[Senate Hearing 112-452]
[From the U.S. Government Publishing Office]








                                                        S. Hrg. 112-452

   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2012

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   on

                               H.R. 2112

 AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD 
 AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL 
         YEAR ENDING SEPTEMBER 30, 2012, AND FOR OTHER PURPOSES

                               __________

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

                               __________

         Printed for the use of the Committee on Appropriations




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                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi
TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 KAY BAILEY HUTCHISON, Texas
PATTY MURRAY, Washington             LAMAR ALEXANDER, Tennessee
DIANNE FEINSTEIN, California         SUSAN COLLINS, Maine
RICHARD J. DURBIN, Illinois          LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            LINDSEY GRAHAM, South Carolina
MARY L. LANDRIEU, Louisiana          MARK KIRK, Illinois
JACK REED, Rhode Island              DANIEL COATS, Indiana
FRANK R. LAUTENBERG, New Jersey      ROY BLUNT, Missouri
BEN NELSON, Nebraska                 JERRY MORAN, Kansas
MARK PRYOR, Arkansas                 JOHN HOEVEN, North Dakota
JON TESTER, Montana                  RON JOHNSON, Wisconsin
SHERROD BROWN, Ohio

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

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

                     HERB KOHL, Wisconsin, Chairman
TOM HARKIN, Iowa                     ROY BLUNT, Missouri
DIANNE FEINSTEIN, California         THAD COCHRAN, Mississippi
TIM JOHNSON, South Dakota            MITCH McCONNELL, Kentucky
BEN NELSON, Nebraska                 SUSAN COLLINS, Maine
MARK PRYOR, Arkansas                 JERRY MORAN, Kansas
SHERROD BROWN, Ohio                  JOHN HOEVEN, North Dakota
DANIEL K. INOUYE, Hawaii (ex 
    officio)

                           Professional Staff

                             Galen Fountain
                        Jessica Arden Frederick
                             Dianne Nellor
                        Stacy McBride (Minority)
                        Rachel Jones (Minority)

                         Administrative Support

                          Molly Barackman-Eder




















                            C O N T E N T S

                              ----------                              

                        Thursday, March 10, 2011

                                                                   Page

Department of Agriculture: Office of the Secretary...............     1
Material Submitted Subsequent to the Hearing.....................    63

                        Thursday, March 17, 2011

Department of Health and Human Services: Food and Drug 
  Administration.................................................    69
Nondepartmental Witnesses........................................   113

 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                        THURSDAY, MARCH 10, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:05 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Herb Kohl (chairman) presiding.
    Present: Senators Kohl, Nelson, Pryor, Brown, Blunt, 
Cochran, Collins, Moran, and Hoeven.

                       DEPARTMENT OF AGRICULTURE

                        Office of the Secretary

STATEMENT OF HON. TOM VILSACK, SECRETARY
ACCOMPANIED BY:
        KATHLEEN MERRIGAN, DEPUTY SECRETARY
        JOSEPH GLAUBER, CHIEF ECONOMIST
        MICHAEL YOUNG, DIRECTOR, OFFICE OF BUDGET AND PROGRAM ANALYSIS


                 opening statement of senator herb kohl


    Senator Kohl. The subcommittee will come to order.
    This is our first hearing on the President's fiscal year 
2012 budget.
    First, I want to welcome our new ranking member, Senator 
Roy Blunt.
    I'd also like to recognize the new members of this 
subcommittee, Senator Brown, Senator Moran, and Senator Hoeven. 
We look forward to working with each and every one of the new 
members of this subcommittee.
    And, Mr. Secretary, it's very good to see you again.
    I also want to welcome Deputy Secretary Merrigan and U.S. 
Department of Agriculture (USDA) Chief Economist Joseph 
Glauber. Also, we have with us today Mr. Mike Young, who is the 
new USDA Budget Director.
    Mr. Secretary, it's obvious that we are faced with 
tremendous challenges. The Nation is still struggling through 
economic recovery, while Government spending is being reduced 
by a big margin.
    Here at home, we feel the economic throes of unrest in 
distant parts of the world as oil supply lines are being shaken 
and our cost of energy rises hugely from 1 week to the next. On 
top of all this, the Federal Government is still operating on a 
continuing resolution for the current fiscal year. These are 
the realities.
    We all recognize that Government exists for a reason and 
there are some things that Government must do because it is the 
job of Government to do. Our food must be safe, our people must 
not go hungry, our farm and rural economies must remain strong, 
and we must never lose sight of the impact they have on our 
national economy. On the other hand, we are going to have to 
let go of some of the things that, while popular, are not 
essential. These are indeed days of hard decisions.
    The President's budget makes a good start in that 
direction. Some programs are cut and some are eliminated. At 
the same time, new initiatives are brought forward and the 
President is requesting increases in some programs. Our job is 
to review all of these priorities and make the hard decisions.
    The American people rely on USDA every day. The American 
people also rely on us to make sure their tax dollars are spent 
wisely. As Government spending declines, the need for wisdom in 
setting priorities has never been more acute. Mr. Secretary, we 
will look forward to your guidance on that very important task.
    As we continue, I'd like to take note that we have a vote 
scheduled for 3 o'clock, and so, if we all are brief in our 
comments, we'll have an opportunity to ask the Secretary the 
relevant questions.
    Mr. Secretary.


               summary statement of secretary tom vilsack


    Secretary Vilsack. Mr. Chairman, thank you very much. I 
appreciate the opportunity to be with you this afternoon.
    I will be very short. We have a written statement we'd ask 
to be part of the record. I'd just simply make two points.
    First, we recognize the responsibility to reduce our 
budget. We started that process last year. We continue it with 
the budget we propose to you this year, both in the 
discretionary and on the mandatory side. The reality is that 
there has to be shared sacrifice, as well as shared 
opportunity.
    The second point I would make is that, in addition to 
cutting our way to a more balanced fiscal approach, we also 
have to grow the economy. We have to be focused on jobs. That 
is certainly true in rural America, where we have had, 
historically, a much higher unemployment rate than in other 
parts of the country. Interestingly enough, as a result of the 
strong agricultural economy, we're seeing the unemployment rate 
coming down in rural America at a faster rate than the rest of 
the country. We'll obviously want to continue the momentum.
    So, we do indeed focus on an effort to not only reduce our 
spending, but also to focus it in a way that will advance, 
strategically, a growth agenda, as well in rural America, and 
continue the momentum.


                           prepared statement


    I understand that you've got a vote. I understand that you 
really need to have questions directed to us. With that, I will 
simply conclude and look forward to your questions.
    [The statement follows:]
              Prepared Statement of Secretary Tom Vilsack
    Mr. Chairman and distinguished members of this subcommittee, I 
appreciate the opportunity to appear before you as Secretary of 
Agriculture to discuss the administration's priorities for the U.S. 
Department of Agriculture (USDA) and provide you an overview of the 
President's fiscal year 2012 budget. I am joined today by Deputy 
Secretary Kathleen Merrigan, Joseph Glauber, USDA's Chief Economist, 
and Michael Young, USDA's budget officer.
    In his State of the Union Address, the President laid out some of 
the challenges America faces moving forward as we compete with nations 
across the globe to win the future. We need to be a Nation that makes, 
creates, and innovates so that we can expand the middle class and 
ensure that we pass along to our children the types of freedoms, 
opportunities, and experiences that we have enjoyed. We also need to 
take some serious steps to reduce the deficit and reform Governmentt so 
that it's leaner and smarter for the 21st century.
    The fiscal year 2012 budget we are proposing reflects the difficult 
choices we need to make to reduce the deficit while supporting targeted 
investments that are critical to long-term economic growth and job 
creation. To afford the strategic investments we need to grow the 
economy in the long term while also tackling the deficit, this budget 
makes difficult cuts to programs the President and I care about. It 
also reflects savings from a number of efficiency improvements and 
other actions to streamline and reduce our administrative costs. It 
looks to properly manage deficit reduction while preserving the values 
that matter to Americans.
    In total, the budget we are proposing before this subcommittee is 
$130 billion, a reduction of $3 billion less than the fiscal year 2011 
annualized continuing resolution. For discretionary programs, our 
budget proposes $18.8 billion, a reduction of $1.3 billion less than 
the fiscal year 2011 level. These decreases are achieved through 
reductions and terminations in a wide range of programs as well as 
proposals to achieve savings through streamlining our operations. These 
actions will allow us to focus limited resources on programs where we 
can achieve the greatest impact.
    Further, we are proposing legislative changes to target reductions 
in farm program payments, which would save $2.5 billion over 10 years, 
while only affecting 2 percent of participants. The savings would come 
in addition to savings we have achieved through administrative 
improvements that reduced the error rate in farm program payments from 
2 percent to less than 0.1 percent as well as a partnership with the 
Internal Revenue Service to eliminate improper payments to wealthy 
individuals who exceed income eligibility criteria. In addition, 
legislation will be proposed to reduce premiums for the catastrophic 
coverage option under the crop insurance program providing a savings to 
taxpayers of $1.8 billion over 10 years.
    These and other reductions must be made if we are serious about 
deficit reduction and being able to support the critical investments we 
need to make to secure our future.
    At USDA, we haven't waited to begin reducing our expenditures. Last 
year, we saved $6 billion through the negotiation of a new agreement 
for crop insurance, $4 billion of which will go to pay down the Federal 
deficit. Agencies across the Department have looked for ways to reform 
the way they do business--from reducing the number of visits a farmer 
has to make to our offices to get conservation services, to saving 
taxpayer dollars by operating our nutrition assistance programs with 
historic levels of accuracy.
    I would now like to focus on some specific highlights in each of 
our major goals.
            assisting rural communities to create prosperity
    Agriculture has generally fared well during the recent economic 
downturn, with farm income expected to be at almost record levels this 
year largely due to the productivity and hard work of American farmers 
and ranchers and growers. Further, agriculture continues to be one of 
the major sectors of the American economy that has a trade surplus. Our 
budget preserves a strong farm safety net, including a $4.7 billion 
farm credit program, about $150 million more than the fiscal year 2011 
level. As I mentioned earlier, we are also proposing to better target 
farm payments by reducing the cap on direct payments and reducing over 
a 3-year period the adjusted gross income eligibility limits. These 
actions would save $2.5 billion over 10 years.
    Rural America offers many opportunities, but it also faces a number 
of challenges that have been experienced for decades. Rural Americans 
earn less than their urban counterparts, and are more likely to live in 
poverty. More rural Americans are older than the age of 65, they have 
completed fewer years of school, and more than one-half of America's 
rural counties are losing population. In addition, improvements in 
health status also have not kept pace, and access to doctors and health 
services has been a key challenge in rural areas.
    Within the context of a reduced total funding level, our budget 
proposes to focus resources on the most effective means to address the 
long-term challenges facing rural communities and the Nation. A 
critical element is engaging with public and private partners to 
revitalize rural communities by expanding economic opportunities and 
creating jobs for rural residents.
    For Rural Development programs, our budget proposes a total program 
level of roughly $36 billion supported by $2.4 billion in budget 
authority, a reduction of about $1.6 billion in program level and $535 
million in budget authority. It also reflects the administration's 
efforts to utilize funding in the most cost-effective manner to achieve 
our goals.
    A number of difficult decisions were made, including a reduction of 
$390 million in budget authority from the fiscal year 2011 level in 
housing programs. The budget eliminates funding for a number of loan 
and grant programs, including Self-Help Housing grants and low-income 
housing repair loans. We are also reducing funding for direct single-
family housing loans and focusing on maintaining support for single-
family housing loan guarantees at a program level of $24 billion. This 
level of assistance can be provided with no budget authority by 
continuing a fee structure that fully supports the subsidy cost of the 
program. We are also reducing the water and waste loan and grant 
program by $62 million in budget authority. Associated with these 
program reductions, we are reducing administrative funding and staffing 
levels. These and other actions allow us to focus limited resources on 
meeting priority investment needs in rural America.
Regional Innovation Initiative
    One of these priority investments is in a new approach we have 
developed to ensure USDA supports rural communities who choose to 
engage in regional economic strategies. This approach recognizes that 
attempting to address the challenges faced by rural communities through 
a generic approach will not be sufficient. Instead, USDA needs to 
respond to grassroots local priorities and recognize that each rural 
region needs a distinctive strategy that reflects its unique strengths, 
its particular mix of industry clusters, and which integrates its 
regional economic assets.
    In 2010, to support rural communities' efforts to collaborate 
regionally, USDA used the Rural Business Opportunity Grant program to 
provide funding to seven identified regions to support plans focused on 
supporting job creation, local, or regional food systems, renewable 
energy, capitalizing on new broadband deployment, and the utilization 
of natural resources to promote economic development through regional 
planning among Federal, State, local, and private entities. Funding has 
been provided to multijurisdictional regions in California, Iowa, North 
Dakota, Oregon, South Carolina, Vermont, and Washington to develop 
regional plans to enhance economic opportunities. USDA is working 
department-wide to determine how it can support the priorities of the 
people in the region. USDA is also working with other Federal partners 
to ensure that these rural regions have access to other Federal 
programs that support their regional strategies. By creating a regional 
focus and increasing collaboration with other Federal agencies, 
resources can be leveraged to create greater wealth, improve quality of 
life, and sustain and grow the regional economy.
    For 2012, USDA proposes a Regional Innovation Initiative that works 
through existing programs to fund regional pilot projects, strategic 
planning activities, and other investments to improve rural economies 
on a regional basis. USDA would target up to 5 percent of the funding 
within 10 existing programs, approximately $171 million in loans and 
grants, and allocate these funds competitively among regional pilot 
projects tailored to local needs and opportunities. The approach will 
support projects that are more viable over a broader region than 
scattered projects that serve only a limited area. It will also help 
build the identity of regions, which could make the region more 
attractive for new business development, and provide greater incentives 
for residents to remain within their home area.
    The fiscal year 2012 budget specifically provides an increase of $5 
million for the Rural Business Opportunity Grant program to foster 
regional collaboration that encourages regions to engage in strategic 
regional economic planning that identifies the needs of a defined rural 
region. In addition, an increase of $2.1 million is included for the 
Rural Community Development Initiative to provide technical assistance 
to communities to develop housing or community facilities projects.
Facilitating the Development of Renewable Energy
    A major administration priority is continuing to make investments 
in building a green energy economy. Last year, the President laid out 
his strategy to advance the development and commercialization of a 
biofuels industry. At the center of this vision is an effort to 
increase domestic production and use of renewable energy. Advancing 
biomass and biofuel production that holds the potential to create green 
jobs is one of the many ways the Obama administration is working to 
rebuild and revitalize rural America. By producing renewable energy--
especially biofuels--America's farmers, ranchers, and rural communities 
have incredible potential to help ensure our Nation's energy security, 
environmental security, and economic security. Through investments in 
energy efficiency and renewable energy sources, farms and rural small 
businesses across the country can reduce their energy consumption and 
energy expenses. In 2009 and 2010, USDA has helped nearly 4,000 rural 
small businesses, farmers, and ranchers save energy and improve their 
bottom line by installing renewable energy systems and energy 
efficiency solutions that have produced or saved a projected 4.3 
billion in kWh--enough energy to power 390,000 American homes for a 
year.
    In 2012, USDA plans to invest more than $900 million in 
discretionary and mandatory funding to improve the entire supply chain 
of biofuels and bioenergy, from research and development, to production 
and commercialization. In addition, the budget includes $6.1 billion 
for electric loans, which will be used to support renewable energy and 
the development of clean-burning low-emission fossil fuel facilities to 
support renewable energy deployment and clean energy technology.
Promising Market Opportunities
    Developing and supporting market opportunities and outlets for 
agricultural producers helps to promote jobs and prosperity in rural 
America. Over the past year, we have supported efforts to build and 
strengthen regional and local food systems through the ``Know Your 
Farmer, Know Your Food'' efforts. Our goal is to build a link between 
local production and local consumption, which is particularly 
beneficial to small- and mid-sized farmers.
    In fiscal year 2012, USDA will continue to support efforts to 
expand promising market opportunities with $9.9 million in funding for 
the National Organic Program, which will be used to strengthen 
oversight and enforcement and $7.7 million for transportation and 
market development activities that will stimulate development of 
regional food hubs and marketing outlets for locally and regionally 
grown food.
    Furthermore, USDA, working together with the Departments of Health 
and Human Services and the Treasury will implement the Healthy Food 
Financing Initiative (HFFI) to provide incentives for food 
entrepreneurs to expand the availability of healthy foods by bringing 
grocery stores, small retailers, and farmers markets selling healthy 
foods to underserved communities. HFFI will make available more than 
$400 million in financial and technical assistance to community 
development financial institutions, other nonprofits, public agencies, 
and businesses with sound strategies for addressing the healthy food 
needs of communities. For USDA, the budget requests $35 million to 
support local and regional efforts to increase access to healthy food, 
particularly for the development of grocery stores and other healthy 
food retailers in urban and rural food deserts and other underserved 
areas. In addition, USDA will make other funds available by encouraging 
and rewarding relevant grant and loan applications through existing 
Rural Development and Agricultural Marketing Service programs.
Broadband
    In his State of the Union Address, President Obama established a 
goal to deploy the next generation of high-speed wireless coverage to 
98 percent of all Americans. In the last one-and-a-half years, with 
funding from the American Recovery and Reinvestment Act (ARRA) we have 
done more to bridge the digital divide for rural Americans than many 
ever thought possible. ARRA funding will enable around 7 million rural 
Americans to connect to 1 of 285 last-mile, 12 middle-mile, or four 
satellite projects funded by USDA. On top of that, more than 360,000 
businesses and 30,000 community service organizations such as 
hospitals, schools, and public safety agencies will be connected to a 
high-speed digital future. USDA will continue to build on the success 
of funding provided through ARRA by making loans and grants under the 
authorities provided by the farm bill. Our budget continues to provide 
support for these important efforts with $17.9 million for grants to 
support local broadband access in rural communities and funding for 
loans with balances available from prior-year appropriations.
Trade Expansion
    Expanding access to global markets makes a critical contribution to 
our efforts to enhance rural prosperity by providing opportunities for 
increased sales and higher incomes. During the past year, we have 
worked diligently to remove trade barriers and open new markets. 
Through our efforts, we were able to regain access for our poultry 
exports to Russia, after Russia introduced a ban on the use of chlorine 
washes in the processing of poultry. Similarly, we worked to expand 
market access for pork in Russia and China by addressing residue and 
disease issues, and we continue to engage China on reopening that 
market for our beef exports. Also noteworthy, we entered into a 
memorandum of understanding with China that addresses quality and 
sanitary and phytosanitary policy issues that will help to facilitate 
our soybean exports. This is a very significant step as China is now 
our largest overseas market for soybeans, and the significant growth we 
have experienced in that market--in soybeans and many other products--
has helped China to emerge as our largest agricultural export market.
    Our trade promotion activities support the National Export 
Initiative (NEI), a Governmentwide effort to double U.S. exports over 
the next 5 years in order to spur economic growth and employment 
opportunities. Every $1 billion worth of agricultural exports supports 
an estimated 8,000 jobs, so we know that when we succeed in expanding 
markets we are creating real benefits for our workforce. To bolster 
these efforts, the budget proposes an increase of $20 million for the 
Foreign Agricultural Service to support an expansion in trade 
monitoring and enforcement activities, exporter assistance and 
education efforts, support for State-organized trade missions, and in-
country market access and promotion activities.
            Ensuring Private Working Lands Are Conserved, Restored, and 
                    Made More Resilient to Climate Change, While 
                    Enhancing Our Water Resources
    USDA continues to be a major partner in advancing the 
administration's conservation and environmental agenda through support 
of the conservation partnership and the strategic targeting of funding 
to high-priority regional ecosystems. The budget request will ensure 
that the conservation partnership remains strong among Federal 
agencies, State and local governments, tribes, industry, and farmers. 
This broad partnership has proven to be a resilient and effective 
mechanism for meeting the administration's water policy goals and 
helping protect the Nation's 1.3 billion acres of farm, ranch, and 
private forestlands.
    The budget requests nearly $900 million in discretionary funding 
for conservation activities, primarily technical assistance that 
provides comprehensive conservation planning for the Nation's farmers, 
ranchers, and private forest landowners. This reflects a reduction of 
$168 million and related staff-years for the elimination of the 
watershed operations and rehabilitation programs, conservation 
operations earmarks, and the Resource Conservation and Development 
program.
    The fiscal year 2012 budget advances resource protection by 
strategically targeting funding to high-priority regional ecosystems 
and initiatives. This includes $15 million to implement the Strategic 
Watershed Action Teams Initiative, which will enhance targeted 
technical assistance in priority watersheds for a period of 3-5 years 
with the goal of reaching 100 percent of the landowner base in each 
watershed eligible for farm bill conservation program assistance. The 
goal of this initiative is to hasten environmental improvement while 
keeping production agriculture competitive and profitable.
    To improve the delivery of conservation technical assistance, which 
is a field staff-based activity, the budget includes $11.3 million to 
fund the Conservation Delivery Streamlining Initiative. This initiative 
will develop new business processes designed to simplify the planning 
process and maximize the amount of time USDA technicians spend in the 
field helping farmers. These funds will improve how we deliver 
conservation planning and financial assistance and help farmers with 
practice installation.
    Finally, the budget includes an increase of $7 million for the 
Conservation Effects Assessment Project, to enhance the scientific 
understanding of the environmental effects of conservation practices on 
agricultural landscapes. This knowledge will help us improve the design 
and implementation of conservation programs.
    The fiscal year 2012 budget also includes $5.8 billion in mandatory 
funding to support cumulative enrollment of more than 302 million acres 
in farm bill conservation programs, an increase of nearly 8 percent 
more than fiscal year 2011, for conservation programs authorized in the 
2008 farm bill, such as the Wetlands Reserve Program, Environmental 
Quality Incentives Program, and the Conservation Reserve Program.
 promote agricultural production and biotechnology exports as america 
                    works to increase food security
    USDA works to improve global food security through a wide variety 
of activities, such as providing food and technical assistance that 
supports the development of sustainable agricultural systems in 
developing countries, by facilitating the adoption of biotechnology and 
other emergent technologies that increase agricultural production and 
food availability, and by working to advance internationally accepted, 
science-based regulations that facilitate trade. These efforts are 
important because more than 1 billion people worldwide face hunger and 
malnutrition every day, and we know that failing agricultural systems 
and food shortages fuel political instability and undermine our 
national security interests.
    USDA is an active partner in the administration's global food 
security initiative--Feed the Future--and we have been working closely 
with the State Department, the U.S. Agency for International 
Development (USAID), and others to further its objectives. As an 
implementing partner, USDA can offer expertise in basic and applied 
research that benefits both the United States and developing countries; 
in-country capacity building and technical assistance; and market 
information and economic analysis. For example, during the past year, 
USDA has worked with USAID to develop the Norman Borlaug Commemorative 
Research Initiative, a mechanism designed to increase cooperation and 
collaboration between our two agencies in managing research strategies 
and their implementation. Through this mechanism, we will collaborate 
on targeted, high-impact research priorities, such as wheat rust, 
legume productivity, livestock diseases, mycotoxins, and human 
nutrition, which can have far-reaching benefits to farmers worldwide.
    An important means to assist developing countries to enhance their 
agricultural capacity is by providing training and collaborative 
research opportunities in the United States, where participants can 
improve their knowledge and skills. The budget provides increased 
funding for the Cochran and Borlaug Fellowship programs, which bring 
foreign agricultural researchers, policy officials, and other 
specialists to the United States for training in a wide variety of 
fields. Under our proposal, as many as 600 individuals will be able to 
participate in these programs and bring this knowledge home to benefit 
their respective countries.
    Foreign food assistance programs remain a core component of our 
efforts to enhance global food security. The fiscal year 2012 budget 
includes more than $2 billion of funding for both emergency and 
nonemergency international food assistance programs carried out by USDA 
and USAID. Although funding for the McGovern-Dole International Food 
for Education and Child Nutrition Program is reduced by $9 million, the 
program will assist as many as 5 million women and children during 
2012.
    As the world population grows and the demand for food with it, we 
must look to new technologies for increasing production, including 
biotechnology. Biotechnology can expand the options available to 
agricultural producers seeking solutions to a variety of challenges, 
including climate change. However, prudent steps must be taken to 
ensure that biotech products are safely introduced and controlled in 
commerce. For 2012, the budget includes increased funding to strengthen 
USDA's science-based regulatory system and ensure that we can provide 
timely, sufficient review of the expanding volume and complexity of 
biotechnology applications. During the past fiscal year, USDA continued 
to see an increase in workload due to this expanding industry. Notably, 
USDA received 44 percent more requests for field testing of genetically 
engineered plants than were received in fiscal year 2009.
     ensuring that all of america's children have access to safe, 
                     nutritious, and balanced meals
Nutrition Assistance
    The budget fully funds the expected requirements for the 
Department's three major nutrition assistance programs--the Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC), 
the National School Lunch Program, and the Supplemental Nutrition 
Assistance Program (SNAP).
    National School Lunch Program participation is estimated to reach a 
record-level again in 2012, 32.5 million children each school day, up 
from about 31.6 million a day in 2010. The budget proposes an increase 
of $9 million to ensure USDA makes progress to decrease the prevalence 
of obesity among children and adolescents, and to improve the quality 
of diets. The increase will allow USDA to continue implementing the 
scientific, evidence-based nutrition guidance and promotion of the 2010 
update of the Dietary Guidelines for Americans.
    The budget includes $7.4 billion for WIC, which will support the 
estimated average monthly participation of 9.6 million in 2012, an 
increase from an estimated 9.3 million participants in 2011. The 
request is $138 million more than the 2011 annualized continuing 
resolution. This includes an increase for the breastfeeding peer 
counseling program and a doubling of the breastfeeding program 
performance bonus funding. WIC State nutrition services and 
administrative activities are funded at a level sufficient to ensure 
effective program operations along with increased emphasis on 
information technology (IT) and electronic benefits transfer (EBT).
    Participation in SNAP is estimated to average about 45 million 
participants per month in 2011, and is projected to fall slightly in 
2012. The budget includes more than $85 billion, including ARRA 
funding, to fund all expected costs. Legislation will be proposed to 
extend the ARRA provision that waives time limits for able-bodied 
adults without dependents for an additional fiscal year. In total, this 
change would add about $92 million to recipient benefits and SNAP 
program costs in 2012. In addition, the fiscal year 2012 budget 
proposes to maintain the increase for SNAP benefits authorized by ARRA 
for 5 months, increasing outlays in 2014 by $3.3 billion.
Food Safety
    The budget includes $1 billion for the Food Safety and Inspection 
Service, a reduction of about $7 million less than 2011. The requested 
level is adequate to fully fund inspection activities and including an 
increase of $27 million to improve our capability of identifying and 
addressing food safety hazards and preventing foodborne illness. These 
increases are more than offset by reductions due to streamlining agency 
operations, reducing lab expenses, and recognizing that implementation 
of a catfish inspection program will not occur in 2012.
Minimizing the Impact of Major Animal and Plant Diseases and Pests
    To protect agricultural health by minimizing major diseases and 
pests of food crops and livestock, the budget includes $837 million, a 
reduction of $76 million, in appropriated funds for the Animal and 
Plant Health Inspection Service (APHIS). We have taken a close look at 
the APHIS budget and have proposed a number of program reductions and 
redirections to ensure that scarce resources are being used prudently. 
The budget achieves savings through a variety of means. It includes 
decreases for activities where eradication campaigns have been 
successful, such as cotton pests, pseudorabies, and screwworm, and for 
pests and diseases where eradication is not likely, such as tropical 
bont tick. Savings are also possible in the avian health program 
without affecting overall performance. Further, the budget achieves 
other savings by acknowledging the role of the producer to engage in 
best management practices to reduce certain diseases, such as Johne's 
disease. These savings allow us to propose increases for selected 
pests, including the light brown apple moth and the European grapevine 
moth.
                                research
    Scientific research is essential for our prosperity, health, 
environment, and our quality of life. By investing in the building 
blocks of American innovation, we will help ensure that our economy is 
given all the necessary tools for new breakthroughs, new discoveries 
and the development of new industries. While progress will not come 
immediately, our investments today will be a catalyst which leads to 
answers to problems of national importance, including developing 
alternative energy sources, improving the nutrition and health of 
America's children, and developing solutions to the most urgent 
environmental problems.
    The fiscal year 2012 budget requests approximately $1.2 billion in 
discretionary funding for the National Institute of Food and 
Agriculture (NIFA), a decrease of $141 million from 2011. The budget 
eliminates $141 million in congressional earmarks as well as makes 
selective reductions in ongoing programs, including a reduction of 5 
percent in formula funding for 1862 Land Grant Institutions and the 
elimination of the animal health and disease formula program. The 
budget continues to move toward the use of competitive grants to 
generate the solutions to the Nation's most critical problems. A major 
element in NIFA's research budget is an increase of $62 million for the 
Agriculture and Food Research Initiative (AFRI)--the premier 
competitive, peer-reviewed research program for fundamental and applied 
sciences in agriculture. This increase, which brings the total AFRI 
funding to $325 million, will focus on sustainable bioenergy, global 
food security, food safety, human nutrition and obesity prevention, and 
global climate change, while still supporting foundational research.
    The fiscal year 2012 budget for the Agricultural Research Service 
is approximately $1.14 billion, a net decrease of $42 million. This 
reduction is achieved through the elimination of congressional earmarks 
and other lower-priority projects that total about $101 million. These 
reductions help fund program increases totaling approximately $59 
million for high-priority research. Major initiatives include improved 
genetic resources and cultivars leading to better germplasm and 
varieties with higher yields, enhanced disease and pest resistance, and 
resilience to weather extremes such as high temperature and drought. 
The budget will also fund several initiatives to support research on 
breeding and germplasm improvement in livestock which will enhance food 
security and lead to the development of preventive measures to combat 
diseases and thereby increase production. These initiatives have great 
potential to help ensure an abundant, safe, and inexpensive supply of 
food to meet global demand. Additionally, the budget funds research 
initiatives that will accelerate the development and deployment of 
dedicated energy feedstocks, thereby reducing dependence on foreign oil 
and expanding the opportunities for American farmers. Finally, the 
budget supports projects that focus on food safety, human nutrition, 
and obesity prevention.
    The fiscal year 2012 budget request for the National Agricultural 
Statistics Service includes an increase of nearly $12 million in 
initiatives, which is offset by $8.3 million in terminations of low-
priority programs. This includes the elimination of a land tenure 
survey largely comprised of farm operators that are accounted for in 
the Agricultural Resource Management Survey. The fiscal year 2012 
budget includes full funding to support the third year of the 2012 
Census of Agriculture's 5-year cycle and to improve the data quality of 
the County Estimates program which is used within the Department to 
administer crop insurance programs, as well as crop revenue support 
programs, emergency assistance payments, and the Conservation Reserve 
Program.
    Finally, $8.4 million is included for initiatives within the 
Economic Research Service, including an initiative for behavioral 
economics that will yield information and analysis that enhances 
decisionmaking on economic and policy issues related to agriculture, 
food, farming, natural resources, and rural development. These 
increases are partially offset by a $4.9 million reduction from lower-
priority projects.
                         management initiatives
    To reform USDA so it is leaner, more efficient and ready for the 
21st century, we will support efforts to better streamline operations 
and deliver results--at lower cost--for the American people. The budget 
reflects the Department's commitment to increasing program delivery 
effectiveness by implementing management improvements, administrative 
efficiencies, and IT systems that modernize the USDA workplace.
    A significant streamlining and efficiency measure being proposed is 
a structured buyout of 504 Federal headquarters and related employees--
10 percent--of the Farm Service Agency (FSA). This restructuring effort 
is expected to result in net savings of $27 million in 2012 and total 
savings of $174 million through 2015. In addition, we are proposing a 
further savings of $14.4 million in FSA administrative expenses through 
efficiencies related to advisory contracts, travel expenses, printing 
and supplies. It is also critical that we continue to invest in 
modernizing the FSA IT system to provide a secure, modern system 
capable of supporting Web-based program delivery.
    One of the key components for increasing USDA effectiveness is 
focused on creating a high-performing and diverse workforce across the 
Department. Through USDA's Cultural Transformation Initiative, the 
Department and its workforce are being revamped to increase job 
satisfaction, training opportunities, and career development 
possibilities. USDA will focus on improving leadership development, 
labor relations, human resources accountability, and veterans and other 
special employment programs. These efforts will greatly improve the 
productivity of the Department, resulting in better service to USDA 
constituents and more value for American taxpayers. A $3 million 
increase is proposed to strengthen our human resources transformation 
initiatives and veterans hiring efforts.
    USDA also strives to improve the efficiency with which it purchases 
more than $5 billion in goods and services annually. These acquisitions 
support USDA program delivery, including food purchases for the 
nutrition programs and IT purchases in support of business operations. 
Regardless of what is being purchased, USDA relies upon a workforce of 
acquisition professionals to efficiently and effectively procure the 
goods and services needed to ensure continued service delivery by the 
Department. As part of a Governmentwide initiative pursuant to the 
President's Memorandum on Government Contracting, USDA is requesting 
funding of $6.5 million for training, workforce development activities, 
and supporting IT systems. Such efforts will greatly improve the 
workforce's ability to negotiate more favorably priced contracts and 
manage contract costs more effectively. These improvements will support 
USDA's actions to implement its acquisition savings plan that includes 
a projected 7-percent reduction in noncommodity acquisitions in fiscal 
year 2011, with additional reductions in the out-years.
    We are also taking additional steps to address the unfortunate 
history of civil rights in USDA. As you know, since coming into office, 
this administration has made great strides in resolving claims of 
discrimination by reducing the backlog of complaints and by working to 
settle lawsuits brought against the Department by Black and Native 
American farmers and ranchers. USDA has worked closely with the 
Congress to secure the funding necessary to address the Pigford II 
class action lawsuit. The Department has also been working to resolve 
other discrimination claims such as those being brought by women and 
Hispanic farmers and ranchers. In fiscal year 2012, we are requesting 
funding under the FSA to pay the administrative costs of resolving 
existing civil rights claims, and to provide settlement for 
discrimination claims filed under the Equal Credit Opportunity Act 
where the statute of limitation has expired. The Department remains 
committed to taking these actions as part of our commitment to create a 
New Era of Civil Rights in USDA.
    Ensuring that the Department and its programs are open and 
transparent is also a key component of the transformation effort. As a 
result, USDA is proposing to expand the Office of Advocacy and Outreach 
(OAO), which was established by the 2008 farm bill, to improve service 
delivery to historically underserved groups and will work to improve 
the productivity and viability of small, beginning, and socially 
disadvantaged producers. The outreach efforts led by OAO will help to 
ensure that all persons eligible to participate in USDA programs will 
have the opportunity and the information necessary to benefit from the 
services delivered by the Department.
    The President told us that winning the future will require a lot of 
hard work and sacrifice from everyone. The President's budget reflects 
sacrifice, but provides the funding to achieve his vision for a strong 
America. I look forward to working with this subcommittee to help build 
a foundation for American competitiveness for years to come so that we 
pass on a stronger America to our children and grandchildren.
    I would be pleased to take your questions at this time.

    Senator Kohl. All right. We'll begin our questioning. Thank 
you so much, Mr. Secretary.

            FOOD SAFETY AND INSPECTION SERVICE FUNDING LEVEL

    As you are aware, we're still in negotiations regarding the 
fiscal year 2011 bills. H.R. 1 proposes an $88 million cut to 
the Food Safety and Inspection Service (FSIS). I've been told 
this proposed cut would seriously limit FSIS's ability to 
maintain its inspection force. At what point, Mr. Secretary, 
would budget cuts at fiscal year 2011 result in a furlough of 
FSIS inspectors? If that is so, do you have a contingency plan?
    Secretary Vilsack. Mr. Chairman, we are obviously hopeful 
that this matter gets resolved without significant reductions 
in the FSIS budget. As you probably well know, that budget is 
predominantly personnel. Any significant cut and reduction in 
that budget would obviously lead to a very difficult set of 
decisions we would have to make, relative to our workforce. 
Most of what our workforce does in that area is to provide 
inspection services to a number of processing facilities. We 
would be concerned, obviously, about the impact it would have 
on those processing facilities and on the markets that are 
impacted and affected by the work that they do.
    We have proposed, in the fiscal year 2012 budget, a 
reallocation within FSIS. I would simply say that the key here 
is to give the Department sufficient time to manage difficult 
choices that you all have to make. If you attempt to squeeze, 
in a relatively short period of time--i.e., a set of months--a 
solution to a budget problem that has accumulated perhaps over 
decades, I think you're going to have difficulty, and I think 
you're going to make it very difficult for us to manage it 
properly without someone being hurt. This is one area, in 
particular, that we have concerns about.
    Senator Kohl. All right.

             GAO REPORT ON DUPLICATIVE GOVERNMENT PROGRAMS

    Mr. Secretary, the Government Accountability Office (GAO) 
recently released a report on duplicative Government programs, 
which I'm sure that you are aware. Duplication in food safety 
efforts across Federal agencies was a major theme in the 
report. Can you please respond to the findings of the report 
regarding overlap in food safety activities? Do you believe the 
current food safety system is adequately serving the American 
public? And, how do you believe it can be improved?
    Secretary Vilsack. Mr. Chairman, we engaged, at the 
beginning of the administration, in a workstudy group with the 
Department of Health and Human Services. It has, in a sense, 
jurisdiction on food safety issues, as you well know. We handle 
roughly 20 percent of the food needs of this country. The Food 
and Drug Administration (FDA) handles the other 80 percent.
    What we wanted to be able to do, and what I think you 
accomplished with the food safety legislation passed last year, 
was to begin to create parallel tracks, for both the FDA and 
the USDA, focused on a philosophy of prevention rather than 
reaction. I think that the food safety proposal that you passed 
is a very good, significant step forward. We are working with 
the FDA as they begin the process of implementing that. We've 
provided staff to assist them in rulemaking, and we'll make 
sure that we parallel as best we can.
    We've also, Mr. Chairman, improved our communication 
between the two Departments so that we're in a position to know 
what FDA knows and they're in a position to know what we know, 
so that we do a better job of regulating the safety of the food 
supply, particularly as it relates to school lunch purchases 
and the school lunch program, where we had a problem early in 
the administration. So, I'm confident that we will be able to 
do a better job of protecting the food safety concerns of 
Americans.
    There's still work to be done. We are proposing in the 
budget additional support for the Public Health and Information 
System, which will provide us data that will allow us to do a 
better job, within USDA, of determining where there may be 
potential problems, and address those problems before they 
manifest themselves into difficulties.
    We are also continuing to work on the Uniform Incident 
Command structure, which will allow us to do a better job of 
communicating with State and local public health officials. In 
the event there is a concern or a problem, we'll try to contain 
it and mitigate it, as best as possible.
    We will continue to work, within USDA, on better testing, 
and more appropriate testing, to ensure that we are catching 
and identifying pathogens. As the science evolves, so must our 
testing.
    Senator Kohl. Thank you.
    We'll turn now to Senator Collins, and then Senator Moran.
    Senator Collins. Thank you, Mr. Chairman.
    First, let me thank you for holding this hearing.
    Also, a warm welcome to the Secretary and the members of 
this panel.
    The Department's budget request for the year 2012 is a 
source of great interest to many Mainers. Farmers across my 
State, including blueberry growers, potato farmers, and dairy 
producers, all look to USDA for assistance in the areas of crop 
research, farm management, and agricultural marketing. But as 
we know, the Department's mission is much broader than that, 
than simply fostering agricultural production. And it also 
plays a key role in spurring economic and infrastructure 
development in rural communities around the country. I believe 
that most people would be surprised to learn that roughly 
three-quarters of USDA's budget actually goes to providing 
nutrition assistance. That is why I want to take the time today 
to talk about policies in the Department that appear to be 
headed toward limiting access to fresh white potatoes within 
our Federal nutrition programs.
    Let me concede a certain bias here. I grew up in northern 
Maine, and my first job was picking potatoes on a farm during 
the school recess, for a couple of years, when I was very, very 
young.
    So, I do want to talk about the fact that the white potato 
is the only vegetable excluded from the Special Supplemental 
Nutrition Program for Women, Infants, and Children (WIC)-
approved food list. And the Department is proposing to place 
strict limits on the use of potatoes for the national school 
breakfast and lunch programs.
    So, I have a visual aid here that I want to use to 
illustrate my point, because if you compare the nutritional 
content of iceberg lettuce, which is on the WIC list and is not 
proposed for limitations for the school lunch or breakfast 
program, with that of the fresh Maine potato, there is quite a 
difference.
    For example, one medium white potato has nearly twice as 
much vitamin C as this entire head of iceberg lettuce. Per 
serving, potatoes contain more than four times the potassium as 
iceberg lettuce, and more potassium than bananas, a fruit that 
we think of when it comes to potassium. Per serving, potatoes 
contain twice as much dietary fiber as the iceberg lettuce, and 
three times more iron than iceberg lettuce, which we know is so 
important to pregnant women.
    So, my question, Mr. Secretary, is, what does the 
Department have against potatoes?
    Secretary Vilsack. Absolutely nothing, Senator. The reality 
is that when you take a look at the WIC program, it is 
absolutely supplementing the purchases by the mom or the dad 
that's using the WIC program. And what we know from research is 
that moms and dads understand what you have outlined, which is 
the significant nutritional value, and the dollar value, of 
purchasing potatoes. And for that reason, they are already 
purchasing potatoes in great quantity. So, what the WIC program 
is doing is, it's essentially supplementing those potato 
purchases with purchases of other vegetables that are not 
normally purchased or not purchased in the quantity that 
potatoes are purchased. So, in other words, it's not 
discriminating against potatoes, it's recognizing that potatoes 
are already being purchased by WIC recipients.
    As it relates to the school breakfast and school lunch 
programs, we are working--I had a meeting with the Potato 
Council just recently, and we're willing to take a look at 
opportunities to look at potato consumption in the school 
breakfast and school lunch programs. What we want to do is, 
obviously, move away from the fried nature of what most schools 
are preparing. That's essentially the equipment that they have. 
We obviously want to take a look at ways in which we might be 
able to provide other alternatives for producing those potatoes 
so that they are not as caloric--high in caloric content and 
fat content, because, as you know, we're trying to deal with a 
significant obesity issue.
    So, it's not the potato, it's the way in which the potatoes 
are being produced or being provided.
    Senator Collins. Thank you, Mr. Secretary. I hope you will 
take a look at that.
    I would suggest, since my time has expired, that the 
Government sends a signal when it lists every other vegetable 
except the potato for the WIC program and when it proposes to 
limit the use of potatoes in the school lunch or breakfast 
program. That signal can be perceived as a negative one. I know 
that's not your intent, but it can be perceived as saying that 
potatoes are not healthy, when, in fact, when we do that 
comparison--and I have nothing against iceberg lettuce----
    Secretary Vilsack. High value of vitamin K, by the way, 
that head of lettuce.
    Senator Collins. I'm sorry?
    Secretary Vilsack. It's a high value of vitamin K.
    Senator Collins. K. Yes, but when you compare it with the 
fiber, vitamin C, and potassium, it doesn't stack up. I'm not 
saying this should be banned. I'm saying that neither should 
this be.
    Secretary Vilsack. Right.
    Senator Collins. So, I do appreciate the fact that you're 
willing to work with the industry about what you would perceive 
as more helpful ways of preparing the potato.
    Thank you.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you very much, Senator Collins.
    Before we turn to Senator Moran, I'd like to ask our 
ranking member to make his statement and ask for questions.
    Senator Blunt. Thank you, Mr. Chairman. I think I'll take 
my questions in order. Thank you. Sorry to be late for the 
meeting. I certainly look forward to working with you on this 
subcommittee, and was pleased to get a chance to visit with the 
Secretary just a few days ago.
    But I am pleased to be here. And I'll take my questions in 
the order that I arrived. Maybe Mr. Moran will ask better 
questions than I might have asked, anyway.
    So, thank you, Chairman.
    Senator Kohl. All right. Very good.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much. And thank 
you, Mr. Blunt.
    I'm honored to be a member of the agricultural 
appropriations subcommittee. I spent the bulk of my time, in 
the House of Representatives, as a member of the authorizing 
Committee. Certainly, the jurisdiction of our subcommittee is 
of great interest to many, many Kansans, and has a huge 
consequence upon American producers, as well as American 
consumers.
    I welcome the Secretary and look forward to working with 
him in my current capacity.
    And I just want to direct my questions in a couple of 
areas. First of all, agricultural research. I believe that 
agricultural research is a significant component of what we can 
do to be of assistance to agriculture, as well as those who 
purchase agriculture commodities. USDA has a significant role 
to play. I think, generally, we've fallen behind in regard to 
the resources going into agriculture research, as compared to 
other research. And in particular, I wanted to focus on the 
competitive grant research program, Agriculture and Food 
Research Initiative (AFRI). I've tried to find out, in my short 
6 weeks of being a Member of the Senate, how that money is 
spent.
    So, Mr. Secretary, my hope is, either today or at an 
appropriate time, you could give me a list of the Department's 
priorities, how that money is categorized, and what your 
suggestions are for increasing or decreasing funding within 
those various categories, so I can get a better understanding 
of what the priorities of the Department are, and to, from my 
perspective, make sure that you continue to focus, or that you 
again focus, upon production agriculture in the research 
concepts that you pursue.
    Secretary Vilsack. Senator, if you want, I can provide you 
some background about that today, and supplement it if it's not 
satisfactory.
    We have increased our commitment to competitive grants. We 
believe this is one way of leveraging additional resources. 
There are a number of key areas in which we focus these 
competitive grants.
    First, I would say that we have grants that are focused on 
both commodity and livestock production and protection. That 
has to do with how do we make farms more efficient, in terms of 
their capacity to create more production? And how do we protect 
them against pests and diseases, invasive species and the like, 
that could potentially cut down on productivity? So, that is 
one key area.
    We are also spending some time and some resources on 
biofuels, ways in which we might be able to use a wide variety 
of crops, crop residue, and waste products to be able to 
produce biofuels to supplement what we're doing with a corn-
based ethanol process, to expand beyond that. As we know, the 
Renewable Fuel Standard requires us to get to 36 billion 
gallons by the year 2022. To do that, we need substances other 
than corn, so we're doing some research in that area.
    We are obviously focused on food security issues, in terms 
of our capacity to meet the growing need that we not only have 
in this country, but, as well, the global need. As you well 
know, the world population is scheduled to grow to 9 billion-
plus by 2050. The question is, how are we going to feed those 
folks? What is America's role in feeding those folks? How do we 
maintain security--food security? That's part of the research 
that is underway with the AFRI grants.
    We are also taking a look at ways in which agriculture will 
have to adapt or mitigate the consequences of climate change 
that may impact itself in less water, higher temperatures, more 
opportunities for drought, more flooding conditions, what we 
can do to make sure that we don't see a significant decline in 
productivity.
    We are also taking a look at resources in the area of 
nutrition and obesity, given the very significant impact that 
we have with a third of our children being obese, and the 
consequences of that to our national security and educational 
achievement. We think that's an appropriate place for some 
resources to go, in terms of our competitive grants.
    That gives you a general overview. There's probably more 
specifics that you'd like, and we'll be happy to provide those.
    [The information follows:]

                              AGRICULTURE AND FOOD RESEARCH INITIATIVE--FOCUS AREAS
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year 2011  Fiscal year 2012
                        Focus area                          Fiscal year 2010         \1\               \2\
----------------------------------------------------------------------------------------------------------------
Bioenergy.................................................           $40,000           $40,000           $48,239
Global climate variability................................            55,000            55,000            60,058
Global food security......................................            15,000            15,000            31,980
Nutrition and health......................................            25,000            25,000            33,520
Food safety...............................................            20,000            20,000            28,520
Foundational areas \3\....................................            80,773            80,773            89,605
NIFA fellows..............................................             6,045             6,045            11,480
Legislatively authorized set-asides.......................            20,664            20,664            21,253
                                                           -----------------------------------------------------
      Total, AFRI.........................................           262,482           262,482           324,655
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2011 annualized level as presented in the fiscal year 2012 President's budget.
\2\ These numbers reflect redirection of funding for the Institutional Challenge Grants and the Graduate
  Fellowships programs into AFRI. Institutional Challenge Grants funding has been equally allocated across the
  AFRI Challenge Areas. The Graduate Fellowships funding has been added to the NIFA Fellows program.
\3\ These are considered investments in each of AFRI's congressionally established priority areas, as follows:
  --plant health and production and plant products;
  --animal health and production and animal products;
  --food safety, nutrition, and health;
  --renewable energy, natural resources, and environment;
  --agriculture systems and technology; and
  --agriculture economics and rural communities.

    Senator Moran. Mr. Secretary, I would love to see the 
breakdown, in dollars, in each one of those areas, and kind of 
the trend in which I see the Department going.

      GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION RULE

    I'm going to try to ask a very brief question, which the 
answer can be yes or no. I asked the Department, last 
September, to do economic analysis--Mr. Glauber, to make 
economic analysis available in regard to Grain Inspection, 
Packers and Stockyards Administration rules. I'm pleased to 
know that you're doing that. And I am asking whether or not--
once that economic analysis is complete, whether the Department 
will allow for public comment.
    Secretary Vilsack. Senator, if I can, that's not as easy of 
a question to answer with a yes or no. And the reason is that 
in order to explain how we went about this process--we 
solicited comments, as you know, it generated a substantial 
amount of comments. We're taking those comments into 
consideration, categorizing them, and they will help to inform 
the analysis that Joe and his team will do. I've instructed 
them to do a thorough analysis, a complete analysis. Obviously, 
we want to make sure that, once we present the final rule for 
review and for implementation, that it's a solid rule, one that 
we can justify. And given the extent of the comments, I'm 
confident in Joe's team, that they'll be able to provide an 
analysis that can pass muster and that will lead to a good 
product that we can support and defend.
    Senator Moran. I would encourage you, Mr. Secretary, to 
allow a very transparent post-economic analysis process at the 
Department.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you, Senator Moran.
    We'll turn to Senator Brown, and then Ranking Member Blunt.
    Senator Brown. Thank you very much, Mr. Chairman.
    Secretary Vilsack, nice to see you.
    Mr. Chairman, I know that Wisconsin produces more cheese 
than any State in the country, but you should know that Ohio 
produces more Swiss cheese than any State in the country, and 
that I grew up on a dairy farm, working on a dairy farm, 
milking Guernseys and Holsteins. So, if you want to know more 
about Swiss cheese, I'm your guy, right?
    I chose this subcommittee, on the Appropriations Committee, 
for a couple of reasons. One is that one out of seven Ohioans 
are employed in agriculture--not too different from many other 
States in this country--but also because of the priorities of 
this Committee, the subcommittee, under Chairman Kohl's 
leadership, had been pretty much exactly right--putting food on 
the table and fighting hunger in America and abroad, about 
ensuring families don't have to worry about the quality and 
safety of the food that we buy in supermarkets; about ensuring 
that our Nation's children grow up strong and healthy, and 
their mothers have the support and nutritional foundation they 
need to succeed; and about cutting-edge research to bear on our 
Nation's most difficult problems. And this subcommittee has 
pursued those as priorities, and I'm appreciative of that and 
laud that.

                               BROADBAND

    I have a couple of questions, Mr. Secretary. During the 
2008 farm bill, several of us worked--in the Agriculture 
Committee--to rewrite the broadband section of the bill to 
ensure wider access for communities that are underserved. And 
you were in Ohio, and worked on that and discussed that and 
helped to begin the implementation. I understand USDA, today, 
announced the implementation of the new language for broadband. 
Could you just briefly give us your thoughts about that?
    Secretary Vilsack. Sure. Senator, we certainly agree with 
the observations contained in the 2008 farm bill, that there 
needed to be a more focused effort on broadband expansion in 
unserved and underserved areas. You all basically instructed us 
to take a look at how to define ``rural'' with respect to 
broadband expansion. And the interim rule, the final rule, that 
we proposed today, we're talking about communities of 20,000 or 
less that are not located adjacent to, or near, an urban area. 
We have instructed our folks to take a look at giving priority 
to unserved and underserved areas.
    Our hope is that there are sufficient resources for us to 
continue the good work that was done with ARRA. ARRA allowed us 
to fund 330 projects, impacting 7 million Americans in rural 
areas, potentially 320,000 businesses having access to 
broadband, as well as 32,000 anchor institutions, like schools, 
libraries, and hospitals.
    We obviously want to continue that, because the Department 
of Commerce recently put out a map of the United States, 
showing some of the holes, if you will, in terms of coverage. 
We want to try to address those with these rules.
    So, we've put the rules out. We've put out an application 
process that will be on the Web, and we're encouraging folks to 
get comments in, before May 14, on the structure we proposed, 
and to begin the process of applying for resources.
    Senator Brown. Thank you.
    I will submit several questions for the record on topics 
important to Ohio, especially something we've talked about, the 
Agricultural Research Station in Wooster, and what we can do on 
that.
    [Senator Brown's questions were not available at press 
time.]

                           BEGINNING FARMERS

    Senator Brown. And the other question I'd like to ask now 
is--comment and question, Mr. Secretary--the average age of 
farmers, as we know, in all of our States, is now 57, and going 
up--and we all are concerned about what that means, attracting 
young people into agriculture. How do we better target Farm 
Service Agency (FSA) loan programs and other USDA assistance, 
to help launch careers for beginning farmers?
    Secretary Vilsack. Senator, we're cognizant of that issue. 
Thirty percent of our farmers are older than the age of 65, as 
well. We saw a 30-percent increase in the number of farmers 
older than 75, and a 20-percent decrease in the number of 
farmers younger than 25. There are a couple of things.
    No. 1, focusing our Beginning Farmers and Ranchers Loan 
Program, which we have been doing. We've got the Office of 
Advocacy and Outreach, that is focused on strategies for 
beginning farmers.
    No. 2, I would say that we are doing a better job of using 
our direct loan capacity. I may be wrong on the percentage of 
this, but a substantial percentage, maybe up as high as 50 
percent of our loans, on the direct loan side, have gone to 
beginning farmers, as well as about 19 percent going to 
socially disadvantaged farmers. So, we are making an effort to 
direct our credit efforts in a way that helps beginning 
farmers.
    But I think there has to be, as we begin the debate and 
conversation about the 2012 farm bill, I think this is one area 
that we really need to focus on. We've got some ideas and 
thoughts. I know my time is up, but I'd be happy to share them 
with you or the subcommittee, at a later date, relative to how 
we can identify young people who are interested in farming, how 
we might be able to use the tax code to encourage farmers who 
have no relatives to pass the farm on to, to get young people 
engaged, to get sweat-equity opportunities. There are a whole 
series of things that need to be done.
    Senator Brown. Thank you.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you very much, Senator Brown.
    Senator Blunt.

                           PREPARED STATEMENT

    Senator Blunt. Thank you, Mr. Chairman. Again, I look 
forward to working with you on this subcommittee.
    I'll have a statement for the record and some written 
questions, I'm sure, as well.
    [The statement follows:]
                Prepared Statement of Senator Roy Blunt
    Good afternoon. Thank you Chairman Kohl for holding today's hearing 
on the U.S. Department of Agriculture's (USDA's) fiscal year 2012 
budget request, and thank you to our witnesses for being here today.
    This is my first hearing as ranking member of the Agriculture 
subcommittee, and I look forward to working with the chairman and other 
members of the subcommittee as we determine funding levels for the 
Department during an era where we must show restraint, and everything 
must be on the table.
    While we are still working to get our fiscal house in order for 
fiscal year 2011, we are looking forward to fiscal year 2012. The task 
that has been placed before us, Mr. Chairman, is not ideal. How we 
respond to this responsibility is important for the taxpayers and our 
economy as a whole. We're at a crucial moment in our Nation's history, 
and the decisions we make now will define who we are going to be as a 
country.
    We are all aware of the current state of our economy. Americans are 
gravely, and rightfully, concerned about the size of the national debt 
and the budget deficit. As we begin to formally review the 
administration's budget request, we have to recognize that every $1 we 
appropriate will be borrowed and must be repaid with interest. The 
Government must start operating under the same rules that families 
across America face every day when balancing their checkbook.
    Last week, the Government Accountability Office released a report 
on duplicative efforts throughout the Government that highlighted more 
than 30 programs at USDA. The President's budget also proposes a series 
of program consolidations and terminations at the Department. Both of 
these proposals should be thoughtfully and seriously considered.
    While tackling these difficult funding decisions, we do so with an 
understanding of the important role that agriculture plays in our 
economy. We should invest taxpayer dollars wisely in agriculture 
programs that will increase our agricultural communities' 
competitiveness here and abroad because agriculture is a leading driver 
in our economic recovery.
    For example, research supports more efficient, higher-quality 
agricultural production and the continued development of new and 
existing biofuels. That same research also supports American farmers 
and rural communities by giving them the tools to be more competitive 
in the global economy.
    Agriculture products remain the one highlight in our export 
portfolio. The Secretary notes in his written testimony that every $1 
billion worth of agricultural exports supports an estimated 8,000 jobs. 
Agriculture exports from Missouri alone support more than 37,000 jobs.
    We have to continue to expand access to foreign markets because a 
thriving agriculture industry is key to our economic recovery. It's 
time to move forward with the free trade agreements with South Korea, 
Columbia, and Panama.
    Mr. Secretary, I look forward to hearing your thoughts on these 
important issues. Again, thank you Chairman Kohl for holding today's 
hearing.

                            CROP PRODUCTION

    Senator Blunt. I may have missed it, but, in your response 
to Senator Moran's question about agricultural research, I 
didn't hear as much as I would hope to hear about plant 
research, about having better results from less and less 
acreage, or on the same amount of acreage as we struggle to 
feed a growing world. I know that's one of your priorities, but 
I'd like to hear your thoughts on that.
    Secretary Vilsack. Senator, I did--I actually started with 
the first area of emphasis, in terms of our competitive grant 
program, is on crop and livestock production and protection, 
which is precisely to your point of how----
    Senator Blunt. Actually, I thought that was more the 
implementation of things we thought might work than trying to 
develop what might work, which was my point.
    Secretary Vilsack. No, no--the question was about 
competitive research grants. And this has to do with developing 
new ways to produce, to become more efficient, more effective. 
It's precisely the point that I'm making.
    Senator Blunt. Good.
    Secretary Vilsack. As well as on the food security side, 
how do we learn from our experiences in other countries that 
may be drought-stricken, may be struck with floods? How can we 
create, potentially, new products that would be more inclined 
to be productive in very adverse weather conditions? That's 
part of the research, as well.

                            TRADE AGREEMENT

    Senator Blunt. Good. On the ``other countries'' front, we 
have three trade agreements. I understand they could mean an 
additional $2.3 billion in meat and poultry exports alone. That 
could add almost 30,000 new jobs in our economic recovery. What 
is the position you and the Department are taking on each of 
those three agreements?
    Secretary Vilsack. We are very supportive, obviously, and 
hope to have quick ratification, of the Korean Free Trade 
Agreement, which has been completed. That will basically allow 
60 percent of the tariffs on about $5 billion of agricultural 
products to be removed immediately; the other 40 percent, over 
a period of years. You're correct, it will increase 
opportunities for us and make us far more competitive. We want 
it to be done quickly, because, obviously, we risk the 
possibility of Korea making a deal with Australia and other 
countries, where we could potentially lose market share.
    It's my understanding that Ambassador Kirk has been 
instructed to complete the discussions and negotiations on the 
Colombian and Panama Free Trade Agreements, and we're excited 
about that opportunity, as well. We hope that the Korean Free 
Trade Agreement's passage will provide momentum for the passage 
of the other two free trade agreements.
    It's not just those bilateral agreements, it's also the 
multilateral discussions that are taking place--the 
Transpacific Partnership, which the President is very 
interested in embracing--as well as our efforts at USDA in the 
Foreign Agricultural Service to reduce barriers to trade. We've 
seen a lot of that happen, in part because of the growing trade 
surplus that we're experiencing in agriculture. We project it 
to be $47.5 billion this year, which will be a record, in terms 
of sales, by almost a $20 billion increase more than last 
year's record. Every $1 billion of agriculture sales creates 
8,000 to 9,000 jobs. So, we are certainly supportive of this, 
and encouraging quick action.
    Senator Blunt. Very good.
    On the other two agreements, not for today, but I'd like to 
know what you think, for Colombia and Panama, the best markets 
are. For example, wheat or other markets that might benefit.
    Regarding the beef market, and again, I think your point is 
well made, that if we don't get to those markets before other 
people do, you allow patterns to establish that are often hard 
to reverse. And I think the beef area still needs some work, 
but it's moved some since Ambassador Kirk has worked on it, as 
he has.

                   GAO REPORT ON DUPLICATIVE PROGRAMS

    There was a GAO duplication report that came out after you 
submitted your budget, and I wonder if that's given you a 
chance to go back and look at things to find some savings by 
bringing programs to your Department that would be better done 
there than somewhere else, or figuring out how to better 
accomplish some of the programs that are duplicative.
    Secretary Vilsack. I had a conversation with the President, 
earlier today, about the whole issue of trade--as you well 
know, that there are a number of agencies that are involved and 
participate in trade. The challenge is to make sure that the 
opportunities and the tremendous advantage that we have in 
agriculture, in whatever structure, whatever ultimately comes 
about, in terms of restructuring or reorganization, is not 
impacted negatively. This is a good-news story. This is a 
positive story. It's one we want to build on, we want to 
continue. We've got really good people working at Foreign 
Agricultural Service, breaking those barriers down. We want to 
continue that.
    We are constantly looking for ways in which we can 
restructure and reorganize within the USDA. We have a Process 
Improvement Program underway, which is identifying efficiencies 
and savings. As we deal with difficult budgets, as we deal with 
decisions you all will make, they will obviously impact 
personnel. Our only request is that you give us sufficient time 
in which to manage it properly.
    As I said earlier, if we try to shoehorn in a solution to 
budget problems that have accumulated over a number of years 
into a short period of time, it makes it much more difficult 
for us, as managers, to do an effective job and to minimize the 
negative impact that it may have on the American public. We 
don't want that. You don't want that. We just simply need 
appropriate time.
    I haven't had a chance to look at the GAO report in its 
totality. I know that there are issues concerning food safety. 
And as we are working with the FDA to make sure that we are 
coordinating our efforts so that we have, in a sense, a virtual 
food safety agency, in terms of its capacity, in terms of its 
philosophy, focused on prevention, as opposed to just reacting. 
We want to be able to be proactive. We want to prevent problems 
from occurring before they happen.
    Senator Blunt. I remember one point in that report was that 
FDA is responsible for the safety of shell eggs, and USDA is 
responsible for the safety of processed eggs.
    Secretary Vilsack. That is a good example, Senator, but, 
maybe a better example is the pizza example, that, if it's a 
cheese pizza, with respect to Senator Brown or the chairman----
    Senator Blunt. Particularly if it's a Swiss cheese pizza.
    Secretary Vilsack. That might be tough. But if it's a 
cheese pizza, basically, FDA does it. But if there's one 
pepperoni slice on it, it's ours. And I think that there are, 
obviously, ways.
    But in order to do this, I think the first thing is, you've 
got to build a foundation. And the way you build a foundation 
is to make sure that the philosophies are the same. I think 
what we had was a philosophy, because of the quantity that FDA 
had, of being reactive to circumstances, to try to mitigate the 
impact. And we at USDA--because of our niche, we were looking 
more to preventative measure. I think preventative is now what 
you all have been able to do with the food safety legislation 
that passed last year. You've got us all on the same track, 
which I think is very, very important, and I think it's going 
to result in improved food safety.
    Senator Blunt. I did ask the Housing Secretary the other 
day, at a hearing like this, if they had the infrastructure to 
handle the rural housing component. They may or may not have. 
And what we don't want to do is eliminate programs if your 
Department can uniquely serve a purpose that others would have 
to create additional infrastructure to do. So, we want to be 
careful about it, but we also want to be sensible about it, in 
trying to eliminate duplication wherever we can.
    Secretary Vilsack. Also, I think that there's a real desire 
to avoid--we had this with the U.S. Agency for International 
Development, in terms of overlapping jurisdiction and 
responsibilities and confusion.
    There's a difference, if I can, between rowing and 
steering. Steering is the policymaking aspect of this. There 
should be consistency. There should be, clearly, somebody in 
charge of the steering apparatus. But the implementation--it's 
a different set of skills, and somebody ought to be--that ought 
to be a separate lane. And if you start confusing the steering 
and rowing, you end up not going anywhere.

                               BROADBAND

    Senator Blunt. That is absolutely true. Not for an answer 
today, but on broadband, which we're all interested in seeing 
that people have access to, I'd like you to come back to me 
with a definition of what ``underserved'' means. I know what 
``unserved'' means. I don't know what ``underserved'' means, 
and I think you get into a really interesting competitive 
environment, where you go in and assist somebody to compete 
with someone who has gone in and already put infrastructure in, 
themselves, without taxpayer help.
    Secretary Vilsack. I think the answer to that may be in the 
interim final rule that we presented today. We'll get you and 
your staff a copy of that.
    [The information is available as follows:]

    See Federal Register, Monday, March 14, 2011, Vol. 76, No. 49, pgs 
13770-13796, Rules and Regulations at http://www.gpo.gov/fdsys/pkg/FR-
2011-03-14/pdf/FR-2011-03-14.pdf

    Senator Blunt. Good. I'd like to see it.
    Thank you.
    And thank you, Mr. Chairman.
    Senator Kohl. Thank you, Senator Blunt.
    We'll listen, now, to Senator Nelson, then Senator Hoeven, 
and then Senator Cochran.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    And, Mr. Secretary and your colleagues, it's good to have 
you here. We appreciate this opportunity to go over some very 
important issues.

