but all six of the ARS Human
Nutrition Research Centers were to participate in the research and
would have received a share of those funds distributed from Beltsville.
This proposed reallocation was never implemented since Congress, in the
2012 conference report, directed that the funds continue to support
DOPRU. The proposed closure of DOPRU is part of the ARS proposed
termination of several predominantly extramural research projects.
CATFISH INSPECTION
Question. With passage of the Food, Conservation and Energy Act of
2008 Congress shifted inspection and regulation of catfish from the
Food and Drug Administration (FDA) to the United States Department of
Agriculture (USDA) Food Safety and Inspection Service (FSIS). Since
that time, USDA has undertaken a thorough process to implement this new
responsibility, including issuing a proposed rule and completing the
comment period on June 24, 2011. It has been almost 4 years since this
responsibility was given to USDA-FSIS. When will the final rule be
implemented?
Answer. Because there are many factors that influence rulemaking,
it is difficult to estimate when the final rule is published, but FSIS
will do so as soon as possible.
Question. What are the challenges with completing this rule?
Answer. As you know, the law provided that USDA define ``catfish,''
which is not as simple as it may seem. In the taxonomy of fish,
Siluriformes (the common name of which is ``catfish'') consist of 36
different families, among which are Ictaluridae (North American channel
and blue catfish) and Pangasiidae (which are common to Asia). While
some Siluriformes imported from Asia include those in the family
Ictaluridae, much of the product is in the family Pangasiidae. Thus,
there is a great deal of controversy surrounding the question of
whether ``catfish'' should be defined narrowly or broadly.
Question. Will you commit to issuing this final rule this year?
Answer. FSIS will publish a final rule as soon as possible.
FARM SERVICE AGENCY OFFICE CLOSURES
Question. Do you foresee any need to take further action beyond the
``Blueprint for Stronger Service'' initiative to further reduce the
number of Farm Service Agency (FSA) county offices?
Answer. There is currently no plan or proposal to close more than
the 131 FSA county offices identified on January 9, 2012.
Over the last 2 years, FSA's salaries and expenses appropriation
has been reduced by more than 5 percent. These reductions have
necessitated significant reductions in administrative spending, a
reduction in permanent staffing by 12.5 percent, and the proposed
consolidation of 131 offices in 32 States. These actions were designed
to bring the Agency's operating budget in line with the current and
expected future funding levels. USDA will continue to do its best to
serve America's farmers and ranchers within the funding level set by
Congress.
Question. How could the process used to consider USDA field office
consolidations be improved to involve stakeholders in the process
before these proposals are officially announced?
Answer. USDA adheres to congressional notification requirements in
the annual appropriations acts. For FSA, additional guidelines are laid
out in the 2008 farm bill.
The proposal to close 131 FSA county offices remains the Agency's
only proposal to close FSA offices. This proposal was announced on
January 9, 2012. Over the following month, FSA held public meetings in
each affected county and notified Congress of the proposed office
closures on February 27, 2012. The public meetings enabled stakeholders
to share their concerns with senior FSA leadership. FSA communicated
about the circumstances that led to proposed county office closures--
the need to manage the Agency under significantly reduced operational
spending, 12.5 percent fewer permanent staff, and an ever-increasing
workload, while continuing to deliver the best possible service to
farmers and ranchers. FSA's approach to consultation adhered to
statutory requirements, and provided a transparent and inclusive means
to communicate with affected parties.
Question. With 2,800 NRCS offices and only 2,100 FSA offices
remaining open across the country, how is USDA insuring that producers
are being adequately serviced in locations without both agencies
present?
Answer. We strongly believe that co-location is a great benefit to
producers, and we will continue to offer these arrangements wherever
possible. However, it is important to note that even before the
proposed closures were announced, not all FSA offices had an NRCS
presence. Further, we do not believe the proposed closures
significantly undermine our efforts to co-locate FSA and NRCS offices.
FSA is modernizing IT and improving its business processes so that
farmers will be able to do more of their business with FSA without
having to visit an office. If the proposed consolidations occur, FSA
will concentrate staff in its 2,113 remaining offices in order to
provide consistent service in fully staffed, fully functioning offices.
