    [Senate Hearing 112-853]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 112-853

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2013

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED TWELFTH CONGRESS

                                 SECOND SESSION

                                       on

                               H.R. 5973/S. 2375

     AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD
     AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL
             YEAR ENDING SEPTEMBER 30, 2013, AND FOR OTHER PURPOSES

                                   __________

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

                                   __________

             Printed for the use of the Committee on Appropriations

       Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/
            committee.action?chamber=senate&committee=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 29, 2012

                                                                       Page

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

                            Thursday, April 19, 2012

    Department of Health and Human Services: Food and Drug
      Administration.................................................    89

        Material Submitted by Agencies Not Appearing for Formal Hearings

    Department of Agriculture: Office of Inspector General...........   153
    Related Agency: Farm Credit Administration.......................   158
    Nondepartmental Witnesses........................................   163

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

                            THURSDAY, MARCH 29, 2012

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:03 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Herb Kohl (chairman) presiding.
        Present: Senators Kohl, Pryor, Brown, Blunt, Cochran,
    Moran, and Hoeven.

                           DEPARTMENT OF AGRICULTURE

                            Office of the Secretary

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

                     opening statement of senator herb kohl

        Senator Kohl. The subcommittee will come to order. Today,
    we begin our first hearing on the fiscal year 2013 budget
    request for the U.S. Department of Agriculture (USDA).
    Secretary Vilsack, we thank you for being here. We also want to
    welcome Deputy Secretary Kathleen Merrigan, USDA Chief
    Economist, Joseph Glauber, and Budget Officer, Michael Young.
    We look forward to hearing from you today.
        The fiscal year 2013 budget request for the USDA is $18.3
    billion. This represents a 7-percent increase over last year.
    Some programs are cut, while some programs are eliminated
    entirely. Several new initiatives are proposed and substantial
    increases are requested in some areas.
        The Women, Infants, and Children (WIC) program provides
    healthy food for women, infants, and children, and is increased
    by $422 million. This is mainly due to higher food prices.
        Public Law 480 program is reduced by $66 million. This is
    somewhat of a concern, as the humanitarian and food needs
    around the world, as we all know, have increased.
        Our job is to review all the priorities in the budget
    ensure that programs vital to people's health, safety, and
    livelihoods are adequately funded. We also need to make sure
    that tax dollars are spent wisely, as we all know we need to do
    more with less.
        The USDA is broad in scope and affects the lives of every
    American. Now, more than ever, it's essential that we set the
    priorities correctly to ensure the Department is both
    effective, efficient, and also serves the American people in
    the proper way.
        We face many challenges this year, as we move through the
    appropriations process. I hope to work closely with the
    Department, so we can produce a responsible bill.
        We also very much look forward to working with Senator
    Blunt and all members of the subcommittee. I'd like to thank
    Senator Blunt for the helpful and the bipartisan manner in
    which we have worked together. This subcommittee has a
    tradition of working in a bipartisan manner, and I assure all
    members that we will continue that practice as we move forward.
        Secretary Vilsack, we thank you again for being here, and
    we look forward to your statement. Before that, I would like
    ask Senator Blunt for any comments that he may have.

                         STATEMENT OF SENATOR ROY BLUNT

        Senator Blunt. Thank you, Mr. Chairman, and thank you for
    holding this hearing. I hope that with your leadership we can
    produce a bill again this year, and I'm going to do everything
    I can to be helpful in your efforts to get that done, as I
    believe others on the subcommittee will. It was good that the
    agriculture appropriations bill was the bill that became the
    host for the first appropriations bills that passed last year,
    and I hope we can do our work in the same manner this year.
        The President's budget proposes a net increase in spending
    in the USDA. Of course, as our Nation's debt increases, we have
    to look carefully at every part of the budget, including this
    one. But over the past year, the Agriculture subcommittee has
    made difficult and necessary decisions, as the Department has,
    including cutting discretionary spending by 15 percent.
        This year represents a significant anniversary for the
    USDA. It was 150 years ago, in 1862, that President Lincoln
    signed into law the bill that created the USDA. And today, the
    Department touches the lives of every American, every day.
    Activities undertaken by USDA include agriculture research,
    conservation, housing and business loan programs for rural
    communities, domestic and international nutrition programs,
    food safety, and trade promotion.
        The same year that President Lincoln signed the bill that
    created the USDA, he also signed a bill that was the Morrill
    Land Grant College Act. And over the course now of a century-
    and-a-half research and extension conducted at those land grant
    universities, and now others, has transformed American
    agriculture into the most innovative and productive in the
    world. As a result, agriculture remains the brightest spot in
    our country's economy today.
        Last year, American farmers supported record agricultural
    exports and earned their highest income since the 1970s. U.S.
    farm exports alone helped support more than 1 million U.S. jobs
    in 2011. At the same time, however, USDA predicts farm income
    will decline by 6.5 percent this year, and recent studies show
    that farmers are less optimistic as surging fuel prices and
    increases in other inputs increase their costs.
        As we look ahead to fiscal year 2013, we have to be mindful
    of the important role that agriculture plays in our economic
    recovery. We have to make wise investments in those programs
    that will increase our agricultural community's competitiveness
    here and abroad, and sound agricultural research is the
    cornerstone to success in all aspects of the agriculture
    industry, whether it's developing more efficient production
    methods, eradicating pest and disease, developing biofuels,
    maintaining a safe food supply, or enhancing the nutritional
    quality of our diets, USDA is and will be involved.
        Agriculture research today makes it possible for one
    American farmer to feed 155 people. Continued investment in
    research will make it possible for us to meet the global food
    demand, which is expected to double, a number that always
    surprises me, but the global food demand expected to double by
    2050.
        I'm pleased to see the Department has increases in its
    plans for research. These programs and others are critical to
    our farmers' ability to increase production, and every $1 spent
    on research results in a $20 return to the U.S. economy.
        I'm glad the Secretary and his team are here today, and
    really believe that they are managing the Department in a
    really challenging time in a way that's transparent, and
    effective, and forward looking. And Mr. Secretary, glad you
    could join us today.
        Senator Kohl. Thank you very much.
        Secretary Vilsack.

                    SUMMARY STATEMENT OF HON. THOMAS VILSACK

        Secretary Vilsack. Mr. Chairman, and Senator Blunt, and
    Senator Moran, thank you very much for the opportunity to
    appear today. You have my statement, and I would just simply
    ask for an opportunity to amplify on it just a bit.
        We want to thank the subcommittee for this opportunity, and
    we would like to start with a plea, and the plea is for an
    understanding that we need time and flexibility during these
    difficult times.
        While the budget that we propose does increase over last
    year, I would like to point out that it is several billion
    dollars less than it was in 2010. And that has resulted in us
    at USDA taking a look very carefully at the ways in which we
    expend taxpayer resources and are in the process of a variety
    of steps to try to make this a more efficient and more
    effective USDA.
        We need time to absorb the reductions that have taken
    place. We need time to fully implement our plans for additional
    savings, which includes a very top to bottom review of our
    administrative functions. And we need to have the opportunity
    and the flexibility to build on the success that we've
    experienced at USDA in the recent past.
        Senator Blunt mentioned the fact that we had record income
    last year. And while it is true that income is expected to be
    down just a bit, it will still be one of the best years in farm
    income in our history. It is a result of record exports, a
    record number of acres enrolled in conservation, a record
    number of crop insurance programs, a record amount of credit
    extended to producers, homeowners, and businesses, a record
    amount of investment in bio-based products, and a bio-based
    economy, as well as the expansion of local and regional food
    systems, a record investment in business growth in rural areas
    and community development, record lows in fraud and in error
    rates in many of our nutrition programs, including the
    Supplemental Nutrition Assistance Program (SNAP), expanded food
    safety efforts, and expanded effort to improve the nutrition of
    American families, with a particular emphasis on our school
    children. And as Senator Blunt indicated, an expanded effort at
    agriculture research, which is extraordinarily important for us
    to be able to meet the growing demands, not here just in the
    United States, but also globally.
        This has required us to make some tradeoffs, and you'll
    find that we actually had to make some difficult decisions
    concerning programs that were either duplicative, ineffective,
    inefficient, unnecessary, or in some cases, just inadequately
    funded to make a difference. We also had to take into
    consideration the impact of the farm bill discussions, which
    have just begun in the Senate and the House.
        We have very specific goals, and I'll conclude with that.
    We want a Farm Service Agency (FSA) that provides appropriate
    credit and maintains a safety net for our producers. We want to
    continue to expand trade and to establish food security
    globally through our Foreign Agricultural Service. We want to
    promote job growth and improve quality of life and energy
    security through rural development.
        Through our food safety efforts, we want better food safety
    more focused on prevention, surveillance, and detection, and
    more rapid recovery and response.
        Through the natural resources portion of our budget, we
    want to expand technical assistance to landowners so that we
    can get conservation on the ground sooner, and we want to focus
    on some high-priority landscaped areas, so we can improve soil
    and water quality, increase wildlife diversity, work with our
    friends and neighbors in the sportsmen field to expand outdoor
    recreational opportunities.
        In the Marketing and Regulatory Programs (MRP) area, we'd
    like to continue our efforts at expanding local and regional
    food systems, as well as prioritizing animal and plant health.
    The research area, we want to continue to focus on our ability
    to maintain competitive targeted research towards priorities,
    and within the administration of our food programs, we want to
    continue to provide access while improving the integrity of
    each and every one of the programs.
        Finally, in the administration of the Department, we want
    to continue the cultural transformation efforts to improve
    employee moral, expand on our process improvement efforts,
    which is provided for a more efficient use of our time, realign
    our workforce through early retirement incentives, and consider
    taking a look at our footprint, which has involved some very
    difficult and tough decisions concerning office consolidations,
    and at the same time, continue, as I indicated earlier, a
    fairly extensive process that's looking at our administrative
    services.

                               PREPARED STATEMENT

        It has been a busy time at USDA, and we appreciate the
    subcommittee's opportunity to appear today, and look forward to
    your questions.
        Thank you.
        [The statement follows:]

                   Prepared Statement of Hon. Thomas Vilsack

        Mr. Chairman and distinguished members of this
    subcommittee, I appreciate the opportunity to appear before you
    to discuss the administration's priorities for the Department
    of Agriculture (USDA) and provide you an overview of the
    President's 2013 budget. I am joined today by Deputy Secretary
    Kathleen Merrigan, Joseph Glauber, USDA's Chief Economist, and
    Michael Young, USDA's Budget Officer.
        When I made my first appearance before this subcommittee,
    our country and the Department of Agriculture faced historic
    challenges. The economy had deteriorated significantly. It was
    a crisis that cost the United States more than 8 million jobs
    and plunged the economy and the world into a crisis from which
    we are still fighting to recover. Three years later, thanks to
    the President's bold actions, the economy is growing again and
    creating millions of jobs in the private sector. Over the past
    22 months, the Nation's businesses have created 3.2 million
    jobs. Last year, we added the most private sector jobs since
    2005.
        I am proud to say that America's farmers, ranchers, and
    producers have helped fuel the beginnings of the recovery. The
    establishment of the Department 150 years ago underscored the
    importance of agriculture and rural America to the country.
    What was true then remains true today--agriculture and rural
    America matter. Agriculture plays a fundamental role in our
    economy--responsible for 1 in 12 jobs. That's not surprising,
    because at the time the Department was created, the Morrill Act
    established the partnership between USDA and the land grant
    universities. Because of this partnership, these institutions
    have graduated 20 million people, people who went on to jobs
    that built our economy. So, when American producers earn record
    income, as they did last year, everyone benefits through the
    creation of more jobs and higher wages, whether in food
    processing, packaging, or farm equipment manufacturing, the
    reduction of our dependence on foreign oil supplies, or the
    increased availability of more nutritious food.
        On February 10, 2012, I announced another record-breaking
    calendar year for farm exports. Total agricultural exports for
    calendar year 2011 were a robust $136.3 billion. We saw a rise
    in both the value and volume of U.S. agricultural exports
    worldwide in 2011, as international sales rose $20.5 billion
    over the previous record set in calendar year 2010.
    Agricultural exports have supported the creation of over a
    million jobs. USDA has expanded markets for American goods
    abroad by working aggressively to break down barriers to trade
    and provide U.S. businesses with the resources needed to reach
    consumers around the world. Last year, we exported an all-time
    high of $5.4 billion worth of beef and beef products,
    surpassing the previous record by more than $1.6 billion. The
    volume of shipments also surpassed the 2003 levels, the last
    year before a detection of bovine spongiform encephalopathy
    (BSE) disrupted U.S. trade. The return to pre-2003 levels marks
    an important milestone in USDA's steadfast efforts to open and
    expand international markets. The ratification of the trade
    agreements with South Korea, Colombia, and Panama will increase
    U.S. farm exports by an additional $2.3 billion--supporting
    nearly 20,000 American jobs--by eliminating tariffs, removing
    barriers to trade and leveling the playing field for U.S.
    producers.
        Agriculture has also led the development of our bio-based
    economy, where what we grow and raise is used to make fuel,
    chemicals, and polymers to complement our traditional
    production of food, feed, and fiber. Resilient, hard-working
    rural residents provide a model for creating economically
    thriving communities, which underscores why the unemployment
    rate is dropping more quickly in rural America than anywhere
    else in the country.
        At USDA we have been working to fulfill President Obama's
    vision for a Nation where everyone gets a fair shot and an
    economy that makes, creates and innovates. We have been working
    to implement the President's vision by laying a foundation for
    sustainable economic growth and job creation. USDA is at the
    forefront of developing the technology and tools necessary to
    transform rural America so that it can create and take
    advantage of new economic opportunities.
        We have generated rural wealth with our conservation and
    rural development programs. These programs help create green
    jobs, improve recreation and tourism, and facilitate the
    production of renewable energy. We have maintained a strong
    agriculture safety net through a system of income support,
    disaster mitigation, and a record number of farm loans.
        The Department has programs to help people in need by
    ensuring that they have access to a plentiful supply of safe
    and nutritious food. This is fundamental to the healthy
    development of every child in America and to the well-being and
    productivity of every family. In recent years, the Supplemental
    Nutrition Assistance Program (SNAP) has helped millions of
    families meet basic nutritional needs. The program currently
    serves as a bridge to recovery for over 46 million Americans
    who are at risk of being hungry when they face challenging
    economic times. More than half of those who rely on the program
    are children, elderly, or the disabled, and many participants
    are newly unemployed who may have never thought they would need
    this assistance.
        While SNAP has increased steadily since its last low point
    in 2000, and sharply during the recent economic downturn, the
    rate of increase has been declining since January 2010. And
    now, we estimate that rising employment and household income
    will reduce participation in SNAP in 2013, even as the program
    serves a larger share of those eligible. This is how the
    program is designed to work; participation rises during
    difficult economic times and falls in better times. Even under
    this period of rapid growth in participation, this
    administration has achieved historically high accuracy rates in
    SNAP, saving the taxpayer billions of dollars. We will continue
    to make improvements that protect program integrity, even as
    Federal and State budgets for oversight of the program are
    declining.
        We have accomplished a critical step on the road to deliver
    healthier, more nutritious food to our Nation's schoolchildren
    and to help them develop healthy eating habits for life. On
    January 26, 2012, we published the final rule that refines and
    improves the standards for meals available to over 51 million
    school children across the country every day. The new rule
    implements provisions of the Healthy, Hunger-Free Kids Act of
    2010 that are simpler and less burdensome than the ones they
    replace. The rule substantially increase offerings of fruits,
    vegetables, and whole grains; reduce saturated fat, trans fats
    and sodium; and set sensible calorie limits based on the age of
    children being served. Our understanding of the nutritional
    quality of food is built upon USDA science. We have seen the
    connection between what our kids eat and how well they perform
    in school. And we know that America's success in the 21st
    century is dependent on having the best-prepared and best-
    educated workforce in the world. So it is critical that that
    all children have the basic nutrition they need to learn, to
    grow, and to pursue their dreams.
        These are just a few of the ways that USDA is helping to
    create jobs and work towards an economy built to last. But it's
    going to take more to keep moving forward, and that's the goal
    of President Obama.
        I share the President's vision for investing in activities
    that promote economic growth, while reducing our deficits over
    the long-term. We need to cut what we can't afford in order to
    pay for what really matters, but in a way that does not hamper
    growth or prevent us from helping businesses and American
    families that need assistance. At USDA we recognized, like
    families and businesses across the country, that we could not
    continue to operate as we did in the past and that we must
    innovate, modernize, and be better stewards of the taxpayers'
    dollars.
        Over the past decade, USDA has seen an increase in program
    complexity and demand for services while staffing has
    decreased. Therefore, for fiscal year 2012, I led a Department-
    wide review of operations to make USDA work better and more
    efficiently for the American people. Agency leaders took a hard
    look at all their operations, both in headquarters and field
    offices. The result was our Blueprint for Stronger Service. The
    plan identifies administrative efficiencies, office closures,
    and targeted staffing reductions, to help us deal with
    reductions in funding. This plan will create optimal use of
    USDA's employees, better results for USDA customers, and
    greater efficiencies for American taxpayers.
        Under the Blueprint for Stronger Service, USDA is reducing
    expenditures for certain IT products, supplies, travel,
    printing, and other services. The Blueprint also calls upon
    USDA to strengthen its administrative services. Under this
    initiative, the Department identified 379 recommendations for
    improving USDA's office support and operations, which includes
    ways to streamline the provision of administrative services,
    such as civil rights, information technology, finance, human
    resources, homeland security, procurement, and property
    management. Twenty-seven initial improvements have been
    identified for first-phase implementation of this project that
    will realize efficiencies through improved administrative
    services, such as leveraging USDA's size through strategic and
    volume purchases as is demonstrated by the consolidation of
    over 700 cell phone plans down to approximately 10.
        To realize further efficiencies, USDA has proposed closure
    of 259 domestic offices, facilities, and labs across the
    country, as well as seven foreign offices while ensuring that
    the vital services they provide are not diminished. In some
    cases, the offices being closed are no longer staffed or are
    staffed by one or two people; many are within 20 miles of other
    USDA offices. In other cases, technology improvements, advanced
    service centers, and broadband service have reduced the need
    for brick and mortar facilities.
        Last year, many agencies put hiring controls in place,
    followed by voluntary early retirement programs and targeted
    separation incentive programs. We have offered these programs
    on a broader basis in fiscal year 2012. Over the last 15
    months, nearly 7,800 people have elected to take advantage of
    regular and early retirement opportunities. These departures
    have provided agencies the flexibility to eliminate or
    restructure positions to be more relevant to customer needs.
    Many of the vacated positions will not be refilled, and many of
    those refilled will be at lower grades than before. We opted to
    manage change rather than implement reductions-in-force or
    furloughs, which would have disrupted services that matter to
    the public.
        When fully implemented, these immediate actions along with
    other recommended changes will generate efficiencies valued at
    about $150 million annually. Further improvements are expected
    based on the realignment of the workforce. Most important,
    these actions will ensure that USDA continues to provide an
    optimal level of service to the American people within
    available funding levels. Ultimately, the Blueprint for
    Stronger Service will allow us to manage change in a way that
    allows us to provide a high level of services despite reduced
    operating budgets.
        I have made it a priority to transform USDA into a high-
    performing and diverse organization. Under our Cultural
    Transformation initiative, we are focusing on improving several
    aspects of employee culture, including leadership
    accountability, employee development, talent management, labor
    relations, customer focus, and diversity of the workforce. By
    strengthening management operations and engaging employees,
    USDA will also improve customer service; increase employment
    satisfaction; and implement strategies to enhance leadership,
    performance, diversity, and inclusion.
        This in-depth evaluation and improvement of our operations
    provided a firm foundation for us to develop the fiscal year
    2013 budget. For 2013, the budget we are proposing reflects the
    difficult choices we are making to control spending, while
    maintaining investments that are critical to long-term economic
    growth and job creation.
        In total, the 2013 budget we are proposing before this
    subcommittee is $141 billion, an increase of $6.9 billion above
    the 2012 estimate. Of the increase, $6.4 billion is for
    mandatory programs, due primarily to a one-time shift in the
    timing of certain crop insurance costs mandated by the 2008
    farm bill. The budget also increases funding for the nutrition
    assistance programs to fully fund estimated participation
    levels. As we continue to create jobs and grow the economy,
    fewer families will need nutrition assistance.
        For discretionary programs, our budget proposes $19.3
    billion, approximately $478 million above the 2012 level. The
    majority of the increase is for the Special Supplemental
    Nutrition Program for Women, Infants and Children (WIC) and
    agricultural research. The discretionary funding request
    reflects the Department's continued efforts to innovate,
    modernize, and be better stewards of the taxpayers' dollars.
    Discretionary spending is partially offset through about $1
    billion of proposed limits on selected mandatory programs and
    other adjustments. For 2013, further administrative
    efficiencies, realignment of staff, and other actions are
    proposed to reduce costs. In addition, the budget proposes to
    reduce or terminate selected programs and reallocate resources
    to fund targeted investments in priority programs and
    infrastructure to provide a foundation for sustainable economic
    growth.
        This budget provides the resources we need to effectively
    deliver the level of service our customers and your
    constituents expect from USDA--whether it is applying for a
    farm operating loan, enrolling more acres into conservation
    programs, supporting business creation, seeking nutrition
    assistance, or any of the multitude of services provided by our
    dedicated workforce. Any further reduction in funding for our
    back office operations would significantly impair our ability
    to deliver critical services and would imperil our efforts to
    manage an increasingly complex workload with less money and
    fewer workers.
        Reducing the deficit is a critical part of the President's
    economic plan. The long-term stability of the economy depends
    on whether we have the will to act now. Farmers and ranchers
    know the importance of a healthy economy, which raises incomes
    and increases demand for their products. Therefore, the 2013
    budget reflects the President's Plan for Economic Growth and
    Deficit Reduction. The President's plan reduces the deficit by
    $32 billion over 10 years by eliminating direct farm payments,
    decreasing crop insurance subsidies, and better targeting
    conservation funding to high-priority areas.
        As Congress initiates its deliberations on the
    reauthorization of the farm bill, we must remember that
    American agriculture has achieved its success today because of
    the policies and the investments that have been made over many
    decades. We are here because we've maintained a strong safety
    net so there is adequate financial help when times are tough
    and disaster strikes. We have supported research that has led
    to a significant increase in agricultural productivity and
    promoted vibrant markets. We are also here because policies in
    the farm bill for research, renewable energy, and broadband are
    providing rural America the tools to take advantage of new
    economic opportunities. Statutory authority for all disaster
    programs expired on September 30, 2011; accordingly, USDA
    cannot provide assistance through these programs to producers
    for losses due to natural disasters occurring after that date.
    As the farm bill is drafted, I encourage Congress to provide
    USDA the tools and the flexibility needed to address the
    challenges faced by American producers.
        Our 2013 budget protects the farm safety net, while
    achieving the President's goal for deficit reduction. Income
    support programs, including 2012 direct payments, 2013 counter-
    cyclical payments, and Average Crop Revenue Election (ACRE)
    payments, are expected to total about $4.9 billion and outlays
    under the Federal crop insurance program are projected to reach
    $9.3 billion. Despite a strong farm economy, demand for USDA
    farm loans remains strong due, in part, to tighter private
    credit standards including higher down-payment requirements.
    The 2013 budget provides nearly $4.8 billion for loans to meet
    the expected demand for financing. The requested loan levels
    will serve nearly 30,000 farmers.
        In order to better serve producers with faster and simpler
    service, the budget continues to fund IT modernization
    activities of our Farm Service Agency (FSA). This investment
    will improve the Agency's ability to deliver increasingly
    complex farm program benefits, securely, reliably, and rapidly.
    Since 2003, staffing levels at FSA have declined over 30
    percent, making investments in IT infrastructure even more
    important.
        One of USDA's most important objectives is to protect our
    abundant natural resources. Over the last 3 years, we enrolled
    a record number of acres of private working lands in
    conservation programs. These programs help to preserve the
    soil, improve water quality, and promote wildlife diversity and
    add hundreds of millions of dollars to local economies in rural
    areas. For 2013, the budget provides approximately $6.2 billion
    to support approximately 358 million acres in farm bill
    conservation programs.
        For the Natural Resources Conservation Service (NRCS), the
    2013 budget proposes $828 million for conservation operations.
    NRCS will continue efforts to leverage technical assistance
    funds through agreements with its traditional partners, such as
    conservation districts, as well as with nonprofit organizations
    and State and local agencies. This approach of voluntary
    conservation works. That is why we are embracing locally driven
    conservation programs and entering partnerships that focus on
    large landscape-scale conservation programs, such as the
    Chesapeake Bay, the Bay-Delta region in California, the
    Mississippi River Basin, Gulf Coast, and the Great Lakes.
        Our budget for 2013 contributes significantly to the
    economic growth goals of the White House Rural Council by
    continuing to fund programs that promote renewable energy, job
    training, infrastructure investment, access to capital, and
    green jobs throughout rural America. Approximately $6.1 billion
    in direct loans will be made available to support the
    transformation from fossil fuels to cleaner technologies.
    Allowing financing for environmental upgrades will support the
    continued development of a national clean energy strategy.
    Almost $1 billion in loans will be used to support rural
    business and entrepreneurs, which will put more people back to
    work. USDA's efforts, including a regional approach to wealth
    and job creation, is one reason why the unemployment rate is
    dropping more quickly in rural America than anywhere else in
    the country. We are giving renewed opportunity to the nearly 50
    million people who live in those areas who don't necessarily
    farm.
        Cutting edge research remains key to the United States
    retaining its competitive edge and global leadership in
    agricultural productivity--estimated to need to increase 70 to
    100 percent by 2050 to meet growing global demands for food.
    The correlation between research and improved productivity
    could not be clearer. As a result of research at USDA, our land
    grant universities, and the private sector, American
    agriculture ranks second in productivity gains of all segments
    of the U.S. economy since 1980. Over the past 60 years, yields
    per acre of major crops--corn, soy, wheat, and cotton--have
    doubled, tripled, and in some cases even quadrupled. At the
    same time, livestock production and specialty crop production
    have become far more efficient. These incredible productivity
    gains were achieved through a sustained investment in research.
    We will continue to support a robust research program that will
    ensure sustainable agricultural production, economic growth for
    growers and greater choice for consumers. The 2013 budget
    proposes funding of $325 million for the Agriculture and Food
    Research Initiative (AFRI), an increase of $60.5 million, and
    $1.1 billion for our Agricultural Research Service (ARS). We
    will continue to focus additional research dollars in key
    areas, such as biofuel feedstocks, livestock and crop
    production and protection, and enhancing American agriculture's
    ability to meet growing global demand sustainably.
        Because we are still in a recovering economy, USDA
    recognizes the need to support those in need by ensuring access
    to safe and nutritious food, which is essential to the healthy
    development of every American child and to the well-being and
    productivity of every American family. The budget fully funds
    the expected requirements for the Department's three major
    nutrition assistance programs--WIC, the National School Lunch
    Program, and SNAP.
        The Department has had great success in promoting healthy
    eating habits and active lifestyles. Too many adults and
    children have poor diets and gain excessive weight contributing
    to poor health and increased medical costs. The Centers for
    Disease Control and Prevention data show that the prevalence of
    obesity among children tripled from 1970 to 2008 and it doubled
    among adults. However, data for 2009-2010 show the obesity rate
    for both children and adults has stopped increasing. Policies
    aimed at increasing access to more nutritious diets, promoting
    eating habits consistent with the Dietary Guidelines and
    encouraging healthy lifestyles are partly responsible for this
    change.
        One of the key challenges for providing healthier school
    meals is to modernize cafeteria equipment appropriately so
    schools can prepare attractive, wholesome meals with more whole
    grain, fruit and vegetables, and less fat and saturated fat.
    Helping schools to upgrade the nutritional quality of meals
    served is essential. So an important part of the budget request
    is $35 million to continue competitive grants to help schools
    purchase equipment to serve healthier meals as well as to
    expand the breakfast program. These grants will help about
    10,000 schools across America.
        The budget not only supports domestic food assistance, but
    also provides $1.4 billion to support programs that further the
    administration's global food security objectives, including
    those supporting preschool and school feeding programs carried
    out under the McGovern-Dole International Food for Education
    and Child Nutrition Program. In fiscal year 2013, the McGovern-
    Dole program is expected to benefit more than 4 million women
    and children. Through the U.S. Government's leadership in
    global food security, we advance global stability and
    prosperity by improving the most basic of human conditions--the
    need that families and individuals have for a reliable source
    of quality food and sufficient resources to purchase it.
        The Obama administration and USDA are committed to
    partnering with rural communities to increase their economic
    competitive by helping them provide residents access to quality
    healthcare services, modern library facilities and school
    buildings, and reliable emergency equipment and services.
    Financing totaling $2 billion, an increase of approximately
    $700 million, will provide assistance to over 1,700 rural
    communities. Investing in rural communities is essential for
    growth and job creation.
        Helping rural residents obtain safe and affordable housing
    is also a key to maintaining stable communities and creating
    jobs. The 2013 President's budget requests a significant level
    of funding for housing programs. USDA continues to request that
    single family housing assistance be provided primarily through
    loan guarantees. The 2013 budget includes funding to support
    $24 billion for guaranteed loans. USDA's single family housing
    direct loan program is funded at $653 million, and will be
    targeted to teachers in rural areas, and very-low-income
    recipients of mutual and self help grants. These funds will
    create job opportunities and make the dream of home ownership a
    reality for over 184,000 families in rural America.
        Since the founding of President's Obama's Food Safety
    Working Group in 2009, USDA has collaborated extensively with
    other Federal partners to safeguard the food supply, prevent
    foodborne illnesses and improve consumers' knowledge about the
    food they eat. USDA is working to strengthen Federal efforts
    and develop strategies that emphasize a three dimensional
    approach to prevent foodborne illness: Prioritizing prevention;
    strengthening surveillance and enforcement; and improving
    response and recovery. Between 2000 and 2010, USDA reached a
    national goal of reducing E. coli rates by 50 percent, largely
    because of strengthened beef safety policy and enforcement. In
    2011, stricter Salmonella and Campylobacter performance
    standards were implemented to reduce these pathogens in turkeys
    and young chickens, which are expected to prevent as many as
    25,000 foodborne illnesses annually.
        Despite this success, we can and must do a better job of
    ensuring the safety of meat and poultry products regulated by
    USDA, but we need to do it more efficiently and effectively.
    The Food Safety and Inspection Service (FSIS) recently
    published a proposed regulation that will prevent thousands of
    food-borne illnesses, streamline poultry inspections, and
    reduce spending by approximately $90 million over the first 3
    years of implementation. We will revise current procedures and
    remove outdated regulatory requirements that do not help combat
    foodborne illness. The new procedures will use taxpayer dollars
    more effectively and efficiently; even with these program
    efficiencies, the budget includes approximately $1 billion for
    FSIS.
        The economic vitality and quality of life in rural America
    and the U.S. economy at large depends on a competitive,
    efficient, and productive agricultural system. In an era of
    market consolidation and intense competition, producers rely on
    fair and open access to markets and control over their
    decisions to thrive. Producers also rely on animal and plant
    resources being protected against the introduction of foreign
    agricultural pests and diseases. For 2013, the budget includes
    over $880 million in discretionary funding to improve
    agricultural market competitiveness and production for the
    overall benefit of consumers and producers.
        We have taken a close look at the budget for the Animal and
    Plant Health Inspection Service and have proposed a number of
    program reductions and implemented identified program
    efficiencies to ensure that scarce resources are being used
    efficiently. The budget achieves savings through a variety of
    means. It includes decreases for activities where eradication
    campaigns have been successful, such as boll weevil, and for
    pests and diseases where management is currently more prudent
    than eradication, such as emerald ash borer. Savings are also
    possible in animal disease testing while still meeting
    international standards. Further, the budget achieves other
    savings by acknowledging the role of the producer and other
    cooperators to directly reduce certain pests and diseases, such
    as Johne's disease. The budget also proposes modest increases
    to improve overall animal disease traceability and to provide
    protections against animal diseases that could impact human
    health. At the requested budget level, we estimate we will
    prevent and mitigate about $1.18 billion in damages as a result
    of selected plant and animal health monitoring and surveillance
    efforts.
        USDA's central Departmental Management provides human
    resource, procurement, information technology, and financial
    management oversight and services to agencies. Departmental
    staff offices provide legal and economic support,
    communications coordination, and program appeal hearings for
    the Department's program activities. These activities are vital
    to USDA's success in creating opportunities for America's
    farmers, ranchers, and rural communities. The 2012
    appropriations act made deep cuts in funding for these offices.
    Under these reduced funding levels, we took prudent actions to
    maintain critical functions needed to support the agencies'
    effective delivery of program operations. But further
    reductions in these areas cannot be sustained without
    deterioration in service. For 2013, the budget proposes funding
    to ensure that these offices maintain the staffing levels
    needed to provide leadership, oversight, and coordination.
    These efforts are critical to making the Department an
    efficient and effective organization.
        Since coming to USDA, I have made it a priority to resolve
    all of the civil rights cases facing the Department which the
    administration inherited. During this time, we have resolved
    large-scale class action lawsuits involving allegations of past
    discrimination by Black and Native American farmers and
    ranchers and provided an additional path to justice for women
    and Hispanic farmers and ranchers who allege discrimination. We
    have corrected past errors, learned from mistakes, and charted
    a stronger path for the future where all USDA employees treat
    all Americans with dignity and respect. The 2013 budget builds
    upon our progress by increasing funding for selected key
    priorities that will improve USDA's handling of civil rights
    matters and will address claims of potential discrimination in
    the delivery of programs.
        In conclusion, the President is deeply committed to
    reducing the deficit so that the economy can continue to grow
    over the longer term. This is a responsible, balanced budget
    that continues to meet key priorities and is consistent with
    the President's commitment. We will continue to achieve
    significant progress in administering more complex programs
    with fewer staff and resources by adopting reforms that will
    improve our programs and service to our customers.
        At this time, I will be glad to answer questions you may
    have on our budget proposals.

        Senator Kohl. Thank you very much, Secretary Vilsack.

                              WIC PROGRAM FUNDING

        Mr. Secretary, the fiscal year 2013 budget includes $422
    million increase for WIC. Do you believe this budget is
    sufficient to cover the demand for the WIC program? How will
    the Department adjust should cost food costs and participation
    increase in 2013?
        Secretary Vilsack. Mr. Chairman, we do believe it is
    adequate. We do believe it's based on accurate estimates. We're
    a bit off this year, and so we wanted to be doubly sure that we
    focused on maintaining the WIC program so that there weren't
    waiting lines. We know that's something the Congress does not
    want us to have. But, also point out that we are expecting and
    anticipating that the food inflation will be moderate in
    comparison to last year. We saw fairly significant spikes at
    various points in time. We don't expect to see quite the high
    level of food price increases that we experienced last year.
    So, we do believe that that estimate is accurate.

                             SNAP CONTINGENCY FUND

        Senator Kohl. Mr. Secretary, the food stamp program, which
    is now called SNAP, saw a $2 billion increase to its
    contingency fund. This is not a small amount of money. Why is
    this additional amount of money needed, given the current state
    of the economy? Do you envision using any of the contingency?
        Secretary Vilsack. Mr. Chairman, what we have seen with
    reference to SNAP is a plateauing of our SNAP numbers, which is
    obviously a good sign, may very well be reflective of the fact
    that we're beginning to see an improved economy.
        Having said that, as noted earlier, high energy costs could
    potentially derail that recovery, and so we want to be in a
    position that if things don't continue to proceed in a positive
    way that we can respond to the nutritional needs of families,
    and also continue to focus on the fact that their nutrition
    assistance programs are not just for the struggling families,
    but it is, in a sense, part of the overall program to ensure
    the safety net for our producers. Sixteen cents of every food
    dollar goes into a farmer's pocket. So, as we look at the
    totality of our support, and help, and assistance for our
    farmers and producers, you have to look at all of the programs,
    including SNAP.

                             SNAP PROGRAM INTEGRITY

        Senator Kohl. Mr. Secretary, over the past few months we've
    heard a lot about the integrity of the SNAP program. This
    program provides a crucial safety net for millions of people.
    We certainly need to ensure that this program is managed in the
    most effective and efficient manner possible. What is your
    Department doing to address waste, fraud, and abuse in this
    program?
        Secretary Vilsack. Mr. Chairman, let me start off by
    pointing out that the fraud rates and the error rates are at
    historic lows. We've taken a number of steps.
        First, as it relates to individuals, we have in place a
    program that will allow us to check against death records,
    Social Security records, et cetera, to make sure that people
    are not inappropriately using other's identity. We also have a
    program for those individuals who live near border States to
    ensure that they don't try to collect in a number of States.
        I will tell you that in 2010, our latest numbers, nearly
    800,000 investigations were conducted by States, in terms of
    individuals, and more than 44,000 individuals were disqualified
    from the program as a result of being disqualified in those
    inspections.
        We have looked at approximately 15,000 businesses, stores,
    and we have an alert program, which allows us to begin looking
    at 18 different demographic factors and demographic pieces of
    information and data about how SNAP proceeds are being
    processed.
        For example, if we see a continuation of even no-cent
    purchases, $35, $50 even, that is a tip-off for us to really do
    a more thorough investigation of how the program is being
    utilized.
        We are also making sure that if a location is disqualified
    from the program, that there's not a transfer of ownership that
    is basically hiding the previous owner, so we're going into
    greater detail in terms of looking at the paperwork of these
    transfers.
        So, we take all of this very, very seriously. We understand
    it's important and necessary to maintain the integrity of these
    programs. While we are pleased that we are at record lows,
    we're not satisfied. We want to continue to work to ensure the
    integrity of these programs.

             FOOD SAFETY AND INSPECTION SERVICE POULTRY INSPECTION

        Senator Kohl. Thank you. The Food Safety and Inspection
    Service (FSIS) program, is responsible for ensuring that the
    Nation's commercial supply of meat, poultry, and processed egg
    products is safe and wholesome. This is done to a large degree
    by Federal inspectors and meat processing plants.
        However, FSIS's budget includes a $13 million cut in
    funding associated with implementing new methods of poultry
    inspection and reducing staff by 500 employees. Certain
    inspection responsibilities would shift from Federal inspectors
    to company employees.
        In light of continuing outbreaks of food-borne illness,
    we're concerned that this decision may put consumers at risk
    solely for budget savings. Do you believe this new inspection
    method will keep our food safe? What training will be required
    of company employees prior to assuming these new tasks?
        Currently, FSIS inspectors can evaluate up to 35 birds per
    minute. The new process is supposed to be five times faster,
    and is this safe for workers?
        Secretary Vilsack. Mr. Chairman, thank you for asking that
    question. First of all, let me suggest to you that we believe
    that this process will actually make the food safer, not as
    safe, but safer. And the reason for this is, based on the fact
    that we have had a number of pilot facilities around the
    country for a number of years use this new system that we're
    proposing, and from that, the data suggests that we can save
    5,200 food-borne illness incidences as a result of this new
    system.
        Second, it's important to know that essentially what we're
    doing in terms of company inspection is not so much in terms of
    food inspection and in terms of food safety, it has more to do
    with the cosmetic appearance of the poultry. At the beginning
    of the process, we are currently using individuals to look for
    defects in the cosmetic nature of poultry, which we think is
    really more about the marketing of the product, not the safety
    of it.
        What we'd like to be able to do is to have the company
    assume that responsibility for cosmetic review, and then shift
    the responsibility of the people that we currently have on that
    line to taking a look at the locations along the line where the
    hazards are greatest, and beef up that effort.
        It is true that this will result ultimately over time in
    roughly 500 to 800 fewer positions, but it will also result in
    more than 1,000 people actually receiving a higher paying job
    and a more sophisticated job, for which there will be
    additional training. We expect and anticipate that this will be
    factored in or phased in over a couple-of-years period in order
    to ensure the training is accurate.
        As it relates to the worker safety question, we are going
    to institute a study at the beginning of this process. We have
    a study, but we want to make sure that the results of that
    study are verified. And we are going to essentially look at a
    very complicated review of the safety of workers. If we see a
    problem with the safety, we will obviously adjust accordingly.
        The last thing I would say is that this whole process, this
    review process, this inspection process has been peer reviewed.
    And I think that the review suggests very strongly that this
    will actually result in a safer system, a safer food supply. It
    just happens to also save money for the Government and for the
    companies, but it is primarily for food safety that we're
    looking at this.
        Senator Kohl. Thank you, Mr. Secretary.
        Secretary Vilsack. Thank you.
        Senator Kohl. Senator Blunt.
        Senator Blunt. Thank you, Chairman.

                      WIC PROGRAM INCREASES IN CALIFORNIA

        Mr. Secretary, in the WIC program, I think there's been,
    particularly in California, an increase in costs. It's the
    largest program, of course, but it's increased a whole lot
    faster than in other States. And I wonder if you could tell us
    a little bit about what you're doing to look at that, and what
    might be the cause for that.
        Secretary Vilsack. Senator, there may be a number of
    reasons, but the one that concerns us the most is that there
    are very, very small stores that have dramatically overpriced
    products in the WIC package. And we have advised the State of
    California that this has taken place. We have asked the State
    of California to first and foremost stop any further approvals
    or permission for those sized stores to continue to participate
    in the WIC program. We've asked them to review their protocols
    for the analysis of those smaller stores, and we have been
    advised by the State of California that they will be coming up
    with a new regime this spring that will address in a very
    serious way, in a very concrete way, and a very quick way, the
    fact that there have been stores that have taken advantage of
    folks, and taken advantage of this program.
        So, that's one of the concerns that we've had, and we've
    notified the State, the State has responded, and they are in
    the process of fixing the problem.
        Senator Blunt. Just a curiosity here. I'm glad you're
    looking at this carefully, and it sounds like you're working
    with them to solve it. Do these stores have a different section
    for WIC customers, or do they just assume that most people
    won't buy the more expensive gallon of milk, the more expensive
    loaf of bread, or whatever they're pricing at this higher rate?
        Secretary Vilsack. Senator, I'm not sure if they have a
    different section. My understanding was, and I could be wrong
    about this, that this was sort of mixed in with their overall
    operation, and basically taking a fairly significant advantage
    of folks. When we're seeing the price of various items being
    two, three, four, maybe even higher at times what you would
    normally see in a regular grocery store. And I think one of the
    keys for us, as this is----
        Senator Blunt. Did you say two, three, or four times as
    high?
        Secretary Vilsack. Or higher.
        Senator Blunt. To understand this, if you're a WIC
    recipient, you have a coupon that allows you to get this
    product that has nothing to do really with the price of the
    product where you buy it.
        Secretary Vilsack. That's correct. And then the grocery
    store or the convenience store puts in a bill, if you will, for
    reimbursement for that, and were charging a substantial amount
    for that product far, far in excess of what the market was
    currently charging for that product, whether it be cereal, or
    whatever it might be.
        We noticed this in our review of the data, and we contacted
    the State and said this is a serious problem. First and
    foremost, what we are going to tell you is we don't want any
    further businesses of this size, if you will, in these high-
    risk areas to basically be permitted, and then second, we want
    you to take this very seriously and rethink the way in which
    you are providing oversight. As you know, these programs, the
    administrative oversight is initially at the State level to
    provide oversight so that this doesn't happen.
        And, again, I think California did respond. Governor Brown
    and his team have looked at this, and they said, yes, you're
    right. This is not right. We're going to fix it, and we're
    going to fix it quickly.
        Senator Blunt. Do you feel like this might be happening on
    maybe even a lesser level, but in other places?

                       NUTRITION PROGRAMS FRAUD DETECTION

        Secretary Vilsack. I'm not aware of it happening in other
    States, Senator. I know that we're looking at this, and being
    careful about it. And the point I would make, with reference to
    nutrition programs, generally, is--as we look at the farm bill,
    and as we talk about this issue--I think we need to take a look
    at the definition of stores that qualify for these various
    programs, because right now we see a lot of issues with
    relatively small facilities. That's where many of our concerns
    are relative to error rates or fraud in many of these nutrition
    programs. So, I think we really need to be careful about the
    permission we grant. There are more than a quarter-of-a-million
    stores, for example, that provide SNAP, and a relatively small
    percentage of those stores sell a disproportionate amount of
    SNAP food. It's maybe less than 20 percent sells 80 percent of
    the food. That type of ratio. So, I think we need to really
    take a look at that.
        Senator Blunt. I'm going to ask a technology question next,
    so it may be the answer.
        Is there any way your system can monitor whether some area
    is way out of bounds on pricing of specific products?
        Secretary Vilsack. I think there is. Certainly, in a couple
    of programs we do have that review, and we're continuing to
    look at ways in which we can mine data that we collect to be
    able to identify problems, as I said earlier.
        For example, if we see a store where there are a lot of
    even purchases. I mean no one goes into a grocery store and
    gets $35 worth of groceries. They get $35.18 or $35.16. We see
    a pattern of that. That gives us a tip that there's a problem
    there, and that triggers a review and investigation.
        Senator Blunt. And you say for both WIC and SNAP this is
    something that you're watching carefully.
        Secretary Vilsack. Yes. And that's why we had 15,000 store
    reviews. That's why we had nearly 800,000 individual
    investigations and reviews, in terms of the program. And that's
    why several hundred stores were disqualified, and 44,000
    individuals were taken off the program. And that's why our
    fraud rate and our error rate are at historic lows.
        Senator Blunt. On technology, I thought about that. I
    thought well, I probably ought to go to this technology
    question, too.

                   FARM SERVICE AGENCY INFORMATION TECHNOLOGY

        With the FSA offices, I understand the technology there has
    been about as old as any technology anybody's still using, and
    to some extent, individual farm records were essentially
    captive to whatever machine they were in 1984, or whatever. You
    could tell me more about this. The Modernize and Innovate the
    Delivery of Agricultural Systems (MIDAS) program is the program
    that would upgrade that?
        Secretary Vilsack. That's correct. And we spent the last
    several years, with the resources provided by this
    subcommittee, building the design for the new system. And the
    good news, this year we'll begin to see actual on-the-ground
    construction or building of the system, starting with acreage
    reports, and starting with some of the farm record development
    as a strong foundation. And then the following year, we will
    build on top of that foundation, and hopefully, within the next
    year or 2, our farmers will begin to see a much more convenient
    approach from the FSA offices. And hopefully, we will get to a
    point in those places where there's sufficient broadband
    Internet access that folks can work literally from their homes.
        Senator Blunt. From their home. Now, my belief is that the
    equipment that the FSA office has been using is like mid-1980s.
        Secretary Vilsack. It's not so much the equipment. It's the
    software.
        Senator Blunt. It's the software system.
        Secretary Vilsack. Yes. And so when you have a farm bill
    every 5 years, what happens is oftentimes those systems, many
    of them have to be manually coded, if you can imagine that. And
    that's why it takes a long time to implement things. But, MIDAS
    is designed to address that. And it's taken a number of years
    to do it right, a lot of feedback from those who work on the
    ground, in the field, to make sure that we design it properly,
    and to test it properly.
        Senator Blunt. And this has almost $12 million in it. Would
    that complete MIDAS?
        Secretary Vilsack. Oh, no. No. No. It's far more than that,
    Senator. This is a very, very significantly expensive
    operation.
        Senator Blunt. There's a $12 million increase, though.
    $11.78 million, I guess.
        Secretary Vilsack. We are asking for a substantial increase
    this year. Just to give you a sense of this, the
    implementation, in fiscal year 2011, we asked for $45 million.
    In fiscal year 2012, it's $112 million. And the reason it goes
    from $45 million to $112 million is because we're not actually
    building the infrastructure to do this. And we're going to
    build the foundation this year, and a lesser amount next year
    should complete the process.
        Overall, we had anticipated and estimated years ago that
    this would cost several hundred million dollars, and that
    estimate is going to be correct.
        Senator Blunt. So, in fiscal year 2012, the budget year
    we're in right now, this is the big year for MIDAS.
        Secretary Vilsack. This is the big year. And fiscal year
    2013, we're reducing it, but it's still a substantial amount of
    money. It's nearly $100 million. So, it's less than this year,
    but it's still substantially more than the previous years,
    because we're now building it, as opposed to designing it and
    testing it.
        Senator Blunt. And this is more of a software problem than
    a hardware problem?
        Secretary Vilsack. That's my understanding. I'm not a
    technical expert, and maybe someone here on the panel can
    amplify on this. But it's primarily----
        Senator Blunt. No one's raising their hand on the panel.
        Secretary Vilsack. It's primarily.
        Secretary Blunt. You're on your own.
        Secretary Vilsack. It's, as I understand it, primarily a
    software issue. If I'm wrong about that, we will let you know.
    But the reality is, it is an expensive proposition, but
    eventually, it should get to the point where if you have
    Internet access, you will be able to be at your kitchen table,
    call up your files, and basically be able to work with FSA
    offices online. That's the goal.
        [The information follows:]

        MIDAS focuses on software, specifically adapting commercial-off-
    the-shelf software (COTS) to run Farm Program applications in a Web-
    accessible environment. The Department's Common Computing Environment
    (CCE) focuses on refreshing the system hardware and upgrading the
    network used by the USDA Service Centers.
        Regarding MIDAS, the Farm Service Agency (FSA) has completed the
    initial design for MIDAS, which includes business requirements
    documentation, design of re-engineered processes, improved access to
    data, and creation of a network comprised of Service Center employees
    to ensure the new software meets the needs of the business. The MIDAS
    Program is now in the build phase, during which the system software is
    configured to meet the requirements, and all technical components are
    set up and tested.
        In fiscal year 2012 the emphasis of CCE is network optimization
    which is the effort to replace the aging infrastructure--desktop
    computers, servers, data storage capacity, bandwidth to support
    applications--to ensure that the core network infrastructure meets the
    demands of many of USDA's and FSA's IT modernization efforts including
    MIDAS. At completion, it will be possible for farmers and ranchers to
    access MIDAS online, via Internet access, e.g., ``from your kitchen
    table.''

                    FARM SERVICE AGENCY OFFICE CONSOLIDATION

        Senator Blunt. Now, if you go to a new FSA office, based on
    consolidation, will your records be there? Do you know that
    they're there?
        Secretary Vilsack. Not only will the records be there, but
    most likely, the person who dealt with you at the previous
    office will also be there. There are about 170 people that are
    impacted specifically by what we're proposing, and all 170 of
    those folks will still be able to work at FSA, if they choose
    to do so.
        Senator Blunt. Mr. Chairman, do you think we'll have time
    for a second round?
        Senator Kohl. Yes.
        Senator Blunt. If so, I'll go ahead and wait for that
    second round for other questions.
        Senator Kohl. Thank you very much.
        Senator Pryor.
        Senator Pryor. Thank you, Mr. Chairman. I thought Senator
    Moran was here before me.
        Senator Kohl. I thought I'd rotate.
        Senator Pryor. Okay. Thank you, Mr. Chairman.

               FARM SERVICE AGENCY OFFICE CONSOLIDATION CRITERIA

        Mr. Secretary, I think a bad way to start a hearing is when
    one of us writes you a letter on February 21, and we don't get
    the response until March 28, at 4 p.m., hand-delivered the day
    before a hearing. I'd like to follow-up on some of the
    questions I asked in that letter, one, in particular, that you
    did not answer. And that would be my question No. 2 in the
    letter, where I ask you ``to provide all relevant criteria
    relating to the closure of offices within specific distances,
    along with the formula used to determine mileage between county
    offices. I'd appreciate if this included copies of mapping
    data, provided by any internal or external source, used to
    determine the mileage between all proposed office closures in
    Arkansas.''
        And the reason I ask that is because you have chosen to use
    Euclidean miles, which is defined ``as the crow flies,'' as
    compared to road miles. Had you used road miles, 7 of the 10
    offices in Arkansas would not be closing now, but you chose to
    use Euclidean miles. So, could you tell us why you decided to
    use ``as the crow flies,'' instead of the mileage that people
    actually have to drive to get to the office?
        Secretary Vilsack. Senator, we had a process that involved
    not just the offices in DC, but also the State offices that
    assisted us in making the calculations. And candidly, we're
    confronted and faced with two realities in the farm service
    world. One is that over a period of time, we have seen
    operating budgets reduced by the Congress. And second, 10 years
    ago, there were 18,000 people working for FSA. Today, there are
    around 12,000 people. So, we have seen one-third fewer workers.
    We've seen an increase in workload. We were faced with a very
    difficult decision, whether we would take a look at roughly 130
    offices that were within 20 miles ``as the crow flies,'' as you
    have indicated, for closure, or whether we would institute
    furloughs or layoffs. And I will tell you, sir, from my
    perspective, as long as I'm Secretary, the last thing I want to
    do is furlough a worker or lay one off. And if I can prevent
    it, that's what I'm going to do.
        Senator Pryor. Why did you choose to use ``as the crow
    flies,'' as opposed to road miles? Was it to close more
    offices?
        Secretary Vilsack. Not necessarily. It was what the staff
    recommended. It was not necessarily to close more offices. It
    was basically to make sure that we were operating within the
    directive of the Congress. The Congress was not clear, and was
    not definitive and specific. It just said 20 miles. So, we felt
    that that was the simplest way to do it.
        And it's true that there may be situations and
    circumstances in your State and other States where it may take
    longer, or it may require more of a distance, but again, the
    reality is the choices. You either do that, or you basically
    create potential chaos in 2,000 offices with furloughs or
    potentially chaos in a number of offices with layoffs. We felt
    focusing on offices that had no employees, we found that 35 of
    the 131 offices had no full-time employees. Offices that had
    one employee, where if you were sick or if there was a ballgame
    you needed to see, there was no one there to service the needs.
    It was a better idea to basically provide for larger staffed
    offices, and perhaps within 20 miles or so of where the
    previous office was.

                         BLUEPRINT FOR STRONGER SERVICE

        Senator Pryor. Now, I've heard that your proposed savings
    on this are going to be $150 million. Is that per year?
        Secretary Vilsack. No, sir. That's not accurate.
        Senator Pryor. How much do you save on this?
        Secretary Vilsack. The office closings themselves are about
    $6.5 million. The $150 million figure comes from a combination
    of a number of things that we've done. A reduction in travel, a
    reduction in supply purchases, a reduction in conferences, and
    the administrative services process, in which we've identified
    379 recommendations for changes internally within USDA, 27 of
    which we're in the process of implementing. An example is
    taking over 700 cell phone contracts that we had at USDA and
    consolidating them into 10 to 15 contracts, so we get quantity
    discounts, things of that nature. When you combine all of those
    steps, that's where you get the $150 million number.
        Senator Pryor. Yes. That's a helpful clarification. All
    right.

                    FARM SERVICE AGENCY OFFICE CONSOLIDATION

        I want to ask you about three offices in Arkansas. I'll
    probably have to come back on the second two. But, we have one
    in Izard County, in Melbourne, Arkansas, that is 18.5 miles
    ``as the crow flies,'' but it's 21.8 miles to the nearest FSA
    office if you drive it. The problem is, to drive it on those
    highways and those roads it's 44 minutes each way. So, it's 1.5
    hours roundtrip, if you want to go over to that next county's
    office and pick up a form, or whatever it may be.
        Now, in the farm bill in 2008, in the closure criteria, we
    use the phrase, ``To the maximum extent possible,'' which, to
    me, sounds like we gave you discretion on hardship cases like
    this, where it may be technically 20 miles away, even though
    this is longer than 20 road miles away. It seems like you would
    have some discretion to make exceptions or to understand the
    hardship that you'd be causing on people to close the office.
    Did you make any exceptions for anyone in the country?
        Secretary Vilsack. We've not made exceptions as of today,
    Senator. And the reality is that I think probably every single
    member of Congress and every Senator could probably make a good
    persuasive local case for why a particular office should stay
    open and not be closed. This is a very difficult set of
    circumstances that we're confronted with. We have less money
    and we have substantially fewer people.
        We've had a substantial increase in the number of
    retirements. In order to avoid substantial layoffs and
    furloughs, we had to have an early retirement, an early
    separation package, which in the last 15 months we've seen
    7,000 of our most experienced people leave.
        This is not an easy process. We have tried desperately to
    avoid furloughs and layoffs. That's basically where I'm coming
    from. And I'm not hiding anything here. We're doing everything
    we possibly can to try to squeeze out every buck that we can in
    a way that allows us to continue a record amount of activity.
        Senator Pryor. Thank you, Mr. Chairman.
        Senator Kohl. Thank you.
        Senator Moran.
        Senator Moran. Chairman Kohl, thank you. Mr. Secretary,
    thank you for being here.
        Mr. Secretary, you're going to be in Kansas in a few days,
    a couple of weeks, and I wanted to welcome you to our State.
    Very much appreciate you accepting the opportunity to speak at
    a Landon lecture in Manhattan, Kansas. Also want to thank you
    for your ongoing and continued support for the National Bio and
    Agri-Science Research facility and your efforts to see that it
    gets built.
        I want to ask a couple of questions, and I'm going to try
    to ask them so I can get them both in in the 5 minutes that I'm
    allowed.

                             UNIVERSAL SERVICE FUND

        Two different topics. First of all, Rural Utilities Service
    (RUS), it's a lending agency that you have a jurisdiction over.
    It provides loans for electric, water, sewer, and
    telecommunications. The telecommunications loan portfolio is
    more than $4 billion. In October, the Federal Communications
    Commission (FCC) adopted an order that significantly modifies
    the Universal Service Fund and inter-carrier compensation
    formulas. On February 15, I wrote you a letter. I'm not yet
    complaining that it hasn't been responded to, but I've raised
    this topic with USDA, with you, in particular, trying to
    discover what your analysis is about the impact of the FCC's
    Universal Service Fund and inter-carrier compensation order,
    what the consequences are to the RUS loan portfolio, as it
    relates to telecommunications.
        Are you concerned with that order? If so, what's RUS USDA
    doing to explain to the FCC and within the administration? I'm
    worried that the potential now exists for significant loan
    defaults of RUS, because one of the main features by which a
    rural telephone company has to repay their loan to RUS is
    Universal Service Fund dollars that no longer will be flowing
    to those telephone companies.
        Secretary Vilsack. Senator, I'm not sure if that's one
    question or two.
        Senator Moran. That was one question.
        Secretary Vilsack. Okay. Do you want to ask the second one?
        Senator Moran. Thank you very much for that opportunity, if
    the chairman will let me get by with that.

                           LEAN FINELY TEXTURED BEEF

        The second one is certainly a different topic, but Kansas
    is certainly a beef State. And lean finely textured beef has
    been front and center in the last few weeks. If lean finely
    textured beef is no longer used, it will take 1.5 million more
    head of cattle to make up for the lost beef, and the cost to
    producers is estimated to be about $15 a head.
        You said yesterday, and this is your quote, ``Let me
    reiterate, without any equivocation, something that we have
    said hundreds of times, this product is safe, and there's no
    question about it.'' I would like to make certain that that's a
    statement that you believe to be true. And isn't it true that
    finely textured beef is just beef?
        I notice that one of the newspapers today called it filler.
    There's nothing to this product except beef. And I would like
    to give you the opportunity to have you explain to us, but to
    the consumer the safety of this product.

                             UNIVERSAL SERVICE FUND

        Secretary Vilsack. Okay. Senator, let's talk about the
    Rural Utilities Service first. That was your first question.
    When the FCC proposed its initial order, we did, in fact,
    communicate with the FCC about the fact that rural utility
    providers count on the Universal Service Fund. They count on
    inter-carrier rates. They also count on the infrastructure
    assistance that we can provide at USDA. Those three are three
    sort of pillars upon which the whole system operates.
        And we expressed to them the need for them to consider, as
    they put together this proposal, enough flexibility to be able
    to address the need for expanded broadband, which we support.
    At the same time, recognize that there may be circumstances and
    situations where that order may have an impact on a particular
    carrier, that we would have to work with those carriers, and
    they need to give us the flexibility to do so.
        We have asked the folks that we are currently doing
    business with to basically give us more information on the
    specifics as it relates to their individual operation, so that
    we have a better understanding on an individual basis how they
    see the potential impact.
        We have asked the FCC, as they are flushing out this
    process, and it still has not been completed. We've asked them
    to take a look at the waiver system that's in place, to give us
    that flexibility that we've asked for, and if we have it, then
    I think we can make adjustments. We're also aware of the fact
    that the regression factor that they're using to calculate
    various fees and so forth is also being looked at.
        So, this process is not complete. We have weighed in and
    asked for an understanding of its impact on individual
    operations. We've asked those individual operations to provide
    us with information so we could do an appropriate analysis, and
    we've also begun our process of figuring out precisely how we
    will approach things differently if this ultimately comes to
    fruition.
        So, we are aware of it. We've engaged in it. We continue to
    engage in it. We are sensitive to the concerns that you've
    expressed. And we are hopeful that the FCC, with the waiver
    process, will give us enough flexibility to be able to address
    any anomalies or any concerns that might arise.

                           LEAN FINELY TEXTURED BEEF

        We appreciate the fact that folks are now joining us in a
    discussion of lean finely textured beef. We have been talking
    about this issue, Senator, for a number of weeks. Sometimes we
    have been the only ones talking about it. So, we appreciate
    your question.
        It is beef. And it is safe. And it's got less fat. It's
    something we've been saying for literally almost a month now.
        I can't tell you how many times USDA, myself, Dr. Hagen,
    and other members of the FSIS family have been quoted or
    alluded to in reports, and articles, and broadcasts, and in
    news radio interviews about the safety of this product.
        We have two issues, two responsibilities to USDA. One is to
    attest to the safety of a product. The other is as a purchaser
    of items for school lunch and school breakfast programs. In
    that context, we have to be responsive to our customers. We're
    not in the position to mandate that people do a certain thing
    or buy a certain thing, or have a certain thing.
        Several hundred school districts have contacted us asking
    for choice. We have to be responsive to our customers. We've
    provided that choice. But we want to make sure that if they
    make that choice, they're making it based on the facts, and
    that they're not making it on the assumption or belief that
    this product is unsafe, because it is not.
        Senator Moran. Mr. Secretary, thank you very much. And if
    you'd ask somebody in your office to take a look at my February
    15 letter to you in regard to RUS, I'd appreciate it.
        Thank you.
        Senator Kohl. Thank you very much.
        Senator Brown.
        Senator Brown. Thank you, Mr. Chairman. Mr. Secretary,
    thank you. Again, thank you for your trip to Ohio recently, and
    the contribution you made there.

                        AGRICULTURAL RESEARCH FACILITIES

        We've talked a lot about agriculture research, and I
    appreciate the work you've done in Wooster to help us after the
    tornado there. Agriculture is my State's--as the case in just
    about everybody here, I think--number one industry. Both the
    Center for Innovative Food Technologies--near Toledo, and you
    met some people from there--and Ohio State University's
    Agricultural Research Service (ARS) research station in Wooster
    have conducted groundbreaking research in many ways.
        Last year, several of the ARS stations, including the North
    Appalachian Experimental Watershed Research Station in
    Coshocton, Ohio, eastern Ohio, were slated for closure. The
    facility provides valuable information on how farming practices
    affect water quality, data that is important, particularly
    important, given the algal blooms in the Western Lake Erie
    basin, which we discussed, and you learned even more about than
    you already knew the other day.
        This subcommittee provided USDA with the option of
    transferring the land and the facility slated for closure at
    certain other institutions. Could you just give me sort of an
    update? To what extent is USDA open to partnering with eligible
    institutions to develop and implement a use for these
    facilities? How do you plan to move forward on that, inform us,
    and let us know sort of every step of the way, as you go
    forward?
        Secretary Vilsack. ARS basically has got to follow a
    certain set procedure, which we are in the process of doing. We
    are certainly amenable to working with partnerships, land grant
    universities, and others. In fact, in some of the facilities
    that are slated for closure, those discussions, negotiations
    have already taken place, and are taking place.

                               BEGINNING FARMERS

        I will say that, if I can take your question to a slightly
    different place, not only should we think about the
    partnerships with universities, but we have a real problem in
    terms of beginning farmers in this country, in terms of how
    young people, who might be interested in farming, could get
    into farming and be able to afford to get into farming.
        To the extent that the Federal Government is the owner of
    land, or finds itself with land that it needs to dispose of, we
    might want to give consideration to expanding the opportunities
    available to ARS to basically lease or sell to beginning
    farmers, at a reasonable price that land, to make it a little
    bit easier to get young people engaged in farming. The average
    age of the farmer today, I'm guessing, is close to 60 years of
    age now. And I think it's something that we really need to be
    sensitive to.
        So, Senator, we are following the rules as the statutes and
    regulations require. We are making efforts to reach out and
    find out if there is interest. And if there is interest, under
    what circumstances the arrangements could be made for the
    transfer.
        We understand that there are restrictions on what that land
    can be used for, and we will follow those prescriptions and
    those restrictions.
        Senator Brown. Thank you. And I think that your point about
    beginning farmers will pique a lot of interest in a lot of
    places in Ohio, and we've discussed that. I think your idea is
    a good one there, and we will pursue that.

                                BROADBAND ACCESS

        Let me follow-up with a slightly different twist on what
    Senator Moran said about broadband. Yesterday, I did my fifth
    annual, since 2008, my second year in the Senate, I bring
    college presidents from around Ohio to the Capitol for a day,
    and we had about 50, 55 of them yesterday. At the dinner the
    night before, a number of them were talking about broadband
    access or the lack of broadband access. One college president
    said he believes about 29 out of Ohio's 88 counties don't have
    full broadband access. Only one county has none, until a local
    community action agency applied for one of the first ever USDA
    rural development broadband grant. What you-all did, and what
    we did together in the Recovery Act for the $7 billion, and a
    good amount of that went to USDA, and that helped a lot in my
    State, but it's still not enough.
        We must ensure the funding through the rural broadband loan
    program; the community connect programs ensure that funding
    provides it direct to the most underserved areas in the most
    rural communities.
        Tell me what you're doing to ensure that the program
    integrity there in bringing services, especially to those
    underserved low-income and small communities that all of us
    represent.
        Secretary Vilsack. With reference to the Recovery Act
    proceeds, that was the principal effort on the part of USDA,
    was to make sure that we had a focus on areas that were remote
    and rural. In some cases, those remote rural areas probably
    would not be in a position to support full-blown broadband. We
    looked at additional ways in which we could enhance technology
    and make it fiscally responsible and accountable. Part of the
    Recovery Act money was used to create satellite opportunities
    and an upgrade of technology. So, whether it's full-blown
    broadband or whether it was an upgrade, we did focus on remote
    and rural areas.
        As it relates to our regular program, which we're now in
    the process of instituting, there's a very small part of what
    we get from the Congress that is in the form of grants, and it
    is specifically directed, and it is roughly $13 million. It's
    not a great deal of money. It's specifically directed to trying
    to expand opportunities in remote and rural areas.
        In addition to that, there's roughly $25 million that's
    available for distance learning and telemedicine grant
    opportunities. Then, of the $822 million that is in this pot of
    money for telecommunications, about $94 million of it will be
    made available for loan guarantees for expansion in rural
    areas. So, there is a significant effort here, either through
    grants, loans, or the Recovery Act.
        We have, in the last 3 years, funded roughly 600 projects.
    If you take the Recovery Act, the distance learning, the
    telemedicine, and the Connect program, we basically have funded
    roughly 600 projects. Now, it doesn't anywhere near address
    this from a national perspective, which is why the Commerce
    Department has a map that shows where the areas are that still
    need attention, and that should drive additional decisions and
    future decisions.
        Senator Kohl. Thank you very much.
        Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you for convening this
    hearing.

                        WATERSHED REHABILITATION PROGRAM

        Mr. Secretary, I notice in the Department's budget request
    that we see described a budget summary of the Watershed
    Rehabilitation Program. We've had a good many problems in the
    lower Mississippi River Valley with flooding and challenges
    that have resulted from erosion, and it has been clear that
    there's a lot of money that's going to be needed to repair and
    refurbish existing watershed programs, dams, and other
    impoundments that have reached the end of their design lives.
        The budget request doesn't have a specific request for
    funding of any activity in this area, and I wonder what your
    suggestion is. Is there going to be a supplemental budget
    request submitted, or what is the intention of the
    administration in providing assistance to local and district-
    wide governments and associations to rehabilitate these
    structures that are in need of attention?
        Secretary Vilsack. Senator, one of the reasons why there is
    not an appropriation amount is that at the time these
    facilities were constructed, I think there was a basic
    understanding that they became a local and State
    responsibility. Second, the amount of money that has been
    appropriated in that program is relatively small, given what
    could very well be a very significant national need.
        So, if we're going to do this, I would say two things. One,
    it needs to be done on a much larger scale than this budget
    conversation we're having today. And two, if we're going to do
    it, it needs to be in conjunction with and in partnership with
    States and local governments, because they have at least an
    equal responsibility, if not a greater responsibility, given
    the fact that these structures are theirs.

                             CONSERVATION PROGRAMS

        Having said that, we are investing a substantial amount of
    money in conservation and in landscape-scale efforts to try to
    avoid and to try to do a better job of controlling water. We
    still have a long way to go, but we're working on it. We have a
    record number of acres now enrolled in conservation, and the
    budget before you would allow us to add another 29-30 million
    acres to the 330 million acres that are currently enrolled of
    the 1.4 billion acres that could potentially be subject to
    conservation programs of the amount of farmland in this
    country.
        So, I would say we'd be happy to work with you on a much
    larger, much, much larger infrastructure discussion. I mean, I
    think this is part of why there has been a suggestion for an
    infrastructure bank, why there's been a suggestion for a large-
    scale infrastructure appropriations, because when you talk
    about $20 or $30 or $40 million, it really has very little
    impact on the overall problem that you're alluding to.
        Senator Cochran. I appreciate your personal attention to
    the situation and your willingness to explore possibilities for
    providing some Federal assistance in this area.

                           CATFISH INSPECTION PROGRAM

        One area of interest, too, that I wanted to mention at
    today's hearing involved our domestic fish program and the
    development of what has become a very substantial financial
    investment throughout the southern part of the country. Catfish
    inspection and expansion of markets, dealing with competition
    from overseas in the United States are all parts of this area
    of concern and interest.
        I know that as we are preparing for this new farm bill
    that's being considered, there's an opportunity for defining
    some statutory responsibilities for inspection and standards.
        Do you have any information that you can provide the
    subcommittee giving us a status report of where we are on
    developing an inspection program for domestically produced
    catfish?
        Secretary Vilsack. Senator, can I offer some advice before
    I answer your question?
        Senator Cochran. Sure.
        Secretary Vilsack. If you work on this in the farm bill, to
    the extent that you can define what a catfish is, it would be
    helpful.
        Senator Cochran. You can tell by looking.
        Secretary Vilsack. That's what I thought, too, coming from
    Iowa, but I found out in this process that there are at least
    39 different varieties, and depending upon where you are
    domestically, or where you are internationally, catfish is not
    necessarily a catfish, which is why we received a substantial
    number of comments to the proposal.
        As you know, we asked for input from folks to give us a
    better understanding of precisely how the world defines
    catfish, and we're in the process of evaluating those
    responses. And literally, it is a very difficult circumstance
    and situation, because depending upon how narrow or how broadly
    you define that term, it impacts and affects quite a bit. So,
    we're in the process of trying to figure out precisely what was
    meant, and there's some conflict in terms of the congressional
    history of this. And so, it would be helpful if there was
    clarity from the Congress in terms of precisely what variety or
    type of catfish you were referring to, or maybe you're
    referring to all types of catfish.
        Senator Cochran. We look forward to working with you on
    this issue. It is very important, and I think it needs our best
    efforts.
        Secretary Vilsack. I understand, sir.
        Senator Kohl. Senator Hoeven.
        Senator Hoeven. Thank you, Mr. Chairman. Mr. Secretary,
    good to see you again.

                               WATER BANK PROGRAM

        I want to thank you for your help on the Water Bank
    Program, and your folks are working to implement it. We think
    that would be very helpful on Devils Lake. So I just want to
    thank you for that.

                                  WIC PROGRAM

        Also, I want to bring up the WIC program, specifically
    regarding potatoes. I and others feel potatoes need to be
    included with fruits and vegetables. Your thoughts?
        Secretary Vilsack. Senator, the WIC program is basically a
    supplemental program. It's designed to supplement and to
    encourage nutritious eating. What we do in developing the
    package is we take a look at what people are already consuming,
    in terms of fruits and vegetables, and then what we try to do
    is to amplify or add to that. What we found from the review is
    that people are already consuming quite a bit of--the potatoes
    are not something that they don't consume. They consume quite a
    bit of that. What they don't consume as much of are dark green,
    orange vegetables, things of that nature. So, the WIC program
    is designed to essentially complement what people are already
    deciding to do or already eating.
        Senator Hoeven. Are you willing to encourage that potatoes
    be included with the WIC supplemental nutrition program? I
    think there's a lot of people who feel that it should not have
    been left out, and we'd like to see it included. Are you
    willing to work towards that objective?
        Secretary Vilsack. Senator, again, the purpose of this is
    to complement what people are already doing. If they're already
    consuming enough of one item, it would basically mean that we
    would have to reduce our commitment to some other item that
    they're not consuming a great deal of, and probably ought to,
    if they want to have a balanced and nutritious opportunity for
    their young children. So, this is a complementary. This is not
    a situation where people aren't eating any potatoes. These are
    situations in which people are eating quite a lot of potatoes,
    but they aren't eating a lot of the other types of vegetables
    and fruits. So what we want to do is make sure that they have
    access to those other options.
        Senator Hoeven. All right. I understand your point and
    would encourage its inclusion.

                                 BLENDER PUMPS

        But, I want to move to blender pumps. I believe that you've
    looked at funding blender pumps out of the Rural Energy for
    America Program (REAP). Is that correct?
        Secretary Vilsack. That's right.
        Senator Hoeven. And in the President's budget, there's $4.6
    million in REAP funding. Give me your thoughts on what portion
    of that can and should go to blender pumps. I know you and I
    share a common belief that blender pumps are a good thing, can
    help give consumers more choice, better pricing, help stimulate
    renewable fuel, production, and distribution. What are your
    thoughts in terms of what you can put towards blender pump,
    promoting blender pumps and helping gas station owners get
    blender pumps on their premises?
        Secretary Vilsack. I agree, Senator. And I may be
    misstating this, and if I have, I'll correct it. I believe we
    received instructions from the House that they were not
    particularly interested in us using monies for blender pumps.
    I'm not sure if there's a prohibition. I think there was at one
    point.
        I don't know that I'd necessarily want to commit to a
    certain percentage, because there are an awful lot of good
    ideas that come out of the REAP program. We were a little
    concerned about the fact that it was substantially reduced in
    this current budget, which made it more difficult for us to do
    everything we'd like to do.
        We've had 13,000 different projects, energy efficiency,
    anaerobic digesters, energy audits, windmill solar systems, as
    well as blender pumps. We've funded, I think, a couple hundred,
    maybe 250 blender pumps. We obviously want to do more than
    that. And depending upon the amount of resources that the
    Congress allocates to this program, we're going to continue to
    fund blender pumps, if there's not a prohibition restriction.
        Senator Hoeven. I know there's been some legislation
    offered that would restrict it. I don't know of any restriction
    in place. I mean last year, I think the funding was about
    $3.4----
        Secretary Vilsack. You mean in terms of what went to
    blender bumps, or the overall REAP money, because it was more
    than that.
        Senator Hoeven. Oh. Blender pumps. I think it was around
    $3.4. Does that sound right?
        Secretary Vilsack. You're probably right.
        Senator Hoeven. In any event, I'd like to work with you to
    see what we can do. I know there is some pushback on it, but
    look, I think in terms of renewable fuels, we're trying to find
    more market-based approaches to continue to develop renewables
    from the standpoint of giving customers choice and helping with
    pricing. I think blender pumps is the way to do it. So, I'm
    interested in working with you in the context of your budget as
    to how we can do more of it.
        I thought REAP might be the best program. You may have
    other ideas. If so, I'd love to hear what they are.
        Secretary Vilsack. To me, when you deal with the farm bill,
    you deal with rural development programs, and you deal with the
    energy title within the farm bill, to the extent that we can
    have flexibility, that's the key. We may have to have fewer
    programs, but if we have flexibility, we can use maybe the
    business and industry loan program to work with a consortium,
    for example, of convenience store owners to assist them in
    putting blender pumps in, as opposed to an individual grant to
    an individual business. Maybe that's a possibility. That's
    currently not necessarily a possibility under the business and
    industry loan program.
        Senator Hoeven. Who would we work with on your staff to
    really figure out what makes most sense, in terms of trying to
    develop this?
        Secretary Vilsack. Sarah Bittleman. We'll get you her
    contact information, Senator.
        Senator Hoeven. Thanks, Secretary.
        Secretary Vilsack. Thank you.
        Senator Kohl. Thank you very much.

                         FOOD FOR PEACE TITLE II GRANTS

        Mr. Secretary, we all know that many, many millions of
    people around the world suffer from chronic and acute hunger.
    We've seen how rising food prices have caused instability to
    some of the most vulnerable populations, and yet, the budget
    includes a decrease of $66 million in the Public Law 480
    program.
        What is the rationale for cutting this program when the
    need for food assistance around the world is increasing? And if
    less funding is provided for this program, is this
    administration prepared to respond to an emergency, as we saw
    last year in the Horn of Africa?

                         INTERNATIONAL FOOD ASSISTANCE

        Secretary Vilsack. Senator, we work with our sister agency,
    the U.S. Agency for International Development (USAID), to make
    sure that we're providing the assistance and help that's
    necessary. We have the Bill Emerson Humanitarian Trust, as you
    well know, that provides some degree of assistance and help, an
    entity that may, for example, be utilized when North Korea is
    requesting food assistance. There's a possibility of that.
        These are difficult times. If you say to add the money back
    that you reduced from that, then the question is, where does it
    come from? Does it come from the WIC program? Does it come from
    rural development programs? Does it come from the food safety
    program? Where does it come from? I mean the reality is we're
    dealing with constrained budgets. So, tough choices have to be
    made.
        We think that there's a substantial amount of money that's
    committed to these programs. It's $1.4 billion, plus the
    McGovern-Dole program, which we did maintain at a status quo
    funding. We think we're still in a position to help millions of
    people with this. And we also believe it's not just the United
    States' responsibility, which is why we've been working with
    General Assembly countries and the Group of Twenty (G-20)
    Agricultural Ministers to discuss a more coordinated and global
    response to these concerns. A discussion, for example, of
    developing virtual reserves, grain reserves, so that we're in a
    position to be able to respond internationally and in
    partnership in a collaborative effort. That's the reason why we
    have the Feed the Future initiative, which is not just designed
    to provide food assistance, but also to take a look at how we
    might make producers in other countries more productive, so
    that they can do a better job of meeting their own needs. So,
    we reduce the need for this kind of assistance.
        So, I think you have to look at the totality of what we're
    proposing, and look at what we're doing internationally to try
    to stretch and leverage these resources.