                   NATIONAL DROUGHT MITIGATION CENTER

    Mr. Secretary, as you know, the National Drought Mitigation 
Center at the University of Nebraska, Lincoln, performs a 
number of valuable services: monitoring and forecasting 
drought, planning for drought, and developing means of 
mitigating drought. It's extremely important for farmers and 
ranchers for understanding trends that affect food production 
and for planning by a number of businesses and individuals. And 
the widely used Drought Monitor is published on Thursdays, I 
believe. As we all know, these are extremely important.
    For a number of years, a number of these beneficial 
programs were supported by earmarks. In the absence of 
earmarks, do you have any plans for sustaining the National 
Drought Mitigation Center through--and its activities--in your 
fiscal year 2012 budget?
    Secretary Vilsack. Senator, what we have suggested is that 
there really does need to be a priority-setting process. There 
are a number of projects that have received earmarks over the 
course of a number of years. All of them have, I'm sure, 
appropriate justification, including the one that's located in 
your area, in Nebraska.
    I think it would helpful for us to, basically, do a review 
of all of those proposals and all of the existing facilities to 
determine, what are the highest priorities? When we are dealing 
with difficult budgets, it is, at the end of the day, about 
choices and priorities. We want to make sure we can justify 
whatever decisions are made.
    So, there is a priority-setting process in place. I can't 
tell you, today, where the Nebraska project is, specifically, 
in that process, because it hasn't been completed.
    Senator Nelson. I might point out that the project might 
exist in Nebraska, but it's nationwide in its implications, and 
is used by a number of other entities, as well. Unfortunately 
or fortunately, depending upon your point of view, drought is 
not just unique to Nebraska. So, others have focused on it, and 
I think it's, obviously, a worthwhile project. And I want to 
make a pitch for it. Perhaps we can follow up after the 
hearing.
    And relating to trying to find a way to make a budget work 
in difficult and trying economic times, I understand the 
challenge that you face. I think it's important for the 
American people if we--consider it this way, that if you like 
importing 70 percent of your oil, you'll love importing 70 
percent of your food.

                        AGRICULTURAL PRODUCTION

    What I'm getting at is, your agency and the programs under 
your agency and programs--new farm program and everything we 
move forward on, will be designed to try to sustain American 
agriculture so we can continue to produce, here at home, our 
own food for our own needs: food, fuel, fiber, and feed.
    So, I hope that, as we look at cuts, we'll be judicious 
and, as you say, prioritize, so that, at the end of the day, 
agriculture is not left hanging without a safety net. In 
anticipation of bad times, we need to be sure that we are 
protecting against those bad times. And it's harder to do it--
in good times, in terms of commodity prices. But in tough 
budget times, as we do that, we have to be very judicious and 
have very strong prioritization so that we don't end up having 
people talk us out of continuing to support agriculture in 
advance of the bad times.
    Secretary Vilsack. I'm not sure if I have time to respond 
to that, Mr. Chairman.
    Senator, we obviously agree. We're certainly pleased with 
the fact that we have a strong agricultural economy today, but 
recognize full well the nature of agriculture could be 
difficult tomorrow. There does need to be a strong safety net. 
We do have to have shared--as the President says, shared 
sacrifice and shared opportunity, and it has to be 
proportional. We think our budget reflects those--that balance. 
We think it maintains a strong safety net, through a variety of 
mechanisms: additional market opportunities, crop insurance, as 
well as the payment structures that are in place. We are 
suggesting some changes to the payment structure which we think 
are legitimate. But we're happy to tell the agricultural 
community that we are aware of the need for a strong safety 
net.
    Senator Nelson. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you, Senator Nelson.
    Senator Hoeven, Senator Cochran.
    Senator Hoeven. Thank you, Mr. Chairman.
    Secretary Vilsack, good to see you again. You've been up 
here a lot, and I know how demanding your schedule is. So, it's 
good to have you here.

                         AGRICULTURAL RESEARCH

    First thing I want to touch on, for just 1 minute, is a 
follow-up to both my colleagues, Senator Moran and Senator 
Blunt, in emphasizing the importance of agricultural research. 
I think it pays incredible dividends. And obviously, we're 
going to have to tighten up on these budgets. We have a 
spending issue. And from what I've seen, agriculture will 
certainly take its share of the load. Some of us may feel it's 
even taking more than its share of the load. And I think that's 
borne out by some of the percentages I've seen so far.
    But good farm policy is important to every single American 
and people all over the globe, as you well know. We have the 
lowest-cost, highest-quality food supply, not only in the 
world, but in the history of the world, thanks to our farmers 
and ranchers.
    But I'm wondering if there's some flexibility that we could 
give you, in your budget, that would help. And a couple 
different areas. Agricultural research. I think that's 
incredibly important. If you have some ability to move dollars 
around, that might help us do more through our universities and 
extensions, so forth, to do a good job on agricultural 
research. Biofuels development. Also, even in the area of, with 
the Rural Utilities Service (RUS), some of the new clean coal 
technologies, which actually comes under your purview through 
RUS.
    Is there something we can do with flexibility, in these 
times when there are going to be less dollars, that can really 
help, in terms of doing the job--make your budget go further 
for agriculture?
    Secretary Vilsack. On the research side, Senator, we're 
trying to do that by increasing, over what we had last year, 
the competitive grant program. We think that that is a way in 
which we can more effectively leverage scarce Federal resources 
to partner with private resources and the land grant 
universities to extend our research opportunities.

                            ENERGY PROGRAMS

    You mentioned RUS. We are proposing, in this budget, the 
capacity to use a portion of $6 billion in loan authority to be 
able to better assist existing facilities that might be fossil 
fuel-based, as they look for new renewable opportunities for 
peak production, for efficiencies and improvements, and more 
flexibility in being able to use those resources to help assist 
in the development of those improvements. That would be 
something that could be helpful.
    Senator Hoeven. So, that is something we could work with 
your people, in terms of your budget, that--clean coal 
technology, the RUS loan program is a great example. How do we 
make sure--same thing in biofuels--second-generation cellulosic 
development for ethanol, other--and biodiesel.
    Secretary Vilsack. Well, the biofuels----
    Senator Hoeven. We need to get that creativity going in the 
private sector.
    Secretary Vilsack. You're right.
    Senator Hoeven. We need to get your dollars into those 
projects.
    Secretary Vilsack. On the biofuels side, I think the 
Congress and the President have been of one mind, in terms of 
getting the energy title of the farm bill implemented. And we 
are attempting to do that with new biorefineries that are being 
financed with the Biomass Crop Assistance Program, with 
advanced biofuel producer assistance. All of that is underway. 
So, I think we're doing a pretty good job on that. But we're 
certainly willing to work with you in other ways.
    I will tell you that I have a deep concern--this is a 
little far afield from your question, but I have a deep concern 
about the cliff that some folks want to create, in terms of the 
incentives that are currently in place for the biofuel 
industry. I think, if you create a cliff, what you're going to 
see is a drop in production. You're going to see a loss of 
jobs. I think it would be much better to have a glidepath 
towards ultimate elimination of those incentives--but, a 
glidepath. And perhaps a redirection of those incentives in a 
way that helps blender pumps, helps build greater demand with 
flexible fuel vehicles. That kind of thing could be very 
helpful to us.
    So, I think there are a number of ways in which we can 
help.
    Senator Hoeven. Blender pumps, flex-fuel vehicles, higher-
blend standard, working with the Environmental Protection 
Agency--I think we can transition to some of those measures 
that can still help the industry grow, but that don't create a 
cost, necessarily, for the Federal Government.
    Secretary Vilsack. Right. Or reduce the cost that we've 
been incurring over time.
    Senator Hoeven. Right. Thank you.
    Senator Kohl. Thank you, Senator Hoeven.
    Senator Cochran.
    Senator Cochran. Mr. Chairman.
    Mr. Secretary, welcome to the subcommittee. We appreciate 
your cooperation with us in attending the hearing.

                       CATFISH INSPECTION PROGRAM

    While we understand that the Department has been 
considering releasing some catfish inspection regulations and 
beginning to implement a program, we've not seen any final 
action taken, or specific requests for funding, for enforcement 
of the program. What is the status of that issue, if you know, 
particularly as it relates to aquaculture activities?
    Secretary Vilsack. Senator, we just recently put forward 
for comment and consideration, specifically as it relates to 
catfish, a responsibility that was given to us statutorily, a 
new inspection program. We expect and anticipate that there'll 
be quite a bit of comment, relative to precisely how extensive 
that inspection process should be, in terms of the varieties of 
catfish that should be included.
    I didn't know how many different varieties of catfish there 
were until I got this job. I just thought there was one kind, 
out in the Mississippi River. But I find that that's not the 
case. There are quite a few more.
    So, our view is that it's going to take some time for us to 
sort of get our hands around precisely what we will be 
regulating. Therefore, it would be a bit premature this year to 
ask for resources for an inspection process, or enforcement 
process, when we don't have the program in place. We anticipate 
it will take us a little time to get it in place.
    Senator Cochran. We would encourage you to move ahead on 
it. We hope you don't do like we do here in the Senate 
sometimes, and just kind of filibuster, talk, talk, and nothing 
really happens. We hope the administration will cooperate with 
this subcommittee, and collaborate on defining a new regime, 
and then let us provide the funds to pay for it.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you very much, Senator Cochran.

                   FARM SERVICE AGENCY LOAN PROGRAMS

    Mr. Secretary, for the past 2 years, private credit markets 
provided insufficient credit to support farmers and ranchers, 
due to the recession. As a result, this subcommittee had to 
increase support for FSA loan programs. Wisconsin is the 
largest user of these programs, with a loan portfolio of more 
than $1.3 billion. And they are particularly important for the 
dairy industry. This budget cuts those programs by 6 percent. 
Can you give us some assurances that private credit markets 
will provide adequate credit for farmers and ranchers in fiscal 
year 2012?
    Secretary Vilsack. Mr. Chairman, I think the most 
significant reduction in the loan programs is a program that 
provided not just a loan, but also interest assistance. Given 
the difficult times, our feeling was that there obviously are 
priorities, and our priorities should be on the direct loan and 
the guaranteed loan programs without interest assistance.
    We are seeing a better credit circumstance, in terms of the 
capacity to get credit. That's probably in part because farm 
prices are better. It's in part because we're seeing fewer 
defaults. We're seeing fewer efforts to restructure or ask for 
additional time in which to pay. Therefore, we're fairly 
confident that the numbers we've provided should be adequate to 
meet the credit needs of our farm community, given the 
circumstances as they exist today. But as you know, things 
could change in the next 3 or 4 months. We're keeping an eye, 
obviously, on energy costs. That may have an impact on all of 
this. But at this point in time, we're confident that we'll be 
able to meet the need with what we proposed.

                        GOVERNMENT SPENDING CUTS

    Senator Kohl. Mr. Secretary, as we've all been trying to 
find ways to reduce Government spending, we received from the 
Office of Management and Budget (OMB) a list of suggested 
places to cut spending across the entire Government. That list 
included 38 items, of which 12 out of the 38 were from USDA. 
Those USDA programs included cuts of $1.5 billion, from a total 
of $6.5 billion on the entire OMB list.
    So, can you explain why OMB seems to be focused so much on 
USDA spending? Are these USDA programs really not that 
important? Does USDA simply have too much money these days, or 
does the administration have huge amount of regard and respect 
for your ability to create efficiencies?
    Secretary Vilsack. I'd like to think it's the latter, Mr. 
Chairman. But in all seriousness, we at USDA recognize the 
responsibility because of the people that we work with and 
represent and work for--the folks in rural America, who I 
think, themselves, understood something about that long ago, 
which is one of the reasons why the agricultural economy is 
probably a little bit stronger than other parts of the economy, 
because there wasn't quite as much debt. We're seeing, right 
now, an 11.3-percent debt-to-asset ratio in farm country, which 
is a solid ratio.
    So, we stepped up last year, with a $4 billion savings on 
the crop insurance. We were asked to identify, consistent with 
the President's instructions, a number of reductions that would 
take place within a reduced discretionary spending number. 
We've provided those to OMB. And I think what you see is a 
reflection of OMB's efforts to accelerate what we have 
identified in the fiscal year 2012 budget as a way of assisting 
the Congress in trying to finalize the fiscal year 2011 budget.
    Will these reductions be easy? No. If I had my druthers, 
I'd like to live in a world where we had unlimited resources 
and we didn't have to deal with these issues. But the reality 
is, American families are dealing with them, and they expect 
their Government to do the same. And we want to be reflective 
of that value.
    Senator Kohl. All right. Senator Pryor, we'll turn to you.
    Senator Pryor. Thank you, Mr. Chairman.
    Secretary Vilsack, always good to see you. Thank you for 
being here today.
    Let me start by picking up on something that Senator 
Cochran said just a few moments ago. And that is that catfish 
is an important industry, of course, but even more than that, 
it's an important food source for people, and it's important 
that consumers know what they're eating and can be assured that 
it's safe to eat. So, I hope that the USDA will continue to 
move down the tracks with your new catfish rule.

               NATIONAL INSTITUTE OF FOOD AND AGRICULTURE

    Let me, though, ask a question about the National Institute 
of Food and Agriculture (NIFA). I have a question, generally, 
about the administration's decision to recommend some of these 
cuts, because as some of my colleagues have said already, 
agriculture is a fairly strong sector of the U.S. economy. I 
think you just mentioned that. And we are not doing well, when 
it comes to exports. We have a huge trade deficit. The 
President has come out and said he wants to double exports 
within so many years. It seems to me that we're a world leader 
in exporting of agriculture products, and so I'm not sure why 
we should be cutting that. We want to see economic recovery. We 
want to see a more stable, more robust economy in this country. 
And really, the foundation of rural America's economy is 
agriculture.
    So, I was going to ask about NIFA. But just generally, why 
are you recommending some of these cuts? And particularly with 
NIFA, which is agricultural research and is doing great things 
all over the country. Why are we cutting now? I understand 
we're in a difficult budget environment, but tell me the 
administration's thought process.
    Secretary Vilsack. I would say two things.
    First of all, as it relates to exports, I want to make sure 
I make our budget clear, Senator. We are proposing, actually, 
in that area of the budget, an increase of $20 million. And we 
believe that that increase--based on experience, every $1 we 
spent on export assistance last year netted $35 of trade. So, 
that's actually an increased item on our budget.
    Senator Pryor. Right.
    I think it's great. That's why we need the product in the 
pipeline.
    Secretary Vilsack. It can create economic opportunity.
    As it relates to NIFA's budget, basically, we are 
increasing the competitive grant program within NIFA. Our 
belief is that, by increasing that part of NIFA, of AFRI, we 
will be able to leverage an equal or greater amount of overall 
dollars within research. So, while it obviously is, in total, 
less money, we think by increasing a part of that budget, we 
can make up for whatever reductions may take place in other 
parts of the research budget.
    And it's primarily in the areas of formula funding, a small 
reduction in formula funding, an increase in competitive 
grants, because competitive grants, we believe, have the 
greater potential for accessing additional dollars into 
research. This administration has been a supporter of research, 
and has been proposing additional resources for research, over 
the last couple of years.
    Senator Pryor. Thank you, Mr. Chairman.
    Senator Kohl. Thank you very much, Senator Pryor.
    Senator Blunt.
    Senator Blunt. Thank you, Chairman.

                      DISCRETIONARY FUNDING LEVELS

    What is the fiscal year 2010 number that you're working 
under now, the fiscal year 2012 number, and the fiscal year 
2008 number? If somebody could give me the bottom line. I don't 
expect you to know that, without looking it up, but you might.
    Secretary Vilsack. I know that the net discretionary 
appropriations for fiscal year 2010, enacted, was $26 billion. 
In the fiscal year 2011 budget, what we proposed was a little 
more than $25.5 billion. And the fiscal year 2012 number is 
less than----
    Senator Blunt. This is net discretionary, right, Secretary?
    Secretary Vilsack. Yes.
    Senator Blunt. The other number I'd like to know is what 
the 2008 number was for net discretionary.
    Secretary Vilsack. The fiscal year 2012 budget number is 
almost $24 billion--$23.8 billion. The fiscal year 2008 number 
is $21 billion.
    Senator Blunt. Okay, that's helpful. Thank you.

                           BUDGET PRIORITIES

    What are the three top priorities that you have for the 
year for the Department? And why would those be your three top 
priorities?
    Secretary Vilsack. That is a really difficult question, 
given the scope of what we do at USDA.
    First and foremost, we obviously want to continue the 
momentum that's been building in rural America, in terms of job 
growth and economic opportunity. We've got a strong 
agricultural economy. We want to continue to build on that. We 
have a strategy of expanding broadband, of making sure the 
biofuels industry is supported, of doing a good job of using 
our conservation resources in a way that builds outdoor 
recreational opportunities, which we think can help build the 
rural economy. And the ability to build local and regional food 
systems creates job opportunities. So, that's one.
    Second, we've got a good trade story to tell. We obviously 
want to increase the momentum there.
    Then we have a responsibility to make sure that safe and 
nutritious food is available to every American. So, that gets 
into the food safety area. It also gets into the nutrition 
programs that are important, with particular emphasis on 
implementation of the recently enacted Healthy and Hunger-Free 
Kids Act of 2010, a historic opportunity for us to improve, 
significantly, the school lunch and school breakfast programs, 
given the obesity and hunger issues we face.
    Now, there are a multitude of other responsibilities we 
have. Invasive species are a big issue, often not discussed in 
a context of this budget, because, in terms of dollars, it may 
not be the largest part of our budget, but it's extraordinarily 
important to crop production and productivity.
    There are issues relative to homeownership, that we 
discussed briefly earlier. That's an issue.
    The credit needs of farmers is an issue. The beginning 
farmer. I mean, there are just a lot of issues that you deal 
with in this Department.
    And asking which of those, of all my priorities, is sort of 
like asking which of my two sons I love the most. I love them 
all. And we want to work hard to try to advance all of these 
priorities.
    Senator Blunt. Thank you, Secretary.
    I think that is it for my questions, Mr. Chairman.
    Senator Kohl. Senator Cochran.
    Senator Cochran. I have no further questions.
    Senator Kohl. Senator Hoeven.
    Senator Hoeven. I have one other question, Mr. Chairman.

                             CROP INSURANCE

    Mr. Secretary, crop insurance is incredibly important for 
our producers. It's going to be incredibly important in the 
next farm bill. I see, in the budget proposal you put forward, 
you're reducing funding for crop insurance by $1.7 billion. 
That follows about a $4 billion reduction this past year. But I 
think crop insurance is really going to be a cornerstone of our 
safety net. It will be a cornerstone of our safety net for our 
producers in the new farm bill. How do we improve crop 
insurance?
    Secretary Vilsack. If I can, let me explain why we're 
proposing the reduction. The $4 billion reduction was, in part, 
a result of us doing a historical study of appropriate returns 
on investment for the insurance industry to provide stability 
in the crop insurance arena. What we determined was, a 12-
percent return on investment would be sufficient to promote and 
ensure stability. What we did with the crop insurance agreement 
was to come down from the 17-percent to a 14-percent return. 
So, we think that there is stablility and security.
    The proposal we're making this year is in one narrow area 
of crop insurance: catastrophic insurance. And the reason we're 
doing this is because the loss ratio, not the premiums, but the 
relationship with the insurance industry was based on a 1.0 
loss ratio. When in reality, historically, it's been far less 
than that. So, there are ways in which we can reduce the 
exposure to the taxpayers, not increase the cost to producers, 
and make the product still available. That's what we're 
proposing.
    We are expanding crop insurance. We have 14,000 additional 
customers in our crop insurance program, as a result of the 
program improvements we made last year in range and pasture and 
forageland areas. We're looking at a series of organic crops 
that could potentially be covered, as well. We're reducing 
surcharges on a variety of citrus products, which may not 
impact North Dakota, but----
    Senator Hoeven. That's funny.
    Secretary Vilsack [continuing]. Are obviously important to 
folks in the South. So, there are steps that we are taking.
    We are also creating a premium refund program for good 
producers, those who have historically good records. We've 
identified about $75 million that could be returned, if you 
will, to producers.
    So, I think we're looking--always looking for ways in which 
we can expand coverage and create a better program.
    Senator Hoeven. I think it's going to be absolutely key 
that we work together, particularly as we go into this next 
farm bill, on crop insurance. I think that's going to be just a 
key, key component. And we have such a good case to make with 
it, too, for our producers.
    Secretary Vilsack. You're right, Senator. I don't disagree 
with that.
    Senator Hoeven. Thank you.
    Senator Kohl. Senator Pryor, you have a question?
    Senator Pryor. I do, Mr. Chairman. Thank you.

                  THE NATIONAL AGRICULTURAL LAW CENTER

    This may seem like a parochial matter, but it really isn't; 
it's of national importance. And that is, University of 
Arkansas School of Law has the National Agricultural Law Center 
housed there. It offers a master of laws in agricultural law, 
which I think is the only program in the country that does 
that. But even more than that, it is really a clearinghouse for 
all kinds of information. Last year, they had 430,000 visitors 
to their Web site, wanting to know about agriculture law.
    It reminds me--I just finished a book on healthcare--
there's now a new field of economics, called ``healthcare 
economics.'' Agriculture is complicated enough, where there is 
a legitimate field of agriculture law.
    But the Web site also had well more than 1 million hits. 
And 20 percent of those--this is just last year's numbers--20 
percent of those were Federal employees.
    So, this is a real resource that's available to everybody. 
Even our own Federal Government relies on it heavily. There's a 
lot of very constructive and positive things I could talk about 
with the National Agricultural Law Center. In fact, in your 
shop, Janie Hipp and Doug O'Brien are former directors of the 
center.
    Nonetheless, I'm curious to hear your explanation about why 
the program is proposed to be terminated and how we might 
overcome the adverse effects of a termination.
    Secretary Vilsack. Senator, this is just a reflection on 
the concern that has been expressed by the President and 
others, in terms of specific earmarks. This is a process that 
we need to undertake within the USDA, that we are undertaking 
within USDA, to establish a priority listing of things that 
need to be maintained and things that need to be continued, and 
to be able to explain and justify why they need to be 
continued. We're undertaking that. And in lieu of that, our 
budget reflects an elimination of all of those earmarks.
    Senator Pryor. Mr. Chairman, I'm not sure I agree with 
y'all's definition of ``earmark,'' but that's something that we 
should talk about further, and maybe not in this context. But I 
do think it does provide a national service.
    Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                Questions Submitted by Senator Herb Kohl
                               broadband
    Question. A recent Washington Post article called the U.S. 
Department of Agriculture (USDA) Rural Broadband Loan Program one of 
the ``worst ideas in Washington.'' The loan program is eliminated in 
your fiscal year 2012 budget, but there will still be money available 
from previous years to carry it out.
    How do you respond to criticism that the program hasn't focused on 
rural America?
    Answer. The program is focused on rural America. The issues raised 
in the Washington Post article addressed concerns from the USDA 
inspector general that the program did not reach the most rural 
communities. USDA has used the statutory definition of ``rural'' for 
its Broadband program that was enacted through the 2002 farm bill and 
then revised the Broadband program in 2008. USDA had no authority to 
change the statutory definition and was pleased that the Congress 
enacted the inspector general's recommendation to amend the definition 
of ``rural'' in 2008. This new definition of rural was used for the 
American Recovery and Reinvestment Act's (ARRA's) Broadband Initiatives 
Program (BIP) and is used today in our revised farm bill Broadband Loan 
program. I am also pleased to report that no farm bill broadband 
infrastructure loans to new borrowers were made under this 
administration using the old definition of ``rural.'' I am also pleased 
to report that the Rural Utilities Service (RUS) has addressed all 
Office of Inspector General (OIG) recommendations on the farm bill 
Rural Broadband Loan Program and as of March 24, the OIG has now closed 
the audit. If the Congress has concerns with the current statutory 
definition of rural for our Broadband program, we would be pleased to 
work with the subcommittee to draft a new standard.
    Question. When will rural America truly be served by high-speed 
broadband, which is important for economic development?
    Answer. Under ARRA, USDA received more than $28 billion in 
applications for BIP. With our $2.5 billion in budget authority, we 
were pleased to leverage these funds into 320 awards totaling in excess 
of $3.5 billion. In Wisconsin, USDA made 15 BIP awards totaling in 
excess of $90 million. For example, USDA provided a $15.5 million loan 
and $15.5 million grant to Chequamegon Communications Cooperative, Inc. 
(CCC) to offer high-speed broadband to 31 rural communities in northern 
Wisconsin. CCC's network will bring high-speed fiber to more than 3,000 
new customers including several community anchor institutions. To 
further leverage this BIP award, CCC partnered with the State of 
Wisconsin on another ARRA project to bring high-speed Internet to 
schools and libraries in the area. The project will create or save 66 
jobs.
    Regrettably, we did not have sufficient resources to reach every 
unserved area in rural America. To help reach families and business in 
areas unserved by BIP or the Department of Commerce's Broadband 
Technology Opportunities Program (BTOP), USDA made $100 million in 
awards to satellite service providers to lower the cost of installation 
and monthly broadband service to areas that remain unserved after all 
BIP and BTOP awards were made.
    Finally, USDA has other broadband programs to assist with bringing 
broadband to rural areas. Our Community Connect Grant program is 
specifically targeted to rural communities that have no broadband 
service. The 2008 farm bill Rural Broadband Loan Program offers loans 
to bring broadband to underserved and unserved communities. Both 
programs are operating under carryover funding this fiscal year and 
were part of the President's fiscal year 2011 budget request. The 
President's fiscal year 2012 budget did not request funds for the farm 
bill loan program but did request an additional $17.8 billion for the 
Community Connect Grant program. The fiscal year 2012 budget did not 
request additional funds for the Broadband program because it 
anticipated sufficient carryover funding would be available.
                            renewable energy
    Question. USDA was given a clear and urgent mandate to promote the 
development and expansion of renewable energy, to help diminish the 
Nation's dependence on fossil fuels. Recent oil price volatility has 
caused us to refocus on this charge. Substantial mandatory funding was 
included in the farm bill for this purpose. This subcommittee needs to 
know what USDA has done with this mandate and the funding you received. 
Specifically:
    Please describe the current state of implementation of USDA's 
renewable energy programs.
    Answer. The interim rules for the Advanced Biofuel Payment Program 
and the Repowering Assistance Program were published in the Federal 
Register on February 11, 2011. The interim rule for the Biorefinery 
Assistance Program was published in the Federal Register on February 
14, 2011. Notices of funds availability and a notice contract of 
proposal for these programs were published in the Federal Register on 
March 11, 2011. The interim rule and Notice of Funds Availability for 
the Rural Energy for America Program (REAP) are expected to be 
published in the Federal Register by April 14, 2011. The Rural Energy 
Self Sufficiency Initiative was not implemented because no funds have 
been appropriated for this program.
    Question. What are the timelines you envision for bringing new 
energy sources on line to reach consumers?
    Answer. New energy supplies from biofuels currently being developed 
by the Biorefinery Assistance Program will take 3-5 years to allow for 
plants to be built, ramped up, and for supplies to reach consumers. 
Less complex renewable energy and energy efficiency projects involving 
known technologies are being completed anywhere from a few months to a 
few years.
    Question. What challenges are slowing achievement of your goals?
    Answer. Interest in our programs has never been greater. In terms 
of market concerns: the availability of private-sector capital and 
investments necessary to develop new biofuels and biorefineries is a 
challenge. Some lenders are risk averse and the Department has worked 
closely with the industry and the investment community to address this 
issue.
    Question. We need to know which of these programs work and which do 
not. How are you measuring success and what can you tell us about 
successes and failures?
    Answer. All of our programs are working, very popular, and in the 
case of REAP, producing measurable results. While awards have been 
made, none of the construction projects have been completed. In terms 
of applicants: REAP had 2,400 successful applicants in 2010; it helped 
to provide an investment of $159 million in renewable energy and energy 
efficiency projects in rural America with less than $84 million of 
Government grants and helped to produce or save more than 2,900 
megawatt hours of energy. The Bioenergy Program for Advanced Biofuels 
is providing incentive payments for the production of advanced 
biofuels. The program made payments of $19 million to 140 recipients 
that produced advanced biofuel during fiscal year 2010. We measure 
success of our programs by the geographic diversity of the program 
funds, funding a wide range of project technologies, jobs creation, 
energy production, energy conservation, leveraging other funds with 
program funds, and by providing loan guarantees for the development of 
new fuels that will meet the energy demands of our Nation. Upon 
request, the Rural Business Service (RBS) will provide summary data for 
all of the title 9 RBS programs.
    Question. Please describe how you are coordinating the energy 
initiatives within USDA, and with land grant universities' research 
efforts.
    Answer. USDA is working within the Department and with other 
Federal departments and organizations, including the land grant 
universities, on furthering renewable energy initiatives and programs. 
Efforts include the following intra-/inter-governmental panels, 
councils, working groups, and boards.
    As an extramural research, education, and extension agency, the 
National Institute of Food and Agriculture (NIFA) works directly with 
land grant universities and others to implement sustainable bioenergy 
strategies. These extramural groups carry out the needed work to 
advance programs. This is further coordinated with NIFA review of the 
State plans of work for noncompetitive funding. Competitive funding 
typically brings together university faculty, Federal scientists, 
industry, and others to meet national needs related to advancing 
bioenergy. This leverages and coordinates Federal, State, and private 
funding in most cases.
    The USDA Energy Council mission is to advance the contribution of 
agriculture and forestry in rural America in promoting the Nation's 
achievement of energy security through the efficiency and effectiveness 
of the Department's numerous energy-related programs and initiatives. 
Chaired by the Secretary of Agriculture and consisting of the Under 
Secretaries and other senior managers, the Energy Council leads the 
Department in policy development and efforts to reach all audiences to 
inform them about USDA energy programs and regulations. The council 
ensures that these audiences are aware of the Department's 
comprehensive energy program and also understand how it fits into the 
United States' overall energy policy.
    The USDA Energy Council Coordinating Committee consists of staff 
from all USDA mission areas who work on energy issues, coordinates 
energy-related activities among USDA agencies and performs duties as 
assigned by the Secretary as the Energy Council chair, or the Energy 
Council as a whole.
    The Biomass Research and Development Board is co-chaired by USDA 
and the Department of Energy (DOE). The board coordinates the 
Governmentwide research initiatives and activities for the purpose of 
promoting the use of bio-based products, power, and biofuels. Members 
of the board also include the National Science Foundation (NSF), the 
Environmental Protection Agency (EPA), the Departments of the Interior 
and Defense, and the Office of Science and Technology Policy.
    The Biomass Research and Development Advisory Committee is a group 
of approximately 30 individuals from industry, academia including land 
grant universities, and State government. The committee is responsible 
for providing guidance to the Biomass Research and Development Board on 
the technical focus of the Biomass Research and Development Initiative.
    The National Agricultural Research, Extension, Education and 
Economics Advisory Board's Renewable Energy Committee was created by 
the Congress in 2008. This committee annually submits to the advisory 
board a report that contains its findings and any policy 
recommendations to the USDA in preparation for the annual budget. The 
committee also consults with the Biomass Research and Development 
Technical Advisory Committee.
    Question. How is USDA coordinating efforts with other Federal, 
State, and private entities to make sure the most efficient use of 
public dollars is taking place?
    Answer. We coordinate with DOE, using their environmental reviews 
when available for biorefinery assistance projects and we are working 
with DOE grant recipients, where we guarantee loans to build 
biorefineries that will help to end our dependence on foreign sources 
of petroleum. The USDA works closely with DOE to provide the best 
energy expertise to our field staff and ensure that all of our project 
loans and grants are awarded in accordance with the highest 
professional standards. We work closely with EPA to ensure that their 
expertise is utilized as well as their efforts to promote anaerobic 
digester technology. We ensure that applications for assistance are 
selected on a basis of competition using priority scoring so that 
applicants selected have a project that is meritorious. REAP provides a 
grant for no more than 25 percent of eligible project costs, up to a 
maximum amount to an eligible applicant; and the majority of funds are 
invested by the applicant who put their own money into the project. Our 
programs succeed by utilizing State incentive programs, renewable 
portfolio standards, utility incentives, and local and national lenders 
making solid investments in partnership with applicants throughout the 
Nation.
    Question. What is your evaluation of the Department's success in 
meeting its renewable energy mandate?
    Answer. Based on the purpose of the program and the results 
tracked, we determine whether the program is successful. In fiscal 
years 2009 and 2010, REAP helped nearly 4,000 rural small businesses, 
farmers, and ranchers save energy and improve their bottom line by 
installing renewable energy systems and energy efficiency solutions 
that will save a projected 3 billion in kWh--enough energy to power 
390,000 American homes for a year. In 2010, the Biorefinery Assistance 
Program provided a conditional guaranteed for $55 million private loan 
to the advanced bioenergy producer Sapphire, once completed the 
facility is expected to generate 72 million kWh in renewable energy, 
once the biorefinery is built. In 2010, the Bioenergy Program for 
Advanced Biofuels provided $18.5 billionin support of the generation of 
53 billion BTUs, and the Business and Industry Guaranteed Loan program 
provided $43.4 billion in support of renewable energy infrastructure.
                          plant/animal health
    Question. More than $830 million is requested for protection 
against invasive species, pests, and diseases. However, there is no 
indication in the budget what the real costs of these various threats 
are, in terms of market disruption, lost income, diminishment of 
producers' capital, etc. It is also unclear what the value is of the 
Department's strategies implicit in this request. This budget asks the 
subcommittee to make decisions regarding allocating discretionary 
resources absent any cost/benefit framework.
    This subcommittee needs to know what are the costs facing the 
economy of these different threats.
    Answer. Invasive pests and diseases can cause huge losses and 
control and eradication costs. For example, we estimate that a half-
week delay in finding an animal disease outbreak can increase cleaning, 
disinfection, depopulation, and quarantine costs by $70 million per 
incident (on average). The light brown apple moth (LBAM) attacks more 
than 2,000 types of plants and trees found throughout the United States 
and we estimate that it has the potential to cause production losses 
ranging from $700 million to $1.6 billion annually if it spreads. The 
Asian long-horned beetle's total potential economic impact on 
industries in New York and New England is estimated at $1.1 billion in 
annual losses.
    Question. In addition, what are the benefits that accrue from 
expenditures on the various programs?
    Answer. The benefits of Animal and Plant Health Inspection 
Service's (APHIS') pest and disease programs generally include the 
prevention of damage to the commodity or resource at risk, reduced 
control costs over time, and continued trade opportunities. For 
example, the Asian long-horned beetle (ALB) program protects forest 
resources and urban trees nationwide, as roughly 30 percent of U.S. 
trees are potential ALB hosts. If urban areas across the United States 
were infested with ALB, the estimated potential national impact would 
be a loss of 35 percent of the canopy cover and almost $815 billion in 
compensatory value. The benefits of the program include protecting 
these trees in neighborhoods and parks across the country as well as 
preventing the spread of the pest into New England's hardwood forests, 
which support the timber, tourism, and maple syrup industries. The LBAM 
program prevents the spread of the pest through regulatory and control 
efforts. Without the regulatory program to prevent LBAM from spreading, 
U.S. trading partners would restrict, if not ban, imports of U.S. 
fruits, vegetables, and nursery stock into their countries.
    Question. What basis did the administration use to determine the 
priorities implicit in the request?
    Answer. Our main focus was to determine those programs where we 
could have a positive impact on the health of American agriculture and 
where we could best contribute to reducing losses caused by pests and 
diseases. Recognizing the need to restrain Federal spending, we 
reviewed our programs to determine where we could do things 
differently. In some areas, the agency was able to take advantage of 
program successes to realize savings (examples include the decreases 
requested for the cotton pests, screwworm, pseudorabies, and avian 
influenza programs). APHIS also identified programs that could be 
reduced since eradication or control of agricultural pests or diseases 
are no longer considered feasible (such as emerald ash borer), or where 
we will request greater contributions from partners or those that 
directly benefit from program efforts (such as the potato cyst nematode 
program).
    Question. Please identify the administration's priorities within 
these components.
    Answer. Ensuring our ability to prevent the entry of exotic pests 
and diseases, quickly detect those that do enter the United States, and 
respond in a timely way remain our highest priorities. Our budget 
proposes to maintain our strong infrastructure of highly skilled 
employees and cooperative relationships with States and industry. 
Additionally, there are several emerging needs for which we request 
more funding.
    APHIS developed the National Animal Identification System in 2004 
to enhance the United States' capability to minimize the spread of 
foreign and domestic animal diseases of concern. Since then, USDA has 
obtained input from stakeholders to develop a more efficient 
traceability system. Detecting a disease before many animals have been 
exposed to it limits the spread and allows for more timely eradication 
and management efforts. The proposed funding level for fiscal year 
2012, which includes an increase of $8.85 million for a total of $14.15 
million, more accurately reflects how much the program needs to carry 
out essential activities and retain advances made to date.
    APHIS faces a growing workload in the area of genetically 
engineered (GE) plants. The requested increase for our Biotechnology 
Regulatory Services (BRS) program, while significant, is needed to 
implement improvements, expand our regulatory program for 
biotechnology, and resolve the challenges currently faced by the 
program.
    The agency is responsible for enforcing the Animal Welfare Act 
(AWA). APHIS' Animal Welfare program carries out activities designed to 
ensure the humane care and treatment of animals. USDA's Office of 
Inspector General (OIG) recently conducted a review of APHIS' 
inspections for AWA compliance, specific to problematic dog dealers who 
have committed repeat and serious violations. OIG concluded that APHIS 
should shift its compliance efforts from an education focus to an 
enforcement focus, improve inspection performance, and seek legislation 
regarding the Internet sale of dogs. APHIS is responding to the audit 
and needs additional resources to address the improvements noted in the 
OIG audit.
    The fiscal year 2012 budget also includes increases for programs 
that target specific pests, such as the Asian long-horned beetle (ALB) 
and the European grapevine moth (EGVM). The ALB program has eradicated 
two ALB outbreaks (in Chicago, Illinois, and Hudson, New Jersey) and 
has successful tools and strategies to attack this pest. The program is 
now addressing a large outbreak near Worchester, Massachusetts, that 
threatens New England's hardwood forests. With adequate resources, the 
program can prevent ALB from spreading into the valuable forests and 
ultimately eradicate it. APHIS is also addressing EGVM (detected in 
fiscal year 2009) in California. With a strong early response, APHIS 
and State and industry cooperators have greatly reduced EGVM 
populations. Continued resources are necessary to ensure that the pest 
is eliminated.
    Questions. In the future, this subcommittee requests that this 
segment of the budget (at least) be supported by a rigorous cost-
benefit analysis, to better focus the Department's plans and 
strategies, and to equip this subcommittee with adequate tools to make 
the most effective decisions.
    Answer. We will make every effort to provide this information with 
our budget request in the future.
                     genetically modified organisms
    Question. GE or genetically modified organisms (GMOs) were in the 
news again last week--specifically, GMO alfalfa and GMO sugar beets. 
Obviously, there are a variety of concerns surrounding the 
proliferation of genetically modified (GM) species.
    What assurances can you provide that new GM crops will not result 
in drift-related problems, contaminating nearby species?
    Answer. Before a GE crop can be commercialized, APHIS thoroughly 
evaluates it to ensure there is no plant-pest risk, thereby enhancing 
public and international confidence in these products. Crops being 
field tested must be grown under a permit or notification depending on 
the type of crop and its potential risk. APHIS imposes confinement 
measures for field trials of regulated GE organisms to safeguard 
against the unintended release of GE materials into the environment and 
also limit gene flow. Safeguards can include surveying for local wild 
relatives; removing plant reproductive structures (detasseling); 
cleaning equipment; and bagging flowers to contain pollen. APHIS also 
conducts thorough inspections of field trials to ensure that 
biotechnology organizations are adhering to APHIS regulations and 
permit conditions. Once APHIS has made a determination of nonregulated 
status, the GE organisms do not fall under APHIS regulatory purview and 
can be moved and planted freely in the United States.
    Question. Does this budget request, for instance for BRS, provide 
sufficient resources for the Department to meet marketplace demands and 
ensure public safety regarding GMOs?
    Answer. The fiscal year 2012 budget request for the BRS program 
includes an increase of $12,072,000 to, among other things, enhance 
APHIS' compliance program and improve the petition process for 
nonregulated status. Specifically, the increase will allow BRS to 
inspect additional field test permit acreages, develop emergency 
response plans for APHIS to rapidly respond to incidents involving 
regulated GE organisms, enhance port of entry inspection procedures and 
processes, increase the ability to respond to emerging technologies, 
and fully implement the Biotechnology Quality Management System, a 
voluntary program that helps participating biotechnology researchers 
and companies develop sound management practices that enhance 
compliance with regulatory requirements for field trials and movement 
of regulated GE organisms. APHIS has also requested funding in the 
fiscal year 2012 budget to begin a multiyear gene flow status and 
trends monitoring program. This program will develop information about 
the extent, scale, and measurement of gene flow in major agricultural 
regions in the United States.
                                research
    Question. Mr. Secretary, the budget proposes to decrease funding 
for the two USDA research agencies, the Agricultural Research Service 
and NIFA, by $180 million. In NIFA alone, nearly 20 programs are 
eliminated.
    I understand and appreciate the need to consolidate or eliminate 
programs, especially in this budget environment. How did you determine 
which programs to eliminate and which to protect? Are you trying to 
steer people towards competitive funding?
    Answer. The administration strongly believes that peer-reviewed 
competitive programs that meet national needs are a more effective use 
of taxpayer dollars than earmarks that are provided to specific 
recipients. The fiscal year 2012 budget proposes to eliminate these 
targeted earmarks. Within necessary budget constraints, it is critical 
that taxpayer dollars be used for the highest quality projects, those 
that are awarded based on a competitive peer-reviewed process to meet 
national priorities. Therefore, some broad aspects of many research 
topics currently addressed by earmarked projects can be included in the 
scope of the Agriculture and Food Research Initiative (AFRI) program in 
fiscal year 2012. Other topics will be addressed under other broader 
based, competitively awarded Federal programs supported with non-
Federal funds administered by State-level scientific program managers.
                agriculture and food research initiative
    Question. In AFRI specifically, over the past few years, have you 
received more qualified applications than you have been able to fund? 
How do you coordinate with other Federal and State research agencies to 
prevent duplication?
    Answer. There are always more qualified applications for AFRI than 
we are able to fund. In fiscal year 2009, the first year of the AFRI 
program, NIFA received 2,424 applications, of which 835 ranked well 
enough in the peer review process to qualify for funding. Funds were 
available to support 470 of those applications. For fiscal year 2010, 
funds are available to support the applications processed to date.
    NIFA has increased discussions in recent years with agencies such 
as NSF, the National Institutes of Health (NIH), and others to ensure 
coordination and lack of duplication. NIFA is actively partnering with 
these agencies to offer joint programs in areas of common interest, 
creating greater visibility and impact for agricultural issues. For 
example, NIFA has recently partnered with NIH to offer a program 
entitled, ``Dual purpose with dual benefit: Research in biomedicine and 
agriculture using agriculturally important domestic species.'' This 
program allows NIFA to leverage its scarce dollars while engaging a 
broader research community in work relevant to NIFA's mission.
                                research
    Question. Is there concern about the long-term effects that occur 
from stopping or significantly reducing agricultural research projects 
mid-stream? Typically, do the researchers stay in agriculture research, 
or do they move on to something else?
    Answer. While the administration proposes to eliminate earmarks and 
emphasize peer-reviewed competitive programs, we do expect earmark 
projects funded in fiscal year 2010 to fully meet research goals and 
objectives outlined in the proposals submitted to and approved by the 
agency. The majority of these projects included multiyear funding that 
would allow for the orderly completion of the specific research 
outlined in these proposals. The agency has encouraged recipients of 
earmarked projects to submit proposals to the competitive grant 
programs of the agency. Researchers generally continue to stay in 
agricultural research but may also look to alternative sources to 
support their work.
                  settlements of discrimination cases
    Question. Recently the Department announced settlement processes 
for discrimination cases involving Hispanic and women farmers and 
ranchers.
    Please summarize the current status of the Pigford, Love, Garcia, 
and Keepseagle cases.
    Answer. On February 18, 2010, USDA worked with the Department of 
Justice (DOJ) to enter into a settlement with Black farmers for $1.25 
billion, known as Pigford II. And on December 8, 2010, President Obama 
signed legislation that will provide $1.15 billion in funding for this 
settlement beyond the $100 million provided for in the 2008 farm bill. 
When this settlement receives final approval by a Federal court, we 
look forward to bringing closure, once and for all, to the long-
standing litigation brought by Black farmers against USDA.
    On October 19, 2010, USDA and DOJ announced the settlement of a 
class action lawsuit filed against USDA by Native American farmers 
(Keepseagle) alleging discrimination by USDA. The settlement, which 
received preliminary approval by a Federal court, ends litigation 
concerning discrimination complaints from Native Americans generally 
covering the period 1981-1999. Under the settlement agreement, $680 
million will be made available from the Judgment Fund to eligible class 
members to compensate them for their discrimination claims, and tax 
relief. An additional $80 million will be provided by USDA for the 
forgiveness of existing farm loan program debt.
    On February 25, 2011, USDA and DOJ announced a unified claims 
process for Hispanic and women farmers and ranchers who allege 
discrimination that occurred between 1981 and 2000. Under the plan, the 
United States will make available at least $1.33 billion from the 
Judgment Fund to eligible claimants to resolve their discrimination 
claims. USDA will provide an additional $160 million in debt relief to 
successful claimants with eligible farm loan program debt. USDA is 
presently conducting outreach across the country regarding the claims 
process and is in the process of procuring an independent administrator 
and adjudicator to carry out the claims process. Once the administrator 
and adjudicator are in place, the opening of the 180-day period for 
filing claims will be announced.
    Question. Are there other situations involving groups of aggrieved 
applicants that remain unresolved?
    Answer. On March 15, 2011, a group of Garcia plaintiffs filed a 
complaint challenging the voluntary claims process. This complaint has 
been referred to the judge presiding over Garcia and the Government 
will argue for its swift dismissal. We are moving forward to fully 
implement the Hispanic and Women Farmers and Ranchers Claims Process 
and the new lawsuit has no impact on our outreach and preparation. USDA 
is confident that the court will uphold the legality of the voluntary 
claims process.
    Question. What processes have you implemented to ensure equal 
public access to all farm credit programs?
    Answer. The Farm Service Agency (FSA) has more than 2,400 offices 
located throughout the country. While not all of the offices have 
credit officials permanently stationed in them, FSA employees are cross 
trained to provide basic information on credit programs and arrange an 
appointment with the credit official if needed. Each FSA office 
delivering credit programs has developed a marketing/outreach plan to 
ensure programs are marketed to all sectors of the served communities. 
FSA credit forms have been streamlined to make the application process 
less daunting. Currently FSA is working on a ``plain language guide to 
FSA loans'' that when completed will provide for a layman's guide to 
obtaining credit.
                            renewable energy
    Question. REAP has been in existence, in some form, since the 
fiscal year 2002 farm bill. Substantial mandatory and discretionary 
funding has been spent on this program over the years. This budget 
seeks to supplement the $70 million of mandatory funds available in 
2012 with an additional $37 million of discretionary dollars.
    Why is additional funding needed for this specific program?
    Answer. The demand for REAP far exceeds the funds available in this 
program. In 2010, more than 300 eligible applications did not receive 
funding. This program encourages investment; and successful applicants 
make tangible investments in more energy conservation, more renewable 
energy production, and a more productive economy.
    Question. In the past, the bulk of this funding was used for on-
farm activities such as grain dryers. Is this the best use of this 
funding?
    Answer. Through the interim rule the agency is limiting equipment 
replacement to similar size or capacity equipment. The change is 
designed to provide an equitable distribution among a range of 
technologies and balance our portfolio without giving any project type 
an undue advantage.
    Question. Would utilizing these funds in alternative energy 
programs be more effective in moving the United States toward energy 
independence?
    Answer. REAP is geared towards rural areas and small businesses. 
Achieving energy independence is a goal that requires a comprehensive 
effort and will involve every community in America, rural and urban. 
Energy efficiency has played a major role in reducing our demand for 
energy and most experts predict we will continue to do more with less 
energy in the future. Providing the mechanisms for energy efficient 
rural communities must be part of achieving energy independence. While 
we aren't going to totally replace fossil fuels in the near term, we 
need to rapidly grow our ability to use alternative advanced biofuel 
and rural communities are on the frontlines of that effort. The 
investment in REAP and other USDA Energy programs is a sound investment 
with real dividends for America.
                    water and waste disposal program
    Question. The second largest source of budget authority 
expenditures in the USDA Office of Rural Development (RD) is the Water 
and Waste Disposal program. Projects are typically funded through loan/
grant combinations, with the loan component averaging 65-70 percent of 
the project cost.
    Have you given thought to requiring communities to rely even more 
heavily on loans?
    Answer. RD Water and Waste Loan and Grant activities are 
exclusively focused on rural water and waste infrastructure needs, 
working with only rural areas with populations of 10,000 or less. Most 
RD projects serve areas well less than a 10,000 population. Applicants 
must demonstrate that they need Federal assistance because they cannot 
obtain credit from commercial lenders or investors, and they have 
urgent needs for water or wastewater improvements. While some 
communities are able to take on additional loan debt, many of our 
applicant communities are not. The average cost for water and waste 
disposal service in rural America has increased as the cost of 
construction, operation, and maintenance of water and waste disposal 
systems has increased. The average cost per equivalent dwelling unit 
was $43 per month for water service and $45 per month for waste 
disposal service for the projects we funded in fiscal year 2010.
    The program is a needs-based program, where loan and grant funds 
are combined based on a strict underwriting process to keep rates 
reasonable for rural residents. That underwriting process considers the 
cost of the project, the current ability of a community to take on 
additional debt, and the level of reserves that are needed for 
replacement of short-lived assets (i.e., motors, pumps, etc.), as well 
as other factors necessary to ensure that the project is feasible.
    In fiscal year 2010, RD obligated 1,052 loans of which 315 (30 
percent) were cases where the loan component was greater than 70 
percent of the funding provided.
    Question. Can this be done such that grant funding is conserved for 
the most remote and low-income rural communities?
    Answer. Grant funding is currently conserved for the communities 
with the greatest financial need. We continue to implement our funds 
through an underwriting process that determines the loan and grant mix 
needed to fund the project. Grant levels are subject to the 
availability of funds and we are not always able to provide the level 
of grant funding a community has requested. Therefore, we encourage and 
often facilitate the partnering of our funding with that of other 
Federal, State, and local programs to keep the user rates as reasonable 
as possible.
                                housing
    Question. This budget announces a fee change in administration 
policy regarding rural housing support. Many long-standing rural 
housing programs are eliminated, and the flagship Single-Family Housing 
Direct Loan program is slashed. The following housing programs are 
eliminated:
  --Very Low-Income Housing Repair Loans;
  --Multifamily Housing Guaranteed Loans;
  --Credit Sales of Acquired Property;
  --Self-Help Land Development Loans;
  --Mutual and Self-Help Housing Grants;
  --Housing Preservation Grants; and
  --the Multifamily Housing Revitalization and Preservation Program.
  --And the Single-Family Housing Direct Loan Program is reduced from 
        an historic annual level of $1.1 billion to $211 million. This 
        loan program, for very low- and low-income rural households, 
        will fund fewer than 1,700 houses nationwide.
    What is your vision of the future role the Federal Government will 
play regarding providing support for rural housing?
    Answer. Housing is a vital economic pillar in rural America for 
creating wealth for communities and homeowners. USDA realizes that 
rural populations tend to be more economically challenged with lower 
incomes and fewer housing choices than their suburban and urban 
counterparts, and therefore we continue to offer a no-down payment 
homeownership program through both the Single-Family Housing Guaranteed 
and Direct programs. Providing credit in areas that lack private 
investment is a critical function of USDA RD. To address the need for 
credit--particularly in the rural housing market--RD has dramatically 
increased the Single-Family Housing Guaranteed Loan Program in recent 
years, doubling the Government's investment from $12 billion in 2010 to 
$24 billion in 2011. A fee structure that is consistent with other 
Federal housing agencies has eliminated the requirements for additional 
budget authority.
    Question. What evidence do you have that private housing credit 
markets have recovered sufficiently to meet credit needs in rural 
America?
    Answer. RD's section 502 guaranteed loans have taken on a greatly 
increased role in providing adequate housing credit in rural America. 
The program increased from 31,000 guarantees for $3 million in fiscal 
year 2006 to 133,000 guarantees totaling nearly $12 billion in fiscal 
year 2010. The market has clearly demonstrated a need for USDA's home 
loan program as lenders have increased activity in rural areas. We 
expect this growth to continue.
    The private housing credit markets have never fully met the needs 
in rural America. These credit markets have changed, with RD stepping 
in to play a crucial role to help assure adequate credit will be 
available to rural Americans and stabilize mortgage availability. The 
situation would be worse without the USDA program.
    The private housing credit markets for affordable rental loans 
guaranteed through the section 538 program have not changed the past 
several years. RD has maintained its relationship with the Government 
National Mortgage Association (Ginnie Mae) to secure loans guaranteed 
under the section 538 program. Through this relationship the vast 
majority of the loans guaranteed under the section 538 program prior to 
the credit crisis and after the crisis have been purchased by private 
investors as pooled loans in Ginnie Mae securities.
    Question. Does it make sense to have a nationwide housing loan 
program that serves fewer than 1,700 families?
    Answer. The Single-Family Housing Direct Loan Program provides 
subsidized mortgages to low- and very low-income families, who cannot 
obtain credit elsewhere, so that they can own modest, decent, safe, and 
sanitary homes in rural areas. In some instances, qualified borrowers 
can reduce the interest rate to 1 percent. The fiscal year 2012 budget 
provides funding to support the needs of rural America's neediest 
homeowners. The funds are targeted to very low-income borrowers who 
would not be eligible for private-sector financing. The Direct Loan 
program enables these borrowers the opportunity to purchase a home.
    While it's true that the Single-Family Housing Guaranteed Loan 
Program performance from 2010 shows that 30 percent (more than 40,000) 
of the loans were to low-income home buyers, there will always be a 
segment of the population that will not qualify for the guaranteed 
program because of the need to qualify for private-sector credit. It is 
USDA's intent to meet that need, however large or small, to the extent 
possible given our budget constraints.
    Question. In the face of eliminating the multifamily revitalization 
program, how does USDA plan to protect the Government's interest in its 
large multifamily housing portfolio?
    Answer. The USDA plans to protect the Government's interest in its 
large multifamily housing portfolio through a proposed budget increase 
in the Section 515 Direct Rural Rental Housing Program for fiscal year 
2012. Traditionally, the way to fund revitalization has been though the 
section 515 program with rehabilitation loans. The fiscal year 2012 
budget proposes to increase the section 515 program from $69.5 million 
to $95 million.
    Question. For years USDA has cultivated the expansion of Self-Help 
Housing grantee organizations across the country. What assistance can 
the Department provide to these organizations now that you are 
eliminating grant funding?
    Answer. USDA intends to continue a partnership in the immediate 
future with the Self-Help Housing Technical and Management Assistance 
(T&MA) contractors to provide guidance to Self-Help Housing grantees. 
As we transition out of a program that we recognize has made major 
contributions to rural housing, we will no longer have the ability to 
fund the administrative costs associated with Self-Help Housing due to 
budget constraints. Together with the grantees and T&MA contractors, 
USDA will identify other means for grantees to garner fees for their 
services and address regulations that will accommodate new ideas.
                           rental assistance
    Question. Please describe in detail the forecasting methodology 
used to develop contract renewal estimates (number of contracts and 
costs) for the President's budget.
    Answer. In 2004, the RD Program Office and Chief Information Office 
developed a rental assistance forecasting tool that incorporated the 
Office of Management and Budget's (OMB's) inflation rate to forecast 
the exhaustion of funds from all the rental assistance contracts. The 
forecasting methodology reviews actual rental assistance usage over the 
last 3 years, develops an average usage rate, and applies the inflation 
factor to determine the amount needed in the contract based on the 
number of units with rental assistance. The methodology was reviewed by 
the Government Accountability Office (GAO), which provided comments on 
the inflation adjustment that were incorporated in the tool in 2005.
    Question. How do you determine inflation factors for utility 
increases, etc.?
    Answer. Inflation factors are determined within the forecasting 
tool using the OMB inflation rate.
    Question. Is the same methodology used for section 515 and farm 
labor housing?
    Answer. The same methodology is used for section 515 and farm labor 
housing.
    Question. Has this methodology been reviewed by either OIG or GAO?
    Answer. This methodology was reviewed by GAO in 2005.
    Question. If so, what were their comments and what changes were 
implemented based on those comments?
    Answer. GAO suggested a change in the inflation adjustment to add 
the inflation factor one time, rather than for each year in a contract. 
The change was incorporated.
    Question. Please provide, by year since 2008, the total President's 
budget request, including the number of contracts and average costs.
    Answer. [The information follows:]

----------------------------------------------------------------------------------------------------------------
                                                                                      Amount
           Fiscal year            Budget request   Appropriation   No. of units      obligated      Average per
                                     (millions)     (millions)    under contract    (millions)         year
----------------------------------------------------------------------------------------------------------------
2008............................            $567          $478.7         121,568          $478.7          $3,937
2009............................             997           997.0         210,618           902.5           4,285
2010............................             897           980.0         219,231           980.0           4,470
2011............................             966           980.0         211,111           252.8           4,340
2012............................             906  ..............         204,500  ..............  ..............
----------------------------------------------------------------------------------------------------------------

    Question. Also provide the appropriated amount, the number of 
contracts actually funded and the average cost.
    Answer. [The information follows:]

----------------------------------------------------------------------------------------------------------------
                               Budget request    Appropriation   No. of units   Amount obligated    Average per
         Fiscal year             (millions)       (millions)    under contract      (millions)         year
----------------------------------------------------------------------------------------------------------------
2008........................            $567            $478.7         121,568            $478.7          $3,937
2009........................             997             997.0         210,618             902.5           4,285
2010........................             897             980.0         219,231             980.0           4,470
2011 continuing resolution..             965             980.0          58,237             252.8           4,340
----------------------------------------------------------------------------------------------------------------

    Question. For each year since 2008 please provide the average 
actual duration of contracts funded.
    Answer. Starting in fiscal year 2008, Rental Assistance contracts 
were funded for a 1-year period. In fiscal year 2009, of the contracts 
funded in fiscal year 2008, approximately 9.5 percent of the contracts 
exhausted funds prior to the end of the 1-year period. In fiscal year 
2010, of the contracts funded in fiscal year 2009, approximately 3 
percent of the contracts exhausted funds prior to the end of the 1-year 
period.
    Question. Please describe how RD controls the escalation of rental 
assistance costs.
    Answer. The Housing Act of 1949 requires that borrowers under 
Section 515 Rural Rental Housing and Section 514 Farm Labor Housing 
programs submit a budget annually to demonstrate the costs associated 
with operating rental housing. This includes requests for rent 
increases, which must be justified by the borrower. Since rental 
assistance provides some of the operating income to support operations, 
the Rural Housing Service (RHS) field staff work closely with borrowers 
and management agents in reviewing the budget and determining 
appropriate costs.
                 multifamily revitalization initiative
    Question. Please describe in detail all of the tools available in 
the Multifamily Housing Revitalization Initiative toolbox, and how RD 
utilizes this mix of options to sustain affordable housing in rural 
areas.
    Answer. The Multifamily Housing Revitalization Demonstration 
Program uses four tools to financially restructure these affordable 
rural rental properties. These tools are a modification of the existing 
section 515 loan, a zero-interest rate section 515 loan, a soft second 
section 515 loan (a second loan that has its interest and principal 
deferred to a balloon payment) and a revitalization grant. In addition, 
there are two other programs which, although not technically 
revitalization, are funded from the same account. They are the 
Preservation Revolving Loan Fund and RD vouchers. The properties are 
reviewed and underwritten to determine the property's financial needs, 
after which a combination of tools are used to ensure the property is 
financially sound and remains in the affordable housing portfolio for 
many years. In addition to these section 515 revitalization tools, 
direct loans are available to support revitalization activities of the 
portfolio as well. The section 538 loan guarantee has also been used in 
the past to address immediate capital repair needs; however, funding 
for section 538 is not requested in the fiscal year 2012 budget. Many 
revitalization projects also use third-party funding, such as low-
income housing tax credits, as additional leverage for revitalization 
of section 515 properties.
    Question. By year, for the life of the initiative, please provide 
the President' budget request, the appropriated amounts, and how those 
funds were used.
    Answer. [The information follows:]

                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Budget
                                  request     Appropriated  Number of   Soft second                           Zero-percent   Preservation
         Fiscal year              (budget       (budget       deals        loans        Grants    Deferrals   section 515     revolving       Vouchers
                                authority)     authority)                                                         loan        loan fund
--------------------------------------------------------------------------------------------------------------------------------------------------------
2006.........................       $214.00        $18.976         76         $4.5          $0.2        $48         $0.280         $6.415         $0.620
2007.........................         74.25         18.853         87          2.8           0.5         56          2.561          9.151          3.000
2008.........................         27.80         27.804        135         13.0           0.4        100         12.649         13.793          6.205
2009.........................  ............         27.714         94          5.3           0.2         50         15.021         15.398          6.751
2010.........................         26.62         43.191        142         21.5           0.3        117          5.057         20.897          7.595
2011.........................         18.00         43.191          8          3.7   ...........  .........          0.391          7.061          4.557
                              --------------------------------------------------------------------------------------------------------------------------
      Total..................        342.67        179.730        536         50.8           1.6        371         51.030         80.820         28.730
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Question. For vouchers specifically, please provide by year the 
President's budget request, the amount appropriated, the number and 
amount of vouchers offered (distinguishing between new and renewals), 
the number and amount of vouchers accepted (also distinguishing between 
new and renewals), and how surplus voucher funding was utilized.
    Answer. [The information follows:]

                                                            RURAL DEVELOPMENT VOUCHER PROGRAM
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Vouchers issued
                       Fiscal year                          President's    Appropriated       Dollars    -----------------------------------------------
                                                              budget                         obligated          New          Renewals      Total issued
--------------------------------------------------------------------------------------------------------------------------------------------------------
2006....................................................  ..............     $16,000,000        $620,000             211  ..............             211
2007....................................................     $74,250,000      15,840,000       3,000,000           1,098  ..............           1,098
2008....................................................      27,800,000       4,965,000       6,205,375           1,013           1,088           2,101
2009 \1\................................................  ..............       4,965,000       6,751,534             811           1,251           2,062
2010....................................................       4,965,000      16,400,000       7,595,644             764           1,481           2,245
2011 \2\................................................      18,000,000      16,400,000       3,610,843             563             577           1,140
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................  ..............  ..............      24,783,396           4,460           4,397           8,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Indicates the President's budget did not request funds for this program and proposed a $20 million rescission from carryover balances.
\2\ Fiscal year 2011 obligations are as of March 31, 2011.