If the proposed consolidations take place, producers may choose any
county office that is convenient for them to conduct their FSA
business.
Question. Recently there has been a lot of emphasis on reorganizing
the field office structure of the Farm Service Agency in an attempt to
provide better more timely service to the producers they serve. Most
private businesses do not cut or make reductions at the customer level
until a complete review of their structure has been completed above the
field level. As I look at USDA's Blue Print for Success, it appears to
me that you have not made any attempts to review FSA's structure above
the field level to find needed savings. When does USDA plan on
reviewing and reorganizing USDA/FSA above the field level? Does USDA
have any plans to reduce the number of State offices?
Answer. FSA reviewed its operations at all levels to identify
administrative efficiencies that resulted in significant savings. FSA
also achieved needed savings by reducing staff levels in national,
State, and county offices by 12.5 percent. There is currently no plan
or proposal to close any offices other than the 131 FSA county offices
identified on January 9, 2012.
Question. Under USDA's Blueprint for Success, a number of county
offices met the criteria of two or fewer permanent full-time employees
after VERA (voluntary early retirement program) and VSIP (voluntary
incentive payment retirement program) programs in 2011. Some of these
offices have the workload to support four or more employees and
employed four or more FTEs when calendar year 2011 began. Because of
VERA and VSIP, some of these offices were quickly reduced to two FTEs.
When you looked at the number of employees for each office, did you
take into account the previous workload of each office?
Answer. The VERA and VSIP opportunities were implemented in order
to reduce staffing necessary to live within current and expected future
budget realities. To identify FSA offices for consolidation, USDA
followed criteria provided by Congress in section 14212 of the 2008
farm bill, which required, for any office closures, that the Secretary
``first close any offices of the Farm Service Agency that--(a) are
located less than 20 miles from another office of the Farm Service
Agency; and (b) have two or fewer permanent full-time employees.'' In
addition, FSA proposed for closure all offices with zero full-time,
permanent employees regardless of the distance to another FSA office.
Question. Office closure language included in the 2008 farm bill
called for offices located closer than 20 miles apart would be the
first offices considered for closure/consolidation. Under USDA's
Blueprint for Success, there are a number of cases where the navigable
miles between the proposed office to be closed and the proposed
receiving office is significantly more than 20 miles. You mentioned in
a previous letter that USDA used Euclidian miles in order to be more
objective. Why was it determined that 20 Euclidian miles were more
objective than 20 navigable road miles when developing the list of
offices proposed to be closed/consolidated?
Answer. USDA measured using Euclidian miles because Euclidean miles
offer no advantages to any particular county. Euclidean miles are the
most uniform and equitable unit of measurement for distance, regardless
of geography or terrain.
Question. Since 1996, USDA has prided itself in using the Service
Center for customers utilizing programs and services provided by any
agency in USDA. Repeatedly, USDA has stated the importance of having
all USDA agencies in a single location to provide maximum customer
service. Knowing 131 of the 259 USDA offices being proposed for closure
are FSA county offices, this will certainly cause the Service Center
concept to be abandoned in many areas. How can USDA maximize customer
service while abandoning the Service Center, causing USDA customers to
visit separate locations to transact business?
Answer. It is important to note that even before the proposed
closures were announced, not all FSA offices were Service Center
locations. Further, we do not believe the proposed closures undermine
the Service Center concept. However, we strongly believe the Service
Center concept is a great benefit to producers, and we will continue to
offer these arrangements wherever possible. We understand the concerns
of producers who will have to travel to another location to conduct
business with FSA once consolidations take effect. However, over the
past 3 years, FSA has had to make tough decisions to be able to
continue to operate within significantly reduced budgets.
FSA is modernizing IT and improving its business processes so that
farmers will be able to do more of their business with FSA without
having to visit an FSA office. FSA will concentrate staff in its
remaining offices in order to provide consistent service in fully
staffed, fully functioning offices. Producers affected by an office
closure will be able to choose any county office that is convenient for
them to conduct their FSA business.
SUBCOMMITTEE RECESS
Senator Kohl. And this hearing is recessed.
[Whereupon, at 3:53 p.m., Thursday, March 29, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]