        ANIMAL AND PLANT HEALTH INSPECTION SERVICE FUNDING AND STAFFING

        Senator Kohl. Mr. Secretary, the Animal and Plant Health
    Inspection Service (APHIS) promotes the health of animals and
    plants and guards against invasive species. The budget proposes
    7-percent funding reduction as well as elimination of 151
    employees. How do you plan to meet the responsibilities of
    APHIS with such severe cuts in funding and staff? Can you
    provide assurances that existing safeguards against intrusion
    of new invasive pests will not, in fact, be weakened?
        Secretary Vilsack. Senator, what we have done is we've,
    first of all, engaged in a fairly significant process
    improvement initiative within APHIS, so that we can do our job
    in a quality way, in a better way, and spending less time.
    There are a number of permitting regulatory and licensing
    responsibilities that APHIS has, where we have substantially
    reduced the amount of time. We can provide you and the
    subcommittee with a copy of our process improvement manual that
    shows the number of days that we've saved from biotechnology
    reviews, et cetera. That's one strategy.
        [The information follows:]

             Streamline Decisions for Genetically Engineered Plants
        While maintaining strong oversight to ensure the safety of
    genetically engineered (GE) products, APHIS is reforming its processes
    so that the time it takes to consider petitions for deregulating the
    use of GE crops will be cut in half, reducing to 13-16 months the
    potential adoption of new seeds with traits that can deliver a variety
    of improvements such as improved yields or reduced inputs. APHIS
    announced the start of this process in November 2011 as part of other
    streamlining improvements. APHIS reviewed its approval process using
    Lean Six Sigma's business process improvement strategy and identified a
    number of areas that could be improved, leading to a more timely,
    predictable and higher quality process. APHIS has improved the overall
    timeline significantly by standardizing and streamlining process steps.
    APHIS will also be soliciting public input on pending petitions earlier
    in the review process, enabling the agency to improve the quality of
    its environmental analyses. By taking these steps, APHIS believes it
    can deliver to its customers and the public a more predictable process
    for considering and acting on product deregulations. Once the agency
    implements all of these business process improvements, a more
    predictable timeframe will enable developers to bring products granted
    nonregulated status to market more quickly and provide growers with
    more choices and access to new technologies sooner, while enabling
    APHIS to maintain its mission to protect U.S. agriculture and the
    environment from plant pests. In calendar year 2011, USDA made 10
    determinations on petitions for nonregulated status for genetically
    engineered crops. That is the most determinations in a single year in
    more than a decade.
               streamline veterinary biologics licensing process
        To ensure the best use of resources and work toward meeting the
    demand of the biologics industry, APHIS is conducting a business
    process improvement review of work flow at the agency's Center for
    Veterinary Biologics with the objective of decreasing turnaround times
    for veterinary biologics license submissions, reducing the overall time
    it takes to process a complete license application by about 100 days, a
    savings of 20 percent. Making certain we meet our responsibility of
    ensuring that veterinary biologics are pure, safe and effective has
    always been the strongest consideration during this process. APHIS
    broke the larger licensing process up into smaller, multiple projects
    creating a group of projects that will ultimately speed up overall
    licensing times. Some of the process improvements include the
    electronic workflow of documents and moving from a four-tier labeling
    system to a single-tier labeling system. The four-tier labeling system
    required a significant amount of information to be printed on product
    packages. Rather than have more information on the label, the proposal
    is to require a label statement referring the user to a Web site where
    basic information regarding efficacy and safety for the product may be
    viewed. From this information, the end-user can use personal judgment
    in determining which product to use to meet his/her particular
    circumstances/needs. The user may also compare efficacy results from
    several firms with like products. APHIS projects additional savings
    from reductions in reagent/reference production, laboratory testing,
    and animal use.
        Additional examples of process improvements can be found at USDA's
    Web site on the Blueprint for Stronger Service (www.usda.gov/
    strongerservice). A summary of some other APHIS actions is included in
    the fact sheet for Marketing and Regulatory Programs and a blog on
    February 24, 2012, by Administrator Parham.

        Secretary Vilsack. The second strategy is that we have
    taken a look at the pest and diseases that we are currently
    managing and asking the question, Is the strategy that we are
    using with reference to specific diseases and pests the
    appropriate strategy? Do we have an eradication strategy when,
    in fact, a maintenance strategy might be more appropriate and
    probably more feasible? Are there circumstances where good
    practices by producers will be sufficient to protect against a
    reemergence of a particular disease or pest?
        As a result of all of those steps, we feel that we can
    still do the job that we are required to do and should do in
    order to increase and maintain agricultural productivity, even
    though we're faced with, again, some difficult budget
    discussions and decisions.
        The 151 employees, this is basically, we worked our way
    through an attrition program. We have a workforce where 50
    percent is probably within 5 to 10 years of retirement, and in
    many cases, well over the normal retirement age. We're seeing a
    lot of folks beginning to retire. So, we're trying to manage
    this in a way that allows us to do our job, do it well, but
    perhaps do it quicker, more efficiently, and more effectively.
        Senator Kohl. All right. Senator Blunt.

                             BROADBAND PROGRAM RULE

        Senator Blunt. Thank you, Chairman. Mr. Secretary, both
    Senator Moran and Senator Brown talked about broadband. My
    biggest question on broadband continues to be the balance
    between the underserved and the unserved. In fact, Senator
    Brown used the phrase, ``The most underserved,'' which I assume
    the unserved, would be the most underserved.
        Talk to me a little about the new rule, and concerns I
    would have, without knowing a lot about the rule until you
    explain it to me, that we're continuing to encourage
    competition, where people have taken their own money and
    created a network that somebody's decided is underserved,
    because there's no competition, rather than really focusing on
    the 15 percent of Missourians that are unserved.
        Secretary Vilsack. Senator, I want to make sure I
    understand your question. When you talk about the rule, you're
    talking about the FCC rule, or are you talking about the rule
    that we have for the administration of our broadband program?
        Senator Blunt. I'm talking about the new RUS rule.
        Secretary Vilsack. Okay. What we are attempting to do is to
    respond to the concerns that folks have expressed about the
    fact that we are not directing our resources in the appropriate
    way and in the right way. I think what you'll see from us is a
    focus on those unserved.
        Senator Blunt. Unserved is what I want to say.
        Secretary Vilsack. Unserved areas. Having said that, there
    are times when because of the remoteness of it or the
    population of a particular area, it may be difficult to have
    the highest level of broadband capacity, because you may not be
    able to sustain it with a customer base. So, it is, I think,
    important for us to continue to look for ways in which we can
    improve access and connection to telecommunications, without
    necessarily creating a circumstance where we're setting
    somebody up for failure.
        I think the FCC rule does have some play here, because I
    think the FCC is under the belief that if they empower some of
    the larger operators to become more interested in these
    unserved areas, that they'll do a better job than they've done
    in the past of trying to respond to the needs of those unserved
    areas.
        Let me also say that I think that there are new technology
    opportunities that we haven't had a chance to discuss today. I
    should have brought my prop with me today. At USDA, we are
    engaged in experimenting in the State of Hawaii with a
    technology that basically is about as big as this card, and
    it's about that thick, and four or five of these items placed
    on a tall building or on a hill will provide access for miles
    and miles of coverage, without the necessity of tens-of-
    thousands of dollars of infrastructure.
        We are operating these units to develop a 4G network in
    Hawaii, using it for public safety purposes, and to provide
    interoperability. So, a month or so ago, I was sitting in my
    office in DC, in the Agriculture building in DC, talking to our
    chief information officer, who was on the big island in Hawaii,
    and we were talking to an ambulance that was driving on another
    island, by virtue of these little square boxes. As I understand
    it, they are several hundred dollars, not several thousand
    dollars, in cost. So, it is conceivable that we are on the cusp
    of new technology that will make it easier to get to those
    remote areas, and still make it financially feasible for them
    to have the technology. It's a combination of our programs, the
    FCC trying to help the Verizons and the AT&Ts of the world be
    more responsive to these needs, and new technology advancements
    that might make it less expensive to do it.
        Senator Blunt. That sounds good. It doesn't surprise me at
    all that the technology is getting smaller and more available,
    and I encourage you to continue to stay focused, as you
    obviously are, on that. It does bother me when we use tax
    dollars to create a competitor to somebody that has created a
    service without tax dollars, particularly, when there are still
    people who have no service of any kind.
        Secretary Vilsack. I agree, and I think that's the reason
    why when we did the Recovery Act we made a real effort to avoid
    that criticism and that concern. So you'll see a lot of where
    we're working on the unserved areas, and in some cases, very
    remote areas.

                             RESEARCH LAB CLOSURES

        Senator Blunt. Right. I appreciate that. On the extramural
    grants, when we close research labs, what's the cost of moving
    that program somewhere else? And did the cost in fiscal year
    2012 meet your expectations for the fiscal year 2012 cost of
    the labs we're currently in the process of closing and moving
    that work somewhere else?
        Secretary Vilsack. We're still in the process of doing
    that, Senator, so it may very well be that a more definitive
    response can be given to you in a couple of months.
        Senator Blunt. Would you do that?
        Secretary Vilsack. Sure.
        Senator Blunt. Go ahead and do what you can today, but I'll
    just ask right now.
        Secretary Vilsack. Absolutely.
        Senator Blunt. When you get more information on that, I'd
    like to see it.
        [The information follows:]

        The fiscal year 2012 agriculture appropriations conference report
    agreed with the ARS proposal to close 12 laboratories. Research
    activities at the 12 laboratories have ceased and were not relocated
    elsewhere. The one-time costs associated with the relocation or
    separation of affected personnel and the disposal of property are
    estimated at $39 million in fiscal year 2012.

        Secretary Vilsack. I have requested from ARS an outline of
    what their plans are. There are certain timelines, certain
    restrictions, certain communication requirements that they are
    going through, and they are going through with each individual
    location. In some cases, it obviously costs a little bit more
    upfront, and the savings occurs down the line.
        I don't know that I've been apprised at this point that any
    of the estimates are totally inaccurate. Sometimes it does
    depend on the relationship and the deal that's made with the
    university, in terms of rehabilitation, in terms of
    environmental cleanup, that type of thing, but I have not been
    advised as of today that there is a significant difference
    between our estimates and what we actually will incur.
        As far as the programming is concerned, let me say that
    what ARS has done, at my request, is they have looked at every
    single facility in our portfolio, more than 100 of these
    locations, and if you can conceptualize in your mind a grid, it
    is basically divided into four quadrants. In this quadrant at
    the top right-hand are those facilities that are in very good
    shape, from a maintenance standpoint, and are also high-
    priority research.
        The lower right-hand quadrant are high-priority research,
    but in facilities that are not in particularly good shape. The
    upper left-hand quadrant are low-priority research and
    facilities that are in pretty good shape, and then over here,
    low-priority research and facilities that are in bad, bad
    shape.
        So as we look at this quadrant, we're going to be in a
    position to know, as resources get tight, where the priority
    research is and where the good facilities are, and we have to
    make sure that we do the best job we can to match those up, and
    that's essentially what we're doing.
        If we close a facility, and the research is high priority,
    it gets transferred to another facility. If it's research that
    is of a lower priority, it may have to be assumed by someone
    else. I mean the reality is we're dealing with a different day
    here, a different day, and that day is that we will have and
    have had less money in many of these areas, and that's the
    consequence of having less money. You've got to prioritize. And
    when you prioritize, you basically prioritize, and you draw a
    line where the money runs out, and everything below that line
    has got to go in some way, or shape, or form.
        Senator Hoeven knows about this. Maybe he doesn't, because
    he's always dealt with surpluses, but those of us who are not
    fortunate enough to have been Governor of North Dakota
    understand that. And if you want to take something from the
    bottom of the pile and take it to the top of the pile, and then
    something from the top of the pile has to come down, because
    you've only got so many dollars.
        Senator Blunt. My understanding is the surpluses got a lot
    greater after Senator Hoeven became Governor, so maybe they
    didn't always have them, but they did have them when he left.
        On that regard, as long as I don't have to explain what was
    in every quadrant, I'm okay, but I think I've kind of followed
    the quadrants, as you explained them.
        Do you have any idea how ARS, rather, arrived at the
    decision as to where to make the cuts? It did seem they fell
    very heavily on the research outside of ARS, the extramural,
    the campus-based research, as opposed to research that was more
    inside the department.
        Secretary Vilsack. I think I would have to provide a more
    detailed explanation, but I don't want to misstate something,
    and I'll be happy to provide that to you, but I will tell you
    that given where we see this headed, with various discussions
    and decisions you-all have to make about reducing budgets
    significantly, we want to be prepared to be able to do this in
    a thoughtful and strategic way. As a result of this approach
    that I've just outlined, we're now in a position to do that.
    And I think, if there are criticisms, I'd be happy to visit
    with you about----
        Senator Blunt. Yes. If you can get a little more of that
    information to our staff, that would be great. I would like to
    look at that, because it does seem to me that the campuses,
    particularly, have a lot of resources included, and student
    labor, and other opportunities that aren't available in other
    places. And I think that campus-based research has always been
    pretty cost-effective, but these closures appear to be heavily
    focused on that kind of research versus research that's fully
    funded by the Federal Government.
        Secretary Vilsack. It may be the age of the facilities. It
    really may be the priority of the research itself. It could be
    the fact that it duplicates research that's being done in other
    locations more effectively and more efficiently. I mean it
    could be a combination of all those factors, Senator.
        [The information follows:]

        The temporary budget reductions to ongoing ARS programs in fiscal
    year 2012 are necessary to finance the one-time costs associated with
    the closure of 12 ARS laboratories. ARS sought to balance the impact on
    intramural and extramural programs through an across-the-board
    reduction of intramural research, a hiring freeze, and extramural
    funding reduction. Together, these actions will finance the one-time
    costs to ARS for facility closures without terminating other ARS
    research projects and continuing research with ARS extramural partners.

        Senator Blunt. I want to talk more about that, and we can.
        Thank you, Chairman.
        Senator Kohl. Senator Pryor.

                    FARM SERVICE AGENCY OFFICE CONSOLIDATION

        Senator Pryor. Thank you, Mr. Chairman. And I would like to
    follow-up on something Senator Blunt said a few moments ago
    about broadband, and Senator Moran and Senator Brown mentioned
    it as well.
        In terms of closing some of these offices, these FSA
    offices in Arkansas, if you look on a map, where we have the
    least amount of broadband, that's where you tend to be closing
    these offices. It's in the most rural and sometimes most
    challenging parts of the State. And I know a lot of people do
    business online today, but these farmers who are out there in
    these parts of the State, they're not going to be able to go
    online.
        Let me ask about another FSA office in Arkansas, and I'm
    sure this is true in other places. In Lafayette County, it's
    spelled Lafayette, but we pronounce it La-fay-ette in our
    State, there's Lewisville, Arkansas. It is 22.86 Euclidean
    miles away from the closest FSA office, which is in Hope. And
    what I would like to do, if possible, is get an understanding
    from you, because your people say it is only 14.9 Euclidean
    miles away.
        Secretary Vilsack. Senator, if we've made a mistake, we
    obviously have to acknowledge that, and we'd be happy to work
    with you and your staff to make sure that either we're right or
    you're right, and if we're wrong, we'll need to correct that.
        Senator Pryor. Here's a map of it right here. Is it
    possible that I could send one of my staff members over either
    today or tomorrow to sit down with your people and look at your
    software? This software that we have right here, we couldn't
    get from you. We requested several times to give us a copy of
    what you have, and to show us how you're doing it. You wouldn't
    do it. We were going on Google. We were going on MapQuest,
    whatever else. Finally, we figured out that we actually have
    the software that you use at the Geographic Information office
    in Little Rock, so we understand we're using the exact same
    software you are. Could we send a staff person over there to
    sit down with your people and confirm that----
        Secretary Vilsack. Sure.
        Senator Pryor. We're right on our numbers? Thank you.
        In Faulkner County, which is Conway, we have a situation
    where there's 136,000 total reported planted acres in Conway.
    You have what we call a one-stop shop. I think you guys may
    call it a service center, where you have lots of different
    government offices there, where everybody can come in, and it's
    something that I know in recent years USDA and others have
    bragged about, because it makes it very convenient for the
    citizens of the State. This is another example where if we were
    using the road miles versus the Euclidean miles, this one
    wouldn't be closed. Do you take into consideration the
    convenience here that, in effect, what you're doing is you're
    breaking out of this one-stop shop for people? Did you-all take
    that into consideration when you looked at it?
        Secretary Vilsack. We were aware of the fact that some of
    these facilities were collocated, Senator, but to get back to
    the comment that I made earlier, the options are not good. None
    of the options are good. And eventually, the options were
    creating greater inconvenience for a lot more people and a lot
    more offices. I mean, if you furlough people or you lay people
    off, that's going to create more concerns in a lot more
    offices. So, that's what we're faced with.

                         BLUEPRINT FOR STRONGER SERVICE

        These are not easy decisions, trust me. We did not take
    these lightly. Just in the same way that we're not taking
    lightly internally what we're trying to do within USDA to
    figure out how we might be able to provide more efficient
    service, save money, and not have to close offices in the
    future. This administrative services process, I'm not sure how
    familiar you and your staff are with it, but we'd be happy to
    brief you on it. I think you will find that we are looking very
    carefully at our own internal activities, taking a look at
    whether or not we could be better off with regional centers for
    some of the work that we do, figuring out whether or not there
    are centers of excellence or shared service centers that might
    allow us to do a better job of human resources, or civil
    rights, or IT, the things that are common to every mission
    area.
        We are looking at every aspect of this, because we
    recognize you-all have tough decisions to make, you're going to
    make those tough decisions, and we're going to have less money.

                    FARM SERVICE AGENCY OFFICE CONSOLIDATION

        Senator Pryor. I mentioned that we have 10 FSA offices in
    Arkansas that closed, and I promise you this will be the last
    one I mention. This is the fourth out of the 10. And we could
    go through all 10, but we won't today.
        In Clarksville, Arkansas, there's one, and it's within the
    20 miles of Paris, Arkansas. But, you also have Paris on the
    closure list. So, that means that there will not be one for the
    folks in Clarksville, in that county, so they're going to have
    to go to Ozark, which is farther than 20 miles. Did you take
    that in consideration when you were doing this? That, to me,
    seems inconsistent with the statute.
        Secretary Vilsack. Let me say that we asked the State folks
    to verify and to weigh in on the decisions that were specific
    to the State of Arkansas.
        Senator Pryor. Right. But there again, this is another map
    of it. That seems inconsistent with the statute, because what
    they're left with is, they're left with traveling farther than
    the 20 miles that's in the statute to get to an FSA office. I
    mean this is more of an interpretative issue, I think, with
    USDA rather than your local people in Arkansas issue.
        Secretary Vilsack. It isn't, though, sir, because of the
    way in which these decisions were developed. They were
    developed primarily from instructions in DC, implemented, if
    you will, at the State level, so the State folks were the ones
    who gave us the recommendations for which offices needed to be
    closed. So, if we've made mistakes, we obviously have to own up
    to those mistakes.
        Senator Pryor. Right.
        Secretary Vilsack. There's no question about that.
        Senator Pryor. But, wouldn't you say that this might be a
    mistake, too?
        Secretary Vilsack. I don't know, because--I mean, I don't
    know this particular situation. The first example that you gave
    me was, I think, a little clearer in my mind, and it may be
    that I need to--I can't see that map, frankly, Senator.
        Senator Pryor. Okay. We certainly can----
        Secretary Vilsack. My eyes aren't that good. I wish they
    were.
        Senator Pryor. In fact, maybe this afternoon or tomorrow,
    when I send my staff person over to meet with your people, they
    can talk about this one, too, because basically the bottom line
    is, these folks in Clarksville, the net effect is they will
    have to drive farther. They will have to drive much farther
    than 20 miles to get to an FSA office.
        Actually, my last question on this line, Mr. Chairman, is,
    I know that you slated 131 of these for closure, and you had
    several public meetings. Did any of these public meetings
    change your mind at all on these 131?
        Secretary Vilsack. Senator, these are tough decisions, and
    obviously, people are going to come and they're going to talk
    very passionately about the need for their individual office.
    And you could basically find a reason to keep every single one
    of them open, but the reality is we don't have the resources or
    the people to do that. That's number one.

                               RURAL DEVELOPMENT

        Number two, my view of this is that we really need,
    perhaps, at USDA to do an even better job than we've done, even
    though we've helped more than 50,000 small businesses in the
    last 3 years, which is a record number. We really need to
    figure out how we can generate a lot of private sector activity
    in these communities so that there are options for jobs and for
    better incomes. Many of these communities rely, to a great
    extent, on publicly supported institutions, and really, we need
    to figure out how to do a better job of creating private
    enterprise, so that folks have more job opportunities than they
    have from trying to keep a post office, or an FSA office, or a
    school open. Those are really important, but we haven't done a
    good enough job, I guess, in getting factories opened there so
    that folks have options.
        Senator Pryor. Thank you, Mr. Chairman. I actually have a
    few more questions. Are we going to have a third round?
        Senator Kohl. Certainly.
        Senator Pryor. Thank you.
        Senator Kohl. Mr. Hoeven.
        Senator Hoeven. Thank you, Mr. Chairman. I can defer, if
    you just have a question or two to finish up, Senator. Are you
    sure? Okay.

                          AGRICULTURE RESEARCH FUNDING

        I actually want to follow-up on a question that Ranking
    Member Senator Blunt asked you, and it's about the agriculture
    research funding, and it's the extramural program funding. At
    North Dakota State University, they're doing a lot of work on
    the U.S. Wheat and Barley Scab Initiative, and also on the Ug99
    barley stem rust research program. Both of those have seen
    administrative reductions of about 30 percent. And at the State
    level we've put a lot of funding into our agriculture research
    greenhouse at North Dakota State University, and so I
    understand that you have to find ways to save, but could you go
    into a little bit of how you're making that analysis?
        And I know that Senator Blunt was asking the same question,
    but through the university system, and in States like ours,
    we're willing to try to design programs to maximize the
    leverage on that research. So, we need to understand how you're
    approaching that, so that we can, I guess, do the best job
    possible of attracting those dollars into programs like these
    two, which are very important to us.
        Secretary Vilsack. Roughly 51 percent of the resources go
    into crop and animal production protection and productivity.
    Roughly 18 percent or so goes into environmental stewardship
    and the importance of maintaining water quality and quantity. A
    percentage goes into some of the other areas that are outside
    of agriculture, specifically in terms of nutrition, food
    safety, and things of that nature. So, it's a broad base of
    responsibilities we have from a research perspective. I get a
    little confused, because when we talk at USDA about external
    and internal, we often refer to the external as the competitive
    grant program.
        Our belief is that we have got to do a better job on two
    fronts. First, we have to do a better job of continuing to
    leverage the resources that we have more effectively. The
    competitive grant process allows us that opportunity to fund
    the best projects possible, and to really force and compel
    people to really think about what research they're doing and
    how they're doing it.
        Second, as great as the university systems are, and they
    are, and I appreciate Senator Blunt's acknowledgement of our
    150th anniversary, and that of the Morrill Act, there is no
    overarching process that establishes the national research
    goals that would allow us to avoid duplication and replication
    of research that's taking place in many land grant universities
    across the country. So it's going to be important, I think, for
    us to have a conversation in a time of limited resources,
    either at the State level or at the Federal level, to do what
    we're doing at the global level.
        We have the Global Research Alliance, where we're dealing
    with 30 different countries on climate issues, and we're saying
    let's not replicate or duplicate research, let's make sure the
    right hand knows what the left hand is doing. I have to feel
    that there's probably some duplication that's taking place
    across the country, and maybe we're not investing our research
    dollars, whether internally or externally, as efficiently as we
    can. So, somewhere there's got to be a process, the competitive
    grant process is one way of compelling collaboration, and which
    is working. We're making grants now to a university, but that
    university may have six or seven different other universities
    that they're partnering with. So, I think there's a lot of work
    in this area.
        The last thing I would say, we don't have the advantage
    that other research areas have, the National Science
    Foundation, the National Institutes of Health. Our funding has
    been flat-lined, for the most part. It hasn't been increased
    dramatically. We don't have outside foundations or resources
    that would allow us to supplement our resources. So, I think
    there's a lot of opportunity in this space for us to do a
    better job.
        Senator Hoeven. I do want to emphasize those two programs
    to you, U.S. Wheat and Barley Scab Initiative, also, the Ug99
    Barley Stem Rust Research Program, because both saw 30-percent
    reduction, administratively applied reduction, which I think is
    significant.
        Secretary Vilsack. Senator, can I ask, when you say
    administrative, so I know what you mean, I think I know what I
    would mean by that, but what do you mean by that?
        Senator Hoeven. Essentially, reduction in this year's
    funding for those programs, for those research programs, in
    terms of what came out to the university to deduct.
        Secretary Vilsack. I think there has been an effort on our
    part to make sure that we're not overfunding the administration
    of grants, as opposed to the actual research. There's a
    difference between how much money goes to the university to
    sort of administer the university versus how much money
    actually goes to the research project itself.
        Senator Hoeven. No. I'm talking about research for those
    specific programs, research dollars for those specific
    programs.
        Secretary Vilsack. But I'm saying, within that grant,
    there's a certain allocation for administration and a certain
    allocation for the actual research, and I'm not sure if that's
    where we're having a communication issue.
        Senator Hoeven. No. When I say administratively reduced, I
    mean USDA actually coming in on a discretionary basis, reducing
    actual research dollars for that research. And this is
    something that I'll be working with Senator Blunt and others
    on, because I mean this is something that, obviously, we're
    very interested in and think that this is critically important.
        The other thing is, in terms of the, and I say this a lot
    of times, I've got one more question. I can certainly defer for
    the third round. I know that's what Mark did. Maybe it's best I
    do that.
        Senator Kohl. Go ahead.

                                 CROP INSURANCE

        Senator Hoeven. Okay. Just in the overall budget, the
    administration's budget, they reduced crop insurance by almost
    $8 billion. I'm on the Agriculture subcommittee as well, and
    that's not the direction we're going. Clearly, we're not going
    to have direct payments. And so, what we're trying to do is
    find ways to enhance crop insurance. I'm on legislation with
    Senator Conrad, Senator Baucus, and others, and there are other
    bills as well. But crop insurance is going to be more
    important, in terms of a cost-effective safety net.
        Just give me your thoughts here, because my sense is you're
    sympathetic to the tremendous importance of crop insurance,
    particularly in the situation of tight dollars. That's going
    the wrong direction. Just your thoughts.
        Secretary Vilsack. It depends. It depends on where the
    money is coming from. I mean clearly, let me state
    unequivocally that crop insurance is the linchpin of the safety
    net. But, there are three components to the crop insurance.
    There's the amount the insurance company gets. There's the
    amount the agent gets. And there's the amount that the farmer
    pays. And all of those are basically supplemented, if you will,
    by Government assistance.
        We've done an analysis of what insurance companies
    currently are getting in terms of the return on investment, and
    how much it would take for those insurance companies to be able
    to maintain the integrity of crop insurance. What we found was
    a 12-percent return on the money would be sufficient to
    maintain the integrity.
        Even in a year that was extraordinary, last year, crop
    insurance companies are still going to net about $1.5 billion,
    I'm told, of profit. So right now, they're getting 14 percent.
    So, the question is: Is there any adjustment in these tight
    times between 14 and 12 that could be made that doesn't
    compromise the process of the crop insurance program at all?
    Number one.
        Number two, I think agents, on average, get somewhere
    around $1,000 per policy for selling a policy, a slight
    adjustment to that, given the fact that 15 years ago when crop
    insurance was sold, it was quite difficult to sell the concept
    to farmers. Today, it's not at all difficult, because most
    farmers want it, and most bankers require it. Can there be a
    slight adjustment there?
        Then the third component of the President's proposal is
    crop insurance is a partnership between the Government and
    farmers. Some commodities, we are actually subsidizing the
    premium by 60 to 65 percent. Maybe a 50-50 partnership is fair.
    So those three areas do not compromise the capacity for us to
    have crop insurance, nor does it compromise our capacity to
    expand the number of products available to cover more crops as
    we've done. So, I don't know that you necessarily equate
    reductions in Government subsidy with not supporting the
    program. It depends on where the money comes from.
        Senator Hoeven. There was $6 billion taken out of crop
    insurance, in terms of what goes to the insurers in the past
    year. And crop insurance is going to have to carry a lot more
    of the load. So, separate and apart from what you're saying, in
    terms of the actual program and how we make sure we have a
    safety net for farmers, we're going to need to emphasize crop
    insurance, which is going to take more funding in that part of
    the program, not less.
        Secretary Vilsack. Not necessarily, Senator, because with
    the money that was taken, insurance companies were generating
    17, in some cases as much as 26-percent return on their money
    annually.
        Senator Hoeven. But, remember, we took $6 billion out of
    the program already.
        Secretary Vilsack. This brought it down to 14--$2 billion
    went back into various programs to help the farmers.
        Senator Hoeven. And now you've got crop insurance picking
    up some of the help that was formerly provided by other parts
    of the program. Crop insurance is going to have to pick that
    up. So, there's a lot more to it than just the one piece you're
    talking about.
        Secretary Vilsack. Unless you amplify crop insurance with
    another program, which a lot of folks are talking about, which
    the President recognized in his budget of providing additional
    resources for ``a disaster program of one kind of another.''
        Senator Hoeven. There'll be some of that, but we're still
    going to need to have to emphasize crop insurance.
        Thank you.
        Senator Kohl. Good. Senator Pryor.

                   AGRICULTURAL RESEARCH SERVICE LAB CLOSURES

        Senator Pryor. Thank you, Mr. Chairman. Let me ask about an
    ARS issue, about a 30-percent cut to extramural ARS activities.
        As I understand it, in fiscal year 2012, ARS proposed to
    close 12 laboratories. However, USDA did not submit a budget
    request to the Congress that included all the costs associated
    with closing these facilities, including the closure of labs,
    relocating employees, et cetera. As a result, ARS was $38
    million short for these activities after the appropriation
    bills were signed into law. Is that right? Do I have that
    right?
        Secretary Vilsack. Senator, you may very well be right, and
    that's basically what we have to do is when that happens we've
    got to figure out how to absorb that cost.
        Senator Pryor. And that seems to me to be a budget mistake
    on USDA's part for not budgeting properly last year.
        Secretary Vilsack. I'd like to think that you-all would
    have given us that money, but I'm not sure that's the case,
    given the fact that you've been cutting ARS the last couple of
    years.
        Senator Pryor. My understanding was that it wasn't part of
    your request, that you thought you had adequate funds to do the
    changes.
        Secretary Vilsack. We have to absorb that, Senator.
        Senator Pryor. And that's my point. You're absorbing it at
    our expense. I mean, in effect, we're paying for the mistake.
    Aren't there other ways to find that money to absorb that $38
    million?
        Secretary Vilsack. There are other ways. You could
    appropriate money. I mean a supplemental appropriation. We
    could transfer money, but in which case you'd then be asking me
    why we were transferring resources from another program that
    you like to another program that you like. I mean these are
    tough issues, Senator. These are tough issues, and when the
    Congress is basically telling us, as we have heard repeatedly,
    that we're going to have less money, and when we're talking
    about a $1.5 trillion cut that's forthcoming, these are hard
    decisions. There's no easy answer.
        And I will tell you, I hear a lot of folks talk about
    waste, fraud, and abuse is the answer. Well, there's always
    going to be better ways to do things, but at the end of the
    day, with the kind of cuts we're talking about, and that we've
    dealt with, we're dealing with real difficult decisions. I
    think it's important for people to understand that.
        Senator Pryor. I do have some more questions along those
    lines, but I don't want to try the subcommittee's patience. So,
    let me ask about one more thing.

                 AGRICULTURAL RESEARCH SERVICE GRAZING RESEARCH

        It seems like Arkansas got a lot of focus over at the USDA
    when they looked at cutting their budget this year. You've
    decided to close the Dale Bumpers Small Farms Research Center
    in Booneville. In light of the closure of the Brooksville,
    Florida, facility in 2011, and the expected closures of
    Watkinsville, Georgia, and Beaver, West Virginia, by June 1,
    2012, where will the ARS conduct grazing research for the
    Eastern part of the United States?
        Secretary Vilsack. There are three areas that will pick up
    some of the work that was done in Arkansas. They are Nebraska,
    Oklahoma, and Texas.
        Senator Pryor. And they'll be looking at the grazing aspect
    of it.
        Secretary Vilsack. Yes, sir.
        Senator Pryor. Because I know that part of what Booneville
    was doing is they were doing long-term, like a 20-year study on
    watersheds and the impact livestock have on those.
        Secretary Vilsack. The fact is that the priority research
    is going to continue. It may continue in a facility where the
    maintenance costs over time will be less. It may continue at a
    facility that is actually doing this work as well, to avoid
    duplication.
        Senator Pryor. And actually, this Dale Bumpers facility
    actually meets one of the criteria you talked about earlier,
    because it is hard for young people to get into farming. And
    here, they focus on small farms, and startups, and how you can
    get into certain type of farming activities and actually make a
    go of it.

                             AGRICULTURAL RESEARCH

        I think that on this, and maybe some of these other
    facilities that we've talked about today, they focus on long-
    term basic research that actually helps farming, helps
    agriculture, and helps that be a core strength in the U.S.
    economy. So, are you-all just going to be getting out of the
    research business? Is that where you're headed?
        Secretary Vilsack. Senator.
        Senator Pryor. I'm asking.
        Secretary Vilsack. We have over 100 facilities that will
    still be operating, and we've asked for additional resources in
    the Agriculture and Food Research Initiative (AFRI) portion of
    the budget, $60 million-plus additional above and beyond what
    was appropriated last year. We've been advocating for more
    research opportunities. It doesn't necessarily mean that we
    have to have more facilities. It means that there is a number
    of different ways in which we can embrace additional research.
        So, it's unfair to suggest that we're trying to get out of
    the research business. But, it is fair to point out that the
    Congress has provided less money in several areas of our
    budget, and we have to deal with that. I'm not going to whine
    about it. I'm not going to complain about it. I'm going to
    manage it. But I have to have the capacity to manage it. I have
    to have the capacity to make choices. And sometimes those
    choices are difficult.
        If it doesn't come from one source, it's got to come from
    another source. That's the reality of less money, and we are in
    that position and circumstance where every single entity, every
    single agency of the Government is going to have to go through
    this.

                         BLUEPRINT FOR STRONGER SERVICE

        Frankly, it's a difficult process, but it's an important
    process, because it really allows you to think carefully and
    very strategically about what we ought to be doing, where we
    ought to be doing it, and how we ought to be doing it. Which is
    why we just didn't focus on office closings, we just didn't do
    what a lot of people do when they're faced with less money, is
    just to do a blanket across-the-board cut in workforce, which
    would have disrupted services in a lot of different areas. We
    took a strategic approach. We said, Less travel, less supplies,
    less conferences. We said, Are there ways in which we can do
    civil rights, IT, budget and finance, human resources,
    security, property management, and procurement more effectively
    and efficiently? Yes--379 different set of recommendations that
    we're now in the process of implementing.
        We looked at a Voluntary Separation Incentive Pay and
    Voluntary Early Retirement Authority (VSIP/VERA) process, so
    that we didn't have to be unfair to the people who had worked
    and dedicated their life to USDA, by giving them an opportunity
    for early retirement or for a buyout, so that we could keep a
    lot of our young people that we have been hiring over the
    course of the last several years, to maintain a good diversity
    in our workforce.
        We looked at office closings. We looked at lab closings. We
    looked at the entire process, which is what you have to do. If
    you could tell me we're not going to be faced with tough budget
    times in the next couple of years, that's great, but everything
    I read suggests that we're going to have to hunker down here.
    That's why I managed the change, rather than be managed by the
    change.

                             AGRICULTURAL RESEARCH

        Senator Pryor. That's why I asked about research, because
    under the Budget Control Act, it's going to be tougher in the
    next few years. And I'm trying to get a sense from you. You say
    you want to spend more in research, but you're going to have to
    be cutting other places. I'm just trying to get a sense of
    where you think the USDA is going over the next several years.
        Secretary Vilsack. The research that we see is the best way
    to use scarce resources, is to do it in a competitive way, that
    compels land grant universities and other universities that are
    engaged in research to collaborate, to avoid duplication, to
    avoid replication of research. That's why we think that the
    AFRI process and National Institute of Food and Agriculture
    (NIFA) is a good way to approach this and get the biggest bang
    and the largest stretch for our dollar.
        There have been those that have suggested that we need to
    complement that with the establishment of a foundation. I'm all
    for that. I think that's great. We don't have that in
    agriculture. We have it in a lot of other areas, and those
    areas have seen significant improvements in research. So, there
    are multiple ways in which we are going to be supportive of
    agricultural research. Make no mistake about that. Make no
    mistake about that. Because there is a direct correlation
    between agricultural productivity and research. The charts are
    very clear.
        Senator Pryor. I agree. I agree. And that's why I was
    asking that. I hope one thing you'll consider is taking these
    old facilities and research you're not using, and not going to
    fund any more, and possibly see if you can turn those over to
    some land grant universities so they can use those for
    research.
        Secretary Vilsack. We are required to do that, in the sense
    that we're required to reach out to our land grant university
    partners and say, ``Are you interested in having this facility?
    And if you are, what would you be willing to do with it, and
    can we enter into an agreement where you would commit it to
    agricultural activities for a period of time?'' We're required
    to do that, and we will follow through with that.
        Senator Pryor. And would there be any funding stream that
    would go along with that for research?
        Secretary Vilsack. That would, I suppose, depend on whether
    or not they'd like to participate in the competitive grant
    process under NIFA and the AFRI program.

                                  CIVIL RIGHTS

        Senator Pryor. Mr. Chairman, the last thing I will say, and
    I'm sorry for trying the subcommittee's patience here. I know
    you've made a lot of progress in the last few years on civil
    rights, but there is still one major problem, I think, that
    exists, and that is USDA has no deadline for civil rights
    intake process or responding to civil rights complaints. And we
    have several folks in our State, and I'm sure others do as
    well, that are hanging out there in limbo for sometimes years
    at a time, waiting for responses from USDA.
        Secretary Vilsack. Senator, I don't think that's correct. I
    just don't think that's correct. In fact, I get a quarterly
    report on both internal and external complaints against USDA by
    mission area. We have a response time within 180 days. I will
    get to your staff the list that I get, and it will show you
    that there is no claim that's currently before the USDA that is
    over the time period that the statute of limitations has
    expired since we started this process and started keeping
    track.
        [The information follows:]

        The attached table is the color coded list that USDA uses to track
    the progress of pending complaints that raise claims under the Equal
    Credit Protect Act (ECOA). The table tracks the number of days left
    before the statute of limitations runs on ECOA claims. USDA's civil
    rights managers at every level meet once a week to review progress on
    these claims and take steps to expedite or remove road blocks as
    necessary.
        Most ECOA claims in inventory fall under a 2-year statute of
    limitations. This means that 2 years from the date of the incident
    alleged to be discriminatory, complainants lose the right to pursue the
    claim in court. More recent claims may benefit from the 5-year statute
    of limitations extended by the Dodd-Frank Act. This administration
    inherited a backlog of over 1,000 uncatalogued complaints that did not
    identify ECOA claims or track the date of the applicable statute of
    limitations.
        USDA civil rights staff inventoried the backlog and identified
    complaints raising ECOA claims. Based on that information, USDA created
    the attached table to track processing time against the deadline
    created by the statute of limitations for each complaint. The table
    identifies complainants' names (redacted); the number of days remaining
    until a 2-year statute of limitations would expire; the date on which
    the 2-year statute of limitations would expire; the status of each
    complaint; OASCR staff assigned to process the complaint; and other
    relevant information.
        An ECOA committee representing staff at every stage of complaint
    processing continues to meet regularly to maintain and update the
    table. New complaints raising ECOA claims are immediately added to the
    list. USDA civil rights managers at every level meet once a week to
    review progress on these pending claims and take steps to expedite or
    remove road blocks as necessary.

                                             USDA--OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS--OFFICE OF ADJUDICATION--EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT EXPIRED
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                     Days
                                             2 years                                                                                                                                elapsed                 Actual      Initial    Date ECOA
     No.   Days  remaining until 2 years      since     USDA rcvd        Agency          Case #        Status       Investigator   Pending review     Program name      Corresp      (from      Current    incident    incident     letter
                from  incident date         incident      date                                                       adjudicator        OASCR                            date      incident      date        date        date       mailed
                                              date                                                                                                                                   date)
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    ---1-32------------------------------4/30/2012.--10/1/2010.--FSA..............--11-4279....--Adjudication..--MB, WS........--OASCR.........--Farm Operating-----9/14/2010.--698.......--3/29/2012.--5/1/2010..--5/1/2010..--10/13/2010--
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       2 55                              5/23/2012.  5/25/2010.  FSA..............  10-3929....  Adjudication..  SF, WH, EP....  OASCR.........  FSA-Guaranteed     5/24/2010.  675.......  3/29/2012.  5/24/2010.  5/24/2010.  ..........
                                                                                                                                                  Loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       3 58                              5/26/2012.  7/28/2010.  FSA..............  10-4133....  Adjudication..  RC, HR........  OASCR.........  Farm Service       7/22/2010.  672.......  3/29/2012.  5/27/2010.  5/27/2010.  9/23/2010
                                                                                                                                                  Agency (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       4 100                             7/7/2012..  7/27/2010.  RD...............  11-4412....  Adjudication..  CB, KC........  Adjudication..  SFH--Rural         7/29/2010.  630.......  3/29/2012.  7/8/2010..  12/21/2010  12/29/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       5 155                             8/31/2012.  7/27/2010.  RD...............  11-4338....  Investigation.  SF............  Investigation.  SFH--Rural         9/29/2010.  575.......  3/29/2012.  9/1/2010..  9/1/2010..  12/2/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       6 168                             9/13/2012.  10/4/2010.  FSA..............  11-4283....  Adjudication..  HR, RC........  OASCR.........  Direct Operating   9/27/2010.  562.......  3/29/2012.  9/14/2010.  9/14/2010.  11/5/2010
                                                                                                                                                  Loan/Guaranteed
                                                                                                                                                  Operating Loan
                                                                                                                                                  (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       7 188                             10/3/2012.  1/31/2011.  RD...............  11-4704....  Adjudication..  CB, JE........  Adjudication..  SFH--Rural         3/25/2011.  542.......  3/29/2012.  10/4/2010.  10/1/2010.  3/25/2011
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       8 213                             10/28/2012  7/27/2010.  RD...............  11-4515....  Adjudication..  KCB, LR.......  OASCR.........  SFH--Rural         10/29/2010  517.......  3/29/2012.  10/29/2010  10/29/2010  12/15/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       9 228                             11/12/2012  11/23/2010  FSA..............  11-4443....  Adjudication..  MB, LR........  Adjudication..  Farm Operating     11/13/2010  502.......  3/29/2012.  11/13/2010  11/13/2010  1/12/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      10 265                             12/19/2012  1/10/2011.  FSA..............  11-4609....  Investigation.  MB............  Investigation.  Farm Operating     12/22/2010  465.......  3/29/2012.  12/20/2010  12/20/2010  2/7/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      11 289                             1/12/2013.  1/7/2011..  RD...............  11-4606....  Investigation.  MP............  Investigation.  SFH--Housing       2/24/2011.  441.......  3/29/2012.  1/13/2011.  1/13/2011.  2/24/2011
                                                                                                                                                  Repair &
                                                                                                                                                  Rehabilitation
                                                                                                                                                  Grant/Loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      12 303                             1/26/2013.  2/1/2011..  FSA..............  11-4687....  Investigation.  WH............  Investigation.  Farm Operating     3/14/2011.  427.......  3/29/2012.  1/27/2011.  1/27/2011.  3/14/2011
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      13 330                             2/22/2013.  11/4/2011.  FSA..............  12-5519....  Investigation.  TA............  Investigation.  Farm Operating     10/17/2011  400.......  3/29/2012.  2/23/2011.  2/23/2011.  11/29/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      14 345                             3/9/2013..  9/22/2011.  FSA..............  11-5359....  Investigation.  TA............  Investigation.  Farm Ownership     10/19/2011  385.......  3/29/2012.  3/10/2011.  3/10/2011.  10/19/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      15 352                             3/16/2013.  4/11/2011.  FSA..............  11-4845....  Investigation.  SA............  Investigation.  Farm Operating     4/5/2011..  378.......  3/29/2012.  3/17/2011.  3/17/2011.  6/17/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      16 377                             4/10/2013.  10/1/2010.  FSA..............  11-4280....  Adjudication..  AG............  Adjudication..  Farm Operating     9/29/2010.  353.......  3/29/2012.  4/11/2011.  4/11/2011.  10/15/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      17 377                             4/10/2013.  4/21/2011.  FSA..............  11-4887....  Adjudication..  JE, MP........  Adjudication..  Farm Ownership     4/14/2011.  353.......  3/29/2012.  4/11/2011.  4/11/2011.  5/13/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      18 395                             4/28/2013.  3/2/2011..  RD...............  11-4828....  Investigation.  MB............  Investigation.  SFH--Rural         4/29/2011.  335.......  3/29/2012.  4/29/2011.  ..........  7/18/2011
                                                                                                                                                  Housing Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      19 395                             4/28/2013.  3/25/2011.  FSA..............  11-5093....  Investigation.  EP............  Investigation.  Farm Operating     4/29/2011.  335.......  3/29/2012.  4/29/2011.  4/29/2011.  8/15/2011
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      20 412                             5/15/2013.  8/19/2011.  RD...............  11-5227....  Investigation.  TA............  Investigation.  SHF-Guaranteed     8/4/2011..  318.......  3/29/2012.  5/16/2011.  5/16/2011.  10/7/2011
                                                                                                                                                  Loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      21 414                             5/17/2013.  9/20/2011.  FSA..............  11-5348....  Investigation.  AG............  Investigation.  Farm Operating     9/30/2011.  316.......  3/29/2012.  5/18/2011.  5/18/2011.  9/30/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      22 421                             5/24/2013.  9/7/2011..  RD...............  11-5316....  Investigation.  MP............  Investigation.  SFH--Rural         8/25/2011.  309.......  3/29/2012.  5/25/2011.  5/25/2011.  10/27/2011
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loan (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      23 433                             6/5/2013..  6/20/2011.  FSA..............  11-5046....  Investigation.  CB............  Investigation.  Farm Operating     6/12/2011.  297.......  3/29/2012.  6/6/2011..  6/6/2011..  9/26/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      24 442                             6/14/2013.  5/4/2011..  RD...............  11-4937....  Investigation.  MP............  Investigation.  SFH--Rural         4/25/2011.  288.......  3/29/2012.  6/15/2011.  6/15/2011.  6/23/2011
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      25 450                             6/22/2013.  7/5/2011..  RD...............  11-5098....  Adjudication..  SA, LR........  Adjudication..  SFH--Rural         6/28/2011.  280.......  3/29/2012.  6/23/2011.  6/23/2011.  7/28/2011
                                                                                                                                                  Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      26 456                             6/28/2013.  7/19/2011.  FSA..............  11-5132....  Investigation.  KCB...........  Investigation.  Farm Operating     7/14/2011.  274.......  3/29/2012.  6/29/2011.  6/29/2011.  8/8/2011
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      27 475                             7/17/2013.  8/15/2011.  FSA..............  11-5215....  Investigation.  LJ............  Investigation.  Farm Operating     7/18/2011.  255.......  3/29/2012.  7/18/2011.  7/18/2011.  11/9/2011
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      28 500                             8/11/2013.  11/8/2011.  FSA..............  12-5524....  Investigation.  LJ............  Investigation.  Farm Operating     10/19/2011  230.......  3/29/2012.  8/12/2011.  8/12/2011.  11/18/2011
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      29 500                             8/11/2013.  9/30/2011.  FSA..............  11-5392....  Investigation.  EP............  Investigation.  Farm Operating     9/15/2011.  230.......  3/29/2012.  8/12/2011.  8/12/2011.  10/21/2011
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      30 542                             9/22/2013.  11/8/2011.  RD...............  12-5527....  Investigation.  NA............  Investigation.  SFH--Rural         10/29/2011  188.......  3/29/2012.  9/23/2011.  1/27/2010.  11/22/2011
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      31 553                             8/29/2013.  10/24/2011  RD...............  12-5497....  Fact-Finding..  FF............  Fact-Finding..  SFH--Rural         10/24/2012  177.......  2/23/2012.  8/30/2011.  8/30/2011.  2/13/2011
                                                                                                                                                  Housing Loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      32 580                             10/30/2013  1/9/2011..  FSA..............  12-5699....  Fact-Finding..  FF............  Fact-Finding..  Commodity Def.     12/28/2011  150.......  3/29/2012.  10/31/2011  10/31/2011  3/16/2012
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      33 609                             11/28/2013  1/18/2012.  RD...............  12-5715....  Fact-Finding..  FF............  Fact-Finding..  SFH--Other         12/20/2011  121.......  3/29/2012.  11/29/2011  11/29/2011  2/28/2012
                                                                                                                                                  (Moratorium).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      34 616                             12/5/2013.  1/20/2012.  FSA..............  12-5740....  Fact-Finding..  FF............  Fact-Finding..  Farm Operating     1/10/2012.  114.......  3/29/2012.  12/6/2011.  12/6/2011.  2/28/2012
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      35 624                             12/13/2013  11/23/2011  RD...............  12-5576....  Fact-Finding..  FF............  Fact-Finding..  SFH--Rural         1/23/2012.  106.......  3/29/2012.  12/14/2011  12/14/2011  1/23/2012
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      36 687                             2/14/2014.  3/2/2012..  FSA..............  12-5864....  Fact-Finding..  FF............  Fact-Finding..  Farm Operating     2/21/2012.  43........  3/29/2012.  2/15/2012.  2/15/2012.  3/16/2012
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      37 950                             11/4/2014.  2/26/2010.  RD...............  10-3706....  Adjudication..  FF............  Adjudication..  SFH--Other (RD)..  11/19/209.  875.......  3/29/2012.  11/5/2009.  11/5/2009.  ..........
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      38 1047                            2/9/2015..  8/16/2010.  RD...............  10-4155....  Adjudication..  FF............  OASCR.........  Rural Development  4/25/2010.  778.......  3/29/2012.  2/10/2010.  2/10/2010.  10/1/2010
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      39 -103                            12/17/2011  5/13/2010.  FSA..............  10-3906....  Adjudication..  OASCR.........  OASCR.........  Farm Operating     5/27/2010.  833.......  3/29/2012.  12/17/2009  7/15/2010.  5/27/2010
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      40                                 ..........  6/22/2010.  FSA..............  10-4017....  Adjudication..  OASCR.........  OASCR.........  Farm Operating     6/16/2010.  ..........  3/29/2012.  TBD.......  TBD.......  8/24/2011
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      41 -412                            2/11/2011.  3/4/2009..  FSA..............  09-2297....  Adjudication..  OASCR.........  OASCR NF        Farm Operating     2/11/2009.  1142......  3/29/2012.  2/11/2009.  2/11/2009.  4/16/2010
                                                                                                                                  Proposed OGC    Loans (FSA).
                                                                                                                                  Not Signed.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      42 0                               1/22/2012.  2/18/2010.  FSA..............  10-3681....  Settlement      ..............  ..............  Farm Operating     2/8/2010..  797.......  3/29/2012.  1/22/2010.  1/22/2010.  9/1/2010
                                                                                                  completed                                       Loans (FSA).
                                                                                                  with
                                                                                                  complainant.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      43 42                              5/10/2012.  5/18/2010.  FSA..............  10-3933....  F 2/29/2012...  ..............  ..............  Farm Operating     5/18/2010.  688.......  3/29/2012.  5/11/2010.  5/11/2010.  6/22/2010
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      44 218                             11/2/2012.  2/15/2011.  FSA..............  11-4729....  F 2/29/2012...  ..............  ..............  FSA--Farm          4/8/2011..  512.......  3/29/2012.  11/3/2010.  4/8/2011..  ..........
                                                                                                                                                  Operating Loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      45 93                              6/30/2012.  9/22/2010.  FSA..............  10-4242....  F 2/29/2012...  ..............  ..............  Farm Operating     8/27/2010.  637.......  3/29/2012.  7/1/2010..  7/11/2010.  10/20/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      46 34                              5/2/2012..  6/2/2010..  FSA..............  10-3988....  NF 3/8/2012...  ..............  ..............  Operating Loan     5/25/2010.  696.......  3/29/2012.  5/3/2010..  5/25/2010.  7/7/2010
                                                                                                                                                  (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      47 0                               2/22/2012.  3/2/2010..  RD...............  10-3719....  Closure         ..............  ..............  SFH--Rural         2/22/2010.  766.......  3/29/2012.  2/22/2010.  2/22/2010.  9/9/2010
                                                                                                  Withdrawn 1/                                    Housing Direct
                                                                                                  30/2012.                                        Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      48 0                               8/31/2011.  1/20/2010.  FSA..............  10-3593....  NF 3/8/2012...  ..............  ..............  Farm Operating     12/30/2009  941.......  3/29/2012.  8/31/2009.  5/1/2009..  ..........
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      49 0                               5/13/2012.  6/8/2010..  RD...............  10-3966....  NF 1/12/2012..  ..............  ..............  RD (loan)........  5/24/2010.  685.......  3/29/2012.  5/14/2010.  5/14/2010.  6/25/2010
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      50 0                               8/18/2012.  7/27/2010.  FSA..............  11-4445....  Closure 8/19/   ..............  ..............  Farm Operating     8/22/2010.  588.......  3/29/2012.  8/19/2010.  8/19/2010.  12/15/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      51 0                               7/11/2013.  7/20/2001.  RD...............  11-5143....  Closure 11/03/  ..............  ..............  SFH--Rural         7/12/2011.  261.......  3/29/2012.  7/12/2011.  7/12/2011.  8/12/2011
                                                                                                  2011.                                           Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      52 0                               2/8/2012..  3/1/2010..  FSA..............  10-3707....  NF 12/2/2011..  ..............  ..............  Direct Operating   2/24/2010.  780.......  3/29/2012.  2/8/2010..  2/8/2010..  7/19/2010
                                                                                                                                                  Loan/Guaranteed
                                                                                                                                                  Operating Loan
                                                                                                                                                  (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      53 0                               11/9/2011.  4/29/2010.  FSA..............  10-3873....  NF 11/10/2011.  ..............  ..............  Outreach &         4/25/2010.  871.......  3/29/2012.  11/9/2009.  4/7/2010..  4/30/2010
                                                                                                                                                  Assistance for
                                                                                                                                                  Socially
                                                                                                                                                  Disadvantaged
                                                                                                                                                  Farmers.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      54 0                               11/9/2011.  4/29/2010.  FSA..............  10-3872....  NF 11/09/2011.  ..............  ..............  Outreach &         4/25/2010.  871.......  3/29/2012.  11/9/2009.  4/7/2010..  11/5/2010
                                                                                                                                                  Assistance for
                                                                                                                                                  Socially
                                                                                                                                                  Disadvantaged
                                                                                                                                                  Farmers.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      55 0                               12/2/2011.  3/18/2010.  RD...............  10-3766....  NF 10/24/2011.  ..............  ..............  SFH--Rural         3/8/2010..  848.......  3/29/2012.  12/2/2009.  12/2/2009.  2/11/2011
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      56 0                               10/22/2011  9/15/2010.  FSA..............  10-4218....  NF 10/21/2011.  ..............  ..............  Operating Loan     9/7/2010..  889.......  3/29/2012.  10/22/2009  5/3/2010..  ..........
                                                                                                                                                  (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      57 0                               11/1/2011.  5/27/2010.  FSA..............  10-3942....  NF 10/24/2011.  ..............  ..............  Farm Operating     5/21/2010.  879.......  3/29/2012.  11/1/2009.  11/1/2009.  Pending
                                                                                                                                                  Loan (FSA).                                                                    discussio
                                                                                                                                                                                                                                 n
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      58 0                               2/29/2012.  7/28/2010.  RD...............  10-4099....  Closed 10/19/   ..............  ..............  Rural Development  7/20/2010.  759.......  3/29/2012.  3/1/2010..  3/1/2010..  6/1/2010
                                                                                                  2011.                                           (502/504 loan
                                                                                                                                                  grant).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      59 0                               3/9/2012..  10/28/2010  RD...............  11-4469....  Closed 10/21/   ..............  ..............  SFH--Rural         2/11/2011.  750.......  3/29/2012.  3/10/2010.  3/10/2010.  6/1/2010
                                                                                                  2011.                                           Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      60 0                               5/31/2012.  7/20/2010.  FSA..............  10-4102....  Closed 8/15/    ..............  ..............  Emergency Loan     7/12/2010.  667.......  3/29/2012.  6/1/2010..  ..........  9/27/2010
                                                                                                  2011.                                           (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      61 0                               11/14/2012  5/4/2011..  RD...............  11-4941....  Closed 10/5/    ..............  ..............  SFH--Rural         4/12/2011.  500.......  3/29/2012.  11/15/2010  ..........  7/8/2011
                                                                                                  2011.                                           Housing Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      62 0                               10/9/2011.  10/27/2009  FSA..............  10-3304....  NF 9/30/2011..  ..............  ..............  Farm Operating     10/26/2009  902.......  3/29/2012.  10/9/2009.  10/9/2009.  5/5/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      63 0                               11/18/2011  1/26/2010.  FSA..............  10-3633....  NF 9/29/2011..  ..............  ..............  Farm Ownership     1/27/2010.  862.......  3/29/2012.  11/18/2009  11/18/2009  5/18/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      64 0                               2/26/2012.  2/26/2010.  FSA..............  10-3689....  Closed--No      ..............  ..............  Farm Ownership     2/26/2010.  762.......  3/29/2012.  2/26/2010.  2/26/2010.  2/11/2011
                                                                                                  Jurisdiction.                                   Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      65 0                               6/30/2012.  8/25/2010.  FSA..............  10-4181....  Adjudication    ..............  ..............  Diaster Loan       8/25/2010.  637.......  3/29/2012.  7/1/2010..  7/1/2010..  10/4/2010
                                                                                                  Closed--Filed                                   (FSA).
                                                                                                  in Federal
                                                                                                  Court.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      66 0                               9/1/2011..  7/20/2010.  FSA..............  10-4083....  NF 8/31/2011..  ..............  ..............  Farm Operating     7/12/2010.  940.......  3/29/2012.  9/1/2009..  9/1/2009..  ..........
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      67 0                               10/14/2011  10/21/2009  FSA..............  10-3312....  NF 8/26/2011..  ..............  ..............  Farm Operating     10/14/2009  897.......  3/29/2012.  10/14/2009  10/14/2009  5/20/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      68 -616                            7/22/2010.  12/15/2008  FSA..............  09-2094....  Investigation   ..............  ..............  Farm Operating     12/9/2008.  1346......  3/29/2012.  7/22/2008.  7/22/2008.  4/15/2010
                                                                                                  (Held in                                        Loans (FSA).
                                                                                                  Abeyance).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      69 -626                            7/12/2010.  7/31/2008.  FSA..............  8-1642.....  Investigation   ..............  ..............  Farm Operating     7/31/2008.  1356......  3/29/2012.  7/12/2008.  7/12/2008.  4/30/2010
                                                                                                  (Held in                                        Loans (FSA).
                                                                                                  Abeyance).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      70 0                               7/4/2012..  7/27/2010.  RHS..............  10-4092....  Closure 8/23/   ..............  ..............  Rural Development  7/20/2010.  633.......  3/29/2012.  7/5/2010..  7/5/2010..  8/27/2010
                                                                                                  2011.                                           (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      71 0                               12/2/2011.  1/12/2010.  FSA..............  10-3558....  Adjudication    ..............  ..............  Farm Operating     1/4/2010..  848.......  3/29/2012.  12/2/2009.  12/2/2009.  ..........
                                                                                                  Not ECOA.                                       Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      72 0                               12/11/2011  12/30/2009  FSA..............  10-3546....  Removed Not     ..............  ..............  Farm Ownership     12/11/2009  839.......  3/29/2012.  12/11/2009  12/11/2009  9/3/2010
                                                                                                  ECOA.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      73 0                               9/1/2011..  4/7/2010..  FSA..............  10-3827....  Closure 8/17/   ..............  ..............  Farm Operating     3/21/2010.  940.......  3/29/2012.  9/1/2009..  9/1/2009..  5/27/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      74 0                               1/1/2012..  10/6/2010.  RD...............  11-4468....  Closure 8/17/   ..............  ..............  SFH--Rural         2/11/2011.  818.......  3/29/2012.  1/1/2010..  1/1/2010..  5/14/2010
                                                                                                  2011.                                           Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      75 0                               1/14/2012.  4/5/2010..  RD...............  10-3813....  Removed Not     ..............  ..............  Rural Development  3/24/2010.  805.......  3/29/2012.  1/14/2010.  1/14/2010.  5/13/2010
                                                                                                  ECOA.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      76 0                               7/24/2011.  9/4/2009..  FSA..............  09-3073....  F 7/25/2011...  ..............  ..............  Farm Operating     8/27/2009.  979.......  3/29/2012.  7/24/2009.  10/1/2009.  ..........
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      77 0                               7/28/2011.  8/14/2009.  RD...............  09-2948....  NF 7/28/2011..  ..............  ..............  SFH--Rural         8/7/2009..  975.......  3/29/2012.  7/28/2009.  7/28/2009.  4/16/2010
                                                                                                                                                  Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      78 0                               7/29/2011.  1/8/2008..  RD...............  8-0907.....  NF 7/28/2011..  ..............  ..............  SFH--Rural         1/6/2010..  974.......  3/29/2012.  7/29/2009.  7/29/2009.  ..........
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      79 0                               10/26/2011  10/26/2009  FSA..............  10-3260....  Removed Not     ..............  ..............  Farm Operating     10/26/2009  885.......  3/29/2012.  10/26/2009  10/26/2009  5/20/2010
                                                                                                  ECOA.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      80 -253                            7/20/2011.  9/11/2009.  FSA..............  09-3087....  Closure/File    ..............  ..............  Farm Operating     7/20/2009.  983.......  3/29/2012.  7/20/2009.  7/20/2009.  ..........
                                                                                                  in Federal                                      Loans (FSA).
                                                                                                  Court (KCB).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      81 0                               7/21/2011.  11/7/2009.  FSA..............  10-3332....  Closure 7/20/   ..............  ..............  Farm Operating     10/7/2009.  982.......  3/29/2012.  7/21/2009.  7/1/2009..  5/20/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      82 0                               10/31/2011  10/9/2009.  FSA..............  10-3343....  Closure 6/27/   ..............  ..............  Farm Operating     9/29/2009.  880.......  3/29/2012.  10/31/2009  10/31/2009  7/1/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      83 0                               2/26/2012.  4/2/2010..  RD...............  10-3810....  Closure 6/24/   ..............  ..............  Denial of Loan     2/26/2010.  762.......  3/29/2012.  2/26/2010.  2/26/2010.  9/3/2010
                                                                                                  2011.                                           (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      84 0                               2/23/2012.  7/27/2010.  FSA..............  10-4090....  Closure 6/23/   ..............  ..............  Farm Operating     4/27/2010.  765.......  3/29/2012.  2/23/2010.  2/23/2010.  4/30/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      85 0                               7/13/2011.  7/30/2009.  FSA..............  09-2919....  NF 7/12/2011..  ..............  ..............  Farm Operating     7/24/2009.  990.......  3/29/2012.  7/13/2009.  7/13/2009.  5/5/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      86 0                               7/8/2011..  3/5/2009..  FSA..............  09-2294....  NF 7/5/2011...  ..............  ..............  Farm Operating     2/25/2009.  995.......  3/29/2012.  7/8/2009..  5/18/2009.  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      87 0                               7/14/2011.  4/6/2009..  FSA..............  09-2482....  Removed.......  ..............  ..............  Farm Ownership     4/3/2009..  989.......  3/29/2012.  7/14/2009.  7/14/2009.  4/30/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      88 0                               7/6/2011..  7/29/2009.  FSA..............  09-2904....  NF 7/1/2011...  ..............  ..............  Farm Operating     7/9/2009..  997.......  3/29/2012.  7/6/2009..  7/6/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      89 0                               6/26/2011.  7/30/2009.  RD...............  09-2899....  NF 6/27/2011..  ..............  ..............  Rural Business     7/28/2000.  1007......  3/29/2012.  6/26/2009.  6/26/2009.  7/19/2010
                                                                                                                                                  Enterprise Grant
                                                                                                                                                  (loan) (RBS).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      90 0                               6/17/2011.  5/28/2009.  FSA..............  09-2668....  Closure 5/26/   ..............  ..............  Farm Operating     5/18/2009.  1016......  3/29/2012.  6/17/2009.  4/24/2009.  5/20/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      91 0                               7/17/2011.  8/20/2009.  RD...............  09-3014....  Closure 6/23/   ..............  ..............  SFH--Housing       8/11/2009.  986.......  3/29/2012.  7/17/2009.  7/17/2009.  5/6/2010
                                                                                                  2011.                                           Repair &
                                                                                                                                                  Rehabilitation
                                                                                                                                                  Grant/Loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      92 0                               8/1/2011..  10/8/2009.  FSA..............  10-3243....  Closure 6/27/   ..............  ..............  Beginning Farmer   9/28/2009.  971.......  3/29/2012.  8/1/2009..  8/1/2009..  6/15/2010
                                                                                                  2011.                                           loan.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      93 0                               8/8/2011..  8/17/2009.  RD...............  09-2946....  Closure 7/5/    ..............  ..............  SFH--Rural         8/8/2009..  964.......  3/29/2012.  8/8/2009..  8/8/2009..  5/5/2010
                                                                                                  2011.                                           Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      94 0                               8/17/2011.  8/25/2009.  RD...............  09-2999....  Closure 6/23/   ..............  ..............  SFH--Rural         8/17/2009.  955.......  3/29/2012.  8/17/2009.  8/17/2009.  5/20/2010
                                                                                                  2011.                                           Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      95 0                               2/14/2012.  2/26/2010.  RD...............  10-3716....  Closure 6/23/   ..............  ..............  502 Housing Loan   2/14/2010.  774.......  3/29/2012.  2/14/2010.  2/14/2010.  4/30/2010
                                                                                                  2011.                                           (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      96 0                               2/22/2012.  9/8/2010..  FSA..............  10-4260....  Closure 6/23/   ..............  ..............  Farm Operating     8/23/2010.  766.......  3/29/2012.  2/22/2010.  2/22/2010.  8/3/2010
                                                                                                  2011.                                           Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      97 0                               6/3/2011..  10/7/2009.  RD...............  10-3337....  Partial         ..............  ..............  SFH--Rural         10/7/2009.  1030......  3/29/2012.  6/3/2009..  6/4/2009..  4/30/2010
                                                                                                  Finding 6/03/                                   Housing
                                                                                                  2011.                                           Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      98 0                               5/18/2011.  6/9/2009..  FSA..............  09-2724....  NF 5/18/2011..  ..............  ..............  Farm Operating     5/1/2709..  1046......  3/29/2012.  5/18/2009.  4/14/2009.  ..........
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      99 0                               5/18/2011.  1/20/2010.  FSA..............  10-3593....  NF 5/18/2011..  ..............  ..............  Farm Operating     12/30/2009  1046......  3/29/2012.  5/18/2009.  5/1/2009..  ..........
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     100 0                               5/19/2011.  4/7/2009..  FSA..............  09-2455....  NF 5/19/2011..  ..............  ..............  Farm Operating     4/1/2009..  1045......  3/29/2012.  5/19/2009.  4/2/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     101 0                               5/26/2012.  7/15/2010.  FSA..............  10-4089....  Adjudication    ..............  ..............  Farm Operating     7/6/2010..  673.......  3/29/2012.  5/26/2010.  5/26/2010.  8/3/2010
                                                                                                  Admin Close.                                    Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     102 0                               5/13/2011.  3/5/2009..  RD...............  09-2311....  NF 5/13/2011..  ..............  ..............  SFH--Rural         2/16/2009.  1051......  3/29/2012.  5/13/2009.  5/13/2009.  4/23/2010
                                                                                                                                                  Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     103 0                               5/5/2011..  5/27/2009.  FSA..............  09-2646....  NF 5/4/2011...  ..............  ..............  Farm Operating     5/4/2009..  1059......  3/29/2012.  5/5/2009..  5/5/2009..  5/20/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     104 0                               4/30/2011.  6/10/2009.  FSA..............  09-2726....  NF 5/2/2011...  ..............  ..............  Farm Operating     6/5/2009..  1064......  3/29/2012.  4/30/2009.  6/5/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     105 0                               5/1/2011..  3/4/2009..  FSA..............  09-2302....  NF 5/2/2011...  ..............  ..............  Farm Operating     7/7/2009..  1063......  3/29/2012.  5/1/2009..  5/1/2009..  ..........
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     106 0                               4/23/2011.  5/6/2010..  RHS..............  10-3898....  F 4/25/2011...  ..............  ..............  504 Loan Grant/    4/28/2010.  1071......  3/29/2012.  4/23/2009.  4/23/2009.  5/20/2010
                                                                                                                                                  Loan (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     107 0                               8/1/2011..  11/17/2009  FSA..............  10-3367....  Admin Closure.  ..............  ..............  Farm Operating     11/12/2009  971.......  3/29/2012.  8/1/2009..  8/1/2009..  5/5/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     108 0                               5/7/2011..  5/27/2009.  RD...............  09-2667....  Admin Closure.  ..............  ..............  SFH--Rural         5/7/2009..  1057......  3/29/2012.  5/7/2009..  5/7/2009..  5/20/2010
                                                                                                                                                  Housing
                                                                                                                                                  Guaranteed Loan
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     109 0                               4/1/2011..  6/12/2009.  RD...............  09-2815....  Admin Closure.  ..............  ..............  Rural Housing....  6/24/2009.  1093......  3/29/2012.  4/1/2009..  4/1/2009..  4/23/2010
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     110 0                               4/8/2011..  4/21/2009.  FSA..............  09-2501....  F 4/8/2011....  ..............  ..............  Farm Operating     4/15/2009.  1086......  3/29/2012.  4/8/2009..  4/8/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     111 0                               4/9/2011..  5/6/2009..  FSA..............  09-2580....  NF 4/11/2011..  ..............  ..............  Farm Operating     4/30/2009.  1085......  3/29/2012.  4/9/2009..  4/9/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     112 0                               6/1/2011..  10/14/2010  FSA..............  11-4379....  Status Change   ..............  ..............  Farm Operating     9/27/2010.  1032......  3/29/2012.  6/1/2009..  6/1/2009..  2/3/2011
                                                                                                  No Longer                                       Loans (FSA).
                                                                                                  ECoa (RC).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     113 0                               4/17/2011.  4/30/2009.  FSA..............  09-2560....  Admin Closure.  ..............  ..............  Farm Operating     4/17/2009.  1077......  3/29/2012.  4/17/2009.  4/17/2009.  Request to
                                                                                                                                                  Loans (FSA).                                                                   withdraw
                                                                                                                                                                                                                                 ltr. Was
                                                                                                                                                                                                                                 mailed to
                                                                                                                                                                                                                                 Comp. on
                                                                                                                                                                                                                                 040610
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     114 0                               5/18/2011.  5/27/2009.  FSA..............  09-2651....  Admin Closure.  ..............  ..............  Farm Operating     5/18/2009.  1046......  3/29/2012.  5/18/2009.  5/18/2009.  Need ECOA
                                                                                                                                                  Loans (FSA).                                                                   ltr. Gave
                                                                                                                                                                                                                                 to TMJ on
                                                                                                                                                                                                                                 051910
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     115 0                               4/2/2011..  4/26/2009.  RD...............  09-2568....  NF 4/4/2011...  ..............  ..............  SFH--Rural         4/16/2009.  1092......  3/29/2012.  4/2/2009..  4/2/2009..  4/16/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     116 0                               4/15/2011.  4/22/2009.  FSA..............  09-2524....  Admin Closure.  ..............  ..............  Farm Operating     4/14/2009.  1079......  3/29/2012.  4/15/2009.  4/15/2009.  ..........
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     117 0                               3/19/2011.  6/5/2009..  FSA..............  09-2729....  NF 3/21/2011..  ..............  ..............  Farm Operating     5/29/2009.  1106......  3/29/2012.  3/19/2009.  3/19/2009.  6/15/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     118 0                               4/30/2011.  5/13/2009.  RD...............  09-2622....  Admin Closure.  ..............  ..............  SFH--Rural         4/30/2009.  1064......  3/29/2012.  4/30/2009.  4/30/2009.  5/24/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     119 0                               3/6/2011..  4/7/2009..  RD...............  09-2438....  Adjudication    ..............  ..............  RD (loan)........  3/25/2009.  1119......  3/29/2012.  3/6/2009..  3/6/2009..  6/15/2010
                                                                                                  Admin Closure.
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     120 0                               2/4/2011..  6/30/2008.  FSA..............  8-1537.....  Settlement 2/4/ ..............  ..............  Farm Operating     6/30/2008.  1149......  3/29/2012.  2/4/2009..  2/4/2009..  4/15/2010
                                                                                                  2011.                                           Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     121 0                               2/5/2011..  2/9/2009..  FSA..............  09-2233....  NF 2/7/2011...  ..............  ..............  Farm Operating     1/15/2009.  1148......  3/29/2012.  2/5/2009..  2/5/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     122 0                               1/8/2011..  2/24/2009.  FSA..............  09-2273....  NF 1/10/2011..  ..............  ..............  Farm Operating     1/27/2009.  1176......  3/29/2012.  1/8/2009..  1/8/2009..  4/16/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     123 0                               1/21/2011.  1/6/2009..  RD...............  09-2164....  NF 1/20/2011..  ..............  ..............  SFH--Rural         12/21/2008  1163......  3/29/2012.  1/21/2009.  1/21/2009.  4/16/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     124 0                               7/7/2011..  7/22/2009.  RD...............  09-2861....  Adjudication    ..............  ..............  SFH--Housing       7/16/2009.  996.......  3/29/2012.  7/7/2009..  7/7/2009..  4/30/2010
                                                                                                  Admin Closure.                                  Repair &
                                                                                                                                                  Rehabilitation
                                                                                                                                                  Loan (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     125 0                               1/6/2011..  1/29/2009.  FSA..............  09-2210....   NF 1/6/2011..  ..............  ..............  Farm Operating     1/8/2009..  1178......  3/29/2012.  1/6/2009..  1/6/2009..  4/23/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     126 0                               12/21/2010  2/2/2009..  RD...............  09-2226....  NF 12/21/10...  ..............  ..............  RBP--Business &    1/20/2009.  1194......  3/29/2012.  12/21/2008  12/21/2008  4/16/2010
                                                                                                                                                  Industry
                                                                                                                                                  Guaranteed Loans
                                                                                                                                                  (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     127 0                               12/20/2010  11/13/2008  FSA..............  8-1651.....  NF 12/20/10...  ..............  ..............  Farm Operating     11/3/2008.  1195......  3/29/2012.  12/20/2008  12/20/2008  4/23/2010
                                                                                                                                                  Loan (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     128 0                               12/20/2010  8/5/2008..  FSA..............  8-1660.....  F 12/20/10....  ..............  ..............  Farm Operating     8/1/2008..  1195......  3/29/2012.  12/20/2008  12/20/2008  4/15/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     129 0                               11/29/2010  1/7/2009..  RD...............  09-2129....  NF 11/26/10...  ..............  ..............  SFH--Rural         12/27/2008  1218......  3/29/2012.  11/27/2008  11/27/2008  4/23/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     130 0                               11/13/2010  12/23/2008  RD...............  09-2118....  NF............  ..............  ..............  SFH--Rural         12/4/2008.  1232......  3/29/2012.  11/13/2008  11/13/2008  4/23/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     131 0                               11/1/2010.  10/29/2008  FSA..............  09-1973....  NF 10/28/10...  ..............  ..............  Farm Operating     10/18/2008  1244......  3/29/2012.  11/1/2008.  11/1/2008.  4/15/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     132 0                               9/17/2010.  12/15/2008  FSA..............  09-2095....  NF 9/16/10....  ..............  ..............  Beginning Farm     12/5/2008.  1289......  3/29/2012.  9/17/2008.  9/17/2008.  4/23/2010
                                                                                                                                                  loan denied
                                                                                                                                                  (SOL).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     133 0                               8/13/2010.  8/20/2008.  RD...............  8-1715.....  NF 8/12/10....  ..............  ..............  SFH--Rural         8/14/2008.  1324......  3/29/2012.  8/13/2008.  8/13/2008.  4/23/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     134 0                               8/19/2010.  8/27/2008.  FSA..............  8-1744.....  F 8/19/10.....  ..............  ..............  Farm Operating     8/20/2008.  1318......  3/29/2012.  8/19/2008.  8/19/2008.  4/15/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     135 0                               6/14/2010.  6/21/2008.  FSA..............  8-1269.....  NF 6/11/10....  ..............  ..............  Farm Operating     6/9/2008..  1384......  3/29/2012.  6/14/2008.  6/14/2008.  5/27/2010
                                                                                                                                                  Loans (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     136 0                               5/16/2010.  5/14/2008.  FSA..............  7-0270.....  F 5/17/10.....  ..............  ..............  Farm Storage       5/16/2008.  1413......  3/29/2012.  5/16/2008.  5/16/2008.  4/27/2010
                                                                                                                                                  Facility Loans
                                                                                                                                                  (FSA).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     137 0                               5/6/2010..  5/20/2008.  RD...............  8-1416.....  F 5/10/10.....  ..............  ..............  SFH--Rural         5/15/2008.  1423......  3/29/2012.  5/6/2008..  5/6/2008..  4/19/2010
                                                                                                                                                  Housing Direct
                                                                                                                                                  Loans (RD).
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
         Current date: 3/29/2012.
         Priority 1 =<180 days from 2-year incident date.
         Priority 2 =181-365 days from 2-year incident date.
         Priority 3 = >365 days from 2-/5-year incident date.
         Case SOL TBD.
         Case held in abeyance.
         Cases resolved prior to SOL expiration.

    ----------------------------------------------------------------------------------------------------------------
                                     Name                                          Title               Initial
    ----------------------------------------------------------------------------------------------------------------
    Tonya Ahmed..........................................................  Investigator........  TA
    Sterling August......................................................  Investigator........  SA
    Karen Bascombe-Cleaver...............................................  Investigator........  KBC
    Moses Brown..........................................................  Investigator........  MB
    Cinnamon Butler......................................................  Investigator........  CB
    Roberto Contreras....................................................  Investigator........  RC
    Michele Ferreira.....................................................  Investigator........  MF
    Shawntey Fox.........................................................  Investigator........  SF
    Alpha Griffin........................................................  Investigator........  AG
    William Henry........................................................  Investigator........  WH
    Loretha Johnson......................................................  Investigator........  LJ
    Minh Pham............................................................  Investigator........  MP
    Edward Profit........................................................  Investigator........  EP
    Carletta Watkins.....................................................  Investigator........  CW
    Kristine Yen.........................................................  Investigator........  CY
    Barrett Caine........................................................  Adjudicator.........  BC
    Leila Levi...........................................................  Adjudicator.........  LL
    Carla Quincy.........................................................  Adjudicator.........  CQ
    William Reid Strong..................................................  Adjudicator.........  RS
    Pilar Velasquez......................................................  Adjudicator.........  PV
    Millie West-Wigins...................................................  Adjudicator.........  MWW
    Tysan Williams.......................................................  Adjudicator.........  TW
    Keyo & Judy..........................................................  Adjudicator.........  K&J
    Heather..............................................................  Adjudicator.........  H&N
    Lawrence Rudden......................................................  Adjudicator.........  LR
    Neema G..............................................................  Adjudicator.........  NG
    ----------------------------------------------------------------------------------------------------------------

                                                   UPDATE STATUS CODES
    ----------------------------------------------------------------------------------------------------------------
                                                                                                    Codes
    ----------------------------------------------------------------------------------------------------------------
    Program Intake Div................................................................  PI
    Program Investigations Div........................................................  PID
    Program Adjudications Div.........................................................  PAD
    Fact Finding......................................................................  FF
    Transfer..........................................................................  T
    Admin Closure.....................................................................  AC
    Actual Incident Date Change.......................................................  AIDC
    Finding...........................................................................  F
    No Finding........................................................................  NF
     ECOA Complaint Addition..........................................................  ECA
    Assignment........................................................................  ASMT
    Pending...........................................................................  P
    Status Change.....................................................................  SC
    Closure...........................................................................  C
    ----------------------------------------------------------------------------------------------------------------

        Secretary Vilsack. We are now in a process of knowing.
    We've got a red, green, yellow system, and if it's a red, it
    tells us that within a certain period of time we've got to get
    a response, otherwise their claim expires. We have not let that
    happen.
        Senator Pryor. That's great. I know you have been improving
    this, but I met with a fairly large group in Arkansas, 3 or 4
    months ago, I don't remember exactly when it was, and that was
    one of the concerns that pretty much everybody in the group
    had.
        Secretary Vilsack. They don't know what the system is,
    Senator. I mean that's just not accurate.
        Senator Pryor. Okay. We have one claim, apparently, that's
    2 years old, that they haven't gotten a response from you guys
    yet. I'll tell you what. We'll sit down after this. I'll send
    my folks over, or you can send your folks over. We can talk
    about it.
        Secretary Vilsack. I'm happy to talk to you about it, but
    sometimes it turns out that there's more to the story than
    either you or I are getting, and if we have a claim that's more
    than 2 years old, I'm happy to personally get that rectified.
    But, I will tell you that we are very focused on this, because
    we are not interested in giving rise to the tens-of-thousands
    of lawsuits and claims that I've been working on for the last
    couple of years to get resolved.
        [The information follows:]

        In 2009, USDA discovered more than 14,000 documents that had been
    classified as civil rights program complaints filed against the
    Department between 2001 and 2008 that had barely been looked into. Many
    of these documents in fact turned out to be complaints, alleging
    discrimination under a variety of laws, including title VI, section 504
    of the Rehabilitation Act, the Food Stamp Act, and the Equal Credit
    Opportunity Act (ECOA). The delayed and minimal processing of
    complaints during the previous Administration was particularly
    troubling for those cases that fell under the ECOA. The ECOA, which
    prohibits discrimination in lending, is distinct from other civil
    rights laws because under the ECOA, the Government can be held liable
    by a court for compensatory damages. In addition, the USDA has the
    authority to provide monetary relief to resolve an administrative
    complaint of lending discrimination against the Department provided the
    complainant could still go to court on that claim (e.g., the statute of
    limitations is not expired). For incidents of discrimination that
    occurred before July 21, 2009, the statute of limitations for ECOA
    claims is 2 years.\1\
    ---------------------------------------------------------------------------
        \1\ The Dodd Frank Financial Reform Act extended the statute of
    limitations to 5 years, but the extension was not retroactive.
    ---------------------------------------------------------------------------
        The administration proposed $40 million in the fiscal year 2013
    President's budget request for the purpose of settling written claims
    filed under the ECOA from July 1, 1997, to October 31, 2009. This
    funding would be subject to authorization by Congress to allow USDA to
    waive the statute of limitations to settle these claims.
        A farmer or other customer with an ECOA claim does not have to file
    a complaint with USDA; they have the right to proceed directly to
    court. However, litigation can be a costly alternative to the
    administrative process. When the backlog was discovered, the typical
    processing time for a civil rights complaint was 4 years, with many
    cases taking much longer, which meant that by the time a decision was
    rendered on a complaint, no monetary relief could be provided by USDA
    where discrimination and resulting economic harm was found. To ensure
    that a backlog like the one encountered did not occur again, the
    Department set a policy to resolve all ECOA complaints either in formal
    closure and/or a settlement before the expiration of the statute of
    limitations. To achieve this goal, the Office of Civil Rights doubled
    the number of investigators and adjudicators working on program
    complaint processing, and instituted a Lean Six Sigma process
    improvement initiative to streamline the complaint process and reduce
    processing time. Since the new complaint staff have been recruited and
    trained, every ECOA complaint filed with the USDA has been resolved
    before the expiration of the statute of limitations. The typical
    processing time for new civil rights program complaints has been
    reduced from 4 years to 18 months. Processing time for one component of
    the complaint process, complaint intake, has been reduced from an
    average of 90 days to an average of 28 days to determine jurisdiction
    and intake a complaint in 2012. Despite the extension of the ECOA
    statute of limitations to 5 years in the Dodd Frank Financial Reform
    Act, the Office of Civil Rights is pressing forward to further reduce
    processing time for complaints. Just this year, the Office of Civil
    Rights debuted a single, USDA-wide form that USDA customers and program
    participants can use to file a civil rights complaint. By capturing all
    of the information needed to accept a complaint, the form will reduce
    the time it takes to process complaints. The form helps to simplify and
    expedite the process for those who believe they have been discriminated
    against. The Department knows how important it can be to customers to
    receive a decision on their civil rights case and is committed to
    making that happen as quickly as a fair, thorough, and just decision
    can be reached.