    Carryover funding that was not used for vouchers in the 
appropriated fiscal year was used to fund the Multifamily Preservation 
and Revitalization Program, for voucher administration contracting 
payments, and for information technology upgrades.
    Question. What percentage of voucher recipients move from their 
original place of residence?
    Answer. RHS experience in the program as of October 2010 is that 
12.6 percent of the former section 515 tenants receiving vouchers move 
from their original apartment after the property leaves the section 515 
program.
    Question. Please describe the information systems RD utilizes to 
manage the voucher initiative. What socioeconomic data do you collect 
on voucher recipients?
    Answer. USDA maintains a database system on all tenants in section 
515 and section 514 housing developments. As a borrower prepays the 
section 514 or 515 mortgage, or a foreclose action occurs, tenant 
information is used to advise tenants of the availability of the 
voucher program. Once a tenant chooses to accept a voucher, USDA 
utilizes the services of a contractor, who has developed a Workflow 
Management System that houses landlord and voucher holder information. 
In addition, RHS is currently in the process of replacing and upgrading 
its current accounting database, which will manage the voucher 
certification and payment processes.
    The agency collects demographic and income data on voucher holders 
at the time of issuance of the voucher. The tenant characteristics are 
captured in the Multifamily Information Systems database.
    Question. Are vouchers always renewed for the same amount or have 
you instituted procedures whereby voucher amounts can be increased?
    Answer. Generally, vouchers are renewed for the same amount. There 
are exceptions where the original amount of the voucher may have been 
reduced from the maximum amount available because the voucher amount 
exceeded the amount of the voucher holder's rent. If the voucher holder 
moves to another apartment where the rent is higher, the voucher amount 
is adjusted upward, not to exceed the maximum amount available. USDA 
has not instituted a cost of living or annual adjustment increase.
                        microenterprise program
    Question. What is the status of implementation of the 
Microenterprise Program?
    Answer. Rural Development, Rural Business-Cooperative Service 
published a final rule in June 2010 and began funding loans and grants 
during the fourth quarter of fiscal year 2010. Additionally, on July 
19, 2010, the agency published a technical correction to the interim 
rule (1 CFR, park 4280, subpart D).
    Question. Is this program showing success as you expected?
    Answer. Yes, in fiscal year 2010, the Rural Business-Cooperative 
Service funded 63 direct loans in the amount of $24,982,500, 62 
automatic technical assistance grants in the amount of $5,356,349, and 
12 technical assistance only grants in the amount of $1,289,500. It is 
anticipated that the intermediary will revolve the Rural 
Microentreprenuer Assistance Program loan funds twice in the 20-year 
term; and each ultimate recipient loan will assist one business and 
save a minimum of one job. Each loan to an ultimate recipient is 
expected to average $15,000 to $20,000. This equates to an estimated 
minimum 40 businesses assisted and 40 jobs created/saved per $100,000 
of Loan Budget Authority.
    Question. At this stage of implementation, isn't it premature to 
request additional discretionary funding to supplement the mandatory 
funding that is available?
    Answer. The program has already experienced success based on the 
overwhelming interest in the program, as a result of the 2010 Notice of 
Funds Availability (NOFA). The majority of available discretionary and 
mandatory funding has been provided during the first round of 
solicitation in 2010. To date, $34.9 million has been awarded to 82 
microlenders in 38 States.
    The reduced level of funding included in 2011 will be fully 
utilized when the 2011 NOFA is published. Already, there are 60 
applicants requesting $17.1 million in programmatic funds in the 
funding cue. This compares to the approximate $16 million program level 
provided for 2011. If the Congress determines that additional 
discretionary funds are needed, it would meet the demand of rural small 
businesses.
    Question. How are you measuring success?
    Answer. We measure success of our programs by the number of jobs 
created/saved, businesses assisted, geographic distribution, and 
addressing communities with the greatest need.
                          agricultural exports
    Question. The budget request includes an increase of $20 million 
for the National Export Initiative (NEI). According to USDA, 
agricultural exports are forecast to hit a record of $135 billion, this 
is $9 billion more from the November forecast and higher than the 
previous record set in 2008.
    Given the current budget atmosphere and ever shrinking resources, 
please explain why you believe this request is justified at this time.
    Answer. The $20 million request for NEI in fiscal year 2012 
supports additional activities and staff positions that are necessary 
to reach the President's goal of doubling U.S. exports by the end of 
2014. The Foreign Agricultural Service (FAS) will use these funds to 
enhance our activities in defending market access as well as expanding 
market access for U.S. agricultural products. Competitive opportunities 
around the globe are rapidly changing, as more and more countries enter 
into trade agreements and preferential arrangements. Although U.S. 
agricultural exports are currently strong and increasing, these 
changing international relationships will pose ever-increasing 
challenges to U.S. export competitiveness. We must also help educate 
more agricultural businesses on the benefits of exporting and provide 
technical assistance on reaching foreign customers.
    To expand FAS export assistance efforts, $18 million will be used 
to provide technical assistance and trade facilitation, both in the 
United States and in overseas markets, in order to strengthen the 
ability of U.S. producers and related agribusinesses to increase 
exports to a wider range of foreign markets. Domestic outreach efforts 
will include a special outreach to educate and support small- and 
medium-sized enterprises, which are a key focus of NEI. The remaining 
$2 million will be used to bolster FAS's trade monitoring and 
enforcement efforts. This work will focus on key countries such as 
China, the European Union, Indonesia, Canada, Mexico, Japan, as well as 
on prospective Free Trade Agreement partners such as South Korea, 
Colombia, and Panama. With continued growth in exports come new and 
more complex opportunities for trade barriers and irritants, especially 
on sanitary and phytosanitary issues, and other technical issues. The 
additional resources will enable FAS to better support U.S. challenges 
to foreign actions that harm U.S. agricultural interests, as well as 
support U.S. defenses against trade cases brought against us, such as 
under the World Trade Organization.
                      humanitarian food assistance
    Question. News events daily remind us of a chaotic world where 
chronic and acute hunger threatens the lives of millions of people. As 
we have seen over the past few months, rising food prices around the 
world have caused instability in some of the most vulnerable places. 
Your budget includes level funding for Public Law 480 title II grants, 
which often provides the only meal a person will have during the day.
    Given the current worldwide economic situation, do you believe your 
request is sufficient to meet the ever increasing demand for food 
assistance?
    Answer. Although USDA is not responsible for administering the 
title II program, we understand the importance of food aid programs and 
appreciate the Congress' support in our efforts to alleviate hunger. 
Rising food prices do have an impact on hunger and certainly lead to 
political and economic instability worldwide.
    Given competing priorities and current deficit-reduction 
strategies, we believe that amounts requested for fiscal year 2012 are 
sufficient. If unanticipated emergencies arise, the Bill Emerson 
Humanitarian Trust is available to supplement title II resources.
                             farm bill cuts
    Question. The farm bill provides mandatory spending for a number of 
programs. Over the last several budget cycles the administration has 
proposed to limit several of these programs.
    Can you discuss why the administration believes these limitations 
are needed and how you decide which programs to target?
    Answer. The President believes that if we are to promote economic 
recovery, invest in our long-term competitiveness, and create 
opportunities for all Americans a comprehensive, balanced deficit 
reduction framework must be part of that strategy. The President's 
vision of ``shared sacrifice'' requires that mandatory programs be 
included in the comprehensive deficit reduction framework. There are a 
number of factors that have influenced which mandatory programs have 
thus far been targeted for reductions in the President's annual budget 
requests as well has how those reduction have been proposed. For 
example, President Obama made a campaign promise to eliminate farm 
program payments to wealthy individuals. Accordingly, since taking 
office, the President's budget requests have consistently proposed 
reductions to mandatory farm programs to eliminate payments to wealthy 
individuals and better target the farm safety-net payments to 
individuals who need the assistance. These proposals have provided 
budgetary savings consistent with the President's campaign promises 
while preserving the basic structure of the farm safety-net programs so 
that the future of the farm program policies can be debated in the 
context of the next farm bill.
  the special supplemental nutrition program for women, infants, and 
                                children
    Question. Mr. Secretary, the budget request includes an increase of 
$138 million for the Special Supplemental Nutrition Program for Women, 
Infants, and Children (WIC). According to the Economic Research 
Service, food prices are expected to increase 3-4 percent this year. 
Often times, when we see food prices rise, we also see a corresponding 
rise in WIC participation levels. Food becomes more expensive and so 
more people need assistance.
    In light of food price increases, do you believe your request of 
$7.4 billion is sufficient to cover the demand for this program?
    Answer. The amount requested for WIC in the President's budget was 
based on estimates for the program derived from the most current data 
available at that time. However, the Food and Nutrition Service (FNS) 
recognizes that circumstances can change, and we constantly monitor 
food costs and participation in the program.
    Question. The budget does not include new monies for the 
contingency fund. What is the current availability in the contingency 
fund? Given the current economic situation, do you envision the need 
for the contingency fund?
    Answer. FNS constantly monitors program performance in WIC, 
including participation trends and food costs, and would consider 
seeking apportionment of the $125 million in WIC contingency funds if 
needed to support participation because program costs are unexpectedly 
higher than anticipated.
                    public health information system
    Question. For fiscal year 2012, the budget proposes to decrease 
funding for the Food Safety and Inspection Service (FSIS) overall 
slightly, but includes significant increases for the Public Health 
Information System (PHIS), which will help FSIS track information in a 
more streamlined, real-time manner.
    Can you discuss how the testing of PHIS went and what benefits you 
expect it to provide when fully implemented.
    Answer. FSIS conducted multiple rounds of user acceptance testing 
with field personnel as well as several extensive dry-run training 
sessions with District Office representatives from around the country 
in order to make PHIS the best possible tool for FSIS personnel. They 
provided critical feedback that was utilized to refine the system for 
implementation and finalize clear and concise training for inspection 
program personnel.
    The goal of the PHIS is to improve the agency's ability to collect, 
analyze, and communicate data to protect public health. The system will 
integrate FSIS' data sources to support a comprehensive, timely, and 
reliable data-driven approach to FSIS inspection, auditing and 
scheduling. This system will be flexible, user-friendly, and Web-based. 
It refines and replaces many of FSIS' stove-piped legacy systems (e.g., 
Performance-Based Inspection System (PBIS)), automates paper-based 
business processes (e.g., export certification), and can accommodate 
changing needs.
    PHIS will better identify food safety risks to help prevent 
outbreaks or recalls. Using multiple FSIS data sources, analysts will 
be able to identify trends and anomalies, including the relationship 
between pathogen test results and inspection findings.
    Using PHIS' predictive analytics component, the agency will be able 
to monitor establishment data in near real time and have built-in 
alerts for anomalies such as a large number of incomplete inspection 
activities or high rates of noncompliance in an establishment.
    PHIS will also streamline the agency's export program by automating 
paper-based processes, including establishment applications for 
approval for export, applications for export certificates, and the 
issuance of export certificates. The system will enable automatic edit-
checks to ensure that certificates properly reflect a foreign country's 
import requirements.
    Finally, the system will allow for faster and more effective 
communication between FSIS personnel at headquarters and the more than 
8,000 FSIS personnel protecting public health nationwide in 
approximately 6,200 federally inspected establishments and elsewhere on 
the front lines. It will also allow for improved collaboration with 
stakeholders and Federal, State, and local public health partners to 
improve contaminant tracing and prevent foodborne illness outbreaks.
    Question. What will the effects be if the Congress is unable to 
provide the level of funding you are requesting for PHIS?
    Answer. The agency will seek to manage the effects in such a way as 
to minimize the impact on PHIS. FSIS considers PHIS a critical food 
safety regulatory tool for inspection program personnel.
    The goal of the PHIS is to better protect public health by 
improving the agency's ability to collect, analyze, and communicate 
data. The system will integrate FSIS' data sources to support a 
comprehensive, timely, and reliable data-driven approach to FSIS 
inspection, auditing, and scheduling. Through improved data quality, 
more consistent reporting, enhanced management controls, and efficient, 
effective use of FSIS data, PHIS will enable FSIS to respond more 
quickly to threats. Integration and analysis of the data will also help 
us to predict negative public health outcomes and pinpoint 
vulnerabilities so that FSIS can rapidly respond to the hazards at all 
points and prevent problems. The system will also allow FSIS to 
coordinate effectively within FSIS and with stakeholders and other 
agencies, improving investigations and contaminant tracing.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin
                   food safety and inspection service
    Question. For fiscal year 2011, the administration requested an $18 
million increase more than fiscal year 2010 levels for the Food Safety 
and Inspection Service (FSIS) to support initiatives to improve public 
health infrastructure, speed up investigations and response to 
outbreaks, conduct a baseline study on the prevalence of pathogens, and 
expand sampling. Rather than this increase, FSIS would suffer an $88 
million cut over the remainder of the year if H.R. 1, passed by the 
House of Representatives becomes law.
    Please describe any progress you were able to make on the 
initiatives described in the fiscal year 2011 budget and describe how 
the fiscal year 2012 budget builds on that. If no progress was made, 
did we in fact lose a year of progress on improving public health?
    Answer. In addition to inspection, verification, enforcement, and 
other activities directly related to FSIS' food safety mission, during 
fiscal year 2011, FSIS has continued to develop its Public Health 
Information System (PHIS). The agency conducted multiple rounds of user 
acceptance testing with field personnel as well as several extensive 
dry-run training sessions with District Office representatives from 
around the country, who provided critical feedback that was used to 
make PHIS the best possible tool for employees. FSIS refined the system 
based on this feedback; began training inspection program personnel on 
March 14; and plans to launch the system on a staggered basis, as 
employees are trained, in April 2011. FSIS will continue implementation 
and enhancement of PHIS into fiscal year 2012.
    During fiscal year 2011, FSIS has also implemented policy 
initiatives, such as revised salmonella performance standards and new 
campylobacter performance standards aimed at reducing the prevalence of 
these pathogens in young chickens and turkeys. However, FSIS did not 
fund these initiatives as they were proposed in the President's fiscal 
year 2011 budget, since FSIS is operating with an annualized fiscal 
year 2011 continuing resolution funding.
    Question. What impacts would the proposed $88 million cut have on 
food safety programs, and how would those impacts be addressed in 
fiscal year 2012--even assuming the Congress provides at least the full 
FSIS budget request for fiscal year 2012?
    Answer. Under the proposed plan to mitigate an $88 million 
reduction, the agency would seek to manage the effects in such a way as 
to minimize the impact on the agency's regulatory responsibilities, on 
industry, and ultimately the consumer.
    If FSIS funding for fiscal year 2011 were reduced further, we would 
have to review our options for achieving efficiencies for fiscal year 
2011 and fiscal year 2012. I would point out, however, that 85 percent 
of the FSIS budget is for personnel; therefore, a reduction of this 
magnitude would likely have an effect on the FSIS workforce.
    Question. Can you describe what is new in the food safety 
initiatives proposed for fiscal year 2012 and what is a carryover from 
last year's request?
    Answer. For fiscal year 2012, the FSIS request totals 
$1,011,393,000, a net decrease of $7,127,000 (0.7 percent) compared 
with the annualized fiscal year 2011 continuing resolution amount of 
$1,018,520,000.
    The fiscal year 2012 budget for FSIS includes the following 
increases for food safety initiatives:
  --$16.6 million to continue the deployment and enhancement of the 
        FSIS public health information infrastructure, including $13 
        million to allow for the purchase of critical equipment and 
        improvement of information gathering systems to enhance access 
        of inspection personnel to centralized, mission-critical 
        systems (fiscal year 2011 request); and $3.6 million to pay for 
        staffing requirements associated with the implementation of 
        PHIS (fiscal year 2012 request).
  --$700,000 to support regulatory testing for strains of non-O157 
        Shiga-toxin producing E. coli, motivated by increasing 
        awareness that these strains are causing human illnesses 
        (fiscal year 2012 request);
  --$5.5 million to expand regulatory sampling for key pathogens and 
        conduct an additional baseline study. Expanded sampling will 
        help FSIS better estimate food safety risks and focus its 
        resources most effectively and efficiently (fiscal year 2011 
        request);
  --$4.3 million for strengthening the Public Health Epidemiology 
        Program, which will support the agency in responding more 
        quickly to the current public health needs, including rising 
        frequency of multijurisdictional foodborne illness 
        investigations (fiscal year 2011 request).
    Increases in the fiscal year 2012 budget request for FSIS are 
partially offset by reductions in funding for:
  --The Catfish Inspection Program, given the investment to date and 
        the need for considerable stakeholder engagement and regulatory 
        development before adoption and implementation of the program 
        (-$15.3 million) (combined fiscal years 2011-2012 request);
  --Cooperative agreements with the 25 State and local partner 
        laboratories in the Food Emergency Response Network (FERN). In 
        conjunction with the capabilities of the FSIS laboratories, 
        this funding will maintain surge capacity throughout the FERN 
        laboratory system should a terrorist attack on the food supply 
        involving meat, poultry, or egg products take place (-$4.1 
        million) (fiscal year 2011 request); and
  --FSIS laboratory capacity-building. Since fiscal year 2002, FSIS has 
        worked to improve the overall security and capacity of its 
        three regulatory sampling laboratories. We have completed the 
        capacity-building phase of these efforts and have begun the 
        maintenance and operational phases, which require considerably 
        fewer resources (-$5.6 million) (fiscal year 2011 request).
    In addition, FSIS will achieve significant savings by streamlining 
agency operations (-$4.5 million); achieving broadband efficiencies 
(-$3.5 million) and laboratory sampling efficiencies (-$1 million); and 
reducing laboratory sample shipping costs ($400,000) (fiscal year 2012 
requests).
    Question. The inspector general for the U.S. Department of 
Agriculture (USDA) found that the current sampling program lacks a 
statistical precision that is reasonable for assuring food is safe. 
Would you describe how the program in your budget for fiscal year 2012 
addresses the concerns raised by the inspector general?
    Answer. FSIS agrees that a strong sampling program is an important 
part of inspection activities performed by the agency. We believe that 
to ensure food safety, FSIS must verify that establishments have 
identified hazards likely to occur and have put in place processes to 
minimize or eliminate those hazards. Verification includes a variety of 
inspection activities, of which sampling is just one example.
    The focus of the Office of Inspector General (OIG) report is the 
sampling method that FSIS uses to test for E. coli O157:H7 in beef 
products. Overall, our current beef sampling strategy appears to be 
working, because ground beef is no longer the leading source of 
foodborne-based E. coli illnesses.
    Still, the agency is continually considering new approaches to 
further reduce the incidence of E. coli O157:H7, testing being one of 
our many strategies. Testing alone will not ensure the safety of 
products in the marketplace. Food safety is achieved by ensuring that 
the appropriate safeguards are in place at every step along the 
process.
    That is why the agency is working to ensure that our sampling 
programs have the greatest possible impact on public health. We want to 
explore what improvements can be made in our sampling programs, and the 
OIG report will inform and help drive our efforts.
    As referenced in the report, FSIS will develop a plan for 
prioritizing and performing E. coli O157:H7 baseline studies of beef to 
improve our verification systems, and will develop new verification 
tasks for inspection program personnel to perform as part of their 
hazard analysis verification and their verification of sanitary 
dressing.
    Question. The fiscal year 2012 budget request estimates savings of 
$34 million from restructuring, eliminating positions, and introducing 
efficiencies. If FSIS inspection is inadequate, we risk massive 
recalls, plant closures, and of course, heightened food safety risks to 
consumers.
    Please describe what safeguards would be in place with respect to 
the proposed savings to ensure that they don't result in inspection 
failures with serious adverse consequences?
    Answer. The proposed $34 million in savings for fiscal year 2012 
from restructuring, eliminating positions, and introducing efficiencies 
will not affect our front line inspection workforce. For example, FSIS 
has identified 37 full-time equivalent positions that can be eliminated 
by refraining from backfilling open positions resulting from attrition, 
restructuring functional areas to streamline operations, and 
consolidating staff and resources to eliminate redundant positions, 
saving the agency an estimated $4.5 million. However, none of these 
positions are in the field.
    The agency does not anticipate a change in its regulatory 
requirements and activities, and would seek to minimize any effect on 
the enforcement of its regulatory responsibilities. For example, FSIS 
inspection program personnel will continue to be present at all times 
for slaughter operations and once-per-shift per day for processing 
operations. In addition, FSIS personnel will continue to perform humane 
handling verification and enforcement activities at all slaughter 
plants.
                           school food safety
    Question. The Healthy, Hunger Free Kids Act sets some new 
requirements for USDA to improve food safety in America's schools. 
Specifically, the bill requires you to improve the communication and 
effectiveness of communication from the Federal level to the States 
about food safety holds and recalls.
    How do you intend to improve that communication? Have you 
considered a Rapid Alert System similar to the one used in Europe, 
which uses technology to ensure rapid dissemination of critical 
information?
    Answer. The Food and Nutrition Service (FNS) currently uses a Rapid 
Alert System to communicate with State agencies about food safety 
recalls that affect USDA foods. The Rapid Alert System uses telephone, 
email, text message/SMS, and fax to repeatedly contact the State recall 
coordinators until they acknowledge receiving the message.
    USDA has conducted an evaluation of the needs of State agencies 
during food emergencies such as recalls, and is setting criteria and 
exploring means to improve their capabilities. The President's fiscal 
year 2012 budget request proposes $1.75 million to fund State 
information technology enhancements to assist State agencies in 
fulfilling their responsibility to quickly identify and inform 
recipient agencies that receive recalled product. These enhancements 
would provide for improved communication with recipient agencies about 
recalled foods; enable Web-based information posting; and include both 
a rapid alert notification system and a self-registration notification 
service. Currently, FNS communicates with State agencies through the 
Electronic Commodity Ordering System (ECOS), but a similar system 
reaching from State agencies to local school districts and schools is 
not widely available. Provided funds are available, phase two of this 
initiative would enable the same rapid communication between State 
agencies and recipient agencies.
    Question. Are you considering reorganizing responsibility within 
the Department for oversight of food safety in schools, which is now 
shared among FSIS, the Agricultural Marketing Service (AMS), and FNS, I 
understand?
    Answer. No, at this time the Department has no plans to reorganize 
the oversight of food safety activities within schools.
    Ensuring safe food for our school children is a collaborative 
effort among a number of USDA agencies which have unique authorities 
that span the farm to table food safety continuum, from inspecting the 
product when it is produced, to setting procurement standards, managing 
the distribution of the product to schools, and inspecting the school 
cafeterias in which the product is served.
    In February 2010, Secretary Vilsack announced several new 
initiatives to assure the safety and quality of food purchased by USDA 
for the National School Lunch Program and these initiatives have moved 
forward. For example, in July 2010, after a detailed, ongoing review by 
USDA's FSIS and the Agricultural Research Service (ARS), AMS finalized 
tougher new standards for ground beef purchased for Federal food and 
nutrition assistance programs including the National School Lunch 
Program. The new standards guaranteed that USDA purchase standards meet 
or exceed major private-sector buyers of ground beef.
    In addition, USDA has increased its information sharing between 
agencies to better monitor vendor performance and identify potential 
food safety issues in the process. For example, information on FSIS in-
plant enforcement actions, positive pathogen test results, and recall 
notifications are being shared directly with AMS.
    Also, as Secretary Vilsack had requested, the National Academy of 
Sciences completed a review of the testing procedures and requirements 
of USDA purchased ground beef for the National School Lunch Program. 
The review confirmed America's school children are receiving a safe 
ground beef supply.
    Collectively, these changes and ongoing scientific reviews of AMS 
commodity procurement specifications is ensuring, and will continue to 
ensure, that the food USDA distributes to school children and others 
meets the highest quality and safety standards.
                     dairy policy reform proposals
    Question. There is a significant amount of work being done to 
develop proposals for modifying and reforming Federal dairy policy. The 
Congress will consider a number of important considerations relating to 
the ramifications of any changes to Federal dairy policy. In addition 
to the key objective of enhancing income protection and prospects for 
dairy farmers, the Congress will also be examining expected impacts of 
policy on milk and dairy product markets and prices, consumer prices, 
and costs to the Federal budget both for the dairy programs and for 
nutrition programs such as the Special Supplemental Nutrition Program 
for Women, Infants, and Children.
    Will you ensure that USDA includes all of these considerations and 
potential impacts in its analysis and review of proposals for dairy 
policy reform and that the Department completes and provides to the 
Congress such review and analysis in time for it to be available to the 
Congress in its examination of legislative options for dairy policy 
reform?
    Answer. The USDA looks forward to working with the Congress in 
evaluating proposals for dairy policy reform. We will strive to provide 
comprehensive information on the impacts of significant reform 
proposals in a timely manner.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                                 dairy
    Question. Years 2009 and 2010 were catastrophic for our Nation's 
dairy farmers. Over supply and chronically low prices led to an 
unprecedented loss of farm equity and the closure of more than 4,500 
dairies nationwide. In response, the U.S. Department of Agriculture 
(USDA) spent more than $1 billion on dairy support programs and the 
Congress appropriated an additional $350 million to help farmers 
weather the hard times. These private-sector losses and public-sector 
expenditures were untenable, and the lesson was clear: Federal dairy 
programs must be reformed.
    What is the Department doing to facilitate meaningful reforms in 
the dairy support system?
    Answer. The Secretary formed the Dairy Industry Advisory Committee 
(DIAC) which was made up of 17 milk producers, processors, retailers, 
and academic members. The DIAC has worked over the past year to develop 
a set of recommendations for dairy policy reform. The Department is 
currently reviewing those recommendations. The recommendation of the 
DIAC can be found at: http://www.fsa.usda.gov/Internet/FSA_File/
diac_final_rpt_0302.pdf.
    Question. Do you believe that a supply management system will help 
stabilize dairy prices? And if so, will the market stabilize at a level 
that is sustainable for both producers and processors?
    Answer. Developing and administering a supply management system to 
stabilize dairy prices at a level that is sustainable for both 
producers and processors could prove to be a tremendous challenge. 
Finding the correct balance between producer and processor price 
desires in an ever changing domestic and international marketplace 
could be difficult. While the DIAC recommended that the Federal 
Government should adopt a growth management program by a narrow margin, 
the subcommittee was not prepared to endorse a specific plan or agree 
on whether better coordinating milk marketings with milk usage over 
time in order to reduce milk price volatility should be a public or a 
private endeavor.
                        dairy insurance program
    Question. Crop insurance has been a great asset to row crop farmers 
across the country looking to manage their risks, but to date the dairy 
insurance program, Livestock Gross Margin for Dairy (LGM-Dairy), has 
not seen the same successes.
    Is a new dairy insurance program needed to ensure that farmers have 
a bona fide safety net and a sound financial management strategy?
    Answer. The Risk Management Agency (RMA) has administered the LGM-
Dairy pilot program since 2009. Until this year, the pilot program 
experienced very low participation. During summer 2010, the Federal 
Crop Insurance Corporation Board of Directors approved two program 
changes that have had a significant impact on participation. The board 
revised the date that premium is due from the producer until the end of 
the coverage period, and instituted a graduated producer premium 
subsidy. These changes went into effect for the December 2011 sales 
period, and RMA saw a significant jump in participation. Participation 
in the LGM-Dairy policy has continued to grow each month since then, 
until program funding was exhausted during the March 2011 sales period. 
(The Federal Crop Insurance Act limits funding to not more than $20 
million for administrative costs to cover all livestock pilot programs, 
which generally include any premium subsidy and administrative and 
operating expenses. There are currently eight livestock pilot programs 
available, and LGM-Dairy was allocated approximately $16.2 million with 
the remaining amount left to fund the other livestock programs based on 
their historical rate of spending.) During this short period of sales 
time reflecting the new program changes, private companies wrote and 
RMA will reinsure about 44 million cwt. of milk, representing about 2.5 
percent of the market. Thus, dairy producers have responded to these 
changes indicating they believe the LGM-Dairy program has become a 
viable risk management strategy.
    Question. If every dairy farmer in the country were to opt in to 
the existing LGM-Dairy program, what would be the annual expected cost 
to the Federal Government? If we found a way to reduce the volatility 
of the dairy market, how would this annual expected cost change?
    Answer. If every dairy farmer were to use the LGM-Dairy product, 
USDA estimates it would need approximately $715 million to support this 
program, based on the recent market conditions and purchasing patterns 
of dairy producers. If the volatility in the dairy market were reduced, 
both the cost to dairy producers and the amount of premium subsidy paid 
to dairy producers would decrease, but it is not possible to provide 
any meaningful estimates as to how much savings that might entail given 
the wide range of potential scenarios to consider.
                             invasive pests
    Question. California farmers, unlike farmers in many other States, 
pride themselves on receiving very little by way of Federal subsidies. 
But what I do hear is that they need assistance in finding ways to 
control invasive pests that come across the border from Mexico or 
through our international ports. The European grapevine moth, just 
discovered last year, already has the potential to devastate the $3.2 
million California grape and wine industry. The red palm weevil, just 
discovered this year, threatens the date industry and poses a serious 
public safety threat. And of course, the Asian citrus psyllid, which 
has been found in San Diego, Imperial, Orange, Riverside, and Los 
Angeles counties is poised to overwhelm citrus producers in California, 
just as it overwhelmed the Florida producers only 3 years ago.
    Simply put, U.S. agriculture is facing threats from foreign pests 
and diseases like never before, and the USDA must do more to help 
growers address these bugs.
    The Congress included section 10201 in the 2008 farm bill which 
authorized funding for States and localities to address invasive pest 
problems in new and unique ways, but the funding for this program is in 
question because the Commodity Credit Corporation (CCC) will not 
release the funds to pay for these activities. What are you doing to 
ensure that this funding goes out in a timely manner?
    Answer. We recognize your concern about the threats that U.S. 
farmers face from invasive pests and diseases and the potential for 
section 10201 programs to help with early detection and control of new 
infestations. The Animal and Plant Health Inspection Service (APHIS) 
has taken steps to improve the process for allocating section 10201 
funds and worked with a variety of stakeholders, including the National 
Plant Board, specialty crop stakeholder groups, State partners, and 
others, to develop criteria for evaluating proposals for the funds.
    The Commodity Credit Corporation Charter Act (15 U.S.C. 714i) 
limits the availability and use of section 11 CCC funds for salaries 
and related expenses, including technical assistance, associated with 
the implementation of farm bill programs. Language was included in the 
American Recovery and Reinvestment Act of 2009 that allowed APHIS, and 
certain other USDA agencies, to utilize the funds of CCC to administer 
certain 2008 farm bill programs in fiscal year 2009 and fiscal year 
2010. However, this authority expired at the end of fiscal year 2010 
and without this authority to use CCC funds to administer farm bill 
programs going forward, APHIS and other agencies would have to reduce 
discretionary program funding and use appropriated funds to carry out 
mandatory farm bill programs.
    For fiscal year 2011, USDA requested language be included in the 
full-year appropriations bill that would allow section 11 funds of CCC 
to be available for salaries and related administrative expenses 
associated with the implementation of certain farm bill programs 
without regard to the limitation contained in section 11 of the CCC 
Charter Act. The fiscal year 2012 budget includes $50 million for 
section 10201.
    Question. What authorities and resources can APHIS use to address 
emerging pests and diseases prior to congressional approval of the 
action?
    Answer. Under section 442 of the Plant Protection Act, the 
Secretary of Agriculture may transfer funds from other appropriations 
or funds available to the agencies or corporations of the USDA in 
connection with emergencies in which a plant pest or noxious weed 
threatens any segment of U.S. agriculture. For example, USDA released 
$16.9 million from CCC for the European vine moth in fiscal year 2011. 
APHIS can also use its appropriated Contingency Fund to address small-
scale outbreaks.
    Question. I was pleased to see that the President's budget included 
$44.8 million for the Citrus Health Research Program because this 
program is critical to ensuring that the citrus industry has a future 
in our country. Can please update me on what progress has been made in 
developing citrus trees that are resilient to the Huanglongbing disease 
carried by the citrus psyllid?
    Answer. Industry-led research to develop citrus greening-resistant 
trees began in 2007. The company that developed the trees is currently 
conducting field trials under a permit from APHIS on genetically 
engineered (GE) trees that have shown disease resistance in a 
laboratory setting. If the trees perform well in the field, the company 
will likely petition APHIS to determine the GE trees' regulatory status 
so that they can be commercialized.
    APHIS is working to coordinate and accelerate research efforts to 
identify tools that can assist producers with sustainable management of 
citrus greening, including development of disease-resistant trees. USDA 
has established the Citrus Research Coordination Group, a collection of 
representatives from USDA agencies, universities, States, and citrus 
industry organizations. This group is coordinating the comprehensive 
research being conducted by more than 150 scientists dedicated to 
finding the necessary tools and solutions for citrus greening. The 
research efforts focus on several critical areas, including: crop 
improvement by developing disease-resistant trees; horticulture 
management strategies designed to maintain productive trees, even if 
they are infected with citrus greening; early-detection technology to 
find the disease; and tools to track infectious citrus psyllid 
populations and limit their encroachment into citrus production areas.
                              antibiotics
    Question. I remain concerned about the routine use of antibiotics 
in the food and water of animals that are not sick. While I understand 
that these antibiotics may improve feed efficiency, it also facilitates 
the development of antibiotic-resistant bacteria.
    The President's fiscal year 2012 budget request announces that the 
Agricultural Research Service (ARS) plans on launching a biotherapeutic 
discovery program to find alternatives to antibiotics in animal 
agriculture. Can you provide more details on this initiative and when 
you plan on implementing this program?
    Answer. The incidence of antibiotic resistance in pathogenic 
bacteria is rising. This presents one of the greatest threats to human 
health in the 21st century. Public health concerns with antibiotic 
resistance are driving new proposed regulations and policies to 
restrict the use of antibiotics in animal production. Developing 
alternatives to antibiotics is therefore becoming a critical issue for 
food animal medicine. The ARS Animal Health Research Program is using 
new information emerging from the rapidly expanding ``omic'' 
technologies (e.g., animal genomics, metagenomics, transcriptomics, 
proteomics, metabolomics) to discover new molecules with antimicrobial 
activity that can be developed as alternatives to antibiotics. The ARS 
Animal Health National Program plans for fiscal year 2012 include 
launching a biotherapeutics discovery program that will focus initially 
in the following strategic areas:
  --innate immune molecules with antimicrobial function;
  --bioactive phytochemicals (herbal extracts and volatile oils); and
  --demonstrated synergistic approaches that could both reduce costs 
        and increase efficacy while reducing the risk of drug 
        resistance development.
    This animal health initiative cross-cuts other national programs, 
such as the ARS Food Safety Research Program, which includes research 
on alternatives to antibiotics, microbial ecology, and the effect of 
processing environments on antibiotic resistance prevalence.
    Question. Should the USDA and ARS receive funding less than the 
President's fiscal year 2012 request, will this inhibit the program?
    Answer. If ARS receives funding less than the fiscal year 2012 
request, this will prevent the launch of the proposed animal health 
alternatives to antibiotics research program.
    Question. Are you working with the Food and Drug Administration 
(FDA) in relation to its proposed draft guidance regarding the use of 
antimicrobials in food-producing animals? When can we expect to see 
this guidance implemented on the farm?
    Answer. ARS provided significant input to the development of the 
draft guidance document. USDA has collectively drafted a response plan 
to FDA's latest guidance document on the voluntary reduction of growth 
promoters in agriculture. APHIS is the lead agency for USDA 
interactions and any timeline for on-farm implementation.
                                organic
    Question. Organic agriculture is one of the fastest growing 
segments of the rural economy. It creates nearly 150,000 jobs and 
provides farmers with lucrative market opportunities.
    But Federal investment in organic research and market data has 
lagged behind its fair share--organic agriculture makes up about 3.7 
percent of the total industry, but research in this new and promising 
area only makes up 2.6 percent of the total USDA research budget. I was 
pleased to see the agency's plan to spend $20 million in the Organic 
Agriculture Research and Extension Initiative (OREI) and an additional 
$5 million in the Organic Transitions program, but I believe more must 
be done to help ensure the continued growth of this industry.
    What additional resources can be made available to help organic 
farmers discover and understand the best ways to address invasive pests 
and diseases?
    Answer. In the 2011 OREI, research and extension to develop and 
improve systems-based Integrated Pest Management (IPM) programs for 
organic crops was one of the seven priority areas. Specifically, we 
requested systems-based evaluations that could include the safety and 
efficacy of allowable pest management materials and practices. Special 
emphasis was given in the 2011 request for applications to research 
relating to management of diseases, insect pests, and weeds in specific 
regions where organic acreage is increasing, and yet remain deficient 
in terms of numbers of certified and exempt organic farms, as compared 
to nationwide averages. For example, the southern region lags behind 
the northeastern and north central regions in organically certified 
acreage. Additional research and extension on pests, weeds, and 
diseases that may limit production in those regions should help 
overcome barriers to the growth of organic farming in these 
underrepresented regions. The southern region is often the first place 
that invasive plants, diseases, and pests are noticed. Controlling them 
in the region in which they first appear can help reduce the spread to 
other regions, as well as making additional management tools available 
as they are needed. Research in organic systems is particularly 
valuable, because organic farmers rely on a systems approach that 
includes rotation, cover crops, tillage, biological controls, and less 
toxic materials. Thus resistance is less likely to develop to a 
specific material.
    Invasive pests, weeds, and diseases also can be a problem in animal 
agricultural systems. An additional priority in the 2011 OREI was to 
develop or improve systems-based animal production and pest management 
practices, especially in the areas of nutrition, grazing, pasture, and 
confinement requirements, to improve animal productivity, health, and 
welfare, while retaining economic viability. Thus two of the seven 
priorities in OREI pertained directly to pest, weed, and disease 
issues. In addition, plant breeding and animal selection for pest and 
disease resistance comprised two additional priorities of the seven. 
Therefore, more than one-half of the priorities for this program deal 
with some aspect of research and extension on management of pest, 
weeds, and diseases in organic farming systems. Compiling extension 
resources is another priority, and these resources could also address 
pest, weed, and disease management.
    The Sustainable Agriculture Research and Education (SARE) program 
is another source of competitively awarded funding for improved pest 
management in organic production systems. Historically, approximately 
20 percent of the SARE program awards have been for applied research in 
organic systems and pest control has been one of the predominant focus 
areas for the proposals that we receive. The SARE program had a funding 
line in 2010 of $14.5 million for research and education and a funding 
line of $4,705,000 for professional development and training. Together 
these funds allow SARE to provide a seamless continuum that links 
research with outreach and implementation. The fiscal year 2012 budget 
proposes increases of $10.8 million for SARE, including $10 million for 
the creation of a new Federal-State matching-grant SARE program to 
assist in the establishment and enhancement of State-sustainable 
agriculture research, education, and extension programs. These 
increases will bring the total SARE funding to $30 million in 2012.
    In fiscal year 2012, total ARS and NIFA funding will provide more 
than $38 million for direct organic research. ARS spends an additional 
$32.5 million on research which indirectly contributes to organic 
production.
    Question. What internal work is being done by ARS or other USDA 
entities that reduces the need for harsh chemical pesticides and 
improves the effectiveness of greener and organic alternatives?
    Answer. ARS organic farming research is focused on understanding 
the scientific basis of biological and physical processes innate to 
plants, soils, invertebrates, and microbes that naturally regulate pest 
problems and soil fertility. ARS organic research emphasizes whole-
system preventative solutions, rather than one-for-one substitution of 
conventional production materials and practices with organic ones. 
Results from ARS organic research can also benefit conventional 
agriculture by reducing the need for purchased synthetic agricultural 
chemicals. ARS organic research activities are coordinated with other 
agencies through the USDA Organic Working Group. In March 2011, three 
Research, Education, and Economics agencies (ARS; the Economic Research 
Service (ERS); and the National Institute of Food and Agriculture 
(NIFA)) together with the Office of the Chief Scientist and the Office 
of the Secretary hosted a very successful USDA Organic Research 
Conference in Washington, DC. Feedback from participants indicated that 
many were pleasantly surprised by the breadth, depth, and level of USDA 
support for organic agriculture research. Some specific examples of ARS 
internal research objectives and activities are:
  --Identify genetic plant growth efficiency mechanisms and combine 
        with soil fertility management strategies to increase crop 
        productivity with improved cultivars suited to organic 
        production conditions.
  --Develop whole-system biological-based management strategies for 
        weed, insect pest, and disease control using preventive 
        approaches as first defense, and therapeutic controls as rescue 
        practices.
  --Develop whole-system biological-based management strategies for 
        prevention of parasites in small ruminant grazing animals.
    NIFA is engaged with a wide range of research, education, and 
extension programs that develop and help agricultural producers adopt 
IPM approaches on their farms and ranches. IPM provides a sustainable 
approach to managing pests by combining biological, cultural, physical, 
and chemical tools in a way that minimizes economic, health, and 
environmental risks. These approaches encourage the use of the most 
environmentally friendly and sustainable methods for managing pests. 
NIFA programs support the development of IPM strategies and bio-based 
methods like biological control methods, microbial pesticides, mating 
disruption tactics, genetic manipulation of pests, and improving plant 
resistance to pests and diseases. The adoption and implementation of 
these science-based IPM methods helps reduce the need for pesticides on 
conventional and organic farms and ranches.
    The National Organic Program (NOP) strictly regulates the 
pesticides that can be utilized in certified organic production. In 
most cases, these materials are less toxic and have reduced potential 
for an adverse environmental impact. In certified organic production, 
many of the allowed pesticides are restricted to use as a ``last 
resort'' in an overall approach that relies first and foremost on 
biologically based materials and cultural management practices. These 
practices include tillage, rotation, and cover cropping as a preferred 
alternative to herbicide usage. Very few herbicides are allowed in 
certified organic production. All these practices utilized by organic 
farmers reduce the potential for the development of resistance in pest 
and weed populations and the necessity for increasingly harsh and 
frequent application of pesticides.
    Question. Organic products receive a substantial premium at market, 
and this has helped many farmers increase their income and improve 
their living conditions. But along with this premium comes the 
possibility that some farmers may seek to cheat the system and make 
false ``organic'' claims.
    Please explain how $10 million for NOP is sufficient to regulate 
and enforce a set of complex standards on more than 16,000 certified 
organic operations. What assurances can you give me, and all consumers 
of organic goods, that the USDA ``Organic'' label really means that the 
product was grown without pesticides or hormones?
    Answer. NOP accomplishes its main mission by accrediting private 
and public entities as certifying agents to conduct organic 
certification of production and handling operations. There are 
currently 94 accredited certifying agents located around the world, 
certifying about 27,000 operations, about 17,400 of which are U.S. 
domestic operations. NOP authorizes the State of California to handle 
compliance and investigative activities for agents and operations 
located in the State. NOP also recognizes six foreign governments 
(United Kingdom, Denmark, Israel, New Zealand, India, and Japan) to 
exercise oversight for products certified to the NOP standards in their 
countries. The United States-Canada Organic Equivalency Arrangement 
allows products certified to each country's standards to go to the 
other country with minimal additional conditions.
    NOP currently has a budget of $7 million which supports 32 staff 
members. NOP staff members manage a comprehensive accreditation 
program, handle complaints and take enforcement actions on violations 
of the regulations, develop and revise standards and policy guidance, 
as well as coordinate the activities and implement the recommendations 
of the National Organic Standards Board.
    NOP ensures organic integrity and consumer assurance through a 
rigorous accreditation and certification process. The accreditation 
applicants are first assessed through a comprehensive desk audit. Upon 
satisfactory completion, an onsite audit of personnel and system is 
then conducted. Subsequently, regular audits are conducted at every 2.5 
years for all certifying agents, domestic and foreign. NOP 
certification is a process-based system that establishes proactive 
control measures through the development, approval and implementation 
of organic system plans (OSP). The OSPs describe detailed practices and 
procedures for production and handling, all inputs used and their 
source/composition/application, monitoring practices and procedures, 
record-keeping system, and management practices to prevent 
contamination and commingling. Implementation of the OSP is verified 
through annual onsite inspections.
    NOP regulations require pre- or postharvest tests based on 
suspected use of prohibited materials or excluded methods. Such tests 
are often conducted in the process of complaint investigation and 
utilized as a tool to verify compliance. The program is presently 
considering additional measures to further deter the use of prohibited 
materials.
    The program accomplishes these tasks by collaborating with other 
entities and leveraging resources to manage this complex global program 
within available resources. However, many areas could be enhanced to 
increase organic integrity of products shipped to the United States 
from around the world. To that end, a $2.9 million increase has been 
proposed in the NOP budget for 2012 to conduct additional surveillance 
of foreign accredited certifying agents; increase the program's 
capacity to investigate complaints and violations (both domestic and 
foreign); educate certifying agents worldwide to ensure the organic 
regulations are consistently applied; and respond to requests for 
international equivalency agreements.
    Question. Could you please provide me with a report on all 
enforcement actions taken by NOP in 2010, and with an enforcement 
strategy for the remainder of 2011 and beyond?
    Answer. Responsibility for enforcement of the NOP regulations is 
shared by the certifying agents and NOP. Certifying agents ensure the 
correct implementation of NOP standards through annual inspections and 
require corrective actions by operations when noncompliances are 
identified. NOP takes enforcement action as part of its complaint 
investigation and accreditation audit processes.
    NOP has increased its enforcement activities, not only in the 
United States but also in foreign countries, through monitoring 
recognition agreements and certification activity of foreign certifying 
agents. During fiscal year 2010, NOP conducted compliance assessments 
in Canada, Egypt, Israel, Denmark, Ghana, and China. AMS auditors also 
conducted organic audits in Argentina, Italy, Germany, Bolivia, and 
Mexico.
    During fiscal year 2010, NOP closed 123 complaints. As a result of 
investigating these complaints, NOP issued 10 civil penalties, totaling 
$64,000; and issued 52 cease-and-desist letters that stopped 
inappropriate use of the NOP logo or label.
    Through the enforcement activity of NOP, three certifying agents 
have lost their accreditation status (Guaranteed Organic Certification 
Agency, California; California Organic Farmers Association, California; 
and Certified Organic, Incorporated, Iowa). Those certifying agents are 
no longer permitted to certify organic producers or handlers.
    For the remainder of 2011 and beyond, NOP's No. 1 priority is to 
protect organic integrity through enforcement activities. NOP's plan is 
focused on the following 10 points:
  --clear, enforceable standards;
  --timely notification to certifiers, organic producers, and handlers 
        concerning changes/clarifications to the standards;
  --transparency of suspensions, revocations, adverse actions, and 
        sanctions;
  --quality certification program;
  --effective and efficient complaint handling process;
  --penalties for willful violations;
  --market surveillance inspections;
  --unannounced inspections;
  --periodic pesticide residue testing; and
  --continual improvement.
            section 502 and mutual self-help housing program
    Question. The administration's budget proposes to reduce funding 
for affordable housing for low-income families and improving housing 
conditions in smaller, poorer rural communities. The Department's 
Section 502 Single-Family Housing Direct Loan Program was funded at 
$1.02 billion, but the administration has requested $211 million for 
fiscal year 2012. This is a cut of nearly 79 percent to a program that 
small towns and rural communities rely on for affordable housing. In 
addition, the Mutual and Self-Help Housing Program, which was funded at 
$43 million in fiscal year 2010, has been eliminated in the 
administration's request.
    How will the Department continue to offer affordable housing to 
low-income families in rural areas despite the elimination of the 
Mutual and Self-Help Housing Program and a major budget cut in the 
section 502 program?
    Answer. Housing is a vital economic pillar in rural America for 
creating wealth for communities and homeowners. USDA realizes that 
rural populations tend to be more economically challenged with lower 
incomes and fewer housing choices than their suburban and urban 
counterparts, and therefore we continue to offer a no-down payment 
homeownership program through both the Single-Family Housing Guaranteed 
and Direct Loan programs.
    Providing credit in areas that lack private investment is a 
critical function of USDA Rural Development. To address the need for 
credit--particularly in the rural housing market--Rural Development has 
dramatically increased the Single-Family Housing Guaranteed Loan 
Program in recent years, doubling the Government's investment from $12 
billion in 2010 to $24 billion in 2011. In these austere fiscal times, 
we are investing more than ever in rural housing at no cost to the 
taxpayer, because the Single-Family Housing Guaranteed Loan Program has 
a negative subsidy rate and does not require budget authority.
    The need to address the state of the current housing stock, in 
particular for very low-income seniors, and in areas of persistent 
poverty like tribal lands and border communities, will be met through 
the Section 504 Home Repair Grant Program. There are fewer affordable 
housing options in smaller and more rurally remote communities and we 
continue to grow the Section 515 Multifamily Direct Program to address 
needs in these communities. Often the section 515 program is the 
critical element in making a low-income housing tax credit deal work in 
rural communities that are starved for private investment. We already 
serve hundreds of thousands of very-low and low-income tenants through 
our multifamily housing programs, and we intend to continue to invest 
in new properties and the revitalization of existing units.
    USDA intends to continue a partnership in the immediate future with 
the Self-Help Housing Technical and Management Assistance (T&MA) 
contractors to provide guidance to Self-Help Housing grantees. As we 
transition out of a program that we recognize has made major 
contributions to rural housing, we will no longer have the ability to 
fund the administrative costs associated with Self-Help Housing due to 
budget constraints. Together with the grantees and T&MA contractors, 
USDA will identify other means for grantees to garner fees for their 
services and address regulations that will accommodate new ideas.
                                 ______
                                 
               Questions Submitted by Senator Mark Pryor
                             formula funds
    Question. Over the last three decades, formula funds (land grant 
institutions) as a percentage of the U.S. Department of Agriculture 
(USDA) extramural funding have declined in both absolute and relative 
amounts. To rectify that drop, the Congress filled in the gaps with 
special grants--earmarks--that are no longer available. With inherent 
limitations on the scope and effectiveness of competitive-funded 
research and extension, do you believe it is wise to reduce our formula 
fund investment by 5 percent?
    Answer. Although we are proposing modest cuts in formula funds, the 
National Institute of Food and Agriculture (NIFA) has proposed 
significant increases in the Agriculture and Food Research Initiative 
(AFRI) competitive grants program that includes increased investments 
in the integrated programs of AFRI. These integrated programs provide 
significant opportunities for support of multidisciplinary and 
multistate extension programs. Strong extension components within the 
integrated programs of AFRI will help ensure that research findings are 
accessible to agriculture producers and other key stakeholders. In 
addition, NIFA proposes to continue support for our electronically 
based initiative, eXtension, to ensure broad access to peer reviewed 
research-based information.
                                research
    Question. Why did the administration decide to cut funding to the 
Agricultural Research Service (ARS) at a time when we are depending on 
our leadership in science and technology to help our economy recover 
from the recession?
    Answer. The President's fiscal year 2012 budget request for ARS 
proposes a net decrease of $41.9 million. The budget proposes an 
increase of $58.7 million, including $55.7 million for new and expanded 
research initiatives in food safety, child and human nutrition; crop/
animal breeding and protection; bioenergy/biomass; plant, animal, and 
microbial collections; production systems for sustainable agriculture; 
global climate change; and the National Agricultural Library. 
Investments in these high-priority programs will be critical to keeping 
the food and agriculture sector of the economy strong. These increases 
are offset by the proposed reduction or termination of ongoing ARS 
programs. The proposed net reduction in the fiscal year 2012 budget for 
ARS is achieved through the elimination of earmarked and other lower-
priority projects.
                            housing programs
    Question. Can you explain why the administration has sharply 
reduced funding for the Section 523 Mutual Self-Help Housing Program 
and the Section 502 Single-Family Housing Direct Loan Program which 
have been both successful and important in rural America?
    Answer. The Department believes that the Section 502 Single-Family 
Housing Guaranteed Loan Program is the most cost-effective approach to 
providing a large number of housing loans. With a $24 billion level, at 
a negative subsidy rate, the program provided more assistance and 
served more families in rural areas by far than any other housing 
program at the Department. For example, more than 30 percent of the 
loans made last year, were made to low-income families, the target 
population of the Section 502 Single-Family Housing Direct Loan Program 
(commonly known as the section 502 direct program). In fact the 30-
percent figure represented 43,708 loans to low-income families, more 
than have ever been made in a single year by the section 502 direct 
program. While both the section 502 direct program and the Section 523 
Mutual Self-Help Technical Assistance Grant programs have assisted low-
income families, they are much more costly than the Section 502 Single-
Family Housing Guaranteed Loan Program.
                         forest legacy projects
    Question. I understand that the administration ranks Forest Legacy 
projects. Can you explain a little bit about that process? And can you 
explain to me how the projects will be funded? Will you go straight 
down the ranking list and fully fund project No. 1, No. 2, No. 3, and 
so on until you run out of funds?
    Answer. Program priorities are developed in consultation with 
participating State-lead agencies. Each summer, the Forest Service 
sends a call letter to States asking them to provide a prioritized list 
of up to three projects. These projects always involve willing sellers 
who voluntarily seek to participate in the Forest Legacy Program. In 
many cases, there are other partners from the local community and 
forestry and conservation organizations who support the projects.
    The call letter includes the scoring criteria that details how the 
projects will be ranked. In January, a panel convenes for 2 days to 
rank the projects and develop a prioritized list. The panel is composed 
of 10 members: 6 Forest Service employees and 4 representatives from 
State agencies responsible for implementing the Forest Legacy Program. 
Each member arrives at the panel having reviewed and scored the 
proposed projects based upon the scoring criteria. Once the prioritized 
list is developed, it is cleared through the Forest Service and the 
USDA and becomes part of the President's budget proposal to the 
Congress.
    The intent is to follow the prioritized list as developed and fund 
as many projects as funding allows. The Forest Legacy prioritization 
process is well-developed and understood by our State partners and 
other conservation interests and we believe it is important to adhere 
to the competitively developed list.
                        china food safety system
    Question. Can you please bring the subcommittee up to speed on how 
things are progressing with the implementation of section 743 of the 
fiscal year 2010 appropriations bill? Are the Chinese cooperating with 
efforts to establish the equivalency of their food safety laws with 
those of the United States?
    Answer. From December 1-21, 2010, FSIS conducted two separate but 
simultaneous audits of China's poultry inspection system: one for 
poultry processing and one for poultry slaughter. FSIS continues to 
analyze materials provided by China during the on-site audits, and 
sought published information on China's food safety system from various 
domestic and international agencies, as part of its equivalence 
evaluation of China's poultry inspection system.
    FSIS will submit two separate audit reports to China. China will 
then be responsible for working with FSIS to address any concerns that 
may be raised in the reports.
    To date, FSIS has obtained from China's primary food safety 
authority all of the information necessary to conduct the equivalence 
audits.
      grain inspection, packers and stockyards administration rule
    Question. Can you tell the subcommittee the status of the new 
analysis of the Grain Inspection, Packers and Stockyards Administration 
(GIPSA) rule, and explain how the administration is working to improve 
the rulemaking process at USDA?
    Answer. GIPSA provided 150 days for the public to comment on the 
rule. The agency received 61,000 comments, and it is currently 
reviewing and analyzing the comments that were received. The Department 
will take the following steps in developing the final rule:
  --Conduct a content analysis of comments and identify those requiring 
        additional legal and policy analysis;
  --Evaluate the proposed cost-benefit analysis in light of comments 
        and revise as necessary;
  --Draft a regulatory workplan and submit to the Office of Management 
        and Budget (OMB);
  --Revise the rule as necessary;
  --Enter the rule into Departmental clearance;
  --Submit the rule for OMB clearance; and
  --Publish the rule.
    The cost-benefit analysis that is being conducted will be guided by 
the comments that we received during the comment period. Further, 
officials within the Department and OMB will clear this rule before the 
rule is promulgated. USDA's Chief Economist, Joseph Glauber is taking 
the lead in coordinating a team of economists across the Department to 
provide rigorous review of the comments.
                                 ______
                                 
              Questions Submitted by Senator Susan Collins
             resource conservation and development funding
    Question. The U.S. Department of Agriculture's (USDA's) Resource 
Conservation and Development (RC&D) program provides important 
resources for many rural communities in Maine and around the country. 
RC&D-sponsored activities have led to more sustainable communities, 
better informed land use decisions, and sound natural resource 
management practices.
    Maine's five RC&D councils have proven their effectiveness through 
a number of accomplishments. During fiscal year 2010, 79 RC&D projects 
were actively worked on and 35 projects were completed. Maine RC&D 
councils participate in a variety of successful projects that range 
from providing technical assistance for the development of community 
wind projects to helping build and sustain agricultural businesses.
    One of the main benefits of the RC&D program is the promotion of 
local economies through the leveraging of Federal dollars. According to 
the National Association of RC&D Councils, the RC&D program returns 
$5.60 for every $1 the Federal Government invests to support economic 
development and resource protection in rural areas. For some RC&D 
councils the leverage is even greater.
    In fact, the administration's budget document cites the program's 
history of success and ability to attract non-Federal dollars as a 
reason why Federal funding is no longer necessary. I appreciate that 
these are difficult budget times, and difficult decisions must be made 
as to where to allocate limited Federal dollars. I wonder, though, 
whether it makes sense to eliminate funding for successful programs. 
Shouldn't we be supporting programs that have a proven track record of 
being able to attract and leverage non-Federal funds?
    Answer. President Barack Obama's budget proposal eliminates Federal 
technical assistance to the 375 RC&D councils, the majority of which 
have received Federal support for at least 10 years. Given the current 
budget situation, we have had to make some difficult funding decisions. 
As nonprofit organizations, RC&D councils will still exist and we 
believe that most have the capacity to identify, plan, and address 
their identified priorities without the need for continued Federal 
support. The RC&D program is not being targeted due to poor performance 
or lack of effectiveness. RC&D has been a remarkable program since 1964 
and it is expected that many councils will continue to provide services 
to their communities.
                       integrated pest management
    Question. Mr. Secretary, the science-based principles of Integrated 
Pest Management (IPM) have proven to be valuable tools for American 
agriculture. IPM has allowed American agriculture to address food 
safety issues by maintaining crop quality, avoiding crop losses, 
improving pest management strategies, and minimizing negative impacts 
to the environment. The four regional IPM centers have been invaluable 
in their effort towards increasing IPM programming breadth and depth 
throughout the United States. Many of these programs funded via USDA 
have demonstrated excellent cost-benefit ratios. For example, the 
University of Maine Cooperative Extension Potato IPM Program showed in 
2009 that for every USDA $1 invested, $58 in benefits were returned. 
The UMaine's IPM program Web site is visited thousands of times per 
growing season, showing how integral it is to the potato industry. 
Farmers use the program to more appropriately treat their crops, to 
lessen the impact of chemicals to the environment, and to catch 
troubling diseases, like late blight and pests sooner.
    Given the importance of these IPM programs, how does USDA plan to 
not only maintain but enhance these valuable IPM programs?
    Answer. The National Institute of Food and Agriculture (NIFA) 
recognizes the importance of IPM in our science portfolio and will 
continue to provide national leadership for IPM research education, and 
extension programs. NIFA will continue to support IPM research, 
extension and education efforts through the Agriculture and Food 
Research Initiative (AFRI) and other NIFA programs. The consolidation 
of funding authorities into broader programs such as AFRI enhances 
NIFA's ability to address issues confronting U.S. agriculture in a more 
holistic way, and with a scale of investment that is large enough to 
make a real difference. Consolidation will also reduce transaction 
costs and improve the efficiency of program management in a climate of 
limited resources.
    In fiscal year 2010, AFRI was restructured so that investments 
could be focused on five societal challenge areas: global food 
security, climate change, food safety, sustainable bioenergy, and 
childhood obesity prevention. The development of IPM methods for plant 
and animal production systems is a key element of efforts to ensure 
global food security, respond to climate change, and develop 
sustainable bioenergy production systems. AFRI supports the development 
and implementation of IPM approaches that help us address these 
challenge areas and contribute to the sustainability of U.S. 
agriculture.
    For fiscal year 2012, NIFA will seek to expand the role and 
influence of science in agriculture through focused, problem-solving 
research, education, and extension activities related to IPM challenges 
in plant and animal production systems. The proposed budget 
consolidates funding for the Expert IPM Decision Support System, Pest 
Management Alternatives, and IPM and Biological Control into a single 
program to improve the efficiency of program implementation resulting 
in research investments with greater focus, more appropriate scale, and 
enhanced impact. The proposed budget maintains funding for the Smith-
Lever 3(d) Pest Management Program, which addresses many challenges 
facing agriculture and the environment by delivering science-based IPM 
methods to producers and agricultural professionals. Supplemental 
programs like the IPM Potato Late Blight project with the University of 
Maine Cooperative Extension Potato IPM Program further address 
significant issues and are closely aligned with the Smith-Lever 3(d) 
program.
                  foreign market development programs
    Question. Programs that increase market access for American 
agricultural products are important to increasing exports and market 
share for our farmers. In 2008, at the height of the economic downturn, 
Maine's wild blueberry industry was beginning market development work 
in China. Although it often can take 5 or 6 years to fully develop a 
new export market, Maine's wild blueberry industry was able to grow its 
market in China by 73 percent between 2009 and 2010.
    Given the importance of such efforts and the President's National 
Export Initiative (NEI), why has the administration only provided a 1-
percent increase for such programs?
    Answer. The administration fully concurs that programs to increase 
market access for American agricultural products are important to 
increasing exports and market share for American farmers. To that end, 
the President's fiscal year 2012 budget includes full funding for the 
Market Access Program, Foreign Market Development Program, Emerging 
Markets Program, and Technical Assistance for Specialty Crops Programs 
consistent with the provisions of the 2008 farm bill; total funding for 
those programs is $253.5 million. In addition, the fiscal year 2012 
request includes an increase of $20 million to provide additional 
funding for Foreign Agricultural Service market development efforts in 
support of NEI.
                             forest legacy
    Question. Maine has the largest private forest ownership in the 
country--some 18 million acres of diverse forest covering roughly 90 
percent of its land area. These private landowners are the stewards of 
our forests and the caretakers of the natural resources that are vital 
to Maine's forest-products industry. In addition, they are the hosts 
for our increasingly important recreation economy.
    One of the most important Federal programs to help forested 
landowners preserve working forest, protect natural resources, and 
promote outdoor recreation is the Forest Legacy Program. I appreciate 
your commitment to this program, and hope we can keep it going for the 
remainder of fiscal year 2011, as the House's decision to deeply cut 
Forest Legacy funding will directly affect Maine.
    Maine's West Grand Lake Community Forest project, for example, was 
ranked the No. 1 Forest Legacy project in the Nation for 2011 through a 
competitive scoring process. This project will ensure sustainable 
forest management and public recreational access. It will also preserve 
and enhance Maine's timber economy and Grand Lake Stream's 180-year 
outdoor recreation heritage. It is a project led by the local community 
and accomplished in partnership with community, State, Federal, and 
nonprofit partners. West Grand Lake is a shining example of how the 
Forest Legacy Program works with local communities to prevent the 
conversion of forest land to nonforest uses while sustaining and 
improving both our local timber and recreational economies.
    I understand that there is a great deal of uncertainty right now as 
to what the Department's budget will look like for the remainder of the 
fiscal year. And beyond fiscal year 2011, there are many worthy 
projects being proposed for fiscal year 2012. Recognizing that things 
are still very much in the air, has the Department considered how it 
might allocate funding within the Forest Legacy Program at a reduced 
funding level? It is my understanding that the fiscal year 2012 request 
assumes that the projects that were priorities for fiscal year 2011 are 
funded this year. How will Department allocate funding among the fiscal 
year 2011 and fiscal year 2012 priorities should full funding not be 
provided this year?
    Answer. Currently, the intent is to adhere to the prioritized list. 
We are aware that the funded list may be a short one. The Forest Legacy 
Program prioritization process at the national level is undertaken 
without a known funding level. The intent is to identify the most 
important forestland for conservation funding. The relative importance 
of the projects does not change because of funding levels and we intend 
to adhere to the prioritized list.
    It is true that there are projects on both the fiscal year 2011 and 
fiscal year 2012 priority lists. Due to the uncertainty of the fiscal 
year 2011 funding at the time of the fiscal year 2012 call for 
projects, some States chose to submit, as their priority, projects on 
the fiscal year 2011 list for consideration in fiscal year 2012. Each 
funding year represents a distinct national competition of projects. 
Fiscal year 2011 projects will not be prioritized in fiscal year 2012 
as only projects submitted in response to the call for proposals for 
fiscal year 2012 will be on the fiscal year 2012 project priority list.

                          SUBCOMMITTEE RECESS

    Senator Kohl. Thank you, Senator Pryor.
    And thank you very much, Secretary Vilsack.
    We have about 5 minutes left in the vote.
    But you've done a great job, been very complete. You've 
offered a lot of information, and we very much appreciate your 
coming here today. We're all looking forward to continuing to 
work with you.
    Secretary Vilsack. Thank you.
    Senator Kohl. Thank you so much.
    The hearing is recessed.
    [Whereupon, at 3:05 p.m., Thursday, March 10, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


             MATERIAL SUBMITTED SUBSEQUENT TO THE HEARING

    [Clerk's Note.--The following testimony was received 
subsequent to the hearing for inclusion in the record.]
    Prepared Statement of Hon. Leland A. Strom, Chairman and Chief 
             Executive Officer, Farm Credit Administration
    Mr. Chairman, members of the subcommittee, I am Leland A. Strom, 
chairman and chief executive officer of the Farm Credit Administration 
(FCA). On behalf of my colleagues on the FCA Board, Kenneth Spearman of 
Florida and Jill Long Thompson of Indiana, and all the dedicated men 
and women of FCA, I am pleased to provide this testimony.
    Before I discuss FCA's role, responsibilities, and budget request, 
I would like to thank the subcommittee staff for its assistance during 
the budget process. Also, I would respectfully bring to the 
subcommittee's attention that the funds used by FCA to pay its 
administrative expenses are assessed and collected annually from the 
Farm Credit System (FCS) institutions we regulate and examine--the FCS 
banks, associations, and service corporations, and the Federal 
Agricultural Mortgage Corporation (Farmer Mac). FCA does not receive a 
Federal appropriation.
    Earlier this fiscal year, FCA submitted a proposed total budget 
request of $62,299,787 for fiscal year 2012. FCA's proposed budget for 
fiscal year 2012 includes funding from current and prior assessments of 
$62,000,000 on FCS institutions, including Farmer Mac. Almost all this 
amount (approximately 82 percent) goes for salaries, benefits, and 
related costs.
    The fiscal year 2012 proposed budget is driven largely by two 
factors:
  --stress on FCS caused by conditions in the agricultural and the 
        general economy; and
  --the large number of retirements that FCA anticipates in the coming 
        5 years.
    Although FCS remains safe and sound overall, risks have increased 
across FCS, and conditions in several institutions have deteriorated. 
As a result, we are hiring additional staff members to provide more 
intensive examination and oversight. We are also hiring employees to 
fill the positions of those who will be retiring soon. The funding 
we've requested for fiscal year 2012 will allow us to provide the 
additional supervision and oversight required in challenging economic 
times and to ensure that we maintain a staff with the skills necessary 
to properly examine, oversee, and regulate FCS.
               mission of the farm credit administration
    As directed by the Congress, FCA's mission is to ensure a safe, 
sound, and dependable source of credit and related services for 
agriculture and rural America. FCA accomplishes its mission in two 
important ways. First, FCA protects the safety and soundness of the FCS 
by examining and supervising all FCS institutions, including Farmer 
Mac, and ensures that the institutions comply with applicable laws and 
regulations. Our examinations and oversight strategies focus on an 
institution's financial condition and any material existing or 
potential risk, as well as on the ability of its board and management 
to direct its operations. We also evaluate each institution's 
compliance with laws and regulations to ensure that it serves all 
eligible borrowers, including young, beginning, and small farmers and 
ranchers. If an FCS institution violates a law or regulation or 
operates in an unsafe or unsound manner, we use our supervisory and 
enforcement authorities to take appropriate corrective action. Second, 
FCA develops policies and regulations that govern how FCS institutions 
conduct their business and interact with customers. FCA's policy and 
regulation development focuses on protecting FCS safety and soundness; 
implementing the Farm Credit Act; providing minimum requirements for 
lending, related services, investments, capital, and mission; and 
ensuring adequate financial disclosure and governance. The policy 
development program includes approval of corporate charter changes, FCS 
debt issuance, and other financial and operational matters.
   examination programs for farm credit system banks and associations
    FCA's highest priority is to maintain appropriate risk-based 
oversight and examination programs to ensure the safety and soundness 
of FCS institutions. Given the increasing complexity and risk in FCS 
and human capital challenges at FCA, we have undertaken a number of 
initiatives to improve operations, increase examination effectiveness, 
and enhance staff expertise in key examination areas. FCA bases its 
examination and supervision strategies on institution size, existing 
and prospective risk exposure, and the scope and nature of each 
institution's business model. FCA also performs nationally focused 
examinations of specific issues and operational areas to monitor the 
condition and operations of FCS as a whole. On a national level, we 
actively monitor risks that may affect groups of FCS institutions or 
the entire FCS, including risks from the agricultural, financial, and 
economic environment.
    The frequency and depth of examination activities vary based on 
risk, but each institution receives a summary of examination activities 
and a report on its overall condition at least every 18 months. FCS 
institutions are required to have effective loan underwriting and loan 
administration processes, to maintain adequate asset-liability 
management capabilities, and to establish high standards for governance 
and transparent disclosures for shareholder oversight. Because of the 
recent increased volatility in the agricultural and credit sectors, FCA 
has increased its on-site examination presence. Also, FCA is closely 
watching rapidly rising real estate values in certain sections of the 
country to ensure that FCS lending practices remain prudent.