        Senator Pryor. Like I said, I think you deserve a lot of
    credit for the progress you've made in that area, because it's
    been something that's been neglected for a long time.
        Thank you.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Kohl. Thank you very much, Senator Pryor, and we
    thank you-all for being here today, particularly Secretary
    Vilsack, for your very strong testimony.
        We'll keep the record open for 1 week.
        Secretary Vilsack. Thank you.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing.]

                    Questions Submitted by Senator Herb Kohl

                             FIELD OFFICE CLOSINGS

        Question. What is the current status of the Farm Service Agency
    (FSA), Natural Resources Conservation Service (NRCS), and Rural
    Development office closings that were recently announced?
        Answer. As of March 29, 2012, Rural Development (RD) closed 20 of
    the 43 offices with plans to close the remaining office by the end of
    fiscal year 2012 and NRCS plans to close or consolidate 24 offices by
    the end of fiscal year 2012. At this time none of the NRCS offices have
    been closed or consolidated. The 2008 farm bill (Public Law 110-246)
    requires that FSA take no action toward final approval of the office
    consolidation proposal until at least 90 days after the Secretary of
    Agriculture notified Members of Congress of his proposal. This
    notification occurred on February 27, 2012.
        [Clerk's note: Subsequently, on May 29, FSA announced its decision
    to consolidate 125 of the 131 offices originally proposed for
    consolidation with other USDA Service Centers, consistent with
    provisions of the 2008 farm bill.]
        Question. What will be the total costs of closing offices in fiscal
    year 2012?
        Answer. The total estimated costs for the Department in fiscal year
    2012 will be approximately $44.5 million.
        Question. What do you estimate to be the total savings of these
    closings in fiscal year 2013?
        Answer. Total annual savings for all closures is approximately
    $58.7 million, already reflected in the budget.

                       FOOD SAFETY AND INSPECTION SERVICE

        Question. The Food Safety and Inspection Service (FSIS) is
    responsible for ensuring that the Nation's commercial supply of meat,
    poultry, and processed egg products is safe, wholesome, and correctly
    labeled and packaged. This is accomplished through inspection and
    regulation of the products by agency personnel. The budget calls for a
    $13 million cut in funding associated with implementing new methods of
    poultry inspection and reducing staff by 500 employees.
        Have you begun negotiations with your unions on implementation of
    the new inspection process?
        Answer. We are currently conducting pre-decisional involvement
    (PDI) sessions with the union that should be completed by June 2012. In
    PDI, we work with representatives of the union by sharing information
    about the proposed poultry slaughter process and asking the union to
    identify its concerns. We have tried to find solutions to the union's
    concerns to limit the scope of bargaining should we decide to go
    forward with the final rule. PDI is essentially pre-negotiations.
        Question. The $13 million in fiscal year 2013 savings assumes
    implementation of the new inspection method by October. Is it realistic
    to think you can obtain industry buy-in, successfully complete union
    negotiations, and implement new procedures in such a short time?
        Answer. Our timeline is very ambitious, and there are of course
    some things beyond our control. However, FSIS is committed to
    implementing on schedule. We understand that most large and small
    plants favor the proposed change, so industry will likely seek to
    participate shortly after a final rule is published. As stated above,
    we are conducting pre-decisional involvement sessions with the union.
    We are hopeful that these sessions will limit the scope of any
    necessary bargaining, assuming that the agency decides to finalize the
    proposal. When the agency makes a final decision on how to proceed, we
    hope to conduct any negotiations with the union, possibly in late
    summer. Our experience with the Hazard Analysis and Critical Control
    Point (HACCP)-based Inspection Models Project gives us some
    understanding of the implementation tasks we face and will help us
    manage the conversion should we decide to adopt the rule. Finally, our
    estimate was based on spreading implementation over about 9 months, so
    FSIS does not expect to have to convert a large number of plants
    immediately in order to achieve our estimated savings.
        We are currently conducting PDI sessions with the union. In PDI, we
    work with representatives of the union by sharing information about the
    proposed poultry slaughter process and asking the union to identify its
    concerns. We have tried to find solutions to the union's concerns to
    limit the scope of bargaining should we decide to go forward with the
    final rule. PDI is essentially pre-negotiations.
        Question. How do you plan to purge 500 employees from your roles
    next year?
        Answer. FSIS' goal is to ensure that every employee affected by
    this proposed change is given an opportunity to remain with the agency.
    We plan to accomplish most of the reductions through attrition and
    reassignment to vacancies in other parts of the agency.

                                    NON-O157

        Question. In September 2011, FSIS published a ``Final
    Determination'' that six additional strains of E. coli would be deemed
    adulterants in certain beef products.
        Please detail the process and scientific evidence on which this
    determination was made.
        Answer. FSIS developed a risk profile to examine the risk of non-
    O157 Shiga toxin-producing Escherichia coli (STEC) as an emerging food
    safety hazard associated with beef consumption in the United States.
    This risk profile provides an in-depth review of the relevant science
    to assess public health risk. The conclusions reached in the risk
    profile include that raw non-intact beef products and raw components of
    those products may harbor non-O157 STEC; that pathogenic non-O157 STECs
    are injurious to human health; that ordinary cooking practices, which
    include rare cooking, may be insufficient to destroy all cells of the
    pathogen in beef; and that a low dose of a non-O157 STEC can induce
    illness. In fact, the Centers for Disease Control and Prevention
    estimate that each year, non-O157 STEC serotypes cause nearly 113,000
    foodborne illnesses in the United States. Moreover, while more than 100
    STEC serotypes have been associated with human illness, these six
    serogroups cause between 70 and 83 percent of the confirmed non-O157
    STEC illnesses. Thus, combating these six serogroups can have a
    significant beneficial public health impact.
        For these reasons, FSIS announced a final determination that raw,
    non-intact beef products, or raw, intact beef products that are
    intended for use in raw, non-intact product, that are contaminated with
    STEC O26, O45, O103, O111, O121, and O145, are adulterated, per 21
    U.S.C. 601(m)(1) and (m)(3).
        Question. What are the implications on the industry and on our
    international beef trading partners of this determination?
        Answer. FSIS will launch its non-O157 E. coli testing program on
    June 4, 2012, which will allow establishments time to validate their
    test methods. FSIS will initially test raw beef manufacturing trimmings
    (the major component of ground beef), and then expand testing to other
    raw ground beef product components. FSIS will apply the new tests to
    samples already being tested for other pathogens, so this policy will
    ensure a safer, more reliable food supply with minimal additional cost
    to the agency or to industry.
        Foreign countries that export FSIS-regulated products to the United
    States must maintain a food safety system equivalent to that of the
    United States. Therefore, in February 2012, FSIS contacted foreign
    governments already approved for the export of raw beef to the United
    States and informed them that FSIS would make a limited amount of
    reagents used in the FSIS laboratory method for non-O157 STEC
    serogroups available to a foreign government if that government wanted
    to conduct a comparative analysis of its methods with test kits
    assessed by FSIS.

                         AGRICULTURAL RESEARCH SERVICE

    2013 Budget Resource Reallocation
        Question. The Agricultural Research Service (ARS) is the flagship
    in-house research agency of the Department.
        This budget proposes to redirect over $70 million in resources from
    ``lower priority programs'' to higher priority research activities.
    Please explain your process to determine the priority of research
    initiatives, and how decisions were made to reallocate resources.
        Answer. Focusing on the need to reallocate limited resources to
    address high-priority initiatives, all research programs were
    systematically evaluated based on relevance, quality, impact and cost
    effectiveness. The fiscal year 2013 budget recommends selected high-
    priority initiatives which address the administration's science and
    technology priorities and the Department's strategic goals. The
    reallocation of these resources would allow Congress to fund higher
    priority agriculture research identified in the fiscal year 2013
    budget.
        Question. Is the redirection of $70 million in resources in 1 year
    normal for your research portfolio or is this unusually high?
        Answer. The reduction of $70 million is not unusually high. In
    fiscal years 2009 through 2012, the President's budget for ARS proposed
    reductions and/or terminations of research activities ranging from $39
    million to $146 million to help offset proposed initiatives.
    Agricultural Research Service Lab Closures
        Question. This budget proposes to close five laboratories within
    existing facilities, and to close one facility entirely. Please explain
    how these decisions were made.
        Answer. Decisions regarding which programs to propose for
    termination or closure are always difficult but necessary, given the
    ongoing budget constraints and changing priorities of research
    endeavors. These research laboratories proposed for closure met one or
    more of the following criteria:
      --Considered by the administration to be of lower priority;
      --Mature where the research objectives have been mainly accomplished;
      --Duplicative or can be accomplished more effectively elsewhere in
            ARS;
      --Marginal or below threshold funding for program viability or
            sustainability;
      --Conducted in substandard or inadequate infrastructure and future
            costs are prohibitive;
      --Lacking a critical mass of scientists/support personnel for an
            effective program; or
      --Are carried out by other research institutions.
        Question. What will happen to the employees at these locations?
        Answer. USDA will strive to place all impacted permanent Federal
    employees in suitable jobs where ARS position vacancies exist and for
    which the employee is qualified. While every effort will be made to
    identify a position for all impacted employees, USDA cannot guarantee
    that all employees will be placed. In the event that a placement cannot
    be identified for an impacted employee, the Department will ensure that
    the individual is provided all the entitlements and protections
    available under prescribed personnel procedures and programs.
        Question. How much will it cost to close these labs in 2013?
        Answer. The estimated cost to accommodate the impacted employees
    and dispose of the real property ranges from $10 million to $12
    million. These costs may be spread over 2 fiscal years, depending on
    how quickly the real property assets can be disposed.
        Question. When do you expect to begin realizing savings from these
    closures?
        Answer. Beginning in fiscal year 2013, the $17 million associated
    with the research activities at the six laboratories will be
    reallocated to high-priority research in other ARS laboratories. After
    all costs have been expensed, the closure of these laboratories will
    allow ARS to achieve significant cost avoidance in the capital
    improvement and repair/maintenance of these facilities beginning in
    2014.

                   ANIMAL AND PLANT HEALTH INSPECTION SERVICE

    Budget Reductions
        Question. The Animal and Plant Health Inspection Service (APHIS)
    promotes the health of animal and plant resources to facilitate their
    movement in international markets, and works to ensure abundant
    agricultural products for U.S. consumers. These responsibilities
    include monitoring plant and animal health, working to eliminate or
    control invasive pests, facilitating safely bringing benefits of
    genetic research into the market place, providing diagnostic laboratory
    activities, assisting developing countries improve their safeguarding
    systems, and protecting and promoting animal welfare. However, the
    budget proposes a 7-percent funding reduction, and elimination of 151
    employees.
        How do you plan to meet these responsibilities with such severe
    cuts in funding and staffing?
        Answer. The 2013 budget identified several ways for APHIS to
    operate more efficiently, allowing APHIS to maximize its resources to
    carry out its mission. APHIS has implemented a variety of changes in
    its operations that will result in cost-savings for fiscal year 2013,
    including the consolidation of information technology customer service
    support and switching telecommunications technology. In addition, APHIS
    has identified other areas where a shift in methodology can allow
    savings and still achieve the agency's goals. For example, APHIS has
    developed several statistical and epidemiological methods to increase
    the efficiency of animal health surveillance while continuing to meet
    international standards, saving $9 million. APHIS also is implementing
    business process improvements that will result in savings in areas such
    as licensing of veterinary biologics products, import and export
    reviews, and reviews of petitions to determine the regulatory status of
    genetically engineered crops. The agency's budget request reflects the
    implementation of the identified efficiencies and changes in strategies
    without compromising our mission and services.
        APHIS is also proposing further reductions in the agency's
    contributions towards domestic and international efforts to allow those
    who benefit from our services to contribute, or to scale back the
    Federal role when a pest or disease is simply too widespread. We will
    continue to place high priority on protecting the health and value of
    American agriculture by focusing on those pests or diseases that pose
    the greatest risk and facilitating safe agricultural trade.
        Question. The Animal and Plant Health Inspection Service promotes
    the health of animal and plant resources to facilitate their movement
    in international markets, and works to ensure abundant agricultural
    products for U.S. consumers. These responsibilities include monitoring
    plant and animal health, working to eliminate or control invasive
    pests, facilitating safely bringing benefits of genetic research into
    the market place, providing diagnostic laboratory activities, assisting
    developing countries improve their safeguarding systems, and protecting
    and promoting animal welfare. However, the budget proposes a 7-percent
    funding reduction, and elimination of 151 employees.
        Can you provide assurances that existing safeguards protecting
    against intrusion of new invasive pests into the United States will not
    be weakened?
        Answer. APHIS uses a comprehensive set of measures to safeguard the
    United States against the introduction of foreign pests and diseases.
    These measures include assessing and reducing threats overseas through
    information collection and collaborating with foreign governments, and
    implementing regulatory import policies designed to facilitate trade
    while excluding high-risk products. The agency also works with the
    Department of Homeland Security's Customs and Border Protection to
    enforce these regulations, monitoring for introductions of high-risk
    pests and diseases in the United States and maintaining emergency
    response capabilities to respond when outbreaks occur.
        In developing its fiscal year 2013 budget proposal, APHIS carefully
    examined its programs and operations to determine where we could gain
    efficiencies while maintaining focus on the areas that pose the highest
    risks. For example, APHIS has proposed decreases related to changes in
    epidemiological methods for swine and cattle disease surveillance.
    These changes will allow the agency to realize savings while still
    meeting international standards. In other cases, APHIS identified
    efficiencies that could be gained in telecommunications and information
    technology that will have little or no effect on program operations and
    reduce overall costs. Other reductions target programs for pests and
    diseases that are already established in the United States, such as
    emerald ash borer (EAB), and focus resources on those programs where
    they could make a difference. Despite intensive efforts by APHIS and
    cooperating States to address this pest, we lack the tools needed to
    control it. APHIS will continue to work on tools to manage EAB over the
    long term and protect U.S. forests and urban landscapes. The overall
    proposed reduction is the result of our efforts to identify targeted
    changes and reduce costs while focusing on the highest risk areas.
        Question. The Animal and Plant Health Inspection Service promotes
    the health of animal and plant resources to facilitate their movement
    in international markets, and works to ensure abundant agricultural
    products for U.S. consumers. These responsibilities include monitoring
    plant and animal health, working to eliminate or control invasive
    pests, facilitating safely bringing benefits of genetic research into
    the market place, providing diagnostic laboratory activities, assisting
    developing countries improve their safeguarding systems, and protecting
    and promoting animal welfare. However, the budget proposes a 7-percent
    funding reduction, and elimination of 151 employees.
        Much of this savings assumes State-cooperating agencies accept
    higher costs. Have you discussed with your State partners their
    willingness to take on these higher costs? What are the implications of
    States being unable to pay more for these activities? Do you have a
    back-up plan?
        Answer. Most of APHIS' plant and animal health programs are
    cooperative efforts with State and local partners, and we understand
    that our budget proposal affects them. In developing the agency's
    budget request, we had to make difficult choices to enable us to best
    protect the health of American agriculture while balancing the
    President's priority of reducing the deficit. Under the reality of
    current resource limitations, it is reasonable to share with
    cooperators the costs of programs for which they will receive a
    benefit.
        When addressing pests and diseases of national concern, the Federal
    Government's role traditionally is to coordinate and manage program
    efforts, and ensure that we apply program methods and technologies
    consistently in all affected States and areas. Since these pests and
    diseases have a direct impact on State and local conditions and since
    States and localities are beneficiaries of the actions, it is expected
    that all parties will devote available resources to the effort. While
    there may not have been agreement to the level of contributions for
    each pest and disease program, it is reasonable to expect all parties
    to contribute some level of resources towards these cooperative
    programs that, in most cases, have been in place for several years.
    These decreases will result in a more appropriate allocation of funding
    responsibility given the budget realities we face, and a transparent
    level of Federal contribution will allow cooperators to plan for future
    needs. The agency's budget request is presented more than 6 months in
    advance of when it will become effective, which allows time for program
    partners to develop their spending plans in the coming year. The agency
    will continue to conduct pest and disease programs based on the total
    available resources while considering the highest priorities for the
    program. We will continue to work cooperatively with our State partners
    on these programs and use available resources as effectively as
    possible.

                                 ANIMAL WELFARE

        Question. Animal Welfare has been a high priority of this
    administration. In past years the Department transferred funds from
    other accounts to supplement these activities. However, this budget
    cuts Animal Welfare funding by over 11 percent (larger than the overall
    reduction to the agency). What has caused this change in the
    administration's priority toward Animal Welfare responsibilities?
        Answer. Animal Welfare still remains a high priority of the
    administration. APHIS recognizes that we need to do our part in helping
    to reduce Federal spending. As such, we are scaling back operations as
    a cost-savings measure, including our priority areas such as animal
    welfare inspection and enforcement. Even with the proposed budget in
    2013, the Animal Welfare program remains a priority and will be
    comparable to the adjusted fiscal year 2011 funding level, including
    the reprogramming of $2.5 million in funding.
        Additionally, APHIS will continue its focus on the most egregious
    violators of the Animal Welfare Act (AWA) while seeking ways to operate
    more efficiently in fiscal year 2013. The agency has implemented
    measures to enhance its animal welfare inspection and enforcement
    efforts in recent years. These measures include identifying potential
    regulation changes related to commercial dog breeders and dealers, re-
    evaluating the current methodology for calculating the frequency of
    inspection, and developing and sponsoring meetings and trainings aimed
    at increasing compliance with the AWA. APHIS also conducted a business
    process improvement analysis of its enforcement activities, including
    animal welfare enforcement. After identifying more than 80
    recommendations for streamlining its processes and improving
    timeliness, the agency pilot tested several recommendations with
    considerable success. These business process improvement efforts will
    allow quicker and more effective actions that require fewer resources.

                                   LACEY ACT

        Question. One of the rare increases in this budget is for
    implementation of Lacey Act responsibilities. In fact, the budget seeks
    to double Lacey Act spending by 50 percent, to $1.5 million. Please
    describe what the Department is doing this year regarding its Lacey Act
    responsibilities. In your view, do you think this USDA effort is
    successful? What do you plan to do with the 50-percent increase? Could
    these responsibilities be more efficiently handled outside the
    Department?
        Answer. As amended in the 2008 farm bill, the Lacey Act prohibits
    the importation of any plant, with limited exceptions, taken or traded
    in violation of domestic or international laws. The amendments were
    designed to address illegal logging in other countries. Illegal logging
    is environmentally destructive and undermines markets for wood products
    produced in the United States, affecting businesses and jobs. Among
    other things, the Lacey Act requires a declaration for imported
    shipments of regulated products. This declaration must contain the
    scientific name of the plant, the importation value, the quantity of
    the plant, and name of the country where the plant was taken.
        APHIS began phased-in enforcement of the Lacey Act in May 2009 and
    currently receives about 10,000 declarations per week. Approximately 10
    percent of these are submitted on paper forms that require significant
    resources to analyze and store. Currently, electronic declarations can
    only be made through licensed Customs brokers. In 2012, APHIS has
    $775,000 available for activities conducted under the amendments to the
    Lacey Act. The agency is using these funds for a dedicated staff,
    secure document storage, and outreach activities to inform the various
    industries and importers affected by the Lacey Act amendments. The
    program selects 1 percent of the declarations at random for a cursory
    review and stores the remaining documents. The Department of Homeland
    Security's Customs and Border Protection collects the electronic
    declarations and sends them to APHIS on a weekly basis. For 2013, the
    agency is requesting an additional $725,000 for a total funding level
    of $1.5 million. With these additional funds, the program would work
    toward providing an easier electronic means for collecting and
    maintaining declarations to help eliminate the need for paper-based
    declarations. This will provide another alternative to importers for
    filing declarations (as importers currently must go through a licensed
    customs broker or fill out a paper declaration) and allow APHIS to be
    more responsive to importers' needs. In addition, APHIS would utilize
    additional staff to assist with Lacey Act activities and expand
    outreach efforts to affected industries so they better understand the
    act's requirements. With the requested increase in 2013, the program
    anticipates selecting an increased share of the declarations for a
    review.
        APHIS is working within an interagency group representing the U.S.
    Forest Service, U.S. Department of Homeland Security's Customs and
    Border Protection (CBP), U.S. Trade Representative, U.S. Department of
    Justice, U.S. Department of State, U.S. Fish and Wildlife Service, the
    Council on Environmental Quality, and the U.S. Department of Commerce,
    to implement the Lacey Act provisions and review the program. The
    interagency group represents a broad range of viewpoints on how to
    implement the act. Because of APHIS' regulatory role and interaction
    with the importing community as well as its ongoing joint efforts with
    CBP through the Agriculture Quarantine Inspection program, the agency
    is well positioned to implement the act. APHIS will continue working
    with its partners to administer the Lacey Act in the most efficient
    manner possible given the volume of declarations and products covered.

                       BIOTECHNOLOGY REGULATORY SERVICES

        Question. In the past, this subcommittee has provided increased
    funding for Biotechnology Regulatory Services to support an effective
    biotechnology compliance program for genetically engineered organisms.
    Private sector demands on these services continue to expand. Currently,
    the agency currently faces litigation due to its inability meet its
    regulatory responsibilities in a timely manner. However, this budget
    reduces this funding by 8 percent. How do you plan to improve this
    unfortunate situation with a large funding cut?
        Answer. I appreciate the subcommittee's support for APHIS'
    Biotechnology Regulatory Services (BRS) program. BRS is integral to the
    process of ensuring that genetically engineered (GE) crops under
    development can be safely tested and brought to market. After a careful
    evaluation of the nonregulated status petition review process, APHIS
    has identified several process improvements that are expected to
    achieve the goal of reducing the overall length and variability of the
    time it takes for the petition process. Once complete, this effort is
    expected to reduce review time by more than 50 percent (average review
    times will decrease from about 3 years to just over 1 year). For
    instance, APHIS has eliminated unnecessary steps, clarified and
    simplified responsibilities, and put into place time frames for
    completion of individual steps while maintaining appropriate
    safeguards. Additionally, a portion of the program's $5 million
    increase in fiscal year 2012 will be used for one-time legal fees
    related to litigation over GE alfalfa. The remaining portion will be
    used to hire additional staff and enter into contracts for
    environmental analysis to support the improvements to the petition
    review process. While we are proposing a small decrease in fiscal year
    2013, biotechnology remains a priority for the agency. Even with the
    proposed reduction, the BRS funding level would increase more than 25
    percent from the fiscal year 2010 level of $13.3 million to the fiscal
    year 2013 request of about $16.8 million.

                         AGRICULTURAL MARKETING SERVICE

    Microbiological Data Program
        Question. The fiscal year 2012 House report did not include funding
    for the Microbiological Data Program. The conference report included
    the following statement:

        ``The statement of the managers remains silent on provisions that
    were in both House Report and Senate Report that remain unchanged by
    this conference agreement, except as noted in this statement of the
    managers.''.

        Please explain why this program was zeroed out in the budget even
    though no funding was provided in fiscal year 2012.
        Answer. The Microbiological Data Program (MDP) was continued in
    2012 because the funding reduction in the Consolidated and Further
    Continuing Appropriations Act, 2012 for Marketing Services (which
    includes MDP) could not be positively identified. While the House
    provided $77,500,000 for Marketing Services, accompanied by
    Appropriations Committee report language that denied funding for MDP,
    the Senate and final Appropriations Act provided $82,211,000. Both the
    Senate committee and conference reports were silent on the matter. The
    program was zeroed out in the fiscal year 2013 proposed budget due to
    budget constraints. In developing the fiscal year 2013 budget, we took
    a hard look at activities which support AMS' core mission. The fiscal
    year 2013 budget eliminates funding for MDP, which saves about $4.3
    million. This reduces discretionary funding while focusing Marketing
    Services resources on AMS' core mission. AMS is not a food safety
    agency and MDP is not closely aligned with AMS's core mission to
    facilitate the competitive and efficient marketing of U.S. agricultural
    products.

                        PESTICIDE RECORDKEEPING PROGRAM

        Question. The budget proposes to terminate the Pesticide
    Recordkeeping Program. Currently, 27 States and 2 territories are
    reimbursed to conduct federally recognized State pesticide
    recordkeeping requirements. This program has been in place since 1992.
        Please explain the rationale for terminating this program in light
    of ever-shrinking State budgets.
        Answer. We continue to take practical steps to control expenditures
    and optimize organizational structure to more effectively manage
    current and future resources. In making budget determinations we are
    focusing on AMS' core mission to facilitate competitive and efficient
    marketing of U.S. agricultural products.
        Question. Since this program has been operating for 20 years, why
    does AMS now believe it is no longer central to its core mission?
        Answer. We took a hard look at activities that support AMS'
    marketing-based mission and Pesticide Recordkeeping is not as closely
    aligned with marketing as other AMS activities such as Market News or
    Transportation and Market Development. Although Federal monitoring and
    advisory services will be discontinued, applicators of restricted use
    pesticides will still be required to retain their records and provide
    access upon request to Federal and State agency representatives. Since
    the Federal program has been operating for 20 years, we have had the
    opportunity to educate a large number of private applicators of
    federally restricted use pesticides. More than 100,000 pesticide
    recordkeeping manuals, brochures and other outreach materials have been
    distributed each year by the program to producers.

                                  CONSERVATION

        Question. The budget proposes a decrease of $2.5 million and 142
    staff years for conservation technical assistance.
        How does NRCS plan to provide important technical assistance with
    fewer funds and fewer staff?
        Answer. NRCS will continue to provide important technical
    assistance to landowners in addressing their resource issues and
    concerns. This will be accomplished through the use of improved
    delivery and streamlining processes such as the Conservation Delivery
    Streamlining Initiative (CDSI), expanding the role of Technical Service
    Providers (TSPs), and continuing to build strong conservation
    partnerships with local, State, and Federal entities as well as with
    the private sector.
        Question. Please describe what organizational improvements NRCS
    plans to implement.
        Answer. In coordination with the USDA Blueprint for Stronger
    Service, NRCS is taking a holistic look at our entire organization to
    ensure we are well prepared to meet our mission now and in the years to
    come. NRCS currently has teams working on 17 major efforts that will
    result in a streamlined, efficient organization to transform NRCS into
    a 21st century, multi-billion dollar agency that can adapt to change
    while delivering exceptional conservation assistance to private
    landowners. The information is provided below.
        The efforts are organized into five categories:
      --Conservation Delivery Streamlining Initiative (CDSI).--This effort
            will result in new and innovative technology that will support
            conservation assistance process online, streamline service
            delivery, and will give landowners 24/7 access to their
            conservation information. It will allow conservationists to
            spend more time in the field while enabling administrative
            experts to handle the administrative tasks of programs and
            applications.
        In fiscal year 2012 through fiscal year 2013, CDSI will implement a
            national strategy to realign field positions through the
            establishment of program support specialist position. This
            position will reduce the administrative burden on the technical
            field employees and enable a more streamlined and efficient
            approach to the delivery of conservation support.
      --Science Efforts.--NRCS launched efforts to gain agency-wide
            efficiencies by sharing resources, reducing duplication of
            effort, and enhancing our role as a leader in conservation
            science while addressing decreased operating budgets. Efforts
            include:
        --Consolidate Soil Survey offices and provide shared services
                across larger geographic regions;
        --Reduce duplication of effort and streamline our system of
                developing and maintaining conservation practice standards
                and associated guidance;
        --Improve our capacity to support complex engineering needs across
                the country; and
        --Create more effective and efficient systems for conservation
                technology acquisition, development, and support to the
                field.
        In fiscal year 2012 and fiscal year 2013, NRCS will implement the
            consolidation of the Soil Survey offices, beginning with the 24
            office closures identified by Secretary Vilsack.
      --State Efforts.--NRCS is also working on State level improvement
            efforts to coordinate, centralize, and streamline State
            processes and needs.
        --States are charged with finding ways to increase direct technical
                service and increase resource sharing across State
                boundaries. Selected States in each region will test models
                where they reduce duplication by sharing services such as
                contract management and technical expertise;
        --NRCS is also evaluating the benefits of centralizing support for
                quality assurance, equitable relief, and legal appeals at
                national headquarters to reduce burdens on State and field
                staff.
        In fiscal year 2012, NRCS kicked off the multi-State servicing
            pilot that is testing a comprehensive approach to identifying
            areas for State-sharing, analyzing the option, and implementing
            long-term strategies for sharing resources.
      --Administrative Efforts.--NRCS is taking a comprehensive approach to
            analyze administrative efforts; specifically NRCS is focusing
            on four key administrative functions or areas:
        --Budget and financial management;
        --Human resources;
        --Procurement; and
        --Property functions within NRCS.
        NRCS is determining short-term solutions to position NRCS to best
            integrate the USDA Administrative Solutions Project and deliver
            the best support to the field.
        In fiscal year 2012, NRCS will be moving forward with the
            development of a new administrative operating model that will
            focus on streamlining processes, developing virtual teams, and
            enhancing standardization. NRCS will develop and implement the
            new operating model throughout fiscal year 2013 and this will
            result in increased capacity for administrative services and
            will position NRCS for improved performance.
      --Modernization Efforts.--Modernization efforts across NRCS will look
            at IT, Public Affairs, and Outreach to identify ways to improve
            the delivery of communications and information services to our
            internal and external customers.
        In fiscal year 2012, NRCS began the modernization of the public
            affairs and IT organizations. Public Affairs implemented the
            redesign of the external Web site and engaged with GovDelivery
            for modernization of communications delivery. Public Affairs is
            also underway with a comprehensive redesign that is currently
            in the baseline assessment stage and will result in fiscal year
            2013 with additional improvements to the Public Affairs
            function at NRCS. The IT assessment is currently underway as
            well; an organization redesign is expected in fiscal year 2013.
            This effort will help to improve IT delivery, enhance
            oversight, and enable increased service delivery across NRCS.

                               RURAL DEVELOPMENT

    Broadband
        Question. This subcommittee has provided substantial support for
    expanding high-speed broadband service to remote rural areas. The
    Federal Communications Commission (FCC) is now engaged in revising
    access to the Universal Service Fund, on which the bulk of Rural
    Development broadband loans rely for a portion of their income.
    Reducing Universal Service Fund payments to rural providers will place
    Rural Development's loan portfolio in severe jeopardy.
        Please discuss how USDA is working with the FCC to ensure that
    rural broadband providers are not treated unfairly under the new FCC
    requirements.
        Answer. Throughout the years, Rural Development and FCC have worked
    closely to uphold the universal service provisions in the 1996
    Telecommunications Act as Congress had intended. Those provisions
    ensure that rural America has access to advanced telecommunications
    services at rates and at levels of service that are comparable to those
    offered in urban America. Prior to implementing the new Universal
    Service Fund (USF) Reform Order, Rural Development consulted with FCC
    on numerous occasions to help ensure that this important statutory
    objective was fulfilled. Rural Development has provided briefings and
    data to the FCC on its portfolio and on the impacts of revenue
    reductions to RD's borrowers. The USDA also worked with the FCC in
    developing a national broadband strategy published in 2009, as required
    by the 2008 farm bill.
        Question. What is USDA doing in the short run to protect existing
    broadband borrowers and their rural customers?
        Answer. In the short run, Rural Development is analyzing its
    portfolio to determine the impacts of reduced USF and intercarrier
    compensation revenues on rural telecommunications providers serving
    rural high-cost communities. Rural Development has conducted a series
    of listening sessions with borrowers, financial experts, and other
    segments of the rural infrastructure sector to fully comprehend the
    impact on rural America. Rural Development is keenly focused on making
    sure that rural America continues to receive affordable, high-speed
    broadband service required for economic development and job creation.
        Question. Is the Department experiencing reduced loan demand due to
    the uncertainty of looming changes to FCC requirements? If so, does
    that affect the Department's broadband loan request for fiscal year
    2013?
        Answer. The Rural Utilities Service (RUS) and the
    telecommunications industry continue to evaluate the impact of the FCC
    revisions in USF, ICC, and local rates. While the level of uncertainty
    caused by the order may delay project consideration, the agency fully
    supports the proposed funding levels for fiscal year 2013. The
    broadband infrastructure needs across rural America were demonstrated
    by the tremendous response to the Recovery Act's Broadband Initiatives
    Program (BIP). There were many valuable projects which simply could not
    be funded. We are hopeful that some BIP applicants will apply for
    regular RUS loan programs to further extend existing broadband networks
    to rural areas. We are also hopeful the FCC will consider the needs of
    RUS borrowers who are actively investing in rural broadband networks
    made possible through the Recovery Act by reestablishing the regulatory
    and financial certainty that is needed for rural telecommunications
    investment to continue.
        Question. When the FCC announced plans to reform the Universal
    Service Fund, what changes did the Department make to its broadband
    loan underwriting criteria to reflect this new uncertainty?
        Answer. Even before FCC published it proposed USF Reform Order,
    Rural Development revised its underwriting criteria in both our
    infrastructure and broadband programs to determine reliance on USF and
    the impact of reduced revenues. Only loans which meet more rigid
    underwriting standards advance through this process to loan approval.
    The agency further enhanced its underwriting criteria after the first
    USF order was published and will continue to make changes to ensure any
    taxpayer investments are secured.

                                    HOUSING

        Question. This budget calls for a 27-percent reduction in your
    flagship direct single family housing loan program.
        Is demand for this program going down?
        Answer. The USDA budget proposal reflects the efforts of this
    administration to do more with less and to make tough decisions where
    necessary. Historically, the direct single family housing program has
    helped low- and very-low-income borrowers to obtain homeownership. Our
    budget proposal will refocus the direct single family housing program
    to serve low- and very-low-income borrowers, and will target a portion
    of the funding to help attract a new generation of bright, young
    teachers to our rural schools.
        Over the past decade, Rural Development has increasingly relied
    upon guaranteed loans to cost effectively provide for the credit needs
    of rural America. In fact, during this administration alone, funding
    for the guaranteed single family housing program (excluding Recovery
    Act funding) has quadrupled from about $6.2 billion to $24 billion in
    2011. This funding has helped to fill a critical need for credit in
    rural America, and importantly, this level of assistance is being
    provided at no subsidy cost to taxpayers.
        Question. What is the current backlog of applications and pre-
    applications for these loans?
        Answer. As of March 29, 2012, the total number of Section 502
    Direct Loan applications on a waitlist pending processing due to the
    lack of available funds is 11,398.
        Question. Is there any other Federal direct loan program that
    provides home-ownership assistance for low- and very-low-income rural
    residents?
        Answer. There is no other Federal direct loan program similar to
    the Section 502 Direct Loan program. The Section 502 Direct Loan
    program provides mortgage financing for low- and very-low-income rural
    Americans unable to get credit from other sources. The program includes
    a payment assistance feature to reduce the borrower's housing cost for
    principal, interest, taxes, and insurance to approximately 24 percent
    of income. The other fundamental difference in program administration
    between USDA and other Federal housing programs such as Housing and
    Urban Development (HUD) programs is USDA's field staff, which allows
    USDA to maintain a local presence in the rural communities it serves.
        Question. Why are you seeking such a drastic cut in the program?
        Answer. Some of the same rural residents with low- and very-low-
    incomes who qualify for loans under the single family housing direct
    loan program can also qualify for the single family housing guaranteed
    loan program. The primary difference between the two programs is that
    the direct loans are made and serviced by USDA and in some instances
    contain an interest subsidy. The guaranteed loans are made and serviced
    by a bank or other commercial lender at the current market interest
    rate and guaranteed by the Federal Government. Unlike the direct
    program, the guaranteed program is provided at no subsidy cost to
    taxpayers.
        Question. Please discuss the requested set-asides for rural
    teachers and self-help housing program participants. Why did you
    elevate the priority of those applicants above others, including
    healthcare workers, police and fire workers, daycare workers, etc?
        Answer. The budget proposes to set aside a small portion of the
    direct single family housing program funding for teachers and
    beneficiaries of the Mutual and Self-Help Grant Program for a portion
    of the fiscal year, after which the funds will be available for all
    applicants.
        The decision to set aside funding for the Mutual and Self-Help
    Grant Program ensures that adequate loan funds are available to support
    the grant funding provided by Congress. Without sufficient loan funding
    we would be unable to fulfill the intent of Congress with respect to
    self-help housing.
        Rural Development remains committed to the support of all low- and
    very-low-income families, regardless of their profession. Set aside
    funding for teachers, however, would help address the shortage of
    teachers willing to work in rural areas that lack affordable housing.
    Teachers are a key factor in creating sustainable rural communities. By
    targeting a portion of this assistance to teachers, we hope to
    encourage many bright, young, and enthusiastic college graduates to
    consider returning to rural America to begin their professions as
    teachers.
        Question. This budget seeks to eliminate the multi-family housing
    direct loan program (section 515). The stated justification for this
    elimination is that the guaranteed multi-family housing loan program
    (section 538) also provides construction financing and more funds are
    needed in the multi-housing revitalization program to maintain existing
    projects.
        How effective is the guaranteed loan program in promoting
    construction in small towns and not just in larger communities?
        Answer. The Multi-Family Housing (MFH) Guaranteed Rural Rental
    Housing Program (section 538) is very effective in promoting
    construction and preservation in rural areas. Like the MFH direct loan
    program (section 515), the section 538 program is restricted to areas
    of no more than 20,000 in population, unless eligible under a statutory
    exception. Approximately 50 percent of the loans guaranteed under
    section 538 preserve existing affordable properties in rural areas,
    most notably section 515 properties. For new construction, financial
    tools, including section 515 and section 538 loans, are more efficient
    for properties with more units of affordable housing, so nearly all of
    the new construction activity is in rural areas with populations
    between 10,000 and 20,000.
        Question. How effective is the guaranteed program in offering
    affordable rents for very-low-income households?
        Answer. The MFH Guaranteed Rural Rental Housing Program is very
    effective in offering affordable rents to very-low-income seniors,
    families, and individuals. The vast majority of tenants are under 80
    percent of the area median income. More than 70 percent of all
    properties financed in the past several years using the section 538
    program also have low-income housing tax credits (LIHTC), which impose
    lower income thresholds for tenants to qualify under the LIHTC program.
    Under the LIHTC program tenants must be very-low-income (50 percent of
    area median income) or low-income (less than 80 percent of area median
    income) families. In the last 3 years alone, the MFH Guaranteed Rural
    Rental Housing Program provided financing to build or preserve
    approximately 200 apartment buildings with 11,100 apartments, of which
    more than 9,400 are rented to very-low-income or low-income seniors,
    families or individuals.
        Question. What is the total funding needed for the revitalization
    program?
        Answer. We believe the budget request provides adequate funding for
    the Revitalization Program.
                              community facilities
        Question. This budget requests a $2 billion Community Facilities
    Direct Loan Program (CF) level, up from $1.3 billion in fiscal year
    2012.
        Is there demand for a $2 billion annual loan program?
        Answer. As a result of the credit crisis, one of the biggest issues
    facing rural communities today is the lack of access to capital. In
    recent years, the agency has seen an increase in funding requests for
    projects that are larger in nature, scope, and complexity. Accordingly,
    we believe the proposed program level reflects the sizable demand that
    exists for infrastructure financing in rural areas.
        Question. What is the current backlog of applications and pre-
    applications?
        Answer. As of May 2, 2012, the Community Facilities Program has a
    total backlog of about $1.8 billion. This includes approximately 635
    direct loan applications for $1.6 billion, over 900 grant applications
    for $51 million, and 27 guaranteed loan applications for $131 million.
        Question. Why is the guaranteed loan program eliminated?
        Answer. The guaranteed loan program originated as an inexpensive
    alternative to the direct loan program and was designed to stimulate
    additional assistance to moderate income communities in rural areas.
    The default rate for the program, however, has been much higher than
    originally projected; in effect, this has made it more expensive than
    the direct loan program. The proposed increase in the direct loan
    program will more than offset the effects of the guaranteed loan
    program termination.

                             RURAL JOBS ACCELERATOR

        Question. We have recently become aware of a new initiative, the
    Rural Jobs Accelerator, which apparently will be a joint effort among
    USDA, the Economic Development Administration, the Delta Regional
    Commission, and the Appalachian Regional Commission.
        Please explain the purpose of this initiative and how it is
    designed to work?
        Answer. The programmatic guidelines and goals of the Rural Jobs and
    Innovation Challenge (RJA) are very similar to those of the regular
    RCDI; RJA merely emphasizes building regional capacity. To be eligible
    for RJA, applicants must be eligible for the regular RCDI program.
        RJA is a coordinated interagency funding opportunity designed to
    promote accelerated job creation and community and economic development
    in rural regions through regional collaboration. The RJA will provide
    resources to support economic development in the areas of renewable
    energy, food production, rural tourism, natural resources, and advanced
    manufacturing. The RJA will also assist distressed rural communities in
    accelerating job creation by leveraging local assets, building stronger
    economies, and creating regional linkages. The Funding Partners include
    USDA, the Department of Commerce's Economic Development Administration
    (EDA), the Appalachian Regional Commission (ARC), and the Delta
    Regional Authority (DRA). This coordinated, integrated, interagency
    initiative offers applicants the opportunity to submit a single project
    narrative to access multiple funding sources that collaboratively
    support regional development in rural communities.
        Question. What are the performance measures you will use to gauge
    the initiative's success?
        Answer. Applications will be evaluated based on their ability to
    satisfy core evaluation criteria. This includes building community and
    regional capacity, linking to regional clusters and opportunities,
    integrating and building regional partners, and utilizing multiple
    resources to meet project objectives and promote substantive economic
    growth in the region and rural communities. Grant recipients will
    identify project milestones and submit reports throughout the project
    period, along with a final project performance report. Success will be
    gauged by the degree to which grant recipients achieve their project
    milestones.
        Question. What administrative and programmatic resources have you
    committed in fiscal year 2012, and what resources do you hope to use in
    fiscal year 2013, to support the initiative?
        Answer. The Rural Jobs Accelerator will be administered using
    existing USDA staff for fiscal years 2012 and 2013. Approximately half
    ($2.49 million) of the funding available for use in fiscal year 2011
    and half ($1.81 million) of the funding available for use in fiscal
    year 2012 for the Rural Community Development Initiative (RCDI) will be
    used to support this initiative. The remaining $4.33 million in RCDI
    funding was announced under a separate notice of funding availability
    on March 21, 2012.
        Question. Will USDA's support in fiscal year 2012 require a
    transfer or reprogramming of funds?
        Answer. No. USDA is using existing authorities and a portion of the
    existing appropriations for the Rural Community Development Initiative
    (RCDI) to fund our portion of the Rural Jobs Accelerator. The projects
    funded by USDA must meet all existing RCDI funding criteria and would
    be eligible for RCDI assistance regardless of their participation in
    the Rural Jobs Accelerator. However, by employing a ``whole-of-
    government'' approach through the Rural Jobs Accelerator we can
    significantly enhance the prospects for job growth in the selected
    regions.

                                   NUTRITION

    Equipment Grants
        Question. In 2009, this subcommittee provided $100 million through
    ARRA for grants to allow schools to purchase and renovate their food
    service equipment. The fiscal year 2013 budget for Child Nutrition
    Programs includes $35 million for this same activity. In February 2012,
    USDA's Office of Inspector General (OIG) issued a report criticizing
    FNS' management of these ARRA funds. According to the OIG report, FNS
    ``did not create adequate, proactive controls to ensure that grants
    were awarded based on Recovery Act criteria and accurate data.''
        If funding is provided in fiscal year 2013, what assurances can FNS
    provide to this subcommittee that funds will be managed appropriately?
        Answer. USDA believes that the ARRA grant award process in its
    totality was highly effective and met the goals set forth by the
    Recovery Act to effectively and timely distribute funds to low-income
    schools that clearly demonstrated need. The OIG audit did not identify
    any instances of improper use of the ARRA funds, but it did identify
    some areas for process improvement, and FNS will address these issues
    where needed. FNS' oversight of the State agencies which operate the
    school meals program will focus on ensuring that the processes used to
    distribute grant funds meet all appropriate requirements and ensure
    that funds are used for their intended purpose. As the audit report
    notes, OIG has accepted FNS' plan to implement additional internal
    controls within its standard competitive grant award processes,
    identifying areas that can be strengthened for future grant awards. I
    am confident that FNS would appropriately manage another round of
    school equipment funding.
        Moreover, it is critically important to recognize that there
    remains significant unmet funding need for schools to replace out-dated
    equipment and help schools meet our new, updated standards for school
    meals. These standards represent the first update to school meals in
    over 15 years, emphasizing fruits, vegetables, and whole grains.
    Schools need modern, appropriate equipment to help them serve healthy
    meals. Only about 22 percent of the school districts who requested ARRA
    funds received them. So, the present $35 million request for the School
    Meals Equipment Grants is critical to providing support to help fund
    equipment purchases for school districts that did not receive Recovery
    Act funding.
        Question. How do you envision these grants being allocated?
        Answer. FNS would award equipment assistance funding to State
    agencies using a competitive process, and the State agencies would then
    build on the Recovery Act of 2009 criteria, which targeted low-income
    districts with the greatest need. When developing the specific
    competitive grant process that States would use when awarding these
    grants to school districts, FNS would also consider how to best meet
    the needs of school districts as per the requirements associated with
    the $35 million school meals equipment grant funding request.
        Question. What changes to your grant process will be made in
    response to OIG's recommendations and concerns?
        Answer. FNS will use management evaluations and/or targeted reviews
    to determine State agency compliance with the grant application and
    award processes. As part of these reviews, if FNS reviewers determine
    that (1) exceptions to the grant application were made during grant
    execution; and (2) potential grant awards to the State are pending, FNS
    will develop appropriate corrective action plans which could include
    submission of documentation for selected future grant awards to FNS for
    review and approval prior to implementation. This documentation may
    include applications (RFAs) and grant award evaluation processes prior
    to the States releasing the applications to potential subgrantees.

                                  CIVIL RIGHTS

        Question. Can you explain to the subcommittee the status of the
    women farmers discrimination litigation against USDA, along with the
    status of the USDA's plans for a Women and Hispanic Farmers Claims
    Process?
        Answer. I will provide an update of the civil rights discrimination
    litigation as well as USDA's plans for a Women and Hispanic Farmers
    Claims Process.
        [The information follows:]
        In 2006, the D.C. Circuit affirmed the district court's denial of
    class certification of plaintiffs' ECOA claims. Love v. Vilsack, 439
    F.3d 723 (D.C. Cir. 2006). In 2009, the D.C. Circuit affirmed the
    district court's dismissal of the claims plaintiffs brought under the
    Administrative Procedure Act (APA), 5 U.S.C. sections 701-706, by
    female farmers in Love v. Vilsack, and remanded the cases to the
    district court on the named plaintiffs' individual claims under ECOA.
    Garcia v. Vilsack, 563 F.3d 519 (D.C. Cir. 2009). In January 2010, the
    Supreme Court denied plaintiffs' petitions for certiorari on the APA
    claims in Love and Garcia. 130 S. Ct. 1138 (Mem.) (2010). All appeals
    related to class certification have been decided in favor of USDA and
    the Love case is now limited to individual claims of credit
    discrimination. Love has been stayed while the voluntary Alternative
    Dispute Resolution claims process is being finalized by USDA.
        In order to offer relief to female and Hispanic farmers who allege
    credit discrimination during the relevant statutory period, USDA
    developed an entirely voluntary ADR program to settle those claims
    without litigating them individually in court. This non-adversarial
    process will be administered by a third-party neutral, who will make
    individualized determinations based on the evidence presented by each
    claimant. Successful claimants will receive up to $50,000 or $250,000
    each depending on the tier of relief chosen by the claimant, plus tax
    relief on their award and possible debt cancellation for certain
    outstanding farm loans. Whether any individual chooses to participate
    in the program is entirely up to the individual. Those farmers who wish
    to ignore the ADR process are free to do so.
        The claims process has not yet started. On January 25, 2012, after
    hearing from members of Congress, community organizations, and farmers,
    the Department announced changes to the claims process framework. In
    May, USDA selected an independent Administrator/Adjudicator who is now
    preparing to implement the claims process. Claimants will not need to
    pay any filing fees to participate in the claims process.
        Question. What is the USDA's outreach plan to spread the word to
    women farmers nationwide about the availability of the claims process?
    Who will conduct the outreach, what forms of outreach will be used, and
    how much money does the agency plan to spend on outreach? Is the Agency
    involving women's and farmers' groups in the development of the
    outreach plan?
        Answer. USDA has engaged in outreach activities to inform potential
    claimants, including women farmers who have alleged past
    discrimination, about the claims process. As part of the outreach
    process, USDA has held numerous meetings and webinars with farmers and
    community organizations, including women's organizations. USDA will
    expend up to $75,000 for outreach inclusive of staff travel and meeting
    space incidentals. In addition, USDA announced the claims process
    (including recent changes) through press releases and media interviews;
    and created a dedicated Web site with informational documents about the
    process such as a fact sheet and summary notice. USDA currently
    operates a toll-free call center to register individuals interested in
    participating in the process, allowing them to request a claims
    package.
        USDA plans to continue to notify women and Hispanic farmers who
    allege past discrimination against USDA about the claims process
    requirements and the date on which the claims period will commence.
    Ongoing outreach to potential claimants will be conducted in a number
    of ways. USDA will use media to contact as many women and Hispanic
    farmers as possible about the claims process, including social media,
    press releases, Web sites, and posters, and USDA will hold additional
    webinars summarizing the program to stakeholders. USDA also plans to
    mail postcards directly to over 500,000 women and Hispanic farmers
    listed in USDA customer information systems about the claims process,
    plans to continue to hold meetings with farmers to notify them about
    the program, and plans to work with third-party organizations to reach
    out to potential claimants. Finally, USDA plans to enter into
    cooperative agreements with third-party organizations to educate
    potential claimants about the process.
        Question. What, if any, specific program reforms is USDA
    implementing to prevent future discrimination against women farmers in
    particular?
        Answer. To prevent future discrimination against women farmers,
    USDA has strengthened training, outreach, and policy efforts. At my
    direction, every political appointee in the Department has attended
    civil rights trainings and USDA has offered civil rights training to
    Farm Service Agency, Natural Resources Conservation Service, and Rural
    Development leadership and staff at State offices in more than a dozen
    select States that have a history of problems in this area. The States
    included Oklahoma and Arkansas, two of the States with the highest
    concentrations of female producers. The States selected for civil
    rights training for the Farm Service Agency State leadership accounted
    for a total of 40 percent of FSA program complaints in fiscal year
    2008, and the States selected for Rural Development trainings
    represented 42 percent of RD program complaints in the same period.
        We commissioned an independent assessment of civil rights in USDA's
    program delivery. We are working to implement the recommendations of
    this Cultural Transformation Assessment to help USDA improve field-
    based service delivery to minority and women farmers and ranchers, and
    communities that have historically not participated in USDA programs.
    The recommendations for the Farm Service Agency in the assessment
    included steps to provide better representation of women and minority
    farmers on county committees, to take prompt action to hold employees
    accountable for discrimination, and to institute outreach as a core
    mission of the Agency. To improve USDA programs' ability to serve all
    farmers, we analyzed the potential for new policies, rules and
    decisions to impact civil rights. Over 3 years the Office of Civil
    Rights recommended important changes on about 20 percent of all
    policies they reviewed. We also more than doubled the number of
    internal compliance reviews of USDA agencies to evaluate their civil
    rights policies, procedures and practices.
        USDA is committed to reaching out to women farmers and involving
    new generations of female farmers in local and State USDA committees.
    The Farm Service Agency also recently designed a customer's guide to
    improve all producers' knowledge of farm loan programs.
        In 2010 and again in 2011, USDA's FSA recorded the fewest number of
    customer civil rights complaints since the Department began keeping
    track, 37 complaints were filed in 2010 and 37 in 2011. We have also
    made changes to improve the processing of the complaints we do receive.
    Adding staff and conducting Lean Six Sigma process improvement have
    reduced the typical processing time for new civil rights program
    complaints from 4 years to 18 months.
                                     ______

                    Questions Submitted by Senator Roy Blunt

                      DIVERSITY OF RURAL ELECTRIC PROGRAMS

        Question. The budget request for the Rural Utilities Service
    electric loan program provides specific set-asides for renewable energy
    plants and fossil fuel powered facilities that include carbon emissions
    reduction. As a result, the budget request puts traditional power
    plants sourced by fossil fuels, such as natural gas and coal, at a
    disadvantage in participating in the program.
        While I appreciate the importance of renewable energy and carbon
    sequestration, Americans in rural areas rely on cheap, accessible
    electricity that demands a diversification of energy sources for
    affordable customer rates. Energy policy should have a balanced
    approach and not focus on one particular source.
        Does USDA know the potential long-term economic effects if rural
    electric cooperatives are unable to utilize the loan program to
    construct natural gas and coal-fired power plants or to provide basic
    facility upgrades that do not specifically reduce emissions?
        Answer. USDA has not calculated the long-term economic effects of
    limiting future investment in fossil fuel-fired power plants. However,
    by virtue of being located in rural America, the rural electric
    cooperatives are ideally situated to invest in many renewable energy
    technologies such as solar and wind power. By targeting future
    assistance to renewable fuel technologies the rural electric
    cooperatives have the opportunity to play a central role in this
    administration's ``all-of-the-above'' approach to energy independence.
        Question. How will the recent EPA announcement on greenhouse gas
    emission limits affect participation in the electric loan program?
        Answer. The Rural Utilities Service (RUS) is expecting an increase
    in demand for RUS loan funds as borrowers work to comply with the EPA
    greenhouse gas emissions limits. At this point in time, RUS does not
    know the amount needed for borrowers to comply with EPA. However, the
    estimates for environmental upgrades range from $1 billion this fiscal
    year and reaching approximately $3.5 billion by 2016 according to the
    Electric Program application pipeline and the National Rural Electric
    Cooperative Association's 10-year projections.
        Question. Because the average natural gas powered electric plant
    has a CO2 emissions level below the recently announced EPA
    guidelines, what is the reasoning for prohibiting their access to two-
    thirds of the funding in the rural electric program unless they include
    carbon capture sequestration systems?
        Answer. This limitation is one of many ways to achieve energy
    independence and improve the environmental health of the Nation. The
    proposal does not preclude the ability of rural electric cooperatives
    from seeking other sources of financing to build or upgrade fossil
    fuel-fired power plants. Rather, it provides an opportunity for the
    rural electric cooperatives to be at the forefront of implementing
    renewable energy strategies that will power a greener tomorrow.

                 FREE TRADE AGREEMENTS WITH COLOMBIA AND PANAMA

        Question. Last year, Congress approved the trade agreements with
    South Korea, Colombia, and Panama. Implementation of all three of the
    trade agreements will increase U.S. farm exports by an additional $2.3
    billion--supporting nearly 20,000 American jobs.
        The agreement with South Korea came into force earlier this month
    (March 15). However, the agreements with Colombia and Panama have not
    been fully implemented. Full implementation of these two agreements
    would increase farm exports by $400 million and support approximately
    4,000 jobs. It is important that these agreements are implemented
    expeditiously to open up these markets for our agriculture producers.
        What is the current status of the free trade agreements with
    Colombia and Panama?
        Answer. The United States-Colombia Trade Promotion Agreement will
    enter into force on May 15, 2012. The Department of Agriculture's
    Foreign Agricultural Service (FAS) worked closely with the Office of
    the U.S. Trade Representative (USTR) and stakeholders to establish
    effective mechanisms for ensuring market access under the terms of the
    agreement, particularly for tariff-rate quotas (TRQs). A range of
    issues will be resolved prior to implementation, including barriers to
    U.S. poultry and rice. Almost 70 percent U.S. exports to Colombia will
    become duty-free upon implementation, and most other tariffs will be
    reduced and eliminated over 5 to 10 years, with all Colombian tariffs
    on agricultural products duty-free in 19 years.
        With respect to the United States-Panama Trade Promotion Agreement,
    discussions with Panama are currently focused on changes required in
    their laws and regulations in order to implement the agreement. FAS is
    working closely with USTR to ensure the mechanisms Panama will use to
    implement its agricultural TRQs will be ready when the agreement enters
    into force. Panama will be adapting its current auction system for some
    TRQs and establishing new licensing and first-come, first-served
    systems for others. FAS and USTR are working to ensure that these
    systems will be implemented in a way that is consistent with the
    provisions of the agreement and that will enable U.S. exporters to take
    full advantage of new opportunities.
         Question. Is there an estimated date for implementation of these
    agreements?
         Answer. The United States-Colombia Trade Promotion Agreement will
    enter into force on May 15, 2012. An implementation date for the United
    States-Panama Trade Promotion Agreement will be set once agreement has
    been reached on all of the implementation mechanisms. FAS is working
    with USTR to ensure the new market access opportunities established in
    the agreement will be available as soon as the agreement enters into
    force. In an effort to ensure the implementation of the agreement moves
    forward expeditiously, a team of FAS, USTR, and Customs officials will
    travel to Panama in the first week of May to assist the Panamanian
    Government as it develops its TRQ regulations.

                   AGRICULTURAL RESEARCH SERVICE LAB CLOSURES

        Question. Consistent with the budget request, the fiscal year 2012
    agriculture bill closed 12 Agricultural Research Service (ARS) labs.
    However, the budget request did not adequately budget for the expense
    of closing these labs, which turned out to be far more significant than
    either USDA or the subcommittee imagined.
        How much do you estimate it will ultimately cost ARS to relocate
    staff and close all 12 labs in fiscal year 2012?
        Answer. The termination of research activities at the 12 ARS
    laboratories affected 233 permanent ARS employees. The one-time costs
    associated with the relocation or separation of affected personnel and
    the disposal of property are estimated at $39 million in fiscal year
    2012.

                              EXTRAMURAL RESEARCH

        Question. I understand ARS plans to reduce existing extramural
    research funding by 30 percent this year to find the additional funds
    necessary to close the labs.
        How did ARS arrive at the decision to reduce extramural funding as
    opposed to other activities within ARS?
        Answer. The temporary budget reductions to remaining ARS programs
    in fiscal year 2012 are necessary to finance the one-time costs
    associated with the closure of 12 ARS laboratories. The 30-percent
    reduction to extramural research supported by ARS resources is one of
    several measures necessary to finance the one-time costs. These
    measures also include restricted hiring and assessing all remaining ARS
    management units. As a result of these actions, only about half of the
    one-time costs to close the 12 laboratories will be financed by
    reductions to extramural supported research. Although ARS' mission is
    to conduct primarily intramural research, ARS along with other USDA
    agencies, such as the National Institute of Food and Agriculture
    (NIFA), will continue to support high-priority extramural research.

                      CAPITAL ASSET AND CONSTRUCTION PLAN

        Question. The fiscal year 2013 budget includes a proposal to close
    six more labs.
        Last year, the subcommittee requested a capital assets and
    construction plan from ARS. We have not received the capital asset
    plan. Without the benefit of this plan, how did USDA determine which
    labs would be closed?
        Answer. ARS has completed a capital investment strategy for
    recapitalization and new research facilities based on facility
    condition, needs, and research program priorities. The report
    establishes criteria and processes for determining and recommending the
    appropriate level of new investments needed for USDA research
    facilities. The report's recommendations and overall strategy will
    inform and support the development of administration budget requests
    for research facilities in the out years.
        During the process of evaluating all ARS research programs, and in
    conjunction with developing the capital investment strategy, ARS also
    developed a conceptual framework to determine its capital investment
    needs based on the relation between the condition of a facility to the
    priority level of a program. This methodology allowed ARS to determine,
    on a scale, which facilities are in the poorest conditions and housed
    the lowest priority programs. The six laboratories recommended for
    closure were identified after all evaluations were completed. The 2013
    budget proposes reallocating these funds to facilities/programs that
    support higher priority initiatives.

                     CLOSING COSTS OF RESEARCH LABORATORIES

        Question. Should the subcommittee agree with ARS's plan to close
    the labs, does the budget request adequately account for the cost of
    closing these labs?
        Answer. The estimated cost to accommodate the potentially impacted
    employees and dispose of the real property ranges from $10-12 million.
    If the fiscal year 2013 proposed budget reallocations are approved, ARS
    would be able to utilize the associated program funds to offset the
    facility closure costs.

                   BUDGET IMPACT OF SCHOOL MEALS REGULATIONS

        Question. I have received a number of inquiries from schools across
    Missouri regarding the Department's new school meal regulations. I am
    deeply concerned about the unintended costs on public schools as a
    result of the Department's regulations.
        With the price of food commodities rising, it looks like the impact
    of the regulations will result in an unfunded Federal mandate on
    Missouri schools. My constituents have said that the fruit, vegetable,
    and whole grain requirements will increase the cost of a school lunch
    by as much as $0.28 per meal. The increase in funding provided in the
    reauthorization is set at $0.06 per lunch, significantly less than the
    estimated actual cost of implementation.
        These cost increases will be borne by local school districts, which
    will likely be forced to increase prices on paid lunches, resulting in
    a reduction in overall participation rates.
        How does the Department plan to deal with rising food commodity
    costs?
        Answer. Beginning October 2012, school food authorities that meet
    the new meal patterns will receive a $0.06 lunch reimbursement rate
    increase authorized by the Healthy, Hunger-Free Kids Act of 2010
    (HHFKA). Furthermore, the HHFKA requires that schools set an adequate
    price for paid lunches so that schools receive as much revenue from
    paid lunches as the Federal program provides for free lunches. The
    HHFKA also requires that schools set competitive prices for foods sold
    outside of the reimbursable meal so that revenues received from the
    sale of nonprogram foods equal the cost of obtaining them. When taken
    together, the additional Federal reimbursement provided for improved
    meals and the non-Federal revenue generated by the aforementioned
    provisions will, on average, make sufficient resources available for
    schools to meet the new meal requirements. Also, it is important to
    note that over 3,000 schools receiving the HealthierUS School Challenge
    (HUSSC) awards report they have been able to achieve similar standards
    without significant cost increases. To date, 61 Missouri schools have
    been recognized as HUSSC award winners, including 12 schools that were
    recognized at the Silver level.
        In addition, one key way that USDA helps schools provide cost-
    effective, nutritious meals is by providing agricultural commodities in
    the form of USDA Foods. The USDA Foods program helps schools stretch
    limited food budgets by providing high-quality fruits, vegetables,
    meat, fish, poultry, dairy, and grains. School commodities, which
    represent approximately 15-20 percent of the food on the cafeteria
    serving line, now include more fruits and vegetables, more whole
    grains, and more food that is lower in sugar, salt, and fat than ever
    before. For example, USDA purchased nearly $300 million in canned,
    fresh, frozen, and dried fruits and vegetables for schools through the
    USDA Foods program and the Department of Defense (DOD) Fresh Fruit and
    Vegetable Program in fiscal year 2011. The USDA Foods program is well
    positioned to help schools meet the new meal requirements and we are
    confident that most of the schools will continue to benefit from this
    program.
        Question. Does the Department have a plan for dealing with
    increased costs and the burdens these costs will place on public
    schools?
        Answer. Careful consideration of cost and logistical issues were an
    important part of developing the updated nutrition standards for the
    school meals programs. USDA is committed to ensuring that any such
    standards are practical and accompanied by extensive guidance and
    implementation assistance for our school partners. As part of the
    Healthy, Hunger-Free Kids Act of 2010, USDA built the new rule around
    recommendations from an Institute of Medicine expert panel, updated
    with key changes from the 2010 Dietary Guidelines for Americans.
    Getting the science right is critical to better nutrition and health
    for our children.
        We received unprecedented public participation and input on the
    proposed standards, and made modifications to the proposed rule where
    appropriate. As a result, the final standards are much less costly than
    the proposed standards, provide additional time for implementation of
    some key changes, and better accommodate the administrative constraints
    facing schools and States. These responsible reforms do what is right
    for children's health in a way that is practical and achievable in
    schools across the Nation. USDA's estimate shows implementation of the
    new nutrition standards for school lunches and breakfasts will cost
    $3.2 billion over the next 5 years. This is less than half of the
    proposed standards' originally estimated cost of $6.8 billion.
        In addition, we believe the $0.06 lunch reimbursement rate increase
    authorized by the Healthy, Hunger-Free Kids Act of 2010 along with the
    revenue support provisions noted in the previous response such as the
    non-Federal revenue generated by schools setting an adequate price for
    paid lunches so that schools receive as much revenue from paid lunches
    as the Federal program provides for free lunches and the requirement
    that schools set competitive prices for foods sold outside of the
    reimbursable meal so that revenues received from the sale of nonprogram
    foods equal the cost of obtaining them, will make sufficient resources
    available for schools to meet the new meal requirements. Finally, we
    are working on technical assistance and menu planning materials to help
    schools plan and prepare nutritious meals in a cost-effective manner,
    and will make those materials available as soon as they are complete.

                  BUDGET IMPACT OF COMPETITIVE STANDARDS RULE

        Question. It's clear from speaking to many of the schools in
    Missouri that they depend on revenue from foods sold outside of the
    National School Lunch & Breakfast Programs to give them greater ability
    to purchase healthier options for school meals.
        There is a lot of anxiety in the school foodservice community over
    how new competitive foods' standards will impact this revenue stream,
    particularly at a time when school cafeterias are being asked to cut
    their budgets.
        I understand that the Department believes schools should expect
    increased revenue from competitive foods lines as a result of the new
    standards.
        What data you are basing this assumption on?
        Answer. The Department projected increased revenue from competitive
    foods as a result of regulations implementing section 206 of the
    Healthy, Hunger-Free Kids Act of 2010 (HHFKA). The rule, published in
    the Federal Register on June 17, 2011 (76 FR 35301), requires school
    food authorities (SFAs) to set prices for nonprogram foods purchased
    with SFA funds, a subset of competitive foods, at a level sufficient to
    generate revenue proportionate to their share of SFA food costs. The
    Department estimated that HHFKA section 206 would generate $7.3 billion
    in additional SFA revenue over 5 years. The primary source for that
    estimate was USDA's school year 2005-2006 School Lunch and Breakfast
    Cost Study. That study found that nonprogram foods generated revenue
    for SFAs equal to just 71.3 percent of their reported costs of
    production. Counter to common perception, on average, the revenue
    generated by program meals subsidizes the production of other SFA foods
    when labor and overhead costs are properly allocated to all foods
    prepared with SFA funds.
        Elimination of that subsidy is the source of the revenue generated
    by HHFKA section 206--not nutrition standards for competitive foods,
    which are still under development. Whatever the ultimate impact of
    those nutrition standards on competitive food sales, section 206
    ensures that competitive foods will not divert revenue from the
    production of reimbursable meals. Reforming SFA accounts in this manner
    frees up program revenue for the investments necessary to meet new meal
    standards.
        Question. Do you plan to perform any sort of assessment on impact
    of the competitive foods standards on school cafeteria budgets?
        Answer. Yes. The Department will begin data collection in school
    year 2014-2015 for a ``School Nutrition and Meal Cost Study''. That
    study will examine both the school nutrition environment and school
    foodservice operations. The study will assess the impact of nutrition
    standards on the content of reimbursable meals and competitive foods,
    and will compare the revenues generated by each of these to their
    allocated share of SFA costs.
                                     ______

                    Question Submitted by Senator Tom Harkin

                           LEAN FINELY TEXTURED BEEF

        Question. In the light of the large amount of press attention
    recently given to a product called lean finely textured beef (LFTB), I
    would like to clarify for the record some aspects of the situation. As
    I understand it, the Department of Agriculture was informed and
    reviewed the process and technology involved in producing lean finely
    textured beef and did not raise problems with the process, nor did the
    Department indicate a problem with including it in what is sold as
    ``ground beef'' without any special labeling. It is also my
    understanding that the Food and Drug Administration allows the use of
    ammonia in food under a designation of ``generally recognized as
    safe.'' The factual circumstances seem to show that the company that
    developed the process felt it was applying an innovative technology and
    addressing food safety risks in doing so, again, with the knowledge of
    and effectively an OK from the Department of Agriculture. Now the
    company has suspended operations at several plants and jobs of hundreds
    of workers are in doubt.
        My question is simply, does lean finely textured beef meet the
    applicable food safety standards and criteria of the Department of
    Agriculture?
        Answer. Yes, lean finely textured beef (LFTB) products meet Federal
    food safety standards. The process used to produce LFTB is safe, and
    adding LFTB to ground beef does not make that ground beef any less safe
    to consume.
                                     ______

                Questions Submitted by Senator Susan M. Collins

                                  FOOD SAFETY

        Question. I understand that the Department of Agriculture (the
    Department) has announced that it is preparing to propose new
    regulations for the grinding of raw beef that would require additional
    recordkeeping to help the Department trace outbreaks back to their
    source. It has been reported that these new regulations, which have not
    yet been published, would require retail stores to keep detailed
    records identifying the supplier and the quantities of all source
    materials used in raw ground beef products. The Department has long
    encouraged retail stores to keep such detailed records, but has not
    required them to do so. The Department has indicated that it considers
    the use of beef trimmings without detailed recordkeeping as a ``high-
    risk'' practice.
        What additional actions is the Department taking or proposing to
    take to improve its ability to prevent foods containing dangerous
    pathogens from ever leaving the slaughterhouse, processing facility, or
    entering the retail chain?
        Answer. FSIS announced and asked for comment on a new ``test and
    hold'' requirement for the meat and poultry industry that, once
    implemented, will significantly reduce consumer exposure to unsafe
    food. When the policy is finalized, industry will be required to hold
    products that FSIS has sampled for microbiological testing until the
    test results are received. The product will be released if the results
    show that it is safe to move in commerce. This approach could have
    prevented 22 recalls during fiscal year 2009 and fiscal year 2010.
    Under this policy, FSIS expects fewer recalls by industry, fewer
    illnesses, and increased consumer confidence in the safety of the food
    supply. The agency is also announcing new procedures for tracing
    product that is positive for E. coli O157 to its supplier as well as
    actions that will strengthen its implementation of HACCP.
        Question. What steps is the Department taking to educate consumers
    about the risks of food-borne illness, the dangers and avoidance of
    cross contamination, and the need to handle and cook meat properly to
    ensure it is safe for consumption?
        Answer. On June 28, 2011, FSIS launched a joint national multimedia
    campaign with the U.S. Department of Health and Human Services to help
    families prevent food poisoning: The Food Safe Families--Check Your
    Steps campaign. The campaign urges consumers to remember four key steps
    to food safety: Clean (surfaces, utensils, and hands), separate (raw
    meat and poultry from other foods), cook (to a safe temperature), and
    chill (raw and prepared food). We have reached millions, in English and
    Spanish, using a variety of donated media, including television, radio,
    print media, social media tools, and the Internet.
        On May 5, 2011, FSIS launched the Mobile Ask Karen application
    (m.AskKaren.gov on your phone's mobile browser), a Web-based smartphone
    application that gives consumers another way to access the only U.S.
    Government-sponsored food safety virtual-representative. Consumers can
    search by topic and products, send e-mails, or use the chat feature,
    all via their mobile devices. Thus, users can get answers to their food
    safety questions anywhere: At the grocery store, barbecue grill, and
    kitchen stovetop.
        During fiscal year 2011, the USDA Food Safety Discovery Zone, a new
    and improved USDA Food Safety Mobile, visited grocery stores, schools,
    and local community events to educate consumers about food safety and
    to promote the Food Safe Families Campaign. The Discovery Zone improves
    consumers' awareness of the risks associated with mishandling food and
    provides in-depth, hands-on demonstrations of the steps they can take
    to reduce their risk of contracting a foodborne illness.

                         NATIONAL SCHOOL LUNCH PROGRAM

        Question. Recently the Department purchased for use in the National
    School Lunch Program a product that is commonly referred to as ``pink
    slime,'' known in the industry as ``boneless lean beef trimmings'' or
    ``lean finely textured beef,'' as an additive in ground beef. This
    product is reportedly treated with ammonium hydroxide gas, suggesting
    that decontamination is necessary to ensure the product is safe to eat.
    What analysis has the Department done to determine whether this product
    is safe for consumption?
        Answer. Ammonium hydroxide is used in the production of lean finely
    textured beef (LFTB) as a pH control agent to help reduce harmful
    bacteria. Ammonium hydroxide, produced by mixing anhydrous ammonia
    (ammonia gas) with the natural moisture in LFTB, was determined to be
    Generally Recognized as Safe (GRAS) by the Food and Drug Administration
    (FDA) in 1974, after extensive review and a rulemaking process (21 CFR
    184.1139). USDA, after consultation with FDA, determined that ammonium
    hydroxide is safe and suitable for use in the production of meat and
    poultry products (FSIS Directive 7,120.1).
        Question. Have there been incidents of food-borne contamination in
    products containing pink slime?
        Answer. Some ammoniated beef has been shown to be contaminated with
    E. coli O157:H7, and such product has been excluded or removed from
    commerce under the same procedures FSIS employs for any product it
    regulates.
        Question. Parents in Maine have contacted school districts to
    inquire about the safety and wholesomeness of products containing this
    additive. Are there any health implications, particularly for school-
    age children, associated with consuming foods that have been treated
    with ammonium hydroxide?
        Answer. No. Ammonium hydroxide is accepted as GRAS for this use.
        Question. Does the Department plan to undertake any additional
    studies or actions to ensure that these products are safe for
    consumption by the public and by our Nation's school children?
        Answer. No. No evidence has been presented or cited that would
    raise a question about the GRAS status of this use of ammonium
    hydroxide. However, based on requests from school districts across the
    country, USDA announced on March 15 that it would offer more choices in
    the National School Lunch Program in terms of purchases of ground beef
    products.

                           LEAN FINELY TEXTURED BEEF

        Question. I understand that the Department has recently announced
    it will give schools the choice of using products that do not contain
    pink slime.
        What will the Department do with unwanted product that contains
    this additive that, in some cases, has already been delivered to school
    districts?
        Answer. On March 30, a policy memo was sent to State distributing
    agencies (SDAs) and school food authorities (SFAs) that not only
    reaffirmed the safety of lean finely textured beef (LFTB) but also
    outlined the options available for the treatment of their current
    inventories if recipients chose not to utilize the product as intended.
    USDA does strongly encourage all SDAs and SFAs that have ordered
    donated beef products to use them as intended but understands the
    desires of certain recipient Agencies not to do so. However, USDA
    cannot provide entitlement credit or reimbursement for any processing-
    related fees or replacement product. If the SFA does not wish to use
    donated beef products that contain LFTB, the SDA must determine if the
    donated products can be reallocated to another SFA that is willing to
    use them. If donated beef products in SDA inventories cannot be
    reallocated to another SFA, the SDA must determine if they can be
    transferred to another SDA for distribution to SFAs in the National
    School Lunch Program, or if such foods can be transferred for use in
    the Emergency Food Assistance Program (TEFAP), or another eligible
    charitable institution. SDAs will be responsible for any transportation
    costs, and there will be no compensation to an SDA or SFA for lost
    entitlements.
        USDA continues to affirm the safety of LFTB products. However, the
    Department was overwhelmed with inquiries from schools and parents who
    did not want it to be allowed as a component in the ground beef that
    USDA purchases. The schools are our customers and they were demanding
    choices. The decision was driven by customer demand.
        Question. What is the estimated cost to the Department and to
    schools of choosing not to use products containing this additive?
        Answer. AMS estimates that the cost of beef products that do not
    allow for the inclusion of LFTB could run 3 percent higher than the
    comparable LFTB-allowing beef product specifications. Depending on
    whether a school food authority is ordering donated products or using
    non-entitlement funds, selecting this option could either result in
    them receiving a smaller volume of products or a higher cost. USDA does
    not expect there to be any increased direct costs to the Department
    from providing the option.

               AGRICULTURAL RESEARCH SERVICE PROGRAM REALLOCATION

        Question. In fiscal year 2012, and in the 10 previous fiscal years,
    ARS and the potato industry, through a potato research initiative, have
    cooperated to identify research projects that have scientific merit and
    address potato industry priorities. ARS researchers serve as the lead
    investigators on all projects and collaborate with land grant
    universities and other private entities to conduct this research.
        The President's fiscal year 2013 budget request proposes to
    reallocate $4.6 million to improve the control of diseases attacking
    small fruits, nursery crops, potatoes, and other crops, through the
    development of resistant varieties and disease management strategies.
    Preventing the damaging effects of pests and diseases requires the
    consistent application of sound pest management strategies, including
    the development of disease- and pest-resistant crop varieties. These
    strategies are the result of years of collaborative efforts among ARS,
    research institutions, private industry, and local producers that have
    resulted in better pest management, reduced environmental impact,
    improved quality, and increased yield. Can you explain how the
    Department's proposed reallocation will affect these partnerships? Is
    USDA committed to providing adequate funding for pest and disease
    management programs, including the development of pest and disease-
    resistant varieties through ARS that address the potato industry's
    identified research priorities?
        How does the Department intend to fund and administer these
    programs, and what resources will USDA commit to these programs to
    ensure they are able to address evolving pest and disease management
    challenges facing producers?
        Answer. USDA will maintain its strong partnerships with its
    cooperators, customers, and stakeholders, including agricultural
    producers and universities. These close working relationships are an
    integral part of plant breeding and pathology research programs
    nationwide, and the Department will use its dedicated resources to
    continue these partnerships that address producer priorities in plant
    production and protection.
        Public plant breeding programs are crucial in meeting needs
    identified by the potato and other industries. Development of improved
    germplasm and varieties, as needed, with enhanced disease and pest
    protection is a high-priority research initiative within the
    Department.
        USDA research will continue to address producer needs for plant
    health and sustainability. Research priorities will continue to be
    established through a continuing dialogue with customers and
    stakeholders.

       NATIONAL INSTITUTE OF FOOD AND AGRICULTURE CROP PROTECTION PROGRAM

        Question. The President's fiscal year 2013 budget proposes to
    consolidate several pest management programs into a single ``Crop
    Protection'' program and to provide $29.1 million for that program in
    the next fiscal year. Integrated Pest Management (IPM) programs allow
    research universities to partner with State, local, and regional
    producers to conduct critical field work and research, perform field
    inspections, and provide producer notifications. These steps are
    critical to converting laboratory research into improved pest and
    disease management strategies that can be applied in the field to
    reduce pesticide application and improve crop quality and yield.
        Please describe how the Department intends to administer these
    important programs should such a consolidation occur. How would the
    proposed consolidation affect ongoing partnerships with States and
    research universities to transfer laboratory research to the field? How
    much of the $29.1 million that is requested would go to fund IPM
    programs, and specifically, potato IPM programs? How much of the
    requested funding under this proposed consolidation would go to Minor
    Crop Pest Management (IR-4) program efforts?
        Answer. USDA is currently soliciting broad stakeholder input on the
    appropriate design of the Crop Protection Program in anticipation of
    funding in fiscal year 2013. Our goal is to improve the efficiency of
    the program and enhance NIFA's ability to support research, education,
    and extension activities needed to assist in global food security and
    respond to other major societal challenges.
        [Additional information is provided below.]
        The President's budget for fiscal year 2013 proposed the
    consolidation of six pest management budget lines into the Crop
    Protection Program. The budget proposal identifies five priority areas
    that will be supported by the new program:
      --The development of crop protection tactics and tools;
      --The development of diversified IPM systems;
      --Enhancing agricultural biosecurity;
      --Developing IPM for a sustainable society; and
      --Developing the next generation of IPM scientists.
        These priority areas encompass core research, extension and service
    activities supported by the six budget lines that will be consolidated.
    As we implement the new program, we will try to minimize disruption to
    ongoing efforts that are currently supported by the six budget lines,
    which includes the IR-4 program. We value the partnerships that have
    developed as a result of the Department's involvement with these pest
    management efforts over the past 50 years, and we remain committed to
    supporting critical research, extension and service efforts in fiscal
    year 2013 and beyond. We believe that the proposed budget consolidation
    and creation of the Crop Protection Program will strengthen these
    partnerships, and will result in the most effective and efficient use
    of Federal funding appropriated to the National Institute of Food and
    Agriculture for pest management efforts. Funding allocations for this
    competitive program will be determined when 2013 funding is provided.

                    NORTHEAST REGIONAL AGRICULTURAL RESEARCH

        Question. One of the major strengths of American agriculture is the
    wide variety of crops grown, and the ability of different geographic
    regions to produce high-quality, often unique, agricultural products.
    USDA research activities through the ARS play a key role in leveraging
    departmental resources, academic expertise, and the input of regional
    producers to improve quality and expand production of many crops. The
    President's fiscal year 2013 budget proposes to close several ARS
    laboratories, including the New England Plant, Soil, and Water Research
    Center--the only ARS lab in the six-State New England Region that
    conducts crop, soil, water, environmental, and economic research.
        The closing of ARS labs represents a significant loss not only for
    regional producers, but also for affiliated research universities that
    will lose critical staff and resources. These losses can jeopardize the
    ability of universities and industry to apply prior research and
    develop better pest and disease management strategies. Moreover, the
    closure of the only plant, soil, and water ARS laboratory in New
    England hardens the impression that the Department does not view the
    Northeast's agricultural sector as worthy of growth, improvement, or
    investment. Does the Department believe it is important to maintain an
    ARS laboratory research footprint in New England and other regions of
    the country? Has the Department analyzed the potential economic impacts
    of closing these labs on regional producers who may directly benefit
    from the applied research that these labs can generate?
        Answer. ARS is a national research institution; although many ARS
    research laboratories address the needs of local producers, these
    laboratories also often serve as model systems. Thus, research
    conducted at many ARS locations yields benefits to producers in Maine
    and elsewhere. USDA believes that there are significant benefits to
    maintaining research facilities across the range of climatic, soil, and
    cropping systems represented in the United States. Though the Orono
    facility is proposed for closure, ARS is maintaining a comprehensive
    set of research laboratories in New York, Pennsylvania, Maryland, and
    West Virginia that continue to address the needs of producers in the
    northeast. Agriculture in the United States is seldom extremely
    location-specific. Although crops usually are particularly productive
    in certain combinations of soils and climate, those conditions can
    often be found at multiple locations. Taking advantage of the
    differences across the country contributes to the important
    characteristic of resilience leading to increased food security.
        The Department has not undertaken a comprehensive economic analysis
    of the impacts on regional producers from the proposed closures. Aside
    from Orono, ARS conducts many research projects around the concept of
    Agricultural Systems Competitiveness and Sustainability at research
    locations in several States. In most instances, these projects address
    complete cropping systems relevant to various production areas across
    the country. For example, many research findings in sustainable potato
    production systems in Washington and Oregon benefit producers in the
    northeast. Although the research in those locations is by necessity
    conducted on local crops and soils, the principles that are developed
    are beneficial in a broad range of crops, soils, and climates.
                                     ______

                   Questions Submitted by Senator Jerry Moran

                             COMPETITIVE FOOD RULE

        Question. Changes to the National School Lunch and Breakfast
    Programs have imposed new challenges and costs on schools in Kansas and
    across the country. While I am glad the implementation cost of the
    final meal pattern rule is lower than what was initially proposed, I am
    concerned about what the cost may be of the competitive foods rule USDA
    is currently working on. What assurances can you give me and school
    nutritionists in Kansas who are already having difficulty planning
    menus for next year that the forthcoming rule on competitive foods will
    not impose costs and compliance hurdles similar to those that were
    proposed in the initial meal pattern rule?
        Answer. As you are aware, the Healthy, Hunger-Free Kids Act (HHFKA)
    requires that the USDA develop nutrition standards for foods sold in
    schools outside the National School Lunch Program (NSLP) and the School
    Breakfast Program (SBP). It also requires they be consistent with the
    most recent Dietary Guidelines for Americans and take a number of
    important issues into consideration, including the practical
    application of the nutrition standards in schools. A proposed rule to
    establish such standards is currently under development.
        We are aware that school districts have concerns regarding the
    potential financial and logistical impacts associated with the
    implementation of these standards and have received extensive input
    from a variety of stakeholders on how to best address those concerns.
    As we continue our work to develop the proposed rule, a great deal of
    time has been spent analyzing current scientific information and school
    practices as well as voluntary standards for food sold outside of the
    NSLP and SBP that have been recommended by a number of nongovernmental
    organizations. We have also considered the costs associated with
    implementation of such standards for all foods sold to students in
    school. I am committed to ensuring that any such standards are
    practical and accompanied by extensive guidance and assistance for our
    school partners as implementation moves forward. In addition, I
    understand the need to aim for consistency with the NSLP meal pattern
    regulation in areas in which the regulations may overlap, particularly
    as a means to ensure the regulations do not place undue burden or
    complexity on school staff who operate food service under both
    standards. We look forward to receiving public comments once the
    proposal is published and want to assure you that such comments will be
    most carefully considered as we develop the final rule.
        Question. Last year, in the Consolidated and Further Continuing
    Appropriations Act (Public Law 112-55), Congress expressed concern
    about sodium reduction targets specified in the proposed meal pattern
    rule. Is the Department taking these concerns about aggressive sodium
    reduction targets into account as it finalizes its proposed rule for
    competitive foods?
        Answer. We understand the complexity of balancing ambitious
    approaches to improving the food intake of children with the needs of
    program operators and look forward to receiving public comments once
    the competitive foods proposal is published. I want to assure you that
    such comments will be carefully considered as we develop the final
    rule. We continue to be committed to ensuring a careful review of
    current science and technologies before implementing the ambitious, but
    important, sodium reduction targets included in the school meal
    patterns final rule and will apply these considerations to our work on
    competitive foods.
                                     ______

                   Questions Submitted by Senator Tim Johnson

                                OFFICE CLOSURES

        Question. Let me first thank you for your February 13, 2012,
    response to the letter I sent with Senator Thune and Representative
    Noem concerning your January 9, 2012, announcement to close 259 USDA
    offices, facilities, and laboratories across the country, including
    four FSA offices in my home State of South Dakota. At the same time, I
    was disappointed that several of our questions were not addressed in
    your response. I recognize, as you have stated publicly multiple times,
    that the Department has been faced with difficult choices given reduced
    budgets, and that you faced a choice of either closing offices or
    instituting furloughs. The situation in which you find yourself is
    certainly unfortunate; the rush to cut Federal spending by some in
    Congress without regard for the impact has begun to show the
    consequences.
        Recognizing these difficult circumstances, I would like to get a
    better idea of how you identified offices for closure. The 2008 farm
    bill directed you to use a specific set of criteria. Specifically, my
    constituents would appreciate a better understanding of why the
    Department utilized ``as the crow flies'' rather than driving miles for
    determining the mileage between offices; this has been of significant
    concern for my constituents, because in multiple cases, the distance
    between offices in question is actually greater than 20 miles. As we
    stated in our letter, the Department utilizes miles driven when
    determining mileage for official Government travel with motor vehicles;
    particularly given the unique geographical characteristics of some of
    the affected offices, why did the Department utilize the ``as the crow
    flies'' standard?
        Answer. USDA selected Euclidian miles because it represents a
    precise distance between two points which is not subject to
    interpretation.
        Question. Additionally, some of the offices slated for closure,
    though minimally staffed at the time the decisions were made, have
    still had a significant workload. As we stated in our letter, using the
    actual number of employees in the office at any given time is an
    unreliable and inconsistent staffing measure as this number can vary
    greatly due to retirements and transfers. Why did the Department use
    the actual number of employees for determining whether county offices
    met this statutory guideline?
        Answer. USDA used the number of staff currently employed in each
    office in order to strictly adhere to the criteria laid out in the 2008
    farm bill.

                            HOUSE BUDGET RESOLUTION

        Question. Can you outline what the impact will be of the budget
    resolution recently passed in the House of Representatives, if enacted
    on your ability to operate in the future, and in particular, the degree
    to which you may need to consider additional office closures?
        Answer. The President's budget request was fiscally responsible and
    included reductions in many discretionary programs. For any further
    reductions beyond the President's budget we would need to further
    review our priorities and make appropriate adjustments.

                           COUNTRY OF ORIGIN LABELING

        Question. Thank you for your continued efforts in defending our
    country-of-origin labeling (COOL) program. As you know, I've worked on
    this issue for many years, and I am pleased that USDA, under your
    leadership, has finally implemented the program. Additionally, I am
    very pleased that the administration will be appealing the World Trade
    Organization Dispute Settlement Panel's decision concerning our COOL
    program. Can you provide a general timeframe for the appeals process
    moving forward and the role that USDA will play in the process?
        Answer. The parties to the dispute have already filed all their
    submissions in the appeal. The WTO Appellate Body will hold the hearing
    in this appeal on May 2-3, 2012. A final decision is expected sometime
    during the summer of 2012. USDA's COOL team of regulators, economists,
    trade policy experts and lawyers has been working closely with United
    States Trade Representative's litigation team throughout this dispute,
    both at the Panel stage and at the appellate stage.

                              SUN GRANT INITIATIVE

        Question. As you know, the Sun Grant Initiative is an important
    university research and education program that addresses national
    priorities to develop bioenergy and bioproducts at regional and local
    levels. The initiative broadens the role of land-grant universities to
    conduct research and educational programs that emphasize renewable
    energy systems based on agriculture and renewable resources.
    Particularly given the administration's emphasis on the importance of
    the development of renewable energy, why does the administration's
    budget propose zero funding for this nationally authorized program?
        Answer. A decrease is proposed so funding can be redirected to
    support higher priority activities, and is consistent with the
    administration's policy to redirect available resources, as
    appropriate, and consistent with the agency mission, from lower
    priority areas to other science and technology activities. Alternative
    funding from the Agriculture and Food Research Initiative and/or
    formula funding may be used to support aspects of the program deemed to
    be of priority at State and/or local levels. For example, the 2013
    budget proposes reallocating funding within AFRI towards bio-based
    energy technologies, increasing funding towards this initiative by $30
    million.
                                     ______

                  Questions Submitted by Senator Mark L. Pryor

             AGRICULTURAL RESEARCH SERVICE FISCAL YEAR 2012 FUNDING

        Question. It's my understanding that USDA's fiscal year 2012 budget
    request for Agricultural Research Service (ARS) underestimated the
    funding needed to close the 12 ARS laboratories that were proposed for
    closure in fiscal year 2012. As a result I see that ARS has taken
    action to find the needed $38 million elsewhere in the budget. I note
    three things happened to make up this shortfall:
      --All ARS programs were cut an estimated 0.7 percent;
      --ARS has frozen all vacancies; and
      --ARS has proposed to reduce all extramural activities by 30 percent.
        Do these three rounds of cuts fully make up for the budgeting
    error?
        Answer. I do not believe this was a budgeting error. ARS' fiscal
    year 2012 enacted level was $43 million below what was proposed in the
    fiscal year 2012 President's budget and $38 million below the fiscal
    year 2011 enacted. This permanent reduction eliminated ARS' ability to
    offset the costs of the closures with program funds associated with
    each of the 12 laboratories. The one-time costs associated with the
    relocation or separation of affected personnel and the disposal of
    property are estimated at $39 million in fiscal year 2012. These one-
    time costs are being financed by temporary reductions to remaining ARS
    research programs. The resources accumulated from the temporary
    assessments will cover the one-time costs in fiscal year 2012.
        Question. Why do these cuts, to make up for an ARS budgetary
    mistake, target extramural activities?
        Answer. I do not believe this was a budgetary mistake. The
    permanent reduction of $38 million from fiscal year 2011 levels
    required that all ARS research, not just sponsored extramural research,
    needed to be reduced to pay for the closures. USDA sought to balance
    the impact on intramural and extramural programs through an across-the-
    board reduction of intramural research, a hiring freeze, and extramural
    funding reduction. Together, these actions will finance the one-time
    costs to ARS for the facility closures without closing other ARS
    research projects and let ARS partners continue ARS extramural research
    with 70 percent of the funding. USDA will also continue to support
    high-priority extramural research through other USDA agencies, such as
    the National Institute of Food and Agriculture (NIFA).
        Question. Why is the cut not across the board like the earlier 0.7-
    percent across-the-board cut and the freeze on all ARS vacancies?
        Answer. The approach to financing the one-time costs seeks to
    minimize the impact to USDA personnel. Additional temporary reductions
    to in-house research supported by ARS personnel would potentially
    impact additional ARS employees and require significant reductions in
    ARS intramural research.
        Question. Was there a measured approach used to evaluate
    productivity or performance?
        Answer. To fund the one-time costs associated with closing the 12
    laboratories, all of ARS research was reduced through an across-the-
    board reduction of intramural research, a hiring freeze, and an
    extramural funding reduction. This balanced approach to reductions did
    not evaluate productivity or performance.
        Question. Who made this decision to cut extramural facilities on
    their expected fiscal year 2012 funds to cover the closure costs?
        Answer. I made the decision to assess the funding for extramural-
    supported research, as well as ongoing in-house programs, based on
    recommendations from ARS and other staff.
        Question. Is there an appeal process?
        Answer. USDA has not established a process to appeal the temporary
    reductions necessary to finance the one-time costs associated with
    closing the 12 laboratories.
        Question. What other sources of funding were under discussion to
    help cover the unit closure budget shortfall?
        Answer. The Department's ability to finance the one-time costs is
    limited to the resources appropriated to conduct the agency's research
    programs. All funds appropriated to ARS are used to support the
    salaries of ARS personnel and other necessary expenses to conduct
    research, including cooperative agreements with our extramural research
    partners that contribute to specific ARS program objectives. Since
    2010, the ARS Salaries and Expenses budget has been reduced by over 7
    percent, while the need to invest in research continues to grow. Shared
    sacrifice has to be made given limited resources.

                    DALE BUMPERS SMALL FARMS RESEARCH CENTER

        Question. The fiscal year 2013 budget request includes a proposal
    to effectively close the Dale Bumpers Small Farms Research Center in
    Booneville, Arkansas, by redirecting all its funding elsewhere. I
    obviously do not support this proposal. In light of the closure of
    Brooksville, Florida, in 2011, and the expected closures of
    Watkinsville, Georgia, and Beaver, West Virginia, by June 1, 2012,
    where will ARS conduct grazing research for the benefit of the eastern
    United States if it closes Booneville, too?
        Answer. Grazing research for the Eastern United States is conducted
    at ARS locations in University Park, Pennsylvania (Pasture Systems and
    Watershed Management Research Unit); Lexington, Kentucky (Forage Animal
    Production Research Unit); Madison, Wisconsin (U.S. Dairy Forage
    Research Center); Morris, Minnesota (North Central Soil Conservation
    Research Laboratory); Mandan, North Dakota (North Great Plains Research
    Laboratory); Tifton, Georgia (Southeast Watershed Research Unit); and
    El Reno, Oklahoma (Grazinglands Research Laboratory). The research at
    these units is done in cooperation with university and industry
    partners.
        Question. Booneville is the home of unique long-term water quality
    research including a 20-year grazing study that began in 2003 using 15
    small watersheds in Booneville, and a 10-year study on the effects of
    poultry litter application method on nutrient runoff to watersheds.
    Both of these studies promise answers to critical issues plaguing the
    entire region. What are your plans to continue this highly valuable
    research if Booneville is abandoned?
        Answer. ARS maintains a nationwide network of research watersheds
    at 22 locations. Similar research is being conducted in watersheds at
    University Park, Pennsylvania; Beltsville, Maryland; Florence, South
    Carolina; Madison, Wisconsin; Tifton, Georgia; Fayetteville, Arkansas;
    Bushland, Texas; St. Paul, Minnesota; Mississippi State, Mississippi;
    Bowling Green; Kentucky; and Clay Center, Nebraska. The research is
    addressing animal production systems for cattle beef and dairy, swine,
    and poultry. The mitigation of poultry litter impacts is specifically
    addressed by research at University Park, Fayetteville, Mississippi
    State, and Tifton.
        Question. Additionally, Booneville is home to the only dedicated
    ARS sheep and goat research program. Sheep and goats are an ideal
    enterprise for small farms for the production of meat, wool, or milk,
    and there is an exploding demand for these products in the United
    States. What are your plans for conducting research in this area if you
    abandon Booneville?
        Answer. In addition to Booneville, ARS conducts research in sheep
    production at other locations--Clay Center, Nebraska (U.S. Meat Animal
    Research Center); Dubois, Idaho (U.S. Sheep Experiment Station); and El
    Reno, Oklahoma (Grazinglands Research Laboratory). Research at these
    locations is focused on the development of genetic resources for the
    sheep industry including an ``easy care'' genetic composite for small
    flock producers in the Midwestern and Eastern United States, and
    maternal and terminal lines adapted for large Western and Southwestern
    range flock production systems. This research program is also
    coordinated with the rangeland programs to examine the interaction
    between sheep and rangeland ecosystem services with specific focus on
    grazing and fire remediation, invasive weeds, and rangeland ecology.
    Additional research at the Grazinglands Research Laboratory is focused
    on grazing system forage using pastures and winter annual forages to
    reduce production costs and environmental impacts associated with
    grazing for both small and large animal ruminants. ARS is planning to
    initiate grazing goat research at El Reno in cooperation with the
    Langston University Goat Research Center. ARS is providing leadership
    for an international consortium which is developing a project to
    sequence the goat genome. This project is being developed by ARS
    scientists in Beltsville, Maryland, at the Beltsville Agriculture
    Research Center.
        Question. In your fiscal year 2012 budget proposal, this same
    Center was proposed to be one of the sites for a major increase in
    funding as part of an ARS biofuels feedstock initiative. Now this year
    ARS is apparently targeting for elimination grazing research and
    research that benefits small producers. I understand the budget
    realities the agency faces, but the on-again, off-again, chaotic nature
    of selecting funding priorities is out of line with the normal
    activities of a research agency focused on long-term, basic research.
    Can you explain the rationale behind the changes in ARS priorities from
    year-to-year?
        Answer. A portion of a President's budget request for $10 million
    in 2010, and $6 million in 2011 to the USDA Regional Biomass Research
    Centers was designated for Booneville, but these funds were not
    appropriated. The Booneville location now has only three scientist
    positions. Because of the loss of critical mass of scientists, and
    adequate funding to support priority biomass research at Booneville,
    small ruminant research will be addressed at other ARS locations
    including applications to small scale producers for goats at El Reno,
    Oklahoma, and coordination of regional biomass research at Temple,
    Texas.

                         DELTA OBESITY PREVENTION UNIT

        Question. USDA's fiscal year 2013 budget request proposes to
    eliminate funding for the Delta Obesity Prevention Research Unit in
    Little Rock, Arkansas. I am opposed to this proposed elimination. In
    previous years, ARS has proposed changing priorities for the Delta
    Obesity Prevention Research Unit. It was suggested by ARS that funding
    redirected from this unit would be used at AR Children's Nutrition
    Center, Tufts, and Houston to augment basic nutrition research that
    could be targeted to the Delta region. What happened to that proposal?
    This year's budget proposal simply proposes to terminate this funding
    and redirect ``to more critical needs.''
        Answer. The President's budget for fiscal year 2012 proposed
    redirection of funds from the Delta Obesity Prevention Research Unit
    (DOPRU) to a study that would evaluate factors affecting adherence to
    the Dietary Guidelines for Americans. The funds for that study were to
    be reallocated to Beltsville, Maryland, but all six of the ARS Human
    Nutrition Research Centers were to participate in the research and
    would have received a share of those funds distributed from Beltsville.
    This proposed reallocation was never implemented since Congress, in the
    2012 conference report, directed that the funds continue to support
    DOPRU. The proposed closure of DOPRU is part of the ARS proposed
    termination of several predominantly extramural research projects.

                               CATFISH INSPECTION

        Question. With passage of the Food, Conservation and Energy Act of
    2008 Congress shifted inspection and regulation of catfish from the
    Food and Drug Administration (FDA) to the United States Department of
    Agriculture (USDA) Food Safety and Inspection Service (FSIS). Since
    that time, USDA has undertaken a thorough process to implement this new
    responsibility, including issuing a proposed rule and completing the
    comment period on June 24, 2011. It has been almost 4 years since this
    responsibility was given to USDA-FSIS. When will the final rule be
    implemented?
        Answer. Because there are many factors that influence rulemaking,
    it is difficult to estimate when the final rule is published, but FSIS
    will do so as soon as possible.
        Question. What are the challenges with completing this rule?
        Answer. As you know, the law provided that USDA define ``catfish,''
    which is not as simple as it may seem. In the taxonomy of fish,
    Siluriformes (the common name of which is ``catfish'') consist of 36
    different families, among which are Ictaluridae (North American channel
    and blue catfish) and Pangasiidae (which are common to Asia). While
    some Siluriformes imported from Asia include those in the family
    Ictaluridae, much of the product is in the family Pangasiidae. Thus,
    there is a great deal of controversy surrounding the question of
    whether ``catfish'' should be defined narrowly or broadly.
        Question. Will you commit to issuing this final rule this year?
        Answer. FSIS will publish a final rule as soon as possible.

                      FARM SERVICE AGENCY OFFICE CLOSURES

        Question. Do you foresee any need to take further action beyond the
    ``Blueprint for Stronger Service'' initiative to further reduce the
    number of Farm Service Agency (FSA) county offices?
        Answer. There is currently no plan or proposal to close more than
    the 131 FSA county offices identified on January 9, 2012.
        Over the last 2 years, FSA's salaries and expenses appropriation
    has been reduced by more than 5 percent. These reductions have
    necessitated significant reductions in administrative spending, a
    reduction in permanent staffing by 12.5 percent, and the proposed
    consolidation of 131 offices in 32 States. These actions were designed
    to bring the Agency's operating budget in line with the current and
    expected future funding levels. USDA will continue to do its best to
    serve America's farmers and ranchers within the funding level set by
    Congress.
        Question. How could the process used to consider USDA field office
    consolidations be improved to involve stakeholders in the process
    before these proposals are officially announced?
        Answer. USDA adheres to congressional notification requirements in
    the annual appropriations acts. For FSA, additional guidelines are laid
    out in the 2008 farm bill.
        The proposal to close 131 FSA county offices remains the Agency's
    only proposal to close FSA offices. This proposal was announced on
    January 9, 2012. Over the following month, FSA held public meetings in
    each affected county and notified Congress of the proposed office
    closures on February 27, 2012. The public meetings enabled stakeholders
    to share their concerns with senior FSA leadership. FSA communicated
    about the circumstances that led to proposed county office closures--
    the need to manage the Agency under significantly reduced operational
    spending, 12.5 percent fewer permanent staff, and an ever-increasing
    workload, while continuing to deliver the best possible service to
    farmers and ranchers. FSA's approach to consultation adhered to
    statutory requirements, and provided a transparent and inclusive means
    to communicate with affected parties.
        Question. With 2,800 NRCS offices and only 2,100 FSA offices
    remaining open across the country, how is USDA insuring that producers
    are being adequately serviced in locations without both agencies
    present?
        Answer. We strongly believe that co-location is a great benefit to
    producers, and we will continue to offer these arrangements wherever
    possible. However, it is important to note that even before the
    proposed closures were announced, not all FSA offices had an NRCS
    presence. Further, we do not believe the proposed closures
    significantly undermine our efforts to co-locate FSA and NRCS offices.
        FSA is modernizing IT and improving its business processes so that
    farmers will be able to do more of their business with FSA without
    having to visit an office. If the proposed consolidations occur, FSA
    will concentrate staff in its 2,113 remaining offices in order to
    provide consistent service in fully staffed, fully functioning offices.
        If the proposed consolidations take place, producers may choose any
    county office that is convenient for them to conduct their FSA
    business.
        Question. Recently there has been a lot of emphasis on reorganizing
    the field office structure of the Farm Service Agency in an attempt to
    provide better more timely service to the producers they serve. Most
    private businesses do not cut or make reductions at the customer level
    until a complete review of their structure has been completed above the
    field level. As I look at USDA's Blue Print for Success, it appears to
    me that you have not made any attempts to review FSA's structure above
    the field level to find needed savings. When does USDA plan on
    reviewing and reorganizing USDA/FSA above the field level? Does USDA
    have any plans to reduce the number of State offices?
        Answer. FSA reviewed its operations at all levels to identify
    administrative efficiencies that resulted in significant savings. FSA
    also achieved needed savings by reducing staff levels in national,
    State, and county offices by 12.5 percent. There is currently no plan
    or proposal to close any offices other than the 131 FSA county offices
    identified on January 9, 2012.
        Question. Under USDA's Blueprint for Success, a number of county
    offices met the criteria of two or fewer permanent full-time employees
    after VERA (voluntary early retirement program) and VSIP (voluntary
    incentive payment retirement program) programs in 2011. Some of these
    offices have the workload to support four or more employees and
    employed four or more FTEs when calendar year 2011 began. Because of
    VERA and VSIP, some of these offices were quickly reduced to two FTEs.
    When you looked at the number of employees for each office, did you
    take into account the previous workload of each office?
        Answer. The VERA and VSIP opportunities were implemented in order
    to reduce staffing necessary to live within current and expected future
    budget realities. To identify FSA offices for consolidation, USDA
    followed criteria provided by Congress in section 14212 of the 2008
    farm bill, which required, for any office closures, that the Secretary
    ``first close any offices of the Farm Service Agency that--(a) are
    located less than 20 miles from another office of the Farm Service
    Agency; and (b) have two or fewer permanent full-time employees.'' In
    addition, FSA proposed for closure all offices with zero full-time,
    permanent employees regardless of the distance to another FSA office.
        Question. Office closure language included in the 2008 farm bill
    called for offices located closer than 20 miles apart would be the
    first offices considered for closure/consolidation. Under USDA's
    Blueprint for Success, there are a number of cases where the navigable
    miles between the proposed office to be closed and the proposed
    receiving office is significantly more than 20 miles. You mentioned in
    a previous letter that USDA used Euclidian miles in order to be more
    objective. Why was it determined that 20 Euclidian miles were more
    objective than 20 navigable road miles when developing the list of
    offices proposed to be closed/consolidated?
        Answer. USDA measured using Euclidian miles because Euclidean miles
    offer no advantages to any particular county. Euclidean miles are the
    most uniform and equitable unit of measurement for distance, regardless
    of geography or terrain.
        Question. Since 1996, USDA has prided itself in using the Service
    Center for customers utilizing programs and services provided by any
    agency in USDA. Repeatedly, USDA has stated the importance of having
    all USDA agencies in a single location to provide maximum customer
    service. Knowing 131 of the 259 USDA offices being proposed for closure
    are FSA county offices, this will certainly cause the Service Center
    concept to be abandoned in many areas. How can USDA maximize customer
    service while abandoning the Service Center, causing USDA customers to
    visit separate locations to transact business?
        Answer. It is important to note that even before the proposed
    closures were announced, not all FSA offices were Service Center
    locations. Further, we do not believe the proposed closures undermine
    the Service Center concept. However, we strongly believe the Service
    Center concept is a great benefit to producers, and we will continue to
    offer these arrangements wherever possible. We understand the concerns
    of producers who will have to travel to another location to conduct
    business with FSA once consolidations take effect. However, over the
    past 3 years, FSA has had to make tough decisions to be able to
    continue to operate within significantly reduced budgets.
        FSA is modernizing IT and improving its business processes so that
    farmers will be able to do more of their business with FSA without
    having to visit an FSA office. FSA will concentrate staff in its
    remaining offices in order to provide consistent service in fully
    staffed, fully functioning offices. Producers affected by an office
    closure will be able to choose any county office that is convenient for
    them to conduct their FSA business.

                              SUBCOMMITTEE RECESS

        Senator Kohl. And this hearing is recessed.
        [Whereupon, at 3:53 p.m., Thursday, March 29, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

                            THURSDAY, APRIL 19, 2012

                                           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, Collins,
    Moran, and Hoeven.

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                          Food and Drug Administration

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

                     OPENING STATEMENT OF SENATOR HERB KOHL

        Senator Kohl. Good afternoon. The subcommittee will come to
    order.
        Today's hearing will focus on the Food and Drug
    Administration's (FDA's) fiscal year 2013 budget request. We
    welcome Commissioner Hamburg, Mr. McGarey, and Mr. Cochran. We
    appreciate your being here.
        Before we begin, I'd like everyone to know that we have
    votes scheduled for 2:15 p.m. today. So right now we'll plan on
    just having opening statements by myself, Senator Blunt, as
    well as Commissioner Hamburg. Once the votes are called, we'll
    have to stand in recess until the votes are through, and we'll
    come back then and begin our questions. So we thank everybody
    for accommodating that.
        The administration's budget request for fiscal year 2013
    stands in stark contrast to the requests of recent years. Since
    2008, the Congress has provided the FDA with budget increases
    totaling nearly 30 percent and the administration's requests
    have even been higher. This year, however, the FDA budget
    proposes an increase of only $15 million, bringing total
    funding to approximately $2.51 billion.
        Two main funding increases requested in this budget are $10
    million to enhance inspections of drugs and drug ingredients
    manufactured in China, and to work with Chinese manufacturers
    on ways to meet FDA standards; and $18 million to complete the
    FDA's Life Sciences-Biodefense Laboratory complex. These
    increases are partially offset by decreases found elsewhere in
    FDA's budget.
        As we are all aware, this subcommittee has worked over the
    past several years to provide FDA with increased funding for
    food safety activities. This year the only additional funds for
    food safety are requested in the form of a new user fee. My
    understanding is that negotiations on this user fee are in
    their earliest stages, and it is not likely to be passed this
    year. This means essentially that food safety activities are
    flat-funded in this budget, when we all know that the FDA's
    workload in this area has certainly not leveled off. That
    concerns us. I look forward to discussing this further.
        I don't believe that this budget request reflects less
    support for FDA by the administration, but I do believe it
    reflects the budget realities that we continue to face. The FDA
    has been exempt from significant cuts found elsewhere
    throughout the Government. This will certainly prove to be the
    most difficult year in recent history. The importance of FDA's
    work has not diminished, and the agency's workload continues to
    increase. I have said in the past that I believe ensuring the
    safety of our food and drug supply is an important Federal
    function and should not and cannot be relegated to State and
    local governments as well as private industry.
        As these functions continue to become more and more complex
    every day, we will do our best to provide FDA with the funding
    you need to do your job well, with the understanding that we
    are all being required to do more with less.
        We look forward to your testimony, Dr. Hamburg. But first,
    Senator Blunt.

                         STATEMENT OF SENATOR ROY BLUNT

        Senator Blunt. Thank you, Mr. Chairman. Thank you for
    holding today's hearing on the FDA budget. I want to thank our
    witnesses for being here today. I look forward to working with
    the subcommittee, but particularly to working with the
    chairman, who has had such a good impact on FDA issues over his
    time on this subcommittee.
        Commissioner Hamburg, thanks for your visit the other day.
    The agency you head regulates approximately 20 cents out of
    every $1 spent in America and Americans expect the FDA-related
    products will be safe and effective. Similarly, the industry
    expects transparency and certainty from the FDA.
        The agency has authority over 185,000 domestic
    establishments that range from food processing plants to
    facilities that manufacture life-saving medications. As
    companies struggle through the recession, FDA must be mindful
    that burdensome regulations can stifle innovation and lead to
    unnecessary expenses that limit small businesses' ability to
    create jobs.
        For example, FDA's currently reviewing comments on a
    proposed rule that would require restaurants to list calorie
    content for standard menu items and of course very specifically
    defining standard menu items so you could know what that
    standard was. I believe the proposed rule that you've asked for
    comment on and haven't finalized is at this point still
    unnecessarily broad and too inflexible, but hopefully the final
    rule will benefit from the comments you're receiving.
        When implementing the rule, you should adopt the least
    burdensome alternatives that meet your responsibility, and
    doesn't unnecessarily regulate stores that don't sell food as
    their primary business or other things that wouldn't be
    necessary under the act. In addition, the rule should be
    flexible enough to allow locations that don't serve their
    patrons on site the opportunity to provide nutrition
    information in a variety of formats.
        I look forward to being able to discuss this issue a little
    further.
        I'd also like to take a moment to mention that this very
    well may be the last hearing of the subcommittee this year.
    Chairman Kohl has announced that he'll leave the Senate soon, I
    suppose maybe to focus on basketball full-time or one of his
    other many activities that he's involved in. But this may be
    his final hearing as chairman. We're going to continue to work
    closely together to produce a bill.
        I'd like to say that in leading this subcommittee he's
    really displayed keen knowledge of all the work of the
    subcommittee and--as you know, Commissioner--has shown
    particular interest and has been a real leader on FDA issues,
    particularly on food safety, and really, it's been an honor for
    me to get to work with him last year. I hope we produce a bill
    this year that we can get to the floor again, and we'll both be
    out there doing what we can to make this subcommittee work
    under the chairman's leadership.
        Thank you, Mr. Chairman.
        Senator Kohl. Thank you. Thank you, Senator Blunt.
        Now, Dr. Hamburg.

                       STATEMENT OF DR. MARGARET HAMBURG

        Dr. Hamburg. Thank you, Chairman Kohl and Ranking Member
    Blunt. I do also want to take this opportunity to thank you,
    Chairman Kohl, for the extraordinary leadership that you've
    shown over so many years and the support you've given the FDA
    in our important mission.
        I am joined, as you note, by Patrick McGarey, who is our
    Assistant Commissioner for Budget, and Norris Cochran, who's
    Deputy Assistant Secretary for Budget at the Department of
    Health and Human Services (HHS).
        Let me begin by again thanking you and the subcommittee for
    your efforts in recent years to really try to shrink the gap
    between the agency's budget and its vast and evolving
    responsibilities. Your leadership has put us on a path towards
    more appropriate funding levels to support our unique and
    crucial mission. We are using these funds responsibly to
    reinforce our core functions and to obtain the most public
    health value for the Federal dollar during these challenging
    fiscal times. We're deploying smarter and more flexible
    regulatory approaches and better targeting of our inspectional
    resources. We've consolidated our information technology (IT)
    infrastructure into modern data centers and expanded our
    efforts to leverage both financial and human capital through
    collaborations with public and private partners.

                                 DRUG APPROVALS

        With your support, we have produced concrete results that
    really matter. For example, we lead the world in the number and
    speed of drug approvals, while maintaining high standards for
    safety and efficacy. Last year we approved 35 innovative new
    drugs, many of them groundbreaking, the second highest number
    of approvals in more than a decade.
        During this fiscal year, we've continued our strong
    performance and have already approved 15 innovative new drugs
    and biologics. Last year a total of 195 drug shortages were
    prevented through proactive collaboration with patients,
    healthcare providers, and manufacturers, and by exercising
    regulatory flexibility. This year we've already prevented
    another 30 drug shortages.

                         FOOD SAFETY MODERNIZATION ACT

        Just 1 year after the enactment of the Food Safety
    Modernization Act, we've issued guidances and interim final
    rules and are on the way to meeting the 5-year inspection
    mandate for high-risk domestic facilities.
        I think it is critical to note, though, that the volume and
    complexity of the products we regulate and the complexity of
    the supply chains by which they reach American consumers has
    increased dramatically. We receive thousands of medical product
    submissions each year and serve as the watchdog for the safety
    of tens of thousands of products that are already in the
    marketplace, and we oversee the safety of roughly 80 percent of
    the Nation's food supply. Imports of food products alone come
    from some 200 different countries and from more than 250,000
    foreign facilities each year.

                                 GLOBALIZATION

        In addition, our core responsibilities are expanding to
    include additional product areas, such as tobacco, and evolving
    to accommodate scientific and technological advances and the
    challenges of globalization. Our budget request reflects these
    complexities and new demands, although, as you note, it is
    modest.

                            FISCAL YEAR 2013 BUDGET

        The fiscal year 2013 budget recommends $4.5 billion for FDA
    overall, a 17-percent increase from fiscal year 2012. User fees
    account for 98 percent of the increase, however. We're
    proposing cuts or savings in two areas, IT and related systems
    and building and facilities. FDA is also absorbing more than 80
    percent of inflationary rent costs.
        Our fiscal year 2013 budget authority increases will
    support import safety, medical countermeasures, White Oak
    facilities, the commissioned corps pay raise, and about 20
    percent of our rent increase.

                                 BUDGET REQUEST

        To strengthen the safety of foods and drugs from China, FDA
    is requesting $10 million. Exports from China are experiencing
    unprecedented growth. In the last 5 years alone, shipments of
    FDA-regulated products from China increased by 62 percent. So
    that represents a fundamental shift of our economic and
    security landscape. These additional resources will strengthen
    our capacity to inspect Chinese facilities and our ability to
    work with our colleagues in China and our ability to perform
    risk analysis on Chinese exports.

                            MEDICAL COUNTERMEASURES

        Thanks to this subcommittee, FDA received a fiscal year
    2012 appropriation of $20 million for medical countermeasures.
    The fiscal year 2013 budget recommends an additional $3.5
    million to support development and review of new diagnostics,
    medical treatments, vaccines, and other technologies against a
    range of naturally occurring or deliberate chemical,
    biological, radiological, or nuclear threats, and new funding
    will help support initiatives focused on acute radiation
    syndrome, the needs of children and pregnant women, in vitro
    diagnostic tests, and building flexible medical countermeasure
    manufacturing capacity, and allow us to continue other ongoing
    efforts.

                      LIFE SCIENCES-BIODEFENSE LABORATORY

        The President's budget also proposes an increase of $17.7
    million to outfit the new Life Sciences-Biodefense Laboratory
    and ensure that all of the biosafety systems are operational
    before we occupy and can use the laboratory.

                                   USER FEES

        User fees clearly represent a substantial part of our
    fiscal year 2013 budget and I want to address that briefly. The
    current user fee programs for drugs and medical devices
    expires, as you no doubt know, on September 30 of this year.
    The reauthorization process is now well under way and new user
    fee programs for generic drugs and biosimilars have also been
    put forward.

                         FOOD SAFETY MODERNIZATION ACT

        But to implement the Food Safety Modernization Act and
    reduce the burden of food-borne illness on consumers and
    American food producers, a new food facility registration fee
    that would generate $220 million has been proposed. Additional
    proposals include new user fees to support the cosmetic and
    food contact substance programs, to compensate FDA for medical
    product reinspections, and support import operations at courier
    hubs.

                               PREPARED STATEMENT

        So, to conclude, let me emphasize that the resources in
    this budget are vital to our efforts to ensure timely access to
    innovative products, as well as our commitment to protecting
    the public from unsafe food and ensuring safe, effective
    medical products.
        I appreciate your time and attention and will be happy to
    answer any questions you may have after you come back from your
    vote.
        [The statement follows:]

                   Prepared Statement of Dr. Margaret Hamburg

        Chairman Kohl, Senator Blunt and members of the subcommittee, I am
    Dr. Margaret Hamburg, Commissioner of the U.S. Food and Drug
    Administration. I am pleased to present the President's fiscal year
    2013 budget request for the Food and Drug Administration (FDA).
        I want to begin by thanking you for your efforts over the past few
    years to shrink the gap between the FDA's budget and its vast and
    evolving responsibilities. We have made every effort to spend those
    funds responsibly--to reinforce core functions and obtain the most
    public health value for the dollar.
        As a science-based regulatory agency of global scope, FDA's mission
    is both exciting and daunting. Our core responsibilities are evolving
    and expanding to include additional product areas such as tobacco, to
    accommodate scientific and technological advances, and to step up to
    the global leadership role that FDA must play if we are to promote
    innovation and protect American consumers.
        Our recent spending and new budget requests reflect this evolution.
    We are embracing these changes in several important ways--by deploying
    smarter and more flexible regulatory approaches, by identifying
    efficiencies and innovative approaches to deliver our core mission,
    improve outcomes, and better target our resources, and by using
    collaborations to leverage expertise, data, and experience. Through
    these approaches, we are already improving efficiency and achieving
    concrete results. While the challenges loom large, we are confident
    that we have identified investments and approaches that will allow us
    to continue this evolution and to protect and promote the public
    health.

                          FDA INVESTMENTS AND RESULTS

        With the funding you have provided, FDA has delivered significant
    and quantifiable benefits for the American people, and we are very
    proud of these achievements.
        In the area of drugs, FDA now has the highest first action approval
    rate for new drugs we have ever achieved, and we continue to look for
    ways to improve the predictability, consistency, and transparency of
    our drug review process. During fiscal year 2011, we approved 35
    innovative drugs, many of them ground-breaking. This was the second-
    highest number of approvals in the past decade. These drugs represented
    real advances for patients, including breakthroughs in personalized
    medicine. They include two novel drugs that were developed and approved
    with diagnostic devices that will allow doctors to target the drug to
    those patients most likely to respond, as well as new drugs to treat
    important medical conditions.
        To achieve these results and to speed access to the American
    people, we demonstrated regulatory flexibility, using, for example,
    accelerated approvals and innovative clinical trial designs. Of note,
    we lead the world in the number and speed of drug approvals. Of the 57
    novel drugs approved by both FDA and the European Union between 2006
    and 2010, 75 percent were approved first in the United States.
    Furthermore, between 2003 and 2010, all 23 cancer drugs approved by FDA
    and the European Union were approved first in the United States by FDA.
        During fiscal year 2012, we continued our strong performance. Since
    October 1, FDA approved 15 innovative drugs and biologics. Of the 15,
    11 (or 73 percent) were approved in the United States first. Fourteen
    of these products had Prescription Drug User Fee Act (PDUFA) deadlines,
    and we met the PDUFA deadline for 13 of the 14 products (that is, we
    met the PDUFA deadline 93 percent of the time). Just as important, of
    the 15 innovative drugs and biologics, 12 were approved on the first
    cycle, for an 80-percent first-cycle approval rate.
        Some specific information on individual drug approvals will provide
    context for the importance of these actions. During January 2012, FDA
    approved a truly breakthrough product in the field of personalized
    medicine, a drug to treat a rare form of cystic fibrosis. Known as
    ivacaftor and sold under the trade name Kalydeco, this drug only works
    for patients with a certain genetic mutation. But, thanks to advances
    in personalized medicine, physicians can identify patients with this
    mutation. This allows doctors to use Kalydeco only for patients where
    the drug will be effective. For patients who respond to this drug, it
    can keep their lungs clear, help them breathe, and make an enormous
    difference in the quality of their lives.
        The FDA drug review process normally takes about 10 months. But in
    the case of Kalydeco, a drug of great importance for patients in need,
    this drug was approved in less than 4 months.
        FDA approved another drug in January 2012. Known as vismodegib and
    sold under the trade name Erivedge, it is the first FDA-approved drug
    for metastatic basal cell carcinoma, the most common type of skin
    cancer. This new drug interferes very little with the growth of healthy
    cells, but works by disrupting the molecular pathway in the body that
    causes cancer cells to grow. Given there were no available treatments
    at the time, FDA took measures to expedite its approval. As a result,
    Erivedge was approved in less than 5 months--or half the time of a
    typical FDA approval.
        We have also been working aggressively to address and prevent drug
    shortages and to implement important Presidential directives. On
    October 31, 2011, the President issued an Executive order that directed
    FDA to take action to help further reduce and prevent drug shortages.
    In 2011, FDA successfully prevented at least 195 drug shortages. During
    the first 3 months of 2012, FDA prevented 22 shortages. FDA has sent
    letters to pharmaceutical manufacturers, reminding them of their legal
    obligations to report certain discontinuances to FDA, and urging them
    to voluntarily notify FDA of all potential disruptions of the
    prescription drug supply, even when not required by law. This has
    resulted in a significant increase in the number of potential shortages
    reported to FDA, and thus enhanced our ability to take action. In
    February of this year, we announced a series of steps to increase the
    supply of critically needed cancer drugs that were in short supply,
    including exercising enforcement discretion for the temporary
    importation of an alternative drug and approving a new manufacturer on
    an expedited basis.
        We are also playing our part to address the rising costs of
    healthcare, by implementing a new approval pathway for biosimilar
    biological products and a user fee program to support review and
    evaluation of biosimilar products. We are also proposing a new generic
    drug user fee program that will support faster, more predictable
    reviews for generic drugs, effectively eliminate the current generic
    application backlog, and help assure quality by providing resources for
    regular surveillance inspections of manufacturers of generic drugs.
        In the area of medical devices, in 2011, FDA released the Plan of
    Action for Implementation of 510(k) and Science Recommendations, which
    contained 25 specific actions that we would take in 2011 to improve the
    predictability, consistency, and transparency of our premarket
    programs. Seventy-five percent of those actions, plus eight additional
    actions, are already completed or well underway. We issued guidance on
    FDA's regulatory expectations for personalized medicine diagnostic
    devices that are developed along with a therapeutic product, to target
    that therapeutic product to the appropriate population. We launched the
    Innovation Initiative, which proposed actions that FDA could take to
    help accelerate and reduce the cost of developing and evaluating
    innovative medical devices, using science-based principles to maintain
    or improve patient safety.
        In the area of food safety, the most sweeping reform of our food
    safety laws in more than 70 years was signed into law by President
    Obama on January 4, 2011--the FDA Food Safety Modernization Act (FSMA).
    We issued an interim final rule describing the criteria for
    administrative detention of food when there is reason to believe the
    food is adulterated or misbranded, and we have used this authority
    several times. We met the 1-year FSMA mandate for inspections of
    foreign facilities, and are well on the way to meeting the 5-year
    inspection frequency mandate for high-risk domestic food facilities. We
    also issued an updated guidance for the seafood industry on food safety
    hazards. We anticipate issuing several proposed rules called for in
    FSMA shortly. We post regular progress reports on implementation
    milestones on our Web site.
        In the area of tobacco, we have been working to achieve a number of
    significant public health goals since enactment of the Tobacco Control
    Act of 2009. These include restricting youth access to cigarettes and
    smokeless tobacco, encouraging youth and adults who use tobacco
    products to quit, providing accurate information on the contents of
    tobacco products and the consequences of tobacco use to the public, and
    using regulatory tools to protect kids from initiating tobacco use and
    to begin to reduce the public health burden of tobacco in the United
    States.
        We also have been aggressively and systematically addressing
    challenges that affect all products that FDA regulates. In June 2011,
    FDA issued our ``Pathway to Global Product Safety and Quality'' report,
    describing the challenges of regulating in the globalized world in
    which FDA now operates, calling for a paradigm shift in how we approach
    our duties in light of such challenges, and describing the concrete
    actions we will take in four areas:
      --Assembling global coalitions of regulators dedicated to building
            and strengthening the product safety net around the world;
      --Developing a global data information system and network in which
            regulators worldwide can regularly and proactively share real-
            time information and resources across markets;
      --Expanding FDA's capabilities in intelligence gathering and use,
            with an increased focus on risk analytics and thoroughly
            modernized IT capabilities; and
      --Effectively allocating FDA resources based on risk, leveraging the
            combined efforts of Government and industry.
        The essence of this strategy marries creative international
    coalitions with cutting-edge investigative tools to continue to provide
    the consistently high level of safety and quality assurance the public
    expects--and deserves.

                       MAXIMIZING THE IMPACT OF FDA FUNDS

        At this time of fiscal restraint, FDA is focusing on its core
    responsibilities and working to identify opportunities to streamline
    activities and leverage human and financial resources.
        I have instituted a series of reorganizations designed to ensure
    that FDA better reflects its evolving responsibilities, but that also
    recognizes our responsibility to make the most efficient use of our
    limited resources. Early in my tenure, I appointed a new Deputy
    Commissioner for Foods, to ensure coordination of our growing and
    rapidly evolving responsibilities for oversight of the domestic and
    global food supply chain.
        Last year I created the new position of Deputy Commissioner for
    Global Regulatory Operations and Policy, to fully address the need to
    integrate domestic and foreign inspections, streamline procedures, and
    seek greater harmonization and opportunities for collaboration with our
    counterparts in other countries. I also appointed a new Deputy
    Commissioner for Medical Products and Tobacco, reflecting our
    recognition that the review of medical products increasingly cuts
    across center boundaries and that a new framework was necessary to
    address challenges like personalized medicine and combination products.
    Together, these changes build efficiencies into our organizational
    structure from the ground up and will make it easier to identify new
    opportunities for streamlining in the years to come.
        We have made significant progress in consolidating our IT
    infrastructure into modern data centers. Simultaneously, we have
    modernized and standardized our hardware and software infrastructure,
    resulting in savings in power consumption and the ability to use FDA
    equipment and IT support resources more efficiently. You will see
    savings from this consolidation reflected in our proposed budget for
    fiscal year 2013, as well as additional proposed savings.
        Another key area for improved efficiencies is improved targeting of
    inspection resources. We have been working hard to ensure that our
    import inspection programs are risk-based, targeting imports at port-
    of-entry more efficiently. We are redeploying current food inspection
    resources and pursuing efficiencies to support initial implementation
    of FSMA.

                     PREPARING FDA FOR THE CHALLENGES AHEAD

        FDA's mission is challenging, even in the best of times, with
    scientific advances occurring at breakneck speed and the pace of
    globalization accelerating. Our responsibilities are vast and growing,
    a trend that will only continue. We receive thousands of medical
    product submissions each year, and serve as the watchdog for tens of
    thousands of products on the market, ensuring that they continue to
    meet the highest standards.
        We have evolved from a country that once consumed simple, primarily
    domestically produced goods to one that consumes complex products
    manufactured in every corner of the globe. We enjoy a greater variety
    of products from a greater range of places than ever before. The
    complexity of the products we regulate and the complexity of the supply
    chains by which they reach the eventual consumer has only increased.
    All of this means that FDA's job has gotten more complex and the stakes
    have continued to increase.
        As our fiscal year 2013 budget notes, FDA regulates more than $450
    billion of domestic and imported foods. Nearly 40 percent of the drugs
    Americans take are made overseas, and about 80 percent of active
    pharmaceutical ingredients are imported. Food imports have increased
    nine-fold since 1993. These food imports come from more than 250,000
    foreign facilities in 200 countries. About 70 percent of seafood and
    about 35 percent of fresh produce consumed in the United States comes
    from foreign countries.
        We are grateful that Congress has begun to help give FDA the tools
    needed to effectively regulate in a modern, complex, globalized
    environment. We are on the right path, but the road is long and
    challenging. The proposed fiscal year 2013 budget, described in more
    detail below, will continue the forward motion that you have supported.

                      FDA FISCAL YEAR 2013 BUDGET REQUEST

    Fiscal Year 2013 Summary
        The fiscal year 2013 budget recommends $4.5 billion for FDA, a 17-
    percent increase from fiscal year 2012. The fiscal year 2013 increase
    for user fees, including increases for current law user fees and
    amounts for seven new user fee programs, accounts for 98 percent of the
    FDA budget increase.
        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.
        For fiscal year 2013, FDA is proposing savings in two areas--
    information technology (IT) and the FDA Buildings and Facilities (B&F)
    account. In addition to these budget authority reductions, FDA is also
    absorbing more than 80 percent of the inflationary cost of rent
    activities.
        After accounting for these savings, the net increase in budget
    authority is $11.5 million for fiscal year 2013. Our increases support
    import safety, medical countermeasures, White Oak laboratory
    facilities, a portion of the increased cost of our rent activities, and
    the military pay raise that FDA Commissioned Corps officers will
    receive.
        The Federal investment in FDA is small compared to the breadth of
    our mission and the $2 trillion in products that we regulate. The
    investment in FDA is also an investment in the economic health of two
    of the largest sectors of America's economy: The U.S. food industry and
    the medical products industry.

    FDA Budget Authority
                Fiscal Year 2013 Budget Reductions
        FDA made significant progress in recent years to consolidate our IT
    infrastructure into modern data center facilities. During the
    consolidation, FDA modernized and standardized its hardware and
    software infrastructure. This effort provides an FDA computing
    environment that reduces our costs and provides agility not previously
    possible. The result is savings in power consumption and more efficient
    use of FDA equipment and resources for IT support.
        Under this fiscal year 2013 initiative, FDA will realize savings
    that flow from the consolidation effort. FDA will generate additional
    IT savings by streamlining other data management activities, reducing
    redundant IT devices, and reducing other IT costs, for a total savings
    of $19.7 million. Finally, FDA will also save $3.5 million by deferring
    repair and maintenance projects supported by our Building and
    Facilities account.
                Food and Drug Imports From China
        FDA is requesting a budget authority increase of $10 million to
    strengthen the safety of foods, drug products, and ingredients exported
    from China to the United States. From fiscal year 2007 to 2011, the
    number of shipments of FDA-regulated products from China increased by
    62 percent. This represents a fundamental change in our economic and
    security landscape, a change that requires FDA to alter its approach to
    protecting the health of the American public. To address this change,
    FDA must strengthen its capacity to inspect Chinese facilities that
    ship products to the United States and strengthen its ability to
    perform risk analysis on FDA-regulated products from China.
        The addition of $10 million will strengthen FDA's ability to
    protect American consumers and patients in important and fundamental
    ways.
      --FDA will improve its food and drug inspection and analytical
            capabilities with 16 additional inspectors in China, and by
            adding three United States-based analysts.
      --FDA will broaden the range of its inspections. In addition to
            inspecting Chinese facilities that manufacture food and medical
            products for export to the United States, FDA will inspect
            sites of clinical trials.
      --FDA will strengthen the understanding of Chinese regulators and the
            exporting industry about U.S. safety standards through targeted
            workshops and seminars. This process will foster a constructive
            dialogue on improving the safety and quality of food and
            medical products.
        With these resources, FDA will develop more robust knowledge about
    the complexities of regulatory pathways and supply chains within an
    increasingly globalized environment. This understanding will allow FDA
    to make better evidence-based decisions and allocate FDA resources
    based upon risk.
                FDA Medical Countermeasures Initiative
        The FDA Medical Countermeasures Initiative (MCMi) is designed to
    help meet America's national security and public health requirements
    for medical countermeasure (MCM) readiness. MCMs include drugs,
    vaccines, diagnostics, and other medical products needed to respond to
    chemical, biological, radiological, nuclear (CBRN) threats and emerging
    infectious diseases.
        Thanks to the efforts of this subcommittee, FDA received an
    appropriation of $20 million in fiscal year 2012 to provide a base of
    funding for FDA's MCMi. For fiscal year 2013, the FDA budget includes
    an additional $3.5 million for FDA medical countermeasures activities.
        With the fiscal year 2012 base funding and the additional fiscal
    year 2013 resources, FDA will support partnerships with industry,
    academia, and Government partners to improve the development timelines
    and success rates for MCMs. FDA will also expand technical assistance
    to developers of the highest priority MCMs.
        The top priorities for these MCM funds include FDA action teams to
    support the development of MCMs to address the following MCM needs:
      --Warfighter care for American soldiers exposed to trauma or CBRN
            threats;
      --Diagnosing and treating the multiple manifestations of acute
            radiation syndrome;
      --Meeting the special needs of pediatric patients and pregnant women;
      --Developing next generation in vitro diagnostic tests for CBRN
            threats; and
      --Working closely with HHS to establish flexible manufacturing
            capacity in the United States.
        Since the announcement of the FDA MCMi in August 2010, FDA and its
    drug, device and biologics programs have worked aggressively to ensure
    that the United States has access to high-priority MCMs during a public
    health emergency. Although less than 2 years old, FDA's MCMi has an
    impressive list of accomplishments, made possible by the resources that
    this subcommittee approved.
                FDA Regulatory Science Facilities
        On August 18, 2010, the General Services Administration (GSA)
    awarded the construction contract for the new laboratory complex at
    White Oak, and construction is well underway.
        An fiscal year 2013 increase of $17.7 million will allow FDA to
    outfit the new Center for Biologics Evaluation and Research (CBER)-
    Center for Drug Evaluation and Research (CDER) Life Sciences-Biodefense
    Laboratory complex that will support FDA's core regulatory science
    needs. FDA must make this investment now to ensure that all laboratory
    biosafety hazard systems are operational and the laboratory is ready
    for occupancy during fiscal year 2014.
                Pay and Rent
        The fiscal year 2013 budget also contains $1.5 million to support
    the military pay increase for Commissioned Corps personnel serving at
    FDA and $2.0 million to pay a portion of the inflationary rent costs
    for FDA for FDA programs. Funding these elements of the fiscal year
    2013 budget will help ensure that FDA can retain the professional staff
    to perform our mission of protecting patients and consumers and
    improving public health.
    FDA User Fees
                Prescription Drug User Fees
        In January 2012, the Administration submitted legislation to
    Congress to reauthorize the Prescription Drug User Fee Act (PDUFA). The
    proposed legislation recommends $713 million in PDUFA fees for fiscal
    year 2013. The current law expires on September 30, 2012, and FDA is
    ready to work with Congress to ensure timely reauthorization of this
    vital program. To sustain and build on our record of accomplishments,
    reauthorization must occur seamlessly, without any gap between the
    expiration of the old law and the enactment of PDUFA V. The resources
    in PDUFA V will allow FDA to review and approve new and innovative
    therapies for patients, without compromising the FDA's high standards
    for demonstrating safety, efficacy, and quality of new drugs prior to
    approval.
                Medical Device User Fees
        For more than a year, FDA met with stakeholders and held
    discussions with the medical device industry in an effort to develop a
    package of recommendations to reauthorize the Medical Device User Fee
    Act (MDUFA). On February 17, 2012, FDA reached an agreement with
    representatives from the medical device industry, and published draft
    recommendations to reauthorize MDUFA on March 15. The agreement would
    authorize FDA to collect $595 million in user fees over 5 years, an
    amount that is subject to inflation increases. The agreement would also
    result in an fiscal year 2013 MDUFA fee amount is $97.7 million.
        The agreement strikes a careful balance between what industry
    agreed to pay and what FDA can accomplish with the proposed funding. We
    believe that it will result in greater predictability, consistency, and
    transparency through improvements to the review process.
        Key features of the agreement include:
      --Earlier, more transparent and more predictable interactions between
            FDA and applicants, both during the early product development
            stage as well as during the review process;
      --More detailed and objective criteria for determining when a
            premarket submission is incomplete and should not be accepted
            for review;
      --More streamlined FDA review goals that will provide better overall
            performance and greater predictability. This includes a
            commitment to provide feedback to an applicant if FDA's review
            extends beyond the goal date, so that the parties can discuss
            how to resolve any outstanding issues;
      --Additional resources to support guidance development, reviewer
            training and professional development, and an independent
            assessment of the premarket review process to identify
            potential enhancements to efficiency and effectiveness;
      --More detailed quarterly and annual reporting of program
            performance; and
      --A commitment between FDA and industry to reduce the total average
            calendar time to a decision for premarket approvals (PMAs) and
            510k applications.
                New User Fees for Generics and Biosimilars
        In addition to recommending the reauthorization of PDUFA and the
    Medical Device User Fee and Modernization Act (MDUFMA), the fiscal year
    2013 budget recommends new user fee programs to support review and
    related activities for generic drugs and biosimilars. The proposed user
    fee programs for generic drugs and biosimilars are modeled on the
    successful PDUFA program, but are tailored to reflect the unique
    challenges and needs associated with regulating generic drugs and
    biosimilars.
        Generic Drug User Fees.--As a result of the Drug Price Competition
    and Patent Term Restoration Act of 1984, commonly known as the Hatch-
    Waxman Amendments, America's generic drug industry has been developing,
    manufacturing, and marketing--and FDA has been reviewing and
    approving--lower cost versions of brand-name drugs for more than 25
    years. This legislation and the industry it fostered are a true public
    health success.
        Last year, approximately 78 percent of the more than 3 billion new
    and refilled prescriptions dispensed in the United States were filled
    with generics, yet those drugs accounted for only 25 percent of
    prescription drug spending. In the last decade alone, generic drugs
    have provided more than $931 billion in savings to the Nation's
    healthcare system.
        The number of generic drug submissions sent annually to FDA has
    grown rapidly, reaching another record high during fiscal year 2011,
    including nearly 1,000 ANDAs. The current backlog of pending
    applications is estimated to be more than 2,500. The current median
    time to approval is approximately 31 months, although this includes
    time that the application is with the sponsor to address FDA questions
    about the application.
        The Generic Drug User Fee Act (GDUFA) proposal submitted to
    Congress in January 2012 will put FDA's generic drugs program on a firm
    financial footing and provide $299 million in additional resources to
    ensure timely access to safe, high-quality, affordable generic drugs.
        Biosimilars User Fees.--A successful FDA biosimilars review program
    will spark the development of a new segment of the biotechnology
    industry in the United States. To advance this opportunity, the fiscal
    year 2013 budget includes a proposal for biosimilar user fees of $20.2
    million.
        The proposed biosimilars user fee program will generate fee revenue
    in the near-term and enable sponsors to have meetings with FDA early in
    the process of developing candidates for biosimilar biological
    products. With these fees, FDA will develop the scientific, regulatory,
    and policy infrastructure necessary to review biosimilar biological
    product applications.
                Implementing FSMA--The Fiscal Year 2013 Food Establishment
                        Registration Fee
        Food Safety remains a critical program area for FDA. FDA's fiscal
    year 2013 proposal for food safety aims to advance the vision of a
    strong, reliable food safety system that Congress enacted in the
    landmark FDA Food Safety Modernization Act of 2011 (FSMA). The fiscal
    year 2013 budget proposal builds on the food safety increases that the
    subcommittee appropriated for fiscal year 2011 and fiscal year 2012 and
    calls for user fee revenue to allow FDA to establish a prevention-
    focused domestic and import food safety system, consistent with FSMA.
        FSMA set out a vision for a modern food safety system that shifts
    the focus to preventing food safety problems, rather than relying
    primarily on reacting to problems after they occur. Implementing
    Congress' vision for a strengthened food safety system represents a
    dramatic expansion of FDA's workload. However, the simple truth is that
    FDA cannot meaningfully deliver on these mandates without the funding
    contained in the fiscal year 2013 budget.
        The fee will support:
      --Establishing new, effective, and comprehensive food safety
            standards;
      --Establishing a new program for import safety;
      --Increasing the number and efficiency of inspections;
      --Launching an integrated national food safety system with States and
            localities;
      --Expanding research activities, which will include improved data
            collection and risk analysis; and
      --Improving FDA's capability to conduct risk-based decisionmaking.
        These fees will allow FDA to reduce the risk of illness associated
    with food and feed and decrease the frequency and severity of food- and
    feed-borne illness outbreaks. With these fees, FDA can reduce instances
    of contamination and greatly diminish the burden on American businesses
    and the U.S. economy due to foodborne illness events. Without
    sufficient and reliable fee revenue, we can expect the unacceptably
    high human toll of foodborne illness to continue, with the resulting
    disruptions to the food system and the economic burdens to the food
    industry that result from foodborne illness outbreaks.
                Tobacco Product User Fees
        On June 22, 2009, President Obama signed the Family Smoking
    Prevention and Tobacco Control Act (Tobacco Control Act) into law.
    Since 2009, the user fees authorized in the statute have allowed FDA's
    Center for Tobacco Products (CTP) to hire Center leadership and enable
    those leaders to initiate the scientific, educational, enforcement, and
    regulatory activities needed to accomplish the public health goals of
    the Tobacco Control Act. By the end of fiscal year 2011, the CTP had a
    staffing level of over 230 FTEs, and the Center anticipates meeting
    projected staffing goals in fiscal year 2013.
        The fiscal year 2013 budget request for the Tobacco Program,
    including resources for CTP, is $505 million, an increase of $28
    million above the fiscal year 2012 enacted budget. The amount requested
    is specifically authorized in the Tobacco Control Act and comprised
    entirely of tobacco user fees. Fiscal year 2013 priorities include
    protecting youth from tobacco, encouraging current users to quit, and
    making existing tobacco products less harmful.
                Other New User Fee Proposals
        Cosmetics User Fee.--The proposed cosmetic user fee of $18.7
    million will strengthen FDA efforts to protect public health by
    preventing harm to consumers, ensuring the safety of cosmetics and
    removing unsafe cosmetics from the market. With this fee revenue, FDA
    will develop necessary guidance and standards for industry. The fee
    revenue will also allow FDA to identify research gaps, such as gaps
    related to the safety of novel ingredients used in cosmetics.
        Medical Product Reinspection User Fee.--The FDA Food Safety
    Modernization Act, which Congress enacted in December 2010, authorized
    fees for reinspections of food and feed establishments. FDA is
    proposing to expand this fee authority to medical product
    establishments. With this change, medical product establishments will
    pay the full cost of reinspections and associated follow-up work. FDA
    will impose the user fee when FDA reinspects facilities due to a
    failure to meet Good Manufacturing Practices (GMPs) or other important
    FDA requirements. The fiscal year 2013 estimate for medical product
    reinspection user fees is $14.7 million.
        Food Contact Notification User Fee.--FDA has statutory
    responsibility for the safety of all food contact substances in the
    United States. The Food Contact Notification (FCN) program supports
    applications for innovative food contact substances that help mitigate
    microbial food contamination and provide consumers with more healthful
    and safe food choices. The proposed user fees of $4.9 million will
    support FDA efforts to increase the availability of safe food contact
    substances, to prevent unsafe food contact substances from reaching the
    market and to apply the most modern regulatory science to the review of
    food contact substances.
        International Courier Use Fee.--For fiscal year 2013, FDA is
    proposing a new International Courier User Fee of $5.6 million. The
    proposed fee will support activities associated with increased
    surveillance of FDA-regulated commodities at express courier hubs. To
    address the growing volume of imports entering through international
    couriers, FDA is proposing to pay the increased cost of its
    international courier activities through user fees.

                                   CONCLUSION

        The resources in this budget will allow FDA to perform its
    fundamental public health responsibilities in new and more efficient
    ways. Our budget also supports industry efforts to innovate and bring
    new products to market that will benefit American patients and
    consumers and strengthen our economy.
        My goal with this proposed fiscal year 2013 budget is to position
    FDA to seize these opportunities. The resources in this budget will
    allow FDA to perform its core public health responsibilities in more
    efficient ways, to address these and the many other challenges at the
    heart of our mission. This budget also supports industry efforts to
    innovate and bring new products to market that will benefit American
    patients and consumers and strengthen our economy.
        Thank you for the opportunity to testify. I am happy to answer your
    questions.

        Senator Kohl. Thank you, Dr. Hamburg. The vote has been, at
    least for a while, postponed. So we'll just----
        Dr. Hamburg. Oh, okay.
        Senator Kohl [continuing]. Start out with our questions.
        Dr. Hamburg. Excellent.

                         FOOD SAFETY MODERNIZATION ACT

        Senator Kohl. Dr. Hamburg, this budget request assumes $220
    million in additional funding that theoretically would be used
    to implement to the Food Safety Modernization Act. However, as
    you said, that funding increase would come in the form of a new
    user fee that has already been rejected by the Congress and
    that essentially has no chance of being authorized this year.
        So what that really means is that this budget doesn't
    include any funding increase to implement the Food Safety
    Modernization Act, which is of great concern to many of us. How
    have you been working with both the Congress and the industry
    in order to get these user fees authorized?
        Dr. Hamburg. It is extremely important, as you note, to
    continue to implement the Food Safety Modernization Act, which
    gives us a chance to really reorient our whole food safety
    system towards preventing problems before they occur, rather
    than addressing them after the fact, which will have huge
    benefits both in terms of human health and reducing costs to
    the healthcare system, to the workplace, and to industry.
        We are talking with industry about the importance of this
    work. They understand it. These are difficult, challenging
    economic times, however. We all recognize that. And we are, of
    course, working with other potential partners as we implement
    the Food Safety Modernization Act. We have made progress. We
    will continue to make progress, but we will have to prioritize
    in the context of reduced resources, and it will mean that we
    cannot accomplish all of the goals of the Food Safety
    Modernization Act, and I think it will mean that,
    unfortunately, we will not be able to put in place systems that
    would prevent disease and economic burdens as well.
        But we hope that, though the process may take more time
    than we would like, we will continue to make progress in terms
    of the implementation of user fees. It's not inappropriate, I
    think, when you look at the common good, the benefits to
    industry, as well as the benefits to the public, that support
    for this program be a shared responsibility. We've seen the
    benefits of user fees with our drug user fees and more recently
    the device user fees, and I do believe that when you look at
    the amount of resources available to support food safety in
    this country, we clearly need to do more.
        Senator Kohl. But your budget assumes $220 million
    necessary to discharge your responsibilities, but to be raised
    in the form of user fees which, let's be honest, isn't going to
    happen this year--$220 million. How do you propose to even come
    close to discharging your responsibilities without that $220
    million?
        Dr. Hamburg. As I said, we are going to have to make very
    difficult choices. We are not going to be able to do all the
    things the Congress has asked us to do and that the American
    people expect us to do. We will place our emphasis and our
    resources on the highest priority issues. We do need to respond
    to the challenges of globalization and start to really ensure
    that import safety system--we will be taking more risk-based
    approaches so that we're targeting resources where the greatest
    need is, where the greatest risk is. We'll be working with
    States. We'd hoped to have resources to actually give to States
    as we build those partnerships for an integrated food safety
    system. That will be less possible, but we will have to find
    ways to work with State health and agriculture departments.
        And we will have to work closely with industry and they
    will have to fully step up to the plate as partners. This is
    going to be a very, very challenging budget to implement and it
    will put very difficult choices in front of the Commissioner
    and her team.

                                    GENERICS

        Senator Kohl. All right. One question on generics, then
    I'll turn to Senator Blunt. This budget request assumes the
    collection of $299 million in new user fees for approval of new
    generic drugs. Assuming these fees are authorized--and we are
    more optimistic in this case that they will be, as you know--
    how long will it take to eliminate the backlog of generic drug
    applications that could immediately then be marketed?
        Dr. Hamburg. This is such an exciting and important
    opportunity to really move the generics program and its proven
    benefits to the next level. At the present time, we have
    unacceptable lags in the review of generic drugs, and we're
    also faced with the increasing challenge that so many of the
    manufacturers of generic drugs or components of generic drugs
    are overseas and we really have to level the playing field in
    terms of domestic and overseas inspections.
        This user fee will enable us to do both. We've committed to
    reducing the review lag, which currently it takes an average of
    30 months to review a generic application. We're going to bring
    that down to 10 months. We're committed to doing that in the 5-
    year span of this user fee program. And we also have committed
    to having equity between domestic and foreign inspections over
    that same time period.
        Senator Kohl. Thank you very much.
        Senator Blunt.
        Senator Blunt. Thank you, chairman.
        Commissioner, on the $220 million of additional fees, in
    that fee category what's produced now in the current fees, and
    the ones that expire at the end of this fiscal year? You have
    fees that expire at the end of this year. What do they produce?
        Dr. Hamburg. The fees that would expire in September of
    this year are the drug user fees.
        Senator Blunt. The drug fees.
        Dr. Hamburg. And the medical device user fees.
        Senator Blunt. So you have no fees in the food safety
    issue, right?
        Dr. Hamburg. We don't have an establishment fee, which is
    what is being recommended in this budget at the current time,
    no.

                                REINSPECTION FEE

        Senator Blunt. What kind of fees do you----
        Dr. Hamburg. There's one very small fee, which I have to
    turn to--reinspection. There's a reinspection fee in the food
    safety program.
        Senator Blunt. And the reinspection fee----
        Dr. Hamburg. But it's a very small amount of money and it's
    for after there have been problems in a facility and we go back
    in and reinspect to see if they've been corrected.
        Senator Blunt. So with that exception, there are no fees--
    --
        Dr. Hamburg. Right.
        Senator Blunt [continuing]. Now, where you're proposing the
    $220 million in fees?
        Dr. Hamburg. Yes.
        Senator Blunt. Would that be the same for the cosmetics?
    Are there fees there now?
        Dr. Hamburg. That's correct, there is not a cosmetics fee.
        Senator Blunt. And that's $18 million?
        Dr. Hamburg. $18.7 million, I think, yes.
        Senator Blunt. And what would the potential collection cost
    of that $18 million be?
        Dr. Hamburg. I think that the----
        Senator Blunt. To put the fee in place and to collect it,
    however you would collect that fee?
        Dr. Hamburg. Having built a very robust infrastructure to
    deal with user fees in other components of FDA, I think we can
    move very quickly and efficiently to establish the user fee
    collection mechanism. It is important that it is done properly
    with the right safeguards and firewalls. But we do know how to
    do that now. We have 20 years of experience on the drug user
    fee side. So I think the greater challenge is sitting at the
    table and negotiating to achieve those user fee agreements.

                                   COSMETICS

        Senator Blunt. Do you know what the average fee might be
    for the various categories of cosmetics producers, medium,
    small, or large? Do you have a sense of how this impacts the
    industry?
        Dr. Hamburg. I think we would have to sit down and really
    talk about the different strategies for approaching it and what
    would be the most appropriate way to structure the fee system
    so that there would be the greatest benefit to the industry and
    it would align with the kinds of demands on our time and
    resources.
        Senator Blunt. So would that mean you haven't decided yet
    whether it would just apply to a finished product or have a fee
    during the entire production chain of cosmetics? I assume they
    get things----
        Dr. Hamburg. Yes, I think it would very likely be modeled
    on some of the other fees in terms of registration of
    establishments. But it is a different regulatory framework than
    for drugs. For example, where there's a pre-approval process
    with cosmetics, our legal regulatory responsibilities have to
    do with monitoring for safety issues and is really not focused
    on the pre-approval, so it wouldn't follow the exact kind of
    model of other user fees in existence today.

                                     CHINA

        Senator Blunt. And the China inspection issue, would that
    be fee-based also, or would you propose some inspections in
    China?
        Dr. Hamburg. Yes, the China proposal is really to enable us
    to enhance our inspectional capacity and our presence on the
    ground in China, as well as to enhance our risk-based analytics
    and our strategies for our operations in China. But it would be
    building on existing activities. We'd be expanding our
    inspectional cadre in China by 16 people and correspondingly
    increasing the numbers of inspections in both food and drug.
    But it would not be part of our user fee program.
        Senator Blunt. So it's paid for out of regular taxpayer
    dollars?
        Dr. Hamburg. Yes.
        Senator Blunt. So these Chinese companies wouldn't pay for
    their inspection?
        Dr. Hamburg. No.
        Senator Blunt. Obviously, you'd have to agree that their
    products are going to have to go through this regimen for them
    to be allowed to come into the country?
        Dr. Hamburg. Right. If we are approving a new drug in this
    country, we need to inspect to make sure that, if it's being
    manufactured in another country, that the manufacturing meets
    our standards and requirements. If we are bringing a food
    product into this country, we need to inspect the facility to
    make sure that it's being made according to good manufacturing
    practice and meets our safety quality standards.
        So it would be to enable us to expand work that is under
    way in China. But you can imagine, based on the huge increase
    in imports of the FDA-regulated products that I noted, that we
    are extremely hard-pressed to be able to even begin to do the
    range of inspections that really are important to assuring
    safety and quality to the American people.
        Senator Blunt. But under your proposal for food or
    cosmetics, as an example, either one, that would still be paid
    out of your taxpayer-funded budget. That's not in the fee
    proposal, the China inspection?
        Dr. Hamburg. The China inspections are going to be focused
    on food and drug inspections in China, building on a framework
    that already exists. We do have offices now in Shanghai,
    Beijing, and Guangzhou and are doing inspections out of those
    offices, and also working with our counterpart regulatory
    authorities in China and industry that's based in China, either
    Chinese industries or United States companies, but that are
    manufacturing in China.
        So that $10 million will enable us to expand our capacity
    in ways that are very, very crucial.
        Senator Blunt. I guess the point that I'm trying to get
    established for myself is that we would still fund that effort
    on food, for instance, like we always have, but we would under
    your proposal have a fee for food inspection for U.S. companies
    in the United States, which I'd be reluctant to do. But we can
    visit about that later.
        Dr. Hamburg. What we're trying to do is really create an
    integrated program that is supported by both budget authority
    and user fees. In negotiating the user fees, we would be very
    explicit about how those user fee dollars would be used as part
    of this broader program. But they would not be siloed programs
    in terms of impact----
        Senator Blunt. But the user fees wouldn't be paid by the
    foreign companies. They'd be paid by U.S. companies, unless the
    foreign companies were producing in the United States?
        Dr. Hamburg. The user fees would be paid by the
    establishment that was manufacturing a product----
        Senator Blunt. In the United States?
        Dr. Hamburg. No. They could also be if you were
    manufacturing anything that would be FDA-regulated, foreign or
    domestic.
        Senator Blunt. So the Chinese company might pay the user
    fee if it was in China?
        Dr. Hamburg. Yes, yes.
        Senator Blunt. Okay, okay. That's the one point.
        Dr. Hamburg. No, I'm sorry I wasn't clear. But the $10
    million we're asking for now is to enhance our ability to
    inspect the facilities that are manufacturing goods that are
    FDA-regulated for export into the United States from China.

                                 MENU LABELING

        Senator Blunt. Let me ask a couple of questions about
    probably the issue that we've gotten the most questions about
    of anything you're doing this year, which didn't maybe sound
    all that hard going in, but probably has turned out to be
    pretty complicated. And that's menu labeling. So if I
    understand the rule you've got out, on places where restaurant-
    type food is not the predominant part of the business, this
    would be certainly grocery stores that might have a food area,
    one of your options is that they wouldn't be subject to the
    rule. I think that's option two under your proposed rule.
    That's how I understand that, that that is one option you
    believe you have available.
        Dr. Hamburg. Yes. We put forward some draft proposed rule
    format for comments that included some of the different
    strategies that could be undertaken. As you note, it has proved
    very complicated, how you define a restaurant-like
    establishment and a standard menu. And we have gone out to get
    comment on the different approaches that could be used for
    defining the universe of restaurant-like establishments and
    what should be labeled and how. And we are now in the process
    of responding to the comments that we've gotten. We got a lot
    of comments and they covered the waterfront in terms of
    perspectives on these issues, and we will be coming forward
    with a final rule in the near future.
        Senator Blunt. As I said in my opening comment, I would
    certainly be as flexible as you think the law allows you to be
    here, because there's lots of difficulty, it seems to me, in
    implementing this, particularly if it's not the principal thing
    you do, if it truly is arguably incidental to what you do. And
    the food options vary so much from one of the grocery stores
    you own to another grocery store you may own because of what's
    available that day or how the food counters are operated. I
    would encourage that.

                                  MENU BOARDS

        The other two questions that I had that I'd like you to
    comment on at least, one is the drive-through menu board; what
    do you think that might entail? And what about places where--I
    read somewhere in some information I had that Domino's Pizza,
    that 90 percent of the customers never, never come into a
    location. So for 90 percent of the customers, they're not going
    to see what's on the menu board anyway. Is there some
    understanding that that's a different environment? Do you want
    them to comply in a different way or do you want them to doubly
    comply, something on the Web site and something else on a wall
    that nobody sees? Or what are you thinking there?
        Dr. Hamburg. As I mentioned, we are finalizing the rule
    that will go forward, so I can't speak to specific details
    because it's still being discussed and worked through. But in
    terms of what was sort of put forward in the legislation was
    the recognition that there were different types of
    establishments, but how consumers access menus would be the
    place for communicating the information.
        So if you have a storefront, but that isn't where consumers
    come in to order their pizza, it wouldn't make sense to require
    a menu board that no one would ever see. But if there's a menu
    that's on the Internet, that would certainly be an appropriate
    place, or a flyer that would be distributed, whatever, and the
    same with drive-through food establishments. Where there is a
    menu board that you look at to make your decisions, that would
    probably be the most appropriate place to have the
    communication as to calorie content of what's on the menu.
        But with respect to all of the specifics, it is still in
    discussion, and we got across the range of different types of
    establishments a lot of suggestions about different ways to
    make information available so that it would be most consumer-
    friendly and-or least burdensome to the industries involved.
        Senator Blunt. My last question is, where I read
    ``nutritional content'' does that mean calories or does that
    mean a lot more than calories, as you comply with this?
        Dr. Hamburg. As I remember, calories was what was clearly
    indicated for posting with a requirement to indicate that
    additional nutritional information----
        Senator Blunt. Is available?
        Dr. Hamburg [continuing]. Would be made available on
    request from the consumer.
        Senator Blunt. Thank you.
        Thank you, Mr. Chairman.
        Senator Kohl. Senator Brown.
        Senator Brown. Thank you, Mr. Chairman.