    In certain cases, FCA will use its enforcement powers to effect 
changes in the institution's policies and practices to correct unsafe 
or unsound conditions or violations of law or regulations. FCA uses 
FIRS as a key method to assess the safety and soundness of each FCS 
institution (see chart above \1\ ). The FIRS provides a general 
framework for evaluating significant financial, asset quality, and 
management factors to assign component and composite ratings. FIRS 
ratings range from 1 (for a sound institution) to 5 (for an institution 
that is likely to fail). Overall, FCS remains financially strong and 
adequately capitalized. The FCS does not pose material risk to 
investors in FCS debt, the Farm Credit System Insurance Corporation, or 
to FCS institution stockholders.
---------------------------------------------------------------------------
    \1\ Source.--FCA's FIRS Ratings Database. The above chart includes 
only the five FCS banks and their affiliated direct-lender 
associations. The figures in the bars reflect the number of 
institutions by FIRS rating.
---------------------------------------------------------------------------
    Although FCS's condition and performance remain satisfactory 
overall, a number of FCS institutions are experiencing stress and now 
require special supervision and enforcement actions. These actions 
reflect the weaknesses in the Nation's economy and credit markets, a 
rapidly changing risk environment in certain agricultural segments, 
and, in certain cases, management's ineffectiveness in responding to 
these risks. We have increased supervisory oversight at a number of 
institutions and dedicated additional resources in particular to those 
14 institutions rated 3 or worse. Although these 14 institutions 
represent less than 4 percent of FCS assets and do not meaningfully 
impact FCS's consolidated performance, they require significantly 
greater FCA resources to oversee. As of December 31, 2010, five FCS 
institutions were under formal enforcement action, but no FCS 
institutions are in conservatorship or receivership.
                  regulatory and corporate activities
    Regulatory Activities.--The Congress has given the FCA Board 
statutory authority to establish policy, prescribe regulations, and 
issue other guidance to ensure that FCS institutions comply with the 
law and operate in a safe and sound manner. FCA is committed to 
developing balanced, flexible, and legally sound regulations. Some of 
FCA's current regulatory and policy projects include the following:
  --Revising regulations to implement the requirements of the Dodd-
        Frank Act;
  --Revising regulations to ensure that FCS funding and liquidity 
        requirements are appropriate and to ensure that the discounts 
        applied to investments reflect their marketability;
  --Revising regulations to require that each FCS institution's 
        business plan includes strategies and actions to serve all 
        creditworthy and eligible persons in the institution's 
        territory and to achieve diversity and inclusion in its 
        workforce and marketplace;
  --Enhancing our risk-based capital adequacy framework to more closely 
        align it with that of other Federal banking agencies and the 
        Basel Accord;
  --Revising lending- and leasing-limit regulations to ensure that FCS 
        institutions maintain effective policies to measure and manage 
        exposure to single counterparties, industries, and market 
        segments, and to large complex loans;
  --Revising regulations to allow FCS institutions to purchase eligible 
        agricultural loans from the Federal Deposit Insurance 
        Corporation;
  --Revising regulations to enhance FCS disclosures of senior officer 
        compensation and supplemental benefit programs; and
  --Strengthening investment-management regulations to ensure that 
        prudent practices are in place for the safe and sound 
        management of FCS investment portfolios.
    Corporate Activities.--While the number of FCS institutions has 
declined over the years as a result of mergers, their complexity has 
increased, which has placed greater demands on both examination staff 
resources and expertise. Generally, these mergers have resulted in 
larger, more cost-efficient, and better-capitalized institutions with a 
broad, diversified asset base, both by geography and commodity. Thus 
far in fiscal year 2011, two mergers of associations have become 
effective. In addition, two banks have submitted a plan of merger for 
FCA Board consideration. As of January 1, 2011, FCS had 84 direct-
lender associations, five banks, five service corporations, and two 
special-purpose entities.
                  condition of the farm credit system
    FCS remained fundamentally safe and sound in 2010 and is well 
positioned to withstand the continuing challenges affecting the general 
economy and agriculture. Total capital increased to $33.3 billion at 
December 31, 2010, up from $30.0 billion a year earlier. In addition, 
more than 81 percent of total capital is in the form of earned surplus, 
the most stable form of capital. The ratio of total capital to total 
assets increased to 14.5 percent at year-end 2010, compared with 13.9 
percent the year before, as strong earnings allowed FCS to continue to 
grow its capital base.
    Loan growth picked up in 2010, especially in the second half of the 
year when commodity prices increased sharply. In total, loans grew by 
6.4 percent in 2010 compared with 2.1 percent in 2009. Nonperforming 
loans decreased modestly to $3.4 billion as of December 31, 2010, and 
represented 10.2 percent of total capital at the end of 2010, down from 
11.8 percent at the end of 2009. However, although credit quality is 
satisfactory overall, the volatility in commodity prices and weaknesses 
in the general economy have increased risks to some agricultural 
operators, creating the potential for future declines in asset quality.
    FCS reported significantly higher earnings in 2010, with a combined 
net income of $3.5 billion, up 22.6 percent from 2009. Return on assets 
remained favorable at 1.60 percent. FCS's liquidity position equaled 
173 days at December 31, 2010, which was essentially unchanged from the 
178 days a year earlier and well in excess of the 90-day regulatory 
minimum. The quality of FCS's liquidity reserves also improved in 2010. 
Further strengthening FCS's financial condition is the Farm Credit 
Insurance Fund, which holds more than $3.2 billion. Administered by the 
Farm Credit System Insurance Corporation, this fund protects investors 
in FCS-wide consolidated debt obligations.
    Farm income is expected to be very strong in 2011. The U.S. 
Department of Agriculture forecasts $98.6 billion in farm net cash 
income--the highest since 1974, after adjusting for inflation. The high 
prices that grain, soybean, and cotton farmers will receive for their 
products will largely account for this increase. High feed costs, 
however, will present challenges for livestock producers. Already tight 
supplies of corn and soybeans in the United States could lead to 
significantly higher feed costs in 2011 and 2012 if growing conditions 
are unfavorable. High grain prices combined with extremely low interest 
rates are also propelling farmland values to record highs in parts of 
the Midwest. Although the current economy supports today's average land 
prices, some factors, such as higher interest rates, geopolitical 
developments that could undermine global demand for farm products, and 
an unexpected decline in grain prices because of a global supply 
response, could lead to a drop in the value of farm real estate. To 
address the issue of rising farmland values, FCA organized a meeting 
with the other Federal financial regulators to discuss concerns and 
observations regarding agricultural land values and associated risk to 
loan collateral. Our intent also was to foster a broad-based 
interchange on the appropriate regulator response to these risks and to 
develop a productive working relationship among banking regulators. We 
are considering additional meetings to continue our focus on topics 
important to agriculture.
    FCS's access to capital markets returned to normal during 2010, 
which helped FCS further augment its solid overall financial strength, 
serve its mission, and maintain the Insurance Fund. FCS, as a 
Government-sponsored enterprise (GSE) with solid financial performance, 
benefited from monetary policy actions that helped to foster 
historically low domestic interest rate levels. Tepid investor demand 
for longer-term FCS-wide debt securities in 2009 improved appreciably 
in 2010, particularly for those with maturities of more than 5 years. 
Also, FCS continued to enhance its domestic marketing and internal 
liquidity reserve requirements. For 2011, FCS expects that the capital 
markets will continue to meet all of its financing needs.
               federal agricultural mortgage corporation
    The Congress established Farmer Mac in 1988 to establish a 
secondary market for agricultural real estate and rural housing 
mortgage loans. Farmer Mac creates and guarantees securities and other 
secondary market products that are backed by agricultural real estate 
mortgages and rural home loans, USDA guaranteed farm and rural 
development loans, and rural utility loans made by cooperative lenders. 
Through a separate office required by statute (Office of Secondary 
Market Oversight), FCA regulates, examines, and supervises Farmer Mac's 
operations.
    Farmer Mac is a GSE devoted to making funds available to 
agriculture and rural America through its secondary market activities. 
Under specific circumstances defined by statute, Farmer Mac may issue 
obligations to the Department of the Treasury, not to exceed $1.5 
billion, to fulfill the guarantee obligations on Farmer Mac Guaranteed 
Securities. Farmer Mac is not subject to any intra-FCS agreements and 
is not jointly and severally liable for FCS-wide debt obligations. 
Moreover, the Farm Credit Insurance Fund does not back Farmer Mac's 
securities.
    Farmer Mac made continued financial progress during 2010. Although 
net income was down significantly from 2009, this decline was largely 
the result of unrealized gains and losses; however, core earnings, a 
measure based more on cash flow, was up by 56 percent. As of December 
31, 2010, Farmer Mac's core capital totaled $460.6 million, which 
exceeded its statutory requirement of $301.0 million. The result is a 
capital surplus of $159.6 million, up from $120.2 million as of 
December 31, 2009. The total portfolio of loans, guarantees, and 
commitments grew 14 percent to $12.2 billion.
    In January 2010, Farmer Mac raised $250 million in capital from a 
private offering of shares of noncumulative perpetual preferred stock 
of Farmer Mac II LLC, an operating subsidiary in which Farmer Mac owns 
all of the common equity. Farmer Mac used the proceeds to repurchase 
and retire $150 million of Farmer Mac's outstanding series B preferred 
stock, with additional proceeds available for other corporate purposes. 
The new preferred stock has a lower net effective cost than the retired 
capital and has improved Farmer Mac's ability to generate new capital 
through earnings.
    Farmer Mac's program-business portfolio shows stress in certain 
subsectors but remains manageable. Stress in the ethanol industry, as 
well as certain crop and permanent planting segments, contributed to an 
increase in the nonperforming loan rate. The nonperforming loan rate 
was 1.90 percent at December 31, 2010, compared with 1.41 percent at 
December 31, 2009. Loans more than 90 days delinquent increased from 
1.13 percent at December 31, 2009, to 1.63 percent at December 31, 
2010.
    Regulatory activity in 2011 that will affect Farmer Mac includes an 
interagency joint Notice of Proposed Rulemaking to implement provisions 
of the Dodd-Frank Act relating to capital and margin requirements for 
over-the-counter derivatives that are not cleared through exchanges; a 
Notice of Proposed Rulemaking on nonprogram investments and liquidity 
at Farmer Mac that would, among other things, reduce reliance on credit 
ratings as required by section 939A of the Dodd-Frank Act; and an 
Advance Notice of Proposed Rulemaking that will request public input on 
how to reduce reliance on credit ratings in the methodology underlying 
the Risk-Based Capital Stress Test. In addition, FCA plans to finalize 
a rule to update the stress test to address Farmer Mac's new rural 
utility financing authority and make other technical changes.
                               conclusion
    We at FCA remain vigilant in our efforts to ensure that FCS and 
Farmer Mac remain financially sound and focused on serving agriculture 
and rural America. It is our intent to stay within the constraints of 
our fiscal year 2012 budget as presented, and we continue our efforts 
to be good stewards of the resources entrusted to us. While we are 
proud of our record and accomplishments, I assure you that FCA will 
continue its commitment to excellence, effectiveness, and cost 
efficiency and will remain focused on our mission of ensuring a safe, 
sound, and dependable source of credit for agriculture and rural 
America. This concludes my statement. On behalf of my colleagues on the 
FCA Board and at FCA, I thank you for the opportunity to share this 
information.


   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                        THURSDAY, MARCH 17, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 1:58 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Herb Kohl (chairman) presiding.
    Present: Senators Kohl, Pryor, Brown, Blunt, and Moran.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration

STATEMENT OF DR. MARGARET A. HAMBURG, COMMISSIONER
ACCOMPANIED BY:
        PATRICK McGAREY, ASSISTANT COMMISSIONER FOR BUDGET, FOOD AND 
            DRUG ADMINISTRATION
        NORRIS COCHRAN, DEPUTY ASSISTANT SECRETARY FOR BUDGET, 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES

                 OPENING STATEMENT OF SENATOR HERB KOHL

    Senator Kohl. We will come to order right now and start 
this hearing.
    Today's hearing will focus on the fiscal year 2012 budget 
request of the Food and Drug Administration (FDA). We would 
like to welcome Commissioner Hamburg, as well as Mr. Patrick 
McGarey and Mr. Norris Cochran. It is very good to have you 
guys here with us.
    The FDA budget request for this fiscal year includes an 
increase of $385 million, or 14 percent, more than the funding 
level provided in fiscal year 2010. During a time when overall 
Government spending is declining, this budget request is an 
exception. Among other things, we are here to talk about why 
this increase is necessary.
    Some people have questioned the role of the FDA and the 
growth of the agency's budget over the past several years. 
These are fair and important questions. I have been and 
continue to be a very strong supporter of the FDA. At the same 
time, I understand how difficult it is to talk about deficit 
reduction while at the same time defending such a large 
increase in the budget. Justifying that increase, Dr. Hamburg, 
is your task and it is not an easy one.
    We have supported your work because we believe it is the 
job of the Federal Government to make sure that our food and 
drugs are safe, and we need to make sure that you have the 
funding that you need to make that happen. This is not 
something we can relegate to States, local government, or 
private industry. The world and the way our food and drugs are 
produced are becoming more complex every day, and it is 
important for the FDA to have the ability to adapt to these 
changes.
    Every $1 that we spend in this bill must be questioned, of 
course, defended, of course, and well thought out. The 
administration has proposed to increase this budget while other 
areas of the Government are being cut. I believe the FDA's 
mission is critical to the safety of American families, but we 
must be able to justify the budget increase at this time.
    So, we are looking forward to hearing from you, and first 
we will call on Senator Blunt.

                     STATEMENT OF SENATOR ROY BLUNT

    Senator Blunt. Thank you, Chairman Kohl, for holding this 
hearing on FDA and their budget request for fiscal year 2012. I 
know you have been a knowledgeable advocate for this work and 
look forward to your leadership on it.
    I want to thank our witnesses for coming today as well.
    The administration's request for FDA is an increase of 16 
percent more than the current funding level, and if the budget 
request is approved, the agency will grow by an astonishing 60 
percent since fiscal year 2008. This is one of the largest 
increases in the entire Department of Health and Human Services 
(HHS) and it is a higher percentage increase than in almost any 
agency in the U.S. Department of Agriculture (USDA).
    As I mentioned at last week's hearing with Secretary 
Vilsack and earlier this week in a meeting I am pleased the 
Commissioner was able to have with me in anticipation of this 
hearing, I am concerned about the fragmentation among the food 
agency inspection services and hope we can look for ways to 
streamline wherever we can. I think it was Einstein who said 
everything should be as simple as possible but no simpler. So, 
we do not want to streamline it to the point that it does not 
work, but we do want to look for those efficiencies that we are 
able to find. According to the Government Accountability Office 
report released earlier this month, 15 Federal agencies are 
responsible for oversight of 30 food-related laws. It is 
important we look for ways to do what we can about duplication 
where it occurs.
    The recent outbreak of salmonella in eggs showcased this 
fragmentation. Currently, the FDA has the responsibility of 
ensuring the safety of shell eggs, yet USDA oversees eggs that 
are processed into egg products. The Secretary himself used the 
example of a pepperoni pizza that is under the jurisdiction of 
one agency while cheese pizza is under the jurisdiction of 
another.
    With significant investments, Dr. Hamburg, comes 
significant responsibility. I know you want your agency to be 
accountable and we do too. We cannot look at this budget 
without understanding that the Federal Government is borrowing 
$4 billion every single day. Families all across America do not 
understand why their Government cannot operate with the same 
rules they face, and the Government must start living within 
its means. So, I am looking forward to what we can do together 
to address these issues.
    As we tackle funding decisions this year, we have to be 
mindful, of course, that the FDA touches the lives of every 
American every day, and amazingly around 20 cents out of every 
$1 spent in America is used to purchase an FDA-regulated 
product. Americans expect these products to be safe and 
effective. Dr. Hamburg, I look forward to working with you and 
your team and certainly with Chairman Kohl as we move down the 
path to doing the things that make the most sense for the job 
you have to do.
    And thank you, Chairman.
    Senator Kohl. Thank you very much, Senator Blunt.
    Commissioner Hamburg, we would love to hear from you.

              SUMMARY STATEMENT OF DR. MARGARET A. HAMBURG

    Dr. Hamburg. Thank you very much, Chairman Kohl, Ranking 
Member Blunt, and distinguished members of this subcommittee. I 
appreciate the opportunity to present the President's fiscal 
year 2012 budget for FDA and our priorities for the coming 
year.
    This hearing comes at a critical time for our Nation and 
for our agency. We must be prepared to meet and fully embrace 
the scientific challenges and global realities of our modern 
world, and the stakes for public health, for patients and 
consumers, and for our economic health have never been higher.
    Our agency is charged with an extremely significant task, 
to promote and protect the health of the American people. This 
includes ensuring the safety, effectiveness, and wholesomeness 
of products that Americans rely on, as you noted, in 
fundamental, sometimes lifesaving, ways--drugs, vaccines, 
medical devices, our Nation's food supply, and more. But it 
also includes working proactively to foster the scientific 
innovation that will lead to tomorrow's new breakthrough 
products. Both roles are essential to delivering progress for 
the American people and both roles impact our economy by 
encouraging consumer confidence, growing key industries, and 
creating jobs.
    Thanks to the support of the chairman and members of this 
subcommittee, FDA has been able to make forward progress on a 
wide range of vital priorities to improve the health, quality 
of life, safety, and security of all Americans. With the 
resources that you have appropriated, we have achieved tangible 
benefits for the people that we all serve.
    During the past year, we have approved dozens of new drugs, 
vaccines for seasonal and pandemic flu, and medical devices for 
hearing and vision loss, severe asthma, and to perform 3-D 
mammography screening. We applied cutting-edge whole genome 
sequencing to trace foodborne illness outbreaks. We have 
launched a new system that identified 100 food safety problems 
in the first months of operation. We have collaborated with the 
National Oceanic and Atmospheric Administration to develop and 
to perform screening tests to assure seafood safety and reopen 
the gulf coast fisheries after the Deepwater Horizon oil spill. 
Those are just a few of the things that the agency has 
accomplished in the past year.
    As you can see, FDA is charged with an enormous and unique 
set of tasks, and if we do not do our job and do it fully, 
there is no other agency or entity to backstop behind us. That 
is why I am here to ask for your support of the fiscal year 
2012 budget for the FDA.
    The proposed budget includes $4.4 billion overall and 
identifies four priority initiative areas: Transforming Food 
Safety and Nutrition; Advancing Medical Countermeasures; 
Protecting Patients; and Fostering FDA Regulatory Science and 
Facilities.
    Compared to the fiscal year 2010 budget, the fiscal year 
2012 budget represents an increase of almost $1.1 billion, $382 
million in budget authority, and $694 million in user fees. The 
amount of user fees includes $60 million for three new user 
fees that FDA is proposing.
    In addition, in an effort to contribute to deficit 
reduction, we will undertake nearly $30 million in contract and 
administrative savings across the agency.
    These four initiatives are critical to our mission of 
protecting and promoting the health of the public and they also 
represent important opportunities for our food and medical 
product industries to grow and to strengthen our economy. In 
other words, they will provide the significant return on 
investment that we all are looking for, for products, for 
people, and most importantly, for the public health. And let me 
just quickly explain how.
    First, the Transforming Food Safety and Nutrition 
Initiative contains an increase of $326 million to build a 
stronger, more reliable food safety system that will protect 
American consumers. We will use these resources to aggressively 
implement the Food Safety Modernization Act (FSMA) that the 
Congress passed in December. This landmark legislation provides 
FDA with the tools to establish a prevention-focused food 
safety system, placing the primary responsibility for 
prevention on the food producers and processors and leveraging 
the valuable work of FDA's State and local partners. FDA will 
also make sure that American families have the information that 
they need to make more healthful food choices through menu and 
vending machine labeling.
    Second, for the Advancing Medical Countermeasures 
Initiative, FDA proposes $70 million. Medical countermeasures 
include drugs, vaccines, diagnostic tests, and other medical 
equipment that are needed to detect and respond to deliberate 
chemical, biological, radiological, and nuclear threats, as 
well as emerging infectious diseases or other natural 
disasters, all of which threaten the lives and safety of the 
American people and I think weigh heavily on our minds right 
now given the tragic events in Japan. This investment will help 
accelerate the development of countermeasures to meet a set of 
critical national security and public health needs.
    Third, the Protecting Patients Initiative, for which we are 
proposing an increase of $123.6 million, will allow FDA to 
establish a pathway for approving lifesaving biosimilar 
products. This could offer substantial savings for the Federal 
Government and private-sector healthcare. This initiative also 
includes investments in scientific tools and partnerships to 
enhance the safety of increasingly complex drugs, medical 
devices, and biologics, and an increasingly complex foreign and 
domestic global supply chain.
    Fourth, the FDA Regulatory Science and Facilities 
Initiative contains an increase of $48.7 million to strengthen 
the core regulatory scientific capacity that supports all of 
FDA's missions and will enable us to truly streamline and 
modernize our regulatory work by applying the best possible 
science, especially as we address more advanced therapies, 
complex devices, and emerging technologies. It will also allow 
FDA to outfit and to occupy the Center for Biologics and Center 
for Drugs Life Sciences-Biodefense Laboratory complex which 
will play a critical role in shaping strategies in response to 
pandemics, emerging infectious diseases, and deliberate 
biological threats.
    So, even in these difficult times, the FDA's fiscal year 
2012 budget is essential to our ability to take meaningful, 
science-based action on behalf of the American people. With 
these investments and your support, I am confident that we can 
build on our past successes and better ensure our Nation's 
health.
    Thank you for the opportunity to testify and I am happy to 
answer your questions.
    [The statement follows:]
             Prepared Statement of Dr. Margaret A. Hamburg
                              introduction
    Chairman Kohl, Ranking Member Blunt, and members of the 
subcommittee, I am Dr. Margaret A. Hamburg, Commissioner of the Food 
and Drug Administration (FDA). I am pleased to present the President's 
fiscal year 2012 budget request for FDA.
    For today's hearing, I am joined by Patrick McGarey, FDA's 
Assistant Commissioner for Budget and Norris Cochran, Deputy Assistant 
Secretary for Budget at the Department of Health and Human Services 
(HHS).
    In my testimony today, I will outline the important initiatives in 
FDA's fiscal year 2012 budget request to the Congress. My testimony 
also highlights FDA's unique role in protecting public health and the 
value that FDA delivers for American taxpayers.
                           unique role of fda
    FDA is charged with ensuring the safety, effectiveness, and 
wholesomeness of products that Americans rely on in fundamental, 
sometimes lifesaving, ways--drugs, vaccines, medical devices, our 
Nation's food supply, and more. These are products that people need; 
products they care about; and products that are critical to their 
health, safety, and well-being. Our role is unique and if we don't do 
our job completely and responsibly, there is simply no other agency or 
entity to backstop us.
    Fulfilling our mission--to promote and protect the public health--
is a difficult task under any circumstances. But these are especially 
challenging times. Today, the powerful forces of globalization are 
reshaping our world. We face complex threats--both accidental and 
deliberate--that pose new risks to FDA-regulated products and the 
Americans who rely on them. And we have been forced to rethink the way 
we do our job.
    But we also live in a time of great advances in science and 
technology. Breakthroughs in the life sciences have provided industry 
with new opportunities to invest, innovate, create new markets, 
strengthen our economy, and most important, deliver new products and 
benefits for the American people.
              fda innovation, accountability, and results
    My dedicated colleagues at the FDA are deeply committed to the 
health of American patients and consumers--and they recognize that 
innovation is essential to progress in public health.
    Innovation is the foundation of the successful industries we 
regulate, and innovation is responsible for remarkable advances across 
all of the product areas within FDA's jurisdiction--which is why we 
must work proactively to foster the scientific innovation that will 
lead to tomorrow's breakthrough products.
    Innovation is also critical to maintaining U.S. global leadership 
in many areas, including medical product development. Currently, most 
new drugs are approved in the United States before they are approved in 
Europe. And according to a recent industry study, we either are ahead 
of or tied with Europe for approval of medical devices that fall into 
the lower-risk category, which represents 90 percent of medical 
devices.
    In my testimony, I highlight some recent FDA actions that allow the 
food, drug, biologic, and device industries--all engines of 
innovation--to bring new products and technologies to market.
    We also recognize that just as FDA supports the ability of industry 
to innovate, FDA itself must innovate and become more efficient. In 
FDA's fiscal year 2012 budget, we highlight more than 100 examples in 
which FDA centers and offices are improving the efficiency of our 
programs, and in many of these examples, we are also supporting 
industry efforts to develop new products. Examples of FDA innovation 
include the recent launch of the Innovation Pathway, a program to 
stimulate new, breakthrough technology and advances for medical device 
manufacturers, as well as a scientific collaboration with industry to 
develop novel technologies to detect new and traditional foodborne 
contaminants and to develop safe food packaging. These efforts reduce 
the risk and expense of recalling products that fail to meet safety 
standards.
    FDA is also committed to accountability. During the past year, we 
developed and implemented FDA-TRACK, an agency-wide system to monitor 
key performance measures for more than 90 FDA programs. Through FDA-
TRACK, we are systematically monitoring FDA's progress as we work to 
achieve our performance measures and allowing stakeholders and the 
public to witness our progress through quarterly reports that we post 
on www.FDA.gov.
    But the best measure of the value that FDA delivers is the 
opportunity to reduce costs and achieve measurable savings in areas 
that are important to America's health. One example is FDA support for 
the generic drug industry, which markets drugs that save American 
patients and taxpayers $140 billion per year.
    A second example is FDA's food safety program, which is making 
significant progress to reduce foodborne illness that costs the U.S. 
healthcare system $88 billion annually. A third example is the fiscal 
year 2012 Generic Biologics Initiative, which will generate significant 
savings for the Federal Government and for private-sector health plans.
                          fda accomplishments
    Thanks to the support of this subcommittee, FDA continues to 
achieve important public health milestones. Since early 2010, FDA has 
supported industry efforts to bring new products and technologies to 
market--and to think creatively about how to promote and protect the 
health of the American people in meaningful and sustainable ways.
    During the past year, FDA:
  --approved new drugs to treat diabetes, hypertension, osteoporosis, 
        bacterial infections, chronic pain, rheumatoid arthritis, 
        preterm birth, gout, immune deficiencies, schizophrenia, major 
        depressive disorder, and pulmonary disease;
  --approved five new therapies to treat rare diseases;
  --conducted four workshops to stimulate new orphan drug development;
  --tentatively approved the 126th anti-retroviral drug under the 
        President's Emergency Plan for AIDS Relief;
  --approved vaccines for seasonal and pandemic influenza;
  --approved new donor screening tests for HIV and Chagas disease;
  --cleared a new test to support kidney transplant patients;
  --approved new medical devices to treat hearing loss, severe asthma, 
        and vision loss, and to perform 3-D mammography screening;
  --cleared technology for physicians to view diagnostic images on 
        iPhones and iPads;
  --identified measures to prevent radiation overdoses during computed 
        tomography scanning;
  --permitted the marketing of the first test to identify norovirus, a 
        common foodborne illness;
  --applied genome sequencing to trace foodborne illness outbreaks;
  --collaborated with the National Oceanic and Atmospheric 
        Administration to develop tests to re-open gulf coast 
        fisheries;
  --formed public-private partnerships to improve produce safety; and
  --launched a new system that identified 100 food safety problems in 
        first 7 months of operation.
                    fiscal year 2012 budget summary
    Although the President emphasized in his fiscal year 2012 budget 
message that the fiscal realities we face require ``hard choices,'' the 
5-year freeze on Federal spending announced in the fiscal year 2012 
budget is not an across-the-board cut. Although the overall budget 
represents a freeze in the aggregate, it also contains investments in 
areas critical to sustain and grow the American economy.
    FDA is one such area of critical investment. As you can see from 
FDA's fiscal year 2012 priorities--food safety and nutrition, medical 
countermeasures (MCMs), patient safety, and FDA regulatory science--an 
investment in FDA is an investment in the economic health of two of the 
largest segments of America's economy: our food and medical products 
industries.
    Our fiscal year 2012 budget is also an investment in health--in the 
health of individuals and the public health of our Nation. As a result, 
the budget includes $4.4 billion in budget authority and user fees to 
protect and promote the health of the American public every day, and 
through every stage of life.
                  contract and administrative savings
    Although FDA's fiscal year 2012 budget is an overall increase for 
FDA, it also contains savings that contribute to the administration's 
deficit reduction goals. FDA is proposing $29.7 million in contract and 
administrative savings designed to achieve reductions and cut costs 
across all FDA program areas.
    To achieve these savings, FDA will reduce administrative staff by 
46 full-time equivalents, lower contract costs by increasing 
competition, and expand the use of blanket purchase agreements and 
other agency-wide approaches to reduce contract costs. Where possible, 
we will also save by using technology to improve how we manage our 
contracts and the contracting process. Finally, in some program areas, 
FDA will reduce the cost of employee training by replacing the 
traditional classroom model with online training.
                 transforming food safety and nutrition
    For fiscal year 2012, FDA proposes an increase of $326 million for 
the Transforming Food Safety and Nutrition Initiative to build a 
stronger, more reliable food safety system that will protect American 
consumers. This increase includes $225.8 million in budget authority 
and $100.2 million for user fees, including the four new user fees 
enacted in the FDA Food Safety Modernization Act (FSMA).
    With this increase, FDA will begin to implement the landmark food 
safety legislation, which the Congress enacted last December. Under 
this initiative, FDA will also ensure--through menu and vending machine 
labeling--that American families have the information they need to make 
more healthful food choices.
    FDA Food Safety Investment.--The passage of FDA FSMA, the first 
major overhaul of our food safety law in more than 70 years, will 
transform FDA's food safety program. Through FFSMA, the Congress 
enacted new safeguards and enhanced tools to protect America's food 
supply by preventing food safety problems rather than reacting to 
problems after they occur.
    Regrettably, foodborne illness is pervasive across America. Each 
year, nearly one of every six Americans gets sick due to foodborne 
illness. Some cases are severe--128,000 require hospitalization, and 
3,000 Americans die from foodborne illness.
    FFSMA closes significant and longstanding gaps in FDA's food safety 
authority. For example, FFSMA gives FDA important new tools to ensure 
that imported foods are as safe as domestic foods and directs FDA to 
build an integrated national food safety system in partnership with 
State, local, and tribal authorities.
    FDA will use these resources to establish a prevention-focused food 
safety system that leverages the valuable work of FDA's State and local 
food safety partners. In addition to yielding profound public health 
benefits, the FFSMA focus on prevention offers the opportunity for a 
dramatic return on the resources that this subcommittee invests in food 
safety. According to recent studies and the latest estimates of 
foodborne illness, the healthcare cost of foodborne illness--not 
including costs to the food industry--exceeds $88 billion each year.
    The combined result of these actions will be a stronger, more 
reliable food safety system that protects the American people.
    In its fiscal year 2012 budget, FDA is organizing its food and 
animal feed safety programs and investments to implement FFSMA. Our 
detailed budget documents display the specific dollar amounts that FDA 
will allocate to implement the 22 separate sections of the law.
    Nutrition.--As part of the Transforming Food Safety and Nutrition 
Initiative, FDA will also begin an $8.8 million program to improve 
nutrition labeling on restaurant menus and vending machines so that 
consumers can adopt healthier diets. This small but significant 
initiative offers powerful return on investment. A fiscal year 2009 
analysis estimated the medical costs of obesity at $147 billion per 
year (Finkelstein, et al., Health Affairs), which means that 
controlling obesity goes hand-in-hand with controlling healthcare costs 
and reducing a significant burden on our economy.
    The investments in this initiative will empower consumers to make 
better nutritional choices and will motivate food producers to develop 
healthier foods.
                   advancing medical countermeasures
    For fiscal year 2012, FDA proposes $70 million for the Advancing 
MCMs Initiative. MCMs include drugs, vaccines, diagnostic tests, and 
medical equipment and supplies to respond to deliberate chemical, 
biological, radiological, and nuclear (CBRN) threats and emerging 
infectious diseases, such as pandemic influenza.
    The Advancing MCM Initiative will strengthen FDA's ability to 
respond to these national security threats by supporting the 
development of MCMs as well as enhancing review by allowing FDA to work 
interactively with product developers and Government partners from 
early in the development process. With this investment, FDA will be 
better able to anticipate and resolve bottlenecks in MCM development 
and accelerate development of MCM products for pressing public health 
and national security needs.
    MCM Gap.--Today, our Nation lacks the range of MCMs required for 
emergency response. For example, there are no countermeasures to treat 
acute radiation syndrome, which would afflict millions in the aftermath 
of a nuclear event.
    Moreover, no FDA-cleared, rapid, point-of-care diagnostics exist 
for any of the biothreat agents of greatest concern. Such diagnostic 
tests are essential to guiding the public health response; ensuring 
that patients receive the most appropriate treatment; and promoting 
appropriate use of the limited supplies of MCMs available during a 
public health emergency.
    Analysis of the Need for MCMs.--In December 2009, on the heels of 
the influenza pandemic, HHS Secretary Sebelius called for a 
comprehensive review of the Nation's readiness to defend against CBRN 
threats. The HHS review was prompted by recognition that influenza 
vaccine became available only after pandemic influenza was already 
widespread across the United States. The HHS review called on the 
expertise of the scientific leadership of all Federal agencies that 
work with MCMs, as well as State and local health departments, the 
National Biodefense Science Board, and the Institute of Medicine.
    The review, released on August 19, 2010, identified the barriers to 
MCM development as well as significant opportunities to improve the 
path for successful MCM development. The review identified FDA as 
critical to the success of the MCM Enterprise, primarily because FDA 
evaluation of product safety and efficacy can significantly affect the 
course of product development.
    The report further recognized that robust FDA engagement from the 
earliest stages of product development can substantially increase the 
odds of successful approval. In other words, increased support for 
FDA's MCM activities is one of the most critical steps the Federal 
Government could take to transform the larger MCM Enterprise.
    Threat Assessment.--Dozens of reports since September 2001 and the 
October 2001 anthrax attack have affirmed the risk of terrorist groups 
wielding biological weapons and the suffering, death, and social and 
economic disruption that would result in the case of an attack. 
Therefore, the fiscal year 2012 investment in FDA medical 
countermeasure development and review offers the potential for a strong 
return on investment.
    The analysis of the National Security Strategy warns that the 
effective dissemination of a lethal biological agent within a U.S. 
population center would endanger the lives of hundreds of thousands of 
people and have unprecedented economic, social, and political 
consequences. The National Security Council warned in 2009 that the 
economic cost of a well-executed bioterrorist attack on American soil 
could exceed $1 trillion.
    Clearly, such an attack would have profound consequences on our 
social and political order, and more broadly, our way of life. Without 
this investment, America's public health and national security will 
continue to be at risk.
                          protecting patients
    For fiscal year 2012, FDA proposes an increase of $123.6 million 
for the Protecting Patients Initiative. This increase includes $64.8 
million in budget authority and $58.8 million from three new user fees. 
FDA is proposing new fees for reviewing generic drug applications, 
paying the cost of medical product reinspections, and inspecting 
imports that arrive by international courier.
    Generic Biologics.--With the fiscal year 2012 increase in budget 
authority, FDA will establish a pathway for approving generic 
biologics. Generic biologics are biological drugs shown to be highly 
similar to an FDA-approved biological product. In some cases, generic 
biologics may also be interchangeable with the FDA-approved biological 
product.
    Biological products include therapies to treat certain cancers, 
rheumatoid arthritis, age-related macular degeneration, and HIV. These 
therapies cost $15,000 to $150,000 or more per patient per year--and 
represent a significant share of Federal Government and private-sector 
pharmaceutical costs.
    Approving biosimilar versions of these products offers the 
potential for substantial savings for the Federal Government and 
private-sector health plans. However, these savings will not 
materialize unless FDA has the resources to implement a clear 
regulatory pathway for approving generic biologics. FDA is requesting 
these funds for fiscal year 2012 because the sooner we make this 
investment the sooner we will see savings from generic biologics.
    Other Medical Products.--In addition to investing in generic 
biologics, the Protecting Patients Initiative also invests in new 
scientific tools and partnerships to enhance the safety of increasingly 
complex drugs, medical devices, vaccines, and other biological 
products. For example, the Protecting Patients Initiative will 
strengthen FDA efforts to modernize and improve safety throughout the 
supply chain of medical products at a time when the number of medical 
products manufactured abroad is increasing dramatically, which presents 
real challenges for medical product and manufacturing safety.
    Safer medical products not only benefit patients, but also benefit 
the manufacturers of drugs, biologics, and medical devices. Safer 
products reduce healthcare costs and allow manufacturers to avoid the 
expense of product recalls.
    With the resources in this initiative, FDA will modernize its 
approach to ensure safety across the supply chain for medical products. 
The initiative will also expand FDA's capacity to conduct medical 
product safety assessments and strengthen the safety of vaccines and 
the blood supply.
    The proposals in this initiative offer a high rate of return for 
the investment of Federal dollars. They can reduce the cost of care and 
promote safe, high-quality, and accessible healthcare that Americans 
deserve. In addition, the administration is proposing additional 
measures for fiscal year 2012 designed to reduce costs and increase the 
availability of generic drugs and biologics.
                 fda regulatory science and facilities
    For fiscal year 2012, FDA proposes an increase of $48.7 million for 
the FDA Regulatory Science and Facilities Initiative.
    The FDA Regulatory Science and Facilities Initiative will 
strengthen the core regulatory scientific capacity that supports all 
elements of the FDA mission. Regulatory science focuses on developing 
the knowledge and tools to properly assess the safety, effectiveness 
and quality of products that are being developed or are already on the 
market. Specifically, this initiative will help modernize and 
streamline the regulatory pathways that industry relies on to bring 
new, innovative products to market.
    It will also modernize the FDA review and approval process for 
products that rely on new and emerging technologies. The result will be 
promising new opportunities to diagnose, treat, cure, and prevent 
disease.
    Finally, the resources in this initiative will also allow FDA to 
outfit the Center for Biologics Evaluation and Research-Center for Drug 
Evaluation and Research Life Sciences-Biodefense Laboratory complex. On 
August 18, 2010, the General Services Administration awarded the 
construction contract for the new laboratory complex at White Oak, and 
construction work is currently underway. Without this investment, FDA 
must pay double the rent: the first for a new lab we cannot occupy and 
second for the old lab we cannot vacate.
    The new laboratory complex will help FDA fulfill our scientific 
responsibilities to promote drug and biologic safety and MCM 
development and prevent threats, including annual influenza. FDA must 
make this investment in fiscal year 2012 to ensure that the laboratory 
is operational and ready for occupancy in fiscal year 2014.
                       fda current law user fees
    For fiscal year 2012, FDA proposes an increase of $634.5 million 
for 12 current law user fee programs.
    FDA user fee programs support safety and effectiveness reviews of 
human and animal drugs, biological products, medical devices, and other 
FDA-regulated products. Fees also allow FDA programs to achieve timely 
and enhanced premarket review performance. Finally, fees support the 
programs and operations of the FDA Center for Tobacco Products.
    Existing user fee laws authorize fee increases for many FDA user 
fee programs. The increases expand the available options for treating 
and curing diseases and addressing other important public health needs.
                               conclusion
    The FDA budget for fiscal year 2012 contains important investments 
for critical public health priorities. With these resources, FDA will 
transform food safety; support the development of urgently needed MCMs; 
protect patients by assuring that the drugs and other medical products 
they rely on are safe; and advance regulatory science, which serves as 
the foundation for all science-based decisions at FDA.
    Thank you for the opportunity to testify. I am happy to answer your 
questions.

    Senator Kohl. Thank you very much, Dr. Hamburg. We will now 
embark on a round of questions from the panel.

                          FOOD AND DRUG SUPPLY

    Your statement highlights what FDA can do with additional 
funding, but what happens if you do not get the full amount you 
are asking for like, for example, can you still tell us that 
you will be able to ensure a safe food and drug supply with 
your present budget?
    Dr. Hamburg. Well, as you know, FSMA, which just went into 
law, gives us a historic opportunity to really transform the 
food safety system in our country into one based on prevention 
and one that will really make a difference in preventing costs 
in terms of illness and death of people, consumers, and 
preventable costs to our healthcare system and to the food 
industry.
    If we cannot get additional resources to support the 
implementation of this bill, we will, of course, continue to 
pursue important aspects of what is contained in that 
legislation, but we will only really be able to put forward 
regs. We will be able to put ideas and programs on paper, but 
we will not be able to fully implement all that needs to be 
done. We will not be able to pursue the ambitious inspection 
program domestically and internationally that enables us to 
have a hands-on look at how food production and processing is 
being done to ensure safety.
    Importantly, we will not be able to work with manufacturers 
and producers to really put in place the prevention-based 
strategies, the risk-based approaches that are really so vital 
to what we need to be doing so that we are not scrambling after 
outbreaks occur but actually preventing them in the first 
place. That will save lives. That will save money.
    And we will not be able to address the increasing challenge 
of import safety. More and more of the food we eat in this 
country is actually grown, produced, manufactured, distributed 
overseas in an increasingly complex supply chain, and we really 
have a responsibility to enhance our efforts to ensure the 
safety of that global food supply as well.
    And at the end of the day, it is very, very important to 
industry that we have and maintain the reputation of a strong 
food supply. We do, at the present time, have one of the 
strongest food safety systems in the world. That is very, very 
important. It matters to people and it matters to the health of 
the industry, their ability to have markets that people have 
confidence here at home, and export markets depend on the 
confidence of the public at large in the work of the FDA 
working with industry.

                        MEDICAL COUNTERMEASURES

    Senator Kohl. The budget for fiscal year 2012, Commissioner 
Hamburg, proposes an increase of $70 million to help develop 
new therapies that could be quickly used in the event of a 
chemical or biological attack or a natural disaster of another 
sort. The tragedy in Japan where they are confronting so many 
challenges right now including, of course, radiation exposure, 
does focus our attention on the importance of preparedness.
    Can you tell us a little bit about this initiative of 
yours? What will we be getting with this investment? What can 
we tell the American people about our present state of 
preparedness with respect to something comparable to what 
happened in Japan?
    Dr. Hamburg. This is a very important initiative, and as 
you say, it is underscored by recent events. As a Nation, we 
must be prepared and we must be resilient in the face of a 
range of potential threats, both naturally occurring and 
deliberately caused. And at the present time, we have more work 
to do, and this Medical Countermeasures Initiative at FDA is 
part of a broader administration-wide initiative to ensure that 
we as a Nation are prepared for the kinds of potential threats 
to our Nation's security that can occur.
    If we cannot move forward with this Medical Countermeasures 
Initiative, we will not be able to ensure that we have the 
drugs, the vaccines, the diagnostics, the medical equipment 
that is necessary to respond to an event. We need to be 
developing, for example, with respect to radiation safety, 
state-of-the-art therapies that will enable us to treat both 
acute radiation syndrome, such as, sadly, workers in the 
nuclear plant in Japan are potentially being exposed to, and 
other forms of radiologic exposures, both the threat of a dirty 
bomb or an intentional nuclear event, or a catastrophic, 
unexpected event, such as what has occurred in Japan.

                         RADIATION PREPAREDNESS

    Senator Kohl. Are we prepared at this time to deal with the 
fallout of a nuclear meltdown such as they have had in Japan? 
Are we prepared?
    Dr. Hamburg. There are many aspects of preparedness, and 
actually FDA is involved in a number of them. There is the 
issue of ensuring that any imported products from Japan are 
screened and safe for consumption, and we are actively involved 
in addressing that. At the moment, there are not imports from 
that region coming in.
    Senator Kohl. I was referring to something akin to what 
happened in Japan. Are we prepared today to deal with it here 
in the United States?
    Dr. Hamburg. Oh, an event in--you know, we have many 
systems of preparedness in place, but we are lacking some 
critical elements of preparedness, including these important 
medical countermeasures. We need to make sure that we have the 
medical treatments necessary. We do not have treatments for 
acute radiation sickness. We need to develop those treatments 
and we need to make sure that they are available for the 
American people and potentially available for people around the 
world.
    Senator Kohl. Before I turn this over to Senator Blunt, I 
believe I hear you saying that we could not assure the American 
people here today that in the event of something similar to 
what happened in Japan, we would be in a position to take care 
of the needs of the people in the areas where the nuclear 
disaster occurred. We are not prepared to take care of them.
    Dr. Hamburg. We have systems for response and we have some 
acute measures that we could provide, but we do not have, for 
example, as I said, the treatment of acute radiation sickness 
that we would need to be able to benefit people exposed to very 
high levels of radiation exposure. We do not have the 
treatments to address a range of potential nuclear exposures. 
We would be able, in the case of a nuclear reactor event, to 
provide potassium iodide for limited protection of the thyroid 
organ. There are other potential exposures, and we are working 
to develop, as a Government, interventions that will make a 
difference.
    But we need to make targeted investments today to be 
prepared for tomorrow. That is what this Medical 
Countermeasures Initiative is about. In the field of radiation 
exposure absolutely, yes, we have other gaps in preparedness 
that we need to address whether it is naturally occurring 
infectious disease threats or the potential for biological, 
chemical, nuclear terrorism. We really have a responsibility to 
make sure that we make these investments today, and I think it 
is something that we all, for our Nation's security, need to 
work on together.
    Senator Kohl. Senator Blunt.

                          RADIATION TREATMENTS

    Senator Blunt. Thank you, Chairman.
    Commissioner, are you saying on this area of radiation 
problems, that we do not have a stockpile of the treatments or 
that the treatments do not exist?
    Dr. Hamburg. The treatments do not exist for many aspects 
of radiation exposure.
    Senator Blunt. And are you saying that under this program 
you are talking about, one of the FDA's goals would be to 
develop those treatments?
    Dr. Hamburg. Would be to work with industry and Government 
scientists to, yes, develop and also to get them reviewed and 
approved for safety and effectiveness so that they could be 
available to the American people.

                       RESPONSIBILITY DUPLICATION

    Senator Blunt. Well, I am going to get to review and 
approval here in 1 minute. Let me go through things with some 
quickness, if I can.
    On the duplication issues that I talked about earlier and 
that we talked about the other day, is there any ongoing effort 
in the food and drug safety agencies to try to figure out how 
we can do that in a more focused way?
    Dr. Hamburg. It is an important area of focus. Soon after 
the President was inaugurated, he initiated the Food Safety 
Working Group to bring together the different agencies of the 
Federal Government that have responsibilities for food to 
really look at how they could coordinate better and to develop 
key cross-cutting strategic priorities as well.
    It is the case that FDA and USDA have the major 
responsibilities for food safety in this country, and we, of 
course, do work closely together and we are examining ways to 
work more closely going forward. Certainly, in FSMA 
implementation, we are working closely with USDA in order to 
take advantage of their expertise and experience working in 
farming communities, to take advantage of the resources that 
they already have on the ground. We are also talking with them 
about how to more effectively share information around 
inspections and other food safety-related activities.
    The partnership is also very important, and the integration 
working with State and local authorities as well, and that is 
an important component of FSMA, and it is a very important 
component of how we do business and need to do business more 
efficiently going forward.
    Within the FDA itself, we have looked hard at how to make 
our work more efficient and integrated as well because we had 
components of the FDA working on food safety issues and we have 
now created an Office of Foods with a Deputy for Foods in 
charge of all of those activities and are integrating our food 
safety activities across both the human and the animal food 
safety arenas to make our program more robust, more integrated, 
and more efficient. And there is lots more work to be done.

                     FOOD SAFETY MODERNIZATION ACT

    Senator Blunt. Well, I encourage you to pursue all of that 
work as vigorously as we can. We need to be able to defend the 
things we do and to argue with justification that we are trying 
to do those things better and not duplicate our effort.
    On the duplication of effort, one of my big concerns about 
FSMA was yet another on-farm presence of another Government 
regulator. What are you doing there, as you look at those new 
responsibilities, and are you working with agencies like USDA 
that are already there to see how you can work with the 
information and structure they have?
    Dr. Hamburg. Yes. No, very much so. We have been working 
hard to really make sure that we understand the challenges and 
the concerns of the farming community as we move towards 
implementing FSMA. We, of course, have been on farms in the 
past when there are food-borne outbreaks around BSE issues and 
tissue residue issues. So, it is not completely new territory 
to us. But we recognize that we are now undertaking a new set 
of roles and it is very important that we work constructively 
with the farming community and with other partners that 
interact with the farming community.
    I have been out to visit quite a number of farms and my 
Deputy for Foods even more, have learned a lot about the full 
range of different types of farms and their different issues 
and have listened hard and will continue to try to work with 
the farming community. And USDA has been very helpful to us and 
the Extension Service is a critical component of our ability to 
do outreach to farmers and to consumers.
    We recognize that nobody wants more people in their farming 
communities telling them what to do. We view this as a 
collaboration. We view this as an opportunity for us to pursue 
a common goal of ensuring that the food supply is safe, doing 
what I think every farmer and food producer wants to be able to 
do, which is to make sure that the food they produce is safe 
and wholesome and that consumers can count on it and trust it.

                           FOOD TRACEABILITY

    Senator Blunt. And do you have new responsibilities for 
food traceability in this law?
    Dr. Hamburg. It is an important component of what we need 
to do as part of FSMA, and it will certainly prove to be of 
value if we can put that kind of a program in place because it 
will enable much more rapid identification of a problem and its 
source when it should occur so that we can identify and respond 
rapidly, control the problem, and mitigate the effects, and get 
those companies back up and running, producing the food with a 
robust market for the food that they produce.
    Senator Blunt. Would that be across the board? This is a 
question I do not know the answer to. Is that across the board 
for your agency? Does that include livestock as well?
    Dr. Hamburg. No. We regulate about 80 percent of the food 
supply, but we are not responsible for meat, poultry, processed 
eggs, and catfish.
    Senator Blunt. And particularly catfish.
    Dr. Hamburg. Right.
    Senator Blunt. Mr. Cochran will be glad to know that you 
are not going to get involved in catfish. Probably Mr. Pryor as 
well.
    But you will have new traceability requirements or 
obligations on the things you do regulate on the farm.
    Dr. Hamburg. We are going to be starting to have those 
discussions about what such a system should look like. Industry 
has an important voice and a lot of experience in these issues 
because it is so important in terms of being able to rapidly 
identify problems and address them.

                             REVIEW PROCESS

    Senator Blunt. Let me ask just a couple of quick questions 
on review processes, particularly since you mentioned you might 
have some other ways to try to get these products that Chairman 
Kohl was talking about to the market quicker.

                            USER FEE REVIEWS

    Two of your largest fee programs, prescription drugs and 
medical device review, are up for reauthorization in this 
fiscal year. How do you intend to approach those fee 
negotiations with industry?
    Dr. Hamburg. Well, these are very important activities, and 
the user fee programs that were introduced in the 1990s have 
demonstrated their value on the drug side and on the device 
side in terms of helping to give us the resources that we need 
to be able to ensure the best possible review in the most 
timely way possible. The negotiations are underway. We have 
actually just begun negotiations with the generic industry as 
well, which currently does not have user fees. We are 
optimistic that we are going to be able to achieve a good 
proposal for the next user fee legislation that will come 
before you. And I think both the industries we regulate that 
provide user fees and certainly our agency feel that these are 
critical programs that help to enable us to be able to do our 
job. And I think that overall we have been performing well in 
response to the introduction of the user fees and meeting the 
targeted goals both on the drug side and the device side.
    Senator Blunt. I do not know what the fiscal year 2010 
numbers were. I think the fiscal year 2009 numbers--and 
clearly, this is the first 9 months of this administration, so 
numbers that may be even less than fiscal year 2009. But I 
think in fiscal year 2009, the agency failed to meet one-third 
of its drug review goals and approximately 20 percent of its 
device review goals.
    Dr. Hamburg. Well, those are different numbers than I have 
seen. On the drug side, it is the case that in recent years we 
have not met all of the goals, although in the first 15 years 
of the program, we met and surpassed the goals. In 2007, the 
FDA Amendments Act (FDAAA), gave FDA quite a comprehensive set 
of additional new responsibilities mainly focused on drug 
safety, and it is the case because our resources are fairly 
limited, we had to target resources that might have gone into 
drug review into responding and implementing the requirements 
of this new and important Amendments Act. So, we saw some drop-
off in our review times as we began to implement those 
components of FDAAA. We are getting right back up to the 
performance levels prior to that though. But we have had a lag. 
That is true.
    On the device side, most of the device program is focused 
on the premarket notification program, what is called the 
510(k) process. About 95 percent, I think, of the devices that 
we review are part of that program. And we have been meeting 
the targets agreed to with industry in that program.
    Senator Blunt. And they should expect you to do that.
    Dr. Hamburg. And they should expect us to do that.
    In the premarket approval area, which is a more rigorous 
approval mechanism and has more requirements, we can and will 
do better. We have put forward, under the leadership of our new 
center director, Dr. Jeffrey Shuren--he has led a very serious 
review of our regulatory pathways, how we can make them more 
effective and efficient, how we can bring the best possible 
science to bear. He put forward in January of this year 25 
recommendations that reflected a lot of public comment, 
discussions with industry, stakeholders, patient advocates, and 
others. He put forward these 25 recommendations for how we can 
do better.
    We have also asked the Institute of Medicine of the 
National Academies of Sciences to take a look at some of the 
regulatory issues in the device area to make broader 
recommendations about how we can modernize and improve our 
regulatory pathways.
    Senator Blunt. Good.
    Dr. Hamburg. So, we want to keep working on it.
    Senator Blunt. if my figures are wrong here, would you 
please get back to me and let me know? But my notes here 
indicate that FDA failed to meet one-third of the drug review 
goals and approximately one-fifth of the device review goals. 
And if that is not right, just tell me at some future time.
    Dr. Hamburg. We will get back to you.
    [The information follows:]
                      Drug and Device Review Goals
    In fiscal year 2008, we met or exceeded the 90-percent performance 
levels for 33 percent--or 4 of 12 goals--of the drug review performance 
goals. In fiscal year 2009, we demonstrated significant improvement in 
regaining stability in meeting our performance goals and met or 
exceeded the 90-percent performance levels for almost 60 percent--or 7 
of 12 goals--of the drug review performance goals.
    The Food and Drug Administration (FDA) agreed to more stringent 
device performance goals as part of the Medical Device User Fee 
Amendments of 2007, also known as MDUFA II. For fiscal year 2009, FDA 
is on track to meet or exceed 7 out of 10 device performance goals for 
which we have reportable results, including the goals relating to 
510(k) devices, which represent more than 90 percent of the devices FDA 
clears or approves for marketing. The goals not met by FDA in fiscal 
year 2009 represent less than 3 percent of the submission volume FDA 
reviews, and performance has been steadily improving for these goals. 
The Center for Devices and Radiological Health has undertaken a number 
of steps to continue making improvements towards meeting these goals, 
including drafting clinical trial guidance, identifying, and recruiting 
needed staff expertise, strengthening its external experts program, and 
improving its premarket information management systems.

    Senator Blunt. I would also be pleased to see the numbers 
for fiscal year 2010, if they are available now, the data that 
ended September 30.
    [The information follows:]
                Fiscal Year 2010 Drug and Device Reviews
    It is too early to determine the overall performance for fiscal 
year 2010, given the current number of pending applications. While drug 
review performance numbers for fiscal year 2010 are still preliminary, 
it appears that the Food and Drug Administration (FDA) is on track to 
meet or exceed 11 of the 12 drug review performance goals called for 
under the Prescription Drug User Fee Act. Preliminary data as of the 
fiscal year 2010 Medical Device User Fee Amendments of 2007 performance 
report indicates that FDA is meeting or exceeding 5 of the goals for 
which there are sufficient results to reliably estimate current 
performance, and has the potential to meet or exceed all 12 performance 
goals.

    Senator Blunt. I have got a couple other questions, but I 
think I will try to do those a little later, chairman, and let 
others ask questions. Thank you.
    Senator Kohl. Thank you.
    Senator Brown for 5 minutes.

                                 MAKENA

    Senator Brown. Thank you, Mr. Chairman. I will take less 
time. My Governor from Ohio is coming in and I have a meeting 
with him in a few minutes.
    But just one brief line of questioning, Dr. Hamburg. And 
thank you for joining us.
    As you know, after the FDA-approved Makena, which was the 
version of a longstanding medicine that had been produced by 
compounding pharmacies for years given to women who were at 
high-risk of low birth weight, early birth babies, K-V 
Pharmaceutical announced that the price for the product would 
jump from about $10 to $20 per injection and typically a woman 
would take 20 doses of it, I guess, over 20 weeks. It would 
jump from $10 to $20 per injection to $1,500 per injection, 
which by my calculations is from $10 to $1,500 is a 14,900-
percent increase.
    Since the drug plays such a critical role in reducing the 
incidence of premature birth and the associated deaths and 
disabilities and costs, this price increase marks a dramatic 
setback for public health, to insurance carriers, to 
businesses, to taxpayers, to anyone and to the individuals 
trying to pay them going from $10 times 20 injections to $1,500 
times 20 injections.
    What can the FDA do to stop manufacturers from exploiting 
this existing approval process? Even though K-V has admitted 
that the price increase does not derive from R&D or from 
production costs, all they did was--my understanding--they say, 
pay $200 million for the clinical trials, but they did not do 
the R&D. In fact, taxpayers did most of the R&D here. So, 
taxpayers, in the end, get a good drug, but it looks a lot like 
blackmail to me. Seat belts serve an important purpose too, but 
they are not priced in the stratosphere to reflect the fact 
they save lives. But they are pricing it in a way that they 
will make huge profits and it will compromise the public 
health.
    What can you do? Administrative, legislative strategies? 
What do we do about a drug that has been used for decades and 
prevented an awful lot of low birth weight baby births and 
instead will become so, so, so prohibitively expensive?
    Dr. Hamburg. Well, it is such an important concern, and 
like you, I was very surprised when I learned about the price 
increase. I think it is important and an advance that we have 
an FDA-approved drug to prevent preterm pregnancy and all of 
its consequent serious medical concerns for both mother and 
infant. And while the drug had been available through 
compounding, compounding as a practice has been associated with 
serious health risks, contamination----
    Senator Brown. I am not in any way questioning that FDA did 
the right thing here. But my understanding is under Bayh-Dole 
enacted decades--three decades--25, however many years ago, I 
think in the 1980s. Under Bayh-Dole, you in fact do have the 
power to do something about this price and do something about 
K-V Pharmaceutical's actions. And if you do not, it is so 
important that we figure out something to do here.
    This price increase in my understanding started this week, 
and it is only going to get worse. And if K-V is not willing to 
back down, I would hope the embarrassment of doing this to 
America's families would cause them to want to back down, at 
least try to price it a little more reasonably. But if you 
cannot use Bayh-Dole, you need to figure out a strategy what to 
do here.
    Dr. Hamburg. I am not as expert on these issues as I 
perhaps should be. I am told that Bayh-Dole does not fall under 
FDA's jurisdiction.
    Senator Brown. It is HHS with Bayh-Dole. You are suggesting 
that to them. You are writing a letter. You are weighing in 
with them, as we are doing and some other Senators are starting 
to now, as we worked on this.
    Dr. Hamburg. This is an issue that, as you know, has arisen 
recently. It did come as a surprise to us, very surprising, 
especially in that the National Institutes of Health, as you 
indicated, did the original clinical trials on which this 
approval was based. I think it is a very important issue to 
raise. FDA does not make its approval decisions with pricing 
considerations.
    Senator Brown. Nor should you.
    Dr. Hamburg. So, I think our role is a different one, but I 
think that the issue that you are raising about the 
accessibility to this important drug is a critical one.
    Senator Brown. I made clear I am not blaming FDA. FDA did 
the right thing. This company acted I guess you cannot say 
criminally, but immorally and any other string of adverbs you 
might want to choose. I am just looking for FDA to take 
leadership with HHS in finding a way, a strategy, or a path 
quickly to get this company to price its drug more reasonably 
for American women. Fair enough. Thank you.
    Dr. Hamburg. Thank you.
    Senator Kohl. Thank you very much, Senator Brown.
    Senator Moran.

                           FOOD FROM THE FARM

    Senator Moran. Chairman Kohl, thank you very much.
    Thank you, Dr. Hamburg, for joining us.
    In a broad sense, I was pleased to hear you indicate that 
you are working to understand the challenges of the farm 
community. In a broad sense, a broad question that I would ask 
you is what does that mean within FDA. Have you hired people as 
a result of the passage of the legislation who have farm 
experience--agronomists, actual farmers, or ranchers who 
produce food for our country?

                         LIVESTOCK ANTIBIOTICS

    And then in a very narrower, more specific way, I want to 
raise concerns that I have raised previously in regard to your 
draft guidance No. 209 issued June 28, 2010, ``The Judicious 
Use of Medically Important Antimicrobial Drug in Food-
Processing Animals.'' We are very much a livestock-producing 
State, and I generally would tend to avoid commenting on what I 
would hope would be scientific-based decisions by FDA, but I 
continue to raise significant concerns about FDA's proposal in 
that draft guidance document.
    It appears, from reading that draft, that FDA did not 
engage in rigorous review of current research in regard to 
antimicrobial resistance and is attempting to ban the use of 
those antibiotics for growth promotion, feed efficiency, and in 
some instances preventive treatment based upon uncertain 
evidence. In fact, if you read the report, the analysis uses 
the phrases like--when you cite reports in that draft, they 
fail to establish a direct link between antibiotic use and the 
risk to human health, not adequate epidemiological evidence, a 
very limited amount of that research unable to find a 
substantial body of evidence. And so there is, in my view, 
great uncertainty about the specific risk posed by antibiotics 
shown in your draft. And it also appears that the most recent 
scientific evidence was completed 10 years ago.
    And so I am asking what has changed, other than personnel 
at the FDA, that now causes the FDA to have a significant 
interest in regulating antibiotics.
    Also in that draft you state, in fact, that before 
withdrawing a drug that is for--a labeled use of an approved 
drug, Federal law requires the FDA to demonstrate that new 
evidence shows that a drug is not shown to be safe under 
approved conditions. And I am interested in knowing what that 
new evidence is and how you are proceeding with this draft, 
what time frame, have you read the comments, and the direction 
that you are going.
    Dr. Hamburg. As you well know, antibiotics are an essential 
and vital tool for the health of animals and the health of 
people. It is a limited resource. There is a serious and 
growing problem with antibiotic resistance, and that is well 
documented in human populations and in animal populations. And 
that is the concern that we are trying to address. We do not 
want to go back to an era of pre-antibiotics because the 
antibiotics that we have no longer work. And in some areas of 
serious medical disease, we have begun to see that kind of a 
circumstance occurring.
    We are a science-based agency. It is our mission, our 
orienting purpose to make data-driven science-based decisions. 
So, it is very, very important to us that we do that rigorous 
review of the scientific literature and really look at what the 
data tells us about these important questions. There is broad 
scientific literature in this area. There is a lot of data to 
support the concerns about the use of antibiotics in food-
producing animals for growth promoting or feed enhancement 
purposes. Many, many of the public health, medical, and 
scientific societies have reviewed the science and have made 
recommendations that such use should not be considered 
judicious, therapeutic use. We, of course, are doing our own 
internal reviews.
    But this guidance is voluntary guidance. We are working on 
it with industry and other stakeholders. When we proposed our 
framework, which was to limit medically important antimicrobial 
agents in food-producing animals to the circumstances that are 
necessary for assuring health and to also have those 
antibiotics used under the supervision or oversight of a 
veterinarian, that was done as guidance. It was put forward 
over the summer. We have received a lot of comments from a 
range of stakeholders, all with very different and very hard-
held perspectives. We are analyzing those comments and 
continuing to look at the data. We will be coming forward with 
a revised guidance and we will continue to have that open for 
comment from the public. We want to move towards something that 
benefits the health of animals and humans.
    Senator Moran. Mr. Chairman, I have follow-up, but I notice 
they have just called the vote and I would not want to prevent 
Mr. Pryor from having his opportunity to question.
    But I would say that the draft proposal that you have put 
forth does not demonstrate the things that you said about the 
broad scientific evidence. It lacks the connection. And I also 
still continue to believe that the scientific research that you 
announced or indicated in your draft proposal is still 10 years 
old. And so if there is more to come or you have additional 
scientific-based evidence, I would welcome that.
    Thank you, Mr. Chairman.
    Senator Kohl. Thank you, Senator Moran.
    Senator Pryor.

               NATIONAL CENTER FOR TOXICOLOGICAL RESEARCH

    Senator Pryor. Thank you.
    Thank you for joining us today, Commissioner. It is always 
good to see you.
    Let me start with something that you know is near and dear 
to my heart. It happens to be located in my State. It is the 
National Center for Toxicological Research (NCTR). NCTR focuses 
on technological research so that the FDA can make science-
based decisions, and this includes an emphasis on regulatory 
science. The decisions that the FDA makes based on this 
research range from food safety to safety devices used in the 
medical community to safety of basic cosmetics.
    The House has proposed a very significant cut--I believe it 
is 43 percent--in their continuing resolution, and my 
understanding is that might even lead to the closure of NCTR. I 
guess the first question is, do you have any idea why the House 
targeted NCTR?
    Dr. Hamburg. No, I really do not, but it is a grave concern 
to me what that will mean.
    Senator Pryor. If you do not mind, tell the subcommittee 
what NCTR is and what it does and what its unique role is at 
the FDA.
    Dr. Hamburg. Well, it is a unique resource for FDA and for 
the Nation. It is a center for toxicological research really 
focused on strengthening our understanding of a set of safety 
concerns that cut across drugs and cosmetics and food, dietary 
supplements, a range of issues that FDA regulates. It is 
helping us to really understand emerging new technologies in 
terms of the scientific promise that they hold, things like 
nanotechnology. They have been a leader in nanotechnology 
research which offers applications in so many areas. But also, 
we need to understand what are the implications in terms of 
near-term and long-term safety issues, and they are a leader in 
research in that area.
    They undertake important research in areas that are very 
much on the minds of Americans these days, issues like 
bisphenol-A (BPA), a chemical in plastic and the lining of food 
containers, really trying to sort out what are the risks and 
benefits of a substance like that and really understand and 
trying to modernize the underlying science of toxicology so 
that we can get important answers for consumers and to support 
industry in key areas and to make sure that we have the 
innovative products that Americans are counting on.
    Senator Pryor. Is there another facility that does all this 
type of research?
    Dr. Hamburg. It is really quite a unique resource, a whole 
center really focused on toxicology research and doing this 
research in the service of product evaluation for safety and 
efficacy.

                             NANOTECHNOLOGY

    Senator Pryor. You mentioned a few moments ago about 
nanotechnology and research in that area at NCTR. There are 
more and more products that are coming onto the market that 
claim to be nanotechnology products. I am sure a lot of them 
are.
    What steps is FDA taking to ensure the American public that 
nano products are safe?
    Dr. Hamburg. Well, there is a broad research agenda that 
needs to be undertaken to really understand the effects that 
these very, very small nano-sized materials have when they are 
introduced into the human body, often with chronic exposures, 
and they can be used to deliver drugs in exciting ways to get 
targeted therapies to people. They can be used in food 
products, in cosmetics. They are used in non-FDA-regulated 
products as well, including fabric and clothing.
    But NCTR is really helping to develop and undertake 
important areas of research to examine how these nano particles 
work under different circumstances, how the human body 
responds, and to look at it under different conditions, 
different models, different products, and of course, working in 
partnership with others, but it is a unique resource.
    Senator Pryor. And my last question on nanotechnology--
maybe my last question because I am out of time--is should the 
FDA have a regulatory science program on nano-toxicology.
    Dr. Hamburg. I think that we are undertaking important 
experiments in that arena. I think it probably needs to be 
developed as a full-fledged area of focus, and FDA clearly 
should be at the center of those activities in that as we see 
more and more products using this technology, we need to be 
able to fully assess the risks and the benefits and we need to 
have a strong, sound science base to enable us to make the most 
informed decisions possible.
    Senator Pryor. Thank you.
    Thank you, Mr. Chairman.