                               KV PHARMACEUTICAL

        Thank you, first of all, for your decisive action a year
    ago on the Makena drug, the progesterone made by KV
    Pharmaceutical, when they took what was a compound, priced it
    $10 to $20 per injection, and a woman, a pregnant woman, needed
    about 20 injections, as you know, in the course of the
    treatment, and after getting FDA approval jacked the price up
    to $1,500. Some would say they overreached. Others would say
    they were greedy.
        Your action was important. However, some things have
    happened that I think demand more attention. As you instructed
    compounding pharmacies to keep compounding and not to respond
    to the cease and desist order, it was a real public health
    victory that you caused. So thank you for that.
        Recently, KV Pharmaceutical--and it's pretty incredible
    behavior, a company that astounds me in its behavior and
    interaction with its patients--claimed that it collected
    contaminated samples of the compounded versions of the drug and
    asked the FDA to investigate. I am pretty amazed how they did
    it, what they did, but they did. This investigation and the
    length of it has caused some doctors to be reluctant in
    prescribing the compound, causing, I would be pretty certain,
    some women not to get the medication, which means a higher
    rate, I don't have evidence of that, but I assume--a higher
    rate of low-birth-weight babies or, second, great expense to
    insurance companies and taxpayers.
        So my question is, what are you doing in this? Are you
    aware of this slowdown in prescriptions that we're told about,
    and what are you doing to speed up this investigation so we can
    put this behind us, so that women who are at high-risk of low-
    birth-weight babies get access to this drug for $300 or $400
    instead, or this progesterone for $300 or $400, instead of--
    well, they dropped the price from $1,500 to $690. That was
    really kind of them, so it's only $20,000 instead of $30,000.
        What are you doing to fix this public health hazard?
        Dr. Hamburg. When we do get a report, wherever it comes
    from, of a potential public health concern regarding an
    activity that we regulate, we take it very seriously and we do
    follow up. So we are in the process of an inspection, an
    investigation of the concerns that were raised. Obviously, we
    need to do this based on more than just reports, especially if
    the reports come from----
        Senator Brown. The manufacturer.
        Dr. Hamburg [continuing]. The manufacturer.
        However, it is an ongoing investigation and I can't really
    report on details of findings or timing. I have not been made
    aware of concerns that during this process that there has been
    a decline in access to the therapeutic intervention overall.
    And I will go back and look at that.
        Senator Brown. We'll compile what information we can.
        Dr. Hamburg. Okay.
        Senator Brown. Some in the medical community have told us
    that the number of prescriptions has slowed as a result of the
    fear that doctors have because this company has made
    accusations that certainly serve its financial interest. Maybe
    they're true. I understand you have that responsibility. But
    you have a responsibility to move as quickly as you can in this
    case because it's clearly a huge public health threat. Okay,
    thank you.

                                 IMPORTED DRUGS

        Second group of questions. Tainted heparin from China--and
    I want to follow up on some things that Senator Blunt asked
    about--in 2008 it killed 100 people in this country, including,
    I believe--around the world; I'm not sure--including 3 people
    from Toledo, Ohio. In 2007-2008, melamine was found in pet food
    and in infant formula in China. I've heard recently, in the
    last year, from a number of dog owners who lost their animals
    as a result, their beloved animals, as a result of tainted
    chicken treats from China.
        More recently, the identity and safety of imported fish has
    become a growing concern, a recurring concern also. You know
    the importance of this. You've asked for $10 million in your
    budget, as you pointed out to Senator Blunt and he pointed out,
    16 new full-time employees, 7 food safety inspectors, including
    7 new safety inspectors and 9 drug safety--7 food, 9 drug
    safety.
        This is a huge problem. There is no way, when you look at--
    my understanding is it would take the FDA 9 years to perform
    one inspection at the high-priority pharmaceutical facilities
    in China and 13 years to inspect all of the foreign-based
    pharmaceutical manufacturing plants.
        Understand $10 million is important. The inspectors are
    important. But isn't the goal to make the companies that import
    these drugs--I don't care if they're American companies or if
    they're French companies or Chinese companies that are selling
    into the American market. Shouldn't your goal be to make them
    personally responsible?
        I mean, if a chief executive officer (CEO) is not certain
    where all the ingredients come from, and those ingredients
    coming from wherever end up killing a patient in Toledo,
    shouldn't that CEO go to jail? Shouldn't that CEO, that
    company, be fined huge amounts of money?
        We'll never be able to inspect every place in China. What
    do we do about this? Come up with something more creative than
    begging the Congress for $10 million so we can sprinkle a few
    food inspectors and safety and pharmaceutical inspectors in a
    country of 1.3 billion. Come up with something----
        Dr. Hamburg. I want to reassure you that, number one, this
    is a huge priority for us and we have a multifaceted program.
    The $10 million is a small drop in the bucket of what our
    overall needs are. We do believe that we have to have a
    strategy that rally increases standards and accountability in
    the countries of manufacture, that increases the ability for us
    to work with other regulatory authorities to share information,
    because many countries are facing the same challenge. We need
    to really carve up the landscape.
        We need to also target our inspectional resources more
    efficiently so that they can be extended further. And of
    course, we have to continue our border import safety activities
    as well, but do it in a more risk-based way.
        Senator Brown. I'm going to interrupt. I'm sorry,
    Commissioner. Is there any way to do these inspections, short
    of threatening legal action--and I don't care about, I really
    don't care about a CEO going to jail or I don't care about a
    huge fine against the companies. I want these companies to be
    responsible for their ingredients. Is there any way to do that
    short of some legal process?

                                FOREIGN IMPORTER

        Dr. Hamburg. Yes. And in fact, the Congress has helped us
    in that domain. The Food Safety Modernization Act included a
    component for foreign importer verification and really puts a
    requirement on people that are bringing products into this
    country to verify that they were manufactured in compliance
    with our standards.
        Senator Brown. And if the ingredients have shown to be
    contaminated and cost lives, what is the legal resource for a
    consumer or a family or a country?

                                  ENFORCEMENT

        Dr. Hamburg. I think on the drugs side there's legislation
    that's currently being considered to give us additional
    authorities to be able to act and enforce. On the food side, we
    have been able to achieve more of the tools and authorities
    that we need. It still is a real problem to take enforcement
    action proactively in another country, and I think it does
    speak to the fact that we need to continue to work, as we are,
    making this a very important area of focus within the FDA, to
    really----
        Senator Brown. I understand that. But for 100 years in this
    country, from the creation of the FDA after Upton Sinclair's
    book, we have worked hard to protect public health and protect
    food safety and pharmaceutical and drug safety. And just
    because the company--you don't have jurisdiction in another
    country doesn't mean that they should have access to our
    markets unless those companies, the importer or the company,
    whoever it is that's bringing it in, that they should have
    ultimate liability for that.
        Mr. Chairman, if I could go one other short set of
    questions. Thank you.
        Dr. Hamburg. I just want to tell you that this is a huge
    priority, and it's one that we talk about every day in terms of
    we as a Nation have to really address this. FDA is at the
    cutting edge of much of this in terms of responding to the
    challenges of globalization. At the present time, we don't have
    the tools and authorities that we fully need to achieve that,
    nor do we have the resources.
        Senator Brown. I respect you. I've watched your career. I'm
    not convinced yet that you are aggressive enough.
        On the question of drug shortages, thank you for your work
    on that. Thank you for the comments from the chairman.

                                  REPACKAGING

        On the issues of repackaging, we sent you a letter about
    repackaging within a specific hospital. They get 15 vials of
    drug X, they break it into 5 packages of 3 each to treat a
    patient, that they're able to repackage and use those, helping
    to perhaps preclude a drug shortage. I sent you a letter
    suggesting we do that. We will follow up with some legislative
    language.
        The letter that you sent back to us yesterday was to us
    inconclusive. I mean, Erin in my office, it wasn't clear to her
    in reading it that that was a very specific answer. I'd just
    like to ask you to work with us on the whole repackaging issue,
    because that can preclude some of these drug shortages.
        Dr. Hamburg. I'd be happy to work with you. I think that
    actually some of the restrictions have to do with other
    components of HHS activity, and we need to work----
        Senator Brown. We'll work with you.
        Thank you.
        Senator Kohl. Thank you, Senator Brown.
        Senator Moran.
        Senator Moran. Mr. Chairman, thank you. Thank you to you
    and to the ranking member.

                             ANTIBIOTICS--LIVESTOCK

        Commissioner, I'm pleased by your presence here today.
    Recently the FDA-issued guidance concerning antibiotic use by
    farmers and ranchers in regard to their livestock. Was that
    guidance based upon peer-reviewed science? The second question
    is: Would you provide this subcommittee with the science on
    which that guidance was based?
        Dr. Hamburg. Certainly. We did review an enormous amount of
    literature over quite a long period of looking at these
    questions. We also worked very closely with all of the critical
    stakeholders as we move toward putting forward that guidance,
    which is to restrict the use of antibiotics for growth
    promotion and feed enhancement purposes. We actually got a lot
    of support in both the analytic work for that and in the
    determination to go forward from our colleagues in animal and
    veterinary health, and the pharmaceutical manufacturers
    involved also, I think, believe that the world has changed
    considerably and we now know a great deal about the impact of
    injudicious use of antibiotics and the development of
    antibiotic resistance, that we as a Nation and as a global
    community are facing a very, very serious public health
    challenge with respect to antibiotic resistance and that this
    can make a real difference in order to really reduce this
    public health threat to both humans and animals with respect to
    ensuring that we have antibiotics that work.
        Senator Moran. I think you were suggesting that there is
    broad consensus to back up, in the industry, both the users and
    the scientific community, to support the guidance that you have
    issued.
        Dr. Hamburg. Nothing we do ever has consensus, but we did
    work hard to listen to the concerns of all of the stakeholders
    and address them.
        Senator Moran. Is it related to the use? When you talk
    about use for growth, I assume that's as compared to treating
    disease and infection?
        Dr. Hamburg. Correct.
        Senator Moran. Did the guidance have any implications on
    that use of antibiotics?
        Dr. Hamburg. Not for treating disease. We do believe that
    these antibiotics, just as in human populations, antibiotics
    are used under prescription and guidance of medical
    professionals, that veterinary professionals should be
    overseeing the appropriate use for treatment of disease.
        Senator Moran. Commissioner, would you work with my staff
    to give us----
        Dr. Hamburg. Certainly.
        Senator Moran [continuing]. A summary of the scientific
    basis for that guidance?
        Dr. Hamburg. Certainly.
        [The information follows:]

        Questions regarding the use of antimicrobial drugs in food-
    producing animals have been raised and debated for many years. A
    variety of recognized international, governmental, and professional
    organizations have studied the issue. Within the FDA Guidance for
    Industry No. 209, ``The Judicious Use of Medically Important
    Antimicrobial Drugs in Food-Producing Animals,'' we have briefly
    summarized the findings and recommendations from some of the notable
    reports that have addressed this issue over the past 40 years. These
    reports provide context to FDA's current thinking on this issue and
    highlight the longstanding concerns that have been the subject of
    discussion in the scientific community as a whole.
        We acknowledge that a significant body of scientific information
    exists, including some information that may present equivocal findings
    or contrary views. However, below is a list of some of the scientific
    literature that FDA considered in developing this guidance, including
    some key reports and peer-reviewed literature. This list is not
    intended to represent an exhaustive summary of the scientific
    literature but rather to highlight some of the more recent scientific
    research related to the use of antimicrobial drugs in animal
    agriculture and the impact of such use on antimicrobial resistance.
      --1. 1969 Report of the Joint Committee on the Use of Antibiotics in
            Animal Husbandry and Veterinary Medicine.
      --2. 1970 FDA Task Force Report, ``The Use of Antibiotics in Animal
            Feed.''
      --3. 1980 National Academy of Sciences Report, ``The Effects on Human
            Health of Subtherapeutic Use of Antimicrobial Drugs in Animal
            Feeds.''
      --4. 1984 Seattle-King County Study: ``Surveillance of the Flow of
            Salmonella and Campylobacter in a Community.''
      --5. 1988 Institute of Medicine (IOM) Report: ``Human Health Risks
            with the Subtherapeutic Use of Penicillin or Tetracyclines in
            Animal Feed.''
      --6. 1997 World Health Organization (WHO) Report, ``The Medical
            Impact of Antimicrobial Use in Food Animals.'' http://
            whqlibdoc.who.int/hq/1997/WHO_EMC_ZOO_97.4.pdf
      --7. 1999 National Research Council (NRC) Report: ``The Use of Drugs
            in Food Animals--Benefits and Risks.''
      --8. 1999 United States Government Accountability Office (GAO)
            Report--``Food Safety: The Agricultural Use of Antibiotics and
            Its Implications for Human Health.'' http://www.gao.gov/
            archive/1999/rc99074.pdf
      --9. 1999 European Commission Report, ``Opinion of the Scientific
            Steering Committee on Antimicrobial Resistance.'' http://
            ec.europa.eu/food/fs/sc/ssc/out50_en.pdf
      --10. 2000 World Health Organization (WHO) Expert Consultation: ``WHO
            Global Principles for the Containment of Antimicrobial
            Resistance in Animals Intended for Food.'' http://
            whqlibdoc.who.int/hq/2000/WHO_CDS_CSR_APH_
            2000.4.pdf
      --11. 2003 Report, ``Joint FAO/OIE/WHO Expert Workshop on Non-Human
            Antimicrobial Usage and Antimicrobial Resistance: Scientific
            assessment.'' http://www.who.int/foodsafety/publications/micro/
            en/amr.pdf
      --12. 2003 Institute of Medicine (IOM) Report, ``Microbial Threats to
            Health: Emergence, Detection and Response.''
      --13. 2004 Report, ``Second Joint FAO/OIE/WHO Expert Workshop on Non-
            Human Antimicrobial Usage and Antimicrobial Resistance:
            Management options.'' http://www.oie.int/fileadmin/Home/eng/
            Conferences_Events/docs/pdf/WHO-CDS-CPE-ZFK-2004.8.pdf
      --14. 2004 United States Government Accountability Office (GAO)
            Report--``Antibiotic Resistance: Federal Agencies Need to
            Better Focus Efforts to Address Risks to Humans from Antibiotic
            Use in Animals.'' http://www.gao.gov/new.items/d04490.pdf
      --15. 2005 Codex Alimentarius Commission (Codex), ``Code of Practice
            to Minimize and Contain Antimicrobial Resistance.'' http://
            www.codexalimentarius.net/download/standards/10213/CXP_061e.pdf
      --16. 2006 Antimicrobial Resistance: Implications for the Food
            System, Comprehensive Reviews in Food Science and Food Safety,
            Vol. 5, 2006.
      --17. 2009. American Academy of Microbiology. Antibiotic Resistance:
            An Ecological Perspective on an Old Problem. 1752 N Street, NW,
            Washington, DC 20036, (http://www.asm.org).
      --18. 2011. Tackling antibiotic resistance from a food safety
            perspective in Europe. World Health Organization (WHO),
            Regional Office for Europe Scherfigsvej 8, DK-2100 Copenhagen
            ;, Denmark. http://www.euro.who.int/data/assets/pdf_file/0005/
            136454/e94889.pdf
      --19. 2008. Longitudinal study of antimicrobial resistance among
            Escherichia coli isolates from integrated multisite cohorts of
            humans and swine. Alali WQ, Scott HM, Harvey RB, Norby B,
            Lawhorn DB, Pillai SD. Appl Environ Microbiol. 74(12):3672-81.
      --20. 2008. Diversity and distribution of commensal fecal Escherichia
            coli bacteria in beef cattle administered selected
            subtherapeutic antimicrobials in a feedlot setting. Sharma R,
            Munns K, Alexander T, Entz T, Mirzaagha P, Yanke LJ, Mulvey M,
            Topp E, McAllister T. Appl Environ Microbiol. 74(20):6178-86.
      --21. 2008. Effect of subtherapeutic administration of antibiotics on
            the prevalence of antibiotic-resistant Escherichia coli
            bacteria in feedlot cattle. Alexander, T.W., L.J. Yanke, E.
            Topp, M.E. Olson, R.R. Read, D.W. Morck, and T.A. McAllister.
            Applied and Environmental Microbiology. 74:4405-4416.
      --22. 2009. A metagenomic approach for determining prevalence of
            tetracycline resistance genes in the fecal flora of
            conventionally raised feedlot steers and feedlot steers raised
            without antimicrobials. Harvey, R., J. Funk, T.E. Wittum, and
            A.E. Hoet. American Journal of Veterinary Research. 70:198-202.
      --23. 2009. Association between tetracycline consumption and
            tetracycline resistance in Escherichia coli from healthy Danish
            slaughter pigs. Vieira, A.R., H. Houe, H.C. Wegener, D.M. Lo Fo
            Wong, and H.D. Emborg. Foodborne Pathogens and Disease. 6:99-
            109.
      --24. 2009. Associations between reported on-farm antimicrobial use
            practices and observed antimicrobial resistance in generic
            fecal Escherichia coli isolated from Alberta finishing swine
            farms. Varga C., A. Rajic, M.E. McFall, R.J. Reid-Smith, A.E.
            Deckert, S.L. Checkley, and S.A. McEwen. Preventive Veterinary
            Medicine. 88:185-192.
      --25. 2010. Farm-to-fork characterization of Escherichia coli
            associated with feedlot cattle with a known history of
            antimicrobial use. Alexander, T.W., G.D. Inglis, L.J. Yanke, E.
            Topp, R.R. Read, T. Reuter, and T.A. McAllister. International
            Journal of Food Microbiology. 137:40-48.
      --26. 2011. Lower prevalence of antibiotic-resistant Enterococci on
            U.S. conventional poultry farms that transitioned to organic
            practices. Sapkota AR, Hulet RM, Zhang G, McDermott P, Kinney
            EL, Schwab KJ, Joseph SW. Environ Health Perspect.
            119(11):1622-8.
      --27. 2011. Association between antimicrobial resistance in
            Escherichia coli isolates from food animals and blood stream
            isolates from humans in Europe: an ecological study. Foodborne
            Pathogens and Disease. Vieira, A.R., P. Collignon, F.M.
            Aarestrup, S.A. McEwen, R.S. Hendriksen, T. Hald, and H.C.
            Wegener. 8:1295-1301.
      --28. 2011. Distribution and characterization of ampicillin- and
            tetracycline-resistant Escherichia coli from feedlot cattle fed
            subtherapeutic antimicrobials. Mirzaagha P, Louie M, Sharma R,
            Yanke LJ, Topp E, McAllister TA. BMC Microbiol. 19;11:78.
      --29. 2012. In-feed antibiotic effects on the swine intestinal
            microbiome. Looft, T., T.A. Johnson, H.K. Allen, D.O. Bayles,
            D.P. Alt, R.D. Stedtfeld, W.J. Sul, T.M. Stedtfeld, B. Chai,
            J.R. Cole, S.A. Hashsham, J.M. Tiedje, and T.B. Stanton.
            Proceedings of the National Academy of Sciences USA. 109:1691-
            1696.
        In addition, FDA also considered a number of other studies that
    were referenced by the Department of Health and Human Services in
    response to the 2004 United States Government Accountability Office
    (GAO) report entitled, ``Antibiotic Resistance: Federal Agencies Need
    to Better Focus Efforts to Address Risks to Humans from Antibiotic Use
    in Animals'':
      --1. Phillips I, Casewell M, Cox T, et al. Does the use of
            antibiotics in food animals pose a risk to human health? A
            critical review of published data. J Antimicrob Chemother,
            2004;53:28-52.
      --2. Holmberg SD, Wells JG, Cohen ML. Animal-to-man transmission of
            antimicrobial-resistant Salmonella: investigations of U.S.
            outbreaks, 1971-1983. Science, 1984; 225:833-5.
      --3. Holmberg SD, Solomon SL, Blake PA. Health and economic impacts
            of antimicrobial resistance. Rev Infect Dis, 1987; 9:1065-78.
      --4. Lee LA, Puhr ND, Maloney K, et al. Increase in antimicrobial-
            resistant Salmonella infections in the United States, 1989-
            1990. J Infect Dis, 1994; 170:128-34.
      --5. Varma J, M

    Source: FCA's FIRS Ratings Database. The above chart includes only the
       System banks and their affiliated direct-lender associations. The
     figures in the bars reflect the number of institutions by FIRS rating.

        The Agency uses the Financial Institution Rating System (FIRS) to
    assess the safety and soundness of each FCS institution. The system
    provides a framework of component and composite ratings to help
    examiners evaluate significant financial, asset quality, and management
    factors. FIRS ratings range from 1 for a sound institution to 5 for an
    institution that is likely to fail. As the chart above indicates, the
    System remains financially strong overall. Institutions are well
    capitalized, and the FCS does not pose material risk to investors in
    FCS debt, the Farm Credit System Insurance Corporation, or to FCS
    institution stockholders.
        Although the System's condition and performance remain satisfactory
    overall, several institutions are experiencing stress and now require
    special supervision and enforcement actions. Factors causing the stress
    include weaknesses in the Nation's economy and credit markets, a
    rapidly changing risk environment in certain agricultural segments,
    and, in certain cases, management's ineffective response to these
    risks. We have increased supervisory oversight at a number of
    institutions and dedicated additional resources in particular to those
    13 institutions rated 3 or worse. Although these institutions represent
    about 2 percent of System assets and do not meaningfully affect the
    System's consolidated performance, they require significantly greater
    Agency resources to oversee. As of December 31, 2011, seven FCS
    institutions were under formal enforcement action, but no FCS
    institutions are in conservatorship or receivership.

                      REGULATORY AND CORPORATE ACTIVITIES

        Regulatory Activities.--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. The Agency is committed to
    developing balanced, flexible, and legally sound regulations. 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 make it more
            consistent with the Basel Accord and with that of other Federal
            financial regulating authorities;
      --Revising regulations to enhance System disclosures and compliance
            requirements for executive compensation, pension, and other
            benefit programs;
      --Strengthening investment-management regulations to ensure that
            prudent practices are in place for the safe and sound
            management of FCS investment portfolios;
      --Revising regulations to provide guidance on the statutory and
            regulatory authority related to rural community investments;
      --Revising regulations to provide the parameters under which an FCS
            institution may organize or invest in LLCs, LLPs, and other
            unincorporated business entities;
      --Clarifying and strengthening standards-of-conduct regulations; and
      --Revising regulations related to FCS bank and association mergers
            and consolidations.
        Corporate Activities.--Because of mergers, the number of FCS
    institutions has declined over the years, but their complexity has
    increased, placing 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 2012, two banks have merged, and two associations have
    merged. In addition, a new service corporation was chartered. As of
    January 1, 2012, the System had 83 direct-lender associations, four
    banks, six service corporations, and two special-purpose entities.

                      CONDITION OF THE FARM CREDIT SYSTEM

        The System remained fundamentally safe and sound in 2011 and is
    well positioned to withstand the continuing challenges affecting the
    general economy and agriculture. Total capital increased to $35.9
    billion at September 30, 2011, up from $33.0 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 15.8 percent at September 30,
    2011, compared with 15.0 percent the year before, as strong earnings
    allowed the System to continue to grow its capital base.
        Because of stronger agricultural profits, which reduced the need
    for farmers to borrow, the System experienced slower loan growth. In
    total, gross loans grew by 1.3 percent over the 12-month period ended
    September 30, 2011, compared with 3.9 percent during the previous
    period. Nonperforming loans decreased modestly to $3.3 billion at the
    end of fiscal year 2011, representing 9.2 percent of total capital,
    down from 11.3 percent a year earlier. However, although credit quality
    has been improving and is satisfactory overall, volatility in commodity
    prices, rising input prices, and weaknesses in the general economy pose
    continued risks to some agricultural operators, creating the potential
    for a reversal of this trend.
        The FCS earned $3.0 billion in the first 9 months of 2011, a 13.7
    percent increase from the same period in 2010. Return on assets
    remained favorable at 1.7 percent. The System's liquidity position
    increased from 172 days as of September 30, 2010, to 200 days a year
    later, remaining significantly above the 90-day regulatory minimum. The
    quality of the System's liquidity reserves also improved in 2011.
    Further strengthening the System's financial condition is the Farm
    Credit Insurance Fund, which holds almost $3.4 billion. Administered by
    the Farm Credit System Insurance Corporation, this fund protects
    investors in Systemwide consolidated debt obligations.
        U.S. agriculture just experienced back-to-back years of exceptional
    profitability. According to U.S. Department of Agriculture estimates,
    combined net farm income for 2010 and 2011 is 23 percent higher than
    for 2008 and 2009. Higher farm incomes reflect rising prices for key
    crops. However, farm prosperity has not been uniform--because of high
    feed costs, profits were lower for livestock producers than for crop
    producers. Despite continued financial stress among certain livestock
    enterprises, such as dairy, farm finances were generally strong going
    into 2012. While many farmers have significantly increased capital
    investments, they have done so using excess cash and limited their use
    of credit. For those farmers borrowing money, they are paying some of
    the lowest interest rates of their lifetime.
        U.S. farm incomes for 2012 may well hinge on the ability of farmers
    across the globe to expand production enough to alleviate tight world
    stocks of key crops. Greatly improved weather and higher plantings
    could turn shortages of key crops such as corn and soybeans into
    surpluses quickly, thus causing prices to fall. Meanwhile, future world
    economic growth and, hence, food demand, remains uncertain, as does the
    exchange value of the dollar and government policies that affect
    agriculture and energy. As a result, commodity prices will probably
    remain volatile.
        An increasing risk to the farm sector's financial health is the
    persistent rise in production costs. The surge in farmland prices and
    rental rates have driven production costs even higher, especially over
    the past 2 years. This is most notable in the Midwest where corn and
    soybeans are the main enterprises. In some States, farmland prices now
    significantly exceed inflation-adjusted records. These prices could
    drop significantly if grain prices fall or interest rates climb. While
    the percentage of debt being used to purchase land appears to be
    modest, FCA continues to closely monitor farmland values and associated
    risk to loan collateral across the System. In addition, FCA continues
    to exchange ideas and meet with other banking regulators to determine
    the most appropriate regulator response to risks associated with rising
    land values.
        The System had full access to the capital markets during 2011,
    which further increased its overall financial strength and its ability
    to serve its mission. In addition, as a Government-sponsored enterprise
    (GSE), the System has benefited from the monetary policies that have
    helped foster historically low interest rates. Despite continued
    volatility in the financial markets, investor demand for System debt
    has remained favorable across the yield curve. Because of low interest
    rates, the System was able to exercise the options on significant
    quantities of callable bonds to further reduce the cost of funds. For
    2012, the System expects that the capital markets will continue to meet
    its financing needs.

                   FEDERAL AGRICULTURAL MORTGAGE CORPORATION

        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), the
    Agency 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 U.S. Treasury Department, not to exceed $1.5
    billion, to fulfill the guarantee obligations on Farmer Mac Guaranteed
    Securities. Farmer Mac is not subject to any intra-System agreements
    and is not jointly and severally liable for Systemwide debt
    obligations. Moreover, the Farm Credit Insurance Fund does not back
    Farmer Mac's securities.
        Farmer Mac made financial progress during fiscal year 2011.
    Although GAAP net income was down from 2010, this decline was largely
    the result of unrealized gains and losses; however, core earnings, a
    measure based more on cash flow, was up by 50 percent. As of September
    30, 2011, Farmer Mac's core capital totaled $461.3 million, which
    exceeded its statutory requirement of $336.6 million. The result is a
    capital surplus of $124.7 million, down from $183.2 million as of
    September 30, 2010. The total portfolio of loans, guarantees, and
    commitments grew 3.2 percent to $11.8 billion.
        Farmer Mac's program-business portfolio shows stress in certain
    subsectors, but credit risk 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 1.46 percent at September 30, 2011,
    compared with 1.86 percent a year earlier. Loans more than 90 days
    delinquent decreased from 1.53 percent at September 30, 2010, to 1.02
    percent a year later.
        Regulatory activity in 2012 that will affect Farmer Mac includes an
    interagency joint final 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 final
    rulemaking on nonprogram investments and liquidity at Farmer Mac; a
    proposed rulemaking to amend regulatory requirements governing
    operating and strategic planning; and a proposed rulemaking to amend
    the Risk-Based Capital Stress Test to reduce its reliance on credit
    ratings.

                                   CONCLUSION

        We at FCA remain vigilant in our efforts to ensure that the Farm
    Credit System 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 2013 budget as presented, and we
    continue our efforts to be good stewards of the resources entrusted to
    us. In addition to appointing a Performance Improvement Officer, we
    have met all of the other requirements of the GPRA Modernization Act
    that apply to our Agency. Our Budget Proposal identifies our goals and
    the performance measures we have developed to help ensure that we use
    our resources judiciously. While we are proud of our record and
    accomplishments, I assure you that the Agency will continue its
    commitment to excellence, effectiveness, and cost efficiency and will
    remain focused on our mission of ensuring a safe, sound, and dependable
    source of credit for agriculture and rural America. This concludes my
    statement. On behalf of my colleagues on the FCA Board and at the
    Agency, I thank you for the opportunity to share this information.

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

                                           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 2013
    budget request for programs within the subcommittee's
    jurisdiction.]

                   Prepared Statement of the Ad Hoc Coalition

        Mr. Chairman, Members of the Subcommittee, this statement is
    respectfully submitted on behalf of the ad hoc coalition composed of
    the organizations listed below. The coalition supports sustained
    funding for our Nation's food aid programs, including the Public Law
    480 Title II Food for Peace Program, McGovern-Dole International Food
    for Education, and Food for Progress. We strongly oppose USDA's
    proposal to divert funding away from Food for Peace.
    Food Aid's Unique Role
        The donation of American commodities as food aid has been the
    cornerstone of U.S. and global foreign assistance programs since their
    inception, and the need for food aid today is stronger than ever.
    According to USDA's Economic Research Service, 12 million metric tons
    of commodities are needed each year to fill food gaps in the 70 most
    food insecure countries. Food aid, delivered in bags bearing the U.S.
    flag marked ``From the American People'' provides a tangible symbol of
    our Nation's generosity and compassion and builds good will toward the
    American people.
        In recent years, opponents of food aid programs have argued that
    they are not being administered efficiently, and that we should
    therefore just transfer these programming funds over to USAID's
    Emergency Food Security Program (EFSP). Through a variety of reforms,
    such as prepositioning commodities and application of the Famine Early
    Warning System, the speed of delivery and accuracy of food aid
    targeting has been dramatically improved in recent years, leading USAID
    Administrator Shah to announce last summer that the United States is
    now the fastest provider of food assistance at times of crisis and
    emergency. Rather than abandon the demonstrated, life-saving benefits
    of U.S.-sourced food aid, we should work together across agencies, and
    across stakeholders, to apply American ingenuity to these programs, and
    continue to make them the best, most efficient programs they can be
    while still preserving their unique benefits overseas and here at home.
        In contrast to most other foreign assistance programs which just
    send money overseas, food aid also provides direct economic benefits
    here at home. U.S. food aid programs not only further our humanitarian
    and security goals by allowing Americans to share their bounty with the
    needy, but these programs also provide stable jobs for hundreds of
    thousands of Americans in our farming, processing, and shipping
    economic sectors.
    Diversion of Food Aid Funding for Cash Donations
        The U.S. Department of Agriculture's proposed fiscal year 2013
    budget includes a request to divert $66 million in funding away from
    Food for Peace, instead adding it to the $300 million already
    designated for USAID's EFSP.
        Mr. Chairman, we are concerned that this back-door diversion of
    funding will further weaken the Food for Peace Program, which has
    suffered extraordinary cuts in recent years. Although the program is
    authorized at $2.5 billion, funding has fallen in recent years and the
    current requested level is only $1.4 billion. This proposal is a replay
    of USDA's proposals for fiscal year 2007-2009, which would have given
    authority to USAID to use Food for Peace funding for the purchase of
    foreign or ``local and regional'' commodities at its discretion. The
    U.S. Government and its global partners already have significant cash
    amounts for local and regional purchases when it is necessary and
    appropriate. Especially in light of the recent cuts to Title II, it is
    our belief that the present funding level of EFSP does not need a
    further infusion of scarce Title II funds. We respectfully request that
    this Subcommittee again reject USDA's proposal, and preserve the
    integrity of the Food for Peace program.

    Conclusions and Recommendations
        We respectfully recommend that our food aid programs continue to be
    funded at responsible, sustainable levels. The Public Law 480 Food for
    Peace Program is the world's most successful foreign assistance
    program, has saved countless lives, and has provided valuable jobs to
    the American people, who take pride in their tangible commitment to
    relieving global hunger. Its straightforward delivery of American food
    to the hungry fills a clear and immediate need overseas, and its unique
    architecture has made it a successful program here at home that has
    endured for over fifty years. Therefore, we respectfully recommend that
    USDA's request to siphon money away from Food for Peace be denied as it
    was in prior years.

    America Cargo Transport Corp.
    American Maritime Congress
    American Maritime Officers
    American Maritime Officers' Service
    APL Limited
    American Soybean Association
    Central Gulf Lines, Inc.
    Hapag-Lloyd USA, LLC
    International Organization of Masters, Mates & Pilots
    Liberty Maritime Corporation
    Maersk Line, Ltd.
    Marine Engineers' Beneficial Association
    Maritime Institute for Research and Industrial Development
    National Association of Wheat Growers
    North American Millers' Association
    National Corn Growers Association
    National Council of Farmer Cooperatives
    National Potato Council
    National Sorghum Producers
    Sailors' Union of the Pacific
    Seafarers International Union
    Sealift, Inc.
    Transportation Institute
    United Maritime Group, LLC
    U.S. Dry Bean Council
    U.S. Wheat Associates, Inc.
    USA Dry Pea & Lentil Council
    USA Maritime
    USA Rice Federation
    Waterman Steamship Corporation
                                     ______

     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 fully fund administrative expense
    funding for the Emergency Food Assistance Program (TEFAP) at $100
    million; to make TEFAP food purchase dollars available for 2 fiscal
    years; to approve the administration's budget request of $186,935,000
    for the Commodity Supplemental Food Program (CSFP) and provide an
    increase of $5 million to begin operations in six additional States
    approved by USDA, and to evaluate alternative approaches for the
    Department of Defense Fresh Program.
        ACDA is a nonprofit professional trade association, dedicated to
    the growth and improvement of USDA's 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 over 1.5 billion pounds of
    USDA-purchased commodity foods annually through programs such as
    National School Lunch Program, the Emergency Food Assistance Program
    (TEFAP), Summer Food Service Program (SFSP), Commodity Supplemental
    Food Program (CSFP), Charitable Institution Program, and Food
    Distribution Program on Indian Reservations (FDPIR).
    Fully Fund TEFAP Administrative Funds at $100 Million
        We urge the subcommittee to fully fund TEFAP Administrative Funds
    at $100 million.
        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 $74.5 million for TEFAP
    Administrative Funds in fiscal year 2010 including ARRA funds, $49.401
    million in fiscal year 2011, and $48 million in fiscal year 2012. While
    these resources have been used responsibly, and are sincerely
    appreciated, food banks around the country are finding that operating
    expenses are increasing while private sector donations are decreasing.
    They have had to increasingly depend upon converting food dollars to
    administrative expense funds in order to maintain their operations.
        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 at least the fiscal year 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 essential to maintaining distribution sites,
    especially in rural distribution sites. In fact, this past year
    Minnesota was not able to reimburse food bank warehouses for the
    storage and distribution costs. New Mexico had to restrict food
    deliveries to remote locations, and had to reduce paid staff by not
    hiring replacement employees.
    Make TEFAP 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.
        ACDA officials have met with FNS and AMS personnel to explore ways
    to improve the ordering of TEFAP foods. While the agencies of the
    Department of Agriculture 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 cancelled 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. We are pleased that Under Secretary for Food, Nutrition
    and Consumer Services Kevin Concannon told the Subcommittee on February
    28 that USDA would support making TEFAP food dollars available for a 2
    year period.
        At the end of fiscal year 2011, Minnesota was at risk of losing
    $70,000. Connecticut had nearly $69,000 at risk. Other States had
    similar experiences at a time when private donations are fewer, and
    when available food dollars result in lower food volumes due to higher
    prices.
        As we did last year, we respectfully point out to the subcommittee
    that 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 committee 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 2013 budget request of $186,935,000
    for the Commodity Supplemental Food Program (CSFP), and urges the
    Committee 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
    overwhelmingly serves elderly individuals, many of whom are homebound.
    States currently operating CSFP requested 116,350 additional caseload
    slots for the current program year, clearly showing the need for this
    program.
    ACDA 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 the Department of Defense 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.
        We once again ask the Committee 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 Committee 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 has identified the following
    nine areas for funding in the fiscal year 2013 Agriculture spending
    bill:
      --Programs that promote animal health;
      --Programs that promote conservation;
      --Programs that expand export markets for agriculture;
      --Programs that enhance and improve food safety and protection;
      --Programs that ensure crop protection tools;
      --Programs that further develop renewable energy;
      --Programs that strengthen rural communities;
      --Programs that support wildlife services; and
      --Research priorities.
        Farm Bureau strongly opposes any cuts to funding of the farm safety
    net. The farm bill discussion has begun, and the House and Senate
    Agriculture Committees should continue to have the primary
    responsibility to ensure farmers and ranchers have a viable farm safety
    net.

    Programs That Promote Animal Health
        Farm Bureau supports a $5.3 million increase for the Animal and
    Plant Health Inspection Service (APHIS) to a total of $14 million for
    voluntary Animal Disease Traceability (ADT). The ADT program requires
    strong Government oversight on the expenditure of funds and is
    essential for animal health.
        Farm Bureau supports $4.79 million for the Veterinary Medicine Loan
    Repayment Program (VMLRP) administered by the Department of Agriculture
    (USDA) National Institute for Food and Agriculture (NIFA). VMLRP
    veterinarians ensure animal health and welfare, while protecting the
    Nation's food supply.
        Farm Bureau supports $123.4 million for the Food and Drug
    Administration (FDA) Center for Veterinary Medicine (CVM). The CVM
    oversees the safety of animal drugs, feeds and biotechnology-derived
    products.
    Programs That Promote Conservation
        Farm Bureau supports funding for conservation programs but
    prioritizes working lands programs over retirement-type programs.
    Farmers and ranchers have made great strides in conserving our natural
    resources, and these gains can continue through working lands programs.
    Programs That Expand International Markets for Agriculture
        Farm Bureau supports funding at authorized levels for:
      --The Foreign Agricultural Service (FAS) to maintain services that
            expand agricultural export markets. Farm Bureau urges continued
            support for the Office of the Secretary for trade negotiations
            and biotechnology resources.
      --The Market Access Program, Foreign Market Development Program,
            Emerging Markets Program and 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.
      --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), which oversees the
            permit, notification and deregulation process for plant
            biotechnology products. BRS personnel and activities facilitate
            agriculture innovation, and ensure public confidence and
            international acceptance of biotechnology.
        Farm Bureau supports continued funding for the U.S. Codex Office.
    Active U.S. participation in the Codex Alimentarius Commission is
    essential to improving the harmonization of international, science-
    based standards for the safety of food and agriculture products.
    Programs That Enhance and Improve Food Safety and Protection
        Farm Bureau recommends 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.
        Farm Bureau supports funding for a National Antimicrobial Residue
    Monitoring System (NARMS) to detect trends in antibiotic resistance.
    NARMS protects human and animal health through integrated monitoring of
    antimicrobial resistance among foodborne bacteria. Farm Bureau requests
    that Congress direct that stakeholder involvement and industry input be
    a priority in the ongoing Federal review.
        Farm Bureau supports funding for the Food Animal Residue Avoidance
    Databank (FARAD) at the authorized level of $2.5 million. FARAD aids
    veterinarians in establishing science-based recommendations for drug
    withdrawal intervals. No other Government program provides or
    duplicates the food safety information FARAD provides to the public.
        Farm Bureau 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 Ensure Crop Protection Tools
        Farm Bureau supports maintaining $12 million for Minor Crop Pest
    Management (IR-4) within NIFA Research and Education Activities.
    Developing pest control tools has high regulatory costs, and public
    support has been needed to ensure that safe and effective agrichemicals
    and biopesticides are available for small, orphan markets. The IR-4
    Project facilitates Environmental Protection Agency registration of
    safe and effective pest management technologies where the private
    sector is unable to cover regulatory cost.
        Farm Bureau supports maintaining funding to the National
    Agricultural Statistical Service (NASS), specifically for the
    continuation of agricultural chemical-use surveys for fruits,
    vegetables, floriculture and nursery crops. NASS surveys provide data
    about the use of agricultural chemicals involved in the production of
    food, fiber and horticultural products.
    Programs That Support the Development of Renewable Energy
        Farm Bureau supports 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.
        Farm Bureau supports funding for the Biomass Crop Assistance
    Program (BCAP). BCAP provides vital financial assistance to farmers who
    produce and transport eligible biomass feedstocks and helps growers
    meet the capital-intensive costs of establishing new crops and
    delivering them to market.
    Programs That Strengthen Rural Communities
        Farm Bureau supports USDA implementing a regional approach to give
    its Rural Development (RD) programs greater flexibility and promote
    innovation in rural regions.
        Farm Bureau supports maintaining the funding at authorized levels
    for:
      --The Value-Added Agricultural Producer Grants, Rural Innovation
            Initiative, Rural Microentrepreneur Assistance Program, and
            Business and Industry Direct and Guaranteed Loans, which all
            foster business development in rural communities.
      --Rural Utilities Service for rural broadband and telecommunications
            services, and the Distance Learning and Telemedicine Program.
      --The Revolving Fund Grant Program for acquiring safe drinking water
            and sanitary waste disposal facilities.
      --The Resource Conservation and Development Program, which helps
            local volunteers create new businesses, form cooperatives and
            develop agri-tourism activities.
      --The Beginning Farmer and Rancher Development Program, which
            provides participants with the information and skills needed to
            make informed decisions for their operations.
      --Agriculture in the Classroom, a national grassroots program
            coordinated by USDA, which helps students gain greater
            awareness of the role of agriculture in the economy and
            society.
    Programs That Support Wildlife Service
        Farm Bureau supports maintaining the funding level for Wildlife
    Service programs. Wildlife Service works to prevent and minimize an
    estimated $1 billion worth of wildlife damage, while protecting human
    health and safety from conflicts with wildlife.
    Research Priorities
        Agricultural research is vital, particularly research focused on
    meeting the growing challenges of production 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. 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.
                                     ______

         Prepared Statement of the American Forest & Paper Association
    Introduction
        The American Forest & Paper Association (AF&PA) is the national
    trade association of the forest products industry, representing pulp,
    paper, packaging and wood products manufacturers, and forest
    landowners. Our companies make products essential for everyday life
    from renewable and recyclable resources that sustain the environment.
        The forest products industry accounts for approximately 5 percent
    of the total U.S. manufacturing GDP. Industry companies produce about
    $190 billion in products annually and employ nearly 900,000 men and
    women, exceeding employment levels in the automotive, chemicals and
    plastics industries. The industry meets a payroll of approximately $50
    billion annually and is among the top 10 manufacturing sector employers
    in 47 States. Within the jurisdiction of this subcommittee, continued
    resources for protecting forest health and providing adequate resources
    to enforce existing trade laws are essential. Specific recommendations
    follow.
    Food and Drug Administration--Food Contact Notification Program
        AF&PA supports continued funding of the Food Contact Notification
    Program.--The Food Contact Notification (FCN) program protects consumer
    health, food safety and quality while providing packaging manufacturers
    with an efficient process that is less burdensome than the food
    additive approval process. It has allowed packaging manufacturers to
    bring new, more environmentally friendly products to market that have
    extended product shelf life, thereby increasing consumer value.
        As Congress begins work on appropriations legislation for FDA in
    the coming weeks, we would like your support and assistance in ensuring
    that robust funding is included in the appropriations bills for the
    Center for Food Safety and Applied Nutrition, and that Congress
    expresses its intention to continue the operation of the FCN program.
    AF&PA appreciates that the subcommittee has previously rejected
    proposals to eliminate the FCN program.
    Animal and Plant Health Inspection Service (APHIS)--Lacey Act
            Enforcement
        AF&PA supports $5.5 million to provide for implementation of the
    declaration requirement of the Lacey Act, as amended by the 2008 farm
    bill.--The 2008 farm bill amended the Lacey Act (16 U.S.C. 3371 et
    seq.) to make it unlawful to trade wood products or other plants taken
    in violation of the laws of either a U.S. State or foreign country.
    This ground-breaking legislation already is beginning to influence the
    way companies make sourcing decisions and monitor their supply chains.
    Full and effective implementation and enforcement of the Lacey Act will
    enable American forest product companies to compete fairly in the
    global marketplace, help keep jobs in the United States, deter the
    destructive impacts of illegal logging on forests and forest-dependent
    communities in developing countries, and reinforce initiatives to
    mitigate climate change.
        When fully implemented, the law requires U.S. importers of wood and
    wood products to file a declaration identifying the genus/species name
    and country of harvest--a critical measure intended by the law's
    sponsors to increase supply chain transparency and assist Federal
    agencies in fair and strong enforcement. The prohibition and the
    declaration requirement affect a wide array of American industries, so
    it is critical that the declaration process generates data in a
    streamlined, cost-effective manner without unduly burdening legitimate
    trade. To that end, APHIS--which is responsible for implementing the
    declaration provision--needs $5.5 million in funding to fully implement
    congressional mandates, including to establish an electronic
    declarations database and to add internal capacity to perform data
    analysis needed for monitoring and enforcement purposes.
    APHIS--Plant Pests
        AF&PA recommends maintaining at least fiscal year 2012 funding of
    $56 million for the ``Tree and Wood Pests'' category to aid in
    combating these, and other pests and diseases.--As world trade
    continues to expand, global weather patterns shift, and an increasingly
    affluent world population has the ability to travel to--and demand
    products from--the far corners of the globe, the inadvertent, yet
    inevitable introduction of nonnative pests and diseases into the United
    States continues. Additional funding is vitally needed to aid in
    combating pests such as the Asian longhorn beetle, the Emerald Ash
    borer, and the Sirex woodwasp, as well as diseases such as Phytopthora
    ramorum. These are but a sampling of the diseases that harm commercial
    timber stands, community parks, and private forest landowners. American
    citizens most certainly will bear the cost of combating these and other
    emergent threats. We believe a comprehensive, coordinated response to
    each is more effective and more economical.
    National Institute of Food and Agriculture--McIntire-Stennis
            Cooperative Forestry Research
        AF&PA requests $33 million for the McIntire-Stennis Cooperative
    Forestry Research Program.--Approximately one-third of the United
    States is forested and these forests enhance our quality of life and
    economic vitality and are an invaluable source of renewable
    bioproducts, outdoor recreation, clean water, fish and wildlife
    habitat, and carbon sequestration. Sustaining these forests in a
    healthy and productive condition requires a strong, continuing
    commitment to scientific research and graduate education. Foundational
    financial support for university-based forestry research and graduate
    education comes from the McIntire-Stennis Cooperative Forestry program,
    funded through the USDA's National Institute of Food and Agriculture.
    Funds are distributed according to a statutory formula to each of the
    50 States, Puerto Rico, Guam, and the Virgin Islands, with a dollar-
    for-dollar match required from the States.
        Additional funding is needed to:
      --Provide the additional scientific research needed to address
            critical forest issues such as fires, storms, insects,
            diseases, urbanization, fragmentation, and lost economic
            opportunities.
      --Develop new knowledge and innovations to sustain healthy,
            productive forests and address the challenges facing forest
            owners, forest products manufacturers and all Americans who
            benefit from our forest resources.
      --Support research capacity within each State to address issues that
            are essential to private forest owners, and develop new
            opportunities for economic benefit from their forests.
                                     ______

      Prepared Statement of the American Honey Producers Association, Inc.
        Chairman Kohl and Members of the Subcommittee, my name is Mark
    Jensen, and I currently serve as President of the American Honey
    Producers Association (AHPA). I am pleased today to submit the
    following statement on behalf of the AHPA, a national organization of
    commercial beekeepers actively engaged in honey production and crop
    pollination throughout the country. The purpose of this statement is to
    bring to your attention the continued threats faced by American
    beekeepers and the billions of dollars in U.S. agriculture that rely
    upon honeybee pollination services. With those threats in mind, we
    respectfully request an appropriation that meets the needs anticipated
    by the 2008 farm bill for research funds to combat CCD and to conduct
    other essential honeybee research through the Agricultural Research
    Service (ARS) and other agencies at the Department of Agriculture,
    including at least $11.7 million for bee research at the ARS Honeybee
    Research Laboratories. And we specifically request that funds and
    personnel not be diverted from the essential ARS Honeybee Research
    Laboratory in Weslaco, Texas, which for reasons given below would
    jeopardize highly valuable research at a critical time for America's
    beekeepers.
        Honeybees are an irreplaceable part of the U.S. agricultural
    infrastructure. Honeybee pollination is critical in the production of
    more than 90 food, fiber, and seed crops and directly results in more
    than $15 billion in U.S. farm output. One key example is the almond
    crop. California grows 100 percent of the Nation's almonds and supplies
    80 percent of the world's almonds, all of which are 100 percent
    pollinated by managed bees. Nearly half of the managed colonies in the
    United States are transported each year from other parts of the country
    to pollinate those almonds. In addition to this clear commercial
    benefit, honeybees are also vital to the health of all Americans given
    the dietary importance of such diverse pollinated crops as almonds,
    apples, oranges, melons, blueberries, broccoli, tangerines,
    cranberries, strawberries, vegetables, alfalfa, soybeans, sunflower,
    and cotton, among others. In fact, honeybees pollinate about one-third
    of the human diet.
        With this in mind, a threat to the existence of managed American
    honeybees is a threat to all Americans. And unfortunately, the American
    honeybee continues to face a number of significant threats. While not
    specifically a topic of relevance for congressional appropriators,
    complex circumvention and customs fraud schemes continue to
    disadvantage the American honey producer, stress pollinated crops and
    even threaten the health and safety of consumers. Producers struggle
    under the impact of increasingly divergent market prices--one price for
    legitimate honey and another rock bottom price for illegally
    transshipped honey. The direct result of these divergent prices is a
    rapidly shrinking domestic market share for American producers. The
    shrinking domestic share has, in turn, diminished the available supply
    of managed bee colonies necessary to pollinate U.S. agriculture, and it
    has placed American consumers at risk due to increasing volumes of low-
    cost, often adulterated, food products entering uninspected into the
    Nation's food supply.
        This substantial trade threat is layered on top of the industry's
    ongoing battle against Colony Collapse Disorder (CCD), a phenomenon
    that since 2006 has ravaged bee colonies across the United States,
    moving from one hive to another in unpredictable patterns and causing
    the death of up to 90 percent of the bee colonies in affected apiaries.
    The National Research Council at the National Academy of Sciences has,
    as a result of CCD, characterized the beekeeping industry as being in
    ``crisis mode''--a point echoed and re-emphasized in a USDA action plan
    regarding honeybee threats. And hundreds of news articles and many in-
    depth media reports have continued to chronicle the looming disaster
    facing American beekeepers and the producers of over 90 fruit,
    vegetable and fiber crops that rely on honeybee pollination.
        Unfortunately, despite extensive and coordinated work by experts
    from Government, academia and the private sector, the definitive causes
    of and solutions for CCD have yet to be identified. The research is
    complex, as there are a wide range of factors that--either alone or in
    combination--may be causes of this serious condition, including stress
    from the cross-country movement of bees for commercial pollination,
    stress of pollinating crops, and the impact of certain crop pesticides
    and genetic plants with altered pollination characteristics. Continuing
    infestations of the highly destructive Varroa mite, combined with other
    pests and mites, are also thought to compromise the immune systems of
    bees and may leave them more vulnerable to CCD. At the same time,
    researchers will need to focus on the many reported instances in which
    otherwise healthy, pest-free, stationary bee colonies are also
    suffering collapse or problems with reproduction.
        AHPA, other industry officials, and leading scientists believe that
    an important contributing factor in the current CCD crisis is the
    longstanding, substantial under-funding of U.S. bee research, resulting
    in an inadequate capacity to respond to new research challenges and to
    take long-term steps to assure honeybee health. In recent years,
    honeybee research has become overly confined to four ARS laboratories
    that, while providing the first line of defense against exotic
    parasitic mites, Africanized bees, viruses, brood diseases, pests,
    pathogens and other conditions, simply cannot be expected to handle the
    full range of honeybee research challenges at current funding levels.
    At the same time, universities and the private sector, despite their
    ability to provide significant and innovative new research on emerging
    bee threats, have scaled back their efforts due to a lack of available
    funds.
        In recent years, the Federal Government has spent very modest
    amounts at each ARS Honeybee Research Laboratory--for a sector that
    contributes $15 billion per year to the U.S. farm economy and
    exponentially more to ensuring ecological balance and a healthy human
    diet. Worse still, with the emergence of CCD, funding amounts have not
    been increased commensurate with growing bee health concerns, resulting
    in a serious gap between the threats faced by U.S. honeybees and the
    capacity of our researchers to respond. Closing this gap will require
    significant new resources. To give a sense of this cost, it is
    estimated that each new scientist, technician and the support materials
    that they need will cost an additional $500,000 per year. Many new
    scientists are needed.
        To address these challenges, the AHPA respectfully requests funding
    consistent with authorizations provided in the 2008 farm bill.
    Specifically, the funds should be divided among the following
    Department of Agriculture agencies and programs: (1) the four ARS Bee
    Research Laboratories for new personnel, facility improvement, and
    additional research; (2) the Animal and Plant Health Inspection Service
    to conduct a nationwide honeybee pest and pathogen surveillance
    program; (3) the ARS Area Wide CCD Research Program divided between the
    Beltsville, Maryland and the Tucson, Arizona research laboratories to
    identify causes and solutions for CCD in affected States; (4) the NIFA
    to fund extension and research grants to investigate the following:
    honey bee biology, immunology, and ecology; honey bee genomics; native
    bee crop pollination and habitat conservation; native bee taxonomy and
    ecology; pollination biology; sub-lethal effects of insecticides,
    herbicides, and fungicides on honey bees, native pollinators, and other
    beneficial insects; the effects of genetically modified crops,
    including the interaction of genetically modified crops with honey bees
    and other native pollinators; honeybees, bumblebees, and other native
    bee parasites and pathogens' effects on other native pollinators; and
    (5) the additional ARS research facilities in New York, Florida,
    California, Utah, and Texas for research on honeybee and native bee
    physiology, insect pathology, insect chemical ecology, and honeybee and
    native bee toxicology.
        Unfortunately, it has come to our attention that ARS, in a unique
    decision to try and achieve false savings, is planning in fiscal year
    2013 to close the Weslaco ARS research facility, including the ARS
    Honeybee Research Laboratory--perhaps the newest and best of the four
    honeybee research laboratories in terms of practical, near term results
    achieved. Our understanding is that funds currently dedicated to the
    Weslaco honeybee research function would be ``re-directed'' to honeybee
    research currently conducted in Beltsville, Maryland, and Tucson,
    Arizona.
        The AHPA strongly opposes the decision to close the Weslaco
    Honeybee Research Laboratory. While we appreciate that ARS intends to
    maintain and re-direct funds rather than terminate the research
    function entirely, it is important to note that the each of the four
    ARS Honeybee Research Laboratories focuses on different problems facing
    the U.S. honey industry and undertakes research that is vital to
    sustaining honey production and assuring essential pollination services
    in this country. And each of the four ARS Honeybee Research
    Laboratories has unique strengths and is situated and equipped to
    support independent research programs which would be difficult, and in
    many cases impossible, to conduct elsewhere. This is particularly true
    of the Weslaco laboratory.
        Thus, given the multi-factor research capacity needed to address
    the scourge of CCD and the unique contributions made by each of the
    four laboratories, the AHPA urges Congress to permit Weslaco and each
    of the other ARS Honeybee Research Laboratories to continue and expand
    upon their unique strengths in their respective geographic locations.
    For the following reasons, the AHPA believes that maintaining the
    laboratory in Weslaco is in the best overall interest of our Nation's
    honeybee research agenda:
      --Personnel.--ARS, in its plan to re-direct funds from the Weslaco
            Honeybee Research Laboratory, does not account for the loss of
            highly skilled personnel. While ARS appears to believe that the
            scientific staff in Weslaco are replaceable, we believe this
            ignores that honeybee research is a unique study with a limited
            number of dedicated scientists worldwide. Further, even
            assuming ARS could replace some or all of the scientists,
            valuable time and years of practical and scientific knowledge
            and experience will be lost. In fact, some of the key personnel
            at Weslaco have already resigned or opted for retirement out of
            concern that the ARS plan for re-direction of funds will come
            to fruition. And finally, since the ARS plan would re-direct
            funding to other laboratories with existing research leaders,
            the result will likely be the loss of a research leader
            position--a position typically reserved for distinguished
            scientists. Each research leader position lost diminishes our
            capacity to attract world class scientific talent to honeybee
            research.
      --Mission.--The Weslaco Honeybee Research Laboratory's mission is to
            research ways to implement integrated pest management
            principles. As discussed above, each of the four ARS
            laboratories has a unique focus. Weslaco is the only honeybee
            laboratory dedicating a significant amount of time, money and
            expertise to honeybee pest, parasite and disease management--an
            absolutely necessary endeavor if we intend to preserve colony
            strength while awaiting the results of research initiatives at
            other laboratories aimed at longer-term solutions for the same
            problems. In short, the Weslaco laboratory is the front-line
            defense. The others represent longer-term hope. For example, in
            cooperation with pharmaceutical and chemical manufacturing
            companies, Weslaco scientists have played a key role in
            bringing to market all of the major chemical controls that have
            successfully mitigated damage that would otherwise be caused by
            Varroa destructor mites. If the honeybee research laboratory at
            Weslaco is re-located as proposed, its research focus will
            necessarily be altered, and possibly even lost since the other
            laboratories do not have expertise in the same area of
            research. We cannot afford to take that risk at this
            particularly challenging time.
      --Cost.--If implemented, the ARS plan will produce an overall cost
            increase for the agency's honeybee research program instead of
            serving as an austerity measure. The Weslaco Honeybee Research
            Laboratory will realize increased costs associated with travel
            and other administrative inefficiencies that will be necessary
            if ARS wishes to continue the current Weslaco research agenda--
            an agenda that relies on particular geographic and climate
            qualities not found in Beltsville, Maryland or Tucson, Arizona.
            Additionally, the receiving facilities will be burdened with
            new administrative responsibilities and demands for space.
            Restructuring any research facility requires time and funding.
            The ARS facilities are no exception. The fiscal year 2012
            Senate Appropriations Committee report included the following
            language: ``[W]hile the Committee understands the need to
            continually look for ways to increase efficiency and improve
            research outcomes, laboratory closures often cost money in the
            short-term and do not necessarily provide real savings.
            Therefore, the Committee directs ARS to evaluate its capital
            asset requirements for necessary coordination with ongoing and
            emerging research opportunities. As part of this evaluation,
            ARS should provide opportunity for public comment in order to
            incorporate the priorities of all interested stakeholders,
            including ARS and other scientists, and users of ARS data.
            Finally, in future budget requests, the Committee directs ARS
            to identify any costs associated with any proposed laboratory
            closures, including decommissioning, relocation or other
            effects on employees, and any other additional costs.''
            Unfortunately, the ARS plan to re-direct funding does not
            appear to account for the added costs discussed above and
            contemplated by Congress just a year ago. Further, while they
            have communicated with certain stakeholders, ARS has failed to
            provide formal notice and afford appropriate time for public
            comment by those most affected by its decision. And finally,
            ARS has not, to our knowledge, identified ``costs associated
            with any proposed laboratory closures, including
            decommissioning, relocation or other effects on employees, and
            any other additional costs.''
      --Climate.--The research currently conducted at the Weslaco Honeybee
            Research Laboratory relies on more than 450 research-quality
            bee colonies located near the facility. The scientists at
            Weslaco have access to such a large bee supply due in
            substantial part to the unique climate and habitat afforded by
            the laboratory's Weslaco, Texas location. Taken together, the
            warm climate and ample scrub brush ranch land combine for an
            optimal breeding ground and year-round research--a combination
            that neither the Beltsville, Maryland or Tucson, Arizona can
            offer.
      --Quality and Divisibility of Facility.--As a practical matter,
            closing the Weslaco Honeybee Research Laboratory is
            unnecessary. As discussed above, the laboratory at Weslaco is
            among the best and newest in the country, and it remains an
            ideal geographic location for honeybee research. While we
            acknowledge that ARS maintains other agricultural research
            laboratories on the same campus, known collectively as the Kika
            de la Garza Subtropical Agricultural Research Center, and that
            those other laboratories are also targeted for closure, we note
            that the property is easily divisible and that closure of one
            lab does not necessitate closure of another. Each laboratory on
            the Weslaco campus operates in a separate building with
            considerable distance between buildings. Further, each
            laboratory has its own independent scientific and
            administrative staff. Thus, ARS can easily close and lease or
            sell other agricultural research laboratories located on the
            Weslaco campus without disturbing the important work conducted
            by the honeybee laboratory. Indeed, this makes good sense given
            that the ARS plan is to both close and eliminate funding for
            those other laboratories whereas, in the case of the honeybee
            laboratory, it is only to close and re-direct funding, a move
            that the members of our organization believe strongly will
            actually result in greater costs than benefits.
      --Precedent.--This is not the first time ARS laboratories have faced
            this challenge. In the President's fiscal year 2003 budget
            proposal, a number of laboratories were proposed for closure,
            consolidation or reduction. Ironically, those targeted then for
            closure included all of the ARS Honeybee Research Laboratories
            except Weslaco. Similar to the current situation, the fiscal
            year 2003 proposal sought to achieve projected budgetary
            savings at the expense of science. Congress wisely and
            emphatically rejected that proposal. The following excerpt is
            from the fiscal year 2003 Senate Appropriations Committee
            report: ``The Committee does not concur with proposals to close
            selected research laboratories and consolidate and terminate
            related ongoing research programs. The Committee directs the
            Agency to maintain these important research programs and
            laboratories and maintains funding which was eliminated under
            the President's budget.'' Then in the fiscal year 2009 omnibus
            appropriations bill, Congress preserved funding for the
            Weslaco, Texas ARS research facility despite a recommendation
            in the President's budget proposal to close that facility.
            Congress should again reject closure and consolidation of the
            ARS Honeybee Research Laboratories in fiscal year 2013, just as
            it did on two prior occasions in the last decade.
        While to date the four ARS Research Laboratories have been the
    backbone of American Honeybee research, we do not believe that those
    four facilities alone--even when fully funded--will have the capacity
    to meet today's research needs. This is why, after analyzing the new
    and serious threats to U.S. honeybees, Congress, representatives of the
    farm sector and leading researchers developed the research priorities
    that were incorporated into the 2008 farm bill. In addition to
    increased resources for ARS research, these experts pressed for new
    funding, through NIFA, for Government, academic and private sector
    research. They also urged new bee surveillance programs through the
    Animal and Plant Health Inspection Service to address the alarming lack
    of accurate information about the condition of U.S. bee colonies
        One particularly effective way of adding needed capacity and
    innovative expertise in the effort to ensure honeybee health would be
    to reinvigorate private sector and university bee research initiatives.
    For many years, these sectors played a vital role in honeybee research,
    and many leading universities have significant bee research
    capabilities. In recent years, non-Federal agency research has
    substantially declined due to a lack of support for such initiatives.
    Fully funding the 2008 farm bill authorization for the Department of
    Agriculture's NIFA would go a long way toward achieving this worthy
    goal.
        NIFA is tasked with advancing knowledge for agriculture by
    supporting research, education, and extension programs. Funds may be
    channeled through the Department to researchers at land-grant
    institutions, other institutions of higher learning, Federal agencies,
    or the private sector. The requested funding for NIFA would provide
    important flexibility in allocating badly needed Federal dollars among
    Government, private sector and university researchers. The recipients
    would provide more widespread research on honeybee biology, immunology,
    ecology, and genomics, pollination biology, and investigations into the
    effects on honeybees of potentially harmful chemicals, pests, other
    outside influences, and genetically modified crops. The result of such
    funds would be to ensure flexible financing with a comprehensive plan
    for battling CCD, pests, and other ongoing and future honeybee threats.
        Additionally, the same coalition of experts identified a need for a
    honeybee pest and pathogen surveillance program. Although significant
    data exists on American honey production, comparably less and lower
    quality data exists on beekeepers and bees. Providing continued funding
    under the 2008 farm bill authorizations to the Animal and Plant Health
    Inspection Service at the Department of Agriculture would allow the
    Department to utilize such data to better respond to pest and disease
    outbreaks, and to compile data that may better enable prediction of new
    threats. Given the roughly $15 billion added to the U.S. farm economy
    each year by honeybees, this is certainly a worthwhile investment in
    the honeybee and pollinator industry.
        In conclusion, we wish to thank you again for your past support of
    honeybee research and for your understanding of the critical importance
    that Federal funding plays in ensuring a healthy honeybee supply. By
    way of summary, in fiscal year 2013, the American Honey Producers
    Association strongly encourages at least $11.7 million in funding for
    CCD and other honeybee research spread among the four ARS Honeybee
    Research Laboratories. The AHPA strongly opposes closure of the ARS
    Honeybee Research Laboratory in Weslaco, Texas. And, the AHPA supports
    continued funding for the NIFA at the Department of Agriculture, and
    the Animal and Plant Health Inspection Service. Only through critical
    research can we have a viable U.S. beekeeping industry and continue to
    provide stable and affordable supplies of bee-pollinated crops, which
    make up fully one-third of the U.S. diet. I would be pleased to provide
    answers to any questions that you or your colleagues may have.
                                     ______

     Prepared Statement of the American Indian Higher Education Consortium

        On behalf of the American Indian Higher Education Consortium
    (AIHEC) and the 32 Tribal Colleges and Universities (TCUs) that
    currently compose the list of 1994 Institutions, thank you for this
    opportunity to outline our needs and concerns for fiscal year 2013.
        This statement is presented in three parts: (a) summary of our
    fiscal year 2013 funding recommendations, (b) brief background on
    Tribal Colleges and Universities, and (c) 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 2013 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: $4,312,000 for the 1994 Institutions' competitive
    Extension grants program; $2 million for the 1994 Institutions'
    competitive Research Grants program; $3,335,000 for the Higher
    Education Equity Grants; a doubling of the corpus in the Native
    American Endowment fund; and in the Rural Development--Rural Community
    Advancement Program (RCAP), that $4 million be appropriated for the TCU
    Essential Community Facilities Grants program (the same level included
    in the President's fiscal year 2013 budget request) to help the 1994
    Institutions address the critical facilities and infrastructure needs
    that advance their capacity to participate as full land grant partners.
    Background on Tribal Land Grant Institutions
        The first Morrill Act was enacted in 1862 specifically to bring
    education to the people and to serve their fundamental needs. Today,
    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 32 Tribal Colleges and Universities that compose the list of
    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 20 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 critically 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 this program include poverty, isolation, health,
    cultural dissonance, and land use practices by Lakota landowners. To
    continue such highly successful programs conducted at 1994
    Institutions, we request that the Subcommittee appropriate a minimum of
    $4,312,000 for this competitive grants program to support 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 Congress is currently
    functioning. The $1,801,000 appropriated last year 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
    program funded at less than $2 million, for which all 32 of the 1994
    Institutions compete for awards, is incredibly 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; ramifications of 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 considerable 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 afford the
    1994 Research competitive program a very modest increase, and
    appropriate $2 million for these critical grants.
        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 appropriate at a minimum, $3,335,000 to allow the 1994
    Institutions to continue their current 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' treasury endowment was $4,306,999 and after
    the USDA NIFA claimed its standard 4 percent administrative fee,
    $4,134,719 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 all
    but 6 of the 32 tribal college (1994) land grant institutions. In other
    words, about 80 percent of the 1994 institutions receive less of the
    annual interest yield for program use than the administrative fee paid
    to the USDA-NIFA.
        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 $97,494, 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. Identifying
    creative solutions is essential to address so many public funding needs
    in a time of extreme fiscal austerity. The TCUs propose a one-time
    doubling of the 1994 Native American endowment, which would result in
    an increase in the annual interest yield by approximately $4 million--
    the same amount as proposed for the TCU Rural Development Essential
    Community Facilities Grant program. Payments into the endowment remain
    with the U.S. Treasury, therefore only the interest yield is scored as
    outlay. Should the endowment corpus be doubled and the agency's
    administrative fee scaled back, the TCUs could then consider forgoing
    the Rural Development program. We respectfully request that the
    Subcommittee consider doubling the current endowment corpus by fiscal
    year 2015. 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 and
    address critical infrastructure needs.
        Tribal Colleges and Universities Essential Community Facilities
    Program (Rural Development).--The Absent the doubling of the 1994
    endowment corpus resulting in an additional interest yield equal to the
    TCU Essential Community Facilities Program, we strongly urge the
    Subcommittee to appropriate a minimum of $4 million, the level included
    in the President's fiscal year 2013 budget request, each year for the
    next 3 fiscal years to afford the 1994 Institutions the means to
    actively 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 2013 appropriations requests.
                                     ______

          Prepared Statement of the American Phytopathological Society

        The American Phytopathological Society (APS), the premier
    educational, professional, and scientific society dedicated to the
    promotion of plant health and plant disease management for the global
    good, appreciates the opportunity to provide our views on research,
    extension, and education provisions of the fiscal year 2013
    agricultural appropriations bill. The APS believes that now is the time
    to make strategic, additional investments in agricultural science to
    help jumpstart the U.S. economy. Thus, we request the Subcommittee to
    include in the fiscal year 2013 agricultural appropriations bill,
    funding for agricultural science and technology at no less than the
    fiscal year 2012 level for the USDA Agricultural Research Service (ARS)
    and the National Institute of Food and Agriculture (NIFA). We further
    request the Subcommittee to support strategic investments, above the
    fiscal year 2012 funding levels, of $72.9 million for the ARS and NIFA
    as described below:
      --A net increase of $7.9 million for salaries and expenses for the
            USDA Agricultural Research Service, (i.e., funding at not less
            than the President's budget request of $1,102,565,000);
      --A net increase of $4 million for the Food and Agriculture Defense
            Initiative (homeland security) under the Integrated Activities
            account of the National Institute for Food and Agriculture,
            returning the funding to the fiscal year 2010 level of $9.83
            million with the increase divided equally between the National
            Plant Diagnostic Network and the National Animal Health
            Laboratory Network; and
      --A net increase of $61 million (total budget of $325 million) for
            the Agriculture and Food Research Initiative (AFRI) competitive
            grants program of the National Institute for Food and
            Agriculture.
        Agriculture in the United States is highly productive. This
    productivity was achieved because past investments in agricultural
    science led to advances that placed our producers, processors, and
    manufacturers at the cutting edge of agricultural technology. To ensure
    continued safety and security of our food, feed, fiber, and natural
    resources, we believe that science-based solutions to the new
    challenges faced in today's agriculture must be explored and developed.
    Further, our agricultural economy must be protected from devastating
    invasive plant diseases and pests by a robust diagnostic network and
    the development of science based tools and resources. The only way we
    can achieve these solutions is by providing strategic investments in
    agricultural science, extension, and education and to make these
    investments with additional funds and not by reducing funding for other
    essential programs at ARS and NIFA.
        The jobs of 21 million Americans depend on the vitality of the U.S.
    agriculture and food sector. In Ohio, for example, one in seven jobs is
    directly tied to agriculture. For every $1 invested in publicly funded
    agricultural research, a minimum of $20 in economic activity is
    generated. Unfortunately, U.S. Government investments in agricultural
    innovation have been flat in recent years. As a consequence, the
    competitive edge that made the U.S. agricultural research sector the
    envy of the world has declined, and industry is turning to other parts
    of the world for innovation. The decisions made by the Subcommittee
    this year will have far-reaching impacts, the downstream implications
    of decisions made now have far reaching impacts, as the scientific
    research funded today will be responsible for enhancing the Nation's
    agricultural productivity and overall economic prosperity in the
    future.
        While an increase of $100 million would have little impact on the
    NIH or NSF research budgets, a $73 million increase in funding for the
    USDA's ARS and NIFA would be significant in the impact on the Nation's
    economy, generating almost $1.5 billion in economic activity.
        The added funds we are requesting for the Food and Agricultural
    Defense Initiative (Homeland Security) would ensure that we have a
    coordinated network of diagnostic laboratories and experts at land
    grant universities, State departments of agriculture to protect our
    crops from diseases such soybean rust, citrus greening, plum pox virus,
    sudden oak death, Ug99. The slight increase in funding for the ARS
    would support funding for food safety, crop health, and strengthen
    long-term agro-ecosystem research that will be essential for ensuring
    an abundant supply of safe, high quality, food, feed, and fiber during
    periods of changing weather patterns.
        The 23 percent increase in the AFRI competitive grants program
    would provide a much needed boost of funding for fundamental, applied,
    and integrated research and education that will be used to address
    critical gaps in food safety science, particularly those related to
    human pathogens on/in plants and plant associated microbial
    communities. The AFRI funding increase could also expand opportunities
    for scientists broadly trained to meet the needs of the various
    agricultural industries.
        We recognize the difficult challenge facing the Subcommittee.
    However, we believe that investment in science for food and agriculture
    is essential for maintaining the Nation's food, economic, and national
    security. Thank you for this opportunity to present our views.
                                     ______

          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 2013
    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.
        APPA is the national service organization representing the
    interests of over 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 $56 million 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
    the Commodity Futures Trading Commission (CFTC), a $102 million
    increase over fiscal year 2012. As the 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 rulemakings and
    implementation. Given the direct effect the rulemakings will have on
    public power utilities and consumers, APPA is supportive of giving the
    CFTC the resources it needs to complete the rulemakings quickly and
    thoroughly.
                                     ______

          Prepared Statement of the American Society for Microbiology

        The American Society for Microbiology (ASM) is pleased to submit
    the following testimony on the fiscal year 2013 appropriation for food
    safety and science programs at the U.S. Department of Agriculture
    (USDA). The ASM is the largest single life science organization in the
    world with more than 38,00 members.
        The administration's fiscal year 2013 budget for research and
    development (R&D) at USDA would provide $2.6 billion or a 2.7 percent
    increase over the fiscal year 2012 level. There is a proposed increase
    of 23 percent for the USDA's competitive grants program, the
    Agriculture Food and Research Initiative (AFRI), which funds research
    at both USDA facilities and land grant universities. Also increased is
    funding for research in food safety and global food security. The
    budget would increase support for USDA bioenergy research as well, in
    part to develop cellulosic and algae-based biofuels. We strongly
    support these program increases and ask Congress to approve the fiscal
    year 2013 request for these resources necessary to strengthen USDA
    research.
        Agriculture not only ensures a healthy, plenteous food supply, but
    contributes significantly to the economy. Agriculture related
    businesses account for 1-in-12 U.S. jobs. Net farm income is forecast
    to be nearly $92 billion this year. Farms and ranches produce food
    volumes roughly one-third greater than domestic demand, and the U.S.
    export share of the global ag market is usually about 20 percent. In
    2011, exports of agriculture related products reached a record $136.3
    billion, supporting more than 1 million jobs in an economic sector
    where exports outperform imports.
        In 2010, U.S. agriculture generated food products worth $352
    billion, and USDA expects $410 billion for 2011 when market data are
    completed. Higher crop yields, better animal breeding, and new products
    like genetically modified plants are among the many science based
    advances involved in the success of U.S. agriculture. R&D efforts have
    had tangible farm-to-fork results, making U.S. agriculture
    statistically one of the Nation's most productive economic sectors.
    USDA research also improves food safety, helps develop sustainable
    energy, protects animal health, and preserves water quality and the
    environment. USDA personnel depend upon the best available methods and
    tools to accomplish public health goals like decreasing foodborne
    illnesses and crop losses due to microbial pathogens.
    USDA Funding Advances Science-Based Agriculture
        The Agricultural Research Service (ARS) conducts intramural
    research and the National Institute of Food and Agriculture (NIFA)
    distributes grants to colleges and universities for extramural
    research, extension, and education activities. The ARS budget request
    for discretionary funding is $1.103 billion, which is $8 million over
    the fiscal year 2012 enacted level. The NIFA request is $1.244 billion
    or $37 million over fiscal year 2012. Updated science and technology
    like genomic databases are critical to USDA's oversight of the
    agriculture enterprise in this country. For example, one-third of total
    U.S. ag exports are genetically engineered (GE) crops or products from
    these crops, and about 80 percent of processed foods sold in the United
    States contain GE-derived ingredients. Federal regulators test an
    increasing number of samples resulting from food biotechnology; in
    fiscal year 2011 alone, testing increased by approximately 28 percent.
    USDA investigators and educators clearly must access the latest
    information when assessing the safety of our food supply. USDA
    researchers also discover best practice approaches to food production,
    microbial diseases of food animals and plants, and sustainable
    environments. A 2011 report by the Government Accountability Office
    called for stronger efforts by USDA in collecting data on antibiotic
    use in food animals, to better understand the relationship between use
    and pathogens' drug resistance. These science based activities require
    adequate funding each year for USDA R&D programs.
        ARS maintains over 100 facilities in the United States and abroad
    with ongoing studies of optimal ag production, food safety and
    security, and environmental stewardship. ARS scientists are responsible
    for epidemiological studies of pest and disease transmission to protect
    crops. The fiscal year 2013 request identifies new proposed research,
    like the allocation of $7.6 million to develop management tools for
    soil-borne plant pathogens and nematodes. One goal is to identify
    beneficial soil microbes for use as biocontrol tools that stop plant
    pathogens naturally. ARS also will increase capacity at its overseas
    biological control laboratories to find new biocontrol agents for use
    in the United States. Another plant protection program receiving
    increased funding will develop plant varieties inherently resistant to
    infectious diseases. Other researchers would focus on livestock
    protection, such as projects to detect and eliminate tumor and enteric
    viruses in poultry.
        NIFA funds extramural research projects at the States' agricultural
    experiment stations, land grant universities, State-based cooperative
    extension system, and other research and education institutions.
    Federal funds are distributed through grants and other competitive
    awards, and NIFA administers USDA's primary grants program, the
    Agriculture and Food Research Initiative. The ASM supports the fiscal
    year 2013 budget for AFRI of $325 billion, an increase of $60.5
    million. USDA identified priority areas funded in part by this increase
    will be developing better feedstocks for biofuel production, minimizing
    antibiotic resistance transmission among foodborne pathogens, and
    supporting additional graduate student training through the NIFA
    Fellows program.
        Research results reported in the past year are the best argument
    for sufficient USDA R&D funding in fiscal year 2013, illustrating the
    breadth of contributions made by USDA science:
      --ARS scientists found that using Fourier transform infrared-
            attenuated total reflection (FTIR-ATR) spectroscopy can rapidly
            identify citrus plant leaves infected with citrus greening
            disease, faster and cheaper than the current DNA method.
      --Last year, USDA and the U.S. Department of Energy jointly announced
            they will invest up to $30 million over 3 to 4 years to support
            R&D in biofuels, bioenergy, and high-value bio-based products.
            In August, they awarded 10 university grants totaling $12.2
            million to improve the efficiency and cost-effectiveness of
            biofuel and bioenergy crops.
      --ARS molecular biologists are identifying genes in the yeast
            Saccharomyces cerevisiae to improve fermentation of fiber from
            corn, wheat, and other plants into cellulosic ethanol during
            biofuel manufacture. The genes are likely to improve the
            yeast's ability to resist deleterious growth inhibitors created
            during acid pre-treatments.
      --Last year, USDA and the U.S. Agency for International Development
            began construction on a university-associated ARS facility that
            will specialize in breeding wheat varieties resistant to stem
            rust disease, which threatens grain crops worldwide.
      --An ARS procedure developed to improve polymerase chain reaction
            (PCR) methods for detecting plant pathogens has increased test
            sensitivity by 100 to 1,000 fold. Called Bio-PCR, it identified
            the bacterium responsible for Pierce's disease of grapes in 90
            percent of infected samples compared to 13 percent with
            conventional PCR.
      --A team of ARS scientists, screening Starmerella yeast for their
            ability to produce surfactant-like sophorolipids, are
            identifying green alternatives to the currently used petroleum-
            based surfactants in products like detergents and paints.
    USDA Funding Protects the U.S. Food Supply
        One in six Americans becomes sick each year with foodborne
    illnesses that could be prevented. USDA cooperates daily with other
    Federal partners, the Food and Drug Administration (FDA) and the
    Centers for Disease Control and Prevention (CDC) to safeguard the U.S.
    food supply through prevention, public and industry education, site
    inspections and disease outbreak investigations. The fiscal year 2013
    budget for food safety will continue USDA's three part strategy to
    fulfill its food oversight responsibilities: prioritizing prevention,
    strengthening surveillance and enforcement and improving response and
    recovery.
        USDA scientists and inspectors are responsible for some important
    steps in reducing foodborne illness. For example, USDA expects to
    enforce new, stricter Salmonella and Campylobacter standards in turkeys
    and young chickens, which could prevent up to 25,000 human illnesses
    annually. During 2000-2010, the agency helped achieve the national goal
    of reducing E. coli O157 infection rates by 50 percent. In the past 15
    years, the overall rates of six foodborne infections have declined by
    23 percent, according to a 2011 CDC report. Both ARS and NIFA sponsor
    research on safe production, storage, processing, and handling of
    animal and plant products. For instance, ARS microbiologists are
    studying the relationship between cattle feed containing corn
    byproducts of biofuel processing and the persistence of pathogenic E.
    coli on the animals' hides. Other USDA microbiologists are studying
    yeast extracts as an alternative to using antibiotics in organic turkey
    farming.
        The USDA's Food Safety and Inspection Service (FSIS) enforces the
    Federal standards for all meat, poultry, and processed egg products, to
    ensure they are safe, wholesome, and properly labeled and packaged. The
    fiscal year 2013 budget proposes a decrease in FSIS discretionary
    funding: at $996 million, more than $8 million below fiscal year 2012
    and $11 million less than the fiscal year 2011 level. Volumes of
    imported foods are steadily increasing and foodborne illnesses persist
    as major public health threats in the United States. Approximately
    8,400 FSIS employees inspect foods and production methods at more than
    6,200 slaughtering and processing facilities, import houses, and other
    federally regulated entities involved in food production. Their
    workload is daunting: for example, about 40 million cattle inspected
    yearly by FSIS personnel.
    Conclusion
        The ASM encourages Congress to increase the fiscal year 2013 budget
    in support of USDA's science and food safety programs. USDA research in
    multiple agriculture sectors has pervasive impacts on our quality of
    life. The USDA mission reaches far beyond its role in transforming our
    Nation's farms and ranches into highly productive, economically
    important businesses. USDA science protects human and animal health,
    prevents crop losses from disease and climate changes, seeks best
    practices to preserve the environment, encourages innovation in
    valuable agriculture based products and supports new generations of
    agriculture scientists and educators.
                                     ______

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

        The American Society of Agronomy (ASA), Crop Science Society of
    America (CSSA), and Soil Science Society of America (SSSA) represent
    over 18,000 members in academia, industry, and Government, and 13,000
    Certified Crop Advisers. The largest coalition of professionals
    dedicated to the agronomic, crop, and soil science disciplines in the
    United States, ASA, CSSA, and SSSA are dedicated to utilizing science
    in order to meet our growing food, feed, fiber, and fuel needs. We are
    pleased to submit the following funding recommendations for fiscal year
    2013: ASA, CSSA, and SSSA urge the Subcommittee to support a $60
    million increase from fiscal year 2012 for the Agriculture Food
    Research Initiative (AFRI), bringing total funding to $325 million, as
    requested in the President's fiscal year 2013 budget proposal. This
    strong level of funding will enable AFRI to continue to target areas
    that are key to American scientific leadership including: plant health
    and production, food safety, sustainable bioenergy and global food
    security. ASA, CSSA, and SSSA further recommend funding the
    Agricultural Research Service (ARS) at $1.13 billion in fiscal year
    2013 to recognize the essential role of the intramural programs in
    ensuring the safety of our Nation's food system. In addition, ASA,
    CSSA, and SSSA recommend funding the United States Department of
    Agriculture's (USDA) National Institute of Food and Agriculture (NIFA)
    at $1.244 billion (an increase of $37 million over fiscal year 2012) in
    order to maintain continued support for research, education, and
    extension programs. Finally, we support a strong commitment to farm
    bill conservation programs and request that they be funded at levels
    agreed to in the 2008 farm bill to ensure preservation of our Nation's
    essential resources--soil and water.
    Background
        The success of the agriculture and food industry plays a
    significant role in the overall health and security of the U.S.
    economy. In 2010, U.S. farms and ranches spent $288 billion to produce
    goods valued at $369 billion. The value of U.S. food and agriculture
    exports is expected to be more than $140 billion in 2011, creating a
    record trade surplus of $42.5 billion. Furthermore, the jobs of 21
    million Americans depend on the vitality of the U.S. agriculture and
    food sector.
        Investments in publicly funded research are critical for
    maintaining a successful agriculture and food sector. For every $1
    invested in publicly funded agricultural and food research, $20 in
    economic activity is generated. Budgetary decisions made today have
    far-reaching impacts, as the scientific research funded today will be
    responsible for enhancing the Nation's agricultural productivity and
    economic prosperity in the future. A strengthened commitment to
    investments in science for food and agriculture is essential for
    maintaining the Nation's food, economic, and national security.
    Agricultural Research Service (ARS)
        ASA, CSSA, and SSSA applaud the Agricultural Research Services'
    (ARS) ability to respond to and address agricultural problems of high
    national priority. ARS's 2,200 scientists are located at 90+ research
    locations, managing 800 research projects that help solve current and
    future crop and livestock production and protection, human nutrition
    and environmental quality challenges. ARS programs and technologies
    ensure high-quality, safe food and other agricultural products; assess
    the nutritional needs of Americans; help to sustain a competitive
    agricultural economy; enhance the natural resource base and the
    environment; and, provide economic opportunities for rural citizens and
    communities. ARS also forms key partnerships that move new technologies
    to the marketplace.
        These partnerships are especially important to leverage during a
    time when our Nation's economy remains vulnerable and Federal funding
    is constrained. Such cooperative research and development helps foster
    American businesses and enhances the position of the United States as a
    global leader in food, feed, fiber and fuel production.
    Highlighting National Institute of Food and Agriculture Programs (NIFA)
        Agriculture and Food Research Initiative (AFRI).--ASA, CSSA, and
    SSSA strongly endorse funding AFRI at $325 million, which is less than
    half of what is authorized in the Food, Conservation, and Energy Act of
    2008. AFRI is the premier competitive grants program for fundamental
    and applied research, extension and education in support of our
    Nation's food and agricultural systems. Investments in AFRI bolster
    work performed by ARS, America's land grant colleges and universities,
    the private sector and the American farmer.
        Hatch Act Formula Funding.--ASA, CSSA, and SSSA support $236 for
    Hatch Act formula funds. These funds provide research grants to our
    Nation's great land-grant colleges and universities. Any additional
    cuts to academic funding will reduce the ability of our scientists and
    students to conduct imperative research such as developing drought
    resistant wheat varieties.
        Sustainable Agriculture Research and Education Programs (SARE).--
    ASA, CSSA, and SSSA support the President's budget request for SARE at
    $22.7 million. This includes $4.7 million for the Professional
    Development Program and $3.5 million for the creation of a new Federal-
    State Matching Grant SARE Program. SARE directly supports farmer-led
    research and development in practices that, in turn, increase food,
    fuel and fiber sustainability. In 2007, 64 percent of farmer and
    rancher grantees noted that because of an SARE project, they had
    achieved higher sales, and another 79 percent had experienced improved
    soil quality.
        Cooperative Extension System.--Extension forms a critical part of
    research, education and extension program integration, a feature unique
    to NIFA. ASA, CSSA, and SSSA support $294 million for Smith-Lever 3(b)
    and 3(c) to support continuing education and research activities.
    Natural Resources Conservation Service
        ASA, CSSA, and SSSA also support farm bill conservation programs
    that help farmers and ranchers adopt critical conservation practices to
    reduce soil erosion, conserve water, address nutrient management
    concerns and contribute to carbon sequestration. NRCS conservation
    programs are an essential tool to help mitigate and address the
    challenge of producing the food, feed, fuel and fiber needed for a
    growing global population. We urge the Subcommittee to fund these
    programs at levels agreed to in the 2008 farm bill.
    Summary
        A balance of funding mechanisms, including intramural, competitive,
    and formula funding is essential to maintain the capacity of the United
    States to conduct both basic and applied agricultural research, to
    improve crop and livestock quality, and to deliver safe and nutritious
    food products while protecting and enhancing the Nation's environment
    and natural resource base.
        Thank you for your consideration. For additional information or to
    learn more about the ASA, CSSA, and SSSA, please visit
    www.agronomy.org, www.crops.org, or www.soils.org.
                                     ______

            Prepared Statement of the American Society for Nutrition

        The American Society for Nutrition (ASN) appreciates the
    opportunity to submit testimony regarding fiscal year 2013
    appropriations for the U.S. Department of Agriculture (USDA) National
    Institute of Food and Agriculture's Agriculture and Food Research
    Initiative (AFRI) and the USDA Agricultural Research Service (ARS).
    Founded in 1928, ASN is a nonprofit scientific society with more than
    4,500 members in academia, clinical practice, Government and industry.
    ASN respectfully requests $1.2 billion for USDA's Agricultural Research
    Service, and we urge you to adopt the President's request of $325
    million for the Agriculture and Food Research Initiative competitive
    grants program in fiscal year 2013.
    Agriculture and Food Research Initiative
        The USDA has been the lead nutrition agency and the most important
    Federal agency influencing U.S. dietary intake and food patterns for
    years. Agricultural research is essential to address the ever-
    increasing demand for a healthy, affordable, nutritious and sustainable
    food supply. The AFRI competitive grants program is charged with
    funding research, education, and extension grants and integrated
    research, extension, and education grants that address key problems of
    national, regional, and multi-state importance in sustaining all
    components of agriculture. These components include human nutrition,
    farm efficiency and profitability, ranching, renewable energy, forestry
    (both urban and agro forestry), aquaculture, food safety,
    biotechnology, and conventional breeding. AFRI has funded cutting-edge,
    agricultural research on key issues of timely importance on a
    competitive, peer-reviewed basis since its establishment in the 2008
    farm bill. Adequate funding for agricultural research is critical to
    provide a safe and nutritious food supply for the world population, to
    preserve the competitive position of U.S. agriculture in the global
    marketplace, and to provide jobs and revenue crucial to support the
    U.S. economy.
        In order to achieve these benefits, AFRI must be able to advance
    fundamental sciences in support of agriculture and coordinate
    opportunities to build off of these discoveries. Therefore, ASN
    strongly urges you to adopt the President's request of $325 million for
    the Agriculture and Food Research Initiative competitive grants program
    in fiscal year 2013. ASN also strongly supports funding AFRI at the
    fully authorized level of $700 million as soon as practical. Current
    flat and decreased funding for AFRI hinders scientific advances that
    support agricultural funding and research.
    Agricultural Research Service
        The ARS is the Department of Agriculture's lead scientific research
    agency. The ARS conducts research to develop and transfer solutions to
    agricultural problems of high national priority. It is also the job of
    ARS to ensure high-quality, safe food, and other agricultural products;
    assess the nutritional needs of Americans; sustain a competitive
    agricultural economy; enhance the natural resource base and the
    environment; and provide economic opportunities for rural citizens,
    communities, and society as a whole.
        Nutrition monitoring conducted in partnership by the USDA ARS with
    the Department of Health and Human Services (HHS) is a unique and
    critically important surveillance function in which dietary intake,
    nutritional status, and health status are evaluated in a rigorous and
    standardized manner. (ARS is responsible for food and nutrient
    databases and the ``What We Eat in America'' dietary survey, while HHS
    is responsible for tracking nutritional status and health parameters.)
    Nutrition monitoring is an inherently governmental function and
    findings are essential for multiple Government agencies, as well as the
    public and private sector. Nutrition monitoring is essential to track
    what Americans are eating, inform nutrition and dietary guidance
    policy, evaluate the effectiveness and efficiency of nutrition
    assistance programs, and study nutrition-related disease outcomes.
    Because of past funding deficiencies, some food composition database
    entries don't reflect the current food supply, which may negatively
    impact programs and policies based on this information. It is
    imperative that needed funds to update USDA's food and nutrient
    databases and the ``What We Eat in America'' dietary survey, both
    maintained by the USDA ARS, are appropriated to ensure the continuation
    of this critical surveillance of the Nation's nutritional status and
    the many benefits it provides.
        With the growing need for agricultural research to ensure that the
    country is healthy, ARS requires access to sufficient funding.
    Therefore, ASN requests that ARS receive $1.2 billion in fiscal year
    2013. At least $10 million above current funding levels is necessary to
    ensure that the critical surveillance of the Nation's nutritional
    status and the many other benefits ARS provides continue. With such
    funding, the ARS will be able to continue its vision of leading America
    toward a better future through agricultural research and information.
        USDA AFRI and ARS programs are both equally important to the
    nutrition field because together they provide the infrastructure and
    the investigator-initiated, peer-reviewed research that generates new
    knowledge and allows for rapid progress toward meeting national dietary
    needs. These programs allow USDA to make the connection between what we
    grow and what we eat. Through strategic nutrition monitoring, we can
    also learn how dietary intake affects our health.
        Thank you for your support of USDA ARS and AFRI, and thank you for
    the opportunity to submit testimony regarding fiscal year 2013
    appropriations. Please contact John E. Courtney, Ph.D., Executive
    Officer, at jcourtney@nutrition.org, if ASN may provide further
    assistance.
                                     ______

       Prepared Statement of the American Society for the Prevention of
                               Cruelty to Animals

        On behalf of the American Society for the Prevention of Cruelty to
    Animals (ASPCA) and our 2.5 million supporters nationwide, thank you
    for the opportunity to submit this written testimony. Founded in 1866,
    the ASPCA was the first humane organization in North America. Our
    mission, as stated by founder Henry Bergh, is ``to provide effective
    means for the prevention of cruelty to animals throughout the United
    States.'' The ASPCA works to rescue animals from abuse, pass humane
    laws, and share resources with other animal protection groups
    nationwide.
        The fiscal year 2013 Agriculture, Rural Development, Food and Drug
    Administration, and Related Agencies Appropriations bill presents
    opportunities to not only cut unnecessary and wasteful Federal
    spending, but also to ensure that programs to protect animals are being
    effectively implemented. As you craft the fiscal year 2013
    appropriations bill, the ASPCA asks that you please consider the
    following provisions to ensure that Federal funds are being effectively
    and responsibly spent to protect animals.
    Reinstatement of the Ban on Federal Funding for Horse Slaughterhouse
            Inspections
        The fiscal year 2012 Agriculture Appropriations bill failed to
    include a provision that barred Federal funding of USDA inspectors at
    horse slaughter plants in the United States. Added as an amendment to
    the Agricultural Appropriations bill in 2005, the original measure was
    supported by huge, bipartisan votes (69-28 in the Senate and 269-158 in
    the House). Each successive appropriations bill included the provision
    until last year. This provision effectively prevented horse slaughter
    in the United States for human consumption and saved taxpayers up to $5
    million a year. Now that the ban on inspections has been removed, horse
    slaughterhouses could resume operations on American soil, even though
    horsemeat is not sold for human consumption in the United States.
        This is distressing on two counts. First, at a time when Congress
    is cutting funds for many vital programs across the entire Federal
    budget, it is outrageous that taxpayers would be asked to spend $5
    million for something as senseless as horse slaughter. Second, since
    Americans do not eat horsemeat, this action will benefit only foreign
    markets in Asia and Europe, where horsemeat is considered a delicacy.
        Contrary to what some may claim, horse slaughter does not create
    jobs. The last three remaining slaughter plants in the United States
    only created a handful of physically dangerous and low paying jobs. Nor
    is horse slaughter a humane way to end a horse's life. Horses are ill-
    suited for commercial slaughterhouses due to their biology. They often
    endure repeated blows to the head and remain conscious during slaughter
    and dismemberment. The USDA has documented, at length, the cruel
    treatment of horses at domestic slaughterhouses.
        Ending horse slaughter enjoys mainstream, bipartisan support in
    Congress. The American Horse Slaughter Prevention Act, which would
    permanently ban horse slaughter in this country and the export of
    horses for slaughter abroad, has overwhelmingly bipartisan support in
    Congress with 26 cosponsors in the Senate and over 160 in the House.
    Beyond Congress, efforts to end horse slaughter enjoy strong mainstream
    support with the American public. A 2012 poll commissioned by the ASPCA
    and conducted by Lake Research Partners found that 80 percent of
    American voters are opposed to the slaughter of horses for human
    consumption.
        The ASPCA requests that the Committee make the fiscally responsible
    and humane decision to reinstate the ban on Federal funding for horse
    slaughterhouse inspections by the USDA by inserting the following
    language:

        ``None of the funds made available in this Act may be used to pay
    the salaries or expenses of personnel to--
                ``(1) inspect horses under section 3 of the Federal Meat
            Inspection Act (21 U.S.C. 603);
                ``(2) inspect horses under section 903 of the Federal
            Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 1901
            note; Public Law 104-127); or
                ``(3) implement or enforce section 352.19 of title 9, Code
            of Federal Regulations.''
    Maintain or Increase Animal Welfare Act Enforcement Funding for the
            Inspection of Puppy Mills
        One of the functions of the USDA's Animal and Plant Health
    Inspection Service (APHIS) is to ensure the humane care and treatment
    of animals by enforcing the requirements of the Animal Welfare Act of
    1966 (AWA). Included in this mandate is the inspection of large-scale
    commercial dog breeding operations, which prioritize profit over
    welfare. Dogs raised in these facilities, commonly known as puppy
    mills, spend their entire lives in small, crowded cages without
    adequate veterinary care, food, water, and socialization. These dogs
    receive no exercise or basic grooming. To minimize waste cleanup, dogs
    are often kept in cages with wire flooring that injures their paws and
    legs. Because these cages are often stacked, waste falls through wire
    floors onto the animals housed below. Female dogs usually have little
    to no recovery time between bearing litters. When, after a few years,
    they can no longer reproduce, the dogs are often abandoned or killed.
        In 2010, the USDA's Office of the Inspector General (OIG) released
    a report detailing the lax and ineffective enforcement of the AWA for
    puppy mills. In response, the House Appropriations Committee late last
    year, recognizing the importance of inspecting ``problematic dog
    dealers,'' repurposed $4 million for puppy mill inspection enforcement.
    The same OIG report recommended closing a loophole in the AWA that
    exempts from regulation breeders selling directly to customers over the
    Internet. In compliance with that request, the USDA is currently
    drafting regulations that would close that loophole, thereby increasing
    the number of entities regulated and inspected under the AWA. These
    rules will likely be final by 2013 and will require increased funding
    for pre-licensing inspections of these new entities and for continued,
    annual inspections of these breeding facilities once licensed. The
    ASPCA is disappointed that the President's fiscal year 2013 budget
    request includes a reduction in funding for APHIS's AWA enforcement
    from $28 million in the previous year to $25 million. For fiscal year
    2012, Congress approved a 20 percent increase in the USDA's annual
    budget to strengthen inspections and enforcement of the AWA. This is on
    top of $4 million in reprogrammed fiscal year 2011 funds approved in
    October by House Agriculture Appropriations leaders to address
    problematic dog dealers. We encourage the Committee to continue this
    trend of prioritizing AWA enforcement. The ASPCA requests that the
    Committee maintain or increase the previous year's funding for APHIS's
    Animal Welfare Act enforcement, build upon the advancements of last
    year's repurposing of funds, and encourage the USDA to improve its
    inspections of puppy mills.
    Exceed the Statutory Funding Cap for Horse Soring Enforcement
        In addition to enforcing the Animal Welfare Act, APHIS is charged
    with protecting horses through its enforcement of the Horse Protection
    Act (HPA) of 1970. USDA inspectors enforce the HPA by conducting
    surprise inspections at walking horse shows by examining horses for
    soring and the presence of harmful and illegal chemicals. Horse soring
    is a cruel practice in which trainers use painful chemicals and other
    devices to cause such agony to a horse's front limbs that any contact
    with the ground makes the horse quickly jerk up its leg, producing the
    pronounced gait prized by the walking horse industry. Recently, the
    USDA's Office of Inspector General and the U.S. Attorney's Office for
    the Eastern District of Tennessee successfully obtained guilty pleas
    from four individuals arrested for horse soring in Tennessee.
        While the ASPCA applauds these successful prosecutions, in most
    cases the cruelty of horse soring goes unnoticed because USDA officials
    do not have the resources to oversee most shows. In 2011, USDA
    inspectors had the resources to attend just 62 of approximately 700
    walking horse shows nationwide. Other shows were overseen solely by
    inspectors trained and hired by the horse industry itself. Although
    present at only 8-10 percent of shows, USDA inspectors found over 50
    percent of reported violations last year. One of the defendants in the
    recent case in the Eastern District of Tennessee testified that ``every
    Walking Horse that enters into a show ring is sored . . . They've got
    to be sored to walk.'' Clearly the problem is endemic and industry
    self-regulation is not effectively exposing violators. A greater USDA
    presence is necessary to root out the bad actors and hold them
    accountable.
        Since passage of the HPA in 1970, effective USDA enforcement of
    horse soring has been frustrated by a $500,000 statutory funding cap on
    activities under the authority of HPA. Though Congress can choose to
    ignore the cap and fund the program at higher levels, only once, in
    fiscal year 2012, did the Committee choose to do so. If APHIS is to
    eradicate soring, the program must be adequately funded so that it can
    assert a strong and frequent presence at horse shows. It must also have
    proper funding to sample horses for the presence of foreign substances,
    such as those documented in the most recent criminal soring
    prosecutions. Finally, HPA enforcement should not have to rely on lax
    and inadequate industry self-regulation. The agency requires increased
    funding in order to certify independent veterinarians who are not
    biased by their involvement in the walking horse industry. APHIS has
    now begun this process and needs greater resources for the program to
    be effective.
        The President's fiscal year 2013 budget request includes only
    $493,000 for HPA enforcement, which is below the statutory cap and
    below the $696,000 that this Committee provided last year. The ASPCA
    requests that the Committee continue to furnish the USDA with the
    proper resources and continue to exceed the statutory funding cap to
    allow the USDA to properly enforce the Horse Protection Act and prevent
    the cruel practice of horse soring.
    Ensure Proper Enforcement of the USDA Ban on Double-Deck Transport of
            Horses Bound for Slaughter
        Double-deck trailers are dangerous and inhumane when used to
    transport horses. The USDA bans the use of these trailers for horses
    bound for slaughter, stating: ``We do not believe that equines can be
    safely and humanely transported on a conveyance that has an animal
    cargo space divided into two or more stacked levels.'' The USDA's
    Veterinary Services (VS) program is charged with enforcing this
    regulation.
        Double-deck trailers are designed for cattle and other short-necked
    livestock--not horses. Because horses are significantly taller and
    require more head room, these trailers cannot physically provide enough
    space to stand upright, leading to unstable footing, falls, injuries,
    trampling, and death. As long as Congress allows horses to be
    transported and exported for slaughter, VS should take proper steps to
    ensure that horses are not transported in cramped and inhumane double-
    deck trailers during their final journeys. Currently, VS does not
    employ sufficient inspectors in the field or at the border to ensure
    that horses are not being transported to slaughter in double-deck
    trailers.
        The ASPCA requests that the Committee direct Veterinary Services to
    properly and effectively enforce the ban on the use of double-deck
    trailers to transport horses bound for slaughter.
    Defund Licensing and Relicensing of Class B Dealers
        Currently, two types of animal dealers are licensed by the USDA to
    sell animals for research: Class A ``purpose-bred'' dealers and Class B
    ``random source'' dealers. Class A dealers are highly regulated
    businesses that raise their own animals. Class B dealers, on the other
    hand, routinely obtain animals from suppliers with unknown or
    suspicious backgrounds. Many of these suppliers obtain the dogs and
    cats through theft, or by posing as adopters and responding to ``free
    to good home'' advertisements. Class B dealers pay suppliers for each
    animal, creating a financial incentive for individuals to steal pet
    dogs and cats from owners' properties. Class B dealers then sell the
    pets to researchers. As a result, many lost or stolen family pets could
    end up as part of an experiment.
        The USDA spends hundreds of thousands of taxpayer dollars each year
    unsuccessfully trying to regulate Class B dealers. The process is both
    lengthy and time consuming; the USDA must do lengthy ``tracebacks'' to
    try to determine the source of the animals. At one point, the USDA
    estimated that it spent as much as $300,000 to regulate approximately
    10 Class B dealers, or about $30,000 per license. Even so, the
    department acknowledges that it is unable to guarantee that dogs and
    cats are not being illegally acquired for use in experiments. Five of
    the only eight dealers currently in operation are under investigation
    by the USDA, and one was recently indicted on a number of Federal
    charges, including identity theft. Additionally, the inability to
    effectively regulate Class B dealers leads to animals often being kept
    in deplorable and inhumane conditions.
        Removing animals sourced from Class B dealers would have little
    impact on our Nation's research capabilities. In May 2009, a National
    Academies report released on the Class B dealer system concluded that
    ``Class B dealers are not necessary for supplying dogs and cats for
    NIH-funded [National Institutes of Health] research.'' The NIH began
    implementing a pilot program in March 2011 to eliminate the use of
    Class B sourced dogs in favor of other more reputable sources for
    NIHsupported research.
        Since the NIH is already taking steps to phase out the use of
    random sourced animals in research, there is no need or justification
    for the USDA to continue to spend Federal funds to support the inhumane
    and corrupt system of Class B dealers. The Committee has an opportunity
    to not only save tax dollars but to also put an end to its tacit
    endorsement of inhumane and possibly illegal businesses.
        The ASPCA requests that the Committee insert the following language
    to prohibit the USDA from spending funds on new licensing or
    relicensing of Class B Dealers:

        ``Provided, That appropriations herein made shall not be available
    for any activities or expense related to the licensing of new Class B
    dealers who sell live, random source dogs and cats for use in research,
    teaching, or testing, or to the renewal of licenses of existing Class B
    dealers who sell live, random source dogs and cats for use in research,
    teaching, or testing''.
    Defund Wildlife Services' Lethal Predator Control
        The USDA's Wildlife Services (WS) division is a little-known
    Federal agency that uses tax dollars to kill wildlife species
    considered by private landowners and ranchers to be problematic or
    nuisances. Unattended traps and poisons--and even helicopter hunting--
    are all routine features of WS's campaign to kill wildlife. Their work
    is often carried out without oversight, fiscal accountability, or
    public notification. The methods they employ are often indiscriminate
    and ineffective. In some cases, WS traps and poisons have
    unintentionally killed beloved family pets.
        The WS lethal predator control program is a waste of taxpayer
    dollars. Not only does WS provide a subsidized service for private
    landowners, but also its indiscriminate and random targeting of
    predators is not based on sound science. The USDA estimates that it
    spends $10 million on its lethal predator control program. By cutting
    this wasteful and unnecessary program, Congress can ensure that U.S.
    taxpayers will stop subsidizing risky wildlife control methods for the
    benefit of private property owners.
        The ASPCA requests that the Committee act in a fiscally sound and
    humane manner and reduce funding for Wildlife Services Damage
    Management by $10 million.
    Direct APHIS Veterinary Services To Prioritize Twenty-Eight Hour Law
            Enforcement
        Passed in 1873, the Twenty-Eight Hour Law states that animals
    cannot be transported interstate via ``rail carrier, express carrier,
    or common carrier'' for more than 28 hours consecutively without being
    unloaded for rest, food, and water. It was not until 2005 that the USDA
    agreed to extend the statute to interstate truck transport, which
    comprises the overwhelming majority of modern farm animal transport.
    The Twenty-Eight Hour Law is an important protection for livestock, as
    many travel great distances en route to livestock auctions and
    slaughter facilities. However, enforcement of this act is still
    lacking. APHIS Veterinary Services (VS) program is charged with
    enforcing the Federal Twenty-Eight Hour Law. Like its lax enforcement
    of the ban on double-decked trailers for horses bound for slaughter, VS
    has not made enforcement of the Twenty-Eight Hour Law an enforcement
    priority.
        The ASPCA requests that the Committee direct APHIS Veterinary
    Services to prioritize Twenty-Eight Hour Law enforcement.
                                     ______

         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 Agriculture and Food
    Research Initiative (AFRI) of $325 million as well as the requested
    level of the Agricultural Research Service (ARS) at $1.13 billion.
        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.
        Despite the fact that foundational plant biology research--the kind
    of research funded by agencies such as USDA--underpins vital advances
    in practical applications in agriculture, health, energy, and the
    environment, the amount of money invested in understanding the basic
    function and mechanisms of plants is relatively small. In his 2012
    annual letter Bill Gates wrote, ``Given the central role that food
    plays in human welfare and national stability, it is shocking--not to
    mention short-sighted and potentially dangerous--how little money is
    spent on agricultural research.'' \1\ This is especially true
    considering the significant positive impact crop plants have on the
    Nation's economy and in addressing some of our most urgent challenges
    like food and energy security.
    ---------------------------------------------------------------------------
        \1\ http://www.gatesfoundation.org/annual-letter/2012/Pages/home-
    en.aspx.
    ---------------------------------------------------------------------------
        Understanding the importance of these areas and in order to address
    future challenges, ASPB organized the Plant Science Research Summit
    held in September 2011. With funding from the National Science
    Foundation, USDA, Department of Energy, and the Howard Hughes Medical
    Institute, the Summit brought together representatives from across the
    full spectrum of plant science research to identify critical gaps in
    our understanding of plant biology that must be filled over the next 10
    years or more in order to address the grand challenges facing our
    Nation and our planet. The grand challenges identified at the Summit
    include:
      --In order to feed everyone well, now and in the future, advances in
            plant science research will be needed for higher yielding, more
            nutritious varieties able to withstand a variable climate.
      --Innovations leading to improvements in water use, nutrient use, and
            disease and pest resistance that will reduce the burden on the
            environment are needed and will allow for improved ecosystem
            services such as clean air, clean water, fertile soil, and
            biodiversity benefits such as pest suppression and pollination.
      --In order to fuel the future with clean energy--and to ensure that
            our Nation meets its fuel requirements--improvements are needed
            in current biofuels technologies including breeding, crop
            production methods, and processing.
      --For all the benefits that advances in plant science bestow--in food
            and fiber production, ecosystem and landscape health, and
            energy subsistence--to have lasting, permanent benefit they
            must be economically, socially, and environmentally
            sustainable.
        In spring 2012, a report from the Plant Science Research Summit
    will be published. This report will further detail priorities and needs
    to address the grand challenges.
    Recommendations
        Because of our membership's extensive expertise and participation
    in the academic, industry and Government sectors, ASPB is in an
    excellent position to articulate the Nation's plant science priorities
    as they relate to agriculture. Our recommendations are as follows:
      --Since the establishment of NIFA and AFRI, interest in USDA research
            has increased dramatically, a trend ASPB hopes to see grow in
            the future. 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 2013 for
            AFRI, which, although far short of the authorized level of $700
            million, provides sound investment in today's fiscal
            environment.
      --The Agricultural Research Service (ARS) provides vital research to
            serve USDA's mission and objectives and the Nation's
            agricultural sector. The need to bolster ARS efforts to
            leverage and complement AFRI is great given the challenges in
            food and energy security. ASPB is supportive of a strong ARS
            and supports the $1.13 billion request for ARS in fiscal year
            2013.
      --USDA has focused attention in several key priority areas including
            childhood obesity, climate change, global food security, food
            safety, and sustainable bioenergy. Although ASPB appreciates
            the value of such strategic focus, ASPB also emphasizes the
            importance of robust support for AFRI's Foundational Program
            because 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.
      --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 and calls for additional 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 focused on the use of plant
            biomass for energy production. However, if crops are to be used
            to their full potential, extensive 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. Please do not hesitate to contact
    ASPB if we can be of any assistance in the future. For more information
    about the American Society of Plant Biologists, please see
    www.aspb.org.
                                     ______

               Prepared Statement of the Animal Welfare Institute

        Thank you for the opportunity to submit testimony as you consider
    fiscal year 2013 funding priorities. Our testimony addresses the U.S.
    Department of Agriculture's Animal Care Program of the Animal and Plant
    Health Inspection Service, and the Food Safety and Inspection Service.
    AWI has also joined several horse show industry organizations, other
    animal protection groups, and the key association of equine
    veterinarians on a separate statement calling for sufficient funding to
    enable USDA to do a better job enforcing the Horse Protection Act.
    Animal Care/Animal Welfare Act Enforcement/Class B Random Source
            Dealers
        In 1966, Congress passed the Animal Welfare Act (AWA) to prevent
    the mistreatment of animals and to assure families that their pets
    would not be sold for laboratory experiments after an expose revealed
    the widespread theft of pets for that purpose.
        Unfortunately, 46 years later, this is still a problem. Despite the
    well-meaning intent of the AWA and the enforcement efforts of the U.S.
    Department of Agriculture (USDA), the AWA routinely fails both to
    reliably protect pet owners against the actions of Class B dealers who
    sell random source dogs and cats for use in research (also known as
    ``random source'' dealers), and to ensure that these dealers provide
    humane care for the dogs and cats kept on their premises.
        In response to repeated requests from Congress, the National
    Institutes of Health (NIH) funded a study by the National Academy of
    Sciences (NAS) of the use of Class B dogs and cats in NIH-funded
    research. The NAS's 2009 report ``Scientific and Humane Issues in the
    Use of Random Source Dogs and Cats in Research'' describes a
    ``complicated tangle of trade'' in animals sold for use in experiments,
    and notes that ``loopholes in the AWR [Animal Welfare Regulations]
    permit pets to enter the research pipeline via Class B dealers.''
    Furthermore, ``. . . USDA could not offer assurances that pet theft
    does not occur, and agreed that such a crime is exceedingly difficult
    to prove . . .'' That difficulty notwithstanding, the report stated
    that there are ``descriptions of thefts provided by informants in
    prison . . . and documented accounts of lost pets that have ended up in
    research institutions through Class B dealers.'' (p.84)
        [As part of its mandate, the NAS report assessed whether there is a
    scientific rationale for recipients of research grants from NIH to
    purchase dogs and cats from random source Class B dealers. The report
    concluded that there is not.]
        Across the Nation, these random source Class B dealers--and the
    middlemen who work for them, known as ``bunchers''--use deceit and
    fraud to acquire dogs and cats. Their tactics include tricking animals'
    owners into giving away their dogs and cats by posing as someone
    interested in pet adoption, and the outright theft of family pets left
    unattended. The treatment of the animals sold by these random source
    Class B dealers is shocking and cruel. Hundreds of animals are kept in
    squalid conditions and are denied much needed veterinary care. Again,
    the NAS report cited a variety of problems with regard to animal
    welfare and enforcement.
        USDA has had to implement a lengthy and time-consuming enforcement
    protocol for these random source dealers, involving quarterly
    inspections (more than any other licensees) and ``tracebacks,'' in
    order to attempt to verify the source of their animals. While it is
    exceedingly difficult to put a price tag on this exaggerated level of
    oversight, USDA did estimate for the NAS report, at a time when 11
    random source Class B dealers were still in business, that it was
    spending as much as $300,000 per year to regulate that small number of
    dealers. There are now eight dealers left, with one's license still
    suspended and four others under investigation. One dealer who recently
    gave up his license had been indicted on a number of Federal charges,
    including conspiracy, aggravated identity theft, mail fraud, and making
    false statements to a Federal agency.
        Congress, too, has spent an inordinate amount of time reviewing the
    actions of Class B dealers and prodding USDA and NIH to address their
    respective Class B dealer problems. NIH long ago banned its intramural
    researchers from using Class B dealers but had until recently ignored
    Congress' repeated calls for it to do likewise with respect to outside
    researchers.
        As a result of the NAS report, ongoing congressional interest,
    enhanced (but disproportionate to their numbers) oversight by USDA, and
    evaporating demand for their dogs and cats, very few of these dealers
    remain, and with NIH's phased-in ban on the use of Class B dealers by
    its extramural researchers, the Class B dealer system has become a
    cruel and expensive anachronism. Those who continue to operate are an
    unjustifiable drain on USDA's resources. However, as long as it is
    possible to issue and renew licenses for such dealers, there is the
    risk that this anachronism will continue to limp along, wasting
    taxpayer money and perpetuating the inhumane treatment of animals and
    the trade in illegally acquired dogs and cats.
        For this reason, we respectfully request that Congress prohibit any
    further spending by USDA both to grant new licenses and to renew
    existing licenses for Class B dealers selling dogs and cats for
    research purposes by including the following language in the report
    accompanying the fiscal year 2013 agriculture appropriations:

        ``Provided, That appropriations herein made shall not be available
    for any activities or expense related to the licensing of new Class B
    dealers who sell dogs and cats for use in research, teaching, or
    testing, or to the renewal of licenses of existing Class B dealers who
    sell dogs and cats for use in research, teaching, or testing''.

        While this step in and of itself will not immediately save much
    money, it will lead to more significant savings later as USDA's
    enforcement load with respect to these entities is eliminated.
    Food Safety and Inspection Service/Humane Methods of Slaughter Act
            Enforcement
        We appreciate the generous support provided by Congress during the
    past decade for enforcing the Humane Methods of Slaughter Act (HMSA).
    While USDA's enforcement of the law has increased recently, attention
    to the issue remains uneven among Federal regional districts.
        An analysis of Humane Activities Tracking System (HATS) data
    reveals that in calendar year 2010, some USDA districts spent 10-20
    times the number of hours on humane enforcement, per animal
    slaughtered, as other districts. Overall, USDA continues to allot an
    extremely small percentage of its resources to humane slaughter. For
    example, in calendar year 2010, only 0.5 percent of all noncompliance
    records written by FSIS were for humane violations.
        Repeat violators present a major enforcement problem for FSIS. Of
    the 205 federally inspected plants that have been suspended for humane
    slaughter violations since January 1, 2008, 32 percent have been
    suspended more than once within a 1 year period. Moreover, 32 plants
    have been suspended on three or more occasions during the past 4 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 (DVMS) 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
    work load 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. No fewer than 140
    full-time equivalent positions should be employed for purposes
    dedicated solely to inspections and enforcement related to the HMSA. In
    addition, the number of DVMS positions should be increased to a minimum
    of two per district. It is essential that the DVMS role, and humane
    slaughter enforcement overall, not be weakened as a consequence of the
    planned consolidation of FSIS districts. 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.
    Animal Care/Horse Protection Act Enforcement/Requested: $891,000
        We request that you support $891,000 for strengthened enforcement
    of the Horse Protection Act (HPA). Congress enacted the HPA in 1970 to
    make illegal the abusive practice of ``soring,'' by which unscrupulous
    trainers deliberately inflict pain on Tennessee Walking Horses' hooves
    and legs to exaggerate their high-stepping gait and gain unfair
    competitive advantage at horse shows. They use such abominable
    practices as applying caustic chemicals and then using plastic wrap and
    tight bandages to ``cook'' those chemicals deep into the horse's flesh
    for days; attaching heavy chains to slide up and down the horse's sore
    legs; inserting metal screws or other foreign objects into the
    sensitive areas of the hooves; cutting the hooves down to expose the
    live tissue; and using salicylic acid or other painful substances to
    slough off scarred tissue in an attempt to disguise the sored areas.
        A report released in October 2010 by USDA's Office of Inspector
    General documents significant problems with the industry self-
    monitoring system on which the seriously understaffed APHIS inspection
    program relies, recommends its abolition, and calls for funding to
    enable the agency to more adequately enforce the law.
        We greatly appreciate the appropriation last year of $696,000 for
    Horse Protection Act enforcement. Under its historic levels of funding,
    Animal Care inspectors were able to attend only about 10 percent of the
    more than 500 Tennessee Walking Horse shows held annually. Sustained
    support at the requested level of $891,000 will help ensure that this
    program doesn't lose ground now that it is finally beginning to address
    the need for additional inspectors, training, security (due to threats
    of violence against inspectors), and advanced detection equipment
    (thermography and gas chromatography/mass spectrometry machines).
    Horse Slaughter
        In 2006, the U.S. House of Representatives and U.S. Senate
    overwhelmingly approved language that prevented tax dollars from being
    used to inspected horse slaughter facilities. This language remained in
    effect until it was removed in conference last year, despite having
    been approved by the full House Appropriations Committee. Allowing
    horse slaughter to resume will only bring this well-documented abuse to
    U.S. soil at great expense to the horses and the American public.
        Given the financial troubles facing the Nation, we encourage the
    Committee to accept this bipartisan language while the full Congress
    moves to pass a ban on horse slaughter:

        ``None of the funds made available in this Act may be used to pay
    the salaries or expenses of personnel to--
                (1) inspect horses under section 3 of the Federal Meat
            Inspection Act (21 U.S.C. 603);
                (2) inspect horses under section 903 of the Federal
            Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 1901
            note; Public Law 104-127);
                (3) implement or enforce section 352.19 of title 9, Code of
            Federal Regulations;
                (4) promulgate or implement a fee-for-service-based Federal
            horsemeat inspection scheme.''.
                                     ______

                 Prepared Statement of Catholic Relief Services
        On behalf of Catholic Relief Services (CRS) I thank the
    Agriculture, Rural Development, Food and Drug Administration, and
    Related Agencies Subcommittee for this opportunity to testify on fiscal
    year 2013 appropriations under your jurisdiction.
        CRS is the relief and development agency of the U.S. Catholic
    Church. The Catholic Church's social teaching informs the work of CRS
    and our focus on the poorest people in the poorest parts of the world.
    The Church has broad and deep experience combating poverty and CRS has
    direct experience as an implementer of foreign assistance projects for
    almost 70 years, and is currently operating in 100 countries around the
    world. CRS programs address HIV and AIDS, health, education, civil
    society, food security, agriculture, emergency relief, WASH, and peace
    building. The Catholic Church in the United States also has abiding
    relationships and regular contact with the church in developing
    countries, where our worldwide community serves the needs of the
    poorest members of the human family. In fact, CRS counts institutions
    of the local Catholic Church as important local partners in many
    countries, and works through the church's network abroad to reach
    significantly more people, and often in communities inaccessible to the
    local government or other actors.
        CRS acknowledges the difficult fiscal challenges that Congress
    faces, including fulfilling our obligations to future generations. We
    welcome thoughtful efforts to reduce our Nation's deficit and debt. But
    even in this context, the most poor and vulnerable must have adequate
    access to our Nation's limited resources. We therefore urge Congress to
    be fiscally responsible in morally responsible ways. We urge Congress
    and the Subcommittee in particular, not to make cuts to international
    poverty-focused humanitarian relief and development assistance.
        CRS has five specific requests related to the Agriculture
    appropriations that we ask you to consider:
      --CRS is advocating for a reauthorization of Title II of Public Law
            480, the Food for Peace Program, of at least $2 billion per
            year before the Senate and House Agriculture Committees. We
            encourage the Agriculture Appropriations Subcommittee to meet
            our recommended authorized funding levels, but in light of the
            tight fiscal climate, we consider $1.5 billion the absolute
            minimum that should be appropriated to Title II in fiscal year
            2013.
      --Within the amounts appropriated for Title II, CRS requests that the
            Agriculture Appropriations Subcommittee direct a minimum of
            $450 million to development programs, and that the existing
            waiver system safe guarding these funds remain unchanged and
            intact.
      --To make more efficient use of resources, CRS encourages the
            Agriculture Appropriations Subcommittee to direct additional
            Title II funding to cash resources, which we believe will help
            to address the inefficiencies of commodity monetization.
      --Similarly, to make more efficient use of resources, CRS encourages
            the Agriculture Appropriations Subcommittee to direct the use
            of Title II funds toward Local and Regional Procurement (LRP),
            which has proven to be an effective tool in the implementation
            of emergency and development programs under certain
            circumstances.
      --CRS requests that the Agriculture Appropriations Subcommittee
            appropriate $250 million for the McGovern-Dole Food for
            Education Program.
        For the duration of the testimony, I will explain our
    justifications for these requests.
        Title II should be reauthorized for at least $2 billion per year,
    and CRS supports yearly appropriations that match this level, but at
    minimum $1.5 billion should to be appropriated to Title II in fiscal
    year 2013.
        It is estimated that around 100 million people will require
    emergency food assistance \1\ and more than 925 million people will
    continue to suffer from chronic hunger worldwide.\2\ CRS estimates it
    would take more than $12 billion annually to effectively address these
    needs. While this global need exceeds the budgetary constraints of the
    U.S. Government, we believe it is our moral imperative to provide as
    much assistance as we can to the world's poor.
    ---------------------------------------------------------------------------
        \1\ World Food Program USA, Emergency Response, at http://
    usa.wfp.org/advocate/emergency-response, last visited March 21, 2012.
        \2\ United Nations Food and Agriculture Organization, The State of
    Food Insecurity in the World (2010), at 8, available at http://
    www.fao.org/docrep/013/i1683e/i1683e00.htm.
    ---------------------------------------------------------------------------
        Title II has been, and continues to be, the U.S. Government's
    premier mechanism to fight chronic hunger and meet the food needs of
    those in emergency situations. In 2011, Title II funding helped CRS
    respond to the devastating drought and famine in the Horn of Africa
    that affected more than 12 million people.\3\ CRS worked in consortium
    with other international and local organizations to provide life-saving
    food to more than 2 million Ethiopians, while also helping households
    protect productive assets, particularly livestock, which is an
    important source of food and serves as a savings mechanism that is
    available when absolutely necessary.
    ---------------------------------------------------------------------------
        \3\ Drought and Famine in the Horn of Africa, Testimony of
    Assistant Administrator, Bureau for Democracy, Conflict, and
    Humanitarian Assistance, U.S. Agency for International Development
    (USAID), Nancy E. Lindborg, Before the Committee on Foreign Relations
    Subcommittee on African Affairs. Washington, DC. August 3, 2011.
    ---------------------------------------------------------------------------
        Looking ahead to 2012, the Famine Early Warning System has
    predicted food shortfalls in the Sahel region of West Africa for the
    coming year. Much like the Horn of Africa, the Sahel has faced in
    recent years cyclical periods of food deficit due to increasingly
    inadequate rainfall and farmers' unfamiliarity with cultivation
    practices tailored to such dry conditions. CRS's current development
    programs in the region help the poor and vulnerable prepare for
    impending food crises through interventions like dry season market
    gardening projects.\4\ In areas where no development programs exist,
    Title II will likely be needed to fund any potential emergency response
    in the Sahel to meet impending acute food needs. Title II will also
    continue to be a necessary source of funding for other unexpected
    global emergencies stemming from natural disasters and human conflict.
    ---------------------------------------------------------------------------
        \4\ Nancy Lindborg, Assistant Administrator, Democracy, Conflict,
    and Humanitarian Assistance, USAID, Responding Early and Building
    Resilience in the Sahel, The Huffington Post, March 3, 2012, available
    at http://www.huffingtonpost.com/nancy-lindborg/responding-early-and-
    buil_b_1316234.html. The article focuses on a CRS market garden program
    in Burkina Faso that was funded through 2009, and is still in operation
    under its own accord.
    ---------------------------------------------------------------------------
        Within the amounts appropriated for Title II, a minimum of $450
    million should be directed to development programs and the existing
    waiver system protecting these funds should be preserved.
        As mentioned above, more than 925 million people suffer from
    chronic hunger worldwide, yet there are insufficient resources to meet
    these needs. Title II development programming is the primary U.S.
    Government funded program to directly address the underlying causes of
    chronic hunger. These programs distribute U.S. food commodities and use
    complementary programming to address all aspects of food security,
    including agricultural production, health, and nutrition.
        Development programs are designed to promote self reliance, long-
    term sustainability, resilience in poor communities, which in the long-
    run can reduce their need for emergency assistance. For example, in the
    recent drought and famine in the Horn of Africa in 2011, CRS worked
    alongside other aid providers, the U.S. Agency for International
    Development, and the Government of Ethiopia, to implement a national
    Productive Safety Net Program (PSNP). The program, funded in large part
    by Title II development resources, distributed food and cash to the
    most vulnerable, giving communities the means to withstand the
    drought's affects and making more costly emergency assistance
    unnecessary for 7 million Ethiopians.\5\
    ---------------------------------------------------------------------------
        \5\ Nancy Lindborg, Assistant Administrator, Democracy, Conflict,
    and Humanitarian Assistance, USAID, Building Resilience in the Horn of
    Africa, USAID IMPACT blog, Dec. 19, 2011, available at http://
    blog.usaid.gov/2011/12/building-resilience-in-the-horn-of-africa/.
    ---------------------------------------------------------------------------
        The United States response to chronic hunger through Title II
    continues to be disproportionately low compared to the need, and
    compared to resources provided for emergencies. Prior to the 2008 farm
    bill, 75 percent of Title II resources were allocated to development
    programs, but a weak waiver system allowed these resources to be
    diverted for emergencies. Ultimately, development program funding
    during this period was whittled down to only a small fraction of
    overall Title II funding. To address this siphoning of development
    funding, the 2008 farm bill authorized specific funding levels each
    fiscal year \6\ and established a stronger waiver mechanism.\7\ Both of
    these additions have greatly aided development programming by ensuring
    a reliable funding source, and are generally referred to as the
    ``safebox.''
    ---------------------------------------------------------------------------
        \6\ 7 U.S.C. Sec. 1736f(e)(1).
        \7\ This waiver requires following to occur before funds protected
    by the development safebox can be used for emergencies: (1) the
    President to determine that an extraordinary food emergency exists; (2)
    resources from the Bill Emerson Humanitarian Trust be exhausted; and
    (3) the President has to submit a request for additional appropriations
    to Congress equal to the reduction in the safe box and Emerson Trust.
    See, 7 U.S.C. Sec. 1736f(e)(2).
    ---------------------------------------------------------------------------
        It is critical that development programs have steady and reliable
    funding because they require a multiyear approach to achieve a
    sustainable impact on chronic hunger. When funding levels shift
    dramatically from year to year, it is hard to ensure program
    objectives, like improved agricultural production or behavior changes
    around nutrition practices, are met. Funding for development programs
    should remain consistent with recent authorized and appropriated
    amounts. CRS therefore requests that the Subcommittee direct $450
    million to development programs in fiscal year 2013, the same level
    authorized in fiscal year 2012. Furthermore, CRS requests that the
    Subcommittee protect the integrity of the safebox by maintaining the
    current waiver provision. We believe it is a common sense approach to
    ensuring development funding is not siphoned off for emergencies unless
    other emergency funding sources have been exhausted.
        To make more efficient use of resources, CRS encourages the
    Agriculture Appropriations Subcommittee to consider making more cash
    resources available within Title II funding.
        Improving food security requires more than just food. Essential
    complementary activities in development programs ensure that gains made
    by food distribution programs can be sustained.\8\ For example, some
    development programs provide new mothers with nutrition and sanitation
    education so that good health practices continue even after programs
    are completed. Programs also distribute food in exchange for community
    work. These programs contribute to long-term food security by building
    roads for better access to markets and by digging irrigation systems to
    grow crops.
    ---------------------------------------------------------------------------
        \8\ Bonnard, P., et al. Report of the Food Aid and Food Security
    Assessment: A Review of the Title II Development Food Aid Program
    (2002).
    ---------------------------------------------------------------------------
        Complementary programs require cash funding to acquire basic inputs
    such as tools, seeds, and building materials, as well as to hire
    technical staff to train, mentor and support beneficiaries. However,
    Title II does not provide cash funding to cover these expenses. Rather,
    implementers like CRS engage in the practice of monetization, which is
    the sale of U.S. in-kind food donations abroad to generate proceeds
    that go to pay for program costs. Monetization is considered an
    inefficient mechanism to pay for development programs because the costs
    incurred to buy, ship, and sell U.S. commodities overseas are often
    greater than the proceeds raised. In the absence of cash resources, CRS
    values the use of monetization to support program activities, but to
    address the inefficiencies of monetization CRS believes more cash
    resources should be made available within Title II, which can be used
    to fund the necessary complementary activities that are vital in
    development programming.
        One option to increase cash resources is to increase funding
    available under the existing 202e provision of Title II, and broaden
    the allowable uses of this funding source. Under the current
    authorization of the farm bill, 202e permits up to 13 percent of Title
    II funding to be provided in cash and used for a discrete set of
    purposes related to program implementation.\9\ However, the limitations
    placed on the use of 202e hamstring the ability of this mechanism to
    provide necessary flexibility in program budgets. The Committee could
    address this by expressly directing additional Title II funding to be
    used for 202e, and allowing 202e to cover any type of program cost. If
    the Agriculture Appropriations Subcommittee pursued this course, CRS
    recommends that appropriations directed to 202e should be to up to 25
    percent of overall Title II funding. Further, other options for
    providing additional cash resources do exist, and CRS would be happy to
    discuss these with the Subcommittee.
    ---------------------------------------------------------------------------
        \9\ 7 U.S.C. 1721(e)(1).
    ---------------------------------------------------------------------------
        To make more efficient use of resources, CRS encourages the
    Agriculture Appropriations Subcommittee to consider allowing the use of
    Local and Regional Procurement (LRP) as a tool to implement emergency
    and development programs under Title II.
        The 2008 farm bill authorized a small 5-year pilot program for
    Local and Regional Procurement (LRP) of food assistance.\10\ Recent
    analysis conducted through Cornell University and implementing
    organizations demonstrates that program activities undertaken as part
    of the pilot can be cost-efficient, effective in saving lives during
    emergencies, and enables communities to improve long-term food security
    through development activities.\11\ More specifically, the pilot showed
    that LRP can save money, varying by commodity, with the most cost
    savings at 53 percent for cereals when compared to U.S. commodities.
    LRP can also save time, reducing the transportation costs relative to
    U.S. in-kind shipments by an average of 13.8 weeks. Further, several
    development LRP interventions funded through the pilot program showed
    that LRP has multiple potential benefits, including linking smallholder
    food producers to markets, building local capacity for food processing,
    milling and fortification, and expanding availability and access to
    highly nutritious foods.\12\
    ---------------------------------------------------------------------------
        \10\ Currently USAID provides a limited level of assistance for
    local and regional purchase in emergencies through the Emergency Food
    Security Program funded in the International Disaster Assistance (IDA)
    Account. Unlike the LRP Pilot Program, IDA funded LRP cannot be used
    for non-emergency purpose.
        \11\ Erin C. Lentz, Christopher B. Barrett, and Miguel I. Gomez,
    ``The Impacts of Local and Regional Procurement of U.S. Food Aid:
    Learning Alliance Synthesis Report, ``Final Report: A Multidimensional
    Analysis of Local and Regional Procurement of U.S. Food Aid,'' January
    2012, available at http://dyson.cornell.edu/faculty_sites/cbb2/papers/
    LRP%20Ch%201%20Lentz%20et%20al%2011Jan2012Update.pdf. Formally, this
    collaboration was known as the Local and Regional Procurement (LRP)
    Learning Alliance, which began as a collaboration among organizations
    implementing LRP programs (Catholic Relief Services, Land O'Lakes,
    Mercy Corps, World Vision) and Cornell University, to monitor and
    analyze the market impacts of LRP. Since the closing of the LRP Pilot
    Program, the Learning Alliance continues to work on knowledge sharing
    to improve the efficacy of LRP as a whole, and has welcomed other LRP
    implementers, including Fabretto Children's Foundation, International
    Relief and Development, ACDI/VOCA, CARE and the United Methodist
    Committee on Relief.
        \12\ At present, food assistance programs authorized through the
    farm bill allow implementing partners to purchase enriched, nutritious
    products only if they are produced in the United States. By supporting
    the development and production of locally procured foods, including
    those used for therapeutic and targeted feeding programs, LRP can
    address this gap.
    ---------------------------------------------------------------------------
        CRS's LRP pilot program in Mali successfully integrated into an
    existing school feeding initiative, and realized cost savings of 46
    percent for peas and 62 percent for grains. In our program, LRP was
    also timely by having food available at the beginning of the school
    year. The program also had noteworthy developmental impacts; for
    instance, through farmer field trainings, the program improved local
    production and storage of harvests, and by purchasing locally sourced
    foods the program helped develop a source for locally led school
    feeding programs in the future.
        The evidence to date demonstrates that LRP can have significant
    benefits, though it also shows that LRP isn't necessarily appropriate
    in all situations. The context of any food crisis should frame the
    decision of which food assistance tool should be used. We simply
    encourage the Agriculture Appropriations Subcommittee to allow LRP
    programming to be used as a tool within Title II, so that LRP can,
    where appropriate, achieve cost savings in some Title II programs.
        CRS requests that the Agriculture Appropriations Subcommittee
    appropriate at minimum $250 million for the McGovern-Dole Food for
    Education Program.
        The McGovern Dole Food for Education (FFE) program supports
    education, child development, and food security initiatives for some of
    the world's poorest children through donations of U.S. food
    commodities, as well as financial and technical assistance for school
    feeding and nutrition projects. FFE has successfully increased school
    enrollment by feeding school children. CRS recently implemented a FFE
    program in Mali, serving 45,000 individuals over 3 years. In this
    program more than 5 million meals, as well as vitamins and medications,
    were distributed among 120 schools. Our program increased school
    enrollment in targeted communities for boys from 26 percent to 32
    percent and for girls from 39 percent to 55 percent. As education and
    nutrition are inextricably linked to a promising future for all
    children, CRS requests $250 million be appropriated for the FFE
    program. By targeting the most poor and vulnerable early in their
    lives, we hope to curb their need for U.S. assistance in the future.
        Thank you for your many years of partnership with CRS and for this
    opportunity to reiterate our values and report back to you on our
    experiences.
                                     ______

     Prepared Statement of the Colorado River Basin Salinity Control Forum

        Waters from the Colorado River are used by approximately 35 million
    people for municipal and industrial purposes and used to irrigate
    approximately 4 million acres in the United States. Natural and man-
    induced salt loading to the Colorado River creates environmental and
    economic damages. The U.S. Bureau of Reclamation (BOR) has estimated
    the current quantifiable damages at about $300 million per year.
    Congress authorized the Colorado River Basin Salinity Control Program
    (Program) in 1974 to offset increased damages caused by continued
    development and use of the waters of the Colorado River. Modeling by
    BOR indicates that the quantifiable damages would rise to more than
    $500 million by the year 2030 without continuation of the Program. The
    USDA portion of the Program, as authorized by Congress and funded and
    administered under the Environmental Quality Incentives Program (EQIP),
    is an essential part of the overall effort. A funding level at
    approximately $18 million annually is required to prevent further
    degradation of the quality of the Colorado River and increased
    downstream economic damages.
        Congress concluded that the Colorado River Basin Salinity Control
    Program should be implemented in the most cost-effective way. The
    Program is funded under EQIP, the U.S. Bureau of Reclamation'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,
        Congress authorized a program for the United States Department of
    Agriculture (USDA) through amendment of the Colorado River Basin
    Salinity Control Act (Act) in 1984. With the enactment of the Federal
    Agriculture Improvement and Reform Act of 1996 (FAIRA), Congress
    directed that the Program should continue to be implemented as part of
    the newly created Environmental Quality Incentives Program. Since the
    enactment of the Farm Security and Rural Investment Act (FSRIA) in
    2002, there have been, for the first time in a number of years,
    opportunities to adequately fund the Program within EQIP. In 2008,
    Congress passed the Food, Conservation and Energy Act (FCEA). The FCEA
    addressed 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.
        The Program, as set forth in the act, is to benefit Lower Basin
    water users hundreds of miles downstream from salt sources in the Upper
    Basin as the salinity of Colorado River water increases as the water
    flows downstream. There are very significant economic damages caused
    downstream by high salt levels in the water source. There are also
    local benefits from the Program in the form of soil and environmental
    benefits, improved water efficiencies and lower fertilizer and labor
    costs. Local producers 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 the act that
    provides that the seven Colorado River Basin States will also cost
    share with the appropriated funds for this effort. This has brought
    together a remarkable partnership.
        After longstanding urgings from the States and directives from
    Congress, 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 1,400 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 specific 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
    the Program. The Colorado River Basin Salinity Control Forum (Forum)
    appreciates the efforts of NRCS leadership and the support of this
    Subcommittee. Colorado River water quality standards have been prepared
    by the Forum, adopted by the States, and approved by the United States
    Environmental Protection Agency (EPA). The Forum has taken the position
    that funding for the EQIP portion of the Program should be consistent
    with the 3-year funding plan submitted by the three NRCS State
    Conservationists for Colorado, Utah and Wyoming. This amount for 2013
    is $18 million and includes both farm and technical assistance. Over
    the last few fiscal years, funding has reached the needed level. State
    and local cost-sharing is triggered by the Federal appropriation. In
    fiscal year 2013, it is anticipated that the States will cost share
    with about $7.7 million and local agriculture producers will add about
    $5.5 million. Hence, it is anticipated that in fiscal year 2013 the
    State and local contributions will be about 42 percent of the total
    cost. The Basin States have cost sharing dollars available to
    participate in funding on-farm salinity control efforts. The
    agricultural producers in the Upper Basin are waiting for their
    applications to be considered so that they might improve their
    irrigation equipment and also cost share in the Program, and
    specifically for the USDA portion of the effort which was added by
    amendments to the act in 1984. 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.
        The Forum is composed of gubernatorial appointees from Arizona,
    California, Colorado, Nevada, New Mexico, Utah and Wyoming. The Forum
    is charged with reviewing the Colorado River's water quality standards
    every 3 years. In so doing, it adopts a Plan of Implementation
    consistent with these standards. The level of appropriation requested
    in this testimony is in keeping with the adopted Plan of
    Implementation. 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 salt in the River cause approximately $300
    million in quantified damages and significantly more in unquantified
    damages in the United States and result in poor water quality for
    United States users. 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.
        Over the years, NRCS personnel have developed a great working
    relationship with farmers within the Basin. Maintaining salinity
    control achieved by implementation of past practices requires
    continuing education and technical assistance from NRCS personnel.
    Additionally, technical assistance is required for planning and design
    of future projects. Last, the continued funding for the monitoring and
    evaluation of existing projects is essential to maintaining the
    salinity reduction already achieved.
        In summary, implementation of salinity control practices through
    EQIP has proven to be a very cost effective method of controlling the
    salinity of the Colorado River and is an essential component to the
    overall Colorado River Basin Salinity Control Program. Continuation of
    EQIP with adequate funding levels will prevent the water quality of the
    River from further degradation and significantly increased economic
    damages to municipal, industrial and irrigation users.
                                     ______

          Prepared Statement of the Colorado River Board of California

        This testimony is in support of funding for the U.S. Department of
    Agriculture (USDA) and its on-farm Colorado River Basin Salinity
    Control Program (Program) for fiscal year 2013. This program has been
    carried out through the Colorado River Basin Salinity Control Act
    (Public Law 93-320) (Act), since it was enacted by Congress in 1974.
    Further, with the enactment of the Federal Agricultural Improvement and
    Reform Act (FAIRA) in 1996 (Public Law 104-127), Congress directed that
    the Program should continue to be implemented as one of the components
    of the Environmental Quality Incentives Program (EQIP). Finally,
    Congress passed the Food, Conservation, and Energy Act (FCEA) in 2008,
    that addressed the cost-sharing required from the Basin Funds, and
    redesignated the cost-sharing requirement as the Basin States Program
    (BSP). Currently, the BSP provides approximately 30 percent of the
    total amount that will be spent each year by the combined EQIP and BSP
    efforts.
        The Salinity Control Program benefits both the Upper Basin water
    users through more efficient water management and the Lower Basin water
    users, through reduced salinity concentration of Colorado River water.
    For example, California's Colorado River water users continue to suffer
    economic damages in the hundreds of million of dollars per year due to
    the current salinity of the Colorado River.
        The Colorado River Board of California (Colorado River Board) is
    the State agency charged with protecting California's interests and
    rights in the water and power resources of the Colorado River system.
    In this capacity, California participates along with the other six
    Colorado River Basin States through the Colorado River Basin Salinity
    Control Forum (Forum), the interstate organization responsible for
    coordinating the Basin States' salinity control efforts. In close
    cooperation with the U.S. Environmental Protection Agency (EPA) and
    pursuant to requirements of the Clean Water Act (Public Law 92-500),
    the Forum is charged with reviewing the Colorado River's water quality
    standards every 3 years. The Forum adopts a Plan of Implementation
    consistent with these water quality standards. The level of
    appropriation being supported in this testimony is consistent with the
    Forum's 2011 Plan of Implementation. If adequate funds are not
    appropriated, significant damages associated with increasing salinity
    concentrations of Colorado River water will become more widespread in
    the United States and Mexico.
        Currently, the salinity concentration of Colorado River water
    causes about $300 million in quantifiable damages in the United States
    annually. Economic and hydrologic modeling by U.S. Bureau of
    Reclamation (Reclamation) indicates that the quantifiable damages could
    rise to more than $500 million by the year 2030 without the
    continuation of the Salinity Control Program as identified in the 2011
    Plan of Implementation. For example, salinity damages occur from:
      --A reduction in the yield of salt-sensitive crops and increased
            water use for leaching in the agricultural sector;
      --A reduction in the useful life of galvanized water pipe systems,
            water heaters, faucets, garbage disposals, clothes washers, and
            dishwashers, and increased use of bottled water and water
            softeners in the household sector;
      --An increase in the use of water for cooling, and the cost of water
            softening, and a decrease in equipment service life in the
            commercial sector;
      --An increase in the use of water and the cost of water treatment,
            and an increase in sewer fees in the industrial sector;
      --A decrease in the life of treatment facilities and pipelines in the
            utility sector;
      --Difficulty in meeting wastewater discharge requirements to comply
            with National Pollutant Discharge Elimination System permit
            terms and conditions, and an increase in desalination and brine
            disposal costs due to accumulation of salts in groundwater
            basins, and fewer opportunities for recycling due to
            groundwater quality deterioration; and
      --Increased use of imported water for leaching and the cost of
            desalination and brine disposal for recycled water.
        In recent fiscal years, the Natural Resources Conservation Service
    (NRCS) has directed that about $18 million of EQIP funds be used for
    the Salinity Control Program. The Colorado River Board respectfully
    urges the Subcommittee to support funding for the Colorado River Basin
    Salinity Control Program for fiscal year-2013 at least at this level.
        The Forum has taken the position that funding for the Program
    should be consistent with the 3-year funding plan submitted by the
    three NRCS State Conservationists for Colorado, Utah and Wyoming. The
    NRCS funding plan for 2013 is $18 million and includes both farm and
    technical assistance program elements. It should also be pointed out
    that State and local cost-sharing is triggered by Federal
    appropriations. In fiscal year 2013, it is anticipated that the States
    will cost-share with about $7.7 million and that local agriculture
    producers will add another $5.5 million. Consequently, it is
    anticipated that the fiscal year 2013 State and local contributions are
    expected to be approximately 42 percent of the total Program costs.
        In conclusion, the Colorado River Board of California recognizes
    that the Federal Government has made significant commitments to the
    seven Colorado River Basin States with regard to the delivery of
    Colorado River water. In order for those commitments to continue to be
    honored, it is essential that Congress continue to provide funds to the
    USDA to allow it to provide needed technical support to agricultural
    producers for addressing salinity control activities in the Colorado
    River Basin. Over the past 28 years, the Colorado River Basin Salinity
    Control program has proven to be a very cost-effective and
    collaborative approach to help mitigate the impacts of the salinity of
    Colorado River water. Continued Federal funding of the USDA elements of
    this important Basin-wide program is essential to maintaining this
    effort.
                                     ______

                Prepared Statement of Colorado State University

        Mister Chairman, Ranking Member and Members of the subcommittee,
    thank you for the opportunity to submit testimony for the record. I am
    writing to share my concerns regarding a recently recognized fungal
    canker disease that poses an enormous economic and ecological risk to
    our Nation's walnut resources. Over the past decade, thousand cankers
    disease (TCD) has caused the death of thousands of black walnut trees
    in nine western States (Arizona, California, Colorado, Idaho, Oregon,
    New Mexico, Tennessee, Utah, and Washington) and recently has been
    discovered in Tennessee, Virginia and Pennsylvania. The negative
    economic impacts of TCD are felt by our Nation's timber, nut and
    nursery producers, furniture manufacturers, and private landowners.
    While States are attempting to stop the spread of TCD through surveys
    and quarantines, greater Federal oversight and funding are needed. I
    request dedicated funding be allocated to the U.S. Department of
    Agriculture's Plant Protection and Early Detection and Rapid Response
    programs for fiscal year 2013 for the study and management of TCD.
    What is TCD?
        TCD results from the combined activity of a fungus (Geosmithia
    morbida) and the walnut twig beetle (Pityophthorus juglandis). As the
    beetle moves through a tree's twigs, branches and main stem it creates
    galleries beneath the bark of the branches and introduces the fungal
    spores. Numerous cankers develop and disrupt the flow of nutrients
    throughout the tree. Over time the tree is unable to store and move
    nutrients and starves. The most likely pathway for transmission of TCD
    is through the movement of raw wood (logs, firewood, stumps, burls and
    wood packaging materials) with bark attached. It is not known whether
    transmission to the eastern United States occurred through natural
    dispersal or by human transport of twig beetle infested walnut
    products.
    Need for Greater Federal Funding and Oversight
        At the Federal level, pests and diseases similar to TCD are
    addressed by the USDA's Animal and Plant Health Inspection Service
    (APHIS) and the U.S. Forest Service (USFS). Within APHIS, the Plant
    Protection and Quarantine (PPQ) program is primarily responsible and
    has the regulatory authority for all pests coming to the Nation's
    borders and the interstate movement of regulated pests. The USFS
    oversees the Early Detection and Rapid Response (EDRR) program, which
    detects new invasive species infestations and support the
    infrastructure necessary to rapidly contain or eradicate these
    infestations.
        To date, USDA has provided some funding and technical assistance
    for TCD, mainly through fiscal year 2010 farm bill funding for survey,
    detection and mitigation methods. However, it has not identified TCD as
    an actionable pest as was done with the emerald ash borer and Asian
    long horned beetle and it has determined that Federal regulatory
    oversight of TCD would be challenging due to the interstate movement of
    products, poor detection capability and the widespread distribution of
    the disease. I believe that it is for these reasons that greater
    Federal oversight and funding is needed.
    Funding Needs
        Funding for basic research to study the life history, biology and
    behavior of the walnut twig beetle and the fungus is needed and would
    inform and improve management of the disease. Examples of priority
    research needs include developing an effective lure for the walnut twig
    beetle, the development of data and maps that would inform where the
    pest is most likely to migrate, and evaluating methodologies on
    survival of the insect and the pathogen after debarking and kiln drying
    or other treatments.
        I thank the committee for this opportunity to provide testimony on
    this important subject. Please do not hesitate to contact me/us if you
    should require additional information.
                                     ______

       Prepared Statement of Copperhead Hill Ranch--John A. and Karen M.
                                Buchanan, Owners

        Mister Chairman, Ranking Member and Members of the subcommittee,
    thank you for the opportunity to submit testimony for the record. I am
    writing to share my concerns regarding a recently recognized Thousand
    Cankers Disease (TCD) that poses an enormous economic and ecological
    risk to our Nation's black walnut resources. Over the past decade, TCD
    has caused the death of millions of black walnut trees in nine western
    States (Arizona, California, Colorado, Idaho, Oregon, New Mexico,
    Nevada, Utah, and Washington) and recently has been discovered in the
    native walnut range (Tennessee, Virginia and Pennsylvania). The USDA-
    APHIS has estimated the standing value of walnut timber as being $539
    billion. This does not include potential loss of: Jobs related to
    logging, transportation, and domestic milling; derivatives of the
    domestic milling industry to make veneer and lumber for furniture,
    cabinetry, paneling, flooring, and gun stocks; export market accounts
    for about 60 percent of the harvested logs; and nuts are shelled into
    nutmeats and the shells are processed for many industrial uses.
        The negative economic impacts of TCD will be felt by private
    landowners with immature walnut timber and by home owners with millions
    of walnut trees in residential areas of the Midwest and Eastern States.
    It will be any ugly site and very expensive to safely remove all the
    walnut trees as they succumb to TCD over the next couple of decades if
    this disease is not contained, suppressed, and locally eradicated.
    Research efforts to date have been limited to monitoring, ecological
    studies of the walnut twig beetle, epidemiology of the fungal pathogen,
    and development of phyto-sanitation treatment of walnut logs harvested
    in quarantined areas. Insecticide and fungicide application is not
    feasible or practical as a means of controlling the spread of TCD.
    Development of biological insect control of the walnut twig beetle is
    expected to be the most effective and feasible technique in stopping
    the advancement of TCD through the native range of black walnut.
        While States are attempting to stop the spread of TCD through
    surveys and quarantines, greater Federal assistance and funding are
    needed. I request dedicated funding be allocated to the USDA-ARS for
    leadership in the development of biological insect control techniques
    of the walnut twig beetle and to the USDA-FS for continued efforts in
    monitoring for TCD for fiscal year 2013.
    What is TCD?
        TCD is a recently recognized disease in which a tiny walnut twig
    beetle (Pityophthorus juglandis) spreads a fungal organism (Geosmithia
    morbida) that causes cankers under the bark which prevents nutrient
    flow to the foliage leading to dieback of branches and ultimately death
    to the tree. While the walnut twig beetle advances only a mile or two
    per year, humans are the vector that spread TCD great distances within
    days by hauling walnut slabs with fresh bark attached that harbor the
    tiny beetles and fungal spores. Such shipments are believed to be the
    reason TCD moved into the native walnut range from the western States.
    Movement of firewood, logs, stumps, and burls with fresh bark attached
    can spread the disease great distances.
    Need for Greater Federal Funding and Specific Directives
        The USDA-APHIS considers both the walnut twig beetle and the fungal
    pathogen to be indigenous to the USA (historical evidence shows them to
    reside on a different walnut species in Arizona and New Mexico). Since
    neither is considered exotic to the USA, APHIS is not productively
    serving any role in combating TCD.
        Federal funding needs to be directed to the USDA-ARS to lead
    research and development of techniques that will contain, suppress, or
    potentially locally eradicate the walnut twig beetle. Additional
    funding needs to be directed to the USDA-FS for continued effort in
    monitoring and development of phyto-sanitization treatment of walnut
    logs harvested in quarantined areas.
        I thank the committee for this opportunity to provide testimony on
    this important subject. Please do not hesitate to contact me if you
    should require additional information.
                                     ______

              Prepared Statement of the Cystic Fibrosis Foundation

        On behalf of the Cystic Fibrosis Foundation and the approximately
    30,000 people with cystic fibrosis (CF) in the United States, we are
    pleased to submit the following testimony to the Senate Appropriations
    Subcommittee on Agriculture, Rural Development, Food and Drug
    Administration, and Related Agencies requesting sufficient funding for
    the Food and Drug Administration in fiscal year 2013. This testimony
    urges the Committee to provide the Food and Drug Administration the
    funding it needs to quickly and efficiently review treatments for CF
    and other rare diseases and encourages the FDA to reach out on a more
    systematic basis to outside experts early in the drug development
    process. Additionally, the CF Foundation urges the Committee to support
    collaborative efforts by the FDA and the National Institutes of Health,
    such as the Regulatory Science Initiative and the FDA-NIH Joint
    Leadership Council. Collaboration between the NIH and FDA has the
    potential to help move innovative new drugs more quickly through the
    development process and into the hands of patients.
        In particular, the Foundation wishes to commend the speed with
    which the FDA approved KalydecoTM, a breakthrough treatment
    for cystic fibrosis that is the first to address the underlying genetic
    cause of the disease for 1,200 people with CF who carry a specific
    genetic mutation. The agency reviewed and approved Kalydeco's New Drug
    Application in only 3 months--one of the fastest approvals of any drug
    in the history of the agency. The speed with which this review was
    conducted is a testament to the FDA's commitment to collaboration with
    Vertex Pharmaceuticals, Kalydeco's developer, and the Cystic Fibrosis
    Foundation, as well as its commitment to the patients who are already
    benefiting from the drug. The science behind Kalydeco has opened
    exciting new doors to research and development that may eventually lead
    to a cure for all people living with CF.
    About Cystic Fibrosis
        Cystic fibrosis is a life-threatening genetic disease for which
    there is no cure. People with CF have two copies of a defective CFTR
    gene, which causes the body to produce abnormally thick, sticky mucus
    that clogs the lungs and results life-threatening lung infections. This
    mucus also obstructs the pancreas, preventing pancreatic enzymes from
    assisting in the breakdown of food and the absorption of nutrients.
        The mission of the Cystic Fibrosis Foundation is to find a cure for
    cystic fibrosis and improve the quality of life for people living with
    the disease. This is accomplished by funding life-saving research and
    working to provide access to quality care and effective therapies for
    people with CF. Through the Foundation's efforts, the life expectancy
    of a child with CF has doubled in the last 30 years. Although real
    progress toward a cure has been made, the lives of young people with CF
    are still cut far too short.
        The promise for people with CF lies in research. The CF Foundation
    has raised and invested hundreds of millions of dollars in private
    money to help develop CF drugs and therapies and nearly every CF drug
    available today was made possible because of the Foundation's support.
    The Foundation accredits a nationwide network of over 110 CF care
    centers that has been widely recognized as a national model for
    specialized treatment of a disease.
    Sustaining Funding for Rare Disease Drug Review at the FDA
                Funding for Rare and Orphan Disease Drug Review
        In order to encourage swift review of drugs for CF and other rare
    diseases, we urge the Committee to recommend sufficient funding for the
    Food and Drug Administration, particularly the Center for Drug
    Evaluation and Research (CDER)'s Office of New Drugs, in fiscal year
    2013.
        To be effective, the FDA needs an adequate number of reviewers with
    the appropriate skills and expertise to evaluate therapies for rare
    diseases like cystic fibrosis. Additional support for the FDA through
    increased funding not only ensures 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 therapies that treat small
    populations and serve specific unmet medical needs.
        It is more critical than ever that Congress significantly increase
    funding for the Center for Drug Evaluation and Research (CDER) at the
    FDA and for the agency as a whole in fiscal year 2013 so that it can
    meet its statutory obligations in a timely manner.
                Accelerating the Rare Disease Drug Review Process at the
                        FDA
        The Cystic Fibrosis Foundation 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.
        As we reap the benefits of the mapping of the human genome,
    treatments like Kalydeco are being developed that target smaller and
    smaller populations. This aspect of personalized medicine holds the
    promise to treat or cure rare diseases and subsets of more common
    diseases that plague millions of Americans.
        However, as the scientific landscape changes, it is important that
    the FDA has access to the expertise it needs to swiftly review
    innovative new treatments. FDA review officials have taken steps to
    improve access to scientific expertise during the review of therapies
    that treat rare diseases, and FDA leaders and review staff have been
    willing to engage in constructive dialogue to address the challenges of
    rare disease review. The agency has taken part in productive
    conversations with researchers and patients at the CF Foundation,
    including with many of the world's foremost experts on cystic fibrosis,
    on the development and review of potential therapies to treat cystic
    fibrosis and on topics separate from specific drug review, such as
    improving tools for Patient Reported Outcomes (PROs). In particular,
    the collaboration showcased during the review of Kalydeco is an
    excellent example of how the FDA, a drug sponsor, patients and external
    experts can work to effectively evaluate new drugs and accelerate the
    approval process.
        However, in some 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. While FDA review divisions do conduct some
    consultations with external experts separate from the advisory
    committee process, the complexity and diversity of applications for
    rare disease therapies suggest that the agency would benefit from more
    regular consultation with extramural experts early in the review
    process. The Cystic Fibrosis Foundation asks that the Committee
    encourage the FDA to reach out on a more systematic basis to outside
    experts early in the drug development process.
        One such strategy the House of Representatives is considering is
    the proposed Expanding and Promoting Expertise in Review of Rare
    Treatments (EXPERRT) Act, H.R. 4156. CFF strongly supports the EXPERRT
    Act, which establishes a program to facilitate FDA outreach to external
    experts earlier and throughout the drug review process on issues such
    as unmet medical need, genetically targeted treatments, disease
    severity, clinical trial design and patient demographics.
        Additionally, the CF Foundation urges the Committee to support
    collaborative efforts by the Food and Drug Administration and the
    National Institutes of Health, such as the Regulatory Science
    Initiative and the FDA-NIH Joint Leadership Council. Collaboration
    between the NIH and FDA has the potential to help move innovative new
    drugs more quickly through the development process and into the hands
    of patients by ensuring that the FDA has the resources, strategies, and
    tools it needs to efficiently review and regulate drugs in this ever
    changing scientific landscape. As treatments like Kalydeco are being
    developed to target specific genetic mutations and smaller and smaller
    populations, it is important that the FDA has the expertise it needs to
    quickly move these drugs through the review process.
        The Cystic Fibrosis Foundation's unique and successful drug
    development model for creating treatments for a rare disease has helped
    create a robust pipeline of potential therapies to fight cystic
    fibrosis. The Food and Drug Administration has played a critical role
    in this process, working with the Foundation as they review treatments
    and move them into the hands of patients. Encouraged by our successes,
    we believe the experience of the CF Foundation 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 the Cystic Fibrosis Foundation, we
    thank the Committee for its consideration.
                                     ______

               Prepared Statement of the Farmers Market Coalition

        The Farmers Market Coalition (FMC) represents more than 2,700
    farmers markets across the United States, as well as the more than
    30,000 farmers that depend upon them. We seek to build viable
    agricultural economies by expanding farmers' marketing choices while
    expanding consumers' opportunities to purchase fresh, locally grown
    foods. Herein, we urge you to fully fund both the Farmers Market
    Promotion Program and the WIC Farmers Market Nutrition Program.
        Farmers markets have grown in response to consumer demand in recent
    years, emerging as cornerstones in more than 7,100 communities across
    the United States. Markets are extending their seasons into winter
    months, too, offering farmers income throughout the year. Uniquely,
    they have the potential to bridge urban and rural divides,
    strengthening the fabric of our country while addressing the
    nutritional needs of Americans at every income level. The percentage of
    SNAP dollars redeemed at farmers markets, for example, is increasing as
    more markets become EBT-equipped and program participants choose to use
    their benefits there. For this reason, FNS and AMS programs that
    facilitate the sector's growth are of critical importance not just to
    farmers, but to families, and community economies. FMC urges the
    following:
        Reauthorize and increase funding for the Farmers Market Promotion
    Program.--The ripple effects of the FMPP program are impressive,
    providing small infusions of funding to communities and groups of
    farmers in all 50 States since 2006. These awardees grow capacity,
    increase farmer income, help new entrepreneurs get started in feeding
    their local communities, and build local partnerships for long-term
    viability. However, the program is highly competitive, funding only 444
    of the Nation's 7,100 farmers markets since 2006. With rural jobs on
    the line, and the nascent local food sector in need of training,
    capacity building, and technical assistance, now is not the time to
    turn our backs on a program with such far-reaching positive impacts, as
    illustrated in recent Senate Agriculture Committee briefings and
    testimonies.
        We urge you to reauthorize funding for the Farmers Market Promotion
    Program, and increase funding to $20 million annually so that it can
    fully serve farmers markets and the many farmers choosing to begin
    marketing to consumers in their local communities.
        Restore full funding to the WIC Farmers Market Nutrition Program
    (WIC FMNP).--In 2010, WIC FMNP served more than 2.1 million WIC
    families, bringing more than $22 million in income directly to more
    than 18,000 small and mid-scale produce farmers. Proposed cuts of $3.5
    million to this important program threaten access to fresh local
    produce for WIC eligible clients in 45 State agencies, Territories and
    Indian Tribal Organizations. For example, in Wisconsin alone, WIC FMNP
    provided fresh fruits and vegetables to approximately 100,000 women and
    their children in 2011, simultaneously providing $864,037 in additional
    income to 1,552 participating Wisconsin produce farmers. Proposed cuts
    to this effective win-win program would mean thousand fewer families in
    need having access to nutritious, locally grown produce, and many
    hardworking farmers unable to serve them.
        New York State, which serves almost 400,000 WIC mothers and their
    children, calculated the devastating impact of these proposed WIC FMNP
    cuts on their agricultural sector. They estimate that small family
    farmers in the State would lose approximately $1.1 million in revenues.
        We urge you to restore WIC FMNP funding to $20 million for fiscal
    year 2013.
        Thank you for your consideration of this testimony, and, on behalf
    of the Farmers Market Coalition Board of Directors and members, thank
    you for all you do on a daily basis to support America's family
    farmers.
                                     ______

              Prepared Statement of Florida Home Partnership, Inc.