                             GENERIC DRUGS

    Senator Kohl. Thank you very much, Senator Pryor.
    Dr. Hamburg and I talked about this issue before. Over the 
years, we have provided funding to speed approval of generic 
drugs because, as everybody knows, they save the consumer tons 
of money. Unfortunately, the backlog of applications awaiting 
approval continues to grow and at this point, we have no 
indication that it will slow down. The budget proposes a very 
slight increase for generic drugs, not enough to keep up with 
the increased workload and again proposes to create a user fee 
for generic drugs in order to offset the costs, which would 
speed up our ability to get these generic drugs approved.
    Research shows that it is the first and second generic 
drugs coming to the market that save consumers the real money, 
and of those at FDA awaiting approval, how many of the pending 
applications, if approved, would be the first or second generic 
of their kind on the market?
    Dr. Hamburg. Of the pending applications, I believe that 
about 365 or so are first generics. I would be delighted to 
give you more specifics on the numbers of second generics. I do 
not have that information at hand. But it is the case that with 
the additional dollars that you have helped us get in recent 
years and what we hope to get going forward through a 
combination of budget authority and user fees, that we will be 
able to make a significant dent in the pending applications and 
be able to continue to get these important products to people 
as quickly as possible.
    You correctly note that they have had a huge impact. I was 
told that over the last decade, it has been about $284 billion 
saved, and of course, people getting access to these drugs. So, 
it is a hugely important area.
    [The information follows:]
                     First and Second Generic Drugs
    It is not possible to immediately determine which pending generic 
applications would be the first or second generics on the market. 
Whether a generic is first or second is based on the order in which it 
is approved and marketed. A number of factors can affect which drug is 
marketed first, making it difficult to identify which pending 
applications will ultimately become first or second generics. However, 
FDA makes every effort to ensure that generics are available to 
consumers as soon as possible. In most cases, a first generic is 
approved shortly after all relevant exclusivities have expired, and all 
relevant patents have expired or are successfully challenged.

                         GENERIC DRUG USER FEES

    Senator Kohl. Yes, as you point out, it has been a 
tremendous savings, if we can just get these drugs to market. 
And the reason I say first and second, if a standard drug from 
a brand name company is priced at $10, maybe the first generic 
comes out at $8, but then the second generic might come out at 
$4 or $2 in order to get their share of markets. So, oftentimes 
it is the second generic that comes to market that really 
impacts the price of that product to consumers.
    Do you support user fees?
    Dr. Hamburg. I do support user fees. I think that the user 
fees will enable our generic program to be much stronger and I 
think that it is increasingly important that we have a robust 
generic review program both because of the importance of these 
drugs to the American people, as we have been discussing, but 
also because our ability to review them is getting harder and 
harder. In a way, we are a victim of our own success. Number 
one, because the industry has really taken off, we are getting 
more and more applications. Believe it or not, we actually 
approve about two generic drugs per working business day at the 
FDA. So, it is a huge volume that comes before us.
    And many of the generic drugs are part of this more 
globalized supply and manufacturing chain that we have touched 
on briefly. So, increasingly, in order to do the approvals, we 
have to go overseas to do inspections of the manufacturing 
plants, and that takes more time and money as well.
    So, as we are seeing the generic industry really expanding 
and the challenge of the review process increasing because of 
this globalization--and in some cases, because of the 
complexity of the drugs that are coming before us, but mainly 
we are facing growing challenges and we need to meet them. I 
think that both industry and the public benefit. So, I think it 
is appropriate to have the program funded by budget authority 
and user fees.
    Senator Kohl. Thank you.
    Senator Blunt, go ahead.
    Senator Blunt. Well, we do have votes, and I may have some 
written questions. I would be interested in how big these user 
fees are for generics compared to the original certification of 
drugs.
    Dr. Hamburg. Well, we are just----
    Senator Blunt. If you had them, what are we talking about 
here?
    Dr. Hamburg. We are beginning to sit down at the table for 
the negotiations. The President's budget proposes, sort of 
targets a $40 million user fee for generic drugs in fiscal year 
2012.
    [The information follows:]
                         Generic Drug User Fee
    The fiscal year 2012 budget proposal calls for a generic drug user 
fee program of about $40 million. In relation to the market for generic 
drugs, estimated at $58 billion, according to the Generic 
Pharmaceutical Association, this represents a modest expense.
    The economics of the generic drug market make it difficult to 
determine precisely what impact this $40 million would have on the 
price of generic drugs. We note that this $40 million is significantly 
less than the $250 million user fee program which members of the 
generic drug industry have outlined in public meetings; any impact from 
the $40 million user fee would therefore be significantly less than any 
impact resulting from the $250 million user fee proposed by industry.

    Senator Blunt. If you have any studies on what impact that 
has on the prices of these drugs, and maybe it is over such a 
large number of drugs it is varied, but I would like to see 
that if you have that information. You know what I am asking? 
What impact do you think $40 million of user fees would have on 
the price of drugs, and is there a way to differentiate that 
out?
    Dr. Hamburg. Okay. Well, we will take our best stab at 
doing that.
    [The information follows:]
                       Generic Drug Price Impacts
    The Federal Drug Administration and the generic drug industry have 
only recently begun negotiations to discuss generic drug user fees. At 
this time, FDA does not know what type of fee structure will be 
established, let alone the amount of each fee. FDA's goal is to work 
with the industry trade associations to establish a program that 
promotes the timely review and inspection of the growing number of 
generic drug applications. Members of the generic drug industry 
outlined proposals at a public stakeholders meeting that would equate 
to about $250 million in annual user fees. Given that sales of generic 
drugs are about $58 billion, from the GPHA, such a user fee would 
represent less than 1 percent of sales.
    By contrast, the prescription drug industry paid approximately $459 
million in fiscal year 2008, on 2008 sales of $234 billion, according 
to a report by the Kaiser Family Foundation in 2010, also less than 1 
percent of sales.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Blunt. I would think that would be something we 
would want to know as part of the whole evaluation of what 
impact this has on the generic marketplace.
    And I may have some other written questions, Mr. Chairman.
    Dr. Hamburg. Okay, delighted to take them.
    Senator Blunt. Commissioner, thank you for your 
knowledgeable answers today.
    Dr. Hamburg. Thank you very much.
    [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
                             overall budget
    Question. Please provide a priority list of the increased funding 
items you are requesting in the budget.
    Answer. The Food and Drug Administration (FDA) is responsible for 
protecting Americans many times each day and through every stage of 
their lives. Our role in protecting public health is unique, and there 
is no one to backstop us.
    With these principles in mind, the FDA fiscal year 2012 budget 
supports many urgent public health priorities. It contains the 
resources to achieve fundamental public health responsibilities 
entrusted to FDA. The budget recommends new resources for FDA to 
transform America's food safety and nutrition, speed the development of 
medical countermeasures to meet critical national security priorities, 
protect American patients, and advance the regulatory science that 
serves as the foundation for FDA public health decisions.
    The initiatives and resources that FDA recommends for fiscal year 
2012 will allow us to act more quickly and strategically to protect 
consumers from food safety threats and help deliver safer, more 
effective medical therapies to the American people. Fulfilling our 
responsibilities to the American public requires additional resources, 
as recommend in the fiscal year 2012 budget, across all of these 
priorities.
    Like many Government executives, I am carefully watching the 
progress of the ongoing bicameral, bipartisan discussions between the 
administration and congressional leadership on the Nation's long-term 
fiscal picture. These discussions will likely affect the overall 
funding for Federal programs, the scope of many programs and the size 
of individual budgets. We look forward to working with you and others 
in the Congress as this process moves forward.
    The administration is committed to making the difficult decisions 
necessary to reduce the deficit. However, we must do so in a way that 
safeguards the public health of Americans now and in the future. That 
is what FDA and its employees strive to do every day.
                        medical countermeasures
    Question. The budget for fiscal year 2012 proposes an increase of 
$70 million for advancing medical countermeasures (MCMs). This is on 
top of a fiscal year 2011 request to use $170 million in unspent 
pandemic flu money for these activities.
    Can you talk a little bit about this initiative--it's a lot of 
money. What, specifically, will we be getting with this investment? Is 
the initiative scalable, and to what degree?
    Answer. FDA plays a key role in facilitating development and 
availability of the Nation's MCMs. To successfully contribute and keep 
pace with the multibillion-dollar investments being made in MCM 
development by the National Institutes of Health (NIH), the Biomedical 
Advanced Research and Development Authority (BARDA) of the Office of 
the Assistant Secretary for Preparedness and Response, and the private 
sector, FDA needs funding to support its MCM Initiative. The fiscal 
year 2012 investment of $70 million in the MCM is critical to 
successfully developing innovative, safe, and effective MCMs to counter 
identified chemical, biological, radiological, and nuclear (CBRN) 
threats and emerging infectious disease threats. The $70 million 
investment is also essential to develop the capacity to rapidly develop 
MCMs in the face of new threats.
    The fiscal year 2012 investment in the MCM will help to accelerate 
the pace and increase the probability of successfully developing MCMs 
for these threats. FDA will use the fiscal year 2012 funds in a number 
of ways. FDA will create and maintain a highly qualified workforce with 
the appropriate technical training, scientific skill, and subject-
matter expertise to fully support FDA's MCM responsibilities. FDA will 
also improve the MCM infrastructure at FDA, such as laboratory 
equipment and information technology, so that our researchers and 
reviewers have the tools they need. FDA will establish 
multidisciplinary Action Teams that will work to establish clear, 
science-based pathways for evaluating and approving MCMs. FDA will 
expand FDA's regulatory science program to help overcome existing 
hurdles in MCM development and to facilitate the translation of 
scientific discoveries into MCMs. And, FDA will modernize agency 
regulations and policies to make the FDA evaluation and review process 
more efficient and to ensure that MCMs can be made readily available to 
the public when needed.
    Regarding the question about whether the MCM is scalable, we 
recognize the budget challenges that the Congress and the Federal 
Government face. The FDA investment has been carefully designed and 
balanced to fulfill the resource needs for the activities that FDA must 
conduct and the performance that FDA must deliver. It has also been 
designed to sustain the MCM infrastructure and programs already under 
way and to continue and build on this critical work. If the Congress 
must scale its investment in MCM, FDA will determine how to make 
adjustments.
    Question. Are there specific threats that you are working on that 
are greater than others?
    Answer. Yes, FDA is fully engaged with its MCM Enterprise partners 
throughout the Federal Government to establish and maintain MCM 
programs and activities based on MCM Enterprise partner priorities 
based on anticipated.
    The Department of Health and Human Services (HHS) prioritizes both 
the threats and the MCM programs to counter those threats. The highest 
priority threats include CBRN threats for which a Material Threat 
Determination has been issued by the Department of Homeland Security. 
Examples include anthrax, smallpox, botulinum toxins, and radiological 
nuclear threats. These have been determined to present a material 
threat against the United States population sufficient to affect 
national security. Pandemic influenza is also a high-priority threat.
    The HHS review, ``The Public Health Emergency Medical 
Countermeasures Enterprise Review'', released in August 2010, 
envisioned the Nation's MCM Enterprise evolving from its current 
threat-specific approach to a flexible capability that can produce MCMs 
rapidly in the face of any attack or threat, known or unknown. As a 
result, FDA is also focusing on supporting the development of broad-
based platform technologies in support of MCM Enterprise priorities 
that can offer scalable and flexible advantages over agent-specific MCM 
programs for high-priority threats.
    Question. I know you've started working on some of this in 
earnest--what happens if you don't get the money you are requesting in 
fiscal year 2011 or fiscal year 2012?
    Answer. HHS provided FDA with the funding to launch and begin 
implementing the MCM by allocating $170 million from previously 
appropriated funds for pandemic influenza activities. The $70 million 
budget request for fiscal year 2012 is designed to provide base funding 
for the MCM.
    As already noted, the $70 million fiscal year 2012 budget request 
for the MCM is designed to sustain the MCM and to enable it to keep 
pace with the multibillion-dollar investments ongoing at NIH and BARDA. 
If FDA receives less than the amount requested, the agency must limit 
its investment in the MCM, regulatory science program, and the full-
time equivalents (FTEs) necessary to support the enhanced review 
process for MCMs. The risks of receiving a reduced amount include an 
inability to adequately implement FDA's MCM, which will ultimately 
degrade the ability of the MCM Enterprise to achieve its mission to 
protect the Nation from these threats.
    The HHS review, ``The Public Health Emergency Medical 
Countermeasures Enterprise Review'', stressed that improving the 
regulatory environment for MCMs is critical to the success of the MCM 
Enterprise and is among the challenges the U.S. Government must address 
if it is to successfully develop MCMs. Moreover, investments in the MCM 
have implications for improving the health and security of the U.S. 
population beyond countering CBRN threats and emerging infectious 
disease threats. Investments to advance regulatory science to support 
development of MCMs will contribute directly and indirectly to 
development of products to treat other diseases and conditions and help 
improve the safety and efficacy of and access to FDA-regulated 
products.
                             pregnancy rule
    Question. An estimated 75 percent of all pregnant women use 4-6 
prescriptions or over-the-counter drugs at some time during their 
pregnancy. It's widely acknowledged that information provided to 
pregnant women on drug labels is confusing at best. I know FDA has been 
working on this issue and even proposed a rule in 2008.
    I understand that 73 comments were received on this proposed rule. 
Even if they are extremely complex, I can't see why I would take 
several years to go through 73 comments. Can you tell me the reason for 
the delay?
    Answer. FDA staff have been reviewing the comments, identifying and 
considering the issues raised by the comments, determining whether any 
revisions should be made to the proposed regulation and preparing the 
final rule. FDA staff are continuing to work on the final rule. Because 
of the importance of this public health issue, FDA wants to proceed 
with the appropriate care and judgment.
    Question. Is it a priority for FDA, and when do you think it will 
be finalized?
    Answer. Publication of the final rule regarding prescription drug 
labeling for pregnant and lactating women remains a strong priority 
within FDA. FDA staff are actively working on the rule. Please be 
assured that FDA is committed to finalizing this rule as promptly as 
feasible and practical.
                             generic drugs
    Question. Dr. Hamburg, I ask about this every year. Over the years 
we have provided funding to speed approval of generic drugs. We do it 
because they save consumers and the Government significant money. 
Unfortunately, the backlog of applications awaiting approval continues 
to grow. And at this point, we have no indication that it will slow 
down. The budget proposes a slight increase for generic drugs--not 
enough to keep up with the increased workload, and again proposes to 
create a user fee for generic drugs in order to offset the costs. These 
user fees would allow you to collect more than $40 million in fiscal 
year 2011.
    To put the question in context, how many generic drug applications 
are pending at FDA right now?
    Answer. There are approximately 2,400 generic drug applications 
pending. These pending applications include applications that are 
awaiting FDA's original assessment or review, applications that FDA 
found were not ready for approval and the company is preparing a 
resolution or response to address the FDA concerns, and applications 
awaiting re-review where companies submitted responses to deficiencies 
previously identified by FDA. This last category of applications is 
known as amendments.
    Question. Research shows that it's the first and second generic 
drugs that save consumers the most money. Of those in the backlog, how 
many, if approved, would be the first or second generic of their kind 
on the market?
    Answer. Our current tracking system does not allow us to identify 
pending generic applications as first or second generics. Whether a 
generic is first or second is based on the order in which it is 
approved and marketed. A number of factors can impact this order and 
factors can cause the order to shift with the passage of time. In 
addition, a first generic might be only one of the dosage strengths 
that the brand manufacturer makes, so the actual definition of first 
generic is not always clear. The Food and Drug Administration makes 
every effort to ensure that generics are available to consumers as soon 
as possible. In most cases, a first generic is, as with multiple 
generic drugs, approved shortly after all relevant patents and 
exclusivities have expired or the relevant patent is successfully 
challenged.
    Question. And within those, how many could go on the market 
tomorrow, as opposed to those being delayed due to lawsuits, etc.?
    Answer. As explained earlier, we cannot specify the number of 
pending first and second generic applications, and therefore, we cannot 
specify how many of those applications are not blocked by patents or 
exclusivities.
    However, of the approximately 2,400 abbreviated new drug 
applications currently under review, about two-thirds are currently 
blocked from approval by patents or other exclusivities. Please note 
that applications waiting for expiration of patents or exclusivity to 
expire may be tentatively approved. A tentatively approved application 
has been found to meet FDA's rigorous approval requirements, and is 
ready to be marketed as soon as the innovator patent expires, the 
patent is successfully challenged, or all exclusivities expire. As a 
general matter, all patent or exclusivity issues related to the brand 
product or reference listed drug must be resolved before the generic 
product can be approved. Currently, there are 309 tentatively approved 
applications.
                     food safety modernization act
    Question. The Food Safety Modernization Act (FSMA), passed last 
year, was the largest expansion of FDA's authorities in 70 years. 
Obviously, the way food is produced, transported, stored, and consumed 
has changed since then, so this updated law was long overdue.
    The Congressional Budget Office has estimated that it will cost 
$1.4 billion over 5 years to fully implement this law. Your budget 
proposes an increase of around $225 million for your Transforming Food 
Safety and Nutrition Initiative, which includes $183 million for you to 
begin implementation. Will this amount fully fund FDA's first year 
costs for the new food safety law, and how much additional funding do 
you think you'll need over the next few years?
    Answer. With the requested increase of $183 million to implement 
FSMA, FDA expects to make substantial progress in building the science-
based, prevention-oriented, and efficient food safety system mandated 
by the Congress. FDA plans to issue the key regulations required by 
FSMA, including produce safety standards, preventive controls in food 
facilities, and standards for preventing intentional adulteration. In 
addition, we would strengthen the scientific basis for the Foods 
Program, including the ability to make the design and implementation of 
our prevention standards more risk-based and effective in preventing 
food safety problems.
    FDA plans to train FDA investigators in the latest inspection 
techniques that take advantage of the preventive controls regulatory 
framework. FDA will also build State capacity and create a national 
inspection work plan so that State inspections can be leveraged to meet 
FDA's domestic inspection frequency requirements.
    FDA plans to design and implement a new import safety framework for 
carrying out the FSMA mandates. The new framework will include stronger 
importer accountability through the foreign supplier verification 
program, an accredited third-party certification program, comparability 
assessments to determine if foreign governments have food safety 
systems comparable to that of the United States, a voluntary qualified 
importer program to expedite review and importation of food by 
qualified importers, and expansion of the foreign inspection program. 
Finally, FDA will need to rely on better information technology to 
support more efficient domestic inspection and effective oversight of 
imports.
    In future years, FDA will need to continue to invest in 
implementing these programs, including increasing FDA science capacity, 
strengthening the integrated food safety system, and implementing the 
import safety framework. We hope to work with the Congress to ensure 
that FDA has adequate resources to achieve our shared food safety 
goals.
    Question. There have been statements made that this law isn't 
really necessary. Some people point to the recent decreases in the 
Centers for Disease Control and Prevention (CDC) estimates of the 
numbers of deaths and illness from food-borne illnesses. Particularly 
at a time when Federal spending is declining, how would you respond to 
those criticisms? Why do we need to spend this additional money right 
now, when we continue to have one of the safest food supplies in the 
world?
    Answer. The revised CDC estimates still demonstrate a significant 
public health burden due to foodborne diseases with an estimated 48 
million illnesses, affecting one in six Americans each year and 
resulting in 128,000 hospitalizations, and 3,000 deaths each year. It 
is true that the United States has one of the safest food supplies. For 
the most part, the food industry does a good job of providing abundant, 
safe food to American consumers. However, there has been a continuing 
series of food safety problems--major recalls, outbreaks, and 
illnesses--most of which are preventable. FDA FSMA, which gives FDA new 
tools to prevent foodborne illness, received the support of industry 
and consumer groups, as well as the Congress, and represents a 
consensus that improvements in the current system are necessary.
    Question. How will these efforts help our economy? What is our 
return on investment?
    Answer. Efforts to improve food safety through the prevention-
focused framework envisioned in FSMA will result in fewer outbreaks of 
foodborne illness and more rapid response when they do occur. Outbreaks 
are costly to all involved--to consumers, to the food and feed 
industries, and to the healthcare industry. A 2007 study estimated the 
average hospital stay at 5.8 days for each case of foodborne illness 
requiring hospitalization. The same study estimated the average cost 
per case of foodborne illness at between $16,100--for an adult--and 
$26,700--for a child. In the case of the 2006 spinach recall, the 
Institute of Food Technologists estimated the cost of recalled spinach, 
lost sales, lost productivity, and other costs at $129 million. 
Likewise, in the case of the 2008 Peanut Corporation of America (PCA) 
peanut product recall, one major manufacturer--Kellogg--estimated its 
costs to recall peanut-containing products at $65 million to $70 
million. FDA expended more than 100 staff years--full-time 
equivalents--to protect consumers and conduct PCA-related inspection 
and recall activities. In the aggregate, the costs of foodborne 
illnesses and outbreaks are in the billions of dollars.
    Question. How can you ensure that the produce safety regulations 
you are drafting will not follow a one-size-fits-all approach, which 
would harm small and organic growers?
    Answer. FDA is aware of the tremendous diversity in farming 
operations and that a one-size-fits-all approach to produce food safety 
will not be practicable. Over the past year, FDA and U.S. Department of 
Agriculture (USDA) technical experts, scientists, and other staff 
participated in listening sessions and meetings in 13 States. In some 
of those States, we were able to tour large and small farms and speak 
with people who have the on-the-ground knowledge that FDA realizes must 
be reflected in the proposed rule. FDA is committed to providing 
operators with flexibility and innovation in their approaches to on-
farm food safety for their operations.
                    food safety duplication efforts
    Question. The Government Accountability Office (GAO) recently 
issued a report on duplicative Government programs. Duplication in food 
safety across Federal agencies was a major theme in the report. Of the 
15 agencies with oversight over food safety activities, the FDA is in 
charge of 80 percent of domestically produced and imported food.
    Since your agency has responsibility for the vast majority of the 
food we eat and in light of the fact that we just passed a massive food 
safety overhaul bill, can you please respond to the findings of the 
report regarding overlap in food safety activities?
    Answer. The GAO report, ``Federal Food Safety Oversight--Food 
Safety Working Group Is a Positive First Step but Governmentwide 
Planning Is Needed to Address Fragmentation,'' highlighted the positive 
steps taken by the Federal food safety agencies under the auspices of 
the Food Safety Working Group (FSWG) to coordinate and collaborate on 
cross-cutting food safety issues, such as produce safety, salmonella 
contamination, and food safety performance measures. The report 
contained one recommendation for the Office of Management and Budget 
(OMB) to develop a Governmentwide performance plan for food safety. FDA 
continues to work through FSWG with its food safety partners to address 
a coordinated agenda of food safety issues as appropriate within our 
statutory frameworks.
    Question. How often and how well do you work with the Food Safety 
and Inspection Service and other Federal, State, and local food safety 
agencies during an outbreak that would affect both agencies, and how 
can you improve?
    Answer. FDA works with its State and local food safety partners 
during every outbreak of foodborne illness. FDA and its State and local 
counterparts are striving to improve how they work together on 
outbreaks. Efforts include cooperative agreements with States to form 
rapid response teams (RRTs). The RRT agreements allow the selected 
recipient to build State program infrastructure and rapid response 
capabilities for food and feed emergencies and implementation of the 
Manufactured Foods Regulatory Program Standards. This project engages 
partners to develop innovative programs and tools, both within each 
individual program and jointly among the nine pilot teams.
    During the past 2 years, there have been three specific 
investigations in which FDA and USDA have had close, very positive 
collaborations--salmonella enteritidis in shell eggs, salmonella 
montevideo in spices used in deli meat, and salmonella enteritidis in 
liquid-/pasteurized eggs. In these investigations, FDA and USDA senior 
level and field level staff have planned the investigation, worked side 
by side in the field, shared laboratory resources, and coordinated 
closely on messages to consumers. Also, senior outbreak staff from FDA, 
CDC, and USDA now participate in 1- to 2-week orientation visits within 
each agency to better understand policies and procedures, and allow 
networking outside of emergency events. In addition, through FSWG, the 
Federal food safety agencies recently formed a group to improve how 
they work together during outbreaks. The agencies have formed a 
standing Multi-Agency Coordination Group for Foodborne Illness 
Outbreaks (MAC-FIO). MAC-FIO is comprised of a designated 
representative from each of the Federal agencies with food safety 
responsibilities, which allows for rapid coordination and communication 
during an outbreak that involves multiple Federal food safety agencies.
                      advancing regulatory science
    Question. The budget includes an increase of $49 million for your 
regulatory science initiative. Of this, nearly $24 million is to pay 
for FDA staff to occupy a new lab.
    What specifically will these funds be used for? Please provide a 
breakout of spending. Is this a top priority?
    Answer. The Advancing Regulatory Science funding relating to White 
Oak are required to ensure that the new Life Sciences-Biodefense 
Laboratories and supporting facilities on the White Oak Campus are 
outfitted and operational to support critical FDA biologic and human 
drug research programs. Since these laboratories use select agents, 
they must undergo a highly specialized certification process before we 
can conduct research in these facilities to advance FDA's mission. 
These funds will allow the testing and commissioning of state-of-the 
art laboratory equipment required for FDA science operations to support 
the following programs: annual and pandemic influenza, nonpandemic 
MCMs, blood and other biological products, biosimilars, and regulatory 
science. System testing and commissioning includes building automation 
system operation and monitoring, air flow tests, HEPA air filter tests, 
primary bio-containment device effectiveness, room pressurization 
control, and power tests. Funding will also allow FDA to provide for 
cabling and telecommunications equipment to support lab operations.
    This is a top priority as the funding will allow FDA to demonstrate 
that all systems and standard operating procedures will provide 
environmental and biological safety. We will be severely hampered in 
our ability to protect national security and world-wide public health 
if funding is not received as our existing laboratories are outdated 
and filled to capacity. In addition, FDA lab facilities would not be 
able to move to White Oak from National Institutes of Health and other 
locations and FDA would continue to pay approximately $20 million in 
annual rent for existing facilities.
                              drug safety
    Question. Drug recalls have increased significantly since 2009, and 
there have been several high-profile cases of tainted drugs reaching 
the market. There have been many potential causes discussed for these 
increases. Some point to the high cost of manufacturing drugs, and 
cost-saving measures taken by manufacturers that lead to problems. 
Others point to manufacturers rushing too quickly to be the first 
company to submit an application, especially in the case of generic 
drugs. Another obvious concern is that 40 percent of drugs consumed in 
the United States are imported, while 80 percent of the ingredients 
used in U.S. drugs come from other countries, and these numbers 
continue to rise. Both you and your senior staff have said very 
recently that we continue to be at risk, and another drug safety 
problem is all but unavoidable. The budget includes an increase of $56 
million for the Protecting Patients Initiative, of which $12 million is 
for import safety.
    Can you talk specifically about this increase, and more generally 
about how you begin to address problems like this when increased 
funding is not a certainty?
    Answer. The increased funding will be used to strengthen our 
multifaceted approach for leveraging different opportunities for 
additional knowledge of imported products and foreign manufacturers. As 
resources allow, we will continue to pursue our efforts to conduct 
additional foreign inspections, enhance our working relationships with 
international regulatory counterparts, and strengthen our foreign 
presence. FDA conducts inspections of foreign facilities that offer 
FDA-regulated products for import into the United States, and in some 
cases supplements information gathered during inspections with 
knowledge gained from foreign regulatory counterparts. In this regard, 
we continue to enhance working relationships and information-sharing 
with our international regulatory partners which, in turn, help FDA 
identify problem products before they are offered for import and enter 
U.S. commerce. Another important opportunity is FDA's acceptance into 
the Pharmaceutical Inspection Cooperation Scheme, whose primary goals 
are to foster the international development, implementation, and 
maintenance of harmonized Good Manufacturing Practice standards, and 
further the development of a quality system of inspectorates in 
medicinal products.
    FDA is also participating in a pilot program with the European 
Medicines Agency on the coordination and performance of joint 
inspections. The overall objective is to see whether greater 
international collaboration can better distribute inspection capacity, 
allowing more sites to be monitored and reducing duplication. In 
addition, FDA's Office of International Programs has opened several 
foreign offices to further enhance FDA's ability to protect U.S. 
consumers from unsafe foreign-sourced products. Establishing a foreign 
presence reflects the evolution of FDA's regulatory strategy and its 
responsiveness to U.S. consumers in meeting its mission of public 
health protection.
    An additional example of international collaboration includes the 
FDA's memorandum of understanding with the Health Products and Food 
Branch of Health Canada. This allows FDA and Canada to develop specific 
procedures for sharing of regulatory, emergency management, and public 
health information related to drug products. This can include 
information on quality defects or product recalls of therapeutic 
products manufactured or distributed in Canada, inspection reports, 
product samples, enforcement activities, product investigations, as 
well as information on facilities registered or authorized to market 
products.
                     patient medication information
    Question. I understand that FDA has been working on a new process 
for producing consumer and patient medication information (PMI) that is 
included with patient prescription medication. This is due to a general 
belief that the current format can be confusing, and too much 
information can be included, which makes it less useful to consumers. 
This information is currently produced by private publishing companies. 
My understanding is that the current proposal would require each 
manufacturer to provide a consumer/PMI insert with each drug they 
produce, and the information would be limited to one page.
    Concerns have been brought to my attention that requiring every 
drug manufacturer to independently produce this information could lead 
to inconsistent information being provided to patients, and limiting 
the documents to one page could lead to the omission of important 
information. I have further been informed that FDA has stated they will 
not be able to provide oversight of these documents.
    What is the current plan for modernizing the consumer and PMI? What 
was the thought process behind requiring each manufacturer to publish 
this information independently?
    Answer. FDA's ongoing analysis of and plans for modernizing 
consumer and PMI are intended to achieve the goals of Public Law 104-
180, enacted in 1996, which included specific targets regarding the 
distribution and usefulness of PMI. FDA-commissioned studies subsequent 
to the enactment of Public Law 104-180 have indicated that those 
statutory goals are not being met by current private sector efforts, 
and we are considering next steps.
    Currently, documents are developed by drug manufacturers, other 
private organizations, or individuals and patients may receive several 
different types of information, developed by different sources. PMI may 
be duplicative, incomplete, inconsistent, or difficult to read and 
understand, and distribution is voluntary for certain types of PMI. The 
distribution of Medication Guides, in accordance with 21 CFR part 208 
and some patient package inserts in accordance with 21 CFR 310.501 and 
310.515 is mandatory as described in the regulations.
    FDA has determined that the current system is not adequate to 
ensure patients receive essential medication information needed to 
safely use drugs. Based on recommendations from FDA's Risk 
Communication Advisory Committee and other stakeholder input, FDA sees 
merit in adopting the use of a single document with standardized 
content and format. FDA is working with all relevant parties, such as 
patients, healthcare providers, drug manufacturers, interested 
professional organizations, and PMI developers and publishers, to 
determine the appropriate regulatory path forward. For example, the 
Engelberg Center for Health Care Reform at the Brookings Institution is 
working with key stakeholders, including FDA, to conduct initial 
demonstration pilots, designed to evaluate feasibility of various PMI 
distribution channels and assess patient and provider PMI preferences.
    FDA does not intend to limit production of PMI solely to drug 
manufacturers. Our goal is to establish standards regarding the content 
and format of PMI in order to increase the overall quality of the 
documents patients receive and hopefully enhance patient care through 
proper medication use. FDA is still considering how best to accomplish 
this goal, and has not finalized requirements for the procedural 
aspects surrounding the creation of PMI or the single page limitation. 
When making any determinations, FDA will consider all stakeholder 
input, including the comments received in your statement.
    Question. Can you please address the concerns that have been 
brought to my attention?
    Answer. We understand that concerns have been voiced that requiring 
every drug manufacturer to independently produce PMI could lead to 
inconsistent information being provided to patients, and limiting PMI 
documents to one page could lead to the omission of important 
information. To address those concerns, FDA is seeking public input and 
taking a scientific approach, including conducting research, as part of 
our decisionmaking process. FDA has developed three draft PMI 
prototypes to be used in consumer testing. The results of the consumer 
testing will inform FDA of the usefulness and various format options 
for PMI documents. FDA recognizes that FDA review and approval of all 
PMI documents prior to distribution may not be feasible given our 
resource constraints and the potential volume of products that may 
require PMI, perhaps as many as 22,000 products. FDA is considering 
developing standardized content and format requirements, which should 
enhance quality and accessibility of information in PMI, similar to the 
standardized labels on over-the-counter drugs and many food products, 
and should lead to improvements in patient care due to safer use of 
medications.
    Question. Will there be rules regarding updating and streamlining 
information to make it easily understandable for consumers, which 
providing an appropriate amount of information? Will FDA provide 
oversight on these publications?
    Answer. Yes, FDA intends to develop rules or guidance based in part 
on the outcomes of our testing and pilot projects. FDA has developed 
three draft PMI prototypes to be used in consumer testing. Based on 
public comment and expert panel input, FDA is also finalizing the 
design of the consumer testing study of the prototypes. Consumer 
testing will begin when the final study design is approved by OMB. The 
results of this study will inform FDA of the usefulness and various 
format options for PMI documents.
    FDA intends to provide oversight of PMI documents, and is 
considering the best approach for doing so. Although one approach to 
oversight could involve FDA review and approval of all PMI prior to 
distribution, we recognize that this may not be feasible given FDA's 
resource constraints and the potential volume of products that may 
require PMI--perhaps as many as 22,000 products when including all 
innovator and generic products.
    Question. What is the timeline for this change?
    Answer. Before implementing changes to PMI, the plan is for FDA to 
first study and test the utility of PMI prototypes. Approval by the 
White House OMB for this research is expected by July 2011 and results 
of the study are expected in 2012.
    One option for implementing changes to PMI might be to develop a 
new rule. The timeframe for developing and finalizing a new rule at FDA 
varies, but the process can take a 5 years. Thus, implementation of a 
PMI rule would likely not occur prior to 2015/2016. During FDA's 
decisionmaking process, FDA plans to continue to study prototypes, 
research potential processes, and discuss and evaluate the impact of 
those potential procedures. FDA intends to continue to involve all 
interested stakeholders in these activities.
                          generic for lipitor
    Question. I understand that later this year, a generic for the 
blood pressure drug Lipitor will be eligible to enter the market due to 
patent expirations. The entry of generic competition to Lipitor has the 
potential to save consumers as much as $6.7 billion.
    Are you working to try to reach a decision as to whether to approve 
a generic drug application for Lipitor in a timely fashion?
    Answer. Lipitor, which has the chemical name atorvastatin, is a 
drug used to treat high cholesterol. The FDA recognizes the benefits 
and value of making safe, effective, high-quality generic drugs, such 
as Atorvastatin, available to the American public. FDA is fully 
dedicated to doing so as quickly as possible within the framework of 
the law and applicable regulations.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                 progress on research into bisphenol-a
    Question. I remain particularly concerned about the use of 
bisphenol-A (BPA) in food containers, particularly those used to 
provide food and beverages to infants and children. Mounting scientific 
evidence demonstrates a link between BPA exposure, even at low doses, 
and a host of harmful health effects such as cancer, diabetes, 
behavioral disorders, and heart disease. This is why I have introduced 
legislation in the 112th Congress that would ban the use of BPA in baby 
bottles, sippy cups, infant formula, and baby food.
    In January 2010, the Food and Drug Administration (FDA) released an 
``Update on Bisphenol A for Use in Food Contact Applications'' (update) 
to explain your current perspective on BPA, including support for 
additional research and interim recommendations for public health.
    In this update, you agreed with the National Toxicology Program 
(NTP) at the National Institutes of Health (NIH) and expressed ``some 
concern about the potential effects of BPA on the brain, behavior and 
prostate gland in fetuses, infants, and young children.'' You also 
cited additional research being pursued by the FDA's National Center 
for Toxicological Research (NCTR), and the interim steps you would take 
to reduce exposure.
    What progress have you made in your consideration of the low-dose 
toxicity studies and peer-reviewed studies of BPA?
    Answer. FDA announced the availability of updated review documents 
on low-dose studies in a Federal Register Notice published on April 5, 
2010. Since that notice published, FDA has continued to incorporate new 
published information and information from studies conducted at FDA's 
NCTR into our review of the safety of BPA in FDA-regulated products.
    Question. What is the status of the research being conducted by the 
FDA's NCTR, including those studies being conducted in collaboration 
with NTP?
    Answer. FDA's NCTR is conducting studies characterizing the 
toxicities of BPA in several animal models in partnership with NTP. 
Study designs are using both oral and intravenous routes of exposure. 
The results with oral studies are used to model dietary exposure while 
intravenous studies are used to model neonatal and infant exposure in a 
medical setting.
    To date, the results of several studies have been published in the 
peer-reviewed scientific literature. Four studies were published that 
characterize systemic distribution and excretion patterns following 
oral and intravenous administration of BPA using rat and nonhuman 
primate models. Human biomonitoring data are also being collected in 
conjunction with research partners, including FDA's Center for Devices 
and Radiological Health; the Centers for Disease Control and Prevention 
(CDC); and the Pacific Northwest National Laboratory. The animal study 
data and the human biomonitoring data will be combined into 
mathematical models to minimize uncertainties in estimates of human 
tissue exposures.
    Several additional, longer-term exposure studies with BPA 
evaluating effects of in utero and neonatal exposures are in progress 
in rats, which include the effects on the brain structure and behavior. 
Additional long-term exposure studies are scheduled to begin in fiscal 
year 2012. These studies include a lifetime cancer bioassay, and an 
evaluation of factors related to diabetes and heart disease. All the 
studies have been designed to fill data uncertainties identified by FDA 
and NTP in order to assess potential impact of BPA on human health.
    Question. What is the status of your consultations with other 
expert agencies including the NIH, the Environmental Protection Agency 
(EPA), the Consumer Product Safety Commission (CPSC), and CDC?
    Answer. FDA included scientists from several other agencies 
including NIH, EPA, and CPSC in an external review of our most recent 
memorandum on low-dose studies of BPA. We continue to interact with 
Government scientists from all these agencies to better inform our 
safety assessment process. For example, FDA's on-going studies at the 
NCTR are being performed in collaboration with the National Institute 
for Environmental Health Sciences (NIEHS), as mentioned previously and 
FDA scientists have attended NIEHS BPA grantee meetings. In addition, 
in November 2010, FDA scientists participated with other U.S. 
Government scientists as well as international experts in a Food and 
Agriculture Organization (FAO)/World Health Organization (WHO)-
sponsored consultation regarding the safety of BPA in food contact 
applications. One conclusion of the FAO/WHO consultation was that it 
would be premature to initiate public health measures based on current 
data.
    Question. You cite support for the industry's actions to stop 
producing BPA-containing bottles and infant feeding cups in the U.S. 
market. What specific actions, if any, have you taken to express this 
support?
    Answer. FDA announced its support for these actions in a January 
10, 2010, announcement posted on FDA's Internet site. At that time, FDA 
announced that major manufacturers had stopped selling new BPA-
containing baby bottles and infant feeding cups for the U.S. market 
since early 2009. FDA's contact with these industry members over the 
past year continues to confirm that BPA is not being used for the 
manufacture of infant feeding articles.
    Question. You also cite the FDA is facilitating the development of 
alternatives to BPA for the linings of infant formula cans by working 
with manufacturers, giving technical advice on the approval of 
alternatives, and expeditiously reviewing new applications for 
alternatives. Please provide details of the efforts you have taken in 
this area.
    Answer. FDA has worked with industry to increase our understanding 
of the different packaging materials currently used for infant formula 
and the types and quantities of infant formula packaged in these 
materials. At the present time nearly 90 percent of infant formula--
primarily those that are powdered--sold in the United States is 
packaged in materials that are not manufactured using BPA. Over the 
past year, FDA has actively worked with industry on a wide range of 
alternative materials for liquid infant formula packaging. Because of 
the complexities in this market and the higher potential exposures to 
infants to these materials, FDA has provided substantial individualized 
guidance regarding the development of appropriate safety data to ensure 
safe use of replacement products. These efforts have been the subject 
of over a dozen presubmission applications, a tool FDA uses to 
communicate with industry prior to the formal submission process. Once 
an applicant submits a complete premarket submission is made to FDA, 
the review time is 120 days. We continue to work with the infant 
formula and packaging industries to bring safe alternative materials to 
the market.
          nuclear radiation and its effect on our food supply
    Question. The tragic events that continue to unfold in Japan are 
having extraordinary consequences even within our own society. In 
addition to the earthquake's much publicized effect on gas prices and 
the price of consumer electronic goods, there is substantial concern 
about the safety of food produced in regions affected by the nuclear 
radiation emitting from the damaged power plants.
    What extra precautions is the FDA taking to ensure that all food 
that has been exposed to high levels of radiation is either destroyed 
or decontaminated before it enters the U.S. market?
    Answer. From the earliest days of the situation in Japan, FDA has 
been actively protecting United States consumers from potentially 
contaminated products; instituting import controls to ensure such 
products do not enter the United States marketplace, and adjusting 
those controls as circumstances warranted. These controls include the 
detention of specific products from prefectures reported by the 
Japanese Government as being found to contain radionuclides; and 
increased examinations and FDA analysis of other FDA-regulated 
products. These controls provide a blanket of coverage for FDA-
regulated products from Japan. As this situation evolves, our targeted 
coverage is evolving.
    As of today, March 17, 2011, FDA-activated electronic screening 
criteria to hold all lines of products manufactured or shipped by 
Japanese firms. This screening provides instructions to FDA's field 
offices when encountering shipments from Japan. The instructions 
include documenting review and disposition of all shipments from Japan 
based upon when the shipment left Japan. For those shipments that left 
Japan prior to March 11, no further action is required. Admissibility 
is determined as per normal procedures. For all lines shipped on or 
after March 11, if the shipment originated from an area outside of our 
areas of concern, admissibility is determined as per normal procedures. 
If the shipment originated from within the affected area, FDA 
investigators are instructed to check with local Customs and Border 
Protection (CBP) to determine if the shipment went through CBP's 
radiation screening. CBP will contact FDA if CBP has not screened the 
line or if CBP screening indicates adverse readings for the presence of 
radionuclide contamination.
    If the importer of contaminated product does not voluntarily 
destroy or decontaminate the product, we will rely on CBP's seizure 
authority to take control of the product and ensure it is properly 
disposed.
    Question. What steps is FDA taking to ensure that the elevated 
levels of radiation in the United States does not impact food 
production in California and across the rest of the country?
    Answer. EPA is monitoring atmospheric radiation levels and collects 
environmental samples, such as rainwater, to monitor radiation and any 
increases that may occur due to the tragedy in Japan. Monitoring allows 
FDA to react swiftly in the unlikely event of significant amounts of 
radionuclides reaching our shores. So far, EPA's monitoring has 
detected only very low traces of radionuclides characteristic of a 
power plant accident. These levels do not present a public health 
concern. FDA has had a sampling program in place domestically for many 
years collecting samples of food products from areas around nuclear 
facilities to monitor any potential problems, including California and 
other States across the country. There have been no sample results from 
this program indicating harmful levels of radionuclides. We continue to 
keep abreast of EPA's monitoring to ensure that there is no threat to 
our domestic crops.
                    food safety bill implementation
    Question. I strongly supported the passage of FDA FSMA last 
Congress because I believe that the FDA needs to move towards 
preventative model when it comes to protecting the safety of our food 
supply. I believe that all processors should have in place a Hazard 
Analysis and Critical Control Point (HACCP) plan, and I believe that we 
must fully enforce the requirement that these plans are in operation 
any time food is being produced.
    However, produce farmers in my State that are concerned that FDA 
will take a one-size-fits-all approach when it comes to the 
implementation and approval of these food safety plans. I do not think 
that this would be in the best interest of safety, and it certainly 
would not be in the best interest of the food production industry.
    What are you doing to ensure that HACCP plans will be product 
specific? What assurances can I give farmers in California that the FDA 
will not treat spinach HACCP plans, like almond or dairy HACCP plans?
    Answer. We understand your question to relate to the produce safety 
standards required by section 105 of the FDA Food Safety Modernization 
Act. FDA is aware of the tremendous diversity in farming operations and 
that a one-size-fits-all approach to produce food safety will not be 
practicable. FDA is committed to providing operators with flexibility 
and innovation in their approaches to on-farm food safety for their 
operations. FDA intends to propose a rule containing requirements that 
will be commensurate to the hazards and risks associated with any 
particular operation.
                     antibiotics in food production
    Question. I remain concerned about the overuse of antibiotics in 
food animal production and FDA's slow response to address this critical 
public health matter. While I was encouraged to see the FDA proposal in 
guidance for industry (GFI) No. 209 in June of last year, I have not 
seen or heard of any definitive progress since. I cannot underscore the 
importance of swift action in addressing this concern--in the last 10 
years antibiotic resistant E. coli infections have risen by 16.5 
percent, antibiotic resistant P. mirabilis infections have risen by 19 
percent, and MRSA infections rose by 22.4 percent.
    When will FDA offer a definitive plan of action on how to reduce 
the over- and misuse of antibiotics in food animal production?
    Answer. FDA's action plan for promoting more judicious use of 
medically important antimicrobial drugs in food-producing animals began 
in 2010 with the publication of draft GFI No. 209. GFI No. 209, which, 
for the first time, lays out FDA's policy on the use of these drugs in 
animal agriculture provides two definitive guiding principles. The 
first principle is that medically important antimicrobial drugs should 
be used in food-producing animals only when necessary for assuring 
animal health. The second, that such use should include veterinary 
oversight or consultation. We believe that by communicating these key 
principles we have identified a clear pathway forward as we work with 
the animal health and animal agriculture industries to reduce the 
overuse and misuse of antibiotics in food animal production. FDA is 
close to completing review of comments received regarding draft GFI No. 
209 and plans to finalize the guidance later this year.
    However, while this was an important first step, the goal now is to 
put these principles into action. Since publication of GFI No. 209, we 
are very encouraged by the interactions we have had to date with key 
stakeholders, including the animal health industry, on plans for 
implementation. Sponsors of some of our most important antimicrobial 
drugs have already initiated discussions with FDA about updating their 
animal drug products in a manner consistent with the principles of GFI 
No. 209.
    To further support implementation of GFI No. 209 principles, FDA 
intends to issue additional guidance which will provide more specific 
information for animal drug sponsors. In addition, FDA has initiated 
the rulemaking process to streamline the Veterinary Feed Directive 
System to facilitate the transition to veterinary oversight of the use 
of medically important antimicrobial drugs in feed. Work has already 
begun on both of these tasks and related publications can be expected 
sometime within the next year.
    Question. If you intend to follow the general principals laid out 
in GFI No. 209, how will you define the term ``nontherapeutic use of 
antibiotics''? Will the definition include prophylactic use of these 
drugs?
    Answer. The intent of GFI No. 209 was to make a distinction between 
those uses of medically important antimicrobial drugs in food-producing 
animals that FDA considers judicious and those we consider injudicious. 
In this context, FDA believes those uses that are considered necessary 
for assuring animal health are judicious uses and those uses for 
production purposes in healthy animals, such as to promote growth or 
improve feed efficiency, represent injudicious use. As noted in the 
GFI, FDA considers uses that are associated with the treatment, 
control, or prevention of specific diseases to be uses that are 
necessary for assuring the health of food-producing animals. However, 
while FDA does believe that some prevention uses are necessary and 
judicious, we also believe it is imperative that such uses include 
veterinary oversight or consultation. Veterinary involvement in the 
decisionmaking process associated with the use of medically important 
antimicrobial drugs is an important aspect of assuring appropriate use, 
including judicious preventive use.
    Question. It is also my understanding that the FDA intends on 
revisiting the Veterinary Feed Directive (VFD) program and the approval 
of new animal drugs under FDA GFI No. 152. What revisions to these 
documents are you considering and by when do you plan on making these 
recommendations public?
    Answer. In March 2010, FDA published an Advance Notice of Proposed 
Rulemaking (ANPRM) regarding the VFD program. This action was taken in 
response to informal comments received by FDA that characterize the 
current VFD process as being overly burdensome. FDA is concerned that 
the VFD process in its current form may be difficult to administer in 
the future as the number of approved VFD animal drugs increases. 
Therefore, the goal will be to streamline the regulatory requirements 
where possible while still protecting public and animal health. The 
target date for publishing of specific proposals based on the comments 
we received on the ANPRM is planned for sometime during 2012. Of 
course, FDA's publication date can be affected by issues that emerge 
during the review and clearance process.
    FDA believes that GFI No. 152 has provided an effective mechanism 
for evaluating antimicrobial resistance concerns as part of the new 
animal drug approval process. This GFI includes a table that ranks 
antimicrobial drugs with respect to their importance to human medicine. 
FDA has acknowledged that this listing may need to be periodically 
updated so that it reflects current conditions regarding antimicrobial 
use in humans. FDA intends to seek public comments on any updates to 
the GFI prior to implementation.
                                 ______
                                 
                Questions Submitted by Senator Roy Blunt
           use of veterinary drugs in food-producing animals
    Question. The international body that establishes standards for 
food safety, known as Codex Alimentarius, is playing an increasing role 
in the facilitation of market access for U.S. agricultural products to 
a growing number of countries and customers around the globe. Standards 
set by Codex should be established based on scientific merit and be 
used to improve trade, not hinder it.
    Specifically, the Codex Committee on Residues of Veterinary Drugs 
in Foods (CCRVDF) has had a maximum residue standard for a Food and 
Drug Administration (FDA)-approved veterinary product, ractopamine, 
pending for the past 3 years. The adoption of this standard should move 
forward.
    FDA chairs this particular Codex committee, what are your thoughts 
on the current process as it relates to this particular situation?
    Answer. An FDA employee chairs the CCRVDF and another FDA employee 
serves as the U.S. delegate to this committee. Proposed ractopamine 
maximum residue levels (MRLs) for cattle and swine have been advanced 
from this committee to the Codex Alimentarius Commission (CAC) for 
adoption. Adopting MRLs is pending at the CAC level. The U.S. 
Government is part of a small group of countries that have been meeting 
at the CAC level to resolve the ractopamine issue before the next CAC 
meeting. The U.S. delegation remains hopeful the deliberations will be 
successful and the recommended ractopamine MRLs will be finalized and 
adopted by the CAC as a Codex standard.
    The U.S. delegation is committed to moving forward to adopt MRLs 
for ractopamine on the merits of the scientific evidence presented to 
Codex, without exemptions that would undermine the international Codex 
standard. The ractopamine MRLs have been recommended as safe after 
extensive review by the Joint Expert Committee on Food Additives 
(JECFA), an independent Food and Agricultural Organization/World Health 
Organization scientific body of recognized world experts. Adopting 
Codex MRLs for ractopamine is especially important for countries that 
do not have the resources to carry out their own risk assessments and 
rely on Codex MRLs. Other countries that do not have an MRL, but want 
to import from countries that enforce Codex MRLs can do so with 
confidence in the safety of the product.
    Some countries are trying to block adoption of the ractopamine MRLs 
using arguments that include national interests, national laws, or 
preferences regarding product use. Blocking the ractopamine MRLs after 
they have been evaluated and deemed safe by JECFA undermines the 
ability of Codex to establish international food safety standards, and 
may set a precedent for discounting the advice of its scientific 
experts.
    Question. How is FDA engaging within with our trading partners to 
ensure a science-based outcome of Codex meetings?
    Answer. The FDA works very closely with the U.S. Codex Office in 
the U.S. Department of Agriculture (USDA) on all matters related to 
Codex. The U.S. Chair of CCRVDF, and the U.S. Delegate to CCRVDF are 
FDA employees and have been actively engaged with the U.S. Codex 
Office, the Foreign Agriculture Service, and the U.S. Trade 
Representative to reach out to other countries on this issue.
                       food marketing guidelines
    Question. In December 2009, the Federal Trade Commission (FTC), 
FDA, USDA, and the Centers for Disease Control and Prevention (CDC) 
released a proposal for voluntary guidelines for food advertising to 
children and teens. These guidelines applied certain nutrition criteria 
to advertising during television programs that are viewed by children 
and teens. Some have complained that the proposal would prohibit the 
marketing of products that clearly fit within USDA and FDA's dietary 
guidelines.
    To what extent was FDA involved in the development of these 
guidelines?
    Answer. The committee reports that accompanied the 2009 Omnibus 
Appropriations Act included a provision calling for the establishment 
of an Interagency Working Group on Food Marketed to Children, made up 
of members from FDA, CDC, USDA, and FTC. The FDA representative to this 
working group was the Director of the Office of Nutrition, Labeling, 
and Dietary Supplements, at the Center for Food Safety and Applied 
Nutrition.
    In 2009, the working group met and held conference calls. The FDA 
representative worked to ensure that the working group understood the 
FDA nutrition labeling requirements and policies, and the FDA 
representative drew upon the technical expertise of FDA staff as 
necessary.
    The working group's discussions in 2009 on nutrition principles led 
to the development of the guidelines that your question refers to. 
Developing the tentative guidelines was the first phase of preparing a 
report to the Congress containing the working group's final findings 
and recommendations, as required by the committee reports that 
accompanied the 2009 Omnibus Appropriations Act. These guidelines were 
a tentative set of recommendations for voluntary nutrition principles. 
The voluntary principles were designed to guide industry self-
regulatory efforts to improve the nutritional profile of foods that are 
most heavily marketed to children.
    These tentative guidelines were made public at a forum hosted by 
the FTC in December 2009, entitled ``Sizing Up Food Marketing and 
Childhood Obesity.'' At the forum, the FDA representative joined 
representatives from the other participating agencies to discuss the 
standards that the working group had tentatively agreed to. Throughout 
2010, the working group met to refine the voluntary nutrition 
principles based on comments provided at the public forum and based on 
newly issued nutrition reports. Once again, the FDA representative and 
staff worked to ensure consistency with existing nutrition labeling 
requirements and current Federal nutrition policy. The continuing 
discussion of the working group has led to the development of a report 
on a set of proposed nutrition principles published for comment on the 
FTC Web site on April 28, 2011.
    Question. Are you aware of any scientific study that directly links 
television advertising to obesity?
    Answer. The Interagency Working Group evaluated research related to 
associations between television viewing, including advertisements, and 
childhood obesity. At the forum hosted by FTC in December 2009, the CDC 
representative to the working group, from CDC's Division of Nutrition 
and Physical Activity, provided data in his presentation from research 
on television viewing and links to childhood obesity. The CDC 
representative noted that although there is some evidence to suggest an 
association between television viewing and childhood obesity, the 
Institute of Medicine, part of the National Academies of Science, has 
concluded in a report entitled ``Food Marketing to Children and Youth'' 
that there is insufficient evidence of a causal relationship between TV 
advertising to obesity. The primary objective of the Working Group has 
been the promotion of children's health through better diet, with 
particular, but not sole, emphasis on reducing the incidence of 
childhood obesity. The proposed recommendations are therefore designed 
to encourage children, through advertising and marketing, to choose 
foods that make a meaningful contribution to a healthful diet and 
minimize consumption of foods with significant amounts of nutrients 
that could have a negative impact on health or weight.
    Question. Would these guidelines prohibit the marketing of foods 
that you would define as healthy?
    Answer. Neither the tentative guidelines on the recommendations for 
voluntary nutrition principles issued in December 2009 nor the report 
on the proposed nutrition principles that issued in April 2011 prohibit 
the marketing of any foods. The nutrition principles in each document 
contain recommendations related to advertising practices to guide 
industry efforts to improve the nutritional profile of foods marketed 
directly to children and to tap into the power of advertising and 
marketing to support healthful food choices. Such recommended 
principles should not be interpreted as a substitute or a replacement 
for any of FDA's food labeling regulations or a change in Federal 
dietary guidance for industry (GFI).
    The final product of the working group will be a report to the 
Congress containing recommendations for voluntary nutrition principles 
for industry to consider in advertising practices and not regulations 
promulgated by the agencies. Therefore, any guidelines from the working 
group would not prohibit the marketing of any foods.
                          generic drug review
    Question. Since the fiscal year 2008 appropriation, funding for the 
Office of Generic Drugs (OGD) has increased by 23 percent. However, 
during this same time period, the median approval time for generic 
drugs has gone from 18.89 months to more than 26 months.
    How do you explain this decline in performance?
    Answer. FDA used the increased resources to hire more reviewers. 
However, it takes several months to train new reviewers and even longer 
before new reviewers become fully productive.
    In addition, the new and experienced reviewers are dealing with 
more complex new drugs that are becoming eligible for generic 
competition. Therefore, more time is required to review and approve the 
generic drug versions. Also, more resources are required to develop 
recommendations and GFI to address complex products.
    The number of new generic drug applications submitted to FDA 
remains at a high rate of more than 800 per year, compared to just more 
than 300 per year a decade ago. Complicating the review is an increase 
in the number of new companies, often relying on overseas manufacturing 
and bioequivalence testing sites. Approval of applications from new 
companies often takes longer as the new companies are less familiar 
with FDA requirements.
    This review effort makes up only part of the median approval time. 
The other part is time that the applications are with the firm to 
address deficiencies raised during review. More than 90 percent of the 
original generic drug submissions are found deficient. The companies 
must address these deficiencies before they can gain approval. The 
responses from companies are not always timely due to the companies' 
own priorities. Furthermore, there may be multiple review cycles before 
approval.
    Finally, other postapproval activities compete with FDA's efforts 
to review generic drug applications. There are many more marketed 
generic drugs products now than ever before. These products must be 
monitored to assure the safety of American patients. For example, any 
change to an already-approved generic drug must be reported to FDA's 
OGD. The growing workload to evaluate these changes competes with the 
workload of new generic drug application review.
    Question. Specifically, what have we been getting for our 
investment in generic drug review?
    Answer. The following is a brief summary of just a few of the 
benefits of the generic drug review program. For the decade 2000 
through 2009, according to a publication from the Generic 
Pharmaceutical Association, the use of generic prescription drugs in 
place of their brand-name counterparts saved the Nation's healthcare 
system more than $824 billion. In fiscal year 2009 alone, the use of 
FDA-approved generics saved $139.6 billion.
    It is estimated that more than 20 percent of all the drugs products 
on the market are only available in generic form. Therefore, generic 
drugs play a role in augmenting the supply and sources of drug products 
for national emergencies.
    In fiscal year 2010, 565 generic drugs were approved or tentatively 
approved. In fiscal year 2010, the OGD took 2079 actions on original/
new generic drug applications. These exceeded estimates for the 
program.
    As of March 2011, OGD has posted more than 800 product-specific 
bioequivalence draft GFI documents, including more than 150 that have 
been finalized after considering public comments. Approximately 15-30 
new GFI documents are posted every quarter. The information that FDA 
posts has been responsible for an approximately 75-percent reduction in 
the number of bioequivalence inquiries during the past 3 years. This 
timely and transparent provision of bioequivalence recommendations 
allows all interested parties equal access to information, and OGD 
believes the overall quality of submissions has improved.
                         medical device review
    Question. Recently, medical device manufacturers have complained 
that FDA's review process is expensive and unpredictable which leads to 
costly delays in approval. Many United States-based device companies 
have indicated that it makes far more financial sense to apply for 
approval and market new medical devices in Europe than in the United 
States. This has led some to worry that this sector would relocate to 
other countries and focus more intently on developing new products for 
marketing in other countries.
    Given that FDA missed 30 percent of its device review goals for 
fiscal year 2009, I wonder if there is any credence to this concern.
    What is your response to this industry complaint?
    Answer. Overall, FDA is meeting or exceeding the Medical Device 
User Fee Act (MDUFA) performance goals for more than 95 percent of the 
more than 4,000 annual device applications subject to these goals. For 
example, under the 510(k) program--the pathway used by 90 percent of 
the devices we examine each year--FDA completed 90 percent of our 
reviews in 90 days or less, which met the applicable goal. FDA also 
completed 98 percent of our reviews in 150 days or less, just as we 
committed to under MDUFA. For most of the goals FDA is not yet meeting, 
our performance has been steadily improving. FDA published more 
detailed performance information in FDA's fiscal year 2010 MDUFA 
Performance Report to Congress.
    The model of the European Union (EU) has important limitations. 
Unlike the United States, the EU does not require that a device be 
shown to be effective. Moreover, decisions to approve a device in the 
EU are made by private companies, called Notified Bodies. There are 
more than 70 from which a manufacturer can select and to whom it pays a 
fee. Notified Bodies are subject to variable amounts of oversight. The 
information on which Notified Bodies make an approval decision is not 
made available to the public. In addition, it is difficult to compare 
the United States and EU systems because, unlike in the United States, 
the EU does not have a centralized, publicly available database of 
review performance, summaries of approval decisions, or important 
measures of safety, such as adverse event reports.
    The European Commission has recognized that the EU model does not 
always offer a uniform level of protection of public health. As a 
result, it has sought comment on proposals to change the EU model. FDA 
believes that the best approach is not to replace the U.S. model, which 
has served the American public well, but rather to make the U.S. model 
more robust. With this goal in mind, in January 2011 FDA announced 25 
actions we will take this year to make our premarket review programs 
more predictable, consistent, and transparent. As a further effort to 
make the U.S. model more robust, in February we announced our 
Innovation Initiative to help bring breakthrough technologies to 
patients more quickly.
    Question. Could you be doing more outreach with device 
manufacturers during the review process to increase review certainty?
    Answer. FDA currently conducts interactive reviews on many 
submissions. As part of the Medical Device User Fee Amendments of 2007 
(MDUFA II) negotiations, FDA agreed to continue to incorporate an 
interactive review process. The commitment letter for MDUFA II states:

    ``The agency will continue to incorporate an interactive review 
process to provide for, and encourage, informal communication between 
FDA and sponsors to facilitate timely completion of the review process 
based on accurate and complete information. Interactive review entails 
responsibilities for both FDA and sponsors.''