        On behalf of Florida Home Partnership, I wish to thank you for
    accepting this testimony on Rural Housing Funding for fiscal year 2013.
    Florida Home Partnership, Inc. (FHP) is a nonprofit Community Housing
    Development Organization (CHDO). Our mission is to provide low and
    moderate income families affordable, quality-built, energy efficient
    homes in communities that offer long-term value and comfort. I am
    urging the Appropriations Subcommittee to fund the following USDA Rural
    Housing Programs at the higher of fiscal year 2012 levels or the
    President's fiscal year 2013 budget request: (1) $900 million for
    Section 502 Family Direct Homeownership Loans, (2) $30 million for
    Section 523 Self-Help Housing Program, and (3) $13 million for the
    Rural Community Development Initiative. The Section 502 Loans provide
    affordable mortgage opportunities for low-income rural Americans, while
    the Section 523 funds allow Self-Help Housing grantees across Rural
    America provide technical assistance to Rural Americans engaged in
    building their own homes through USDA's Mutual Self-Help Housing
    Program.
        FHP administers the USDA Mutual Self-help Program in the rural
    areas of Hillsborough and Pasco Counties in Florida. The impact of this
    service asserts a positive result in four areas: Affordable quality
    housing for low- to moderate-income families; Green Built and Energy
    Star certified homes conserve precious resources; safe and affordable
    housing instills higher goals for the future of youth and teens; and
    the Mutual Self-help Program sustains and stimulates the local economic
    environment.
        With the support of the USDA Mutual Self-Help Program, Florida Home
    Partnership guides groups of 6 to 10, low- to moderate-income families
    to work together to help build each other's homes. In the past 15
    years, over 500 homes and 5 communities have been built. Leveraging
    dollars from the USDA Mutual Self-Help Program, the State of Florida's
    Home Ownership Pool and down payment assistance through Hillsborough
    and Pasco Counties, Federal funds enable FHP to efficiently operate a
    very complex yet effective program. FHP has successfully administered
    over $65 million to implement this USDA affordable housing program.
        Family members of the groups share the common goal of homeownership
    and commit themselves to share in the work that will make that goal a
    reality. When all homes in the construction group are completed, all
    homeowners are authorized to move into their new homes on the same day,
    creating an instant community.
        Families and individuals contribute a minimum of 600 hours of
    ``sweat equity'' in the construction of their new homes in exchange for
    their down payment. Hard work is the key, along with a willingness to
    work cooperatively with other participants. No construction experience
    is necessary! Participants perform a variety of unskilled and semi-
    skilled tasks from digging the foundation, to carpentry, painting,
    electrical and plumbing activities through construction clean-up and
    landscaping--along with everything in between! Our knowledgeable family
    construction coordinators (who themselves have gone through the
    program) guide participants through the construction process all the
    while teaching the participants many new skill sets. Friends, family,
    church members, and others help these families accomplish the labor
    requirements. Therefore, it becomes a community endeavor to complete
    all the homes in a group.
        Each Self Help Home is currently being built as a GREEN Certified
    home, and is constructed to Exceed Energy Star Standards. To date, FHP
    has constructed over 150 GREEN and Energy Star Certified homes. These
    homes conserve energy resources for our country, and just as
    importantly, conserve the precious financial resources of the low-
    income rural clients we serve. Many of the Self-Help Housing
    organizations across America build their homes to these same GREEN and
    Energy Conserving Standards.
        FHP provides services before, during and after to assure the
    success of the families. Services provided ``during'' the application
    process include homeownership education, improving credit, and
    understanding the responsibilities of homeownership. Once the home is
    built, homeowners are also educated and encouraged to become active
    with their homeowners association to assure their community remains a
    quality and safe neighborhood. FHP recently hosted a Parliamentary
    Procedure Training class for interested homeowners and to train new and
    seasoned HOA board members.
        While FHP provides safe housing and encourages community
    involvement, the groundwork is being laid to support a positive outlook
    for youth and teens in the community. The youth of our communities have
    witnessed the hard work of their parents leading to the accomplishment
    of the American Dream, homeownership. We have had multiple experiences
    where children growing up in our decent affordable self help housing
    communities, have gone on to build self help homes of their own. These
    children have learned that hard work and perseverance do pay off.
        The USDA Mutual Self-help Program has also had a positive impact on
    the local economy. In addition to a staff of 17 employees, in which 58
    percent are Self Help Homeowners, FHP has been able to regularly
    subcontract with small family owned, mid-size and chain store
    businesses. A great portion of the $65 million has been circulated to
    these various businesses since our inception in 1993. Consequently, as
    a primary client for many businesses, including Home Depot, in the
    Ruskin, Florida area, FHP has contributed to supporting jobs throughout
    its rural service area.
        The value of the Mutual Self-Help Housing Program has inherent
    benefits that provide answers to other social problems in our society
    by meeting the needs of affordable, quality and energy-efficient
    housing that provides safe environments for our rural families.
    Accordingly, the program also prepares the children of these homeowners
    with the tools to change their collective destinies; all while creating
    and maintaining meaningful jobs for rural Americans.
                                     ______

        Prepared Statement of the Federation of American Societies for
                              Experimental Biology

        The Federation of American Societies for Experimental Biology
    (FASEB) respectfully requests a fiscal year 2013 appropriation of $325
    million for the Agriculture and Food Research Initiative (AFRI) within
    the National Institute of Food and Agriculture. This funding level
    matches the recommendation made in the President's fiscal year 2013
    budget request. FASEB's broader goal is to support sustainable growth
    so that AFRI funding reaches its authorized level of $700 million as
    soon as feasible.
        As a federation of 26 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 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 premier competitive grants
    program, AFRI supports agricultural research, education, and extension
    projects at public land grant universities and other institutions
    nationwide. In order to optimize the effectiveness of its resources,
    AFRI facilitates collaborative, interdisciplinary research to address
    key societal problems and build foundational knowledge in high-priority
    areas of the food and agricultural sciences. AFRI also encourages young
    scientists to pursue careers in agricultural research by providing
    research funding for over 1,700 of the Nation's most promising pre- and
    postdoctoral scholars.
        According to the results of a recent study published in the
    Proceedings of the National Academy of Sciences, global food demand is
    expected to double by the year 2050. The world must meet the increasing
    need for food while simultaneously providing better nutrition, new
    biofuel materials, sustainable farming practices, and greater food
    safety. The effective coordination of research, education, and
    extension activities like those supported by AFRI enables efficient
    translation of scientific discoveries into a broad range of
    applications to overcome some of our most daunting food and agriculture
    challenges. For example, a team of scientists supported by AFRI are
    discovering the biological processes that determine how warm
    temperatures affect corn seed development and crop production. With
    this knowledge, researchers can develop hardier genetic variants of
    corn that are able to overcome the negative effects of heat stress and
    produce higher yields--advances which will be important for maintaining
    an adequate food supply. Other AFRI-funded scientists are studying the
    genomes of soilborne microorganisms responsible for damaging soybeans
    and other crops. By understanding the pathogen's ability to harm
    plants, research and extension specialists can develop methods to
    manage the disease, increase crop production, and assist farmers, who
    lose an estimated $300 million to soybean root and stem rot diseases
    each year. AFRI also makes critical contributions to improving human
    health; scientists are using multidisciplinary approaches to examine
    the process by which disease-causing E. coli are released from the
    digestive tracts of cattle into the food supply. Research on the
    genetic, microbial, and environmental factors that cause the bacteria
    to spread throughout livestock populations enables scientists to devise
    new strategies for reducing cattle infections and preventing food
    contamination.
        Robust AFRI funding will also help attract talented young
    scientists to careers in agricultural research. A new AFRI-sponsored
    fellowship program has been established to help train and develop the
    next generation of agricultural, forestry, and food scientists and
    educators. In its first year of funding, the program awarded a total of
    $6 million to 54 students from 32 universities across the country.
    Fellows are already advancing important research projects, including a
    study to identify sources of microbial contamination in imported foods.
        Agricultural research directly benefits all sectors of society and
    every geographic region of the country. Furthermore, the private sector
    relies on public investments in USDA research to increase productivity,
    improve crops, and train future cohorts of agricultural scientists. The
    estimated value of U.S. agricultural exports increased 32.2 percent
    between fiscal year 2007 and fiscal year 2010, illustrating the growing
    demand for agricultural products worldwide, and yet the AFRI budget has
    stagnated since the program was established with an authorized funding
    level of $700 million in the 2008 farm bill. In fiscal year 2010,
    AFRI's limited resources could only support 40 percent of project
    proposals recommended for funding by review panels, and the program
    remains significantly underfunded relative to its current capacity. The
    fiscal year 2012 AFRI budget of $264 million is woefully inadequate to
    ensure viability of a research enterprise at the core of human
    prosperity.
        Thank you for the opportunity to offer FASEB's support for AFRI.
        FASEB is composed of 26 societies with more than 100,000 members,
    making it the largest coalition of biomedical research associations in
    the United States. Celebrating 100 Years of Advancing the Life Sciences
    in 2012, FASEB is rededicating its efforts to advance health and well-
    being by promoting progress and education in biological and biomedical
    sciences through service to our member societies and collaborative
    advocacy.
                                     ______

      Prepared Statement of Friends of Agricultural Research--Beltsville,
                                      Inc.

        Mister Chairman and Members of the Subcommittee, thank you for this
    opportunity to present our statement supporting funding for the USDA's
    Agricultural Research Service (ARS), and especially for its flagship
    research facility, the Henry A. Wallace Beltsville Agricultural
    Research Center (BARC), in Beltsville, Maryland. We strongly recommend
    full fiscal year 2013 funding support for research programs at
    Beltsville.
        We begin our recommendations, Mr. Chairman, by drawing attention to
    Agriculture Secretary's Tom Vilsack's February 13, 2013, remarks on the
    proposed fiscal year 2013 budget: ``USDA has supported farmers,
    ranchers and growers so that last year they enjoyed record farm income.
    . . . To help sustain record farm income, we will invest in research
    and development to improve agricultural productivity. [And continue]
    support for in-house research and the land grant universities. We'll
    continue our efforts to combat destructive pests and disease that
    threaten crops and livestock.
        Following a Department-wide review of operations, we created a
    Blueprint for Stronger Service to make USDA work better and more
    efficiently for the American people. We found savings in areas like
    technology, travel, supplies and facilities. We've been able to avoid
    the interruptions in service that come with furloughs and employee
    layoffs.
        The Blue Print for a Stronger Service holds out substantive agency-
    wide impacts for the Agricultural Research Service as a whole as well
    as for Beltsville in particular. The agency is streamlining its
    business operations, consolidating activities such as human resources
    and procurement into three ``business service centers.'' In fiscal year
    2011, ARS cut its travel costs by approximately 28 percent from the
    past year, and the ARS printing fund has been cut by more than half.
    While continuing to serve the research needs of American agriculture
    and the Nation, ARS is committed to ``doing more with less.''
        We strongly endorse the remarks of Secretary Vilsack and the
    purposes and goals of the Blue Print for a Stronger Service. Overall,
    ARS will close 12 of its research programs at 10 locations in 2012,
    none of them at Beltsville--a recognition of the outstanding research
    conducted at Beltsville.
        Beltsville--the Nation's premier agricultural research center--has
    spearheaded technical advances in American agriculture for over 100
    years. Beltsville celebrated 100 years of research leadership and
    technical advances in 2010. The long list of landmark research
    achievements over that time is truly remarkable. Still at the threshold
    of its second century, Beltsville stands unequalled in scientific
    capability, breadth of agricultural research portfolio, and
    concentration of scientific expertise. Under the leadership of Director
    Dr. Joseph Spence and with its powerful scientific capability, the
    Beltsville Agricultural Research Center is distinctively, indispensably
    prepared for the challenges that lie ahead.
        Toward that end, the scientists of Beltsville have developed a new,
    bold vision for the future. Titled Innovation and Integration:
    Agricultural Research for a Growing World, this visionary document
    stems from the realization that broader, multidisciplinary approaches
    will be needed to address new, perhaps unforeseeable agricultural
    challenges of the future. New approaches will be needed to reach beyond
    the confines of traditional research approaches tied to narrow issues
    or specific commodities. Traditionally, for instance, plant scientists
    may have worked in some combination with animal scientists or with
    human nutritionists. Only rarely, however, have scientists combined
    efforts across many disciplines to solve problems. Given its broad
    research portfolio and its many disciplines, Beltsville is perfectly
    situated for broad, multidisciplinary approaches to flourish. Thus, in
    every way, Beltsville remains and will continue to be a national Center
    of Excellence for the highest agricultural research priorities.
        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 Beltsville. We would
    respectively suggest that adequate funding for the Agriculture
    Department's flagship research center is central to maintaining
    national and world food security.
    Priorities in the President's Fiscal Year 2013 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.
        We were pleased to see that the fiscal year 2013 budget includes
    increases for environmental stewardship; crop breeding and protection;
    animal breeding and protection; food safety; and human nutrition.
    Obviously, these are areas of great concern to all Americans, and they
    are certainly among the highest priorities for agricultural research
    today. All of these research areas are strengths of the Beltsville
    Agricultural Research Center and they will benefit well from the unique
    facilities and scientific expertise at the Center. We encourage you to
    seriously consider funding the proposed budget and to ensure that
    Beltsville receives the funding that it needs to address these critical
    research needs.
        Although funds are not requested for major facilities projects in
    the fiscal year 2013 budget, we would like to bring to your attention
    the urgent need for renovation of Building 307 on the Beltsville
    campus. The Center has aggressively moved to consolidate space and
    reduce costs and has been very successful at doing so. However, these
    plans require the renovation of a building--Building 307--that was
    vacated some years ago in anticipation of a complete renovation. In the
    past, Congress approved partial funding for this renovation, and those
    monies were retained pending appropriation of the full amount required
    for the renovation. Unfortunately, those funds now have been lost to
    ARS. Consequently, renovation of this vacant, highly useful building is
    on indefinite hold. While we realize that funding is extremely tight,
    we confirm that Beltsville urgently needs a renovated Building 307 for
    adequate, high quality lab space. Moreover, a renovated Building 307
    would not only yield substantial energy savings, but also would allow
    Beltsville to move forward with other long-delayed relocation and
    consolidation plans.
        In summation, we would highlight these spheres of excellence:
        Animal Breeding and Protection.--Beltsville conducts extensive
    research on animal production and animal health. The research center is
    the foundation of genetic improvement in dairy cow production.
    Beltsville is examining ways to prevent resistance to drugs for animal
    parasite prevention and control.
        Crop Breeding and Protection.--Beltsville scientists have an
    extensive record of ongoing research relating to protecting crops from
    pests and emerging pathogens. Beltsville has distinctive expertise for
    identifying pathogens, nematodes, and insects that destroy crops or
    make crops ineligible for export. Beltsville houses the Germplasm
    Resource Information Network, the United States coordinating body to
    identify and catalog plant germplasm.
        Child and Human Nutrition.--The Beltsville Human Nutrition Research
    Center (BHNRC) is the Nation's largest, most comprehensive Federal
    human nutrition research center; unique activities include the What We
    Eat in America survey, which is the Government's nutrition monitoring
    program, and the National Nutrient Databank, which is the gold standard
    reference of food nutrient content that 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.
        Global Climate Change.--Beltsville became actively engaged in
    climate change research long before climate change became a topic of
    intense media interest. 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 detrimental plants (such as weeds.) A central aim is
    finding ways to mitigate negative effects of climate change on crops.
    Beltsville houses unequalled facilities for replicating past climates
    or climates that may exist in the future.
        Plant, Animal, and Microbial Collections.--Beltsville houses
    matchless national biological collections that are indispensable to the
    well-being of American agriculture. In addition to the actual
    collections, Beltsville scientists are internationally recognized for
    their expertise and ability to quickly and properly identify insect
    pests, fungal pathogens, bacterial threats, and nematodes. This
    expertise is crucial to preventing loss of crops and animals, ensuring
    that invasive threats to American agriculture are identified before
    they can enter the country, thus helping to protect homeland security,
    and ensuring that American exports are free of pests and pathogens that
    could prohibit exports. Also, Beltsville houses the National Animal
    Parasite collection and has the expertise to identify parasites that
    are of importance to agricultural animals.
        Mr. Chairman, this concludes our statement. Thank you for
    consideration and support for the educational, research, and outreach
    missions of the Beltsville Agricultural Research Center.
                                     ______

         Prepared Statement of the Global Health Technologies Coalition

        Chairman Kohl, Ranking Member Blunt, and members of the Committee,
    thank you for the opportunity to provide testimony on the fiscal year
    2013 appropriations funding for the U.S. Food and Drug Administration
    (FDA). We appreciate your leadership in global health, and we hope that
    your support will continue. I am submitting this testimony on behalf of
    the Global Health Technologies Coalition (GHTC), a group of nearly 40
    nonprofit organizations working together to advance U.S. policies that
    can accelerate the development of new global health innovations--
    including new vaccines, drugs, diagnostics, microbicides, multi-purpose
    technologies, and other tools--to combat global health diseases and
    conditions. The GHTC members strongly believe that to meet the world's
    most pressing global health needs, it is critical to invest in research
    today so that the most effective health solutions are available now and
    in the future. We also believe that the U.S. Government has a historic
    and unique role in doing so. My testimony reflects the needs expressed
    by our member organizations, which include nonprofit advocacy
    organizations, policy think-tanks, implementing organizations, product
    development partnerships (PDPs), and many others.\1\ We strongly urge
    the Committee to continue its established support for global health
    research and development (R&D), as well as product safety by (1)
    sustaining and supporting the U.S. investment in global health
    research, product development, and global regulation; (2) instructing
    the FDA to prioritize the review and licensure of global health
    technologies; and (3) requiring leaders at the FDA to put plans in
    place to ensure that global health product regulation is efficient,
    coordinated, and streamlined.
    ---------------------------------------------------------------------------
        \1\ Global Health Technologies Coalition. http://
    www.ghtcoalition.org/coalition-members.php.
    ---------------------------------------------------------------------------
    Critical Need for New Global Health Tools
        Every day, more than 35,000 people die from AIDS, tuberculosis
    (TB), malaria, and other neglected diseases. The health detriments
    these diseases cause, even when not fatal, have profound implications
    in other areas such as economic stability and access to education. This
    highlights the urgent need for sustained investment in global health
    research to deliver new tools to combat these devastating diseases.
    While drugs and other health technologies exist for these diseases,
    many have grown ineffective due to increasing drug resistance and
    toxicity or are costly and difficult to administer in poor, remote, and
    unstable settings. While we must increase access to proven, existing
    drugs, vaccines, diagnostics, and other health tools to tackle global
    health problems, it is just as critical to develop the next generation
    of tools to fight existing disease and address emerging threats such as
    malaria, dengue, and drug-resistant TB. There are several very
    promising technology candidates in the R&D pipeline; however, these
    tools will never be available if the support needed to continue R&D is
    not supported and sustained.
    Innovation as a Smart Economic Choice
        Global health R&D brings lifesaving tools to those who need them
    most; however, the benefits are much broader than preventing and
    treating disease. It is also a smart economic investment in the United
    States, where it drives job creation, spurs business activity, and
    benefits academic institutions. Biomedical research, including global
    health, is a $100 billion enterprise in the United States. In
    Washington State, $4.1 billion is generated annually from global health
    activities, including R&D. In North Carolina, the economic impact from
    global health is roughly $2 billion. It is important that the U.S.
    Government support industries, such as global health R&D, which exhibit
    such strong potential to build the economy at home and abroad. Global
    health R&D has been an important legacy of USAID's work for over three
    decades, and should be supported and protected. History has shown that
    investing in global health research not only saves lives but also
    produces cost-savings and efficiencies. In the United States alone, for
    example, polio vaccinations during the last 50 years have resulted in a
    net savings of $180 billion. New therapies to treat drug-resistant TB
    have the potential to reduce the price of treatment by 90 percent and
    cut health system costs significantly. The United States has made smart
    investments in research in the past that have resulted in lifesaving
    breakthroughs for global health diseases, as well as important advances
    in diseases endemic to the United States. It is essential that we keep
    this momentum going and not allow this research to lag behind, in order
    to maximize the resources we have put into these programs. We must now
    build on those investments to turn those discoveries into new vaccines,
    drugs, tests, and other tools.
    Advancing Global Health Product Development
        Because private industry does not invest significantly in the
    development of products for diseases for which there are no lucrative
    markets, a host of new organizational models and incentive mechanisms
    have emerged to address this challenge, with varying success.
        One organizational model that has proven promising is the product
    development partnership (PDP). PDPs are a unique form of a public-
    private partnership established to drive greater development of
    products for neglected diseases. Currently, there are more than 26 PDPs
    developing drugs, vaccines, microbicides, and diagnostics that target a
    range of infectious and neglected diseases, including HIV/AIDS,
    malaria, TB, Chagas disease, dengue fever, and visceral leishmaniasis.
        While each PDP operates differently depending on its disease
    area(s) of focus, they typically employ a portfolio approach to R&D to
    accelerate product development by pursuing multiple strategies for the
    same disease area. They also work in close partnership with academia,
    large pharmaceutical companies, the biotechnology industry, and with
    regulatory and other Government agencies in developing countries.
        PDPs are delivering on their promise to develop lifesaving products
    for use in countries where disease burdens are highest and no viable
    commercial markets exist. To date, PDPs have developed and licensed 16
    products to combat neglected diseases in low- and middle-income
    countries. More can be expected from PDPs in the future with sustained
    and additional support: in 2009, PDPs had more than 120
    biopharmaceutical, diagnostic, and vector-control candidates in various
    stages of development, including 32 in late-stage clinical trials. In
    the next 5 years, it is anticipated that several new technologies could
    be ready for use or in final stages of clinical development.
        For example the RTS,S/AS01 malaria vaccine candidate, manufactured
    by GlaxoSmithKline and co-developed with the PATH Malaria Vaccine
    Initiative, has produced positive results in clinical trials thus far,
    and could be available for general implementation for infants in Africa
    within 5 years or so. Such a vaccine would significantly reduce the
    burden of sickness and death from malaria. Additionally, six TB vaccine
    candidates are in clinical trials worldwide, including the first late-
    stage infant study of a TB vaccine in more than 80 years. There are
    also several new TB drug candidates in testing, which, if approved,
    would become the first new TB drugs in nearly 50 years. These therapies
    could help reduce the 8 million new TB infections and nearly 1.7
    million TB-related deaths that happen each year. Also, a vaccine
    candidate and drug candidates are currently in clinical trials to
    prevent and treat visceral leishmaniasis, a neglected disease whose
    current treatments are costly and toxic. Additionally, two artemisinin
    combination therapies--the gold standard of malaria drug treatment--
    developed in partnership with Medicines for Malaria Venture have
    recently been approved and will be reaching those in need in the near
    future.
    Global Health Product Development Challenges
        Developers of products intended for the developing world face
    challenges in three key areas:
        First, capacity to conduct as well as adequately regulate clinical
    trials does not exist or is often weak in countries where diseases are
    endemic. Second, there is a lack of financing for late-stage clinical
    trials, which are necessary for testing the efficacy and safety of new
    tools. And third, the approval process for new products for neglected
    diseases is poorly coordinated and involves multiple, complex steps.
    Global regulatory systems are not sufficiently streamlined and the
    capacity of regulatory authorities to approve products for the
    developing world is frequently weak. Therefore, regulatory review and
    introduction of new safe and effective products takes longer than
    necessary.
        The FDA has demonstrated through a number of recent actions that it
    can have an impact on the introduction of global health tools. These
    include:
      --The FDA's program to review HIV/AIDS drugs delivered in the
            developing world through the U.S. President's Emergency Plan
            for AIDS Relief.
      --The release of guidance documents that outlined the FDA's
            willingness to review vaccines and other products for diseases
            not endemic to the United States.
      --The agency's partnership with global bodies, such as the World
            Health Organization (WHO), to enhance access to medicines for
            the developing world and assist other countries in bolstering
            their regulatory capacity.
      --The FDA's Priority Review Voucher Program, which awards a voucher
            for future expedited product review to the sponsor of a newly
            approved drug or biologic that targets a neglected tropical
            disease (NTD).
      --The FDA's Office of Critical Path Initiatives, which supports the
            development of regulatory science such as biomarkers and animal
            models to better evaluate and register new TB tools.
      --The FDA's issuance of a guidance for testing new anti-TB drugs in
            combination, which accelerates the development of new, safe,
            and highly effective treatment regimens with shorter therapy
            durations.
        The FDA's efforts in these areas are to be applauded. The agency
    can and should continue to increasingly leverage its expertise to
    benefit the millions of people affected by infectious diseases around
    the world.
    Recommendations
        Support for global health research that saves lives around the
    world--while at the same time promoting innovation, creating jobs, and
    spurring economic growth at home--is unquestionably one of the Nation's
    highest priorities. In keeping with this value, the GHTC respectfully
    requests that the Committee do the following:
      --Sustain and support U.S. investments in the FDA's funding
            resources, as well as its capacity to provide technical advice
            to other regulatory bodies and review and license health
            products for diseases not usually endemic to the United States,
            and its authority to fund research and development for global
            health technologies, including but not limited to those created
            though the Critical Pathways Initiative.
      --Instruct all U.S. agencies in its jurisdiction involved in global
            health to prioritize R&D within all development programs by
            creating actions plans, including metrics to measure progress.
            We request that leaders at the FDA to work with leaders at
            other U.S. agencies, including the State Department, U.S.
            Agency for International Development, the National Institutes
            of Health, the Centers for Disease Control and Prevention, and
            the Department of Defense to ensure that efforts in global
            health R&D are coordinated, efficient, and streamlined. This
            should include establishing transparency mechanisms designed to
            show what global health R&D efforts are taking place and how
            U.S. agencies are collaborating with each other to make
            efficient use of the U.S. investment, and align with the goals
            and intentions of the recently released Health and Human
            Services Global Health Strategy.\2\
    ---------------------------------------------------------------------------
        \2\ HHS Global Health Strategy. http://www.globalhealth.gov/global-
    programs-and-initiatives/global-health-strategy/.
    ---------------------------------------------------------------------------
      --Direct that the results of these initiatives should be reported on
            to Congress and be made publicly available. Past reports of the
            health R&D activities at U.S. agencies have helped coordinate
            efforts between agencies and transparently inform the public
            about the investment of taxpayer money. These reports must be
            continued in the future and should include information on all
            U.S. Government agencies involved in global health R&D.
        We respectfully request that the Committee consider inclusion of
    the following language in the report on the fiscal year 2013
    Agriculture and FDA appropriations legislation: ``The Committee
    recognizes the critical contribution that the U.S. Food and Drug
    Administration's (FDA) funding for new global health tools and its
    leadership in reviewing and licensing global health technologies makes
    to the impact of new global health technologies, and also recognizes
    the need to sustain and support U.S. investment in this area by fully
    funding the FDA to carry out this work. The Committee acknowledges the
    FDA's essential role in capacity-building abroad to help build strong
    regulatory authorities in other nations, and asks that the FDA continue
    and expand on this work. New global health products are cost-effective
    public health interventions that play an important role in improving
    global health and are vital in protecting the lives of Americans and
    populations abroad. The Committee directs the FDA to expand its
    outreach and information-sharing activities with product developers--
    including but not limited to industry groups, nonprofit organizations,
    and other product development partnerships (PDPs)--to support the
    development of safe and effective global health tools. Further, the
    Committee directs the FDA to submit a report to Congress and the public
    outlining the monitoring, evaluation, and progress of its `Pathway to
    Global Product Safety and Quality' as it pertains to products outlined
    in paragraphs (2) and (3) of section 740(c) of the Agriculture, Rural
    Development, Food and Drug Administration, and Related Agencies
    Appropriations Act, 2010 (Public Law 111-80). In its review of drugs
    and other products for neglected diseases, the Committee requests that
    FDA:
      --Maximize the use of priority review where feasible and appropriate.
      --Work with sponsors to facilitate expanded access to investigational
            products.
      --Increase coordination and interaction with the World Health
            Organization, European Medicines Agency, and other
            international regulatory agencies.
      --Implement mechanisms for enhanced collaboration between the FDA and
            national regulatory authorities in developing countries.
      --Increase coordination among individual drug, biological product,
            and device review divisions across FDA centers to support the
            development and monitoring of safe and effective medical
            products for rare and neglected diseases.
        The Committee is also aware that Chagas disease is not on the list
    of neglected diseases as currently defined by the FDA. The Committee
    urges the FDA to make the necessary modifications to include Chagas
    disease in its list of neglected diseases in line with the World Health
    Organization (WHO) list of neglected tropical diseases. The Committee
    is pleased with FDA's current activities in the areas of regulatory
    capacity-building and the promotion of sound regulatory science
    practices abroad, and recommends that the FDA explore how to expand on
    such activities.''
        On behalf of the members of the GHTC, I would like to extend my
    gratitude to the Committee for the opportunity to submit written
    testimony for the record.
                                     ______

          Prepared Statement of the Housing Development Alliance, Inc.

        On behalf of Housing Development Alliance, Inc. and the communities
    we serve, I wish to thank the Subcommittee for the opportunity to
    submit testimony on fiscal year 2013 Appropriations for the Department
    of Agriculture (USDA) Rural Housing Programs. I urge this subcommittee
    to fund USDA Rural Housing's Section 502 Single Family Direct Loan
    Program at $900 million (the fiscal year 2012 level); Section 504 Very-
    Low Income Rural Housing Repair Loans at $28 million; and Section 504
    Very-Low Income Rural Housing Repair Grants at $29.5 million.
        Housing Development Alliance, Inc. (HDA) serves Perry, Knott,
    Leslie and Breathitt Counties in Kentucky. These are among four of the
    poorest counties in the Nation with poverty rates ranging from 24
    percent to over 33 percent. In these four counties over 12,650
    households have annual incomes of less than $25,000 including over
    5,100 households with incomes less than $10,000. Furthermore, these
    counties suffer from persistent poverty (having more than 20 percent of
    population in poverty for more than five decades) which has resulted in
    a poor housing stock and a broken housing market. In short, our
    community has a critical need for safe, decent and affordable housing.
        Since 1996, the Housing Development Alliance has constructed 90 new
    homes which were sold to qualified low and very-low income homebuyers
    who received financing through the Section 502 Single Family Direct
    Loan Program. In this same period, the Housing Development Alliance has
    repaired nearly 180 homes using Section 504 Loan and Grants. These
    programs often serve the poorest of the poor. In fact, the average
    annual income of our Section 502 Direct Loan homebuyers was $14,252 and
    the average annual income of our Section 504 Loan and Grant repair
    client was $10,660 per year.
        In many cases the living conditions of the households prior to
    receiving assistance are deplorable. These homes often lack an adequate
    heat source; have little or no insulation; often have major structural
    defects including collapsing foundations, rotting floors and walls and
    leaking roofs; have unsafe electrical wiring; and lack complete
    plumbing. For example recently the Housing Development Alliance
    encountered an elderly woman whose gas water heater was spewing
    potentially deadly levels of carbon monoxide into her home and another
    elderly woman whose tub/shower was not hooked to the sewer and was
    draining directly under her home.
        However, the benefits of these programs are not limited to just to
    the households purchasing the new home or receiving the affordable home
    repair. The programs provide jobs and other needed economic activity to
    our community. For example, in 2011 the constructed seven homes
    financed in part by the Section 502 Single Family Direct Loan Program.
    Using the National Association of Home Builders' estimate that each
    home constructed creates/preserve 3 construction job per year, in 2011
    the Housing Development Alliance's use of Section 502 Direct Loans
    created/preserved 21 construction jobs. Even more jobs were created/
    preserved through our use of the Section 504 Repair Loans and Grants
    which funded 14 home repairs. While these numbers may seem modest, as
    they are repeated in rural communities throughout America these
    programs have a huge impact on jobs in rural America.
        Furthermore the Section 502 Single Family Direct Loan Program is
    the most cost effective Federal housing program. Despite serving low
    and very-low income households, the average lifetime cost of a Section
    502 Single Family Direct Loan is just $7,200 while the average cost of
    Section 8 Housing Assistance is nearly $7,000 per year. This low cost
    is due in part to the fact that Section 502 Direct portfolio maintains
    an excellent repayment history with a foreclosure rate of just over 4
    percent.
        The administration and others have suggested that the Section 502
    Guarantee Program is a suitable alternative to the Section 502 Direct
    Loan Program; this is simply not true in our community. We completed a
    study of our 502 Direct Loan Program recipients and found that only 1
    out of 10 would have been able to afford the higher interest cost
    associated with a Section 502 Guarantee Loan.
        Thank you again for the opportunity to provide testimony on the
    critically important programs. Without adequate funding for these
    programs low income households will remained trapped in substandard, if
    not outright deplorable, housing and construction and other related
    jobs will be lost across rural America.
                                     ______

                  Prepared Statement of the Hunger Task Force

        I am writing to provide comments on the fiscal year 2013
    Agriculture Appropriations bill.
        Hunger Task Force is a nonprofit, independent food bank located in
    Milwaukee County. We have been feeding emergency food free of charge to
    needy people in southeastern Wisconsin since 1974. Last year we
    distributed 9.8 million pounds of food to programs in our network.
        Currently, our network of 81 food pantries, soup kitchens and
    homeless shelters is providing food to over 35,000 people per month in
    our food pantry network, and we are serving over 60,000 hot meals in
    our soup kitchen network each month. We have seen an 11.9 percent
    increase in the number of people using our food pantries in the last 12
    months. The numbers do not surprise us as 1-in-3 City of Milwaukee
    residents continue to live at or below the poverty level, and 1-in-2
    Milwaukee children live at the poverty level. Milwaukee County's 2-1-1
    IMPACT emergency hotline says that the number one reason people call
    them (27 percent of all calls) is to connect to an emergency food
    provider. A record 272,661 Milwaukee County residents (1-in-5 residents
    in the county) now receive FoodShare benefits. In Wisconsin, a record
    831,000 people now receive FoodShare benefits. A recent report by our
    State's Department of Public Instruction notes that the percentage of
    children in Wisconsin receiving free and reduced-price meals has
    increased 8 consecutive years--a record 41 percent of Wisconsin's
    children now receive free and reduced-price meals, and in the City of
    Milwaukee a record 83 percent of students now receive subsidized meals.
        The increasing poverty and ongoing demand for emergency food in
    southeastern Wisconsin and throughout the State make the Federal
    nutrition and commodity programs more important than ever.
        Hunger Task Force continues to be involved in many of the Federal
    nutrition programs. We have been a contracted provider of TEFAP foods
    since 1999, and we have implemented the CSFP (we call it StockBox)
    since 2003. TEFAP and CSFP commodity foods now account for 75 percent
    of the food we distribute every year. We coordinate 100 StockBox sites
    in southeastern Wisconsin at which 9,300 low-income seniors receive
    monthly box deliveries to their doorstep. The CSFP boxes are incredibly
    important to the seniors we serve. A recent survey of our StockBox
    beneficiaries told us that 39 percent of recipients would eat less, go
    hungry or have a hard time obtaining enough food in they could no
    longer obtain a StockBox. Another 21 percent of StockBox beneficiaries
    mentioned that they would have to look for additional assistance, such
    as meal sites or food pantries, if they did not receive a StockBox each
    month.
        Hunger Task Force has also administered the Senior Farmers Market
    Nutrition Program since 2004. Last year we distributed 3,200 vouchers
    to needy seniors in Milwaukee County. We know Milwaukee's seniors value
    these vouchers, as 91 percent of the vouchers were redeemed in 2011.
        Hunger Task Force has also been actively involved in improving and
    expanding participation in programs such as SNAP (Supplemental
    Nutrition Assistance Program), School Lunch and School Breakfast, WIC
    (Women, Infants and Children), CACFP after-school suppers, and the SFSP
    (Summer Food Service Program). For example:
      --We worked with the Milwaukee Public School district to pilot and
            then expand a universal-breakfast-in-the-classroom program.
            This program now provides free breakfast every day to all MPS
            schoolchildren in 87 schools--over 25,000 children per day now
            receive this benefit.
      --We have spearheaded a local coalition that provides summer meals
            (including suppers) to low-income children in Milwaukee. This
            summer feeding initiative, which is in large part subsidized by
            the Kohl's Corporation, provided over 720,000 meals (including
            89,000 suppers) to needy children last summer.
      --We continually strive to ``modernize'' FoodShare programming in
            Milwaukee County. Since 2009, through our three satellite self-
            service locations, we have helped over 47,000 people apply for
            FoodShare or retain benefits. We also have received Federal/
            state SNAP Outreach Grant funding to ensure that all people
            eligible for SNAP benefits receive them.
      --We worked with Senator Kohl's office to bring the CACFP after-
            school supper program to Wisconsin in 2009. Currently, 36 MPS
            schools provide more than 40,000 after-school suppers each
            month to schoolchildren.
      --We have been a member of the Wisconsin WIC Advisory Committee since
            2000. As a member, we work with local practitioners and State
            officials to ensure that WIC participation is maximized for
            those who are eligible. We also have begun attempting to work
            with State officials on a transition to EBT, and we have
            conducted outreach in our network around the new WIC food
            package.
        Our experience with the Federal nutrition programs is diverse and
    extensive. We see the value of these programs to the people who need
    benefits, as well as to the service providers and local economy. In
    general, we are very pleased with President Obama's fiscal year 2013
    Proposed Budget for USDA's nutrition programs. In particular:
      --We support continued investment in the SNAP, including a
            continuation of State options to suspend time limits on SNAP
            for able-bodied adults without dependent children and
            restoration of cuts to SNAP benefits made in the 2010 child
            nutrition bill.
      --We support the increased investment in the SFSP and WIC Program,
            including an increase in the cash value vouchers for fruits and
            vegetables for children from $6 to $8 per month.
      --We support the competitive grants to fund school meal equipment
            needed for the implementation of the new school meal standards
            and expansion of the School Breakfast Program.
      --We are supportive of the $187 million provided to support the
            existing CSFP caseload, but disappointed that CSFP is not made
            into a seniors-only program. We also would like to see a
            seniors-only CSFP expanded to all 50 States.
      --We are supportive of the increased funding for TEFAP (both
            commodity purchases and administrative funding).
      --We are disappointed that the budget does not provide increased
            investment in the Senior Farmers Market Nutrition Program and
            WIC FMNP. Although we provided SFMNP vouchers to 3,200 needy
            seniors last year, poverty among the elderly continues to grow
            and we could easily triple the number of distributed vouchers
            with additional Federal funding. Also, the WIC FMNP is proposed
            to receive a 30 percent reduction, which will impact families
            who need healthy and nutritious produce as well as small
            farmers at farmers markets that operate in low-income
            communities.
        As an experienced emergency food provider and advocacy-driven
    organization, we ask that you consider our comments as you move forward
    with fiscal year 2013 budget deliberations. Thank you for your
    consideration.
                Sincerely,
                                                  Jon Janowski,
                                                  Director of Advocacy.
                                     ______

            Prepared Statement of the Izaak Walton League of America

        The Izaak Walton League of America appreciates the opportunity to
    submit testimony concerning appropriations for fiscal year 2013 for
    various agencies and programs under the jurisdiction of the
    Subcommittee. The League is a national, nonprofit organization founded
    in 1922. We have more than 39,000 members and 250 community-based
    chapters nationwide. Our members are committed to advancing common
    sense policies that safeguard wildlife and habitat, support community-
    based conservation, and address pressing environmental issues. The
    League has been a partner with farmers and a participant in forming
    agriculture policy since the 1930s. The following pertains to
    conservation programs administered by the U.S. Department of
    Agriculture.
        The 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 a thousand
    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. The League strongly opposes the
    administration's proposal to cut essential conservation programs,
    unilaterally reducing the farm bill baseline for fiscal year 2013 and
    beyond.
        The League is concerned that the administration's budget would
    deprive farmers and ranchers of conservation and environmental
    stewardship assistance in fiscal year 2013 and 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.
        The League and its members across the country are especially
    focused on the following core conservation programs:
        Conservation Reserve Program (CRP).--The Conservation Reserve
    Program (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 fiscal year 2013 budget for CRP proposes a
    reduction in the farm bill authorized acreage limit from 32 million to
    30 million. It is encouraging to see the announcement of a general
    sign-up in fiscal year 2012, and the special provision for 1 million
    acres of wetland and grassland restoration, but that does not alter the
    proposed cut to CRP's mandatory authorization for fiscal year 2013.
        Wetlands Reserve Program (WRP).--The Wetlands Reserve Program (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 U.S.
    Department of Agriculture. Unfortunately, the administration takes no
    action to request new farm bill funding for WRP, which expires with the
    current farm bill authorization in fiscal year 2012. The League urges
    Congress to continue the decades-long commitment made to the goals of
    the program.
        Grassland Reserve Program (GRP).--The Grassland Reserve Program
    (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. Again, the League is
    disappointed that the administration has not proposed continuing GRP or
    any form of the program beyond fiscal year 2012. The League opposes
    this reduction because it will undermine efforts to protect one of the
    country's most threatened natural resources.
        Conservation Stewardship Program (CSP).--The Conservation
    Stewardship Program (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 2013 budget is
    proposing to cut the mandatory spending for CSP by $68 million. The
    League 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).--The Wildlife Habitat
    Incentives Program helps agricultural landowners develop habitat for
    upland wildlife, wetland wildlife, threatened and endangered species,
    fish, and other wildlife. The President's fiscal year 2013 proposal
    also seeks to permanently reduce the mandatory commitment established
    for WHIP in the farm bill. The budget would cut fiscal year 2013
    funding for WHIP by $12 million. The League 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, under-investment 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 Little Dixie Community Action Agency, Inc.

        LDCAA is requesting adequate funding provided to support $900
    million in lending authority for the Section 502 Single Family Direct
    Loan Program. It is disappointing to see the USDA relinquish the
    section 502 direct loan program. The section 502 direct loan program
    has far exceeded in successful outcomes any other Federal homeownership
    program. No other Federal program can equal the profile of families
    served: approximately 60 percent of the families receiving section 502
    loans have incomes of less than 60 percent of the median income, and 40
    percent of families participating in the program have incomes that do
    not exceed 50 percent of the median income.
        Despite serving families with limited economic means, the section
    502 direct loan program is the most cost effective affordable housing
    program in the Federal Government. In fiscal year 2010, the total per
    unit cost for a homeownership loan to a low income family was less than
    $5,000. This stands in significant contrast to the Section 8 Rental
    Assistance program with the annual per unit costs exceeding the total
    Federal expense of a section 502 direct loan.
    Section 523 Mutual Self-Help Housing Program
        LDCAA is requesting national funding of $30 million for the Section
    523 Mutual Self-Help Housing Program. Currently, more than 100
    organizations across America participate in the self-help housing
    program. These organizations unite groups of 8 to 10 self-help families
    who work collectively in the construction of each family's home. They
    perform approximately 65 percent of the overall construction labor.
    This ``Sweat Equity'' results in each homeowner earning and gaining
    instant equity in their homes. It also makes a significant investment
    in their community often resulting in the building of homes and
    neighborhoods together. And despite the fact that self-help families
    constitute the lowest incomes of participants in the section 502
    portfolio, data demonstrates that these families prove to have the
    lowest rates of default and delinquency.
        For the past 3 years, self-help housing organizations have
    constructed almost 3,500 homes. This construction has in turn led to
    more than 11,000 jobs, more than $738 million in local income and $77
    million in taxes and revenue in rural communities across the Nation as
    evidenced from economic impact numbers from the National Association of
    Homebuilders.
                                     ______

                     Prepared Statement of the Lummi Nation

        Mr. Chairman and subcommittee members, thank you for the
    opportunity to provide testimony on the fiscal year 2013 Agriculture,
    Rural Development, Food and Drug Administration and Related Agencies
    appropriations. The following are the requests and priorities of the
    Lummi Nation.

                             BACKGROUND INFORMATION

        The Lummi Nation is located on the northern coast of Washington
    State, and is the third largest Tribe in Washington State serving a
    population of over 5,200. The Lummi Nation is a fishing Nation. We have
    drawn our physical and spiritual sustenance from the marine tidelands
    and waters for hundreds of thousands of years. Now the abundance of
    wild salmon is gone, and the remaining salmon stocks do not support
    commercial fisheries. Consequently, our fishers are trying to survive
    off the sale of shellfish products. In 1999 we had 700 licensed fishers
    who supported nearly 3,000 tribal members. Today, we have about 523
    remaining. This means that over 200 small businesses in our community
    have gone bankrupt in the past 15 years. This is the inescapable
    reality the Lummi Nation fishers face without salmon. We were the last
    surviving society of hunters/gatherers within the contiguous United
    States, but we can no longer survive living by the traditional ways of
    our ancestors.

                       GOVERNMENT-TO-GOVERNMENT PROTOCOL

        Executive Order No. 13175.--The United States has a unique legal
    and political relationship with Indian tribal governments, established
    through and confirmed by the Constitution of the United States,
    treaties, statutes, executive orders, and judicial decisions. In
    recognition of that special relationship, pursuant to Executive Order
    13175 of November 6, 2000, executive departments and agencies
    (agencies) are charged with engaging in regular and meaningful
    consultation and collaboration with tribal officials in the development
    of Federal policies that have tribal implications, and are responsible
    for strengthening the government-to-government relationship between the
    United States and Indian tribes.

                            LUMMI SPECIFIC REQUESTS

    Rural Development Loan Fund
        Tribal Financing and Access.--It is critical that Tribal
    governments acquire affordable and assessable financing for
    infrastructure development, to build facilities that provide tribal
    governmental services to our member and other governmental projects.
    Tribes must have equitable access and the same loan eligibility
    criteria as counties and States. Currently, existing loan criteria is
    inequitable and obligates valuable Tribal financial resources that
    otherwise would be allocated to providing needed services to our
    community.
        Water Supply.--Phase 1 funding of +$2 million, for a new Water
    Supply System--Increase in funding for Hatchery construction, operation
    and maintenance. Funding will be directed to increase hatchery
    production to make up for the shortfall of wild salmon.
        The Lummi Nation currently operates two salmon hatcheries that
    support tribal and non-tribal fishers in the region. The tribal
    hatchery facilities were originally constructed utilizing Federal
    funding from 1969-1971. Understandably most of original infrastructure
    needs to be repaired, replaced and/or modernized. Lummi Nation Fish
    Biologists estimate that these facilities are currently operating at 30
    percent of their productive capacity. Through the operation of these
    hatcheries the Tribe annually produces 1 million fall Chinook and 2
    million Coho salmon. To increase production, we must pursue a ``phased
    approach'' that addresses our water supply system first. The existing
    system only provides 850 GPM to our hatchery. To increase production to
    a level that will sustain tribal and non-tribal fisheries alike, we
    need to increase our water supply four-fold. A new pump station and
    water line will cost the Tribe approximately $6 million. We are
    requesting funding for the first phase of this project. Our goal is to
    increase fish returns by improving aquaculture and hatchery production
    and create a reliable, sustainable resource to salmon fishers by
    increasing enhancement.
        Lummi Nation needs financial resources to develop comprehensive
    water resources conservation and utilization plans that accommodates
    the water needs of its residents, its extensive fisheries resources.
        To ensure related to the removal of wild stocks from the salmon
    available for harvest are compensated through increased hatchery
    construction, operations and maintenance funding.
        Job Development.--The Lummi Nation needs support of its
    comprehensive Fisherman's Cove Harbor and Working Water Front Project
    which addresses Indian Energy, Economic and Workforce Development needs
    of the Lummi Nation membership.
        Unemployment on the reservation has been very difficult to address
    with limited on-reservation jobs. Tribal governments need to be able to
    meet the employment and training needs of our membership as well as the
    business development needs of our communities. This is the objective of
    the Lummi Nation Fisherman's Cove Harbor and Working Waterfront
    Project. We need financial assistance to enable our membership to get
    the job skills the local (Reservation and Non-Reservation) labor market
    demands. We ask the Committee to direct the Bureau to require this
    Office to work with the Lummi Nation to fully develop the Working
    Waterfront Project for the benefit of the Lummi Nation fishers, members
    and others invested in the marine economy of the extreme northwest
    corner of the United States.
    USDA--Natural Resources Conservation Service
        Treaty Reserved Rights.--The Lummi Nation and other western
    Washington tribes are in danger of losing our treaty reserved rights.
    At risk are our constitutionally protected treaty reserved rights to
    harvest salmon. Because of the diminishing salmon populations and
    subsequently constrained tribal harvests--all due to the inability to
    restore salmon habitat faster than it is currently being destroyed and
    limitation on hatchery production to mitigate for lost natural
    production. To stop this habitat degradation, we are requesting that
    our Federal trustee to implement their fiduciary duties by better
    protecting salmon habitat. By fulfilling these essential Federal
    obligations, it is our hope that our salmon resource--the foundation of
    our cultures, our economies, and our rights--will be restored. We are
    urging the following action:
      --Require that all Federal funding for agricultural BMPs are
            contingent upon agreement to imp implement full suites of NMFS/
            USFWS/EPA's western Washington BMP performance standards.
      --Consult with NMFS regarding the impacts of agricultural subsidy
            programs on western Washington salmon.
      --Fund tribal riparian easement and fee simple habitat conservation
            acquisitions.
      --Make the production of traditional tribal foods eligible for
            agricultural subsidy and conservation programs.

                          FAMILY AND CHILDREN WELLNESS

        Healthy, Hunger-Free Kids Act of 2010.--Lummi Nation needs
    assistance to develop and implement our tribal program to take full
    advantage of the National School Lunch Program reimbursement by having
    our tribal traditional foods eligible for reimbursement/subsidy.
        Child Abuse and Neglect.--Poverty is the primary factor in
    predicting incidents of child abuse and neglect. When the whole family
    is living in a car or a camper or in a low income house sparsely
    furnished house stimulation for positive mental, physical and emotional
    child development is absent. Poverty starts a downward spiral that is
    further fueled by the lack of traditional teachings, which values
    working together, not competing with one another. The first and most
    important step in reversing this trend is a job. Jobs not only change
    the life of the one who gets the job, but the lives of everyone in
    their family and positive impact to the community. The reverse is also
    true when jobs are lost. Over the last 10 years over 300 hundred small
    fishing businesses operated by members of the Lummi nation have
    financially failed. The people employed and families supported by these
    businesses are unemployed without access to unemployment insurance.
    Most of these people have replaced their employment with access to
    TANF, GA and other related income transfer programs. Lummi Nation needs
    financial assistance to insure that every Lummi Nation members who
    needs a job has access to a job.
        Domestic Violence.--Poverty starts a downward spiral that is
    further fueled by the lack of traditional teachings, which values
    working together and not competing with one another. Domestic Violence
    is a function of poverty and a lack of traditional values about the
    most prominent difference in our lives is the difference between men
    and women. Traditionally both are considered sacred functions and
    cannot be pre-empted by the other. The first and most important step in
    reversing this trend is a job.
        Elder Abuse.--Lummi Nation is concerned that incidents of elder
    abuse have been identified in our community. The Lummi Nation is
    committed to identify conditions which lead to and support elder abuse
    and eliminating those conditions from the community. Those elders who
    have secured social security payments are often the only family member
    with cash income. As the head of a family they are looked to support
    others who do not have a cash income. When the available resources do
    not match required expenditures month after month tension builds and
    tragic incidents result. Lummi Nation needs financial assistance to
    insure that all of its members who need jobs have jobs. This is the
    best way to insure that our elders may live in our community without
    harm.
        Thank you again for this opportunity to provide you with the
    priorities and requests of the Lummi Nation.
        Hy'shqe.
                                     ______

       Prepared Statement of the Massachusetts Vegetable & Flower Grower

        U.S. agriculture is made up of hundreds of crops of which only a
    dozen or so are considered major crops. The rest are referred to as
    minor or specialty crops and form the backbone and bloodline of our
    country's food supply. The commodity groups supporting this letter
    represent those who grow all the high quality vegetables and fruits we
    eat, the herbs and spices that add flavor to our lives, and the flowers
    and landscape plants that make America a beautiful place to live. All
    crops require pest control whether grown organically or conventionally.
    Due to cost of meeting EPA standards, which ensure all pest control
    compounds are safe to both human health and the environment, it is
    often economically unfeasible to commercialize pest control products
    for minor markets without public support. The limited acres on which
    these crops are grown do not provide the economic incentive for the
    private sector to register these products on our crops. Recognizing the
    need for the Government to assist with pest management in specialty
    crops, the IR-4 \1\ Project was created nearly 50 years ago to help
    America's specialty crop growers. The IR-4 Project is widely considered
    to be a model program with a history of successfully providing
    specialty crop growers with needed production tools and has deep
    support throughout the agricultural community.
    ---------------------------------------------------------------------------
        \1\ The Friends of IR-4 is a large diversified assemblage of
    commodity/agricultural organizations that rely upon and support the IR-
    4 Project as it currently exists. For more information, go to
    www.saveir-4.org.
    ---------------------------------------------------------------------------
        We believe the IR-4 Project has become one of the most efficient,
    indispensable and reliable Government programs ever developed. Simply
    put, specialty crops cannot economically survive without the IR-4
    Project. Since the IR-4 Project is so crucial to our existence, we felt
    great alarm and deep concern when the fiscal year 2013 President's
    budget proposal for the USDA National Institute Food and Agriculture
    (NIFA) was proposing to transfer the IR-4 budget line item (Minor Crop
    Pest Management in Research and Education Activities) into a proposed
    new Crop Protection Program which includes five integrated pest
    management (IPM) programs. This proposed elimination of dedicated
    funding for the IR-4 Project will have profound negative impacts on
    production costs for all specialty crops and will result in
    unsustainable economic losses to growers, food processers and,
    ultimately, the consumers.
        We support the logic and financial considerations behind the
    proposal to consolidate five similar Integrated Pest Management
    Programs into the proposed Crop Protection Program. However, we believe
    that the Crop Protection Program is not the appropriate place to merge
    IR-4 due to its distinct objectives, which do not dovetail into the
    other IPM programs.
        We offer the following reasons why we are adamantly opposed to this
    move:
      --The five Focus Areas for the proposed Crop Protection program, as
            documented in the Explanatory Notes, which was submitted to
            Congress in the President's budget, do not include the primary
            IR-4 mission of ``supporting the development of appropriate
            data to facilitate registration of sustainable pest management
            technologies for specialty crops and minor uses''. Thus, it
            appears that USDA does not intend to continue to support the
            regulatory approvals of new crop protection chemicals and
            biopesticides for food and nonfood specialty crops in the
            proposed Crop Protection Program. We consider this change to be
            a serious threat to specialty crop agriculture in the United
            States.
      --IR-4 is exempt from indirect cost recovery by the host land-grant
            universities under 7 U.S.C. 450i(e), the NIFA grant currently
            provided to fund IR-4. The proposed Crop Protection Program
            transfers funds to Integrated Activities which would allow up
            to 30 percent indirect cost recovery. If IR-4 is included as
            part of the Crop Protection program, it means a 30 percent
            decrease in funds available for IR-4 project. This funding
            decrease is a very threatening proposition for specialty
            agriculture and is something that we cannot accept.
      --IR-4 does much more than crop protection chemical testing. IR-4
            collaborates with:
        --USDA-Foreign Agricultural Service.--To reduce the impact of
                pesticide residues in/on specialty crops from being a
                barrier of trade for U.S. grown exports.
        --Department of Defense.--To prevent sickness/death within deployed
                U.S. military forces who are exposed to insect pests which
                transmits diseases to humans by facilitating the
                availability of public health pesticides.
        --USDA-APHIS.--To perform collaborative research to combat invasive
                pests.
        --USEPA.--To review IR-4 submitted data to help with their
                priorities to provide new technology to reduce the risk
                from pesticides.
        --Department of Commerce/OMB.--IR-4 is involved in a critical
                project supporting the U.S.-Canada agreement to accomplish
                key objectives of the Regulatory Cooperation Council.
      --IR-4 food residue research often takes 3 to 5 years to complete,
            involves highly trained staff that are proficient with USEPA's
            Good Laboratory Practices regulations, and requires expensive
            analytical instruments. This is vastly different from NIFA's
            typical research grants. Restructuring or eliminating IR-4 and
            abandoning numerous ongoing studies would be extremely
            expensive and a waste of already appropriated taxpayer money.
      --Investment in IR-4 has yielded a huge return on investment. Since
            its inception, IR-4 has facilitated the registration of over
            25,000 crop uses. The Michigan State University Center for
            Economic Analysis (Dec. 2011) determined that for a total
            budget of $18 million (USDANIFA and other public/private
            sources), IR-4 efforts contribute over $7.2 billion to annual
            U.S. Gross Domestic Product and supports 104,650 U.S. jobs.
        These comments are on behalf of the 88 undersigned commodity
    associations/grower groups who represent American specialty
    agriculture. Collectively, we represent growers with operations in
    almost every congressional district of every State. Our operations are
    a huge driver in American agriculture; the farm gate value of specialty
    crops is over $67 billion annually. For more information on this topic
    please see: www.saveir-4.org.
        In summary, the proposed consolidation of the IR-4 Project into the
    Crop Protection Program significantly hurts growers of food and non-
    food specialty crops and our food systems. It will lead to higher
    prices for the food that enhances health, and plants that enhance the
    environment. Consolidating IR-4 with the proposed Crop Protection
    Program will substantially increase costs to the taxpayer or result in
    a much smaller program providing significantly less service to American
    growers and ultimately the American public. We urge the Senate
    Appropriations Committee Subcommittee on Agriculture, Rural
    Development, Food and Drug Administration, and Related Agencies to
    continue to dedicate at least $12 million net dollars for Minor Crop
    Pest Management (IR-4) in fiscal year 2013 USDA-NIFA Research and
    Education Activities. Simply put, the United States specialty crop
    growers ask Congress to let the IR-4 Project continue to do the
    excellent job it has done for the past 49 years.
        The following commodity associations/grower groups support the
    above written testimony:
    (while looking at this list, consider the breadth of crops, regions and
                              states represented)
    Ag Matters, LLC
    American Farm Bureau Federation
    American Mushroom Institute
    American Nursery & Landscape Association
    Ball Horticultural Company
    California Apple Commission
    California Asparagus Commission
    California Blueberry Commission
    California Garlic and Onion Research Advisory Board
    Cherry Marketing Institute, Inc.
    Center for Applied Horticultural Research
    Cranberry Institute
    Dill Growers of Oregon and Washington
    Engage Agro USA
    Essex County Fruit Growers
    Florida Blueberry Growers Association
    Florida Fruit and Vegetable Association
    Florida Strawberry Growers Association
    Ginseng board of Wisconsin
    Great Lakes IPM, Inc.
    Hawleys Florist
    Hoogasian Flowers, Inc.
    Hop Growers of Washington, Inc.
    Hop Growers of American, Inc.
    Idaho Grain Producers Association
    Idaho Hop Commission
    Idaho Hop Growers Association
    Idaho Sugar Beet Growers Association, Inc.
    Iwasaki Bros, Inc.
    Kona Perfect Estate Grown Coffee
    Lavender Growers of Oregon
    Maine Vegetable & Small Fruit Growers Association
    Massachusetts Fruit Growers Association
    MGB Marketing
    Meister Media Worldwide-Publisher of:
        American Western Fruit Grower
        American Vegetable Grower
        Florida Grower
        Greenhouse Grower
        CropLife
    Michigan Asparagus Advisory Board
    Michigan Cherry Committee
    Michigan Mint Growers Association
    Minor Crop Farmers Alliance
    Mint Industry Research Council
    Montana Mint Committee
    Nash Produce
    National Asparagus Council
    National Barley Growers Association
    National Greenhouse Manufacturers Association
    National Onion Association
    National Potato Council
    National Watermelon Growers Association
    NC Commercial Blackberry & Raspberry Growers Association
    NC Pickles Packers Association
    NH Vegetable & Small Fruit Growers Association
    New England Vegetable & Berry Growers Association
    North American Blueberry Council
    North American Greenhouse/Hothouse Vegetable Growers Association
    North American Strawberry Growers Association
    North California Garlic & Onions Growers
    North Carolina Blueberry Council
    North Carolina Nursery & Landscape Association
    North Carolina Strawberry Association
    Oregon Blueberry Commission
    Oregon Essential Oil Growers League
    Oregon Fine Fescue Commission
    Oregon Hop Commission
    Oregon Mint Commission
    Oregon Ryegrass Commission
    Oregon Seed Council
    Oregon Tall Fescue Commission
    Pacific Northwest Christmas Tree Association
    Pacific Northwest Vegetable Association
    Pickle Packers International
    Rudd Farm
    Society of American Florists
    Texas Citrus Mutual
    Texas Vegetable Association
    Tulelake Growers Association Mint Research Advisory Committee
    U.S. Apple Association
    U.S. Dry Pea & Lentil Council
    U.S. Hop Industry Plant Protection Committee
    Washington Asparagus Commission
    Washington Blueberry Commission
    Washington Hop Commission
    Washington Mint Growers Association
    Washington Red Raspberry Commission
    Washington State Commission on Pesticide Registration
    Western Alfalfa Seed Growers Association
    Wisconsin Mint Industry
    Wisconsin Muck Farmers Association
                                     ______

       Prepared Statement of the Metropolitan Water District of Southern
                                   California

        The Metropolitan Water District of Southern California
    (Metropolitan) encourages the Subcommittee's support for fiscal year
    2013 Federal funding of about $18 million from the U.S. Department of
    Agriculture's Environmental Quality Incentives Program for the Colorado
    River Basin Salinity Control Program.
        The concentrations of salts in the Colorado River cause
    approximately $300 million in quantified damages in the lower Colorado
    River Basin States each year and significantly more in unquantified
    damages. Salinity concentrations of Colorado River water are lower than
    at the beginning of Program activities by over 100 milligrams per liter
    (mg/L). Modeling by the U.S. Bureau of Reclamation indicates that the
    quantifiable damages would rise to more than $500 million by the year
    2030 without continuation of the Colorado River Basin Salinity Control
    Program (Program).
        Water imported via the Colorado River Aqueduct has the highest
    level of salinity of all of Metropolitan's sources of supply, averaging
    around 630 mg/L since 1976, which leads to economic damages. For
    example, damages occur from:
      --A reduction in the yield of salt sensitive crops and increased
            water use for leaching in the agricultural sector;
      --A reduction in the useful life of galvanized water pipe systems,
            water heaters, faucets, garbage disposals, clothes washers, and
            dishwashers, and increased use of bottled water and water
            softeners in the household sector;
      --An increase in the cost of cooling operations, and the cost of
            water softening, and a decrease in equipment service life in
            the commercial sector;
      --A decrease in the life of treatment facilities and pipelines in the
            utility sector;
      --Difficulty in meeting wastewater discharge requirements to comply
            with National Pollutant Discharge Elimination System permit
            terms and conditions, and an increase in desalination and brine
            disposal costs due to accumulation of salts in groundwater
            basins, and fewer opportunities for recycling due to
            groundwater quality deterioration; and
      --Increased use of imported water for leaching and the cost of
            desalination and brine disposal for recycled water.
        Concern over salinity levels in the Colorado River has existed for
    many years. To deal with the concern, the International Boundary and
    Water Commission approved Minute No. 242, Permanent and Definitive
    Solution to the International Problem of the Salinity of the Colorado
    River in 1973, and the President signed into law the Colorado River
    Basin Salinity Control Act in 1974 (Act). High total dissolved solids
    in the Colorado River as it enters Mexico and the concerns of the seven
    Colorado River Basin States regarding the quality of Colorado River
    water in the United States drove these initial actions. To foster
    interstate cooperation and coordinate the Colorado River Basin States'
    efforts on salinity control, the seven Basin States formed the Colorado
    River Basin Salinity Control Forum.
        The salts in the Colorado River system are indigenous and
    pervasive, mostly resulting from saline sediments in the Basin that
    were deposited in prehistoric marine environments. They are easily
    eroded, dissolved, and transported into the river system, and enter the
    River through both natural and anthropogenic sources.
        The Program reduces salinity by preventing salts from dissolving
    and mixing with the river's flow. Irrigation improvements (sprinklers,
    gated pipe, lined ditches) and vegetation management reduce the amount
    of salt transported to the Colorado River. Point sources such as saline
    springs are also controlled. The Federal Government, Basin States, and
    contract participants spend over $40 million annually on salinity
    control programs.
        The Program, as set forth in the act, benefits both the Upper
    Colorado River Basin water users through more efficient water
    management and the Lower Basin water users, hundreds of miles
    downstream from salt sources in the Upper Basin, through reduced
    salinity concentration of Colorado River water. California's Colorado
    River water users are presently suffering economic damages in the
    hundreds of millions of dollars per year due to the river's salinity.
        These Federal dollars will be augmented by the State cost sharing
    of 30 percent with an additional 25 percent provided by the
    agricultural producers with whom the U.S. Department of Agriculture
    contracts for implementation of salinity control measures. Over the
    past years, the Colorado River Basin Salinity Control program has
    proven to be a very cost effective approach to help mitigate the
    impacts of increased salinity in the Colorado River. Continued Federal
    funding of this important Basin-wide program is essential.
        Metropolitan urges the Subcommittee to support funding for fiscal
    year 2013 of about $18 million from the U.S. Department of
    Agriculture's Environmental Quality Incentives Program for the Colorado
    River Basin Salinity Control Program.
                                     ______

       Prepared Statement of the National Association of County and City
                                Health Officials

        The National Association of County and City Health Officials
    (NACCHO) is the voice of the approximately 2,800 local health
    departments across the country. City, county, metropolitan, district,
    and tribal health departments work every day to ensure the safety of
    the water we drink, the food we eat, and the air we breathe. Local
    health departments work with State, local, and national partners to
    prevent, identify, and respond to outbreaks of foodborne illness.
        The Nation's current financial challenges are compounded by those
    in State and local governments further diminishing the ability of local
    health departments to address community health and safety needs.
    Repeated rounds of budget cuts and lay-offs continue to erode local
    health department capacity. NACCHO surveys have found that since 2008,
    local and State health departments have lost 52,000 jobs due to budget
    reductions. In the area of food safety, that means there are fewer
    inspectors and trained food safety and food service professionals--from
    restaurants and school cafeteria workers to street fair vendors--able
    to identify risks and prevent foodborne illness.
        Local health departments have wide ranging responsibilities
    including measuring population-wide illness and organizing efforts to
    prevent disease and prolong quality of life. In the area of food
    safety, local health department responsibilities are focused on
    preventing foodborne illness and investigating the cause and spread of
    illness. Local health departments represent two-thirds 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.
        Despite the best efforts of public officials, over 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.
    Foodborne illness causes an estimated 128,000 hospital visits and 3,000
    deaths annually. Foodborne illness has significant costs associated
    with direct medical expenses, lost productivity, and decreased revenue
    for food manufacturers and retail establishments. Salmonella, which
    causes 1 million cases of foodborne illness, costs $365 million a year
    in direct medical expenses. The 2009 salmonella outbreak saw a double
    digit decline in the amount of peanut products purchased.
        In 2011, the United States experienced the deadliest foodborne
    illness outbreak in 90 years, an outbreak of listeria in cantaloupe
    that killed 32 people and infected 146 people in 28 States. This
    outbreak was quickly contained and the loss of life limited because of
    coordinated action between local, State and Federal public health
    agencies, including local and State health departments.
        Local health departments are on the front lines conducting food
    safety inspections and have the expertise to educate food handlers in
    their communities. Local health departments inspect restaurants,
    grocery stores, daycare facilities, hospitals, schools, and some food
    manufacturing plants to ensure safe food handling practices and
    sanitary conditions. Local health departments investigate citizen
    complaints and when necessary, will take action to ensure that a food
    establishment complies with sanitation standards.
        In 2010, Congress passed the Food Safety Modernization Act (FSMA),
    which recognized the importance of protecting the public from foodborne
    illness and the need to strengthen our current system for prevention of
    these costly illnesses. In the 21st century, our global food supply
    system is more complex than ever before and has an increased risk of
    accidental or intentional contamination. In FSMA, the Federal
    Government made a commitment to foster coordination and increase
    capacity at the local, State and Federal level to prevent and respond
    to foodborne illness. The return on Federal investment in food safety
    training, surveillance and investigation capacity can be measured in
    improved health and lower health care costs and lost productivity. In
    fiscal year 2012, Congress made a down payment on the implementation of
    FSMA by providing $39 million. NACCHO recommends Congress take further
    steps in fiscal year 2013 to fully implement FSMA and fund the Food and
    Drug Administration's food safety programs as outlined below.
     food and drug administration--center for safety and applied nutrition
    NACCHO Request: $1.0 Billion
    President's Fiscal Year 2013 Budget: $1.0 Billion
    Fiscal Year 2012: $883 Million
        FDA's Center for Safety and Applied Nutrition (CFSAN) supports
    partnerships at the local, State and Federal level to protect consumers
    from, and quickly respond to and track, foodborne illness outbreaks.
    CFSAN also oversees the food safety training program which helps to
    maintain uniform standards in food inspection and the retail food
    safety initiative which provides best practices for retail food
    handlers.
        A national food safety training system, including a certification
    system, will ensure that officials at all levels of government have
    consistent, up-to-date knowledge, as well as the necessary skills, to
    do their jobs. Without a robust national training system, there is less
    capacity to consistently and continuously improve knowledge and skills
    based on the latest science and risk assessments. It is crucial that
    regulators and public health partners have the appropriate knowledge
    and training to carry out their duties to safeguard the public from
    foodborne illness. Food safety training requires continued funding to
    increase capacity and adequately train our Nation's food protection
    workers.
        FDA's dedicated retail food safety initiative supports research and
    distribution of technologies that prevent, mitigate, or detect
    foodborne illness hazards in the retail environment. FDA resources
    allow local health departments to learn about and adopt best practices
    for prevention of foodborne illness in the retail setting and to
    utilize products developed by FDA to educate the public and food
    service workers in their communities.
        As you draft the fiscal year 2013 Agriculture-Rural Development--
    FDA Appropriations bill, we urge consideration of these recommendations
    for FDA programs that are critical to ensuring the safety of our
    Nation's food supply and protecting our Nation's people.
                                     ______

        Prepared Statement of the National Association of State Energy
                                   Officials

        Chairman Kohl and Ranking Member Blunt, I am David Terry, Executive
    Director of the National Association of State Energy Officials (NASEO)
    (dterry@naseo.org), and I am testifying in support of funding for the
    energy title of the farm bill. Specifically, we support funding of at
    least $39 million in discretionary funds for the Rural Energy for
    America (REAP) program (Section 9007 of the farm bill), in addition to
    any mandatory funding. The REAP program was created in the 2002 farm
    bill and it has been a huge success. Over 9,600 energy efficiency and
    renewable energy projects have been implemented in every State since
    2003. With a required $3 match of non-Federal funds for every Federal
    dollar invested in REAP, over $1.6 billion in matching funds have been
    provided. This program has specifically benefitted farmers, ranchers
    and rural small businesses. NASEO members work directly with eligible
    entities, as well as State agricultural agencies and rural interests to
    promote this successful program. Rising oil and distillate prices have
    made this program even more important.
        NASEO represents the energy offices in the States, territories and
    the District of Columbia. The REAP program, and the other critical
    programs in the energy title of the farm bill, helps create jobs,
    increases agricultural productivity, saves energy for farmers, ranchers
    and rural small businesses, generates energy, promotes use of
    alternative fuels, reduces our dependence on imported petroleum and
    saves money in rural America. The cost is very low and the payback is
    very high. REAP is about rural economic development.
        We urge your support for the REAP program.
                                     ______

    Prepared Statement of the National Commodity Supplemental Food Program
                                  Association

        Mister Chairman and Subcommittee members, thank you for this
    opportunity to present information regarding the USDA/FNS Commodity
    Supplemental Food Program (CSFP).
        The National Commodity Supplemental Food Program Association
    (NCSFPA) requests the Senate Agriculture Appropriations Subcommittee
    fund CSFP for fiscal year 2013 at $191,935,000; $186,935,000 as
    requested by the U.S. Department of Agriculture, an additional $5
    million to begin CSFP operations in six States (Connecticut, Hawaii,
    Idaho, Maryland, Massachusetts, and Rhode Island) with USDA-approved
    plans. Additionally, the subcommittee should note that current States
    requested approximately 116,350 additional slots to meet the rising
    demand for nutritional assistance among our vulnerable senior
    population.
        CSFP is a unique program because it brings together Federal and
    State agencies, along with public and private entities. In fiscal year
    2011, 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).
        In fiscal year 2011, 97 percent of all CSFP recipients were low-
    income seniors. Our association has proposed as part of the next farm
    bill fully converting the program into a seniors-only program, allowing
    sufficient time for those mothers and children to transition off CSFP.
        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 for effective access to these supplemental foods as well as
    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.
        CSFP continues to be a testimony to the power of community
    partnerships between faith-based organizations, farmers, private
    industry and Government agencies. The CSFP offers a unique combination
    of advantages that are unparalleled by any other food assistance
    program:
      --The CSFP specifically targets one our Nation's most nutritionally
            vulnerable populations: low-income seniors (but association is
            suggesting that this becomes senior-only project, so don't
            mention children?).
      --The CSFP provides a monthly selection of food packages tailored to
            the specific nutritional needs of seniors. 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 or extra light syrup, and low-salt canned
            vegetables.
      --The CSFP purchases foods at wholesale prices, directly supporting
            American farmers. The average cost of a CSCP food package is
            estimated at $19.85 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 the most recent CSFP survey, more than 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 that it is a cost-effective way of
    providing nutritious supplemental foods. While USDA's budget request
    will provide adequate resources for our monthly caseload of 599,380
    seniors, mothers, and children--a reduction from the 604,931 packages
    USDA was able to support in fiscal year 2011--we urge the Subcommittee
    to strongly consider our request for increased funding to allow six
    additional States to begin providing nutritional assistance to their
    vulnerable seniors.
        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''.
        According to the 1997 report by the National Policy and Resource
    Center on Nutrition and Aging at Florida International University,
    Miami--Elder Insecurities: Poverty, Hunger, and Malnutrition,
    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.
        CSFP recipients believe this is a very significant and vital
    program; our belief is supported by agency and recipient testimonials.
    An Arkansas recipient tells us that they would not be able to eat the
    balanced meals that CSFP provides each month. Arkansas program
    operators talk about the importance of interaction between seniors and
    program staff, saying this interaction is very important for the well-
    being of recipients, and recipients are able to live more stable, self-
    sufficient lives as a result. Colorado participants say that they would
    not be able to have juice and cereal without CSFP, and many appreciate
    the program because they are homebound, and that there are 100 clients
    on the waiting list in El Paso County. Seniors in St. Louis, Missouri,
    say that CSFP foods help them get through to their next checks.
    Participants in Nebraska say that they don't know what they would do
    without this food, calling the program a ``lifesaver''. New Hampshire
    participants tell us that they use CSFP as a primary source of
    nutrition each month and would see a dramatic loss in food availability
    without the program. One Wisconsin recipient said that they would
    starve without the program, while others said that CSFP on their
    limited income meant that they could pay their telephone and electric
    bills.
        These anecdotes represent just a small portion of those affected,
    but it highlights the deep and rising need we are seeing in communities
    across the country. Whether urban, suburban, or rural--we have seen
    dramatic rises in the demand from the community--and have become more
    limited in available resources. With an ever-growing senior population
    living on fixed incomes, there has never been a more pressing time to
    fund this vital program.
        The CSFP is supported by 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 Department
    of Agriculture for their continued innovations to strengthen the
    quality of the food package and streamline administration.
                                     ______

              Prepared Statement of the National Organic Coalition

        Chairman Kohl, Ranking Member Blunt, and Members of the
    Subcommittee: My name is Steven Etka. I am submitting this testimony on
    behalf of the National Organic Coalition (NOC) to detail our fiscal
    year 2013 funding requests for USDA programs of importance to organic
    agriculture.
        The NOC is a national alliance of organizations working to provide
    a voice for farmers, environmentalists, consumers, cooperative
    retailers and others involved in organic agriculture. The current
    members of NOC are the Beyond Pesticides, Center for Food Safety, Equal
    Exchange, Food and Water Watch, Maine Organic Farmers and Gardeners
    Association, Midwest Organic and Sustainable Education Service,
    National Cooperative Grocers Association, Northeast Organic Dairy
    Producers Alliance, Northeast Organic Farming Association-Interstate
    Policy Council, Organically Grown Company, Organic Seed Alliance, Rural
    Advancement Foundation International-USA, and the Union of Concerned
    Scientists.