    In response to this commitment, FDA has developed GFI titled, 
``Interactive Review for Medical Device Submissions: 510(k)s, Original 
PMAs, PMA Supplements, Original BLAs, and BLA Supplements.'' \1,\ \2\ 
We also added an interactive review log in the Center Tracking System 
database and trained Center for Devices and Radiological Health and 
Center for Biologics Evaluation and Research staff on interactive 
review with sponsors.
---------------------------------------------------------------------------
    \1\ PMA refers to premarket approval.
    \2\ BLA refers to biologics license application.
---------------------------------------------------------------------------
    In addition, as reflected in the public meeting minutes, FDA has 
proposed to industry during the Medical Device User Fee Amendments of 
2012 (MDUFA III) negotiations to further enhance interactive review by 
making mandatory the tracking of interactive review and by establishing 
interaction goals for premarket notification, or 510(k), submissions 
and for premarket approval submissions. The proposal also included 
identifying best practices and incorporating them into a Good Review 
Management Practices GFI.
                           counterfeit drugs
    Question. This week, you were on 60 Minutes discussing the $75 
billion counterfeit drug industry. During this interview, you stated 
that the agency does not know the extent to which counterfeit drugs 
have entered the domestic drug supply, but that you are aware that 30-
50 percent of important drugs for public health in certain countries 
are counterfeit.
    What would it take to get a handle on counterfeit products in the 
domestic drug supply?
    Answer. Addressing the challenge of counterfeit drugs is an 
important challenge and FDA uses a multifaceted approach to address 
this challenge. Counterfeiters take steps to avoid detection so it is 
very challenging to determine the prevalence of counterfeit drugs in 
the domestic drug supply. FDA can only quantify those events that we 
discover. FDA believes the U.S. drug supply is one of the safest in the 
world due to the closed distribution system and we rely on global 
estimates and reports to gauge the relative risk to U.S. consumers.
    FDA uses a multilayered approach to minimize the risk of 
counterfeit drugs entering the United States and to protect the U.S. 
drug supply. FDA works closely with supply chain stakeholders to secure 
the product, the supply chain, and distribution of the product by 
engaging in public outreach and education, coordinating regulatory 
actions with State and other Federal agencies, cooperating 
internationally, conducting criminal investigations, and enhancing 
enforcement.
    A robust track and trace system could help decrease the 
opportunities for diversion and counterfeiting by allowing distributors 
and pharmacies to authenticate product origin and supply chain by 
ensuring that a drug was handled only by legitimate entities. FDA is 
working to develop such a system, but implementation by the drug supply 
chain is essential to its success.
    FDA collaborates with many State and Federal agencies, in addition 
to international law enforcement and regulatory bodies to combat 
counterfeit drugs. FDA's Office of Criminal Investigations (OCI) works 
to identify counterfeit drug manufacturing locations, and prosecutes 
those responsible for the manufacturing and distributing of counterfeit 
drugs.
    Drug counterfeiting is a global problem so FDA is tackling this 
issue internationally by actively working with the World Health 
Organization and other private and public sector partners to develop 
tools, implement strategies, and take action to prevent and detect 
counterfeits that threaten the global marketplace and U.S. consumers.
    Question. Do you work with industry to find these products?
    Answer. FDA collaborates with industry to identify counterfeit drug 
products and warn the public once the products are identified. FDA's 
OCI collaborates with industry on a regular basis regarding illegal 
drug products, including counterfeit drugs. An example of this 
collaboration occurred last year when GlaxoSmithKline (GSK) received 
several reports of suspected counterfeit over-the-counter weight-loss 
product from consumers and GSK notified OCI. GSK worked with FDA to 
quickly identify the counterfeit product, warn the public about the 
danger of the counterfeit since it contained the wrong active 
ingredient, and educate consumers on how to distinguish counterfeit 
products from the authentic products. FDA issued two press releases 
with important information for consumers which assisted them in 
protecting themselves from buying or taking a counterfeit product. 
Additionally, OCI successfully identified and prosecuted those 
responsible for manufacturing and distributing the counterfeit product.
    FDA also has a Counterfeit Alert Network (CAN) a coalition of 
health professional and consumer groups. This network also includes 
associations that represent distributors and pharmacies. Participants 
in the network agree to develop educational information and to rapidly 
disseminate important information about confirmed counterfeit products 
to their members. The CAN is another way for FDA to engage other parts 
of the drug supply chain and share information with healthcare 
professionals and consumers so they can identify counterfeit products.
    Question. Would you agree that before we move forward with any 
proposal to allow Americans to buy drugs from other countries, we 
should demonstrate that we can do so safely and do so without 
increasing the chances that Americans may get a contaminated or 
potentially dangerous or counterfeit medication?
    Answer. FDA's main concern with the importation of prescription 
drugs is patient safety. Many of the drugs currently being illegally 
imported are not FDA-approved and come from unknown sources and foreign 
locations that may not be manufacturing the products in accordance with 
FDA regulations. In addition, these products may be counterfeit or may 
contain potentially harmful ingredients. FDA does not have the same 
information for drugs produced and approved for foreign markets or that 
are manufactured in foreign facilities not inspected by FDA as we do 
for products approved and manufactured for the U.S. market.
    Expanding the purchase of drugs from other countries would provide 
additional opportunities for counterfeits and other substandard or 
contaminated products to enter into the U.S. supply chain. FDA 
continues to identify appropriate compliance, enforcement, and 
information technology tools to monitor and address unapproved or 
otherwise illegally imported drugs. FDA is also developing a risk-model 
associated with importation to identify and minimize the risks to 
consumers, drug quality, and the supply chain. In addition, FDA is 
analyzing and assessing potential policies and operations that could 
reduce the risks from allowing foreign-approved drugs into the United 
States. This assessment includes exploring policy options that strike a 
balance between providing adequate safety measures and reducing costs 
to patients.
                           fda modernization
    Question. In February, The Financial Times reported that, ``Barack 
Obama has warned that the U.S. Food and Drug Administration is a 
candidate for a sweeping revamp amid complaints that it is ill-equipped 
to handle biotechnology and advances in medicine. `I've gotten a lot of 
commentary about the fact that . . . essentially their model was 
designed for the kind of medical devices you see in museums,' the 
president said in remarks before a new panel on jobs and 
competitiveness. While he was short on details, Mr. Obama singled out 
the FDA as an agency that ought to be modernized''.
    What changes has the President specifically asked you to initiate?
    Answer. The President has directed agencies to review regulations 
and other procedures to see if they can withdraw or modify regulations, 
or otherwise improve procedures, to reduce regulatory burden and 
improve competitiveness, innovation, economic growth, and jobs, while 
assuring safety. FDA has identified improvements to regulatory science 
as well as other initiatives--such as its Medical Device Innovation 
Initiative, the 510(k) Plan of Action, and the voluntary pilot program 
by FDA and the Centers for Medicare & Medicaid Services--also referred 
to as Parallel Review of Medical Devices--that will help it and the 
industries it regulates innovate and remain competitive.
    FDA has also identified regulations for revision and is continuing 
its review of its rules and procedures to identify additional 
opportunities. For example, FDA recently revised its biologics 
regulations to permit approval of exceptions or alternative to the 
regulation of constituent materials. This action recognizes advances in 
the development and manufacture of safe, pure, and potent biological 
products that, in some instances, render the existing constituent 
materials regulation too prescriptive and unnecessarily restrictive. 
FDA will maintain its ongoing review of device classifications to 
determine whether devices can be classified to a lower level, which 
reduces burdens on industry while maintaining product safety and 
efficacy. FDA is also revising its device adverse event reporting 
requirements to convert to a more efficient paperless, electronic 
system. In addition, FDA is pursuing initiatives to permit electronic 
submission of clinical trial data and other information related to 
drugs and medical devices, which will create efficiencies for both 
industry and FDA.
                            advisory panels
    Question. At advisory panel meetings, FDA reviewers often instruct 
the panel on the standards that apply for assessing the safety and 
effectiveness of the product at hand. It appears that in the context of 
certain advisory panel presentations, FDA reviewers have put forward 
standards that differ from regulations and applicable binding 
agreements.
    What procedures are in place to ensure that FDA review teams' 
presentations to panels comply in every respect with the regulations 
and applicable binding protocol agreements?
    Answer. FDA presentations at panel meetings undergo multiple levels 
of review by scientific and supervisory staff to ensure that statements 
made by FDA are factually correct. FDA provides information that will 
be presented at the meeting to the sponsor of the product under review. 
Sponsors may suggest corrections, clarifications, or edits to these 
materials in advance of the meeting.
    Question. Does a product sponsor have any recourse if the review 
staff's presentation to an advisory panel provides incorrect 
information to the panel regarding the standards of safety, 
effectiveness, or the terms and obligations under a binding protocol 
agreement?
    Answer. In advance of a panel meeting, the product sponsor has the 
opportunity to comment on the review staff's presentation if they have 
any concerns. During the meeting, the sponsor may make a request to 
address the panel with any concerns it may have related to the material 
presented by FDA.
                             blood testing
    Question. I understand FDA is considering whether to require all 
blood donations for human transfusion be screened for hepatitis B virus 
(HBV) using nucleic acid testing (NAT). The last public discussion on 
this issue took place at the April 2009 meeting of FDA's Blood Products 
Advisory Committee (BPAC).
    What is the agency's current thinking is regarding an HBV NAT 
mandate?
    Answer. FDA is evaluating and considering the required testing of 
blood for transfusion using HBV NATs. FDA currently requires that blood 
for transfusion be tested for HBV surface antigen and antibody to HBV 
core antigen. FDA brought the issue of testing of human blood for 
transfusion by HBV NAT to BPAC on April 1, 2009. The committee 
discussed scientific issues related to the risk of HBV transmission by 
blood for transfusion. The committee supported routine HBV NAT for 
blood donations, and establishment of a minimum sensitivity standard 
for the test. Currently, multiplex nucleic acid assay systems that 
simultaneously detect human immunodeficiency virus (HIV), hepatitis C 
virus (HCV), and HBV are in widespread use for testing blood donations. 
Therefore, because HIV and HCV NAT are required by FDA for testing 
blood donations, HBV NAT is also already widely performed to test blood 
for transfusion.
    Question. Is FDA preparing to issue GFI regarding this topic?
    Answer. FDA is considering issuing draft GFI for public comment on 
the use of HBV NAT to test both blood for transfusion and Source Plasma 
for further manufacture into derivatives.
                       diabetes and obesity drugs
    Question. I understand FDA is now requiring additional clinical 
trials, including cardiovascular (CV) studies, for new diabetes and 
obesity drugs.
    What is the agency doing to ensure that changing product 
requirements do not get in the way of making better therapies available 
to patients?
    Answer. For diabetes drugs, new concerns have recently been raised 
regarding the CV safety of drugs to treat diabetes. In May 2007, a 
meta-analysis of clinical trials of the diabetes drug, Avandia, also 
referred to as rosiglitazone, was published that suggested an increased 
risk of heart attacks in patients taking this widely used drug. The 
controversy surrounding the meta-analysis and other data on the CV 
safety of diabetes drugs were discussed at several public advisory 
committee meetings. In July 2008, FDA held a 2-day advisory committee 
meeting to seek advice from a panel of experts in the field of 
endocrinology, cardiology, statistics, and drug safety on the extent of 
assessment of CV safety that should be required of new therapies to 
treat type-2 diabetes mellitus (T2DM). The panel, by a majority of 14-
to-2, voted in favor of requiring a prospective assessment of CV safety 
prior to approval, Subsequently, in September 2010, FDA announced that 
it would restrict the use of Avandia in response to data suggesting an 
elevated risk of cardiovascular events by requiring a restricted access 
program under a risk evaluation and mitigation strategy. In December 
2008, FDA issued GFI titled, ``Diabetes Mellitus--Evaluating CV Risk in 
New Anti-diabetic Therapies to Treat T2DM.'' This GFI articulates FDA 
expectations for CV safety assessment of new drugs to treat T2DM. Under 
this GFI, collection of controlled data of new anti-diabetic therapies 
for at least 2 years is anticipated.
    Regarding obesity drugs, in February 2007, FDA issued a draft GFI 
entitled, ``Developing Products for Weight Management.'' The 
recommendations provided in the 2007 draft GFI document continue to 
guide the development of novel obesity drugs. Significant safety issues 
with three recently reviewed obesity drugs--Qnexa, Lorqess, and 
Contrave--led FDA to request that the drug sponsors conduct additional 
studies. In one case, FDA requested that a cardiovascular safety study 
to provide for a more complete benefit-risk assessment.
    Question. What has FDA's performance, in terms of months to review 
and number of review cycles, been for diabetes and obesity drugs?
    Answer. Since the diabetes GFI was issued in December 2008, FDA has 
approved three new molecular entity new drug applications (NDAs), 
submitted for the treatment of T2DM. Of these three NDAs, two were 
approved within their Prescription Drug User Fee Act goal dates for FDA 
to complete its review and take an action. All three NDAs were approved 
during their first review cycle.
    Since 1999, four NDAs for prescription obesity drugs have been 
submitted to FDA. Qnexa, Lorqess, and Contrave were all reviewed within 
one review cycle and were acted upon within 10 months of submission. In 
addition, the drug Rimonabant was reviewed within 10 months of initial 
submission in 2005 and was undergoing a second review cycle when the 
sponsor withdrew the application.
    The prescription obesity drug, orlistat, was approved in 2007 for 
use without a prescription. The nonprescription application was 
approved following an initial 10-month review cycle and a subsequent 6-
month review cycle.
                                 ______
                                 
               Questions Submitted by Senator Jerry Moran
                     antibiotics in food production
    Question. As discussed by the Food and Drug Administration (FDA) in 
draft guidance for industry (GFI) No. 209, ``The Judicious Use of 
Medically Important Antimicrobial Drugs in Food-Processing Animals,'' 
antibiotic drugs, and the drugs' labeled uses, are approved on an 
individual basis, utilizing a drug-specific risk assessment. In the 
draft GFI, the FDA states that before withdrawing a previously approved 
use of an approved drug, Federal law requires the FDA to demonstrate 
that ``new evidence . . . shows that a drug is not shown to be safe 
under the approved conditions of use.'' Then, once the FDA meets this 
initial burden, under Federal law, the drug sponsor is entitled to 
demonstrate the drug is still safe for its intended use. Despite this 
Federal mandate, it appears that FDA is trying to generally ban the use 
of antibiotics for growth promotion, feed efficiency, and certain types 
of preventive treatment through the draft GFI. However, the draft GFI 
makes no finding in regard to a specific animal drug. Furthermore, the 
studies cited by the draft GFI are dated and generally confirm no 
direct link between antibiotics used for growth promotion, feed 
efficiency, and certain types of preventive treatment and risk to human 
health. Has FDA made any specific findings on individual, previously 
approved drug applications that demonstrate that animal ``production 
uses'' of a specific drug should be withdrawn based on new evidence 
that the drug is no longer safe under the approved conditions for use? 
If so, how many and for which drugs has it made such a finding?
    Answer. No, FDA has not yet made such a finding regarding any 
individual, previously approved new animal drug application.
    Question. In draft GFI No. 209, ``The Judicious Use of Medically 
Important Antimicrobial Drugs in Food-Processing Animals,'' the FDA 
states that rather than follow statutory procedures to withdraw an 
approved drug use, the FDA will sometimes address issues through an 
informal process where it convinces a drug sponsor to voluntarily 
withdraw an approved use.
    Which drug sponsors of animal antibiotic drugs is the FDA, through 
an informal process, currently trying to persuade to withdraw approved 
uses of antibiotics for animal growth promotion, feed efficiency, and 
preventive treatment? Of these drug sponsors, which approved animal 
antibiotic drugs are implicated in the informal withdrawal process?
    Answer. As discussed in draft GFI No. 209, the focus of FDA's 
concerns are on the use of medically important antimicrobial drugs in 
food-producing animals for production purposes, such as to promote 
growth or improve feed efficiency. FDA considers uses that are 
associated with the treatment, control, or prevention of specific 
diseases, including administration through feed and water, to be uses 
that are necessary for assuring the health of food-producing animals.
    Currently, FDA is conducting outreach to the animal health industry 
on this issue. Since publication of draft GFI No. 209, we have been 
very encouraged by the interactions we have had to date with key 
stakeholders, including the animal health industry, on plans for 
implementation. Sponsors of some of our most important antimicrobial 
drugs have already initiated discussions with FDA about updating their 
animal drug products in a manner consistent with the principles of 
draft GFI No. 209. Regarding which specific animal drug products are in 
most need of updating, FDA intends to issue additional GFI, which will 
provide more specific information on this topic and allow stakeholders 
the opportunity to comment on it.
    Question. Once draft GFI No. 209 is finalized, which drug sponsors 
is the FDA, through an informal process, planning to persuade to 
withdraw approved uses of antibiotics for animal growth promotion, feed 
efficiency, and preventive treatment? Of these drug sponsors, which 
approved animal antibiotic drugs are implicated in the informal 
withdrawal process?
    Answer. As previously noted, the focus of FDA's concerns are on the 
use of medically important antimicrobial drugs in food-producing 
animals for production purposes, for example, to promote growth or 
improve feed efficiency. FDA considers uses that are associated with 
the treatment, control, or prevention of specific diseases, including 
administration through feed and water, to be uses that are necessary 
for assuring the health of food-producing animals. Also as noted 
previously, FDA intends to issue additional GFI, which will provide 
more specific information on this topic including identifying which 
specific drugs or drug classes are subject to the recommendations 
outlined in draft GFI No. 209.
    Question. What is the FDA's timeline for publication of the final 
GFI for draft GFI No. 209, ``The Judicious Use of Medically Important 
Antimicrobial Drugs in Food-Processing Animals''?
    Answer. Once review of the comments received on draft GFI No. 209 
is complete, FDA plans to issue final GFI implementing draft GFI No. 
209. FDA is still developing a timeline for issuance of the final GFI 
No. 209. In addition, FDA continues to work collaboratively with other 
agencies and FDA stakeholders to develop sound strategies for 
implementing the recommendations outlined in the draft GFI.
    Question. Has the FDA reviewed and responded to all of the 
submitted comments to draft GFI No. 209, ``The Judicious Use of 
Medically Important Antimicrobial Drugs in Food-Processing Animals''?
    Answer. FDA is nearly finished reviewing the comments received 
regarding draft GFI No. 209. FDA is using the comments to assist in 
development of the final draft GFI No. 209.
    The FDA has requested an increase of nearly $326 million to fund 
its Food Safety and Nutrition activities associated with implementation 
of the FDA Food Safety Modernization Act (FSMA). I am concerned about 
how FDA plans to use these funds to create on-farm production standards 
and traceability rules.
    Question. First, I would like to know whether the FDA will abide by 
the law's exemption from on-farm production standards and traceability 
rules for grain commodities and livestock and not interfere with on-
farm decisions made by producers of these agricultural products.
    Answer. FDA FSMA contains numerous provisions requiring FDA to 
develop more than 50 new regulations, GFI documents, and reports to the 
Congress. As FDA is in the process of developing the required 
regulations, it is too soon to be able to provide specificity about the 
new requirements. However, I can assure you that, as we move forward, 
we will certainly be mindful of any exemptions contained in the 
statute. We also are committed to continuing to engage all our 
stakeholders to gain the information needed to inform our rulemaking 
activities and to help the affected industry implement the new food 
safety requirements.
    Question. Second, I would like the FDA to explain how it plans to 
set on-farm production standards for fruits and vegetables. Is FDA 
planning on promulgating broad, flexible standards that defer to the 
expertise of the individual producer or is FDA planning to promulgate 
specific production standards that restrict producer flexibility and 
ultimately hamper on-farm innovation?
    Answer. FDA is aware of the tremendous diversity in farming 
operations and that a one-size-fits-all approach to produce food safety 
will not be practicable. FDA is committed to providing operators with 
flexibility and innovation in their approaches to on-farm food safety 
for their operations. FDA intends to propose a rule containing 
requirements that will be commensurate to the hazards and risks 
associated with any particular operation.
    Question. During the hearing on March 17, 2011, Commissioner 
Hamburg noted that she recently appointed a new director for the FDA 
Office of Foods and plans to hire additional personnel to assist in 
implementation of on-farm production standards and traceability under 
the new authorities granted by FDA FSMA. Does FDA plan to hire 
individuals with production agriculture experience and education? For 
instance, does FDA plan to consider hiring personnel with a degree in 
agronomy or other applied agricultural science degrees?
    Answer. The authorities granted to FDA under FSMA cover many 
disciplines in the area of food safety, including production 
agriculture. FDA currently has staff whose expertise is production 
agriculture and with degrees in agronomy. FDA is committed to hiring 
subject matter experts from any field relevant to its needs, which 
would include consideration of individuals with degrees in applied 
agricultural sciences.

                         CONCLUSION OF HEARINGS

    Senator Kohl. Thank you very much, Senator Blunt.
    And Commissioner Hamburg, you have been great. You have 
been very informative. We have had a good discussion on many 
issues. I am sure you are looking forward to following it up 
with us.
    Dr. Hamburg. Yes. Thank you so much.
    Senator Kohl. Thank you very much.
    The hearing is recessed.
    [Whereupon, at 2:58 p.m., Thursday, March 17, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

    [The following testimonies were received by the 
Subcommittee on Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies for inclusion in the 
record. The submitted materials relate to the fiscal year 2012 
budget request for programs within the subcommittee's 
jurisdiction.]
 Prepared Statement of the American Commodity Distribution Association
    On behalf of the American Commodity Distribution Association 
(ACDA), I respectfully submit this statement regarding the budget 
request of the Food and Nutrition Service for inclusion in the 
subcommittee's official record. ACDA members appreciate the 
subcommittee's support for these vital programs.
    We urge the subcommittee to maintain administrative expense funding 
for The Emergency Food Assistance Program (TEFAP) at $74.5 million; to 
make TEFAP food purchase dollars available for 2 fiscal years; to 
approve the administration's budget request for the Commodity 
Supplemental Food Program (CSFP) and provide an increase of $5 million 
to begin operations in six additional States approved by the U.S. 
Department of Agriculture (USDA); and to evaluate alternative 
approaches for the Department of Defense (DOD) Fresh Program.
    ACDA is a nonprofit professional trade association, dedicated to 
the growth and improvement of USDA Commodity Food Distribution Program. 
ACDA members include:
  --State agencies that distribute USDA-purchased commodity foods;
  --agricultural organizations;
  --industry;
  --associate members;
  --recipient agencies, such as schools and soup kitchens; and
  --allied organizations, such as anti-hunger groups.
  --ACDA members are responsible for distributing more than 1.5 billion 
        pounds of USDA-purchased commodity foods annually through 
        programs such as the National School Lunch Program, TEFAP, 
        Summer Food Service Program (SFSP), CSFP, Charitable 
        Institution Program, and Food Distribution Program on Indian 
        Reservations (FDPIR).
  the emergency food assistance program administrative funds at $74.5 
     million, as provided for fiscal year 2009 and fiscal year 2010
    We urge the subcommittee to maintain TEFAP administrative funds at 
$74.5 million, as provided for fiscal year 2009 and fiscal year 2010 
when American Recovery and Reinvestment Act (ARRA) funds were added to 
the regular appropriation.
    Food banks around the Nation are in great need. The number of 
Americans who are turning to food banks for assistance continues to 
increase. The Congress appropriated $49.5 million for TEFAP 
administrative funds in both fiscal year 2009 and 2010, and through 
ARRA, supplemented these amounts with an additional $25 million. These 
resources have been used responsibly, and are sincerely appreciated.
    Donations to food banks are declining as many individuals and 
businesses no longer have the ability to be as supportive as they had 
been in the past. ACDA members tell us that unless TEFAP expense funds 
are restored to the fiscal year 2009-2010 level, they will have to 
accept less food to reduce shipping/warehousing expenses, and will 
likely have to cut reimbursement to local distributors. These 
reimbursements are key to maintaining distribution sites, especially in 
rural distribution sites.
    The lower funding level available in fiscal year 2011 has already 
had a negative impact. In Wisconsin, this year's lack of administrative 
funding to compensate for the increased quantities of bonus commodities 
required a mid-year cut in support to Wisconsin's 16 Emergency Feeding 
Organizations administrative budgets.
    We recognize that States have had the ability to convert a portion 
of their food funds to administrative funds, and have done so. We 
appreciate this flexibility, but must respectfully point out that even 
if this flexibility is continued, TEFAP operators will experience a 
significant reduction in available administrative expense funds that 
jeopardizes their ability to provide essential food assistance to needy 
Americans.
    Section 4201 of the Food, Conservation, and Energy Act of 2008 
(Public Law 110-246) increased the authorization for TEFAP 
administrative expense funds from $60 million to $100 million, 
recognizing the need for increased expense funds to responsibly manage 
increased TEFAP food supplies. Our request for $74.5 million, is well 
within the amounts authorized.
make the emergency food assistance program food dollars available for 2 
                              fiscal years
    We urge the subcommittee to make TEFAP food dollars available for 2 
fiscal years, as was done under ARRA.
    While the agencies of USDA work closely with food banks to provide 
as much food for distribution as possible, there are occasions when 
food dollars are at jeopardy through no fault of recipient agencies. If 
food orders are canceled by either USDA or vendors for any reason near 
the end of the Federal fiscal year, State agencies must either purchase 
whatever items might be available through USDA, or lose these end-of-
year balances.
    At the end of fiscal year 2009 Florida had an ARRA TEFAP balance of 
$1.6 million on September 28, 2009, due to the cancellation of cheese 
orders that day. Florida's regular TEFAP balance was $218,023. On 
September 8, 2009, the TEFAP entitlement balance in New York was just 
more than $12,000. On September 28, it was $415,000 due to the 
significant cancellations and deletions of truckloads of commodity 
foods. On July 28, 2009, New York's ARRA balance was $11,000. On 
September 28, it was $481,000. Other ACDA members have told us of 
similar experiences in their States.
    Food banks are working diligently to use every $1 responsibly 
because every $1 is needed. When ARRA was passed, TEFAP food dollars 
were allowed to be carried over from fiscal year 2009 to fiscal year 
2010. This procedure helped food bank operators to make responsible 
decisions and to take maximum advantage of available resources.
    We urge the subcommittee to make TEFAP food dollars available for 2 
years, and urge the Secretary of Agriculture to allow those States who 
made responsible efforts to use their TEFAP food dollars to roll over 
to the next fiscal year balances unexpended through no fault of the 
TEFAP operator.
          funding for the commodity supplemental food program
    ACDA supports the fiscal year 2012 budget request of $176,788,000 
for CSFP, but urges the subcommittee provide an additional $5 million 
to begin CSFP operations in six States that now have USDA-approved 
State plans--Connecticut, Hawaii, Idaho, Maryland, Massachusetts, and 
Rhode Island. This additional funding would make CSFP available in 45 
States. CSFP now serves primarily elderly individuals, many of whom are 
homebound. States currently operating CSFP requested 137,276 additional 
caseload slots for the current program year, clearly showing the need 
for this program.
american commodity distribution association requests the evaluation of 
                  alternative approaches for dod fresh
    There is broad consensus that improving the nutritional well-being 
of Americans, particularly children, includes increasing fruit and 
vegetable consumption, including fresh items. USDA's commodity program 
is constrained in its ability to distribute fresh foods.
    However, in the 1990s, the Department developed a partner 
relationship with DOD to utilize some of the Federal commodity 
entitlement for school meal programs to allow school districts to 
purchase through the DOD distribution system. This program, DOD Fresh, 
was very successful.
    Changes in the DOD procurement and distribution program which have 
outsourced these procurement activities have had a deleterious effect 
on the school program. This change has also created a situation where 
each school that participates must pay a fee to access the DOD secure 
ordering system.
    The Secretary has worked to ameliorate these fees, approximately $3 
million per year, in the short term, but this is a temporary fix. We 
believe that there may be an alternate approach that will restore the 
many benefits of the original DOD Fresh Program.
    We once again ask the subcommittee to direct the Secretary to 
evaluate alternative approaches for replacing DOD Fresh including, but 
not limited to, developing an analog program through the Agricultural 
Marketing Service, and report back to the subcommittee on these 
options.
    We look forward to continuing to partner with you and USDA in the 
delivery of these needed services.
                                 ______
                                 
       Prepared Statement of the American Farm Bureau Federation
    The American Farm Bureau Federation (AFBF) has identified three 
priorities for emphasis and funding for U.S. Department of Agriculture 
(USDA) programs in the fiscal year 2012 agriculture spending bill. They 
are:
  --programs that expand export markets for agriculture;
  --programs that promote broadband expansion; and
  --programs that further develop renewable energy.
    AFBF strongly opposes any cuts to funding for the farm safety net. 
Such cuts would break a 5-year commitment made to America's farmers and 
ranchers in the 2008 farm bill. Producers have made business decisions 
based on this contract with the Government, and to break these 
commitments would severely impact the rural economy. The farm bill 
discussion should occur when the House and Senate Agriculture 
Committees begin hearings and draft legislation for the next farm bill.
       programs that expand international markets for agriculture
    In order to take full advantage of the market opportunities offered 
through trade agreements, AFBF supports funding at authorized levels 
for:
  --The Foreign Agricultural Service (FAS) to maintain services that 
        expand agricultural export markets. We urge continued support 
        for the Office of the Secretary for trade negotiations and 
        biotechnology resources.
  --The Market Access Program, the Foreign Market Development Program, 
        the Emerging Markets Program, and the Technical Assistance for 
        Specialty Crops Program that are effective export development 
        and expansion programs. These programs have resulted in 
        increased demand for U.S. agriculture and food products abroad 
        and should be fully funded.
  --Public Law 480 programs which serve as the primary means by which 
        the United States provides needed foreign food assistance 
        through the purchase of U.S. commodities. In addition to 
        providing short-term humanitarian assistance, the program helps 
        to develop long-term commercial export markets.
    We support full funding for the following Animal Plant Health 
Inspection Service (APHIS) programs:
  --The APHIS Plant Protection and Quarantine personnel and facilities, 
        especially the plant inspection stations, which are necessary 
        to protect U.S. agriculture from costly pest problems that 
        enter the United States from foreign lands.
  --APHIS trade issues resolution and management activities that are 
        essential for an effective response when other countries raise 
        pest and disease concerns (i.e., sanitary and phytosanitary 
        measures) to prohibit the entry of American products.
  --APHIS-Biotechnology Regulatory Services (BRS) that play an 
        important role in overseeing the permit, notification, and 
        deregulation process for products of biotechnology. BRS 
        personnel and activities are essential to ensure public 
        confidence and international acceptance of biotechnology 
        products.
    Funding for the U.S. Codex Office is essential to developing 
harmonized international standards for food and food products. Codex 
standards provide uniformity in food rules and regulations by allowing 
countries to adopt similar levels of safety protection for consumers 
while concurrently facilitating transparency in food trade.
               programs that promote broadband expansion
    The lack of high-speed, modern Internet service in rural America 
prevents rural Americans' access to educational, medical, and business 
opportunities, and hampers the economic growth of rural America. We 
support funding for loans and grants administered by the Rural 
Utilities Service to increase rural broadband capacity and 
telecommunications services and to fund the Distance Learning and 
Telemedicine Program.
             programs that further develop renewable energy
    AFBF supports funding for the following programs, which help 
farmers and ranchers contribute to our Nation's goal of energy 
independence and a cleaner environment.
    We support funding the Biomass Crop Assistance Program (BCAP) at 
levels authorized by the 2008 farm bill. BCAP provides vital financial 
assistance to farmers who produce and transport eligible biomass 
feedstocks and helps growers meet the capital-intensive costs of 
transitioning to producing new crops and delivering them to market.
    Additionally, we support increasing funding for the Renewable 
Energy for America Program (REAP). REAP offers grants, guaranteed 
loans, and combination grant/guaranteed loans for agricultural 
producers to purchase renewable energy systems and energy efficiency 
improvements, as well as offers funding for energy audits and 
feasibility studies.
    AFBF has identified five other areas of importance for USDA 
programs in the fiscal year 2012 agriculture spending bill. They are:
  --programs that promote conservation;
  --programs that strengthen rural communities;
  --programs that enhance and improve food safety and protection;
  --programs that promote animal health; and
  --research priorities.
                   programs that promote conservation
    AFBF supports full funding for working lands programs. In this time 
of fiscal constraint, it is imperative to invest in programs that 
contribute to the world's production of food and fiber. Farmers and 
ranchers have made great strides in conserving our natural resources 
and believe that these gains can continue through working lands 
programs.
               programs that strengthen rural communities
    Rural entrepreneurs often lack access to the capital and technical 
assistance necessary to start new businesses. These new ventures are 
needed for rural communities to sustain themselves and contribute to 
our national economy. AFBF supports funding for USDA Rural Development 
(RD) programs that foster new business development in rural 
communities. These programs include the Value-Added Agricultural 
Producer Grants, Rural Innovation Initiative, Rural Microentrepreneur 
Assistance Program, and Business and Industry Direct and Guaranteed 
Loans.
    Many rural communities lack access to the tax base necessary to 
provide modern community facilities like nursing homes, fire stations, 
and food distribution centers. AFBF supports funding for the 
construction, enlargement, or improvement of essential community 
facilities in rural areas and small towns through RD's Community 
Facility Direct and Guaranteed Loans. The use of Community Facility 
Guaranteed Loans encourages synergy between USDA, private lenders, and 
local communities.
    The Revolving Fund Program grant helps communities acquire safe 
drinking water and sanitary, environmentally sound waste disposal 
facilities. With dependable water facilities, rural communities can 
attract families and businesses that will invest in the community and 
improve the quality of life for all residents. We support funding for 
this important program.
    AFBF supports funding for the Resource Conservation and Development 
Program. This vital program supports economic development and resource 
protection. This program, in cooperation with rural development 
councils, helps local volunteers create new businesses, form 
cooperatives, develop marketing and agri-tourism activities, improve 
water quality and flood control, improve leadership and other business 
skills, and implement renewable energy projects.
    AFBF supports continued funding for the Beginning Farmer and 
Rancher Development Program, which provides farmers information, 
skills, and tools needed to make informed decisions for their 
operations, with the goal of enhancing the success of beginning farmers 
and ranchers.
    AFBF supports full funding for Agriculture in the Classroom, a 
national grassroots program coordinated by the USDA. This worthy 
program helps students gain a greater awareness of the role of 
agriculture in the economy and society, so that they may become 
citizens who support wise agricultural policies.
      programs that enhance and improve food safety and protection
    The continued safety of food is crucial to consumers, as well as 
production agriculture and the rest of the food industry. Sufficient, 
reliable Federal funding for the Government's food and feed safety and 
protection functions is vital to this effort. Agencies responsible for 
food safety must have the necessary resources to reasonably establish 
safety, especially Food and Drug Administration (FDA) inspections of 
imported food. While food imports have increased more than 50 percent 
in the past 5 years, the number of FDA food import inspectors has 
fallen about 20 percent.
    We recommend that adequate funding for food protection at the FDA 
and Food Safety Inspection Service (FSIS) be directed to the following 
priorities:
  --increased education and training of inspectors;
  --additional science-based inspection, targeted according to risk;
  --effective inspection of imported food and feed products;
  --research and development of scientifically based rapid testing 
        procedures and tools;
  --accurate and timely responses to outbreaks that identify 
        contaminated products, remove them from the market, and 
        minimize disruption to producers; and
  --indemnification for producers who suffer marketing losses due to 
        inaccurate Government-advised recalls or warnings.
    We also support authorized funding of $2.5 million for the Food 
Animal Residue Avoidance Databank (FARAD). FARAD aids veterinarians in 
establishing science-based recommendations for drug withdrawal 
intervals, critical for both food safety and animal health. No other 
Government program provides or duplicates the food safety information 
FARAD provides to the public. Without the critical FARAD program, 
producers may be forced to euthanize animals or dispose of meat, milk, 
and eggs due to the lack of withdrawal information.
    AFBF opposes the administration's request for new user fees for 
inspection activities. Food safety is for the public good and as such, 
it is a justified use of public funds.
                  programs that promote animal health
    Tracking infected and exposed animals is critical to protecting 
livestock and poultry health through streamlined surveillance and 
response. Disease traceability helps to reduce the number of animal 
deaths and preserve animal health when outbreaks occur. A traceability 
system can limit the number of animal owners impacted by an outbreak 
and reduce the economic strain on owners and affected communities, as 
well as protect public health.
    We support a voluntary animal disease tracking system, but are 
concerned about the share of implementation costs that could burden 
producers if APHIS is not adequately funded. Providing APHIS Federal 
funding of $15 million this year, and strong oversight on the 
expenditure of funds, is essential to generate the greatest possible 
benefit for animal health and the livestock industry.
    We support $5 million for the Veterinary Medicine Loan Repayment 
Program (VMLRP) administered by the National Institute for Food and 
Agriculture. VMLRP provides veterinary school graduates student-loan 
repayment if they agree to work in underserved areas. VMLRP 
veterinarians ensure animal health and welfare, while protecting the 
Nation's food supply.
    AFBF supports $155.5 million for the FDA Center for Veterinary 
Medicine (CVM). CVM oversees the safety of animal drugs, feeds, and 
biotechnology-derived plant products used as or in animal feed, as well 
as biotechnology-derived products used to improve the health or 
productivity of animals (including fish).
                          research priorities
    Research funding is critical to the future of American agriculture. 
The United Nations' Food and Agriculture Organization predicts that 
farmers will have to produce 70 percent more food by 2050 to feed an 
additional 2.3 billion people around the globe. This production 
challenge likely will have to be met using fewer resources and less 
land than is available today. America's farmers are the most efficient 
in the world, but without a commitment to further agricultural research 
and technological advancement, even America's farmers could be hard-
pressed to meet these challenges. We believe that agricultural research 
is vital to the lives of our citizens and the economic well-being of 
our Nation, particularly research focused on meeting the growing 
challenges of production agriculture.
                                 ______
                                 
 Prepared Statement of the American Indian Higher Education Consortium
    On behalf of the American Indian Higher Education Consortium 
(AIHEC) and the 32 Tribal Colleges and Universities (TCUs) that compose 
the list of 1994 Institutions, thank you for this opportunity to 
outline our needs and concerns for fiscal year 2012.
    This statement is presented in three parts:
  --a summary of our fiscal year 2012 funding recommendations;
  --a brief background on TCUs; and
  --an outline of the 1994 Institutions' plan for using our land grant 
        programs to fulfill the agricultural potential of American 
        Indian communities, and to ensure that American Indians have 
        the skills and support needed to maximize the economic 
        potential of their resources.
                          summary of requests
    We respectfully request the following for fiscal year 2012 for our 
land grant programs established within the USDA National Institute of 
Food and Agriculture (NIFA) and the Rural Development mission area. In 
NIFA, we request:
  --$5,321,000 for the 1994 Institutions' competitive Extension grants 
        program;
  --$1,805,000 for the 1994 Institutions' competitive Research Grants 
        program;
  --$3,676,000 for the Higher Education Equity Grants;
  --an $11,880,000 payment into the Native American Endowment fund; and
  --in the Rural Development's Rural Community Advancement Program 
        (RCAP), that funding for the TCU Essential Community Facilities 
        Grants program be retained at $3,972,000, the same level that 
        has been in place since fiscal year 2008, to help the 1994 
        Institutions to address the critical facilities and 
        infrastructure needs that advance their capacity to participate 
        fully as land grant partners.
             background on tribal colleges and universities
    The first Morrill Act was enacted in 1862 specifically to bring 
education to the people and to serve their fundamental needs. Today, 
nearly 150 years after enactment of the first land grant legislation, 
the 1994 Institutions, as much as any other higher education 
institutions, exemplify the original intent of the land grant 
legislation, as they are truly community-based institutions.
    The Tribal College Movement was launched in 1968 with the 
establishment of Dine College, serving the Navajo Nation. Rapid growth 
of the TCU Movement soon followed, primarily in the Northern Plains 
region. In 1972, six tribally charted colleges established the AIHEC to 
provide a support network for member institutions. Today, AIHEC 
represents 36 TCUs, operating 76 campuses--32 of which compose the 
current list of 1994 Institutions located in 12 States. Each year, 
collectively, tribal colleges serve more than 65,000 American Indians 
from well more than 250 federally recognized tribes through academic 
and community education programs.
    The 1994 Institutions are accredited by independent, regional 
accreditation agencies and like all institutions of higher education, 
must undergo stringent performance reviews to retain their 
accreditation status. TCUs serve as community centers by providing 
libraries, tribal archives, career centers, economic development and 
business centers, public meeting places, and child and elder care 
centers. Despite their many obligations, functions, and notable 
achievements, TCUs remain the most poorly funded institutions of higher 
education in this country. The vast majority of the 1994 Institutions 
is located on Federal trust territory. Therefore, States have no 
obligation, and in most cases, provide no funding to TCUs. In fact, 
most States do not even provide funds to our institutions for the non-
Indian State residents attending our colleges, leaving the TCUs to 
assume the per student operational costs for non-Indian students 
enrolled in our institutions, accounting for approximately 21 percent 
of their student population. This is a significant financial commitment 
on the part of TCUs, as they are small, developing institutions and 
cannot, unlike their State land grant partners, benefit from economies 
of scale--where the cost per student to operate an institution is 
reduced by the comparatively large size of the student body.
    As a result of 200 years of Federal Indian policy--including 
policies of termination, assimilation, and relocation--many reservation 
residents live in conditions of poverty comparable to those found in 
Third World nations. Through the efforts of TCUs, American Indian 
communities are availing themselves of resources needed to foster 
responsible, productive, and self-reliant citizens. It is essential 
that we continue to invest in the human resources that will help open 
new avenues to economic development, specifically through enhancing the 
1994 Institutions' land grant programs, and securing adequate access to 
information technology.
   1994 land grant programs--ambitious efforts to economic potential
    In the past, due to lack of expertise and training, millions of 
acres on Indian reservations lay fallow, under-used, or had been 
developed using methods that caused irreparable damage. The Equity in 
Educational Land Grant Status Act of 1994 is addressing this situation 
and is our hope for the continued improvement of our reservation lands. 
Our current land grant programs remain small, yet very important to us. 
It is essential that American Indians explore and adopt new and 
evolving technologies for managing our lands. With increased capacity 
and program funding, we will become even more fundamental contributors 
to the agricultural base of the Nation and the world.
Competitive Extension Grants Programs
    The 1994 Institutions' extension programs strengthen communities 
through outreach programs designed to bolster economic development; 
community resources; family and youth development; natural resources 
development; and agriculture; as well as health and nutrition education 
and awareness. Without adequate funding the 1994 Institutions' ability 
to maintain existing programs and to respond to the many emerging 
issues, such as food safety and homeland security, especially on border 
reservations, is severely limited. Increased funding is needed to 
support these vital programs designed to address the inadequate 
extension services that have been provided to Indian reservations by 
their respective State programs. Funding for the 1994 Land Grant 
Extension programs is extremely modest. The 1994 Institutions have 
applied their resourcefulness for making the most of every dollar they 
have at their disposal by leveraging funds to maximize their programs 
whenever possible. Two examples of effective 1994 Extension programs 
include:
  --Extension activities at the College of Menominee Nation (Wisconsin) 
        strengthen the sustainable economic development potential of 
        the Menominee, Stockbridge-Munsee, Oneida, and Potawatomi 
        Reservations and surrounding communities by increasing distance 
        education capacity, conducting needs assessment studies, 
        providing workshops and training sessions, and offering 
        strategic planning assistance.
  --The Agriculture & Natural Resources Outreach Education Extension 
        Program at Oglala Lakota College (South Dakota), which is 
        located in one of the poorest counties in the Nation, utilizes 
        education to promote the environmentally sound used of 
        agriculture and natural resources by Lakota people. The program 
        coordinates activities between the college's Agriculture and 
        Natural Resources department, reservation schools, other tribal 
        departments, South Dakota State University, and county 
        extension programs. Specific issues addressed by the program 
        include poverty, isolation, health, cultural dissonance, and 
        land-use practices by Lakota landowners.
    To continue and expand highly successful programs at 1994 
Institutions, we request that the subcommittee support the President's 
fiscal year 2012 budget request for this competitive grants program and 
appropriate $5,321,000 to sustain the growth and further success of 
these essential community-based extension programs.
1994 Competitive Research Program
    As the 1994 Institutions enter into partnerships with 1862/1890 
land grant institutions through collaborative research projects, 
impressive efforts to address economic development through natural 
resource management have emerged. The 1994 Research Grants program 
illustrates an ideal combination of Federal resources and TCU-State 
institutional expertise, with the overall impact being far greater than 
the sum of its parts. We recognize the severe budget constraints under 
which the Congress is currently functioning. The $1,805,000 
appropriated in fiscal year 2010 is, by any measure, inadequate to 
develop capacity and conduct necessary research at our institutions. 
The 1994 Research Grants program is vital to ensuring that TCUs may 
finally be recognized as full partners in the Nation's land grant 
system. Currently, many of our institutions are conducting applied 
research, yet finding the resources to continue this research to meet 
their communities' needs is a constant challenge. This research 
authority opens the door to funding opportunities to maintain and 
expand the vital research projects begun at the 1994 Institutions, but 
only if adequate funds are secured and sustained. A total research 
appropriation of $1,805,000, for which all 32 of the 1994 Institutions 
compete, is hugely insufficient. Priority issue areas currently being 
studied at the 1994 Institutions include:
  --sustainable agriculture and forestry;
  --biotechnology and bioprocessing;
  --agribusiness management and marketing;
  --plant propagation, including native plant preservation for 
        medicinal and economic purposes;
  --animal breeding;
  --aquaculture;
  --human nutrition (including health, obesity, and diabetes); and
  --family, community, and rural development.
    For example, the Standing Rock Sioux Reservation, home to Sitting 
Bull College and located in North and South Dakota, is often 
characterized by high unemployment and health concerns. The college is 
conducting a research project to develop a natural beef enterprise on 
the reservation that will maximize use of existing natural resources, 
allow American Indian students to be actively involved in research and 
to produce a healthier agricultural product for the community. This 
project combines expertise from Sitting Bull College, North Dakota 
State University, and the USDA-ARS Northern Great Plains Research 
Laboratory.
    We request that the subcommittee continue to fund this program at a 
minimum of $1,805,000.
1994 Institutions' Educational Equity Grant Program
    This program is designed to assist 1994 Institutions with academic 
programs. Through the modest appropriations first made available in 
fiscal year 2001, the 1994 Institutions have developed and implemented 
courses and programs in natural resource management; environmental 
sciences; horticulture; forestry; and food science and nutrition. This 
last category is helping to address the epidemic rates of diabetes and 
cardiovascular disease that plague American Indian reservations. We 
request that the subcommittee support the President's fiscal year 2012 
budget by appropriating $3,676,000 to allow the 1994 Institutions to 
build upon their course offerings and the successful activities that 
have been established.
Native American Endowment Fund
    Endowment installments that are paid into the 1994 Institutions' 
account remain with the U.S. Treasury. Only the annual interest yield, 
less the USDA's administrative fee, is distributed to the 1994 
Institutions. The latest annual interest yield for the 1994 
Institutions' endowment was $4,266,794 and after USDA-NIFA claimed its 
standard 4-percent administrative fee, $4,096,122 was distributed among 
the eligible 32 TCU Land Grant Institutions by statutory formula. Once 
again, the administrative fee paid to USDA-NIFA to simply make the 
funds available for draw down by the eligible 1994 Institutions was 
higher than the amount paid to 72 percent of 1994 Institutions.
    Endowment payments appropriated increase the size of the corpus 
held by the U.S. Treasury and thereby increase the base on which the 
annual interest yield is determined. These additional funds would 
continue to support faculty and staff positions and program needs 
within 1994 agriculture and natural resources departments, as well as 
to help address the critical and very expensive facilities needs at 
these institutions. For the latest endowment interest distribution, the 
median interest payment to 1994 Institutions was $95,894, which is 
clearly not sufficient to address curriculum development and 
instruction delivery, not to mention the need to address the ongoing 
facilities and infrastructure projects at these institutions. In order 
for the 1994 Institutions to become full partners in the Nation's land-
grant system, we need the facilities and infrastructure necessary to 
fully engage in education and research programs vital to the future 
health and well being of our reservation communities.
    We respectfully request that the subcommittee again appropriate 
$11,880,000 for the fiscal year 2012 endowment payment. Additionally, 
we strongly urge the subcommittee to review the USDA-NIFA 
administrative fee charged and consider directing the department to 
reduce said fee for the Tribal College Endowment program so that more 
of these already limited interest funds can be utilized by the 1994 
Institutions to conduct essential community-based programs.
Tribal Colleges and Universities Essential Community Facilities Program 
        (Rural Development)
    The President's fiscal year 2012 budget request recommends 
eliminating the TCU Essential Community Facilities Grant program. The 
administration has stated that the TCUs' grant program should be 
eliminated because tribal colleges are eligible to participate in other 
programs offered in the USDA's Community Facilities Loan and Grant 
Programs (CFLGP). However, eligibility does not portend the level of 
success the TCUs might have in securing their much-needed grant 
dollars. Before the TCU-specific grant was established, only three of 
the 1994 Institutions ever received any funding under CFLGP; in other 
words, less than 10 percent of the eligible TCUs were successful in 
securing a grant. Additionally, grant opportunities under CFLGP require 
non-Federal matching funds at a minimum of 25 percent, which it has 
been determined that many of the tribal colleges cannot meet. By 
contrast, in fiscal year 2001 when the TCU-specific program was 
launched, 22 TCU Land Grant Institutions or almost 70 percent of the 
1994 Institutions received grant awards.
    We strongly urge the subcommittee to reject the proposal to 
eliminate this critical program and to continue to appropriate a 
minimum of $3,972,000 each year for the next 5 fiscal years to afford 
the 1994 Institutions the means to aggressively address critical 
facilities and infrastructure needs, thereby allowing them to better 
serve their students and their respective communities.
                               conclusion
    The 1994 Institutions have proven to be efficient and effective 
vehicles for bringing educational opportunities to American Indians and 
the promise of self-sufficiency to some of this Nation's poorest and 
most underserved regions. The modest Federal investment in the 1994 
Institutions has already paid great dividends in terms of increased 
employment, access to higher education, and economic development. 
Continuation of this investment makes sound moral and fiscal sense. 
American Indian reservation communities are second to none in their 
potential for benefiting from effective land grant programs and, as 
earlier stated, no institutions better exemplify the original intent of 
the land grant concept than the 1994 Institutions.
    We appreciate your support of the 1994 Institutions and recognition 
of their role in the Nation's land grant system. We ask you to renew 
your commitment to help move our students and communities toward self-
sufficiency and respectfully request your continued support and full 
consideration of our fiscal year 2012 appropriations requests.
                                 ______
                                 
      Prepared Statement of the American Public Power Association
    The American Public Power Association (APPA) appreciates the 
opportunity to submit this statement outlining our fiscal year 2012 
funding priorities within the jurisdiction of the Agriculture, Rural 
Development, Food and Drug Administration and Related Agencies 
Subcommittee. We support increased funding for farm bill title IX 
programs, and $308 million for the Commodity Futures Trading Commission 
(CFTC).
    APPA is the national service organization representing the 
interests of more than 2,000 municipal and other State and locally 
owned utilities in 49 States (all but Hawaii). Public power utilities 
deliver electricity to one of every seven electricity consumers 
(approximately 46 million people), serving some of the Nation's largest 
cities. However, the vast majority of APPA's members serve communities 
with populations of 10,000 people or less.
              department of agriculture: title ix programs
    APPA supports full funding for programs authorized in title IX of 
the 2008 farm bill for energy efficiency, renewable energy and 
biofuels. APPA is extremely pleased that the President's budget 
provides an additional $36.8 million in addition to the $70 million in 
discretionary funding for the Rural Energy for America Program (REAP). 
In addition, we request the full authorized level of $5 million for the 
Rural Energy Self-Sufficiency Program, and $5 million for the Community 
Wood Energy Program for fiscal year 2012.
                  commodity futures trading commission
    APPA supports the President's budget request of $308 million for 
CFTC, an 82-percent increase more than fiscal year 2011. As CFTC 
continues to implement the Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010, they will struggle to do so in a timely manner 
without the proper staffing levels and technology necessary to complete 
rule-makings and implementation. Given the direct effect the rule-
makings will have on public power utilities and consumers, APPA is 
supportive of giving the CFTC the resources it needs to complete the 
rule-makings quickly and thoroughly.
                                 ______
                                 
     Prepared Statement of the American Society of Plant Biologists
    On behalf of the American Society of Plant Biologists (ASPB) we 
submit this statement for the official record in support of funding for 
agricultural research by the U.S. Department of Agriculture (USDA). 
ASPB supports the requested level for USDA's National Institute of Food 
and Agriculture (NIFA) in fiscal year 2012, specifically funding the 
Agriculture and Food Research Initiative (AFRI) at the requested level 
of $325 million. However, ASPB does not support the proposed decrease 
of $109 million to the Agricultural Research Service (ARS), and would 
ask that funding for ARS be sustained.
    This testimony highlights the importance of biology, particularly 
plant biology, as the Nation seeks to address vital issues including a 
sustainable food supply, energy security, and protecting our 
environment. We would like to thank the subcommittee for its 
consideration of this testimony and for recognizing that its support of 
agricultural research is an important investment in America's future in 
this difficult fiscal environment.
    food, fuel, environment, and health: plant biology research and 
                            america's future
    Plants are vital to our very existence. They harvest sunlight, 
converting it to chemical energy for food and feed; they take up carbon 
dioxide and produce oxygen; and they are the primary producers on which 
all life depends. Indeed, plant biology research is making many 
fundamental contributions in the areas of fuel security and 
environmental stewardship; the continued and sustainable development of 
better foods, fabrics, and building materials; and in the understanding 
of basic biological principles that underpin improvements in the health 
and nutrition of all Americans. In fact, the 2009 National Research 
Council report, ``A New Biology for the 21st Century,'' placed plant 
biology at the center of urgent priorities in food, health, and the 
environment. For example, one of the challenges outlined in the report 
is to generate food plants that can adapt and grow sustainably in 
changing environments, which will require enhanced understanding of 
plant growth mechanisms, genetically informed plant breeding, and the 
advancement of plant genomics.
    Plant biology is at the center of numerous scientific breakthroughs 
in the increasingly interdisciplinary world of alternative energy 
research. For example, interfaces among plant biology, engineering, 
chemistry, and physics represent critical frontiers in both basic 
biofuels research and bioenergy production. Similarly, with the 
increase in plant genome sequencing and functional genomics, the 
interface of plant biology and computer science is essential to our 
understanding of complex biological systems ranging from single cells 
to entire ecosystems.
    Despite the fact that plant biology research--the kind of research 
funded by USDA--underpins so many vital practical considerations for 
our country, the amount invested in understanding the basic function 
and mechanisms of plants is relatively small when compared with the 
broader impacts on society and on our economy. Failure to sustain 
investment in scientific research jeopardizes the Nation's ability to 
maintain U.S. competitiveness in agriculture.
                            recommendations
    Because of our membership's extensive expertise, ASPB is in an 
excellent position to articulate the Nation's plant science priorities 
as they relate to agriculture. Our recommendations are as follows:
  --It is ASPB's hope that USDA will have an elevated role to play as 
        part of the expanding Federal research landscape. USDA supports 
        research that is intended to provide a foundation for creating 
        sustainable food and new energy supplies; however, much higher 
        investment in competitive funding is needed if the Nation is to 
        continue to make ground-breaking discoveries and accelerate 
        progress toward addressing urgent national priorities. ASPB 
        encourages the appropriation of the requested level of $325 
        million in fiscal year 2012 for AFRI, which although far short 
        of the authorized level of $700 million, is sensitive to 
        today's fiscal environment.
  --ARS provides vital research to serve USDA's mission and objectives 
        and the Nation's agricultural research needs. As USDA begins to 
        transform its extramural research programs through NIFA, ASPB 
        asks that the parallel reorganization of the agency's 
        intramural research programs around the five core challenges 
        identified by the USDA be carried out with due care and 
        diligence. Indeed, ASPB supports sustained funding for ARS and 
        does not support the President's proposed cut of $109 million 
        to ARS in fiscal year 2012.
  --USDA has focused attention in several key priority areas including 
        childhood obesity, climate change, global food security, food 
        safety, and sustainable bioenergy. While ASPB appreciates the 
        need for such strategic focus, ASPB also emphasizes the 
        importance of robust support for AFRI's Foundational Program as 
        scientific research supported by this program provides a basis 
        for outcomes across a wide spectrum, often leading to 
        groundbreaking developments that cannot be anticipated in 
        advance.
  --ASPB recognizes the importance of competitive grants in fostering 
        creativity and enabling the research community to take 
        advantage of new opportunities for discovery and innovation. 
        With few research funding streams available, there will be 
        increased pressure on an already limited competitive grants 
        budget. Therefore, ASPB encourages that any funds eliminated in 
        congressionally directed spending be applied to the competitive 
        grants offered as part of AFRI.
  --Current estimates predict a significant shortfall in the needed 
        scientific and engineering workforce as the demographics of the 
        U.S. workforce change. For example, there is a clear need for 
        additional scientists in the areas of interdisciplinary energy 
        research and plant breeding. ASPB applauds the creation of the 
        NIFA Fellows program. However, given the expected need for 
        additional scientists and engineers who are well-grounded in 
        agriculture research and development activities, ASPB calls for 
        targeted funding of specific programs (e.g., training grants 
        and fellowships) to provide this needed workforce over the next 
        10 years and to adequately prepare these individuals for 
        careers in the agricultural research of the future.
  --Considerable research interest is now being paid to the use of 
        plant biomass for energy production. However, if crops are to 
        be used to their full potential, considerable effort must be 
        expended to improve the understanding of their basic biology 
        and development, as well as their agronomic performance. 
        Therefore, ASPB calls for additional funding that would be 
        targeted to efforts to increase the utility and agronomic 
        performance of bioenergy crops.
  --With NIFA now in place, USDA is in a strong position to cultivate 
        and expand interagency relationships (as well as relationships 
        with private philanthropies) to take on bolder new initiatives 
        to address grand challenges related to food, energy, the 
        environment, and health. ASPB also appreciates the need to 
        focus resources in key priority areas. However, ASPB emphasizes 
        continued focus on individual grantees, in addition to group 
        awards and larger multi-institution partnerships. Truly 
        paradigm shifting discoveries cannot be predicted through 
        collaborative efforts alone, and thus, there is a need to 
        maintain a broad, diverse, and robust research agenda.
    Thank you for your consideration of our testimony on behalf of the 
American Society of Plant Biologists.
                                 ______
                                 
           Prepared Statement of the Animal Welfare Institute
    We would like to preface this testimony by recognizing major steps 
the U.S. Department of Agriculture's (USDA's) Animal and Plant Health 
Inspection Service (APHIS) has taken recently to improve its 
performance. In February, based on an investigation into possible 
violations of the Animal Welfare Act (AWA) undertaken by Animal Care 
(AC), APHIS, and the Office of Inspector General (OIG), random source 
class B dealers Floyd and Susan Martin (doing business as Chestnut 
Grove Kennel in Pennsylvania) were indicted on charges of conspiracy, 
aggravated identity theft, mail fraud, and making false statements. In 
March, three individuals in Tennessee were indicted for conspiring to 
violate the Horse Protection Act (HPA) by soring horses, transporting 
sored horses, and falsifying paperwork. Also, in March, AC unveiled its 
new Animal Care Information System search engine. This new system will 
give the public access to key documents, such as information about 
licensees and registrants, inspections reports, and annual reports. 
This is an important step toward greater transparency and 
accountability.
    The Congress' support for needed funding for AC, OIG, and 
Investigative and Enforcement Services (IES) has made enforcement 
improvements possible, and we respectfully request its continued 
support for these programs.
  usda/animal and plant health inspection service/animal care/animal 
                        welfare act enforcement
Animal Welfare Institute Request: Support Administration's Request for 
        $30 Million
    Over the past decade, the subcommittee has responded to the urgent 
need for increased funding for the AC program to improve its 
inspections of nearly 16,000 sites, including animal dealers, 
commercial breeding facilities, laboratories, zoos, circuses, and 
airlines, to ensure compliance with AWA standards. AC now has 130 
inspectors (with nine vacancies), and during fiscal year 2010, they 
conducted 14,003 inspections, including required annual visits to all 
registered research institutions that alone house more than 1 million 
animals (excluding birds, rats, and mice). Moreover, AC inspectors are 
engaged in follow-up with licensees who are regarded as problems 
because of the nature and frequency of their violations.
    This budget request of $30 million provides a minimal increase over 
fiscal year 2011 needed to sustain the progress that has been made.
animal and plant health inspection service/animal care/horse protection 
                            act enforcement
Animal Welfare Institute Request: Support Administration's Request for 
        $891,000
    The goal of HPA, passed in 1970, is to end the cruel practice of 
soring, by which unscrupulous owners and/or trainers, primarily of 
Tennessee Walking Horses, intentionally inflict pain on the legs and 
hooves of horses, through the application of chemical and mechanical 
irritants, to produce an exaggerated gait. In 2008, the American 
Association of Equine Practitioners condemned soring as ``one of the 
most significant welfare issues faced by the equine industry.'' Three 
Girl Scouts bravely documented the brutality of this crime in their 
video ``See it Through My Eyes'' (available at www.youtube.com/
watch?v=kqFeYu1CrjU).
    Throughout its history, however, the law has been openly flouted 
and inadequate funding has hampered enforcement. USDA inspectors are 
able to attend a mere fraction of Tennessee Walking Horse shows--
between 6-14 percent. Consequently, there is continued reliance on an 
industry-run system of certified Horse Industry Organization inspection 
programs that utilize designated qualified persons (DQPs), usually 
industry insiders with a history of looking the other way. Reliance on 
DQPs has been an abysmal failure. Statistics clearly indicate that the 
presence of USDA inspectors at shows results in a far higher rate of 
noted violations than occurs when DQPs are present. The greater the 
likelihood of a USDA inspection, the greater the deterrent effect on 
those who routinely sore their horses. Enforcement should not be 
entrusted to individuals with a stake in the status quo.
    Given the problems as outlined above and in separate, more detailed 
fiscal year 2012 testimony signed by the Animal Welfare Institute and 
many other groups, it is clear that USDA cannot make progress in this 
area with current funding levels. We ask that the Congress appropriate 
the $891,000 for HPA enforcement as provided in the administration's 
budget.
     animal and plant health inspection service/investigative and 
                          enforcement services
Animal Welfare Institute Request: $17,275,000
    IES handles investigations related to enforcement of the laws and 
regulations for APHIS' programs, which involves collection of evidence; 
both civil and criminal investigations; and investigations carried out 
in conjunction with Federal, State, and local enforcement agencies. It 
is actively involved in the two high-profile cases noted at the start 
of this testimony. In addition, IES, in collaboration with USDA's 
Office of the General Counsel, handles other types of enforcement 
actions including stipulations and formal administrative proceedings. 
We respectfully request a $17.275 million appropriation for IES to 
enable the Service to fulfill its full range of responsibilities, 
particularly its increasing HPA and AWA investigatory demands.
  agricultural research service/national agricultural library/animal 
                       welfare information center
Animal Welfare Institute Request: $1,978,400
    We very much appreciate the subcommittee's continuing support for 
the Animal Welfare Information Center (AWIC). AWIC's services are 
vitally important to the Nation's biomedical research enterprise, as 
well as other regulated entities, because they facilitate compliance 
with specific requirements of the Federal animal welfare regulations 
and policies governing animal-related research. It proves its worth 
time and time again.
    AWIC was established in 1986 in response to a mandate in the 
Improved Standards for Laboratory Animals amendment to AWA. The center 
serves as a clearinghouse, training center, and education resource for 
those involved in the use of animals for research, testing, and 
teaching, as well as other entities covered by AWA. It provides 
training and compiles, distributes, and posts on its Web site 
information resources from the scientific literature to assist 
researchers who use animals. The subjects covered include husbandry, 
handling, and care of animals; personnel training; animal behavior; 
alternatives; improved methodologies; environmental enrichment; and 
pain control via anesthesia and analgesia and other methods. It also 
serves as a resource for the wider scientific and agricultural 
communities by providing access to material on zoonotic diseases such 
as avian influenza, transmissible spongiform encephalopathies, 
tuberculosis, West Nile virus, foot and mouth disease, the H1N1 virus, 
and others. Its activities contribute significantly to science-based 
decisionmaking in animal care.
    In fiscal year 2010, staff conducted 13 sessions of AWIC's 
workshop, ``Meeting the Information Requirements of the Animal Welfare 
Act'' (evaluations of which are overwhelmingly positive, with 
participants indicating a high degree of new information acquisition). 
In April 2010 in Kansas City, Missouri, AWIC and AC collaborated on a 
workshop for AC inspectors to help them better understand the 
alternatives requirement of AWA.
    The AWIC Web site (http://awic.nal.usda.gov/) is one of the most 
accessed sites at the National Agricultural Library (NAL), with more 
than 4,322,000 page views during fiscal year 2010. Many improvements to 
the Web site have been made in the past year, including increased 
timeliness and accessibility through a Twitter account and several 
blogs. Currently, 274 full text documents are available on the Web site 
and 24 new ones were added in fiscal year 2010. Already completed or in 
process for fiscal year 2011 are documents on anesthesia and analgesia 
for animals, swine as biomedical models, reducing animal numbers in 
research, review of enforcement data, environmental enrichment for 
nonhuman primates, cryopreservation of animal embryos, a Google map of 
State and local animal control agencies throughout the United States 
and issues of the AWIC newsletter. Making this information available in 
a timely fashion urgently requires additional staff.
    The need and demand for AWIC's services continue to outstrip its 
resources. We write in support of an appropriation of $1,978,400, which 
is urgently needed to fund, in addition to current salaries and other 
expenses, AWIC's services and its ongoing efforts to improve their 
delivery, including but not limited to the following:
  --$300,000.--Add two full-time equivalents to the professional staff.
  --$100,000.--Develop Web-based training modules, including 
        interactive modules, in order to provide online delivery of 
        training opportunities and expand the reach of the program.
  --$50,000.--Present workshops for research personnel, in 
        collaboration with AC. The workshops must be free of charge to 
        the institutions in order to encourage attendance.
  --$20,500.--Internet services.
  --$10,000.--AWIC staff training.
  --$15,000.--To fund an internship program that would provide 
        opportunities for postgraduate students (including 
        veterinarians) to work on special projects, such as creating 
        specialized information resources on animal (especially 
        zoonotic) diseases.
  --$200,000.--Resume acquisition of veterinary publications that NAL 
        discontinued several years ago, and increase the pace of 
        indexing all such publications.
  --$259,000.--Overhead to the Agricultural Research Service and NAL.
  --$50,000.--Meet congressional mandate to digitize more materials; in 
        particular, scanning historically relevant materials dating 
        from the 1800s.
  --$65,000.--Funding is urgently needed to update Essentials for 
        Animals in Research, as well as certain animal care manuals, 
        and then to translate them and AWA and its regulations into 
        Spanish; develop training DVDs, etc. In the past, this program 
        yielded very useful products, including the original Essentials 
        for Animal Research: A Primer for Research Personnel (which was 
        also translated into Spanish and is still among the top 10 
        downloaded documents); a video on normal animal behaviors; and 
        a training video on using animals in research. The growing 
        numbers of Spanish-speaking animal care personnel in U.S. 
        research facilities and zoos, as well as increasing interest on 
        the part of the scientific communities in Central and South 
        America, have made the availability of Spanish-language 
        materials a priority.
    AWIC's value to the research community and other entities that must 
comply with AWA, and to the general public, justifies this modest 
proposed increase in its budget.
  food safety and inspection service/humane methods of slaughter act 
                              enforcement
Animal Welfare Institute Request: An Additional $2 Million for District 
        Veterinary Medical Specialists
    We appreciate the Congress' support during the past decade for 
enforcement of the Humane Methods of Slaughter Act (HMSA). While USDA's 
enforcement of the law has increased since 2008, following the exposure 
of egregious humane handling and food safety violations at the 
Westland-Hallmark plant in California, attention to the issue remains 
uneven among Federal regional districts.
    An analysis of Humane Activities Tracking System data reveals that 
some USDA districts spend 10-20 times the number of hours on humane 
enforcement as other districts. Overall, USDA continues to allot an 
extremely small percentage of its resources to humane slaughter. For 
example, in 2009, only 1.5 percent of Food Safety and Inspection 
Service (FSIS) verification procedures were conducted for humane 
handling and slaughter, and only 0.5 percent of all noncompliance 
records written by FSIS that year were for humane violations.
    Repeat violators present a major enforcement problem for FSIS. Of 
the 173 federally inspected plants that have been suspended for humane 
slaughter violations since January 1, 2005, 32 percent have been 
suspended more than once within a 1-year period. Moreover, 15 plants 
have been suspended on three or more occasions during the past 3 years.
    Federal inspection personnel have inadequate training in humane 
enforcement and inadequate access to humane slaughter expertise. 
Enforcement documents reveal that inspectors often react differently 
when faced with similar violations. District veterinary medical 
specialists (DVMSs) are stationed in each district to assist plant 
inspectors with humane enforcement and to serve as a liaison between 
the district office and headquarters on humane matters. However, the 
workload of each of the 15 DVMSs, which includes visiting each meat and 
poultry plant within the district to perform humane audits and 
conducting verification visits following suspensions, severely limits 
the effectiveness of the role.
    The problems of inadequate and inconsistent enforcement can be 
resolved by increasing the number and qualifications of the personnel 
assigned to humane handling and slaughter duties.
    The standard for time spent exclusively on HMSA-related inspections 
and enforcement should not fall below 140 full-time equivalent 
positions. In addition, the number of DVMS positions should be 
increased to an average of two per district. Enforcement records 
suggest that violations are reported with greater frequency in the 
presence of outside inspection personnel, such as DVMSs. Hiring 
additional DVMSs will provide for increased auditing and training to 
help uncover problems before they result in egregious humane handling 
incidents and potential food safety threats to the public.
    We thank the subcommittee for this opportunity to present testimony 
on behalf of important programs within USDA.
                                 ______
                                 
 Prepared Statement of the Colorado River Basin Salinity Control Forum
    The Congress concluded that the Colorado River Basin Salinity 
Control Program (CRBSCP) should be implemented in the most cost-
effective way. CRBSCP is funded by the Environmental Quality Incentives 
Program (EQIP), the Bureau of Reclamation's (BOR's) Basinwide Program, 
and a cost share for both of these programs provided by the Basin 
States. Realizing that agricultural on-farm strategies were some of the 
most cost-effective strategies, the Congress authorized a program for 
the U.S. Department of Agriculture (USDA) through amendment of the 
Colorado River Basin Salinity Control Act (CRBSCA) in 1984. With the 
enactment of the Federal Agriculture Improvement and Reform Act of 1996 
(FAIRA), the Congress directed that CRBSCP should continue to be 
implemented as one of the components of EQIP. Since the enactment of 
the Farm Security and Rural Investment Act (FSRIA) in 2002, there have 
been, for the first time in a number of years, opportunities to 
adequately fund CRBSCP within the EQIP. In 2008, the Congress passed 
the Food, Conservation, and Energy Act (FCEA). The FCEA addresses the 
cost-sharing required from the basin funds. In so doing, the FCEA named 
the cost-sharing requirement as the Basin States Program (BSP). The BSP 
will provide 30 percent of the total amount that will be spent each 
year by the combined EQIP and BSP effort.
    CRBSCP, as set forth in CRBSCA, is to benefit lower basin water 
users hundreds of miles downstream from salt sources in the upper basin 
as the salinity of Colorado River water increases as the water flows 
downstream. There are very significant economic damages caused by high 
salt levels in this water source. Agriculturalists in the upper basin 
where the salt must be controlled, however, don't first look to 
downstream water quality standards but look for local benefits. These 
local benefits are in the form of enhanced beneficial use and improved 
crop yields. They submit cost-effective proposals to the State 
conservationists in Utah, Wyoming, and Colorado and offer to cost share 
in the acquisition of new irrigation equipment. It is CRBSCA that 
provides that the seven Colorado River Basin States will also cost 
share with the Federal funds for this effort. This has brought together 
a remarkable partnership.
    After longstanding urgings from the States and directives from the 
Congress, the USDA has concluded that this program is different than 
small watershed enhancement efforts common to EQIP. In the case of the 
Colorado River salinity control effort, the watershed to be considered 
stretches more than 1,200 miles from the river's headwater in the Rocky 
Mountains to the river's terminus in the Gulf of California in Mexico 
and receives water from numerous tributaries. The USDA has determined 
that this effort should receive a special funding designation and has 
appointed a coordinator for this multi-State effort.
    In recent fiscal years, the Natural Resources Conservation Service 
(NRCS) has directed that about $18 million of EQIP funds be used for 
CRBSCP. The Colorado River Basin Salinity Control Forum (CRBSCF) 
appreciates the efforts of the NRCS leadership and the support of this 
subcommittee. The plan for water quality control of the Colorado River 
was prepared by CRBSCF, adopted by the States, and approved by the 
Environmental Protection Agency (EPA). The Colorado River Basin 
Salinity Control Advisory Council has taken the position that the 
funding for the salinity control program should not be less than $20 
million per year. Over the last few fiscal years, for the first time, 
funding has almost reached the needed level. State and local cost-
sharing is triggered by the Federal appropriation. In fiscal year 2012, 
it is anticipated that the States will cost share with about $8 million 
and local agriculture producers will add more than $7 million. Hence, 
it is anticipated that in fiscal year 2012 the State and local 
contributions will be about 45 percent of the total program cost.
    Over the past few years, the NRCS has designated that about 2.5 
percent of the EQIP funds be allocated to CRBSCP. CRBSCF believes this 
is the appropriate future level of funding as long as the total EQIP 
funding nationwide is more than $1 billion. Funding above this level 
assists in offsetting pre-fiscal year 2003 funding below this level. 
The Basin States have cost-sharing dollars available to participate in 
funding on-farm salinity control efforts. The agricultural producers in 
the upper basin are waiting for their applications to be considered so 
that they might improve their irrigation equipment and also cost-share 
in CRBSCP.
                                overview
    CRBSCP was authorized by the Congress in 1974. The title I portion 
of CRBSCA responded to commitments that the United States made, through 
a Minute of the International Boundary and Water Commission, to Mexico 
specific to the quality of water being delivered to Mexico below 
Imperial Dam. Title II of CRBSCA established a program to respond to 
salinity control needs of Colorado River water users in the United 
States and to comply with the mandates of the then newly enacted Clean 
Water Act. This testimony is in support of funding for the title II 
program.
    After a decade of investigative and implementation efforts, the 
Basin States concluded that CRBSCA needed to be amended. The Congress 
agreed and made a major revision to CRBSCA in 1984. That revision, 
while keeping the Department of the Interior as lead coordinator for 
Colorado River Basin salinity control efforts, also gave new salinity 
control responsibilities to the USDA. The Congress has charged the 
administration with implementing the most cost-effective program 
practicable (measured in dollars per ton of salt controlled). It has 
been determined that the agricultural efforts are some of the most 
cost-effective opportunities.
    Since congressional mandates of more than three decades ago, much 
has been learned about the impact of salts in the Colorado River 
system. BOR has conducted studies on the economic impact of these 
salts. BOR recognizes that the damages to United States' water users 
alone are hundreds of millions of dollars per year.
    CRBSCF is composed of gubernatorial appointees from Arizona, 
California, Colorado, Nevada, New Mexico, Utah, and Wyoming. CRBSCF has 
become the seven-State coordinating body for interfacing with Federal 
agencies and the Congress in support of the implementation of the 
salinity control program. In close cooperation with the EPA and 
pursuant to requirements of the Clean Water Act, every 3 years CRBSCF 
prepares a formal report evaluating the salinity of the Colorado River, 
its anticipated future salinity, and the program elements necessary to 
keep the salinity concentrations (measured in total dissolved solids) 
at or below the levels measured in the river system in 1972 at Imperial 
Dam, and below Parker and Hoover Dams.
    In setting water quality standards for the Colorado River system, 
the salinity concentrations at these three locations in 1972 have been 
identified as the numeric criteria. The plan necessary for controlling 
salinity and reducing downstream damages has been captioned the ``Plan 
of Implementation.'' The 2008 Review of water quality standards 
includes an updated Plan of Implementation. In order to eliminate the 
shortfall in salinity control resulting from inadequate Federal funding 
for a number of years from the USDA, CRBSCF has determined that 
implementation of CRBSCP needs to be accelerated. The level of 
appropriation requested in this testimony is in keeping with the 
agreed-upon plan. If adequate funds are not appropriated, significant 
damages from the higher salt concentrations in the water will be more 
widespread in the United States and Mexico.
    Concentrations of salts in the river cause well more than $300 
million in quantified damages and significantly more in unquantified 
damages in the United States and result in poorer quality water being 
delivered by the United States to Mexico. Damages occur from:
  --a reduction in the yield of salt-sensitive crops and increased 
        water use for leaching in the agricultural sector;
  --a reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector;
  --an increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector;
  --an increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector;
  --a decrease in the life of treatment facilities and pipelines in the 
        utility sector;
  --difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, and an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins; and
  --increased use of imported water for leaching and cost of 
        desalination and brine disposal for recycled water.
              state cost-sharing and technical assistance
    The authorized cost-sharing by the Basin States, as provided by 
FAIRA, was at first difficult to implement as attorneys for the USDA 
concluded that the Basin States were authorized to cost share in the 
effort, but the Congress had not given the USDA authority to receive 
the Basin States' funds. After almost 1 year of exploring every 
possible solution as to how the cost-sharing was to occur, the States, 
in agreement with BOR, State officials in Utah, Colorado, and Wyoming 
and with NRCS State conservationists in Utah, Colorado, and Wyoming, 
agreed upon a program parallel to the salinity control activities 
provided by EQIP wherein the States' cost-sharing funds are being 
contributed and used. We now have several years of experience with that 
program and with the passage of FCEA we now have a clear authority for 
this program that is now known as the Basin States Program.
    CRBSCA designates that the Secretary of the Interior provide the 
coordination for the Federal agencies involved in the salinity control 
program. That responsibility has been delegated to BOR. BOR administers 
the Basin States cost-sharing funds that are used in the Basin States 
Program.
    With respect to the use of Basin States' cost-sharing funds in the 
past, the Basin States felt that it was most essential that a portion 
of CRBSCP be associated with technical assistance and education 
activities in the field. Without this necessary support, there is no 
advanced planning, proposals are not well prepared, assertions in the 
proposals cannot be verified, implementation of contracts cannot be 
observed, and valuable partnering and education efforts cannot occur. 
Recognizing these values, it is essential that adequate funds for 
technical assistance be provided by USDA and the BSP.
                                 ______
                                 
          Prepared Statement of the Cystic Fibrosis Foundation
    On behalf of the Cystic Fibrosis Foundation (CFF) and the 
approximately 30,000 people with cystic fibrosis (CF), we are pleased 
to submit the following testimony regarding the fiscal year 2012 
appropriations for the Food and Drug Administration's (FDA's) review of 
rare disease treatments.
                         about cystic fibrosis
    CF is a life-threatening genetic disease for which there is no 
cure. People with CF have two copies of a defective gene, known as CF 
transmembrane conductance regulator, which causes the body to produce 
abnormally thick, sticky mucus that clogs the lungs and results in 
fatal lung infections. The thick mucus in those with CF also obstructs 
the pancreas, making it difficult for patients to absorb nutrients from 
food.
    Since its founding, CFF has maintained its focus on promoting 
research and improving treatments for CF. More than 30 drugs are now in 
development to treat CF; some treat the basic defect of the disease, 
while others target its symptoms. Through the research leadership of 
CFF, people with CF are living into their thirties, forties, and 
beyond. This improvement in the life expectancy for those with CF can 
be attributed to research advances and to the teams of CF caregivers 
who offer specialized care. Although life expectancy has improved 
dramatically, we continue to lose young lives to this disease.
    The promise for people with CF lies in research. In the past 6 
years, CFF has invested more than $1 billion in its medical programs of 
drug discovery, drug development, research, and care focused on life-
sustaining treatments and a cure for CF.
    This testimony focuses on the funding the FDA needs to quickly and 
efficiently review treatments for CF and other rare diseases so they 
can swiftly move into the hands of the patients who need them.
       sustaining funding for rare disease drug review at the fda
Cystic Fibrosis Foundation Drug Development Model
    CFF has been recognized for its unique research approach, which 
encompasses everything from basic research through phase 4 
postmarketing drug safety monitoring, and has created the 
infrastructure required to accelerate the development of new CF 
therapies. As a result, we now have a pipeline of more than 30 
potential therapies which are being examined to treat people with CF.
    One such treatment is VX-770, a drug being developed by Vertex 
Pharmaceuticals that was discovered in collaboration with CFF. This 
promising therapy actually targets the genetic defect that causes CF in 
patients with a particular mutation of CF, as opposed to only 
addressing symptoms of the disease. In late February we learned that 
phase 3 clinical trial data of VX-770 showed profound improvements in 
lung function and other health measures in CF patients, and a new drug 
application is expected to be submitted to the FDA for review later 
this year. This new treatment is a direct result of CFF's innovative 
research agenda, advancing from bench to bedside through CFF's research 
program which speeds the creation of new CF therapies.
Funding for Rare and Orphan Disease Drug Review
    In order to encourage the swift review of drugs for CF and other 
rare diseases, we urge the subcommittee to recommend sufficient funding 
for the FDA, particularly the Center for Drug Evaluation and Research's 
(CDER's) Office of New Drugs. Reducing FDA funding to fiscal year 2008 
levels, as has been proposed, would set rare drug review and approval 
back at a time when effective treatment for some of our most deadly 
diseases is sorely needed.
    In order to be effective, the FDA needs not only an adequate number 
of reviewers of new treatments, but also those with the appropriate 
skills and expertise, particularly for rare diseases like CF. 
Additional support for the FDA through increased funding not only 
assures that the Nation has a safe and effective supply of drugs and 
devices, but also that the agency can give the necessary attention to 
reviewing treatments that treat small populations but serve specific 
unmet medical needs, such as new CF drugs.
    The subcommittee and the Congress should be commended for recent 
funding increases for the FDA. Nonetheless, the agency continues to 
face resource constraints. Its workload has increased due to threats 
from bioterrorism and other public health emergencies. Even with 
funding increases in recent years, FDA's appropriation supported about 
9,100 full-time employees in fiscal year 2010. This is the same 
personnel level as 1994, a time in which FDA faced fewer challenges and 
its job was considerably less complex.
    It is now more critical than ever that the Congress significantly 
increase funding for CDER at the FDA and for the agency as a whole in 
fiscal year 2012, so that it can meet its statutory obligations to 
review drugs for safety and efficacy in a timely manner.
Accelerating the Rare Disease Drug Review Process at the FDA
    CFF applauds the FDA, and Associate Director for Rare Diseases Dr. 
Anne Pariser in particular, for their attention to rare disease drugs 
and sensitivity to the unique challenges posed by the evaluation of 
these treatments.
    FDA review officials have taken steps to improve their scientific 
expertise for review of therapies to treat rare diseases, and FDA 
leaders and review staff have been willing to engage in constructive 
dialogue to address issues with rare disease review. The agency has 
consistently taken part in productive conversations with medical 
experts, researchers, clinicians, and patients at CFF, including many 
of the foremost experts in the world on CF. This collaboration has 
augmented the FDA's work, allowing experts in CF to provide the FDA 
with the information it needs to effectively evaluate new treatments 
and accelerate the approval process, such as CFF's ongoing research 
into the development of improved tools for Patient Reported Outcomes 
and measurements of lung function.
    However, in many cases the opportunity for public comment is not 
available if the product in question is not the subject of an advisory 
committee. In all cases, this public comment period occurs very late in 
the review process. We recommend that the agency consider establishing 
a procedure to receive comment from patients and their physicians 
earlier in the process, at the time of the submission of the 
investigational new drug application. Receiving such input earlier 
might be especially useful in defining and addressing the matter of 
unmet medical need. Because orphan diseases are by definition of 
limited prevalence, it is generally unlikely that specific expertise in 
the disease will be available among FDA staff. For that reason, the 
agency should be willing to inform its review process through early 
input from experts--both patients and professionals--regarding living 
with the disease, treating the disease, and developing therapies for 
it.
    Additionally, CFF commends the establishment of the new Regulatory 
Science Initiative, formed by the National Institutes of Health and the 
FDA, with the goal of accelerating the development and use of new 
approaches to evaluate drug safety, efficacy, and quality, and urges 
the subcommittee to strongly support this type of collaboration. 
Support for these types of collaborations throughout the national 
health agencies, including programs like the Therapeutics for Rare and 
Neglected Diseases Program and the Cures Acceleration Network, 
leverages the Federal investment in new research, facilitating swifter 
development, and delivery of new medical treatments.
    CFF's unique and successful drug development model for creating 
treatments for a rare disease has helped create a pipeline with more 
than 30 promising drugs to fight CF, and the FDA has played a critical 
role in this process, working with CFF as they review treatments and 
move them into the hands of those who need them. Encouraged by our 
successes, we believe the experience of CFF in clinical research can 
serve as a model of drug discovery and development for research on 
other orphan diseases and we stand ready to work with the FDA and 
congressional leaders. On behalf of CFF, we thank the subcommittee for 
its consideration.
                                 ______
                                 
    Prepared Statement of the Federation of American Societies for 
                          Experimental Biology
    On behalf of the Federation of American Societies for Experimental 
Biology (FASEB), I respectfully request a fiscal year 2012 
appropriation of $500 million for the Agriculture and Food Research 
Initiative (AFRI) within the National Institute of Food and 
Agriculture. This funding level would keep AFRI on a path to its 
authorized level of $700 million in the 2008 Food, Conservation, and 
Energy Act.
    As a federation of 23 scientific societies, FASEB represents more 
than 100,000 life scientists and engineers, making it the largest 
coalition of biomedical research associations in the United States. 
FASEB's mission is to advance health and welfare by promoting progress 
and education in biological and biomedical sciences, including the 
research funded by AFRI, through service to its member societies and 
collaborative advocacy. FASEB enhances the ability of scientists and 
engineers to improve--through their research--the health, well-being, 
and productivity of all people.
    As the Department of Agriculture's principal extramural competitive 
grants program, AFRI funds agricultural research, education, and 
extension activities critical to improving the Nation's health and 
prosperity. In order to optimize the effectiveness of its resources, 
the AFRI program facilitates collaborative, interdisciplinary research 
that addresses broad societal challenges while expanding the 
fundamental understanding of all life sciences. In addition, AFRI 
encourages young scientists to undertake agricultural research by 
providing grant opportunities for pre- and postdoctoral scholars. 
Currently, our Federal investment in competitive agricultural research 
is only $262 million. This is woefully inadequate to ensure viability 
of a vital industry whose contribution to the economy is more than $300 
billion annually. A report by the Economic Research Service found 
``strong and consistent evidence'' that investment in agricultural 
research has yielded ``high returns per dollar spent,'' citing mean 
annual rates of return of 53 percent. Our investment in agricultural 
research directly benefits all sectors of society and every geographic 
region of the country.
    AFRI creates the necessary resources and infrastructure to 
efficiently translate scientific discoveries into a broad range of 
applications. For example, a team of scientists has identified the 
genes that determine why some varieties of wheat are more tolerant to 
freezing temperatures than others, enabling researchers to use plant 
breeding techniques to accelerate the selection of hardier wheat 
plants. By reducing the effect of cold winters on wheat production, the 
United States can continue to meet the demands of a growing global 
population and remain the world's leading exporter of wheat. AFRI 
research also makes critical contributions to improving human health; 
scientists studying a bacterial type that commonly causes food 
poisoning have determined the mechanism by which it withstands food 
safety precautions, such as heating, refrigeration, and chemical 
preservatives. Other AFRI-funded researchers have found evidence that a 
naturally secreted chemical plays a key role in controlling the 
accumulation of fat in humans and animals, a discovery with important 
implications for the prevention of obesity-related human diseases and 
the agricultural production of leaner, healthier livestock. Strong 
funding for AFRI projects like these is also an effective way to 
attract outstanding scientists to careers in agricultural research. The 
ability of the United States to meet the need for better nutrition, new 
biofuels, more efficient agriculture, and a safer food supply will 
depend on investment in the agricultural sciences as well as 
development and retention of a robust and scientifically diverse 
agricultural research workforce. Furthermore, because of the 
collaborative work of science agencies and the increasingly 
interdisciplinary nature of scientific research, support for the 
Federal research and development portfolio has never been more 
important to the future of the United States. The solutions to our 
Nation's most pressing challenges depend on advances in the 
agricultural sciences.
    Thank you for the opportunity to offer FASEB's support for AFRI.
                                 ______
                                 
                 Prepared Statement of Feeding America
    Chairman Kohl, Ranking Member Blunt, and members of the U.S. Senate 
Committee on Appropriations, Subcommittee on Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies, thank 
you for the opportunity to submit this statement for the record on 
behalf of Feeding America. We look forward to the chairman and the 
subcommittee's examination of the U.S. Department of Agriculture's 
(USDA's) fiscal year 2012 budget request and in particular, the 
programs administered by USDA's Food and Nutrition Service.
    Feeding America is the Nation's leading domestic hunger-relief 
charity with a network of more than 200 food banks in every State 
serving more than 61,000 local food assistance agencies. Feeding 
America food banks as well as food assistance agencies rely on a 
variety of public and private funding streams to feed 37 million 
Americans a year, including 14 million children and nearly 3 million 
seniors.
    During the worst economic downturn since the Great Depression, the 
number of American families struggling to make ends meet has increased 
significantly. With unemployment still hovering near 9 percent, the 
need for food assistance continues to grow and food banks continue to 
be pressed to meet the need in their communities. Last year, 37 million 
people, or 1-in-8 Americans, received emergency food assistance through 
the Feeding America network. This represents an increase of 46 percent 
since 2006. As a result, approximately 5.7 million people per week are 
now receiving emergency food assistance through Feeding America food 
banks.
    The food distributed by Feeding America food banks and the 
children's and senior's programs our food bank members run in local 
communities provide a solid return on taxpayer investments and help 
reduce State government and private-sector health costs as well as help 
invest in a healthy future workforce. Emergency food assistance 
provides support not only to struggling working Americans but also to 
farmers and the agriculture industry through purchase of commodities.
    While Feeding America receives generous support from our national 
and local charitable donors, we would not be able to continue serving 
those in need were it not for the food commodities provided by USDA. 
Indeed, these commodities comprise approximately 25 percent of all the 
food moving through the Feeding America network, and are among some of 
the most nutritious foods that our food banks provide. Without this 
steady, reliable source of nutritious basic food staples, Feeding 
America food banks would simply be unable to continue serving those in 
need on a consistent basis.
           the emergency food assistance program commodities
    The Emergency Food Assistance Program (TEFAP) is a means-tested 
Federal program that provides food commodities at no cost to low-income 
Americans in need of short-term hunger relief through organizations 
like food banks, pantries, soup kitchens, and emergency shelters. 
Healthy and nutritious food commodities provided through TEFAP are an 
essential resource for the continued success of Feeding America food 
banks.
    TEFAP commodities currently account for approximately 25 percent of 
the food moving through Feeding America food banks. In most instances, 
local food banks leverage TEFAP commodities with privately donated 
foods to extend TEFAP program benefits beyond the budgeted amount for 
the program. As the unprecedented demand for food continues at food 
banks across the country, TEFAP commodities are essential for the 
provision of a steady emergency food supply.
    Unfortunately, the level of commodity support Feeding America 
receives from USDA is projected to drop off in fiscal year 2011 and on 
into fiscal year 2012. In Federal fiscal year 2010, TEFAP provided 
approximately $655 million worth of nutritious foods to low-income 
Americans. This figure includes commodity purchases mandated by the 
2008 farm bill as well as bonus commodity purchases that were 
appropriated for in fiscal year 2010 and those purchases made by USDA 
when necessitated by market conditions. Unfortunately though, even as 
the need remains at unprecedented levels, if no additional bonus 
purchases are made in fiscal year 2011, TEFAP spending levels will fall 
to $355 million. This decrease will severely impact efforts to address 
the growing need for emergency food assistance. Without additional 
funding for commodities, too many Americans may go without adequate 
access to the food they need.
    While most decisions on TEFAP spending are made either by the 
authorizing committee or by the administration, Feeding America urges 
this subcommittee to work with the Secretary of Agriculture to identify 
ways to increase the supply of TEFAP commodities and to consider making 
TEFAP a direct beneficiary of any farm support expenditures that may be 
included in a fiscal year 2012 appropriations bill.
    the emergency food assistance program administrative grants and 
                         infrastructure grants
    In order for States to distribute commodity foods to emergency food 
providers and for those providers to get the food to those in need, 
Federal funding is appropriated each year to help defray the costs of 
storing, transporting, and distributing TEFAP commodities. For the past 
several years, despite an authorized spending level of $100 million per 
year, the appropriated funding level has remained steady at $50 million 
per year.
    As food banks are already struggling to respond to a significant 
increase in demand, they can no longer afford the rising costs 
associated with storing and distributing emergency food commodities 
without adequate Federal assistance. While the increase in TEFAP 
products that require refrigeration or freezer capacity has been a 
welcome addition for clients, these products are costly to store and 
deliver across large service areas. Funding TEFAP administrative grants 
at the $100 million level authorized in fiscal year 2012 is critical to 
helping food banks ensure they can provide a wide variety of nutritious 
TEFAP foods to help meet the needs of hungry Americans.
    Similarly, TEFAP infrastructure grants, which received $6 million 
in appropriations in fiscal year 2010, are essential to helping 
emergency food providers meet a variety of infrastructure needs, and 
ensuring the effective and efficient delivery of TEFAP foods to those 
most in need. Funding provided through this competitive grant program 
may be used to help emergency food providers implement, improve, and 
expand their infrastructure activities and projects. Specific items 
that may be funded include developing computerized systems for tracking 
time-sensitive food products; improving the distribution of perishable 
foods (such as fresh fruits and vegetables); rescuing prepared, 
unserved food; identifying donors and eligible recipients; and 
improving facilities and equipment.
    In fiscal year 2010, USDA awarded TEFAP Infrastructure Grants to 39 
emergency food providers, 19 of whom primarily served low-income 
individuals in rural areas. However, USDA had at least four times as 
many applicants for these grants as they had funding to award. The 2008 
farm bill authorizes $15 million per year in annual appropriations for 
this program, and Feeding America urges the subcommittee to provide 
full funding for this program in fiscal year 2012 so that even more 
emergency food providers can benefit.
                  commodity supplemental food program
    Administered by USDA, the Commodity Supplemental Food Program 
(CSFP) leverages Government buying power to provide nutritionally 
balanced food packages to more than 604,000 low-income seniors 60 years 
or older, pregnant and postpartum women, infants, and children up to 6 
years old each month in 39 States, two tribal organizations, and the 
District of Columbia. More than 96 percent of those benefiting from 
this program are seniors with incomes of less than 130 percent of the 
Federal poverty line (approximately $14,000 for a senior living alone). 
For many of these seniors, CSFP may be the only nutrition assistance 
program readily accessible to them.
    CSFP is an efficient and effective program. While the cost to USDA 
to provide this package of food is, on average, $20 per month, the 
average retail value of the foods in the package is $50. For the 
seniors participating in this program, CSFP provides more than just 
food and nourishment, it also helps to combat the poor health 
conditions often found in seniors who are experiencing food insecurity 
and at risk of hunger. According to analysis of data from the 1999-2002 
National Health and Nutrition Examination Survey, seniors older than 
the age of 60 who are experiencing some form of food insecurity are 
significantly more likely to have lower intakes of major vitamins, 
significantly more likely to be in poor or fair health, and more likely 
to have limitations in activities of daily living. CSFP food packages, 
specifically designed to supplement needed sources of nutrients 
typically lacking in participants' diets like protein, iron, zinc, and 
vitamins B-6 and B-12, can play an important role in addressing the 
nutrition needs of low-income seniors.
    In fiscal year 2010, CSFP received $171.4 million in appropriated 
funds. These funds enabled to program to expand caseload to additional 
participants in States and areas with an existing CSFP program and 
provided $5 million for seven additional States--Arkansas, Delaware, 
Georgia, Maine, New Jersey, Oklahoma, and Utah--to begin CSFP service 
for the first time ever. In order to maintain existing caseload in 
fiscal year 2012, Feeding America urges the subcommittee to support the 
President's CSFP budget request for $176.8 million. In addition, we 
urge the subcommittee to provide an additional $5 million to expand the 
program into the six additional States (Connecticut, Hawaii, Idaho, 
Maryland, Massachusetts, and Rhode Island) with USDA-approved State 
plans.
                               conclusion
    We greatly appreciate the opportunity to submit testimony today on 
behalf of Feeding America, our more than 200-member food banks, and the 
37 million Americans our food banks fed last year. For these growing 
numbers of Americans, food banks are truly the first line of defense, 
and many times the only resource standing between them being able to 
put food on the family dinner table or going to bed with an empty 
stomach. However, our food banks and the charitable food assistance 
network cannot be expected to meet the needs of these families alone. 
It is only through our partnership with the public sector and the 
sustained support the Federal Government provides through programs like 
TEFAP and CSFP that we can make real strides in the fight against 
hunger.
                                 ______
                                 
  Prepared Statement of Friends of Agricultural Research--Beltsville, 
                                  Inc.
    Mr. Chairman, and members of the subcommittee, thank you for this 
opportunity to present our statement supporting funding for the U.S. 
Department of Agriculture's (USDA's) Agricultural Research Service 
(ARS), and especially for the ARS flagship research facility, the Henry 
A. Wallace Beltsville Agricultural Research Center (BARC), in Maryland. 
Our organization--the Friends of Agricultural Research--Beltsville 
(FAR-B) promotes the center's current and long-term agricultural 
research, outreach, and educational missions.
    We begin, Mr. Chairman, by citing from Agriculture Secretary Tom 
Vilsack's March 10, 2011, remarks before the Senate Appropriations 
Subcommittee on Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies. To quote from Secretary's 
Vilsack's remarks:

    ``Scientific research is essential for achieving [our] goals. To 
promote American innovation, new discoveries, and new industries, we 
continue to target and focus additional research dollars in key areas, 
like biofuel feedstocks, livestock and crop production and protection, 
ecosystem market foundations, and biotechnology.''

    Also:

    ``We will invest in research to spur innovation, promote exports, 
support renewable energy and conservation, and enhance critical 
infrastructure in rural communities.''

    Our organization could not agree more strongly with Secretary 
Vilsack. Writing on world food in the March 14, 2011, Washington Post, 
highly regarded columnist Robert J. Samuelson warned, ``the global food 
squeeze is largely an uncovered story.'' According to Samuelson, global 
food demand is colliding with strained food supplies. Middle East 
countries, he notes, are importing 50 percent or more of their wheat, 
and looking back from February world wheat prices have doubled in 8 
months. Calling the situation the ``Great Food Crunch,'' Samuelson 
cites growing affluence leading to higher consumption of meat and dairy 
products, and exploding population growth as major contributing 
factors. Looking ahead, he notes that from 2010 to 2050 world 
population is projected to grow by 38 percent, from 6.9 billion to 9.5 
billion.
    Can world food production keep pace with growing demand? There are 
those who would argue that it cannot. Yet the more hopeful of us take 
reassurance in technological advances originating from BARC. Please 
consider as recently as 1950 U.S. average corn yields were 38 bushels 
per acre. Average wheat yields were 17 bushels per acre. By 2010, 
average U.S. corn yields had jumped to 153 bushels per acre, while 
average wheat yields grew to an impressive 46 bushels per acre. 
Technological discoveries from Beltsville contributed tremendously to 
that progress. For decades, Beltsville has stood at the forefront of 
technical advances in agriculture. In 2010, the center celebrated 100 
years of research accomplishments. The center's landmark technological 
achievements over that time are truly remarkable. We would be pleased 
to provide documentation should the subcommittee so wish.
    Today, Beltsville is unequalled in scientific capability, breadth 
of agricultural research program, and concentration of scientific 
expertise. Under the leadership of Director Joseph Spence and with its 
powerful scientific capability, BARC remains unique and indispensable 
to meeting the challenges that lie ahead.
    We are aware of the financial constraints facing our country. We 
are aware, too, of urgent demands for funding among compelling national 
priorities. Securing ample, safe, and nutritious food--food security--
has always been the most compelling of human priorities. That is true 
today, and it will be no less so in the years ahead. Commentators such 
as Robert Samuelson speculate that as much as oil, scarce food could 
shape global politics for decades to come.
    In summation, Mr. Chairman, we strongly support adequate funding 
for BARC. We would respectively suggest that adequately funding the 
USDA's flagship research center is central to maintaining national and 
world food security.
     priorities in the president's fiscal year 2012 budget request
    Now, Mr. Chairman, we turn to key research areas highlighted in the 
President's proposed budget. We strongly recommend this proposed 
funding. Our recommendation is consistent with the remarks of Secretary 
Vilsack.
    Animal Breeding and Protection.--$1 million:
  --Beltsville has extensive research activity related to animal 
        production and animal health.
  --Research conducted at BARC is the foundation for the dairy industry 
        in it's research on the genetic prediction of dairy cows that 
        can more efficiently meet the Nation's dairy needs. Slight 
        differences in milk production by a cow can mean the difference 
        between profitability and loss by dairy farmers.
  --Research at BARC is aimed at preventing development of resistance 
        to drugs used for treating cattle for parasites.
    Crop Breeding and Protection.--$1 million:
  --Beltsville scientists have an extensive record of ongoing research 
        relating to protecting crops from pests and emerging pathogens.
  --Beltsville has unique expertise to identify pathogens such as 
        nematodes and insects that can destroy crops or make crops 
        ineligible for export to other countries.
  --Beltsville also houses the Germplasm Resource Information Network, 
        the U.S. coordinating body to identify and catalog plant 
        germplasm. It is essential to maintain these important 
        functional operations to identify plant germplasm that is 
        diseases resistant, drought tolerant, and most valuable to the 
        consumer.
    Child and Human Nutrition.--$4.5 million:
  --Beltsville houses the Nation's largest, most comprehensive 
        federally funded human nutrition research center, the 
        Beltsville Human Nutrition Research Center (BHNRC).
  --Unique activities include the What We Eat in America survey, which 
        is the Government's nutrition monitoring program and the 
        National Nutrient Databank, the gold standard reference of food 
        nutrient content. It is used throughout the world. These two 
        activities are the basis for food labels, nutrition education 
        programs, food assistance programs including SNAP, the 
        Supplemental Nutrition Assistance Program, school feeding 
        programs, and Government nutrition education programs.
  --The research facilities at BHNRC feature unique feeding facilities 
        and are used in collaboration with other Federal agencies, 
        including the National Institutes of Health, industry, and 
        university partners.
  --Obesity is a serious problem in the United States and it must be 
        dealt with. Effective nutrition programs aimed at preventing 
        the onset of obesity are needed to prevent the high costs of 
        medical care associated with the epidemic of obesity in this 
        country.
    Global Climate Change.--$800,000:
  --Beltsville had been actively engaged in climate change research 
        long before climate change became a topic of discussion in the 
        media.
  --Beltsville scientists are at the forefront of climate change 
        research--understanding how climate change affects crop 
        production and the effects of climate change on growth and 
        spread of invasive and undesirable plants (such as weeds). A 
        central aim is finding ways to mitigate effects of climate 
        change on crops.
  --Beltsville houses truly unique facilities for replication of 
        climates of the past and those that might exist in the future. 
        Scientists here are able to model the effects of climate change 
        and to develop strategies to mitigate the effects of any 
        changes in climate.
    Plant, Animal, and Microbial Collections.--$1.25 million:
  --BARC houses many truly unique national biological collections that 
        are indispensable to the well-being of American agriculture. In 
        addition to the actual collections, BARC scientists are 
        internationally recognized for their expertise and ability to 
        quickly and properly identify threats to agriculture.
  --This expertise is crucial to preventing loss of crops and animals, 
        ensuring that threats to American agriculture are identified 
        before they can enter the country, ensuring homeland security, 
        and ensuring that American exports are free of pests and 
        pathogens that could prohibit exports to other countries.
  --Collections and expertise include insect pests, fungal pathogens, 
        bacterial threats, and nematodes.
  --BARC houses the National Animal Parasite collection and has the 
        expertise to identify parasites that are of importance to 
        agricultural animals.
    Mr. Chairman, that concludes our statement. Thank you for 
consideration and support for the educational, research, and outreach 
missions of BARC.
                                 ______
                                 
        Prepared Statement of the Izaak Walton League of America
    The Izaak Walton League of America (IWLA) appreciates the 
opportunity to submit testimony concerning appropriations for fiscal 
year 2012 for various agencies and programs under the jurisdiction of 
the subcommittee. IWLA is a national, nonprofit organization founded in 
1922. We have approximately 38,000 members and nearly 300 chapters and 
State divisions nationwide. Our members are committed to advancing 
common sense policies that safeguard wildlife and habitat, support 
community-based conservation, and address pressing environmental 
issues. IWLA has been a partner with farmers and a participant in 
forming agriculture policy since the 1930s. The following pertains to 
conservation programs administered by the U.S. Department of 
Agriculture (USDA).
    The Food, Conservation, and Energy Act of 2008 (farm bill) was 
enacted with a prominent commitment to increased mandatory conservation 
spending. It was bipartisan and supported by more than 1,000 diverse 
organizations engaged in farm bill policy. We urge the subcommittee to 
maintain the mandatory spending levels for conservation programs as 
provided in the farm bill. IWLA strongly opposes the administration's 
proposal to cut essential conservation programs, placing the farm bill 
baseline in jeopardy, in fiscal year 2012 and beyond.
    IWLA is also concerned that the administration's budget would not 
only deprive farmers and ranchers of conservation and environmental 
stewardship assistance in fiscal year 2012, but would also reduce the 
farm bill conservation baseline. These programs benefit producers 
through improved soil quality and productivity of their land, and the 
American people through cleaner air and water and healthy habitat. 
Reducing the farm bill baseline in the face of increasing future 
demands for resource protection and productivity is counterproductive.
    IWLA and its members across the country are especially focused on 
the following core conservation programs:
    Conservation Reserve Program (CRP).--CRP reduces soil erosion, 
protects water quality, and enhances habitat through long-term 
contracts with landowners that convert highly erodible cropland to more 
sustainable vegetative cover. The administration's budget is strongly 
supportive of CRP because it proposes to allow landowners to enroll up 
to 6 million acres in fiscal year 2012, on top of the 3.95 million 
acres sought in the fiscal year 2011 general signup. After the 2008 
farm bill reduced the overall acreage limit for CRP to 32 million 
acres--it is encouraging to see the effort being made to ensure farmers 
and ranchers are able to achieve the maximum allowable enrollment for 
their most sensitive lands and most important habitat.
    Wetlands Reserve Program (WRP).--WRP provides technical and 
financial assistance to landowners to restore and protect wetlands on 
their properties. Wetlands are generally conserved through permanent or 
30-year easements purchased by the USDA. Unfortunately, the President 
proposes to permanently reduce the farm bill authorization for WRP by 
158,895 acres. The action taken with this proposal is to arbitrarily 
rewrite the Federal farm bill's multi-year obligation as signed into 
law in 2008. IWLA opposes this cut and urges the Congress to uphold the 
binding, 5-year commitment made to WRP.
    Grassland Reserve Program (GRP).--GRP focuses on limiting 
conversion of pasture and other grasslands to cropland or development 
while allowing landowners to continue grazing and other operations that 
align with this goal. The President's budget also proposes to 
permanently cut the mandated total acreage for GRP by 165,684 acres. 
Again, IWLA opposes this reduction because it will undermine efforts to 
protect one of the country's most threatened natural resources through 
fiscal year 2012 and beyond.
    Conservation Stewardship Program (CSP).--CSP is a comprehensive 
approach to conserving soil, water, and other natural resources across 
a range of lands, including cropland, prairie, and forests. CSP makes 
conservation the basis for a producer to receive Federal financial 
support rather than limitless subsidies for intensive production of a 
few crops. It is troubling that the administration's fiscal year 2012 
budget is proposing to cut the number of acres that could be enrolled 
in CSP by 764,204. IWLA opposes this cut because CSP is a 
comprehensive, whole-farm approach to conservation that can maximize 
benefits to natural resources, fish and wildlife, and producers alike.
    Wildlife Habitat Incentives Program (WHIP).--WHIP helps 
agricultural landowners develop habitat for upland wildlife, wetland 
wildlife, threatened and endangered species, fish, and other wildlife. 
The President's fiscal year 2012 proposal also seeks to permanently 
reduce the mandatory commitment established for WHIP in the Federal 
farm bill. The budget would cut fiscal year 2012 funding for WHIP by 14 
percent, or $12 million. IWLA opposes this damaging cut to a program 
with the central goal of supporting wildlife resources in rural 
America.
    Finally, effective implementation of farm bill conservation 
programs depends upon adequate technical resources to work with 
landowners in addressing their unique environmental concerns. Although 
conservation programs are available, underinvestment in technical 
assistance limits agency support to assist farmers and ranchers in 
selecting and optimizing appropriate programs for their operations. The 
technical expertise of the Natural Resource Conservation Service and 
partners that assist in the delivery of programs and technical 
assistance directly to landowners is necessary for the adoption and 
maintenance of conservation practices. We request that the subcommittee 
support the mandatory levels of conservation program funding as 
provided in the farm bill to enable robust technical resources to 
implement those programs successfully.
    We appreciate the opportunity to testify in strong support of fully 
funding agricultural conservation programs.
                                 ______
                                 
   Prepared Statement of the National Association of County and City 
                            Health Officials
                               background
    The National Association of County and City Health Officials 
(NACCHO) represents the Nation's 2,800 local health departments (LHDs). 
These governmental agencies work every day in their communities to 
prevent disease, promote wellness, and protect the health of the entire 
community. LHDs have a unique and distinctive role and set of 
responsibilities in the larger health system and within every 
community. The Nation depends upon the capacity of LHDs to play this 
role well.
    LHDs have wide ranging responsibilities including measuring 
population-wide illness, organizing efforts to prevent disease and 
prolong quality of life, and to serve the public through programs not 
offered elsewhere. Two of those responsibilities are preventing 
foodborne illness and investigating the cause and spread of illness. In 
fact, LHDs are the significant majority of the 3,000 State, local, and 
tribal agencies that have primary responsibility to regulate the more 
than 1 million food establishments in the United States.
    However, the Nation's current fiscal challenges have diminished the 
resources available to, and therefore the ability of, LHDs to focus on 
the problem of foodborne illness. NACCHO surveys reveal that in the 3-
year period covering 2008-2010, 29,000 jobs have been lost in LHDs, 
which represents a 19-percent cut in local public health jobs 
nationwide.
    Even so, LHDs continue to respond to increased threats of all 
types, from rising chronic disease rates to public anxiety about 
potential radiation from the recent disaster in Japan. These increased 
threats, combined with budget cuts, layoffs, and furloughs make it more 
and more difficult for LHDs to respond to outbreaks of foodborne 
illness.
    Despite the best efforts of public officials, more than 48 million 
cases of preventable foodborne illness occur every year in this 
country. Many of these cases cause pain and suffering, high medical 
bills, disability, lost productivity, lower life expectancy, and death. 
In fact, foodborne illness causes an estimated 128,000 hospital visits 
and 3,000 deaths annually.
    Last year, the Congress passed historic and bipartisan food safety 
legislation. This legislation recognized the importance of protecting 
the public from foodborne illness and the shortcomings of our current 
system. It is clear that LHDs are facing increasing budget pressures 
and that the enormous societal costs imposed by foodborne illness can 
be reduced with extremely modest investments in training as well as 
regulation and enforcement at the retail level. The return on Federal 
investment in retail food safety, training, and enforcement can be 
measured in improved health and lower healthcare costs and lost 
productivity. It is our members' experience that ``tough but fair'' 
enforcement is valued by industry.
       food and drug administration retail food safety initiative
NACCHO Request: $5.6 Million
            President's Fiscal Year 2012 Budget: $5.6 Million (New 
                    Program)
    FDA conducted a 10-year study of more than 800 retail food 
establishments to determine compliance with five key risk factors for 
foodborne illness in nine types of retail operations. These included 
schools, hospitals, and nursing homes, as well as markets and 
restaurants. This study provides the evidence to support a robust, 
science-based approach to food safety at the retail level, where food 
is handled, prepared, and stored prior to direct purchase by consumers 
and where a significant amount of preventable foodborne illness begins. 
LHDs are on the front lines conducting food safety inspections and have 
the expertise to educate food handlers in their communities.
    The presence of certified food safety managers in retail 
establishments is an important factor in achieving overall risk 
reduction in food service operations. It is not possible to attribute 
improvement in overall compliance with food safety standards to any 
single factor, due to the number of interdependent variables with any 
given food service operation. However, NACCHO firmly believes that the 
comprehensive approach of the Food and Drug Administration's (FDA's) 
Retail Food Safety Initiative will significantly enhance the capacity 
of LHDs to achieve compliance with improved food safety standards, 
thereby reducing the incidence of foodborne illness. NACCHO recommends 
a funding level of $5.6 million in fiscal year 2012 to implement this 
initiative, which recognizes the critical importance of local food 
safety activities to protect the Nation's consumers.
                        fda food safety training
NACCHO Request: $8 Million
            President's Fiscal Year 2012 Budget: $8 Million
                Fiscal Year 2010 Funding: $1 Million
    It is crucial that regulators and public health partners have the 
appropriate knowledge and training to carry out their duties to safe 
guard our citizens from foodborne illness. The Congress provided $1 
million in fiscal year 2010 appropriations and the International Food 
Protection Training Institute (IFPTI) is already up and running. 
However, food safety training requires continued funding to increase 
capacity and adequately train our Nation's food protection workers. A 
national food safety training system, including a certification system, 
will ensure that officials at all levels of Government have current, 
consistent, and adequate knowledge, as well as the necessary skills, to 
do their jobs. Without a robust national training system, we risk 
having a food safety workforce applying a patchwork of standards and 
methodologies without the ability to consistently and continuously 
improve their knowledge and skills based on the latest science and risk 
assessments. NACCHO recommends a funding level of $8 million in fiscal 
year 2012 to continue to implement an effective food safety training 
system.
    As you draft the fiscal year 2012 Agriculture, Rural Development, 
Food and Drug Administration, and Related Agencies appropriations bill, 
we ask that you consider our recommendations for these two programs 
that are critical to ensuring the safety of our Nation's food supply 
and will protect our Nation's people. NACCHO thanks you for your 
previous support of food safety and welcomes the opportunity to discuss 
this further with the subcommittee.
                                 ______
                                 
    Prepared Statement of the National Association of State Energy 
                               Officials
    Chairman Kohl, Ranking Member Blunt, and members of the 
subcommittee, I am Phil Giudice, chairman of the National Association 
of State Energy Officials (NASEO). NASEO is submitting this testimony 
in support of funding of at least $39 million in discretionary 
appropriations for the Rural Energy for America Program (REAP) (section 
9007 of the 2008 farm bill) in addition to $70 million in mandatory 
funding. REAP was created as part of the 2002 farm bill and it has been 
a huge success. Approximately 4,000 clean energy projects have been 
implemented in every State since 2003. These activities have included 
energy efficiency projects, as well as wind, solar, biomass, anaerobic 
digesters, biodiesel, and geothermal. Technical assistance has also 
been a big factor in this program. Funding requests are generally three 
times the amount of available funds. NASEO has worked with farmers, our 
State agricultural agencies, and rural interests to promote this 
successful program. As we face dramatically increasing energy bills for 
all sectors of the economy (and increased volatility in energy prices), 
it is critical that we do more to address the energy problems of rural 
America.
    Greater energy efficiency and renewable energy use in the farm 
sector will help create jobs, increase agricultural productivity, and 
improve the environment. Funding for the energy title of the farm bill 
is a critical public investment.
                                 ______
                                 
Prepared Statement of the National Commodity Supplemental Food Program 
                              Association
    Mr. Chairman and subcommittee members, thank you for this 
opportunity to present information regarding the U.S. Department of 
Agriculture (USDA)/Food and Nutrition Service's Commodity Supplemental 
Food Program (CSFP).
    The National Commodity Supplemental Food Program Association 
(NCSFPA) requests the Senate Agriculture Appropriations Subcommittee 
fund CSFP for fiscal year 2012 at $207.588 million, $176.788 million as 
requested by the USDA, an additional $5 million to begin CSFP 
operations in six States (Connecticut, Hawaii, Idaho, Maryland, 
Massachusetts, and Rhode Island) with USDA-approved plans, plus $25.8 
million to meet pending requests for increasing caseload by 114,000 
slots, and include language directing the Department to utilize all 
available resources to supplement the CSFP food package and meet the 
rising demand for nutritional assistance among our vulnerable senior 
population.
    CSFP is a unique program that brings together Federal and State 
agencies, along with public and private entities. Low-income seniors 
added since 1983 now comprise 96 percent of all CSFP participants. The 
USDA purchases specific nutrient-rich foods at wholesale prices, 
including canned fruits and vegetables, juices, meats, fish, peanut 
butter, cereals, grain products, cheese, and dairy products from 
American farmers. State agencies provide oversight, contract with 
community and faith-based organizations to warehouse and distribute 
food, certify eligibility, and educate participants. Local 
organizations build broad collaboration among nonprofits, health units, 
and area agencies on aging for simple, fast access to these 
supplemental foods and nutrition education to improve participants' 
health and quality of life. This partnership reaches even homebound 
seniors in both rural and urban settings with vital nutrition and 
remains an important ``market'' for commodities supported under various 
farm programs.
    In fiscal year 2010, the CSFP provided services through 150 
nonprofit community and faith-based organizations at 1,800 sites 
located in 39 States, the District of Columbia, and two Indian tribal 
organizations (Red Lake, Minnesota, and Oglala Sioux, South Dakota). On 
behalf of those organizations NCSFPA would like to express our 
gratitude for the increased fiscal year 2010 funding that has allowed 
CSFP to begin in seven new States, Arkansas, Delaware, Georgia, Maine, 
New Jersey, Oklahoma, and Utah, and has also resulted in a significant 
increase in the number of individuals who are now able to participate 
in the program in the other CSFP States.
    CSFP's 42 years of service is a testimony to the power of community 
partnerships of faith-based organizations, farmers, private industry, 
and Government agencies. The CSFP offers a unique combination of 
advantages unparalleled by any other food assistance program:
  --CSFP specifically targets our Nation's most nutritionally 
        vulnerable populations--young children and low-income seniors, 
        many of whom may not qualify for other nutrition assistance 
        programs.
  --CSFP provides a monthly selection of food packages tailored to 
        specific nutritional needs. The nutritional content of the food 
        provided has improved with the introduction of low-fat cheese, 
        whole grain products, canned fruits packed in fruit juice, and 
        low-salt canned vegetables.
  --CSFP purchases foods at wholesale prices, directly supporting 
        American farmers. The average food package cost is estimated at 
        $19.26 while the retail value is $50.
  --The CSFP involves the entire community. Thousands of volunteers and 
        private companies donate money, equipment, and, most 
        importantly, time and effort to deliver food to needy and 
        homebound seniors. These volunteers not only bring food but 
        companionship and other assistance to seniors who might have 
        limited support systems.
    In a recent CSFP survey, more than one-half of seniors living alone 
reported an income of less than $750 per month. One-half of respondents 
from two-person households reported an income under $1,000 per month. 
Twenty-five percent were enrolled in the Supplemental Nutrition 
Assistance Program (SNAP) and 50 percent said they ran out of food 
during the month. Seventy percent of senior respondents said they 
choose between medicine and food.
    The Senate Agriculture Appropriations Subcommittee has consistently 
supported CSFP, acknowledging it as a cost-effective way of providing 
nutritious supplemental foods. The Congress provided funding to meet 
the rising need among the elderly in the fiscal year 2010 
appropriation. While USDA's budget request will provide adequate 
resources for our monthly caseload of 604,931 mothers, children, and 
seniors, we urge the subcommittee to strongly consider our request for 
funding to allow six additional States to begin providing nutritional 
assistance to their vulnerable seniors as well as granting us 
sufficient funding to meet the increasing need in the 39 current CSFP 
States.
    CSFP and other nutrition programs, such as SNAP, are only 
supplemental programs by design. Together they cover a shortfall that 
many seniors face each month. These programs must have support to meet 
the increasing need as part of the ``safety net.''

    ``The Managers fully support continued operation of this program 
and recognize the need for a substantial expansion of CSFP . . .  the 
Managers encourage the Secretary to approve all remaining [S]tates for 
expansion and to expand caseload in all participating [S]tates.'' 
(Joint Statement of Managers, H.R. 2419, the Food, Conservation and 
Energy Act of 2008.)

    ``CSFP has charms worth considering in designing human service 
programs . . .  the program's trademarks were its simplicity and 
accessibility . . .  CSFP in particular represents a guaranteed source 
of high quality food, delivered in a balanced package.'' (``The Role of 
CSFP in Nutritional Assistance to Mothers, Infants, Children and 
Seniors'', The Urban Institute, August 2008.)

    NCSFPA requests the following:

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

------------------------------------------------------------------------
To continue serving our monthly caseload of 604,931 needy       $176.788
 seniors (97 percent of participants), women, infants, and
 children (3 percent of participants)......................
Respond to six States (Connecticut, Hawaii, Idaho,                 5.000
 Maryland, Massachusetts, and Rhode Island) requesting
 assistance in serving its vulnerable senior population....
To meet the increasing demand/need. Feed an additional            25.800
 114,718 at risk seniors in 39 States per requests turned
 in to USDA by CSFP operators nationwide...................
                                                            ------------
      Total fiscal year 2012 request.......................      207.588
------------------------------------------------------------------------

    A 1997 report by the National Policy and Resource Center on 
Nutrition and Aging at Florida International University, Miami--``Elder 
Insecurities: Poverty, Hunger, and Malnutrition'' indicated that 
malnourished elderly patients experience 2 to 20 times more medical 
complications, have up to 100-percent longer hospital stays, and incur 
hospital costs $2,000 to $10,000 higher per stay. Proper nutrition 
promotes health, treats chronic disease, decreases hospital length of 
stay, and saves healthcare dollars. America is aging. CSFP must be an 
integral part of senior nutrition policy and plans to support the 
productivity, health, independence, and quality of life for America's 
seniors, many of whom now need to continue working at least part-time 
beyond retirement age to afford basics.
    The CSFP is committed grassroots operators and dedicated volunteers 
with a mission to provide quality nutrition assistance economically, 
efficiently, and responsibly always keeping the needs and dignity of 
our participants first. We commend the Food Distribution Division of 
Food and Nutrition Service of the USDA for their continued innovations 
to strengthen the quality of the food package and streamline 
administration.
                                 ______
                                 
   Prepared Statement of the New Mexico Interstate Stream Commission
    The Congress authorized the Colorado River Basin Salinity Control 
Program (CRBSCP) in the Colorado River Basin Salinity Control Act of 
1974 (CRBSCA). The Congress amended the act in 1984 to give new 
responsibilities to the U.S. Department of Agriculture (USDA). While 
retaining the Department of the Interior as the lead coordinator for 
CRBSCP, the amended act recognized the importance of USDA efforts in 
meeting the objectives of CRBSCP. Many of the most cost-effective 
salinity control projects to date have occurred since implementation of 
the USDA's authorization for CRBSCP.
    Bureau of Reclamation studies show that quantified damages from the 
Colorado River to U.S. water users are about $350 million per year. 
Unquantified damages are significantly greater. Damages are estimated 
at $75 million per year for every additional increase of 30 milligrams 
per liter in salinity of the Colorado River. It is essential that USDA 
salinity control projects be funded for timely implementation to 
protect the quality of Colorado River Basin water delivered to the 
lower Basin States and Mexico.
    The Congress directed, with the enactment the Federal Agricultural 
Improvement and Reform Act of 1996 (FAIRA), that CRBSCP should continue 
to be implemented as a component of the Environmental Quality 
Incentives Program (EQIP). However, until 2004, CRBSCP was not funded 
at an adequate level to protect the Basin State-adopted and 
Environmental Protection Agency (EPA)-approved water quality standards 
for salinity in the Colorado River. Appropriations for EQIP prior to 
2004 were insufficient to adequately control salinity impacts from 
water delivered to the downstream States and Mexico.
    EQIP subsumed the salinity control program without giving adequate 
recognition to the responsibilities of the USDA to implement salinity 
control measures per section 202(c) of CRBSCA. The EQIP evaluation and 
project ranking criteria targeted small watershed improvements and did 
not recognize that water users hundreds of miles downstream are 
significant beneficiaries of the salinity control program. Proposals 
for EQIP funding were ranked in the States of Utah, Wyoming, and 
Colorado under the direction of the respective State conservationists 
without consideration of those downstream, particularly out-of-State, 
benefits.
    Following recommendations of the Basin States to address the 
funding problem, the USDA's Natural Resources Conservation Service 
(NRCS) designated the Colorado River Basin an ``area of special 
interest'' and earmarked funds for CRBSCP. NRCS concluded that the 
salinity control program is different from the small watershed approach 
of EQIP. The watershed for CRBSCP stretches more than 1,200 miles from 
the headwaters of the river through the salt-laden soils of the upper 
basin to the river's termination at the Gulf of California in Mexico. 
NRCS is to be commended for its efforts to comply with the USDA's 
responsibilities under CRBSCA, as amended. Irrigated agriculture in the 
upper basin realizes significant local benefits of improved irrigation 
practices, and agricultural producers have succeeded in submitting 
cost-effective proposals to NRCS.
    Years of inadequate Federal funding for EQIP since the 1996 
enactment of FAIRA and prior to 2004 resulted in the need to accelerate 
the salinity control program in order to maintain the criteria of the 
Colorado River Water Quality Standards for Salinity. With the enactment 
of the Farm Security and Rural Investment Act in 2002, an opportunity 
to adequately fund the salinity control program now exists. The 
requested funding of 2.5 percent of the EQIP funding will continue to 
be needed each year for at least the next few fiscal years.
    State and local cost-sharing is triggered by and indexed to the 
Federal appropriation. In fiscal year 2012, it is anticipated that the 
States will cost-share about $8 million and local agricultural 
producers will add more than $7 million, resulting in contributions for 
more than 40 percent of the total program costs.
    USDA salinity control projects have proven to be a cost-effective 
component of the salinity control program. USDA has indicated that a 
more adequately funded EQIP program would result in more funds being 
allocated to the salinity program. The Basin States have cost-sharing 
dollars available to participate in on-farm salinity control efforts. 
The agricultural producers in the upper basin are willing to cost-share 
their portion and are awaiting funding for their applications to be 
considered.
    The Basin States expend 40 percent of the State funds allocated for 
CRBSCP for essential NRCS technical assistance and education 
activities. Previously, the Federal part of the salinity control 
program funded through EQIP failed to adequately fund NRCS for these 
activities, which has been shown to be an impediment to accomplishing 
successful implementation of the salinity control program. 
Acknowledgement by the administration that technical assistance and 
education activities must be better funded has encouraged the Basin 
States and local producers that cost-share with EQIP. I request that 
adequate funds be appropriated to NRCS technical assistance and 
education activities directed to the salinity control program 
participants.
    I urge the Congress to appropriate at least $1 billion in fiscal 
year 2012 for EQIP. Also, I request that 2.5 percent of the EQIP 
appropriation be designated for CRBSCP.
                                 ______
                                 
        Prepared Statement of Pickle Packers International, Inc.
    The pickled vegetable industry strongly supports and encourages 
your subcommittee in its work of maintaining and guiding the 
Agricultural Research Service. To accomplish the goal of improved 
health and quality of life for the American people, the health action 
agencies of this country continue to encourage increased consumption of 
fruits and vegetables in our diets. Accumulating evidence from the 
epidemiology and biochemistry of heart disease, cancer, diabetes, and 
obesity supports this policy. Vitamins (particularly A, C, and folic 
acid), minerals, and a variety of antioxidant phytochemicals in plant 
foods are thought to be the basis for correlation's between high fruit 
and vegetable consumption and reduced incidence of these debilitating 
and deadly diseases. The problem is that many Americans choose not to 
consume the variety and quantities of fruits and vegetables that are 
needed for better health.
    As an association representing processors that produce more than 85 
percent of the tonnage of pickled vegetables in North America, it is 
our goal to produce new products that increase the competitiveness of 
U.S. agriculture as well as meet the demands of an increasingly diverse 
U.S. population that is encouraged to eat more vegetables. The profit 
margins of growers continue to be narrowed by foreign competition. 
Likewise, the people of this country represent an ever-broadening array 
of expectations, tastes, and preferences derived from many cultural 
backgrounds. Everyone, however, faces the common dilemma that food 
costs should remain stable and preparation time continues to be 
squeezed by the other demands of life. This industry can grow by 
meeting these expectations and demands with reasonably priced products 
of good texture and flavor that are high in nutritional value, low in 
negative environmental impacts, and produced with assured safety from 
pathogenic microorganisms and from those who would use food as a 
vehicle for terror. With strong research to back us up, we believe our 
industry can make a greater contribution toward reducing product costs 
and improving human diets and health for all economic strata of U.S. 
society.
    Many small- to medium-sized growers and processing operations are 
involved in the pickled vegetable industry. We grow and process a group 
of vegetable crops, including cucumbers, peppers, carrots, onions, 
garlic, cauliflower, cabbage (sauerkraut), and Brussels sprouts, which 
are referred to as minor crops. None of these crops is in any commodity 
program and as such, do not rely upon taxpayer subsidies. However, 
current farm value for just cucumbers, onions, and garlic is $2.4 
billion with an estimated processed value of $5.8 billion. These crops 
represent important sources of income to farmers, and the processing 
operations are important employers in rural communities around the 
United States. Growers, processing plant employees, and employees of 
suppliers to this industry reside in all 50 States. To realize its 
potential in the rapidly changing American economy, this industry will 
rely upon a growing stream of appropriately directed basic and applied 
research from four important research programs within the Agricultural 
Research Service. These programs contribute directly to top research 
priorities that the Research, Education, and Economic mission area of 
the U.S. Department of Agriculture (USDA) has identified in that they 
develop vegetable crop germplasm and preservation technology that 
contributes to improved profitability with reduced pesticide inputs in 
a safer, higher quality product grown by rural farm communities across 
the United States, consequently improving food security and food 
safety. Improved germplasm, crop management practices, and processing 
technologies from these projects have measurably contributed to the 
profitability, improved nutritional value, and increased consumption of 
affordable vegetable crops for children and adults in America and 
around the world.
        vegetable crops research laboratory, madison, wisconsin
    The USDA/ARS Vegetable Crops Research Lab at the University of 
Wisconsin is the only USDA research unit dedicated to the genetic 
improvement of cucumbers, carrots, onions, and garlic. Three scientists 
in this unit account for approximately one-half of the total U.S. 
public breeding and genetics research on these crops. Their past 
efforts have yielded cucumber, carrot, and onion cultivars and breeding 
stocks that are widely used by the U.S. vegetable industry (i.e., 
growers, processors, and seed companies). These varieties account for 
more than one-half of the farm yield produced by these crops today. All 
U.S. seed companies rely upon this program for developing new 
varieties, because ARS programs seek to introduce economically 
important traits (e.g., virus and nematode resistance) not available in 
commercial varieties using long-term high risk research efforts. The 
U.S. vegetable seed industry develops new varieties of cucumbers, 
carrots, onions, and garlic and more than 20 other vegetables used by 
thousands of vegetable growers. The U.S. vegetable seed, grower, and 
processing industry, relies upon the USDA/ARS Vegetable Crops Research 
Lab for unique genetic stocks to improve varieties in the same way the 
U.S. healthcare and pharmaceutical industries depend on fundamental 
research from the National Institutes of Health. Their innovations meet 
long-term needs and bring innovations in these crops for the U.S. and 
export markets, for which the United States has successfully competed. 
Past accomplishments by this USDA group have been cornerstones for the 
U.S. vegetable industry that have resulted in increased profitability, 
and improved product nutrition and quality.
    Both consumers and the vegetable production and processing industry 
would like to see fewer pesticides applied to food and into the 
environment in a cost-effective manner. Scientists in this unit have 
developed genetic resistance for many major vegetable diseases that are 
perhaps the most important threat to sustained production of a 
marketable crop for all vegetables. Genetic resistance assures 
sustainable crop production for growers and reduces pesticide residues 
in our food and environment. Value of this genetic resistance developed 
by the vegetable crops unit is estimated at $670 million per year in 
increased crop production, not to mention environmental benefits due to 
reduction in pesticide use. New research in Madison has resulted in 
cucumbers with improved disease resistance, pickling quality, and 
suitability for machine harvesting. New sources of genetic resistance 
to viral and fungal diseases, environmental stress resistance like heat 
and cold, and higher yield have recently been mapped on cucumber 
chromosomes to provide a ready tool for our seed industry to 
significantly accelerate the development of resistant cultivars for 
U.S. growers. Nematodes in the soil deform carrot roots to reduce yield 
from 10 percent to more than 70 percent in major production areas. A 
new genetic resistance to nematode attack was found to almost 
completely protect the carrot crop from one major nematode. This group 
improved both consumer quality and processing quality of vegetables 
with a resulting increase in production efficiency and consumer appeal. 
Baby carrots were founded on germplasm developed in Madison, Wisconsin. 
Carrots provide approximately 30 percent of the U.S. dietary vitamin A. 
New carrots have been developed with tripled nutritional value, and 
nutrient-rich cucumbers have been developed with increased levels of 
provitamin A. Using new biotechnological methods, a system for rapidly 
and simply identifying seed production ability in onions has been 
developed that reduces the breeding process up to 6 years. A genetic 
map of onion flavor and nutrition will be used to develop onions that 
are more appealing and healthy for consumers.
    There are still serious vegetable production problems which need 
attention. For example, losses of cucumbers, onions, and carrots in the 
field due to attack by pathogens and pests remains high, nutritional 
quality needs to be significantly improved and U.S. production value 
and export markets could certainly be enhanced. Genetic improvement of 
all the attributes of these valuable crops are at hand through the 
unique USDA lines and populations (i.e., germplasm) that are available 
and the new biotechnological methodologies that are being developed by 
the group. The achievement of these goals will involve the utilization 
of a wide range of biological diversity available in the germplasm 
collections for these crops. Classical plant breeding methods combined 
with biotechnological tools such as DNA marker-assisted selection and 
genome maps of cucumber, carrot, and onion will be used to implement 
these genetic improvements. With this, new high-value vegetable 
products based upon genetic improvements developed by our USDA 
laboratories can offer vegetable processors and growers expanded 
economic opportunities for U.S. and export markets.
       u.s. food fermentation laboratory, raleigh, north carolina
    The USDA/ARS Food Fermentation Laboratory in Raleigh, North 
Carolina is the major public laboratory that this industry looks to for 
new scientific information on the safety of our products and 
development of new processing technologies related to fermented and 
acidified vegetables. Over the years, this laboratory has been a source 
for innovations which have helped this industry remain competitive in 
the current global trade environment. We expect the research done in 
this laboratory to lead to new processing and product ideas that will 
increase the economic value of this industry and provide consumers with 
safe, high-quality, and healthful vegetable products.
    We seek additional funding to support two new research initiatives 
for this laboratory that have substantial economic potential for our 
industry and health benefits for the American public. These are:
  --adaptation of a more efficient heating technology, such as 
        microwave processing, to replace the current tunnel 
        pasteurizers in order to reduce the energy and water use 
        required for heat processing acidified vegetables; and
  --development of techniques to deliver living probiotic 
        microorganisms to consumers in fermented or acidified vegetable 
        products.
    Nearly all pickled vegetables in the aisles of your super market 
are heated (pasteurized) so they are shelf stable at room temperature. 
Current steam and water bath pasteurizer technologies, which were 
developed in the 1940s and 1950s, have been very successful in that 
there has never been an outbreak of illness caused by commercially 
processed fermented or acidified vegetables. However, these current 
processing technologies are not efficient in the use of energy or water 
resources. Rising costs for energy and limits on water use require that 
major improvements be made in the way we heat process our products. 
There are three promising approaches that could benefit the broad range 
of products and sizes of companies that constitute the membership of 
Pickle Packers International. First, is to develop practical ways to 
preheat and pack vegetables to reduce or even eliminate the residence 
time required in current pasteurizers. Second, is to adapt newer 
thermal processing technologies, particularly microwave heating, to our 
products. Third, is to modify containers and product ingredients such 
that less heat and associated water use is required to assure killing 
of pathogenic bacteria and other spoilage microorganisms. Modifications 
of processes require strong scientific justification to assure 
ourselves, FDA, and the public that safety and quality will be 
maintained. In concert with any new processing technologies adequate 
process verification methods to assure process control and acceptance 
of our processes by FDA must be developed and validated. The objective 
is to have energy-efficient, low water use, and scientifically 
validated thermal processing technologies for commercial preservation 
of acidified vegetables.
    Most of what we hear about bacteria in foods concerns the pathogens 
that cause disease. However, lactic acid bacteria are intentionally 
grown in fermented foods because they are needed to give foods like 
sauerkraut, yoghurt, cheeses, and fermented salami the characteristic 
flavors and textures that we desire. There is a growing body of 
research to indicate that certain living lactic acid bacteria are 
``pro-biotic'' in that they improve human health by remaining in the 
intestinal tract after they are consumed. Fermented or acidified 
vegetables may be a good way to deliver such probiotic bacteria to 
consumers. The objective will be to identify probiotic lactic acid 
bacteria that can survive in high numbers in selected vegetable 
products and investigate the potential for using vegetables as 
healthful delivery vehicles for probiotic organisms.
       sugar beet and bean research unit, east lansing, michigan
    Quality inspection and assurance for pickling vegetables is needed 
at many points from the field through postharvest processing to final 
packaging and marketing. Accurate quality assessment methodologies and 
techniques are critical to growers and processors and ultimately 
consumers of pickling vegetables. While automated quality inspection 
systems are currently used in many pickle processing facilities, they 
are largely confined to inspecting product surface quality 
characteristics. There exists considerable room for improving current 
technologies and developing new and more efficient sensors and 
automated inspection methods, especially for internal quality 
assessment and grading of pickling vegetables and pickled products. 
Moreover, labor required for postharvest handling and processing 
operations represents a significant portion of the total production 
cost. Development of new and/or improved technologies can help growers 
and processors assess, inspect, and grade pickling vegetables and 
pickled products rapidly and accurately for internal and external 
quality characteristics so that they can be directed to, or removed 
from, appropriate processing or marketing avenues. This will minimize 
postharvest losses of food that has already been produced, ensure high-
quality, consistent final product and end-user satisfaction, and reduce 
production cost.
    The USDA/ARS Sugarbeet and Bean Research Unit at East Lansing, 
Michigan provides national leadership in research and development of 
innovative technologies and systems for assessing and assuring quality 
and marketability of tree fruits and pickling vegetables and enhancing 
production efficiency. Over the years, the Unit has developed a number 
of innovative engineering technologies for rapid, nondestructive 
measurement and inspection of postharvest quality of tree fruits and 
vegetables, including a novel spectral scattering technology for 
assessing the texture and flavor of fruits, a portable fruit firmness 
tester, and a spectral property measuring instrument for quality 
evaluation of fruits and vegetables. Recently, it also developed an 
advanced hyperspectral imaging system for automated detection of 
internal and external quality of pickling cucumbers and pickles. 
Research at East Lansing will continue to provide the pickling 
vegetable industry a vital source of innovative inspection and grading 
technology to assure high-quality safe products to the marketplace and 
achieve labor cost savings. Therefore, it is critical that additional 
resources be provided to support and expand the existing program to 
effectively address the technological needs for the pickling industry.
         u.s. vegetable laboratory, charleston, south carolina
    The research program at the USDA/ARS Vegetable Laboratory in 
Charleston, South Carolina, addresses national problems in vegetable 
crop production and protection with emphasis on the Southeastern United 
States. This research program is internationally recognized for its 
accomplishments, which have resulted in development of more than 150 
new vegetable varieties and lines along with the development of many 
new and improved disease and pest management practices.
    This laboratory's program currently addresses 14 vegetable crops 
including those in the cabbage, cucumber, and pepper families, which 
are of major importance to the pickling industry. The mission of the 
laboratory is to:
  --develop disease and pest-resistant vegetable crops; and
  --develop new, reliable, environmentally sound disease and pest 
        management programs that do not rely on conventional 
        pesticides.
    Continued expansion of the Charleston program is crucial. Vegetable 
growers depend heavily on synthetic pesticides to control diseases and 
pests. Cancellation and/or restrictions on the use of many effective 
pesticide compounds are having a considerable influence on the future 
of vegetable crop production. Without the use of certain pesticides, 
growers will experience crop failures unless other effective, 
nonpesticide control methods are found quickly. The research on 
improved, more efficient and environmentally compatible vegetable 
production practices and genetically resistant varieties at the U.S. 
Vegetable Laboratory continues to be absolutely essential. This gives 
U.S. growers the competitive edge they must have to sustain and keep 
this important industry and allow it to expand in the face of 
increasing foreign competition. Current cucumber varieties are highly 
susceptible to a new strain of the downy mildew pathogen; this new 
strain has caused considerable damage to commercial cucumber production 
in some South Atlantic and Midwestern States during the past 5 years, 
and a new plant pathologist position needs to be established to address 
this critical situation.
                      funding needs for the future
    It remains critical that funding continues the forward momentum in 
pickled vegetable research that the United States now enjoys and to 
increase funding levels as warranted by planned expansion of research 
projects to maintain U.S. competitiveness. We also understand that 
discretionary funds are now used to meet the rising fixed costs 
associated with each location. Additional funding is needed at the 
Wisconsin and South Carolina programs for genetic improvement of crops 
essential to the pickled vegetable industry, and at North Carolina and 
Michigan for development of environmentally sensitive technologies for 
improved safety and value to the consumer of our products. The 
fermented and acidified vegetable industry is receptive to capital 
investment in order to remain competitive, but only if that investment 
is economically justified. The research needed to justify such capital 
investment involves both short-term (6-24 months) and long-term (2-10 
years or longer) commitments. The diverse array of companies making up 
our industry assumes responsibility for short-term research, but the 
expense and risk are too great for individual companies to commit to 
the long-term research needed to insure future competitiveness. The 
pickled vegetable industry currently supports research efforts at 
Wisconsin and North Carolina and anticipates funding work at South 
Carolina and Michigan as scientists are put in place. Donations of 
supplies and processing equipment from processors and affiliated 
industries have continued for many years.
U.S. Vegetable Laboratory, Charleston, South Carolina
    New funds are needed to establish a plant pathology position to 
address cucumber diseases, especially the disease caused by a new 
strain of the downy mildew pathogen that has caused extensive damage to 
cucumber production in some South Atlantic and Midwestern States during 
the past 5 years. The plant pathologist is needed to characterize 
pathogen strains using molecular methodologies and to develop new 
management approaches and resistant cucumber lines. This new plant 
pathologist position will greatly contribute to the accomplishment of 
research that will provide for the effective protection of cucumbers 
from disease without the use of conventional pesticides. This position 
will require a funding level of $500,000 for its establishment.

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

Food Fermentation Laboratory, Raleigh, North Carolina
    The current funding for the laboratory is $1,264,000. To carry out 
the new research initiatives to reduce the energy and water use 
required to produce safe, high-quality products and to develop systems 
to deliver probiotic lactic acid bacteria in acidified and fermented 
vegetable products, we request additional support for the Food 
Fermentation Laboratory of $300,000 in fiscal year 2012. This will 
provide support for postdoctoral or predoctoral research associates 
along with necessary equipment and supplies to develop these new areas 
of research.

------------------------------------------------------------------------
          Scientific staff              Current status     Funds needed
------------------------------------------------------------------------
Microbiologist.....................  Active.............        $316,000
Chemist............................  Active.............         316,000
Food technologist/biochemist.......  Active.............         316,000
Microbial physiologist.............  Active.............         316,000
Fiscal year 2012 postdoctoral and    Needed.............         300,000
 predoctoral research associate.
                                                         ---------------
      Total funding required.......  ...................       1,564,000
                                                         ---------------
Presidential budget (fiscal year     ...................       1,264,000
 2012).
                                                         ---------------
      New funds needed.............  ...................         300,000
------------------------------------------------------------------------

Vegetable Crops Research Laboratory Unit, Madison, Wisconsin
    Current base funding for three scientists is $893,150, of which 
$200,000 was added in fiscal year 2002. Emerging diseases, such as 
downy mildew of cucumber, threaten production of the crop in all 
production areas. Therefore, we request an additional $531,850 to fully 
fund the scientists and support staff in fiscal year 2012, including 
graduate students and postdoctorates for new research searching for 
genetic resistance to emerging diseases.

------------------------------------------------------------------------
     Scientific staff in place          Current status     Funds needed
------------------------------------------------------------------------
Geneticist.........................  Active.............        $375,000
Geneticist.........................  Active.............         375,000
Geneticist.........................  Active.............         375,000
Fiscal year 2012 postdoctoral or     Needed.............         300,000
 predoctoral research associates.
                                                         ---------------
      Total funding required.......  ...................       1,425,000
                                                         ---------------
Presidential budget (fiscal year     ...................         893,150
 2012).
                                                         ---------------
      New funds needed.............  ...................         531,850
------------------------------------------------------------------------

Sugar Beet and Bean Research Unit, East Lansing, Michigan
    Current base funding for the location is $190,000, which is far 
short of the funding level needed to carry out research on inspection, 
sorting, and grading of pickling cucumbers and other vegetable crops to 
assure the processing and keeping quality of pickled products. An 
increase of $550,000 in the current base funding level would be needed 
to fund the research engineer position.

------------------------------------------------------------------------
     Scientific staff in place          Current status     Funds needed
------------------------------------------------------------------------
Postdoctoral research associate....  Active.............        $190,000
Research engineer..................  Needed.............         550,000
                                                         ---------------
      Total funding required.......  ...................         740,000
                                                         ---------------
Current funding....................  ...................         190,000
                                                         ---------------
      New funds needed.............  ...................         550,000
------------------------------------------------------------------------

    Thank you for your consideration and expression of support for the 
USDA/ARS.
                                 ______
                                 
     Prepared Statement of the Society for Women's Health Research
    The Society for Women's Health Research (SWHR) is pleased to submit 
written testimony to urge the subcommittee to increase the 
congressional appropriation to the Food and Drug Administration (FDA) 
by $382 million for fiscal year 2012. This allocation will allow the 
agency to provide necessary and critical improvements in 
infrastructure, address resource shortages, and support needed 
investment into the Office of Women's Health (OWH), the focal point on 
women's health within the agency.
    Insufficient investment in this important agency prevents the FDA 
from fully achieving its mission and threatens the health, economic, 
and national security of the Nation. While SWHR recognizes the need for 
responsible discretionary spending, proper and sustained funding of the 
FDA must remain a public priority. The administration's fiscal year 
2012 increase of $382 million to FDA reflects the agency's increased 
responsibilities and workload.
    Appropriate funding of the FDA by the Congress is vital for it to 
fulfill its mission. Americans rely on the FDA every day, from 
promoting wellness and meeting healthcare needs to ensuring the food 
supply and keeping drugs safe and effective. Altogether, 25 percent of 
every consumer $1 spent in America is spent on products regulated by 
the FDA.
    This level of investment will allow the FDA to foster a 21st 
century culture of proactive science and research leadership that will 
better meet the demands and expectations of the American public. Each 
year, more than 80 percent of FDA's budget is allocated toward the 
salary of its scientists and staff, making a substantial investment in 
infrastructure needs, technology, and human collateral all but 
impossible. Until the budgetary allocation from the Congress is enough 
to allow FDA to invest in staffing and infrastructure needs, the FDA 
will continue to act in a reactionary manner against the emerging or 
known threats to food and drug security.
                    fda and sex differences research
    In the past decades, scientists have uncovered significant 
biological and physiological differences between men and women. Sex 
differences have been found everywhere, from the composition of bone 
matter to the metabolism of certain drugs, to the rate of 
neurotransmitter synthesis in the brain. Sex-based biology, the study 
of biological and physiological differences between men and women, has 
revolutionized the way that the scientific community views the sexes. 
America's drug development process continues to advance in delivering 
new and better targeted medications to combat disease; however, 
medication effectiveness and safety could be better targeted to women 
and men if analysis of sex and gender differences would be done 
routinely during review processes at FDA.
    SWHR has long recognized that the inclusion of women in study 
populations by itself was insufficient to address the inequities in our 
knowledge of human biology and medicine, and that only by the careful 
study of sex differences at all levels, from genes to behavior, would 
science achieve the goal of optimal healthcare for both men and women. 
Many sex differences are already present at birth, whereas others 
develop later in life. These differences play an important role in 
disease susceptibility, prevalence, time of onset, and severity and 
have documented roles in cancer, obesity, heart disease, immune 
dysfunction, mental health disorders, and other illnesses. 
Physiological differences and hormonal fluctuations may also play a 
role in the rate of drug absorption, distribution, metabolism, 
elimination, as well as ultimate effectiveness of response in females 
as opposed to males. This vital research is supported and encouraged by 
the OWH at FDA, working directly with the various centers to advance 
the science in this area, collaborating on programs, projects, and 
research.
    Unfortunately, FDA's requirement that the data acquired during 
research of a new drug or device's safety and efficacy be reported and 
analyzed as a function of sex is not universally enforced.
    Information about the ways drugs may differ in various populations 
(e.g., women may require a lower dosage because of different rates of 
absorption or metabolism) are often unexplored, or female enrollment in 
studies is too low to adequately power statistically significant 
results. As a result, this information is not able to be transmitted to 
healthcare providers and the potential benefit of a more appropriate 
medical option is not available to the patient, man or woman.
    SWHR believes that the opportunity to translate this information to 
patients exists now. Sex differences data discovered from clinical 
trials can be presented to the medical community and to patients 
through education, drug labeling, and packaging inserts, and other 
forms of alerts directed to key audiences. SWHR encourages the FDA to 
continue addressing the need for accurate, sex-specific drug and device 
labeling to better serve male and female patients, as well as to ensure 
that appropriate data analysis of postmarket surveillance reporting for 
these differences is placed in the hands of physicians and ultimately 
the patient.
       fda must improve its information technology infrastructure
    The FDA is tasked with guarding the safety, efficacy, and security 
of human drugs, biological products, and medical devices, yet still 
does not have sufficient resources to establish and maintain the 
information technology needed to appropriately analyze the information 
that FDA receives. This lack of appropriate information technology (IT) 
systems inhibits the FDA from fulfilling its mission and prevents 
appropriate sex differences analysis from being conducted. A 2007 
Science Board Report, requested by former Commissioner von Eschenbach, 
found that FDA's IT systems were inefficient and incapable of handling 
the current demands placed on the agency.
    Tremendous advances have been made throughout the agency to 
modernize in the 4 years since that initial report; however, it still 
remains a challenge for the agency to access and maintain the 
information technology needed to meet the growing expectations from the 
American public and to fulfill its mission. As technology continues to 
advance, congressional investment in FDA must remain robust.
    FDA is expected by the Congress and the American public to have IT 
systems that can quickly and effectively do appropriate data analyses 
and reporting, safety analyses, tracking the natural history and 
disease models for rare disorders, analyses of subpopulations within 
the context of larger trials or comparative effectiveness research 
(CER), access large amounts of clinical data, capture emerging trends, 
and determine food and drug safety when a problem impacting the public 
breaks out.
FDA Must Create a Centralized Database
    The creation of a central database would provide a single 
repository for all relevant facts about a certain product, including 
where, when, and how the product was made. Such a database will be 
relevant for all information stored across agencies, so as to maximize 
functionality not only of FDA's data but for any other research and 
analysis needed by the American public for safety and surveillance. 
This database should allow for easier tracking of recruitment and 
retention rates of women and minorities in clinical trials, which will 
allow the FDA to monitor and collect data on how drugs, devices and 
biologics affect men and women differently, and allow for sex 
differences to be analyzed during the drug review process.
    FDA IT systems must encourage electronic submissions and be able to 
handle all applications in an electronic format. FDA must move away 
from a paper-based system into a standardized electronic format. This 
will aid in transforming agency reviews, CER, and further data analysis 
and reporting, such as sex differences.
                      fda office of women's health
    The FDA's OWH, like the agency that houses it, also needs steady 
and sustained investment to remain a key resource advocating for this 
important research. OWH at the FDA, established in 1994, plays a 
critical role in women's health, both within and agency and as an 
information source to the public.
    OWH's programs, often conducted with the agency centers, focus on 
women's health within the FDA and are critical to improving care and 
increased awareness of disease-specific impacts on women. OWH works to 
ensure that sex and gender differences in the efficacy of drugs (such 
as metabolism rates), devices (sizes and functionality) and diagnostics 
are taken into consideration in reviews and approvals, but they cannot 
fix the problem alone. Additionally, OWH endeavors to correct sex and 
gender disparities in the areas for which the FDA has jurisdiction and 
also monitors women's health priorities, providing both leadership and 
an integrated approach to problem solving across the FDA. OWH continues 
to provide women with invaluable tools for their health
    To address OWH's growing list of priorities, SWHR recommends that 
the Congress support an additional $1 million budget for OWH for fiscal 
year 2012 within the budget for the FDA. Each year, OWH exhausts its 
budget. OWH's pamphlets are the most requested of any documents at the 
Government Printing Office facility in Colorado. More than 5 million 
OWH pamphlets have been distributed to women across America, including 
target populations such as Hispanic communities, seniors, and low-
income citizens. Last year, the OWH funded more than 18 research 
studies on conditions ranging from sex and racial disparities in Swam-
Ganz balloon flotation pulmonary artery catheters to assessment of 
outcomes and bleeding complications following drug eluting stents and 
dual anti-platelet therapy.
    The value-added with congressional investment in FDA's OWH is 
clear. The office provides women with the high-quality and timely 
information that American women need to make medical decisions on 
behalf of them and their families. Further, OWH's Web site is a vital 
tool for consumers and is regularly updated to include new and 
important health information. The Web site provides free, downloadable 
fact sheets on more than 100 different illnesses, diseases, and health-
related issues for women. OWH has created medication charts on several 
chronic diseases, listing all the medications that are prescribed and 
available for each disease. This type of information is ideal for women 
to use in talking to their doctors, pharmacists, or nurses about their 
treatment options. Such resources need to be updated, evaluated, and 
disseminated to further impact improvements in women's health. OWH has 
collaborated with Pharmacy Choice, Inc. to create a Web portal solely 
dedicated to FDA consumer health education materials, providing access 
to fact sheets and medication guides. In keeping with current 
technology trends, OWH has used social media networks like Twitter to 
reach out to consumers.
         office of women's health and sex differences research
    OWH funds high-quality scientific research to serve as the 
foundation for FDA activities that improve women's health. Since 1994, 
OWH has funded approximately 195 research projects with approximately 
$15.7 million in intramural grants, supporting projects within the FDA 
that address knowledge gaps or set new directions for sex and gender 
research. All contracts and grants are awarded through a competitive 
process and a large number are published in peer reviewed journals. It 
is critical for the Congress to help preserve the vital functions of 
OWH and to ensure that its budget is dedicated to the resource needs of 
the office and to the projects, programs, and research it funds.
    In conclusion, Mr. Chairman, we thank this subcommittee for its 
strong record of support for the FDA and women's health. SWHR 
recommends for fiscal year 2012 that you appropriate the $382 million 
increase for the FDA provided in the administration's request so that 
the FDA may dramatically improve upon current operations and to improve 
its staffing and infrastructure needs. Second, we urge you to allocate 
$7 million for OWH for fiscal year 2012, and to ensure that future 
budget appropriations for the OWH never fall below fiscal year 2010 
funding levels of $6 million.
    We look forward to continuing to work with the subcommittee to 
build a stronger, healthier, and safer future for all Americans.
                                 ______
                                 
     Prepared Statement of The Humane Society of the United States
    As the largest animal protection organization in the country, we 
appreciate the opportunity to provide testimony to your subcommittee on 
fiscal year 2012 items of great importance to The Humane Society of the 
United States (HSUS) and its 11 million supporters nationwide. In this 
testimony, we request the following assistance for the following U.S. 
Department of Agriculture (USDA) accounts:
  --Food Safety and Inspection Service (FSIS)/Humane Methods of 
        Slaughter Act (HMSA) Enforcement.--Language directing FSIS to 
        ensure that 23 inspectors hired through $2 million appropriated 
        in fiscal year 2009 for improved humane handling focus their 
        attention on overseeing compliance with humane handling rules 
        for live animals as they arrive and are offloaded and handled 
        in pens, chutes, and stunning areas.
  --FSIS/Horse Slaughter.--Language mirroring fiscal year 2010 
        provision.
  --Animal and Plant Health Inspection Service (APHIS)/Horse Protection 
        Act Enforcement.--$900,000.
  --APHIS/Animal Welfare Act Enforcement.--$28,587,000.
  --APHIS/Investigative and Enforcement Services.--$17,275,000.
  --Office of Inspector General (OIG)/Including Animal Fighting 
        Enforcement.--$90,700,000.
  --National Institute of Food and Agriculture (Formerly Cooperative 
        State Research, Education, and Extension Service)/Veterinary 
        Student Loan Forgiveness.--$4,800,000.
  --APHIS/Emergency Management Systems/Disaster Planning for Animals.--
        $1,017,000.
  --APHIS/Wildlife Services.--Funding limitation on use of two 
        particularly toxic poisons.
  --National Agriculture Library/Animal Welfare Information Center.--
        $1,978,400.
    At this time of intense budget pressure, we thank you for your 
outstanding past support for enforcement of key animal welfare laws by 
the USDA and we urge you to sustain this effort in fiscal year 2012. 
While we understand the focus on reducing Federal spending, we believe 
there should be room for careful decisionmaking within the budget to 
achieve macro-level cuts and at the same time ensure adequate funding 
for specific accounts that are vital and have previously been 
underfunded.
    Your leadership is making a great difference in helping to protect 
the welfare of millions of animals across the country. As you know, 
better enforcement also benefits people by decreasing:
  --food safety risks to consumers from sick animals who can transmit 
        illness, and injuries to slaughterhouse workers from suffering 
        animals;
  --orchestrated dogfights and cockfights that often involve illegal 
        gambling, drug trafficking, and human violence, and can 
        contribute to the spread of costly illnesses such as bird flu;
  --sale of unhealthy pets by commercial breeders, commonly referred to 
        as ``puppy mills'';
  --laboratory conditions that may impair the scientific integrity of 
        animal-based research;
  --risks of disease transmission from, and dangerous encounters with, 
        wild animals in public exhibition; and
  --injuries and deaths of pets on commercial airline flights due to 
        mishandling and exposure to adverse environmental conditions.
    In order to continue the important work made possible by the 
subcommittee's prior support, we request the following for fiscal year 
2012.
  food safety and inspection service/humane methods of slaughter act 
                              enforcement
    We request language to ensure strengthened HMSA enforcement. We 
greatly appreciated the subcommittee's inclusion of $2 million in 
fiscal year 2009 to address severe shortfalls in USDA oversight of 
humane handling rules for animals at slaughter facilities, oversight 
that is important not only for animal welfare but also for food safety. 
Effective day-to-day enforcement can prevent abuses like those that 
have previously been documented in undercover investigations, and 
associated food safety risks and costly recalls of meat and egg 
products. While the agency has begun to take steps to strengthen its 
HMSA enforcement, it is imperative that these funds be used in the most 
effective way possible. We understand that nearly all of the $2 million 
was used to hire 23 new inspectors whose responsibilities are not 
focused on humane handling. We, therefore, urge inclusion of language 
directing FSIS to ensure that these 23 inspectors focus their attention 
on overseeing compliance with humane handling rules of live animals as 
they arrive and are offloaded and handled in pens, chutes, and stunning 
areas.
                            horse slaughter
    We request inclusion of the same language barring USDA from the 
expenditure of funds for horse slaughter inspection as the subcommittee 
included in the fiscal year 2010 omnibus. This provision is vital to 
prevent renewed horse slaughter activity in this country.
    animal and plant health inspection service/horse protection act 
                              enforcement
    We request that you support the President's request of $900,000 for 
strengthened enforcement of the Horse Protection Act (HPA). The 
Congress enacted the HPA in 1970 to make illegal the abusive practice 
of ``soring,'' in which unscrupulous trainers use a variety of methods 
to inflict pain on sensitive areas of Tennessee Walking Horses' hooves 
and legs to exaggerate their high-stepping gait and gain unfair 
competitive advantage at horse shows. For example, caustic chemicals--
such as mustard oil, diesel fuel, and kerosene--are painted on the 
lower front legs of a horse, then the legs are wrapped for days in 
plastic wrap and tight bandages to ``cook'' the chemicals deep into the 
horse's flesh, and then heavy chains are attached to slide up and down 
the horse's sore legs. Additional tactics include inserting foreign 
objects such as metal screws or acrylic between a heavy stacked shoe 
and the horse's hoof; pressure shoeing--cutting a horse's hoof down to 
the sensitive live tissue to cause extreme pain every time the horse 
bears weight on the hoof; and applying painful chemicals such as 
salicylic acid to slough off scarred tissue, in an attempt to disguise 
the sored areas. Though soring has been illegal for 40 years, this 
cruel practice continues unabated by the well-intentioned but seriously 
understaffed APHIS inspection program and the inherent conflicts of 
interest in the industry self-policing system established to supplement 
Federal enforcement. A report released in October 2010 by USDA's OIG 
documents these problems and calls for increased funding to enable the 
agency to more adequately oversee the law. Several horse show industry 
groups, animal protection groups, and the key organization of equine 
veterinarians have also called for funding increases to enable USDA to 
do a better job enforcing this law. To meet the goal of the HPA, Animal 
Care (AC) inspectors must be present at more shows. Exhibitors who sore 
their horses go to great lengths to avoid detection, even fleeing a 
show when USDA inspectors arrive. With current funding, AC is able to 
attend only about 6 percent of the more than 500 Tennessee Walking 
Horse shows held annually. An appropriation at the requested level will 
help provide for additional inspectors, training, security (to address 
threats of violence against inspectors), and advanced detection 
equipment (thermography and gas chromatography/mass spectrometry 
machines).
     animal and plant health inspection service/animal welfare act 
                              enforcement
    We request that you support the President's request of $28,587,000 
for Animal Welfare Act (AWA) enforcement under APHIS. We commend the 
subcommittee for responding in recent years to the urgent need for 
increased funding for the AC division to improve its inspections of 
approximately 12,000 sites, including commercial breeding facilities, 
laboratories, zoos, circuses, and airlines, to ensure compliance with 
AWA standards. In May 2010, USDA's OIG released a report criticizing 
the agency's history of lax oversight of dog dealers--finding that 
inhumane treatment and horrible conditions often failed to be properly 
documented and yielded little to no enforcement actions--prompting 
Agriculture Secretary Vilsack to call for more inspections and a 
tougher stance on repeat offenders. USDA is also moving forward on 
regulations to implement a new responsibility created by the Congress 
in 2008--enforcing a ban on imports from foreign puppy mills where 
puppies are mass produced under inhumane conditions and forced to 
endure harsh long-distance transport. AC currently has 130 inspectors 
(with nine vacancies), compared to 64 inspectors at the end of the 
1990s. An appropriation at the requested level would allow the agency 
to continue to address the concerns identified by the OIG, enforce the 
new puppy import ban, and provide adequate oversight of the many 
licensed/registered facilities.
     animal and plant health inspection service/investigative and 
                          enforcement services
    We request that you support the President's request of $17,275,000 
for APHIS-Investigative and Enforcement Services. We appreciate the 
subcommittee's consistent support for this division, which handles many 
important responsibilities, including the investigation of alleged 
violations of Federal animal welfare laws and the initiation of 
appropriate enforcement actions. The volume of animal welfare cases is 
rising significantly, and an appropriation at the requested level would 
enable the agency to keep pace with the additional enforcement 
workload.
        office of inspector general/animal fighting enforcement
    We request that you support the President's request of $90,700,000 
for OIG to maintain staff, improve effectiveness, and allow 
investigations in various areas, including enforcement of animal 
fighting laws. We appreciate the subcommittee's inclusion of funding 
and language in recent years for USDA's OIG to focus on animal fighting 
cases. The Congress first prohibited most interstate and foreign 
commerce of animals for fighting in 1976, tightened loopholes in the 
law in 2002, established felony penalties in 2007, and further 
strengthened the law as part of the 2008 farm bill. We are pleased that 
USDA is taking seriously its responsibility to enforce this law, 
working with State and local agencies to complement their efforts and 
address these barbaric practices, in which animals are drugged to 
heighten their aggression and forced to keep fighting even after 
they've suffered grievous injuries. Dogs bred and trained to fight 
endanger public safety, and some dogfighters steal pets to use as bait 
for training their dogs. Cockfighting was linked to an outbreak of 
exotic Newcastle disease in 2002-2003 that cost taxpayers more than 
$200 million to contain. It's also been linked to the death of a number 
of people in Asia reportedly exposed through cockfighting activity to 
bird flu. Given the potential for further costly disease transmission, 
as well as the animal cruelty involved, we believe it is a sound 
investment for the Federal Government to increase its efforts to combat 
illegal animal fighting activity. We also support the OIG's auditing 
and investigative work to improve compliance with AWA, HPA, HMSA, and 
downed animal rules.
  national institute of food and agriculture/veterinary student loan 
                              forgiveness
    We request that you support the President's request of $4.8 million 
to continue the implementation of the National Veterinary Medical 
Service Act (Public Law 108-161). This program received $2.95 million 
in fiscal year 2009, $4.8 million in fiscal year 2010, and was 
projected to need $5 million in its third year under the Congressional 
Budget Office score accompanying authorization. We appreciate that the 
Congress is working to address the critical shortage of veterinarians 
practicing in rural and inner-city areas, as well as in Government 
positions at FSIS and APHIS. A 2009 Government Accountability Office 
report enumerating the challenges facing veterinary medicine identified 
that an inadequate number of veterinarians to meet national needs is 
among the foremost challenges. A 2006 study demonstrated the acute and 
worsening shortage of veterinarians working in rural farm animal 
practice, while domestic pets in both rural and urban areas are often 
left without necessary medical care. Having adequate veterinary care is 
a core animal welfare concern. To ensure adequate oversight of humane 
handling and food safety rules, FSIS must be able to fill vacancies in 
inspector positions. Veterinarians also support our Nation's defense 
against bioterrorism (the Centers for Disease Control estimate that 75 
percent of potential bioterrorism agents are zoonotic--transmitted from 
animals to human). They are also on the front lines addressing public 
health problems such as those associated with pet overpopulation, 
parasites, rabies, chronic wasting disease, and bovine spongiform 
encephalopathy (``mad cow'' disease). Veterinary school graduates face 
a crushing debt burden of $134,000 on average, with an average starting 
salary of $68,000. For those who choose employment in underserved rural 
or inner-city areas or public health practice, the National Veterinary 
Medical Service Act authorizes the Secretary of Agriculture to forgive 
student debt. It also authorizes financial assistance for those who 
provide services during Federal emergency situations such as disease 
outbreaks.
    animal and plant health inspection service/emergency management 
                 systems/disaster planning for animals
    We request that you support the President's request of $1,017,000 
for AC under APHIS' Emergency Management Systems line item. Hurricanes 
Katrina and Rita demonstrated that many people refuse to evacuate if 
they are forced to leave their pets behind. The AC division develops 
infrastructure to help prepare for and respond to animal issues in a 
disaster and incorporate lessons learned from previous disasters. These 
funds are used for staff time and resources to support State and local 
governments' and humane organizations' efforts to plan for protection 
of people with animals, and to enable the agency to participate, in 
partnership with the Federal Emergency Management Agency, in the 
National Response Plan without jeopardizing other AC programs.
      animal and plant health inspection service/wildlife services
    We also hope the subcommittee will consider a funding limitation on 
two particularly cruel, indiscriminate wildlife control methods used by 
the Wildlife Services (WS) division to kill more than 13,000 animals 
every year: the toxicants sodium cyanide (delivered via small explosive 
devices known as M-44s) and sodium fluoroacetate (commonly known as 
compound 1080). Not only are these two substances undeniably cruel to 
animals, they also pose an unnecessary threat to human health and 
public safety. The Federal Bureau of Investigation (FBI) has declared 
that both compound 1080 and sodium cyanide are ``highly toxic 
pesticides judged most likely to be used by terrorists or for malicious 
intent.'' The FBI and the Canadian Security Intelligence Service have 
listed compound 1080 as a substance that may be sought for use as a 
possible chemical warfare agent in public water supplies. As early as 
1999, the Air Force identified compound 1080 as a likely biological 
agent. A funding limitation on the use of these particular methods 
would not only reduce the number of animals killed every year and the 
amount of suffering animals endure as a result of the continued use of 
these inhumane methods by WS, it would help protect homeland security 
and move WS toward nonlethal wildlife control methods that are safer, 
more effective, less expensive, and more humane. With the most 
indefensible methods eliminated, WS can focus on its other, more 
beneficial programs.
                   animal welfare information center
    We request $1,978,400 for the Animal Welfare Information Center 
(AWIC). These funds will enable AWIC to improve its services as a 
clearinghouse, training center, and educational resource to help 
institutions using animals in research, testing, and teaching comply 
with the requirements of AWA, including consideration of alternatives 
to minimize or eliminate animal use in specific research protocols.
                                closing
    Again, we appreciate the opportunity to share our views and 
priorities for the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriation Act of fiscal year 
2012. We are so grateful for the subcommittee's past support, and hope 
you will be able to accommodate these modest requests to address some 
very pressing problems affecting millions of animals in the United 
States. Thank you for your consideration.
                                 ______
                                 
 Prepared Statement of The Humane Society of the United States--Equine 
                               Protection
    On behalf of the undersigned animal welfare and horse industry 
organizations (HIOs), with combined supporters exceeding 12 million, 
and former Senator Joseph Tydings, we submit the following testimony 
seeking an increase in funding for the U.S. Department of Agriculture 
(USDA)/Animal and Plant Health Inspection Service (APHIS) Horse 
Protection Program to $900,000, as requested in the President's budget 
for fiscal year 2012. We recognize that the Congress is focused on the 
imperative of cutting Federal spending. But we believe that it should 
be possible to achieve meaningful reductions in the overall budget 
while still addressing shortfalls in very specific accounts that are 
vital and have been seriously underfunded. This $900,000 is urgently 
needed to begin to fulfill the intent of the Horse Protection Act 
(HPA)--to eliminate the cruel practice of soring--by allowing the USDA 
to strengthen its enforcement capabilities for this law.
    In 1970, the Congress passed HPA to end soring, the intentional 
infliction of pain to the hooves and legs of a horse to produce an 
exaggerated gait, practiced primarily in the Tennessee Walking Horse 
show industry.
    For example, caustic chemicals--such as mustard oil, diesel fuel, 
and kerosene--are painted on the lower front legs of a horse, then the 
legs are wrapped for days in plastic wrap and bandages to ``cook'' the 
chemicals deep into the horse's flesh. This makes the horse's legs 
extremely painful and sensitive, and when ridden, the horse is fitted 
with chains that slide up and down the horse's sore legs, forcing him 
to produce an exaggerated, high-stepping gait in the show ring. 
Additional tactics include inserting foreign objects such as metal 
screws or hard acrylic between a heavy stacked shoe and the horse's 
hoof; pressure shoeing--cutting a horse's hoof down to the sensitive 
live tissue to cause extreme pain every time the horse bears weight on 
the hoof; and applying painful chemicals such as salicylic acid to 
slough off scarred tissue, in an attempt to remove evidence of soring.
    HPA authorizes the USDA to inspect Tennessee Walking Horses and 
Racking Horses--in transport to and at shows, exhibits, auctions, and 
sales--for signs of soring, and to pursue penalties against violators. 
Unfortunately, since its inception, enforcement of the act has been 
plagued by underfunding. As a result, the USDA has never been able to 
adequately enforce the act, allowing this extreme and deliberate 
cruelty to persist on a widespread basis.
    The most effective way to eliminate soring and meet the goals of 
the act is for USDA officials to be present at more shows. However, 
limited funds allow USDA attendance at only about 6 percent of 
Tennessee Walking Horse shows. So the agency set up an industry-run 
system of certified HIO inspection programs, which are charged with 
inspecting horses for signs of soring at the majority of shows. These 
groups license examiners known as designated qualified persons (DQPs) 
to conduct inspections. To perform this function, some of these 
organizations hire industry insiders who have an obvious stake in 
preserving the status quo. Statistics clearly show that when USDA 
inspectors are in attendance to oversee shows affiliated with these 
organizations, the numbers of noted violations are many times higher 
than at shows where industry inspectors alone are conducting the 
inspections. By all measures, the overall DQP program as a whole has 
been a failure--the only remedy is to abolish the conflicted industry-
run inspection programs charged with self-regulation and give USDA the 
resources it needs to adequately enforce the act.
    USDA appears to have attempted to step up its enforcement efforts 
in recent years, as evidenced in 2009 by a more than twofold increase 
over the previous year in the number of violations cited at the 
industry's largest show (the Tennessee Walking Horse National 
Celebration). However, horses identified at shows as having been sored 
also continue to be shown in subsequent events, and their owners 
continue to win lucrative prizes. USDA needs enhanced resources to 
carry out its responsibilities as the Congress, and the public, 
expects.
    Lack of a consistent presence by USDA officials at events featuring 
Tennessee Walking Horses, Racking Horses, Spotted Saddle Horses, and 
other related breeds has fostered a cavalier attitude among industry 
insiders, who have not stopped their abuse, but have only become more 
clandestine in their soring methods. The continued use of soring to 
gain an advantage in the show ring has tainted the gaited horse 
industry as a whole, and creates an unfair advantage for those who are 
willing to break the law in pursuit of victory. Besides the 
indefensible suffering of the animals themselves, the continued 
acceptance of sored horses in the show ring prevents those with sound 
horses from competing fairly for prizes, breeding fees, and other 
financial incentives, while those horse owners whose horses are sored 
may unwittingly suffer property damage and be duped into believing that 
their now abused, damaged horses are naturally superior.
    Currently, when USDA inspectors arrive at shows affiliated with 
some industry organizations, many of the exhibitors load up and leave 
to avoid being caught with sored horses. While USDA could stop these 
trailers on the way out, agency officials have stated that inspectors 
are wary of going outside of their designated inspection area, for fear 
of harassment and physical violence from exhibitors. Recently, armed 
security has been utilized to allow such inspections, at additional 
expense to this program. The fact that exhibitors feel they can 
intimidate Government officials without penalty is a testament to the 
inherent shortcomings of the current system.
    In years past, inspections were limited to physical observation and 
palpation by the inspector. New technologies, such as thermography and 
``sniffer'' devices (gas chromatography/mass spectrometry machines), 
have been developed, which can help inspectors identify soring more 
effectively and objectively. However, USDA has been unable to purchase 
and put enough of this equipment in use in the field, allowing for 
industry insiders to continually evade detection. With increased 
funding, the USDA could purchase this equipment and hire and train more 
inspectors to use it properly, greatly increasing its ability to 
enforce HPA.
    The egregious cruelty of soring is not only a concern for animal 
protection and HIOs, but also for veterinarians. In 2008, the American 
Association of Equine Practitioners (AAEP) issued a white paper 
condemning soring, calling it ``one of the most significant welfare 
issues faced by the equine industry.'' It called for the abolition of 
the DQP Program, saying ``the acknowledged conflicts of interest which 
involve many of them cannot be reasonably resolved, and these 
individuals should be excluded from the regulatory process.'' The AAEP 
further stated, ``The failure of the HPA to eliminate the practice of 
soring can be traced to the woefully inadequate annual budget of 
$500,000 allocated to the USDA to enforce these rules and 
regulations.''
    The USDA Office of Inspector General recently conducted an audit of 
the Horse Protection Program, and issued its final report in September 
of 2010. The report recommends the abolition of the DQP program, and an 
increase in funding for APHIS enforcement of HPA. The agency concurred 
with the findings and recommendations in the report, specifically 
recommendation 2: ``Seeking the necessary funding from Congress to 
adequately oversee the Horse Protection Program'', indicating that it 
requested a $400,000 increase in funding for fiscal year 2011 and that 
it will develop a budgeting and staffing plan to phase in the resources 
needed to adequately oversee the Horse Protection Program.
    It is unacceptable that nearly 40 years after passage of HPA, the 
USDA still lacks the resources needed to end this extreme form of 
abuse. It is time for the Congress to give our public servants charged 
with enforcing this act the support and resources they want and need to 
fulfill their duty to protect these horses as effectively and safely as 
possible.
    We appreciate the opportunity to share our views about this serious 
problem, and thank you for your consideration of our request.
            Sincerely,
Keith Dane, Director of Equine Protection, The Humane Society of the 
United States.
Former U.S. Senator Joseph Tydings, Original Sponsor of the Horse 
Protection Act.
Lori Northrup, President, Friends of Sound Horses, Inc.
Chris Heyde, Deputy Director, Government and Legal Affairs, Animal 
Welfare Institute.
Betsy Dribben, Vice President for Government Relations, American 
Society for the Prevention of Cruelty to Animals (ASPCA).
Robin Lohnes, Executive Director, American Horse Protection 
Association.
Shelley Sawhook, President, American Horse Defense Fund.
Louise Semancik, Plantation Walking Horses of Maryland.
Karen Brown, Director of Programs, United Animal Nations.
Karen Ayres, President, National Plantation Walking Horse Association.
Susan Crotty, President, Plantation Walking Horse Association of 
California.
Joyce Guillemot, President, United Pleasure Walking Horse Association.
Gina Vehige, Gaitway Walking Horse Association.
Steve Bucher, President, Mid Atlantic Tennessee Walking Horse 
Association.
Bonnie Yeager, President, International Pleasure Walking Horse 
Registry.
Sharon Halpin, Sound Horse Outreach (SHO).
Penny Austin, President, One Horse At a Time, Inc. Horse Rescue.
Fran Cole, President, Northern California Walking Horse Association.
Bob Kuykendall, Tennessee Walking Horse Association of Oklahoma.
Cris Van Horn, President, Pure Pleasure Gaited Horse Association.
Rick Brighton, President, Northwest Gaited Horse Club.
Walter Farnholtz, President, New York State Plantation Walking Horse 
Club.
Michele McGuire, Northwest Pleasure Tennessee Walking Horse 
Association.
                                 ______
                                 
               Prepared Statement of The Wildlife Society
    The Wildlife Society (TWS) appreciates the opportunity to submit 
testimony concerning fiscal year 2012 budgets for the Animal and Plant 
Health Inspection Service (APHIS), National Institute of Food and 
Agriculture (NIFA), and Natural Resources Conservation Service (NRCS). 
TWS represents more than 10,000 professional wildlife biologists and 
managers dedicated to sound wildlife stewardship through science and 
education. TWS is committed to strengthening all Federal programs that 
benefit wildlife and their habitats on agricultural and other private 
land.
               animal and plant health inspection service
    Wildlife Services, a unit of APHIS, is responsible for controlling 
wildlife damage to agriculture, aquaculture, forest, range, and other 
natural resources, monitoring wildlife-borne diseases, and managing 
wildlife at airports. Its activities are based on the principles of 
wildlife management and integrated damage management, and are carried 
out cooperatively with State fish and wildlife agencies. The 
administration's request this year is a $10.36 million decrease from 
fiscal year 2010. Such a significant decrease substantially reduces 
funding for State and Federal cooperative wildlife damage programs 
across the country; just a few of the programs affected would be Hawaii 
Wildlife Operations, Mississippi Beaver Management, Montana, Idaho, and 
Wyoming Predator Management, and Pennsylvania Cooperative Livestock 
Protection. Funding cuts for these programs will result not only in 
significant ecological damage, but threaten local economies as well. 
TWS recommends the Congress increase the appropriation for Wildlife 
Services operations to $77.78 million. This amount would continue to 
provide support for ongoing programs funded through the direct 
appropriations process, as well as fund necessary safety improvements 
and cover the programmed pay costs for operations.
    Another key budget line in Wildlife Service's operations is methods 
development, which funds the National Wildlife Research Center (NWRC). 
Much of the newest research critical to State wildlife agencies is 
being performed at NWRC. In order for State wildlife management 
programs to be the most up-to-date, the work of the NWRC must continue. 
The President's request is currently a $10.36 million decrease from 
fiscal year 2010 enacted levels. Ultimately, this decrease in funding 
will eliminate or severely impact programs conducting research on 
human-wildlife conflict (Jack Berryman Institute), invasive species and 
seed crops (Hilo Hawaii Field Station), and wildlife disease 
(Kingsville Texas Field Station). Such a loss could be devastating, as 
human and wildlife issues are becoming increasingly intertwined. TWS 
requests that the Congress restore $3.9 million to the methods 
development line, including $1,243,892 to the methods development base; 
$904,428 for the Hilo, Hawaii Field Station; $290,000 for the NWRC 
Kingsville, Texas Field Station; and $1.5 million for the Logan, Utah 
Berryman Institute.
    Finally, TWS recommends providing $22.6 million to veterinary 
services for addressing the import and export of invasive species. The 
potential import of exotic disease and parasite vectors into the United 
States is a grave threat to human, wildlife, and habitat health, and 
has been shown to cause incalculable economic damage. To mitigate this 
impact, it is essential that APHIS-Veterinary Services have the 
capacity to conduct inspections at all U.S. ports. The historic method 
of relying on import or user fees has proven to be inadequate at 
preventing importation of previously unknown parasites and diseases. 
Also, with the continuing spread of wildlife diseases worldwide, 
growing number of exotic species importations, and increasing ports of 
entry, the resources available to conduct inspections are stretched 
even further.
               national institute of food and agriculture
    The Renewable Resources Extension Act (RREA) provides an expanded, 
comprehensive extension program for forest and rangeland renewable 
resources. RREA funds, which are apportioned to State Extension 
Services, effectively leverage cooperative partnerships at an average 
of 4 to 1, with a focus on private landowners. The need for RREA 
educational programs is greater than ever because of continuing 
fragmentation of ownership, urbanization, diversity of landowners 
needing assistance, and increasing societal concerns about land use and 
increasing human impacts on natural resources TWS recommends that RREA 
be funded at $10 million.
    The McIntire-Stennis Cooperative Forestry Program is essential to 
the future of resource management on nonindustrial private forestlands 
while conserving natural resources, including fish and wildlife. As 
nationwide demand for forest products grow, privately held forests will 
be increasingly needed to supplement supplies obtained from national 
forest lands. However, commercial trees take many decades to produce. 
In the absence of long research, such as that provided through 
McIntire-Stennis, the Nation might not be able to meet future forest-
product needs as resources are harvested. We appreciate the more than 
$29 million in funding allocated in the fiscal year 2010 appropriations 
and urge that amount to be continued in fiscal year 2012.
                 natural resources conservation service
    Food, Conservation, and Energy Act of 2008 (2008 farm bill) 
conservation programs are more important than ever, given the huge 
backlog of qualified applicants, increased pressure on farmland from 
biofuels development, urban sprawl, and the concurrent declines in 
wildlife habitat and water quality. NRCS, which administers many farm 
bill conservation programs, is one of the primary Federal agencies 
ensuring our public and private lands are made resilient to climate 
change. NRCS does this through a variety of programs that are aimed at 
conserving land, protecting water resources, and mitigating effects of 
climate change.
    One key program within the overall NRCS discretionary budget is 
conservation operations. The total fiscal year 2012 request for 
conservation operations is $899 million, an 11-percent decrease 
compared to the fiscal year 2011 estimated level of $1.010 million. 
Conservation operations' activities consists of five subactivities:
  --technical assistance (TA);
  --grazing lands;
  --soil surveys;
  --snow surveys; and
  --plant materials.
    TA subactivity provides funding for NRCS to support implementation 
of the various farm bill programs. The fiscal year 2012 budget 
recommends an increase of $10 million (1 percent) more than the fiscal 
year 2011 estimated level for TA, and TWS supports this increase. We 
also support the $11.3 million increase for NRCS' Conservation Delivery 
Streamlining Initiative that promises to increase staff efficiencies 
and allow more time for actual in-the-field conservation planning.
    However, TWS believes more attention to TA delivery is needed. 
Changes in the 2008 farm bill greatly increased the number of 
conservation programs NRCS was required to support through delivery of 
TA. In addition, the Congress expanded TA eligible activities in the 
2008 farm bill to include conservation planning, education and 
outreach, assistance with design and implementation of conservation 
practices, and related TA services that accelerate conservation program 
delivery. TA will require funding levels from Office of Management and 
Budget (OMB) that are more than what was historically allocated if NRCS 
is to fulfill congressional intent as intended in the 2008 farm bill. 
Recently, the Congress allowed the use of mandatory funds for TA and, 
under current economic conditions; TWS believes that such funds must 
continue to be utilized for effective delivery to occur. TWS urges the 
Congress to authorize up to 30 percent of each mandatory program's 
funding for technical service provider provisions as mandated by the 
2008 farm bill and additional technical assistance to provide resources 
necessary to help meet NRCS TA shortfalls. Similarly, we strongly 
encourage the Congress to explore new ways of funding technical 
assistance in fiscal year 2012 and beyond. TWS also supports the $7 
million requested for the Conservation Effects Assessment Project. 
Information gathered from this effort will greatly assist in monitoring 
accomplishments and identifying ways to further enhance effectiveness 
of NRCS programs.
    TWS recommends farm bill conservation programs be funded at levels 
mandated in the 2008 farm bill. The administration's current budget 
request will result in collective program reductions for the Wildlife 
Habitat Incentive Program (WHIP), the Environmental Quality Incentives 
Program (EQIP), and the Grassland Reserve Program (GRP) of $22 million 
less than authorized levels. TWS encourages the Congress to restore 
funding for all conservation programs at authorized levels. Demand for 
these programs continues to grow during this difficult economic climate 
at a time when greater assistance is needed to address natural resource 
challenges and conservation goals, including climate change, soil 
quality deficiencies, declining pollinator health, disease, and 
invasive species, water quality and quantity issues, and degraded, 
fragmented and lost habitat for fish and wildlife. We would also like 
to specifically highlight WHIP, a voluntary program for landowners who 
want to improve wildlife habitat on agricultural, nonindustrial, and 
Indian land. WHIP plays an important role in protecting and restoring 
America's environment, and is doubly important because it actively 
engages public participation in conservation. We urge the Congress to 
fully fund WHIP at $85 million.
                      farm services administration
    The administration increased funding for the Conservation Reserve 
Program (CRP) by $145 million versus fiscal year 2011 requested. 
However, this increase assumes a CRP enrollment of 4 million acres in 
spring of fiscal year 2011. TWS applauds Farm Services Administration 
(FSA) efforts to have a 4-million-acre general sign-up in 2011, and to 
more fully utilize CRP enrollment authority to address conservation 
needs. Lands enrolled in CRP are important to conserve soil on some of 
the Nation's most erodible cropland. These lands also contribute to 
water quantity and quality, provide habitat for wildlife that reside on 
agricultural landscapes, sequester carbon, and provide a strategic 
forage reserve that can be tapped as a periodic compatible use in times 
when other livestock forage is limited due to drought or other natural 
disasters. It will be important for FSA to hold another general sign-up 
in 2012 due to expiration of 6.6 million acres of CRP contracts on 
September 30, 2012. A sign-up in advance of the date of expiration 
would provide CRP contract holders the opportunity to compete for re-
enrollment and allow time for them to make management decisions 
regarding their land. We strongly encourage the Congress to fund CRP at 
a level that fully utilizes program enrollment authority through CRP 
general sign-up. CRP initiatives including the Upland Bird Habitat 
Initiative (CP33), Duck Nesting Habitat Restoration (CP37), the 
Longleaf Pine Initiative (CP36), State Acres for Wildlife Enhancement 
(SAFE), and Western States Shrub-steppe Conservation Initiative require 
special incentives for enrollment. We are pleased with and support the 
general sign-up and target enrollment of 4 million acres FSA included 
in the fiscal year 2011 budget. CRP provides farmers with supplemental 
income and helps them manage their farming operations. Enrolled lands 
also provide an important source of fish and wildlife habitat and help 
achieve soil and water conservation goals.
    The Voluntary Public Access and Habitat Incentives Program was 
first authorized in the 2008 farm bill. With an authorization of $50 
million from fiscal year 2008-2012, the administration proposed funding 
of the program for the first time at $16.67 million in fiscal year 
2010. While this level of funding was enacted, none of the funds were 
spent that year due to implementation delays. TWS commends the 
administration for continuing to fund this program in fiscal year 2011 
at the planned $33 million level. These funds will assist State and 
tribal governments with needed resources to provide the public with 
additional outdoor opportunities. In addition, increased public access 
opportunities will help create jobs and stimulate rural economies. 
Continuity of program funding is critical to these programs that rely 
on landowner interest across multiple years. It is important that the 
remaining $17 million in authorized program funding be provided in 
fiscal year 2012 as the administration has requested.
    Thank you for considering the views of wildlife professionals. We 
look forward to working with you and your staff to ensure adequate 
funding for wildlife conservation.
                                 ______
                                 
                  Letter From the USA Rice Federation
                                                    March 31, 2011.
Hon. Herb Kohl, 
Chairman, Subcommittee on Agriculture, Rural Development, Food and Drug 
        Administration, and Related Agencies, Committee on 
        Appropriations, U.S. Senate, Washington, DC.
Hon. Roy Blunt, 
Ranking Member, Subcommittee on Agriculture, Rural Development, Food 
        and Drug Administration, and Related Agencies, Committee on 
        Appropriations, U.S. Senate, Washington, DC.

Re: USA Rice Federation's Fiscal Year 2012 Agriculture Appropriations 
        Requests
    Dear Chairman Kohl and Senator Blunt: This is to convey the rice 
industry's requests for fiscal year 2012 funding for selected programs 
under the jurisdiction of your subcommittee. The USA Rice Federation 
appreciates your assistance in making this letter a part of the hearing 
record.
    The USA Rice Federation is the global advocate for all segments of 
the U.S. rice industry with a mission to promote and protect the 
interests of producers, millers, merchants, and allied businesses. USA 
Rice members are active in all major rice-producing States: Arkansas, 
California, Florida, Louisiana, Mississippi, Missouri, and Texas. The 
USA Rice Producers' Group, the USA Rice Council, the USA Rice Millers' 
Association, and the USA Rice Merchants' Association are members of the 
USA Rice Federation. U.S. rice production supported 128,000 jobs and 
more than $34 billion of economic output nationally in 2009.
    USA Rice understands the budget constraints the subcommittee faces 
when developing the fiscal year 2012 appropriations bill. We appreciate 
your past support for initiatives that are critical to the rice 
industry and look forward to working with you to meet the continued 
needs of research, food aid, and market development in the future.
    A healthy U.S. rice industry is also dependent on the program 
benefits offered by the farm bill. Therefore, we oppose any attempts to 
modify the farm-safety-net support levels provided by this vital 
legislation through more restrictive payment limitations or other means 
and encourage the subcommittee and Committee to resist such efforts 
during the appropriations process, especially given that the 2008 farm 
bill will be debated and reauthorized next year, is paid for, and 
represents a 5-year contract with America's producers. USA Rice 
strongly opposes reducing the farm-safety net to appropriate funds for 
other Federal programs.
    A list of the programs the USA Rice Federation supports for 
appropriations in fiscal year 2012 are as follows.
                             market access
    Exports are critical to the U.S. rice industry. About 50 percent of 
the U.S. crop is exported annually in a highly competitive world-rice 
market. Those directly involved in U.S. rice exports contributed $6 
billion in output and supported more than 14,000 jobs. The Market 
Access Program (MAP) and Foreign Market Development (FMD) Program play 
key roles in helping to promote U.S. rice sales overseas. USA Rice 
Federation industry members spend more than $3 in matching funds for 
each $1 of Foreign Agricultural Service (FAS) funds received. The USA 
Rice Federation uses MAP and FMD funding in more than 25 markets to 
conduct successful export-market-development initiatives.
    The FMD Program allows USA Rice to focus on importer, foodservice, 
and other nonretail promotion activities around the world. This program 
should be fully funded for fiscal year 2012 at the authorized level of 
$34.5 million.
    The MAP allows USA Rice to concentrate on consumer promotion and 
other activities for market expansion around the world. This program 
should also be fully funded for fiscal year 2012 at the authorized 
level of $200 million.
    In addition, the FAS should be funded to the fullest degree 
possible to ensure adequate support for trade-policy initiatives and 
oversight of export programs. These programs are critical for the 
economic health of the U.S. rice industry.
                                food aid
    We urge the subcommittee to fund Public Law 480 title I. No title I 
funding has been provided since fiscal year 2006. At a minimum, fiscal 
year 2012 funding should be the same as 2006. Public Law 480 title I is 
our top food-aid priority and we support continued funding in order to 
meet international demand. Food-aid sales historically account for an 
important portion of U.S. rice exports.
    For Public Law 480 title II, we strongly support funding title II 
up front at the fully authorized $2.5 billion level, which would help 
to make possible satisfying the 2.5 million MT amount required by 
statute. We encourage the subcommittee to fund title II at the higher 
level to ensure consistent tonnage amounts for the rice industry. We 
strongly oppose any shifting of title II funds, which have 
traditionally been contained within USDA's budget.
    We believe all food-aid funds should continue to be used for food-
aid purchases of rice and other commodities from only U.S. origin.
    USA Rice supports continued funding at fiscal year 2006 levels, at 
a minimum, for the Food for Progress Program's Public Law 480 title I-
sourced funding. For the program's Commodity Credit Corporation funding 
component, USDA's fiscal year 2012 budget estimate of $156 million is 
requested. Funding for this program is important to improve food 
security for food-deficit nations.
    The McGovern-Dole International Food for Education and Child 
Nutrition Program is a proven success and it is important to provide 
steady, reliable funding for multi-year programming. USA Rice supports 
funding at the $300 million level for this education initiative because 
it efficiently delivers food to its targeted group, children, while 
also encouraging education, a primary stepping-stone for populations to 
improve economic conditions.
                                research
    U.S. agricultural research needs are great and the challenges are 
plentiful. USA Rice supports funding for the core capacity programs at 
land-grant institutions, USDA's intramural-research activities, and the 
National Institute of Food and Agriculture and its Agriculture and Food 
Research Initiative at levels that would continue the commitment to 
strong agricultural research by and through USDA.
  farm service agency, risk management agency, and natural resources 
                          conservation service
    We encourage the subcommittee to provide adequate funding so the 
agencies can deliver essential programs and services, including for 
improved computer hardware and software. Our members fear a serious 
reduction in service if sufficient funds are not allocated.
    Please feel free to contact us if you would like further 
information about the programs we have listed. Additional background 
information is available for all of the programs we have referenced; 
however, we understand the volume of requests the subcommittee receives 
and have restricted our comments accordingly.
    Thank you for your consideration of our recommendations.
            Sincerely,
                                             Reece Langley,
                                Vice President, Government Affairs.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page

American:
    Commodity Distribution Association, Prepared Statement of the   113
    Farm Bureau Federation, Prepared Statement of the............   115
    Indian Higher Education Consortium, Prepared Statement of the   118
    Public Power Association, Prepared Statement of the..........   121
    Society of Plant Biologists, Prepared Statement of the.......   122
Animal Welfare Institute, Prepared Statement of the..............   123

Blunt, Senator Roy, U.S. Senator From Missouri:
    Prepared Statement of........................................    18
    Questions Submitted by.......................................   103
    Statement of.................................................    70

Cochran, Norris, Deputy Assistant Secretary for Budget, 
  Department of Health and Human Services........................    69
Collins, Senator Susan, U.S. Senator From Maine, Questions 
  Submitted by...................................................    58
Colorado River Basin Salinity Control Forum, Prepared Statement 
  of the.........................................................   126
Cystic Fibrosis Foundation, Prepared Statement of the............   128

Federation of American Societies for Experimental Biology, 
  Prepared Statement of the......................................   130
Feeding America, Prepared Statement of...........................   131
Feinstein, Senator Dianne, U.S. Senator From California, 
  Questions Submitted by.........................................50, 99
Friends of Agricultural Research--Beltsville, Inc., Prepared 
  Statement of...................................................   133

Glauber, Joseph, Chief Economist, Office of the Secretary, 
  Department of Agriculture......................................

Hamburg, Dr. Margaret A., Commissioner, Food and Drug 
  Administration, Department of Health and Human Services:
    Prepared Statement of........................................    73
    Statement of.................................................    69
    Summary Statement of.........................................    71
Harkin, Senator Tom, U.S. Senator From Iowa, Questions Submitted 
  by.............................................................    47

Izaak Walton League of America, Prepared Statement of the........   135

Kohl, Senator Herb, U.S. Senator From Wisconsin:
    Opening Statements of........................................ 1, 69
    Questions Submitted by.......................................31, 92

McGarey, Patrick, Assistant Commissioner for Budget, Food and 
  Drug Administration, Department of Agriculture.................    69
Merrigan, Kathleen, Deputy Secretary, Office of the Secretary, 
  Department of Agriculture......................................     1
Moran, Senator Jerry, U.S. Senator From Kansas, Questions 
  Submitted by...................................................   109
National:
    Association:
        Of:
            County and City Health Officials, Prepared Statement 
              of the.............................................   137
            State Energy Officials, Prepared Statement of the....   138
    Commodity Supplemental Food Program Association, Prepared 
      Statement of the...........................................   138
New Mexico Interstate Stream Commission, Prepared Statement of 
  the............................................................   140

Pickle Packers International, Inc., Prepared Statement of........   141
Pryor, Senator Mark, U.S. Senator From Arkansas, Questions 
  Submitted by...................................................    56

Society for Women's Health Research, Prepared Statement of the...   146
Strom, Hon. Leland A., Chairman and Chief Executive Officer, Farm 
  Credit Administration, Prepared Statement of...................    63

The:
    Humane Society of the United States, Prepared Statement of...   149
        Equine Protection, Prepared Statement of.................   152
    Wildlife Society, Prepared Statement of......................   154

USA Rice Federation, Letter From the.............................   157

Vilsack, Hon. Tom, Secretary, Office of the Secretary, Department 
  of Agriculture:
    Prepared Statement of........................................     3
    Statement of.................................................     1
    Summary Statement of.........................................     2

Young, Michael, Director, Office of Budget and Program Analysis, 
  Department of Agriculture......................................     1


                             SUBJECT INDEX

                              ----------                              

                       DEPARTMENT OF AGRICULTURE

                        Office of the Secretary

                                                                   Page

Additional Committee Questions...................................    30
Agricultural:
    Exports......................................................    45
    Production...................................................    22
    Research.....................................................    23
Agriculture and Food Research Initiative (AFRI)..................    36
Antibiotics......................................................    52
Assisting Rural Communities To Create Prosperity.................     3
Beginning Farmers................................................    17
Broadband....................................................16, 21, 31
Budget Priorities................................................    28
Catfish Inspection Program.......................................    25
China Food Safety System.........................................    58
Condition of the Farm Credit System..............................    65
Crop:
    Insurance....................................................    29
    Production...................................................    18
Dairy............................................................    50
    Insurance Program............................................    50
    Policy Reform Proposals......................................    50
Discretionary Funding Levels.....................................    28
Energy Programs..................................................    24
Ensuring That All of America's Children Have Access to Safe, 
  Nutritious, and Balanced Meals.................................     7
Examination Programs for Farm Credit System Banks and 
  Associations...................................................    64
Farm:
    Bill Cuts....................................................    45
    Service Agency (FSA) Loan Programs...........................    25
Federal Agricultural Mortgage Corporation (Farmer Mac)...........    66
Food Safety and Inspection Service (FSIS)........................    47
    Funding Level................................................    10
Foreign Market Development Programs..............................    60
Forest Legacy....................................................    60
    Projects.....................................................    57
Formula Funds....................................................    56
Genetically Modified Organisms (GMOs)............................    35
Government:
    Accountability Office (GAO) Report on Duplicative:...........
        Government Programs......................................    11
        Programs.................................................    20
    Spending Cuts................................................    26
Grain Inspection, Packers and Stockyards Administration (GIPSA) 
  Rule...........................................................15, 58
Housing..........................................................    38
    Programs.....................................................    57
Humanitarian Food Assistance.....................................    45
Integrated Pest Management (IPM).................................    59
Invasive Pests...................................................    51
Management Initiatives...........................................     9
Microenterprise Program..........................................    44
Mission of the Farm Credit Administration (FCA)..................    63
Multifamily Revitalization Initiative............................    40
National:
    Drought Mitigation Center....................................    22
    Institute of Food and Agriculture (NIFA).....................    27
Organic..........................................................    53
Plant/Animal Health..............................................    33
Promote Agricultural Production and Biotechnology Exports as 
  America Works To Increase Food Security........................     7
Public Health Information System (PHIS)..........................    46
Regulatory and Corporate Activities..............................    65
Renewable Energy.................................................31, 37
Rental Assistance................................................    39
Research..................................................8, 35, 36, 57
Resource Conservation and Development (RC&D) Funding.............    58
School Food Safety...............................................    49
Section 502 and Mutual Self-Help Housing Program.................    56
Settlements of Discrimination Cases..............................    36
The:
    National Agricultural Law Center.............................    30
    Special Supplemental Nutrition Program for Women, Infants, 
      and Children (WIC).........................................    46
Trade Agreement..................................................    19
Water and Waste Disposal Program.................................    37

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration

Additional Committee Questions...................................    91
Advancing:
    Medical Countermeasures......................................    76
    Regulatory Science...........................................    96
Advisory Panels..................................................   108
Antibiotics in Food Production.................................101, 109
Blood Testing....................................................   108
Contract and Administrative Savings..............................    75
Counterfeit Drugs................................................   106
Diabetes and Obesity Drugs.......................................   109
Drug:
    And Device Review Goals......................................    84
    Safety.......................................................    97
First and Second Generic Drugs...................................    90
Fiscal Year:
    2010 Drug and Device Reviews.................................    84
    2012 Budget Summary..........................................    75
Food:
    And Drug:
        Administration (FDA):
            Accomplishments......................................    74
            Current Law User Fees................................    77
            Innovation, Accountability, and Results..............    73
            Modernization........................................   107
            Regulatory Science and Facilities....................    77
        Supply...................................................    78
    From the Farm................................................    86
    Marketing Guidelines.........................................   103
    Safety:
        Bill Implementation......................................   101
        Duplication Efforts......................................    95
        Modernization Act........................................81, 94
    Traceability.................................................    82
Generic:
    Drug:
        Price Impacts............................................    91
        Review...................................................   104
        User:
            Fee..................................................    91
            Fees.................................................    90
    Drugs........................................................89, 94
    For Lipitor..................................................    99
Livestock Antibiotics............................................    86
Makena...........................................................    84
Medical:
    Countermeasures (MCMs).......................................79, 92
    Device Review................................................   105
Nanotechnology...................................................    88
National Center for Toxicological Research (NCTR)................    88
Nuclear Radiation and Its Effect on Our Food Supply..............   100
Overall Budget...................................................    92
Patient Medication Information (PMI).............................    97
Pregnancy Rule...................................................    93
Progress on Research Into Bisphenol-A (BPA)......................    99
Protecting Patients..............................................    76
Radiation:
    Preparedness.................................................    79
    Treatments...................................................    80
Responsibility Duplication.......................................    80
Review Process...................................................    82
Transforming Food Safety and Nutrition...........................    75
Unique Role of FDA...............................................    73
Use of Veterinary Drugs in Food-Producing Animals................   103
User Fee Reviews.................................................    82

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