                   USDA/AGRICULTURAL MARKETING SERVICE (AMS)

    National Organic Program
                Request: 9.896 Million
        Sales of organic food and beverages have experienced a rapid growth
    over the last decade, averaging nearly 20 percent per year. Despite the
    recession, organic sales grew at a rate of 5 percent in 2009 and 8
    percent in 2010. In 2011, the organic sector experienced a 9.5 percent
    growth rate. The National Organic Program (NOP) is the agency charged
    with regulating and enforcing the USDA organic label. For years, the
    rapid growth of the organic industry has far outpaced the resources
    provided to the NOP, which has greatly limited the ability of NOP to
    fulfill its regulatory and enforcement role credibly.
        Fortunately, both Congress and the Administration responded with an
    increase in funding in fiscal years 2009 and 2010 to meet these needs.
    In the final fiscal year 2011 Continuing Resolution cuts were made to
    AMS overall, and funding levels for individual AMS programs were left
    to the discretion of the agency. The resulting NOP funding level for
    fiscal year 2011 is $6.919 million.
        We are requesting for $9.896 million for the NOP, which is the same
    level requested by the Administration's fiscal year 2012 budget,
    representing an increase of $2.98 million over current levels. The
    Administration's fiscal year 2013 level-funding request for NOP does
    not adequately address the needs of this rapidly growing sector.
    Increased funding is needed to accelerate the review and amendment of
    program standards and regulations to reflect industry and consumer
    expectations through a transparent and participatory process; improve
    the consistency in certifier application of the standards; and improve
    timeliness and effectiveness of enforcement actions to protect organic
    integrity.

                             USDA (AMS, ERS, NASS)

    Organic Data Initiative
                Request: $300,000 for AMS Price Report; Report Language for
                        NASS Organic Production Survey, and ERS Organic
                        Data Analysis
        Authorized by Section 7407 of the 2002 Farm Bill, the Organic
    Production and Marketing Data Initiative states that the ``Secretary
    shall ensure that segregated data on the production and marketing of
    organic agricultural products is included in the ongoing baseline of
    data collection regarding agricultural production and marketing.''
    Section 10302 of the Farm, Conservation, and Energy Act of 2008 amends
    the provision to provide mandatory funding, and to authorize $5 million
    annually in discretionary funding.
        As the organic industry matures and grows at a rapid rate, the lack
    of national data for the production, pricing, and marketing of organic
    products has been an impediment to further development of the industry
    and to the effective functioning of many organic programs within USDA.
    The organic data collection and analysis effort at USDA has made
    significant strides in recent years, but remains in its infancy.
    Because of the multi-agency nature of data collection within USDA,
    organic data collection and analysis must also be undertaken by several
    different agencies within the Department.
        In 2008, NASS conducted the first-ever comprehensive Organic
    Production Survey as a follow-on survey to the 2007 Census of
    Agriculture. Published in February 2010, the survey has provided
    information vital to the organic sector's growth and to the U.S.
    Department of Agriculture. The Organic Production Survey should be
    conducted on a regular basis to properly assess the characteristics,
    trends, and changes in the sector.
        The Administration's fiscal year 2013 budget proposes to address
    organic data collection needs within the overall budget request for the
    data collection agencies. However, we are requesting that report
    language be included in the fiscal year 2013 report to clearly specify
    the organic data collection efforts within AMS, ERS and NASS.
    Specifically, we are requesting report language identifying $300,000
    for AMS organic price reporting, level with fiscal year 2012 funding.
    In addition, we are requesting report language urging NASS to undertake
    the necessary planning to conduct an Organic Production Survey on an
    on-going 5-year cycle, as a follow-on survey to the Census of
    Agriculture, starting in 2013; and for ERS to continue its organic data
    analysis efforts.

             USDA/NATIONAL INSTITUTE OF FOOD AND AGRICULTURE (NIFA)

    Organic Transitions Program
                Request: $5 Million
        The Organic Transition Program, authorized by Section 406 of the
    Agricultural Research, Education and Extension Reform Act (AREERA) for
    Integrated Research Programs, is a research grant program that helps
    farmers surmount some of the challenges of organic production and
    marketing. As the organic industry grows, the demand for research on
    organic agriculture is experiencing significant growth as well. The
    benefits of this research are far-reaching, with broad applications to
    all sectors of agriculture, even beyond the organic sector. Yet funding
    for organic research is minuscule in relation to the relative economic
    importance of organic agriculture and marketing in this Nation.
        The Organic Transition Program was funded at levels ranging between
    $2.1 and $1.8 million during the period of fiscal year 2003 through
    fiscal year 2009, received an increase to $5 million in fiscal years
    2010, and $4 million in fiscal years 2011 and 2012. The
    Administration's fiscal year 2013 budget requested level funding. We
    are requesting $5 million to restore the program to its fiscal year
    2010 level.
    Agriculture and Food Research Initiative (AFRI)
                Request: Report language on Conventional/Classical Plant
                        and Animal Breeding
        In recent decades, public resources for classical plant and animal
    breeding have dwindled, while resources have shifted toward genomics
    and biotechnology, with a focus on a limited set of major crops and
    breeds. This problem has been particularly acute for organic and
    sustainable farmers, who seek access to germplasm well suited to their
    unique cropping systems and their local environment.
        Since fiscal year 2005, the Senate Agriculture Appropriations
    Subcommittee has included report language raising concerns about this
    problem, and urging CSREES (now NIFA) to give greater consideration to
    research needs related to classical plant and animal breeding when
    setting priorities within the National Research Initiative (now AFRI).
        In Section 7406 of the Food, Conservation, and Energy Act of 2008,
    the National Research Initiative was merged with the Initiative for
    Future Agriculture and Food Systems to become the Agriculture and Food
    Research Initiative (AFRI). Congress included language within AFRI to
    make ``conventional'' plant and animal breeding a priority for AFRI
    research grants, consistent with the concerns expressed by the
    Appropriations Committee in preceding appropriations cycles.
        Despite the many years of Senate report language and the 2008 Farm
    Bill language on this matter, research proposals for classical breeding
    that have sought AFRI funding in recent years have been consistently
    denied. Of the 127 AFRI-funded projects in 2009, 2010, and 2011 related
    to plant breeding and genomics, there was only one project that could
    truly be classified as classical breeding, which was a 2010 grant to
    Kansas State University for $210,000. Of the 59 AFRI-funded projects in
    animal breeding, fertility and genomics, there appear to be no
    classical animal breeding projects funded at all.
        It is becoming clear that unless a separate AFRI subgrant category
    dedicated to classical plant and animal breeding and the development of
    public cultivars is created, the 2008 Farm Bill classical breeding
    requirement and concerns stated in years of Senate report language will
    not be adequately addressed.
        We are requesting strong report language from the Subcommittee to
    reiterate that the funding for classical plant and animal breeding and
    pubic cultivar development should be a priority area within the AFRI
    program, and urging that a separate and distinct RFA be created within
    AFRI to address this critical need. Specifically, we are requesting the
    following report language in the AFRI section of the Committee report:

    The Committee believes that funding for classical plant and animal
    breeding that results in finished public cultivars and breeds should be
    a priority area within the AFRI program, and urges the agency to create
    a separate and distinct RFA within AFRI to address this critical need.
    Sustainable Agriculture Research and Education (SARE)
                Request: $30 Million ($18 Million for Research and
                        Education Grants, $7 Million for the Federal-State
                        Matching Grant Program, and $5 Million for
                        Extension and Outreach Grants)
        The SARE program has been very successful in funding on-farm
    research on environmentally sound and profitable practices and systems,
    including organic production. The reliable information developed and
    distributed through SARE grants have been invaluable to organic
    farmers. The President's budget requests $22.7 million for SARE program
    for fiscal year 2013, including $3.5 million to start the Federal-State
    Matching Grant program. We are requesting $18 million for research and
    education grants, $7 million for Federal-State Matching Grant program,
    and $5 million for extension and outreach.

                    USDA/RURAL BUSINESS COOPERATIVE SERVICE

    Appropriate Technology Transfer for Rural Areas (ATTRA)
                Request: $3 Million
        ATTRA, authorized by Section 6016 on the Food, Conservation, and
    Energy Act of 2008, is a national sustainable agriculture information
    service, which provides practical information and technical assistance
    to farmers, ranchers, Extension agents, educators and others interested
    and active in sustainable agriculture. ATTRA interacts with the public,
    not only through its call-in service and website, but also provides
    numerous excellent publications written to help address some of the
    most frequently asked questions of farmers and educators. Much of the
    real-world information provided by ATTRA is extremely helpful to both
    the conventional and organic communities, and is available nowhere
    else. As a result, the growth in demand for ATTRA services has
    increased significantly, both through the website-based information
    services and through the growing requests for workshops.
        Funding for ATTRA was completely eliminated in the fiscal year 2011
    Continuing Resolution, greatly jeopardizing information transfer to
    farmers seeking the most up-to-date scientific and practical
    information about sustainable farmers systems, but was funded at $2.25
    million in fiscal year 2012. The President's fiscal year 2013 budget
    requests level funding ($2.25 million) for ATTRA. We are requesting $3
    million for fiscal year 2013, to help meet the growing demand from
    farmers for up-to-date, science-based information.

                    USDA/AGRICULTURE RESEARCH SERVICE (ARS)

    Classical Plant and Animal Breeding Activities
                Request: $9.03 Million
        As noted above in the AFRI section of this request, public
    resources for classical plant and animal breeding have dwindled in
    recent decades, and as a result, our capacity for public breeding in at
    a critical point. While USDA's statutory obligation to address this
    problem through the AFRI competitive grant program remains strong, ARS
    also has an obligation in this regard. Although ARS has the resources
    and expertise to help reverse this dangerous trend, the agency has not
    made a concerted effort in this regard.
        We are requesting $9 million for ARS classical plant and animal
    breeding efforts, to be utilized in a manner similar to that described
    in the Administration's fiscal year 2011 budget request (pages 16-19
    and 16-29 of USDA's fiscal year 2011 Budget Justification document),
    which called for an increase of $4.289 million for ``crop breeding to
    enhance food and production security'' and other $4.75 million for
    ``crop protection to enhance food and production security,'' with a
    clear focus on classical plant and animal breeding activities. With the
    change in leadership at USDA, the Administration's fiscal year 2012 and
    2013 requests for ARS have failed to reiterate this request. However,
    we believe the fiscal year 2011 ARS request for this research was well
    stated, and urge the Subcommittee to provide funding for this critical
    ARS activity.
        Thank you for your consideration of these fiscal year 2013 funding
    priorities. We look forward to working with the Subcommittee throughout
    this year's appropriations process.
                                     ______

           Prepared Statement of the National Rural Housing Coalition

        On behalf of the National Rural Housing Coalition (NRHC), I would
    like to thank the Subcommittee for the opportunity to submit testimony
    on fiscal year 2013 appropriations for Department of Agriculture (USDA)
    Rural Housing Programs. I strongly urge this Subcommittee to fund USDA
    Rural Housing programs at the higher of fiscal year 2012 levels or the
    President's fiscal year 2013 budget request: (1) $900 million for
    Section 502 Family Direct Homeownership Loans; (2) $28 million for
    Section 504 Very-Low Income Rural Housing Repair Loans; (3) $29.5
    million for Section 504 Very-Low Income Rural Housing Repair Grants;
    (4) $26 million for Section 514 Farm Labor Housing Program Loans; (5)
    $9 million for Section 516 Farm Labor Housing Program Grants; (6) $64.5
    million for Section 515 Rural Rental Housing Program; (7) $907 million
    for Section 521 Multi-Family Rental Housing Rental Assistance Program;
    (8) $30 million for Section 523 Self-Help Housing Program: (9) $3.6
    million for Section 533 Housing Preservation Grants Program; (10) $150
    million for Section 538 Guaranteed Multi-Family Housing Loans; (11)
    $46.9 million for the Multi-Family Housing Preservation and
    Revitalization Program; and (12) $13 million for the Rural Community
    Development Initiative.
        NRHC is a national membership organization consisting of housing
    developers, nonprofit housing organizations, State and local officials,
    and housing advocates. Since 1969, NRHC has promoted and defended the
    principle that rural people have the right, regardless of income, to a
    decent, affordable place to live, clean water, and basic community
    services.

    Housing Needs in Rural America
        Even in strong economic times, the needs of rural America are too
    often overlooked. And, although our most recent economic crisis pushed
    these many of these communities to the brink, their needs continue to
    be neglected by the mainstream media, traditional sources of capital,
    and Federal policymakers. For example, although nearly 20 percent of
    the population lives in rural communities, other Federal agencies
    consistently overlook their unique housing needs; less than 7 percent
    of the Federal Housing Administration assistance, 10 percent of
    Veterans Affairs programs, and 12 percent of Section 8 Rental
    Assistance serves rural areas.
        Rural communities have severe housing and development needs. With
    some of the Nation's lowest incomes, rural communities are four times
    more likely to have at least 20 percent of their population living in
    poverty. About 98 percent of ``consistently poor counties'' are rural,
    as are nearly all communities with inadequate drinking water. As a
    result, rural families are far more likely to live in substandard
    housing or be overburden by rent. Housing in rural America is simply
    too expensive relative to household income, overcrowded, or lacks
    certain basic facilities.
        Despite the overwhelming need for safe, clean, and affordable
    housing in rural America, Congress has consistently cut funding for the
    very programs specifically tailored to meet this need. And now,
    President Obama has proposed significant cuts to the Section 502 Direct
    Loan and Self-Help Housing programs, and the elimination of the Section
    515 Rural Rental Housing program. Because these programs overwhelmingly
    serve our most vulnerable residents--lower income families, the
    elderly, and persons with disabilities, these cuts will only make it
    harder for low-income, rural Americans to access safe, decent,
    affordable housing. As such, I would like to focus my testimony on how
    these programs are critical to meeting the needs of rural families.
    Section 502 Single-Family Direct Homeownership Loans
        Over 60 years, the Section 502 Direct Loan Program has helped more
    than 2.1 million families realize the American Dream and build their
    wealth by more than $40 billion. Despite the program's success, demand
    for Section 502 loans continues to outpace supply. Over 25,000 loan
    applications--amounting to more than $2 billion--are currently on
    Section 502 waiting lists.
        No other Federal home ownership program can match the profile of
    the families served under Section 502. It is the only Federal
    homeownership program that is exclusively targeted to very low- and
    low-income rural families. By law, at least 40 percent of Section 502
    funds must be used to assist families earning less than 50 percent of
    the area median income. Two-thirds borrowers have incomes less than 60
    percent of AMI, with an average income less than $27,000.
        Despite serving families with limited economic means, Section 502
    is the single, most cost-effective Federal housing program, period. On
    average, each Section 502 loan costs less than $7,200 over its entire
    lifetime. Compare that to the average Section 8 Housing Assistance
    payment, which costs taxpayers nearly $7,000 each year.
        Although some have suggested that the Section 502 Guarantee Program
    can serve as an adequate alternative, this is simply untrue. Unlike the
    Direct Loan program, the Guarantee program overwhelmingly serves
    higher-income individuals--with an average income of nearly twice that
    of Direct Loan families--leaving rural communities with the greatest
    credit needs without any alternative. Even the USDA has held that the
    guarantee program is the worst-targeted of all its rural development
    guarantees, with loans going to larger, wealthier communities.
    Likewise, the guarantee program does not provide interest rate
    subsidies. This defect will become even more harmful when interest
    rates return to normal levels.

    Section 523 Mutual Self-Help Housing
        The Self-Help Housing program adapts the rural tradition of barn-
    raising to provide housing opportunities for families with limited
    economic means. Through this program, more than 3,500 families have
    been able to realize the American Dream in the past 3 years. This
    construction has led to over 11,000 jobs, more than $738 million in
    local income and $77 million in taxes and revenue in rural communities
    across the country. If the President's budget is approved by Congress,
    Self-Help Housing will be cut to its lowest funding in more than 30
    years, decimating the network of over 100 Self-Help organizations over
    37 States and deserting 50,000 families currently on their waiting
    lists.
        Self-Help Housing is the only Federal program that combines ``sweat
    equity'' homeownership opportunities with technical assistance and
    affordable loans for America's rural families. Self-Help Housing
    families work nights and weekends to provide 65 percent of the
    construction labor on their own and each other's homes. In doing so,
    families earn equity, decrease construction costs, and make lasting
    investments in their community. The hallmark of the Self-Help Housing
    program is its emphasis on hard work, self-reliance, and community.
        This program is exclusively targeted to very low- and low-income
    families who are otherwise unable to access decent housing. Over half
    of the participants are minorities. Although these families have lower
    incomes, default rates are significantly lower than other borrowers.

    Section 515 Rural Rental Housing
        Section 515 is the principal source of financing for rental housing
    in rural communities. Today, more than 500,000 families live in housing
    financed by Section 515. If approved by Congress, the President's
    budget will end a 40-year effort to improve the quality of rural
    housing, leaving seniors, low-income families, and those with
    disabilities even more vulnerable.
        Rental units developed with Section 515 loans are exclusively
    targeted to very low-, low-, and moderate-income families, the elderly,
    and persons with disabilities. A vast majority--94 percent--of Section
    515 tenants have very-low incomes. The average yearly income is only
    $11,000. Some 57 percent these households are elderly or disabled, 26
    percent are headed by persons of color, and 73 percent are headed by
    women.
        Demand for affordable, rural rental housing continues to outpace
    supply. More than 7.8 million rural residents--including 19 percent of
    all rural children--live in poverty. Almost 1 million rural renters
    live in substandard housing. Yet, despite its success and increased
    demand, Section 515 funding has been cut drastically, stalling the
    production of new units and the preservation of existing ones.

    Conclusion
        Providing adequate funding for USDA Rural Housing programs is
    essential to efforts to improve the quality of life and economic
    opportunity in rural America. These programs are all part of the
    toolbox that USDA employs address the shortfall in decent, clean, and
    affordable housing in these communities. For a very small fraction of
    the USDA's budget, Congress can provide affordable rental and
    homeownership opportunities to thousands of rural families with limited
    means and boost flagging economies in small communities.
        Thank you for this opportunity to submit this statement.
                                     ______

      Prepared Statement of the National Sustainable Agriculture Coalition

        Thank you for the opportunity to present our fiscal year 2013
    funding requests. NSAC is a national alliance of over 90 organizations
    that advocates for policies that support the economic, social, and
    environmental sustainability of agriculture, natural resources, and
    rural communities. Our USDA requests are as follows, in the order they
    appear in the appropriations bill.

    Departmental Administration
        Office of Advocacy and Outreach.--The Office of Advocacy and
    Outreach coordinates policy and outreach in two vital areas--small and
    beginning farmers, and socially disadvantaged or minority farmers. It
    administers the Outreach and Technical Assistance for Socially
    Disadvantaged Farmers and Ranchers program and the Farm Labor Grants
    program. We support USDA's request for $1.4 million for the OA&O.
    National Institute of Food and Agriculture
        Sustainable Agriculture Research and Education Program (SARE).--We
    urge you to fund this innovative competitive grants program at $30
    million, divided among research and education grants ($18 million),
    extension and professional development grants ($5 million), and
    Federal-State matching grants ($7 million). SARE has helped turn
    farmer-driven research, education, and extension initiatives into
    profitable and environmentally sound practices for over 20 years.
        Organic Transitions Integrated Research Program.--We request $5
    million to maintain the funding level established in fiscal year 2010
    and in USDA's fiscal year 2012 request. Maintaining the fiscal year
    2010 funding level will allow cooperation with natural resource
    programs to provide environmental solutions with strong farmer delivery
    mechanisms built in. Without full funding, organic research will fall
    further behind in its fair share of the research budget, a share that
    continues to lag behind trends in agriculture.
        National Food Safety Training, Education, Extension, Outreach, and
    Technical Assistance.--We request $10 million to help small and mid
    size farms and small processing facilities comply with new food safety
    regulations. This food safety training for farmers and small
    processors, authorized in the Food Safety Modernization Act of 2010, is
    one of the best, quickest, and least costly ways to improve food safety
    outcomes without resorting to excessive regulation.

    Agricultural Marketing Service
        Federal-State Market Improvement Program (FSMIP).--The FSMIP
    provides matching funds to State departments of agriculture to help
    grantees increase marketing efficiency and innovation, reduce costs,
    stabilize food prices, and support local and regional food marketing
    opportunities. NSAC supports the USDA request of $1.3 million.
        Organic Market Reporting.--NSAC requests level funding at $0.3
    million for AMS for this price data collection and reporting
    initiative. As the organic industry surpasses $30 billion a year in
    sales, this multi-agency initiative is vital to maintaining markets,
    creating risk management tools, and negotiating equivalency agreements
    with foreign governments. We also support baseline funding for NASS and
    ERS to continue coordinated data collection and reporting on organic
    production, marketing, and pricing, including NASS funding for the
    Organic Production Survey.

    Farm Service Agency
        Direct Farm Ownership and Operating Loans--(Program Levels).--
    Direct loans provide a crucial source of capital for beginning farmers
    and others not well served by commercial credit. The final fiscal year
    2011 continuing resolution cut direct farm ownership loan funding by
    $175 million and the fiscal year 2012 bill retained this lower level.
    Nearly $130 million worth of qualified applications were turned away in
    fiscal year 2011. In light of the increasing age of farmers and the
    challenges faced by beginning farmers, it is critical that we fund
    these direct loan programs in the most effective way possible. We ask
    that Congress appropriate sufficient funds to provide for program
    levels of $600 million for Direct Farm Ownership loans and $1,050
    million for Direct Operating Loans.
        Beginning Farmer and Rancher Individual Development Account (IDA)
    Program.--We urge you to provide $5 million for this program, as
    authorized in the 2008 farm bill. This competitive grants program
    enables low-income, limited resource beginning farmers and ranchers to
    open an IDA (matched savings account) to save for asset-building
    purchases, including farmland, equipment, breeding stock, or similar
    expenditures. A 50 percent local match is required.

    Natural Resources Conservation Service
        Conservation Technical Assistance (CTA).--CTA, a subset of
    Conservation Operations, supports farmers enrolling in financial
    assistance programs and helps farmers with conservation planning and
    implementation. CTA also funds assessment of conservation practices and
    systems that underpin the conservation programs, as well as NRCS
    collection, analysis, and dissemination of information on the condition
    of the Nation's natural resources. NSAC urges you to provide $740
    million for CTA in order to adequately support and maximize the
    effectiveness of conservation financial assistance. We also support the
    addition of report language encouraging a modest net increase in the
    percentage of farm bill mandatory funding that may be used for
    technical assistance.

    Rural Business and Cooperative Service
        Value-Added Producer Grants (VAPG).--VAPG offers grants to farmers
    and ranchers developing new farm and food-related businesses that boost
    farm income, create jobs, and increase rural economic opportunity. VAPG
    grants encourage the kind of entrepreneurship in agriculture that
    enables farms and communities to survive economically. Moreover,
    growing interest in local and regional foods is generating greater
    demand for mid-tier value chains and enterprises that aggregate local
    production, exactly the kind of rural development strategy VAPG is
    designed to support. We request VAPG funding of $30 million.
        Rural Microentrepreneur Assistance Program (RMAP).--RMAP provides
    business training, technical assistance, and loans to owner-operated
    businesses with up to 10 employees. Small businesses make up 90 percent
    of all rural businesses, and micro-businesses are the fastest growing
    segment in many areas. RMAP creates jobs and local markets and
    alleviates poverty. This program was stripped of its mandatory farm
    bill funding (only $3 million) in fiscal year 2012. NSAC requests $5.7
    million in discretionary funding in fiscal year 2013 and opposes any
    limitation to renewed or extended direct Farm Bill spending for RMAP.
        Appropriate Technology Transfer for Rural Areas (ATTRA).--The ATTRA
    program, also known as the National Sustainable Agriculture Information
    Service, provides critical support to farmers and Extension agents
    throughout the country. The national program was reauthorized by the
    2008 farm bill. We urge $3 million for fiscal year 2013.

    General Provisions
        Repeated annual cuts the Conservation Stewardship Program,
    Environmental Quality Incentives Program, and other mandatory
    conservation programs have created enormous backlogs among highly
    qualified producers and made it more difficult for farmers to maintain
    healthy, productive soil and to protect water and other natural
    resources. These programs provide critical public benefits such as
    clean water, erosion reduction, and carbon sequestration and act as a
    key piece of the farmer safety net. We strongly oppose the proposed
    cuts to these critical conservation programs. We also oppose changes in
    mandatory program spending to any existing, renewed, or extended farm
    bill direct spending for the Organic Agriculture Research and Extension
    Initiative, Beginning Farmer and Rancher Development Program, Outreach
    and Assistance to Socially Disadvantaged Farmers and Ranchers, Farmers'
    Market Promotion Program, National Organic Certification Cost-Share
    Program, Community Food Grants, and Rural Energy for America Program.
        Finally, we oppose any limitation to full implementation of the
    Packers & Stockyards rule on fair competition that Congress directed
    USDA to promulgate in the 2008 farm bill.

                                                           SUMMARY OF NSAC'S FISCAL YEAR 2013 REQUESTS
                                                                      [Dollars in millions]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Fiscal year 2012                        USDA 2013 request                      NSAC 2013 request
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Departmental Administration:       $1.2..................................  $1.4..................................  $1.4
     Office of Advocacy and Outreach.
    National Institute of Food and
     Agriculture:
        Sustainable Agriculture        $14.5 (research & education) + $4.7     $14.5 + $4.7 + $3.5 (Federal-State      $18.0 + $5.0 + $7.0 = $30 total
         Research and Education         (extension) = $19.2.                    matching grants) = $22.7.
         Program.
        Organic Transitions Program..  $4.0..................................  $4.0..................................  $5.0
        National Food Safety           ......................................  ......................................  $10.0
         Training, Education,
         Extension, Outreach and
         Technical Assistance
         (Authorized by Congress in
         the Food Safety
         Modernization Act of 2010).
    Agricultural Marketing Service:
        Federal-State Market           $1.2..................................  $1.3..................................  $1.3
         Improvement Program.
        Organic Market Reporting.....  $0.3..................................  Funding for this activity included in   $0.3
           We also support continued                                            top line request.
            baseline funding for NASS
            and ERS to continue
            coordinated data
            collection and reporting
            on organic production,
            marketing, and pricing,
            including NASS funding
            for the Organic
            Production Survey.
    Farm Service Agency:
        Direct Farm Ownership and      $475.0 + $1,050.0.....................  $475.0 + $1,050.0.....................  $600.0 + $1,050.0
         Operating Loans--(Program
         Levels).
        Beginning Farmer Individual    ......................................  $2.5..................................  $5.0
         Development Account (IDA)
         Pilot Program.
    Natural Resources Conservation     $729.5................................  $728.8................................  $740.0
     Service: Conservation Technical
     Assistance.
    Rural Business and Cooperative
     Service:
        Value-Added Producer Grants..  $14.0.................................  $15.0.................................  $30.0
        Rural Microentrepreneur        $0.0 ($3.0 CHIMP + $0 discretion-       $3.7 (discretionary)..................  $5.7 ($5.7 discretionary + no CHIMP/
         Assistance Program.            ary).                                                                           limitation on 2012 farm bill direct
                                                                                                                        funding)
        National Sustainable           $2.25.................................  $2.25.................................  $3.0
         Agriculture Information
         Service (ATTRA).
    General Provisions: Conservation   $768.5 ($75.5 CHIMP)..................  $972.0 ($68.0 approx. CHIMP; permanent  No CHIMP/limitation on farm bill
     Stewardship Program.                                                       cut of 759,632 acres).                  direct spending
       We also oppose changes in
        mandatory program spending
        (CHIMPS) for: other directly
        funded farm bill conservation
        programs; and any existing,
        renewed or extended mandatory
        farm bill spending for the
        Organic Agriculture Research
        and Extension Initiative,
        Beginning Farmer and Rancher
        Development Program, Outreach
        and Assistance to Socially
        Disadvantaged Farmers and
        Ranchers, Farmers' Market
        Promotion Program, National
        Organic Certification Cost-
        Share Program, Community Food
        Grants, and Rural Energy for
        America Program.
       We oppose any limitation to
        full implementation of the
        Packers & Stockyards rule on
        fair competition that
        Congress directed USDA to
        promulgate in the 2008 farm
        bill.
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                                     ______

         Prepared Statement of the Northwest Regional Housing Authority
        USDA Rural Development funding for these programs needs to be
    funded to at least the level of 2012. Section 502 Direct Program should
    be at $900 million or more and the Section 523 funding needs to be
    maintained at $30 million. The 502 Direct Program is the only Federal
    homeownership program that is exclusively targeted to very low- and
    low-income rural families. In the past 60 years this program has helped
    more than 2.1 million families build wealth and achieve the American
    dream of homeownership. By law 40 percent of 502 Direct Loan funds must
    be used to assist families earning less than 50 percent of area median
    income. 25,000 loan applications are currently on a waiting list for
    Section 502 loan funding.
        The Section 523 program helps organizations to provide training,
    supervision and technical assistance to families. Families work nights
    and weekends providing construction labor on their own and each other's
    homes to decrease construction costs increase equity and build wealth.
    Every 100 homes built on this program results in 324 jobs, $21.1
    million in local income and $2.2 million in tax revenue. Even though
    Self-Help families have lower income, default rates are significantly
    lower than other borrowers. More than 50,000 families are currently on
    Self-Help Housing waiting lists. Each family that builds a Self-Help
    home makes many sacrifices. Throughout the process and after all the
    hard work they will say, yes, it was worth it. It does not make sense
    to let these programs deteriorate to the point of extinction.
        Thank you for the opportunity to address these issues today.
                                     ______

           Prepared Statement of the Oregon Water Resources Congress

        The Oregon Water Resources Congress (OWRC) strongly supports the
    U.S. Department of Agriculture's (USDA) Natural Resources Conservation
    Service (NRCS) and is deeply concerned about reductions to programs
    important to our members for fiscal year 2013. OWRC is requesting that
    funding for several key NRCS programs be increased for fiscal year 2013
    and that the ``Bridging the Headgates'' MOU between NRCS and the Bureau
    of Reclamation be reactivated and expanded to include other Federal
    agencies.
        OWRC was established in 1912 as a trade association to support
    district member needs to protect water rights and encourage
    conservation and water management statewide. OWRC represents non-
    potable agricultural water suppliers in Oregon, primarily irrigation
    districts, as well as other special districts and local governments
    that deliver irrigation water. The association represents the entities
    that operate water management systems, including water supply
    reservoirs, canals, pipelines, and hydropower production.
    Need
        OWRC and its members believe conservation of natural resources
    through collaborative partnerships is crucial to ensuring the viability
    of irrigation districts and similar organizations that deliver
    irrigation water for the Nation's agriculture. Federal support of water
    conservation activities funded through NRCS programs including the
    Agricultural Watershed Enhancement Program (AWEP) and the Cooperative
    Conservation Partnership Initiative (CCPI) are essential to the
    conservation of our natural resources and critical to protecting our
    food, energy and water supply. Irrigation districts and other
    agricultural water users in Oregon have used these programs to develop
    collaborative projects with Federal, State, and other local entities--
    proving that on-the-ground conservation can be best achieved by
    leveraging partnerships, pooling available resources, and focusing on
    each partner's strengths.
        We are deeply disappointed that the NRCS budget for fiscal year
    2013 is a 13 percent decrease from fiscal year 2012 estimated budget
    levels. While we recognize that the administration has increased
    funding for some of the NRCS programs, the need for additional
    financial assistance with conservation projects still far outweighs the
    budget. NRCS programs are essential to irrigation districts in
    developing and implementing conservation projects that benefit not only
    the individual farmers they serve but also the entire watershed and
    community as a whole. Furthermore, conservation projects also benefit
    the economy through job creation and ensuring the future viability of
    American agriculture. OWRC is requesting that funding for AWEP be
    increased to at least $75 million, which is comparable to the enacted
    fiscal year 2011 levels but is still far less than what could be used
    in Oregon and nationally.
    AWEP and CCPI Needs
        AWEP and CCPI help fill a funding void for multi-partner
    conservation projects. Often large conservation projects do not include
    individual on-farm projects which limits the effectiveness of the
    project. AWEP and CCPI allow farmers to pool together and leverage the
    dollars invested in the off-farm project with the addition of EQIP on-
    farm projects. Because of the large number of successful project
    applications for AWEP, USDA will have to obligate a large amount of the
    annual $60 million appropriation to existing multiyear projects. It is
    important that the funding for these projects not be interrupted so
    that they may be completed. However, it is equally important to have
    funding available for new eligible AWEP and CCPI projects that
    simultaneously benefit the environment and economy.
    Bridging the Headgates MOU and Watershed Planning Needs
        The need for continued coordination among Federal agencies,
    including NRCS, the Bureau of Reclamation (BOR), Bureau of Land
    Management (BLM), Environmental Protection Agency (EPA), NOAA
    Fisheries, U.S. Fish and Wildlife Service, and Army Corps of Engineers
    (ACOE), is a significant issue. With the loss of watershed planning
    funding, reactivating and expanding this program to other Federal
    agencies would be a very cost-effective alternative.
        In the past, Oregon NRCS used a watershed resources planning team
    to conduct Rapid Watershed Assessments throughout Oregon. This planning
    program helped prioritize projects to bring about the most benefit in
    critical watersheds. The use of the Rapid Watershed Assessment has been
    instrumental in getting on-the-ground conservation projects completed
    in a timely manner. A number of NRCS funded district projects have been
    implemented using the data from this program.
        Following in the vein of the Rapid Watershed Assessments, Oregon
    has adopted a Strategic Approach to Conservation. The goal is to invest
    technical and financial resources to strategically solve natural
    resource problems and be more effective, efficient, and accountable for
    staffing, funding and partnerships. The process builds from the ongoing
    planning process utilizing existing conservation plans, watershed
    assessments; conservation agencies, organizations, groups and producers
    to develop consensus on overarching 5-10 years local goals and
    priorities for conservation; including vision, resource inventories,
    resource problems, desired outcomes, other Government/NGO partners
    interests and contributions. This is a method to prioritize and develop
    detailed strategies to address natural resource problems. This strategy
    is intended to accelerate the conservation implementation and leverage
    technical and financial resources required to solve the problem. These
    types of program activities are effective tools that need a consistent
    funding source.

    Program Benefits
        OWRC strongly supports AWEP and CCPI, which are both critical tools
    for districts and other agricultural water suppliers in developing and
    implementing water and energy conservation projects in Oregon. AWEP has
    been highly successful in developing cooperative approaches on a basin-
    wide scale. This program allows districts and other agricultural water
    suppliers to partner with farmers to address regional water quantity
    and quality issues in local watersheds.
        The CCPI allows partnerships to be formed with Federal, State and
    local interests to address Endangered Species Act (ESA) and Clean Water
    Act (CWA) issues in watershed basins and sub basins. We believe that
    water supply issues in Oregon and elsewhere in the Nation can be
    resolved best locally in cooperative partnership efforts that promote
    conservation with a more aggressive Federal funding partnership as
    defined in AWEP and CCPI. In the spirit of streamlining farm bill
    programs, OWRC would support combining AWEP and CCPI into one program,
    but only if the current authorized funding is maintained or increased
    for the two programs combined. OWRC strongly supports the continuation
    and increased funding of the AWEP and CCPI programs for fiscal year
    2013.

    Examples of Successful AWEP Projects in Oregon
        Oregon has had several successful AWEP applicants over the past
    several years, three from our member districts (described below). The
    full list of Oregon projects can be found on the Oregon NRCS website
    at: http://www.or.nrcs.usda.gov/programs/awep/index.html.
      --The Whychus Creek/Three Sisters Irrigation District Collaborative
            Restoration Project focuses on irrigation water efficiency with
            irrigation improvements in the Upper Division of the Three
            Sisters Irrigation District, which is the project partner. The
            effort will improve stream flows and water quality for native
            fish while providing farmers a reliable supply of water. Fiscal
            year 2012 funding: $251,300 (AWEP).
      --The Talent Irrigation District Project works with agricultural
            producers to install conservation practices that will properly
            utilize limited surface water resources, improve water quality
            on flood irrigated land by converting to more efficient
            irrigation systems, and apply irrigation water management to
            eliminate irrigation runoff. Fiscal year 2012 funding: $4,470
            (AWEP).
      --The Willow Creek Project helps landowners in the Lower Willow Creek
            Watershed portion of Malheur County convert to water-saving
            irrigation systems, reduce irrigation runoff, and improve water
            quality in Willow Creek and Malheur River. The project partner
            is the Vale Oregon Irrigation District. Fiscal year 2012
            funding: $251,300 (AWEP).
        In 2012 Oregon requested approximately $3.1 million for project
    funding but only received $2.4 million for existing AWEP approved
    projects. Oregon also requested approximately $3.2 million of CCPI
    funds and received $3 million. Each year local interest has increased
    to compete for AWEP and CCPI funding and additional innovative projects
    like the ones above could be developed and implemented in Oregon if
    more funding is made available.
        The projects above are just a few examples of how NRCS programs
    have been successfully used in Oregon to develop and implement
    collaborative multi-benefit conservation projects. In the future, OWRC
    would also like to see additional funding targeted for projects that
    conserve both water and energy--which are two key and complimentary
    resource areas for the agricultural community. In Oregon, NRCS is
    helping develop the Save Water, Save Energy Initiative, a multi-agency
    cooperative effort to develop a clearinghouse of information on
    financial incentives and technical expertise to assist districts and
    their water users in implementing conservation measures. Supporting
    projects like the pilot project being implemented in the Deschutes
    Basin will provide the groundwork for future Save Water, Save Energy
    projects and help maximize Federal investment in conservation efforts.

    Conclusion
        Our member districts, the farms and other water users they serve,
    and the communities in which they are located benefit greatly from the
    NRCS programs described in our testimony. Oregon's agricultural
    community is actively committed to water conservation programs, but
    those programs require Federal participation if the agricultural
    community is to be able to continue its efforts to address Oregon's
    water supply needs through water conservation. These valuable programs
    are essential tools in not only conserving natural resources but also
    in leveraging Federal, State, local partnerships and resources to
    implement important projects that would otherwise be unrealized.
    Increasing the budget for NRCS programs is a strategic investment that
    will pay both environmental and economic dividends to Oregonians and
    America as a whole.
        Thank you for the opportunity to provide testimony for the record
    on the proposed fiscal year 2013 budget for the U.S. Department of
    Agriculture.
                                     ______

         Prepared Statement of the Organic Farming Research Foundation

        The Organic Farming Research Foundation (OFRF) is a national,
    farmer-led nonprofit organization that fosters the improvement and
    widespread adoption of organic farming systems. Organic agriculture is
    one of the fastest growing sectors of American agriculture, creating
    jobs in rural areas and keeping farmers in business. In 2011, the
    organic sector grew by 9.5 percent; the sector experienced double-digit
    growth before the economic recession and has maintained positive growth
    since. Ensuring the continued growth and job creation ability of the
    organic sector requires upholding the integrity of the U.S. Department
    of Agriculture organic label and continuing the modest but important
    investment in organic agriculture. The following requests are for
    national programs authorized by Congress in past farm bills. The
    agencies included in the requests are all at the U.S. Department of
    Agriculture (USDA): National Institute of Food and Agriculture (NIFA),
    Agricultural Marketing Service (AMS), Rural Business--Cooperative
    Service (RBCS). The programs are the Organic Transitions Integrated
    Research Program (ORG) at $5 million, the Sustainable Agriculture
    Research and Education Program (SARE) at $30 million, the National
    Organic Program (NOP) at $10 million, the Organic Production and Market
    Data Initiatives (ODI) at $0.3 million, and the Appropriate Technology
    Transfer for Rural Areas (ATTRA) at $3 million. We present sensible,
    modest requests that support a basic investment in a fast-growing, job-
    creating sector of agriculture. Additionally, we urge no cuts to
    mandatory program funding. Please read below for further details.
    Organic Transitions Integrated Research Program (ORG)--USDA-NIFA
                2008 Farm Bill Authorized: Sums as Appropriate; Fiscal Year
                        2013 OFRF Request: $5 Million
        An investment in research underpins growth in any sector. One of
    the barriers to continued growth in organic is lack of research and
    information that growers need to improve and increase production. ORG
    is a national, competitive research, education, and extension program
    that provides research to the fast-growing organic sector. Funding ORG
    at $5 million would help bridge the gap between sector growth and
    research investment.
    Sustainable Agriculture Research and Education Program (SARE)--USDA-
            NIFA
                2008 Farm Bill Authorized: $60 Million; Fiscal Year 2013
                        OFRF Request: $30 Million
        SARE is a farmer-driven and regionally led competitive research and
    extension grants program that provides farmers with business,
    marketing, and production information to be successful. SARE
    complements the activities of dedicated organic research programs by
    funding on-farm research. Funding SARE at $30 million would allow for
    the launch of a Federal-State Matching Grants program to build capacity
    at the State level for research and extension to address regional and
    local needs. We support splitting the funding between the Research and
    Education section of SARE ($25 million) and the Extension (or
    Professional Development Program) section of SARE ($5 million).
    National Organic Program (NOP)--USDA-AMS
                2008 Farm Bill Authorized: $11 Million; Fiscal Year 2013
                        OFRF Request: $10 Million
        NOP enforces the national organic program standards, accredits
    certifiers, develops equivalency agreements, handles complaints--in
    essence, NOP ensures the integrity of the organic seal. NOP performs
    regulatory oversight of the organic label and ensures that consumers
    are getting what they pay for when they choose foods with the organic
    label. These are essential functions to the survival and growth of the
    organic sector.
    Organic Production and Market Data Initiatives (ODI)--USDA-AMS
                2008 Farm Bill Authorized: $5 Million; Fiscal Year 2013
                        OFRF Request: $0.3 Million
        Every sector needs reliable, current data and statistics to
    function properly and grow. USDA has historically not collected basic
    data and statistics on the growing organic sector. In the 2008 farm
    bill, Congress directed USDA to collect data for organic through ODI.
    As the industry surpasses $32 billion, the information collected
    through this multi-agency initiative is vital to maintaining stable
    markets, creating proper risk management tools, and negotiating
    equivalency agreements with foreign governments. The request of $0.3
    million for AMS is specifically to continue the collection of price
    data and its dissemination through Market News Reports. We also support
    continued baseline funding for NASS and ERS to continue coordinated
    data collection and reporting on organic production, marketing, and
    pricing, including NASS funding for the Organic Production Survey.
    Appropriate Technology Transfer for Rural Areas (ATTRA)--USDA-RBCS
                2008 Farm Bill Authorized: $5 Million; Fiscal Year 2013
                        OFRF Request: $3 Million
        ATTRA serves farmers and ranchers nationwide by providing cutting-
    edge production and marketing information through web publications and
    a toll-free phone line. Authorized originally in the 1985 farm bill,
    ATTRA has provided technical assistance and educational resources to a
    broad range of farmers and agricultural professionals for over two
    decades. Just last year, ATTRA received over 60,000 technical requests,
    had over 5.8 million publication downloads from its website, and
    conducted workshops in 45 States that over 177,000 individuals
    attended. The program was recently zeroed out because of the mistaken
    assumption that the program is an earmark. ATTRA is a national program
    that is run according to statute by a national, nonprofit organization
    through a cooperative agreement with USDA. The classification of the
    program as an earmark is a mistake.
    No Cuts to Mandatory Program Spending
        OFRF urges the Subcommittee not to cut mandatory program spending.
    Over half a billion dollars in cuts have already been made to mandatory
    farm bill programs (primarily conservation and energy), and we urge the
    Subcommittee not to make anymore. These cuts have negative impacts on
    the baseline funding available for the next farm bill and should not
    unfairly be targeted to certain sectors of agriculture.
        Thank you for the opportunity to submit testimony. Organic
    agriculture is a growth industry. Making the modest investments in the
    key programs described above will help to ensure that organic sector
    operations and businesses continue to grow, to hire new employees, and
    to meet the strong consumer demand for organic food.
                                     ______

            Prepared Statement of Pickle Packers International, Inc.

                                    SUMMARY

        Sustained and increased funding is desperately needed to maintain
    the research momentum built over recent years and to defray rising
    fixed costs at laboratory facilities. Companies in the pickled
    vegetable industry generously participate in funding and performing
    short-term research, but the expense for long-term research needed to
    insure future competitiveness is too great for individual companies to
    shoulder on their own.
    Additional Budget Requests for Fiscal Year 2013
        Funding needs for four USDA/ARS laboratories are as follows:

              REQUESTS FOR PROGRAM ENHANCEMENT--PICKLED VEGETABLES
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Emerging Disease of Crops...............................        $500,000
    Quality and Utilization of Agricultural Products & Food          500,000
     Safety.................................................
    Applied Crop Genomics...................................         500,000
    Specialty Crops.........................................         550,000
                                                             ---------------
          Total Program Enhancements Requested--Pickled            2,050,000
           Vegetables.......................................
    ------------------------------------------------------------------------

    USDA/ARS Research Provides
        Consumers with over 150 safe and healthful vegetable varieties
    providing vitamins A, C, folate, magnesium, potassium, calcium, and
    phytonutrients such as antioxidant carotenoids and anthocyanins.
        Genetic resistance for many major vegetable diseases, assuring
    sustainable crop production with reduced pesticide residues--valued at
    nearly $1 billion per year in increased crop production.
        Classical plant breeding methods combined with bio-technological
    tools, such as DNA marker-assisted selection and genome maps.
        New vegetable products with economic opportunities amidst
    increasing foreign competition.
        Improved varieties suitable for machine harvesting, assuring post
    harvest quality and marketability.
        Fermentation and acidification processing techniques to improve the
    efficiency of energy use, reduce environmental pollution, and reduce
    clean water intake while continuing to assure safety and quality of our
    products.
        Methods for delivering beneficial microorganisms in fermented or
    acidified vegetables, and produce reduced sodium, healthier products.
        New technology and systems for rapid inspection, sorting and
    grading of pickling vegetable products.
    Health and Economical Benefits
        Health agencies continue to encourage increased consumption of
    fruits and vegetables, useful in preventing heart disease, cancer,
    stroke, diabetes and obesity.
        Vegetable crops, including cucumbers, peppers, carrots, onions,
    garlic and cabbage (sauerkraut), are considered ``specialty'' crops and
    not part of commodity programs supported by taxpayer subsidies.
        Current farm value for just cucumbers, onions and garlic is
    estimated at $2.4 billion with a processed value of $5.8 billion. These
    vegetables are grown and/or manufactured in all 50 States.
        The pickled vegetable industry strongly supports and encourages
    your committee in its work of maintaining and guiding the Agricultural
    Research Service. To accomplish the goal of improved health and quality
    of life for the American people, the health action agencies of this
    country continue to encourage increased consumption of fruits and
    vegetables in our diets. Accumulating evidence from the epidemiology
    and biochemistry of heart disease, cancer, 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.
        As an association representing processors that produce over 85
    percent of the tonnage of pickled vegetables in North America, it is
    our goal to produce new products that increase the competitiveness of
    U.S. agriculture as well as meet the demands of an increasingly diverse
    U.S. population that is encouraged to eat more vegetables. The profit
    margins of growers continue to be narrowed by foreign competition. This
    industry can grow by meeting today's lifestyle changes 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 are in any
    ``commodity program'' and do not rely on 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 rural America.
    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 Economics Mission Area (REE) of the
    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 half of the total U.S. public
    breeding and genetics research on these crops. Their past efforts have
    yielded cucumber, carrot and onion cultivars and breeding stocks that
    are widely used by the U.S. vegetable industry (i.e., growers,
    processors, and seed companies). These varieties account for over half
    of the farm yield produced by these crops today. All U.S. seed
    companies rely upon this program for developing new varieties, because
    ARS programs seek to introduce economically important traits (e.g.,
    pest resistances and health-enhancing characteristics) not available in
    commercial varieties using long-term high risk research efforts. The
    U.S. vegetable seed industry develops new varieties of cucumbers,
    carrots, onions, and garlic and over 20 other vegetables used by
    thousands of vegetable growers. Their innovations meet long-term needs
    and bring innovations in these crops for the United States and export
    markets, for which the United States has successfully competed.
        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, tolerance to
    environmental stresses, and higher yield have recently been identified
    along with molecular tools to expedite delivery of elite cucumber lines
    to U.S. growers. A new genetic resistance to nematode attack was found
    to almost completely protect the carrot crop from one major nematode.
    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. The genetic bases of onion flavor, as well as compounds
    that enhance cardiovascular health and have anti-carcinogenic effects
    have been determined and are being used to develop onions that are more
    appealing and healthier 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 should be enhanced. Genetic improvement of all the
    attributes of these valuable crops are at hand through the unique USDA
    lines and populations (i.e., germplasm) that are available and the new
    biotechnological methodologies that are being developed by the group.
    The achievement of these goals will involve the utilization of a wide
    range of biological diversity available in the germplasm collections
    for these crops. Classical plant breeding methods combined with bio-
    technological tools such as DNA marker-assisted selection and genome
    maps of cucumber, carrot and onion will be 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 United States and export markets.

              FOOD SCIENCE RESEARCH UNIT, RALEIGH, NORTH CAROLINA

        The USDA/ARS Food Science Research Unit (FSRU) 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. The scientists in the FSRU have consistently
    provided innovative solutions to processing challenges which have
    helped this industry remain competitive in the current global trade
    environment. Major accomplishments of the FSRU include: pasteurization
    treatments currently used for most acidified vegetables; the
    preservation technology used for manufacturing shelf stable sweet
    pickles; fermentation technology (purging) used to prevent the
    formation of air pockets within fermented pickles. These innovations
    have improved processing and product quality and yielded significant
    savings industry-wide. Furthermore, the FSRU has determined the
    microbial safety parameters now used for acidified vegetable process
    filings, as required by the Food and Drug Administration. The picking
    industry in the United States relies on the FSRU for the development of
    new and improved technologies that will increase the economic value of
    processed vegetable products, provide consumers with safe, high
    quality, healthful vegetable products, and reduce the environmental
    impact of industrial activities. Additional funding is needed to
    support important new research initiatives.
        First, nearly all retail pickled vegetables are pasteurized for
    safety and shelf stability. Current steam and water bath pasteurizers
    rely on technology from the 1940s and 1950s. Promising new technologies
    include continuous flow microwave technology and ``hot-fill-and-hold''
    pasteurization. The objective is to reduce water use and significantly
    improve energy efficiency with new, scientifically validated thermal
    processing technology.
        Second, additional research that offers significant economic and
    environmental advantages to the U.S. industry includes the reduction or
    replacement of salt in commercial vegetable fermentations. Calcium
    substitution of salt in commercial vegetable fermentations has the
    potential to eliminate salt disposal problems and create opportunities
    to manufacture calcium enriched, reduced sodium, healthier vegetable
    products. Reducing environmental impact and production costs for the
    manufacture of healthier products is essential to the sustainability of
    the U.S. industry.
        Third, there is a growing body of research indicating that certain
    beneficial microorganisms (probiotics) improve human health by
    remaining in the intestinal tract after they are consumed. New
    processing technology is needed to develop high value probiotic
    vegetable products, opening new markets in the United States and
    improving the health benefits derived from consumption of fermented and
    acidified vegetables.

           SUGAR BEET AND BEAN RESEARCH UNIT, EAST LANSING, MICHIGAN

        Quality inspection and assurance of pickling vegetables is critical
    to growers and processors and ultimately consumers of pickling
    vegetables. While automated systems are currently used in many pickle
    processing facilities, they are only for inspecting product surface
    quality characteristics. Opportunities exist for developing more
    efficient sensors and automated inspection technologies, 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. New and/or improved inspection 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. 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

        Research at the USDA/ARS U.S. Vegetable Laboratory in Charleston,
    South Carolina, addresses national problems confronting the vegetable
    industry of the southeastern United States. The mission of the
    laboratory is to develop disease and pest resistant vegetables, and
    also new, reliable, environmentally sound disease and pest management
    practices that do not rely on conventional pesticides. The laboratory's
    program currently addresses 14 crops, including those in the cabbage,
    cucumber, and pepper families, all of major importance to the pickling
    industry. Research at this ARS facility is recognized world-wide, and
    its accomplishments include over 150 new vegetable varieties and many
    improved management practices.
        Expansion of the Charleston program would directly benefit the
    southeastern vegetable industry. Vegetable growers depend heavily on
    synthetic pesticides to control diseases and pests. Cancellations of
    many effective pesticides directly impacts future vegetable crop
    production. Without the use of certain pesticides, producers will
    experience crop failures unless other effective, non-pesticide control
    methods are readily identified. In this context, 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. Research
    like this can help provide U.S. growers with a competitive edge they
    must have to sustain and keep their industry vibrant, allowing 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 at the U.S.
    Vegetable Laboratory could 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.
        It is important to note that fiscal year 2012 funding for four USDA
    ARS laboratories (Charleston, South Carolina; East Lansing, Michigan;
    Madison, Wisconsin; and Raleigh, North Carolina) totaled $11,004,900.
    However, funding for all cucurbits equaled just $3,939,000 with only
    $1,718,000 directed toward pickled vegetable research. For fiscal year
    2013, PPI is requesting an additional $2,050,000 in program
    enhancements that will provide needed research for pickled vegetables.

             U.S. VEGETABLE LABORATORY, CHARLESTON, SOUTH CAROLINA

        There is a critical need to establish and fund a plant pathology
    position to address cucumber diseases, especially the disease caused by
    a new strain of the downy mildew pathogen responsible for recent
    extensive damage to cucumber production in South Atlantic and
    Midwestern States. The pathologist is needed to characterize pathogen
    strains and to develop new management approaches, as well as resistant
    cucumber varieties, to combat the disease. Ultimately, this proposed
    plant pathologist would accomplish research that results in effective
    protection of cucumbers from disease without the use of conventional
    pesticides.

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Fiscal year:
        2012 (pickled vegetables)...........................        $456,100
        2013 (proposed budget)..............................         456,100
        2013 additional request (plant pathologist and               500,000
         support)...........................................
    ------------------------------------------------------------------------

              FOOD SCIENCE RESEARCH UNIT, RALEIGH, NORTH CAROLINA

        The current funding includes research and development for a variety
    of vegetable products, including fermented and acidified vegetables. To
    carry out new research initiatives to reduce energy and water use,
    reduce environmental impact from commercial fermentations, and develop
    new health-promoting food (probiotic) technology, we request additional
    support for the Food Science Research Unit of $500,000 in fiscal year
    2013. This will provide support for Post-Doctoral or Pre-Doctoral
    research associates in food engineering and food microbiology along
    with necessary equipment and supplies to develop these new areas of
    research.

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Fiscal year:
        2012 (pickled vegetables)...........................        $647,800
        2013 (proposed budget)..............................         647,800
        2013 additional request (post-doctoral and pre-              500,000
         doctoral research associate and support)...........
    ------------------------------------------------------------------------

          VEGETABLE CROPS RESEARCH LABORATORY UNIT, MADISON, WISCONSIN

        Emerging diseases, such as downy mildew of cucumber, threaten
    production of the crop in all production areas. Therefore, we request
    an additional $500,000 to fully fund the scientists and support staff
    in fiscal year 2013, including graduate students and post-doctorates
    for researching genetic resistance to emerging diseases.

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Fiscal year:
        2012 (pickled vegetables)...........................        $456,600
        2013 (proposed budget)..............................         456,600
        2013 additional request (post-doctoral and pre-              500,000
         doctoral research associate and support)...........
    ------------------------------------------------------------------------

           SUGAR BEET AND BEAN RESEARCH UNIT, EAST LANSING, MICHIGAN

        The current funding is far short of the level needed to carry out
    research on inspection, sorting and grading of pickling cucumbers and
    other vegetable crops to assure the processing and quality of pickled
    products. An increase of $550,000 in the current base funding level
    would be needed to fund the research engineer position.

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Fiscal year:
        2012 (pickled vegetables)...........................        $157,500
        2013 (proposed budget)..............................         157,500
        2013 additional request (research engineer and               550,000
         support)...........................................
    ------------------------------------------------------------------------

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

            Letter From the Rural Coalition/Coalicion Rural, et. al
                                                        March 30, 2012.
    Hon. Herb Kohl, Chairman,
    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.

        Dear Senators: As the Senate considers the Agriculture
    Appropriation for fiscal year 2013, we respectfully request that the
    Senate Appropriations Subcommittee on Agriculture, Rural Development
    and FDA provide adequate funding for a set of critical programs that
    make a real difference in communities that most need support.
        The 2008 Farm Bill made significant improvements in programs
    designed to address the outreach and technical assistance challenges of
    historically underserved producers. We urge you to provide long-term
    protection and continued funding for this critical subset of programs
    and offices charged with serving the most chronically underserved
    segments of agriculture. These represent a fraction of the full
    agriculture budget but are the lifeblood of the sustainable agriculture
    community, beginning, socially disadvantaged and veteran producers, and
    farmworkers.
        We urge you to consider the following recommendations:
        Farm Credit.--Farm Service Agency (FSA) Direct Farm Ownership and
    Operating Loans provide a crucial source of capital for farmers who are
    ineligible for commercial credit. The final fiscal year 2011 continuing
    resolution cut direct farm ownership loan funding by $175 million and
    the fiscal year 2012 bill retained this lower level. Nearly $130
    million worth of qualified applications were turned away in fiscal year
    2011. This is the funding that is essential to create opportunities for
    individuals to get into the farming business. To meet the challenges
    faced by many farmers who are confronting increasing input costs and
    volatile prices, it is critical to fund these direct operating loan
    programs at the highest level possible. We ask that Congress
    appropriate sufficient funds to provide for program levels of $600
    million for Direct Farm Ownership loans and $1.05 billion for Direct
    Operating Loans.
        We further urge you to ensure that farmers and ranchers who are in
    economic trouble receive fair loan restructuring and servicing of their
    loans by funding the Federal match for State Mediation Programs at $5
    million. These programs currently operate in 40 States. We urge the
    Committee to instruct FSA to develop price information to improve
    eligibility and lending capabilities to farmers growing for local and
    regional food markets.
        Tribal Communities.--We urge you to support and expand funding to a
    level of $10 million for the Office of Tribal Relations Program to
    enhance its ability to serve its function as a critical link between
    the Department of Agriculture and the Nation's Tribes.
        In addition, in order to provide critically needed services to
    tribal producers, we urge you to expand funding for the Federally
    Recognized Tribal Extension Program (FRTEP) to $10 million for fiscal
    year 2013 to reach at least 100 of the 566 tribes. Congress mandates
    research and extension services in every county in the Nation--over
    3,100 offices nationwide, funded cooperatively by county, State, and
    Federal levels of government. Extension services are not extended to
    Indian Reservations, except through the limited Federal funds provided
    through USDA to the FRTEP, the only vehicle by which extension programs
    are currently delivered to Indian Country. Tribes contribute in-kind
    cost share for office space and a small portion of operating expenses.
        Only 36 extension agents are supported on Indian reservations with
    current funding of $3 million. These programs have significantly
    affected not only agriculture, but natural resources, 4-H/youth
    development, human nutrition, community resource development and family
    and consumer sciences program areas--much like the impacts seen in non-
    reservation, county-based extension programs. The inadequate funding of
    FRTEP has, without question, a profound negative impact on the long-
    term viability of tribal agriculture, which remains a critical basis
    for the economic security, health and nutrition of Native Americans.
        Fewer than 4 percent of American Indians living on America's Indian
    reservations have access to these programs, yet more than 97 percent of
    America's counties have had robust programs since 1914. Increased
    funding would allow FRTEP to serve better the many tribes who have
    repeatedly requested full access to these programs. It is time that
    Native American producers, families, youth and reservation residents
    receive the same level of service as U.S. citizens who are not
    reservation-bound. In order to correct this grave inequity, we urge you
    to appropriate $10 million for this program in the fiscal year 2013
    Agriculture Appropriation.
        Farmworker Communities.--Farmworkers are a critical component of
    our food and agriculture system. We urge you to maintain the Farmworker
    Coordinator in the Office of Advocacy and Outreach (see below), restore
    funding of at least $4 million annually for the Grants to Improve the
    Agricultural Labor Workforce Program, and provide at least $2 million
    to the Emergency Disaster Grants for Farmworkers program to provide
    funding for services to farmworkers affected by natural disasters and
    keep this critically needed workforce in place in disaster affected
    areas.
        Coordination Activities.--For many years, beginning and socially
    disadvantaged producers have lacked an office at USDA to better
    understand and utilize the wide array of USDA services. The Office of
    Advocacy and Outreach, established in the 2008 Farm Bill, is now in
    full operation and working effectively with communities across the
    Nation to provide equitable access to its programs and enhance the
    viability and profitability of small farms, beginning farmers and
    ranchers, and socially disadvantaged farmers and ranchers, and
    farmworkers. An increase to $5 million would fund the staffing and
    operational needs of this office to allow OAO to adequately conduct its
    activities related to overseeing the Advisory Committees on Minority
    Farmers and Beginning Farmers and Ranchers, overseeing the activities
    of the Office of Small Farms Coordination and the Farm Worker
    coordinator; managing the 1890, 1994 and Hispanic-serving institutions
    programs; managing outreach programs and performing any other outreach
    functions that improve coordination among USDA agencies to improve
    their ability to enhance access to USDA programs for underserved
    constituencies. We urge Congress to provide at least $5 million to this
    office to allow it to continue to provide the important coordination
    services it is designed to deliver.
        Rural Housing.--These Federal rural housing programs provide loans,
    grants and related assistance that create jobs and ensure that low-
    income families live in safe, decent housing. Of particular importance
    is maintaining adequate funding levels for the Section 502 Direct Loan
    program, the Mutual Self Housing program, and programs to finance Rural
    Rental Housing construction and preservation.
        Under the Section 502 Direct Loan program, nearly 66 percent of the
    families receiving loans have incomes at or below 60 percent of area
    median income and 40 percent of the loans go to households with incomes
    at or below 50 percent of area median income. In fiscal year 2011, the
    average total cost to the government for a Section 502 loan was less
    than $7,200 per unit
        We support funding levels for Rural Housing programs administered
    by the Rural Housing Service (RHS) at USDA at the following levels:
      --$900 million for the Section 502 Single Family Direct Homeownership
            Loans;
      --$28 million for the Section 504 Very Low-Income Rural Housing
            Repair Loans;
      --$29.5 million for the Section 504 Very Low-Income Rural Housing
            Repair Grants;
      --$26 million for the Section 514 Farm Labor Housing Program Loans;
      --$9 million for the Section 516 Farm Labor Housing Program Grants;
      --$64.5 million for the Section 515 Rural Rental Housing Program;
      --$907 million for the Section 521 Multi-Family Rental Housing Rental
            Assistance Program;
      --$30 million for the Section 523 Self-Help Housing Program;
      --$3.6 million for the Section 533 Housing Preservation Grants
            Program;
      --$150 million for the Section 538 Guaranteed Multi-Family Housing
            Loans; and
      --$46.9 million for the Multi-Family Housing Preservation and
            Revitalization Program; and $13 million for the Rural Community
            Development Initiative.
        Farmers Market Nutrition Programs.--We strongly urge the Committee
    to fund the WIC Farmers Market Nutrition Program at its fiscal year
    2011 funded level of $20 million. The fiscal year 2012 cut will
    translate into a loss of 25 percent in the benefits available to
    eligible consumers this year who shop at our Nation's farmers' markets
    and roadside stands. In fiscal year 2010, 2.15 million WIC participants
    received FMNP benefits and over 18,000 farmers were authorized to
    receive them at 3,647 farmers' markets and 2,772 roadside stands.
    According to USDA's data, this translated into over $15.7 million in
    revenue to farmers.
        Conservation Programs.--We further urge you to protect and maintain
    funding agricultural conservation programs including maintaining
    support for the Environmental Quality Incentive Program and the
    Conservation Stewardship Program, and other programs which are helping
    producers across the Nation protect their land. The diverse producers
    many of the undersigned groups represent are returning to USDA through
    these programs, and building up small operations that care for the land
    and contribute to the economic viability of small rural communities in
    some of the poorest areas of the Nation.
        Beginning Farmer and Rancher Individual Development Account (IDA)
    Program.--We urge you to provide $5 million for this program, as
    authorized in the 2008 Farm Bill. This pilot program would enable low-
    income, limited resource beginning farmers and ranchers to open an IDA
    (matched savings account) to save for asset-building purchases,
    including farmland, equipment, breeding stock, or similar expenditures.
        In addition to the programs outlined in this letter, we urge you to
    oppose changes in mandatory program spending to any existing, renewed,
    or extended farm bill direct spending. These programs include the
    Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers,
    Beginning Farmer and Rancher Development Program, Farmers Market
    Promotion Program, Community Food Project Competitive Grants, National
    Organic Cost-Share Program, Organic Agriculture Research and Extension
    Initiative, and the Rural Energy for America Program.
        As you proceed with funding for these important programs for fiscal
    year 2013, we urge you to consider the impacts of your funding
    decisions on the future, a concern for the next generation of American
    farmers and ranchers, and great care to being inclusive of beginning,
    minority, tribal women, and limited resource farmers who are often in
    most need of these important programs.
                Sincerely,

    Alliance of Forest Workers and Harvesters, Oakland, CA
    American Federation of Government Employees Local 3354, St. Louis, MO
    American Federation of Government Employees (AFL-CIO), Washington, DC
    BioRegional Strategies, Albuquerque, NM
    Birthing Project USA, Albuquerque, NM
    California Food & Justice Coalition, Oakland, CA
    Casa de Cultura, Las Vegas, NM
    CASA del Llano, Inc., Hereford, TX
    Church Women United in New York State, Rochester, NY
    Community Food Security Coalition, Portland, OR
    D.C. Farm to School Network, Washington, DC
    Family Farm Defenders, Madison, WI
    Farmworker Association of Florida, Apopka, FL
    Federation of Southern Cooperatives, Atlanta, GA
    Food & Water Watch, Washington, DC
    Idaho Rural Council, Filer, ID
    Intertribal Agriculture Council, Billings, MT
    Just Food, NewYork, NY
    Kentucky Resources Council, Inc., Frankfort, KY
    Lideres Campesinas, Oxnard, CA
    Live Real, Oakland, CA
    National Family Farm Coalition, Washington, DC
    National Hmong American Farmers, Inc., Fresno, CA
    National Latino Farmers and Ranchers Trade Association, Washington, DC
    National Wildlife Federation, Washington, DC
    National Women in Agriculture Association, Oklahoma City, OK
    National Young Farmers' Coalition, Tivoli, NY
    New Orleans Food & Farm Network, New Orleans, LA
    Northern New Mexico Stockman's Association, Albuquerque, NM
    Oklahoma Black Historical Research Project, Inc., Oklahoma City, OK
    Rural Advancement Fund, Orangeburg, SC
    Rural Coalition/Coalicion Rural, Washington, DC
    Southern Regional Asset Building Coalition, Tuskegee, AL
    Taos County Economic Development Corporation, Taos, NM
    The Cornucopia Institute, Cornucopia,WI
    The Presbyterian Church (U.S.A.) Office of Public Witness, Washington,
    DC
    United Farmers USA, Manning, SC
    World Farmers, Inc., Lancaster, MA
                                     ______

        Prepared Statement of the Rural Housing Development Corporation
        On behalf of Rural Housing Development Corporation (RHDC), I would
    like to thank the Subcommittee for the opportunity to submit testimony
    on fiscal year 2013 Appropriations for two of Department of Agriculture
    (USDA) Rural Housing Programs. I strongly urge this Subcommittee to
    fund USDA Rural Housing programs at the higher of fiscal year 2012
    levels or the President's fiscal year 2013 budget request: (1) $900
    million for Section 502 Family Direct Homeownership Loans; and (2) $30
    million for Section 523 Self-Help Housing Program.
        RHDC is a nonprofit affordable housing organization in Utah. Since
    1998, RHDC has promoted affordable housing opportunities to low-income
    families living in Central Utah. Over 300 single family homes have been
    built through USDA's Mutual Self-Help Housing program using the 502
    loan in Central Utah and over 1,000 homes have been built across the
    State of Utah.
    About the Mutual Self-Help Housing Program
        The Mutual Self Help Housing program takes the rural tradition of
    barn-raising and puts it to use for families who, after working all day
    and all week, spend their nights and weekends building their own home.
    It is a model of how low-income families help themselves through sweat
    equity. Without the opportunity, many of these families would never own
    their own home. Consider the West family in Utah, a low-income family
    of 5 (children ages 5, 3 and 1),who have lived in two-room log cabin
    built in the 1880's. The cabin measures 21 by 26 feet, which is very
    similar to a modes two-car garage.
        In their own words:

        ``While we enjoy the `coziness' of our home, it does present some
    challenges. The cabin is not well-insulated. We can feel the wind
    through the single-paned windows and cracks throughout the house. Big
    rainstorms cause leaks. Other than weather problems, we are not sure
    which we have the most of living in the walls of our home: bees,
    spiders or mice. Our home is on a cinderblock basement built into a
    dike constructed to control the flooding of the river in the 1980's.
    Because of our close proximity to the river and lake, we have had to
    face additional challenges. This year the ground water is so high it
    fills the septic tank, causing the sewer to back up. The high water
    flow in the river also caused the water to seep through the cracks in
    our basement floor. At the highest point, we had almost 2 feet of
    standing water. Even though the water level has recently dropped, we
    are left with the challenge of the profuse growth of mold. Every
    summer, we have a mold problem in the basement. However, this year,
    with the flooding, the mold is 100 percent worse. This makes us
    concerned for our family's health.
        ``Unfortunately for us, moving is not an option at this time. For
    these reasons, we are telling you our story--not to complain, but to
    ask you for the much needed financial assistance in purchasing a new,
    healthy home for our family through the Mutual Self Help Housing
    Program. We cannot better our situation without your help.''

        Families like the West family have found refuge in building their
    own home and for that reason take great care in the homes they have a
    major stake in. Of the 1,000+ homes built in Utah, there is a
    foreclosure rate of less than 1 percent. This means that the 502 loans
    borrowed are paid back with interest and perpetuated for future
    families.
    Economic Impact
        The economic impact in Utah has been substantial; it is anticipated
    that during 2011 and 2012, the Self Help Housing program would bring
    Utah's economy approximately $58,210,788. The program also creates
    employment opportunities in rural areas; each year in Utah, over 500
    jobs are created for subcontracts, suppliers, realtors, and land
    developers.
        The Section 502 program provides loans to low- and very-low income
    families at a low cost the Government, and as mentioned, has a very low
    foreclosure rate. Sixty percent of the families borrowing direct loans
    from USDA have incomes at or below 60 percent of the area median
    income. The proposed budget contends that the 502 guarantee loan
    program can assist families who are now receiving direct loans. There
    is ample evidence to the contrary; including an Economic Research
    Service report indicating that the guarantee loan program is not
    working well in smaller, more isolated communities. Nor does the
    guarantee loan product have a track record of serving households with
    incomes at 60 percent AMI or less, while the direct loan program does.
    The proposed change will not provide homeownership opportunities for
    many of the current workforce in rural areas, who struggle to find
    affordable rental housing that is both safe and adequate for their
    family size. The loss of this program will also destabilize rural
    workers, negatively impacting rural employers.
        I would ask that the Subcommittee reconsider the proposed budget
    and look at ways to reallocate the reduced spending level in a manner
    that still supports the 502 and 523 programs as indicated above. I
    appreciate your consideration of this request.
                                     ______

                Prepared Statement of the Self-Help Enterprises

        Self-Help Enterprises is a regional nonprofit housing and community
    development organization serving eight expansive counties in
    California's agricultural San Joaquin Valley. Founded in 1965, Self-
    Help Enterprises has developed nearly 6,000 self-help homes and 1,200
    units of multifamily rental housing for farmworkers and other low wage
    earners. In partnership with local governments, SHE has rehabilitated
    or replaced 6,000 homes, assisted 1,500 first-time homebuyers, and
    provided planning and technical assistance to dozens of small,
    unincorporated communities meeting needs for safe drinking water and
    wastewater treatment.
        The Rural Housing Service's housing programs continue to be the
    most effective, and in many cases, the only, resources which address
    the critical housing needs of rural America. Self-Help Enterprises
    strongly supports an appropriation to maintain USDA's Rural Housing
    programs at the following levels.
      --Section 502 Family Direct Homeownership Loans: $900 million
      --Section 504 Very-Low Income Rural Housing Repair Loans: $28 million
      --Section 504 Very-Low Income Rural Housing Repair Grants: $29.5
            million
      --Section 514 Farm Labor Housing Program Loans: $26 million
      --Section 516 Farm Labor Housing Program Grants: $9 million
      --Section 515 Rural Rental Housing Program: $64.5 million
      --Section 521 Multi-Family Rental Housing Rental Assistance Program:
            $907 million
      --Section 523 Self-Help Housing Program: $30 million
      --Section 533 Housing Preservation Grants Program: $3.6 million
      --Section 538 Guaranteed Multi-Family Housing Loans: $150 million
      --Multi-Family Housing Preservation and Revitalization Program: $46.9
            million
      --Rural Community Development Initiative: $13 million
    Section 523 Mutual Self-Help Housing Program
        No other program combines the unique features which make the Self-
    Help program a success. The Section 523 grants provide support to Self-
    Help sponsors who provide technical assistance, recruiting, training,
    and supervising to families to earn ``sweat equity.'' This unique
    construction method also promotes strong communities by building close
    bonds among future neighbors. (PART review, www.expectmore.gov)
        Created by the Housing and Community Development Act of 1968, the
    USDA Rural Development Section 523 Mutual Self-Help Housing Program is
    one of the best and most successful avenues to sustainable
    homeownership for low-income rural Americans.
        With its roots in the tradition of barn raising, mutual self-help
    housing gives hardworking rural families the opportunity to work
    together to achieve the dream of homeownership which individually could
    not be attained. Mutual self-help housing programs, which still retain
    a style reminiscent of pioneer barn raisings, provide the
    organizational structure that allows low-income families to build the
    homes they so desperately want and need. This includes the capital,
    training and supervision, coordination, accounting, and myriad of other
    technical skills necessary to any successful housing development
    effort.
        The concept is straightforward: groups of 6-12 low-income families
    join together to pool their labor to build each other's homes, in the
    process building a neighborhood for their community, for their
    children, and for themselves. The future homeowners commit to
    completing 65 percent of the work necessary to build the homes. At
    Self-Help Enterprises, these families pour the concrete, frame the
    walls, and install electrical wiring, heating ducts, roof framing, as
    well as all finish, tile, paint, and trim. Reducing the labor cost of
    the home reduces the total cost of the home, enabling lower-income
    households to become homeowners and earn equity at the same time.
        The economic benefits extend far beyond the individual homeowners.
    As contractors are hired to turn raw land into subdivisions, local
    vendors provide building materials and subcontractors complete
    technical work such as plumbing. Local governments receive building
    permit fees, and in the long term, property taxes from proud
    homeowners. Rural communities, often plagued with an abundance of
    substandard housing, gain an expanding stock of good housing and the
    stability that comes to a community of homeowners.
        In the San Joaquin Valley each year, as many as 120 hardworking
    families each commit 1,400 hours, 40 hours per week, week after week,
    through the heat of summer and the cold of winter, sharing the labor
    necessary to build homes for their neighbors, their children and
    themselves.
        It is popular today to talk about the importance for homebuyers to
    have ``skin in the game'' as protection against failed mortgages.
    Mutual self-help families have more than skin in the game. They have
    skin, sweat, and occasionally a bit of blood as they invest themselves
    in the home of their dreams. And does it work? With 47 years of
    experience behind us, those of us at Self-Help Enterprises say ``YES''
    unequivocally. Self-help homebuilders achieve remarkable stability.
    Despite being the lowest income of the Section 502 borrowers, our self-
    help homebuilders have lower delinquency rates and very low foreclosure
    rates.
        No other path to homeownership for low-income families has proven
    to be as successful.
    Section 502 Direct Lending Program
        The Section 502 Direct Loan program is an equally important element
    of self-help housing, affording well-underwritten construction-to-
    permanent mortgages that finance the home from the start of
    construction to the final mortgage payment. But the reach of this model
    mortgage program goes far beyond self-help households.
        Since the Housing Act of 1961, the USDA 502 Direct Loan Program has
    been a cornerstone of homeownership opportunity in rural America, with
    over 2 million homeowners seizing the opportunity for an affordable
    mortgage which would enable them to be homeowners in the town where
    they live and work. For a surprisingly low Federal budget cost, the 502
    Direct mortgage is a well underwritten, affordable, no gimmicks
    financing for rural families who want to invest in homes and in their
    communities.
        No other Federal home ownership program can match the profile of
    the families served by the section 502 direct loan program. The average
    income for families receiving direct loans is $27,000. By law, 40
    percent of families participating in the program have incomes that do
    not exceed 50 percent of the median income. For the past 2 years at
    Self-Help Enterprises, fully 60 percent of the borrowers have incomes
    below 50 percent of median.
        Despite serving families with limited economic means, the section
    502 direct loan program is the most cost effective affordable housing
    program in the Federal Government. In fiscal year 2011, the total per
    unit cost for a homeownership loan to a low income family was less than
    $7,200. There are a number of reasons for this overall low cost to the
    Government. First, a low interest rate environment reduces the cost of
    borrowing. Less well known is a longstanding requirement to recapture
    subsidy when a house financed under section 502 is sold. Essentially a
    family and the Government share in the appreciation on a home, taking
    into account how long a family has lived in the house. Recapture
    provides a substantial return to the Government.
        Although the Section 502 Direct Loan Program lends to families with
    limited incomes, the program has a record of success not only in
    creating affordable homeownership opportunity, but also protecting the
    Federal investment. For example, in 2010, USDA Rural Development in
    California foreclosed on a mere 57 mortgages out of a loan portfolio of
    nearly 10,000 loans. This is a foreclosure rate of just over 0.5
    percent and stands in stark contrast to what is happening in the
    conventional market in California.
        It has been stated that the Section 502 guarantee program is an
    alternative for families eligible for direct loans. It is not. The
    average annual income for families receiving the guarantee is $48,000.
    The majority of the loan guarantees go to households with incomes at or
    above 100 percent of the median, and only about 5 percent of families
    receiving guarantees make between 60-70 percent of the median. With the
    inevitable end of the current low interest rate environment, interest
    rates on 502 Guarantee loans will once again rise, and the number of
    qualifying low income borrowers will drop, if not disappear altogether.
    Summary
        USDA's Rural Housing Service and the resources it delivers
    represent vital resources to the people and the economies of rural
    American communities so desperate for jobs. As the recession seems
    finally to be fading in some areas of the country, its grip on rural
    America is still devastatingly strong. This is no time to reduce the
    investment so important to the recovery of Rural America.
                                     ______

       Prepared Statement of the Self-Help Housing Corporation of Hawaii

        The Self-Help Housing Corporation of Hawaii is requesting the same
    allocations from fiscal year 2012 for the USDA Rural Development 502
    Direct Loan Program, and the RD 523 Technical Assistance Mutual Self-
    Help Housing Program. With the average sales price for a single family
    house in Hawaii at $550,000, there would be no affordable housing for
    homeownership in Hawaii without the USDA Rural Housing Programs.
    Because of the extreme gap of income levels for low income families in
    Hawaii and the average housing prices, even the ``workforce'' of Hawaii
    cannot afford homeownership without the subsidies offered by these
    programs.
        Through the recent development of its 72 lot subdivision in a rural
    low income neighborhood, SHHCH is able to offer homeownership
    opportunities to 72 very low and low income families who will build
    their own houses through the mutual self-help housing program. SHHCH is
    providing more than 200 jobs with just this self-help housing project
    with the construction of the infrastructure, materials and equipment
    from building supply houses, and services from title companies,
    appraisers, insurance companies, lenders, etc. With the Federal funding
    of these programs acting as a catalyst, SHHCH has been able to leverage
    another $11 million in private financing to undertake this development.
    Additionally, very low and low income families, who presently live in
    sub-standard, and severely crowded situations, not only improve their
    housing situations, but also gain equity; thereby, continuing to
    improve their lives.
        The Self-Help Housing Corporation has built 591 self-help units
    throughout the State of Hawaii with firemen, policemen, teacher's
    aides, hospital workers, hotel workers, laborers, and those considered
    the ``workforce'' of Hawaii. Currently, in a remote rural area of Maui,
    SHHCH is assisting native Hawaiian low income families to build three
    and four bedroom houses through the RD 523 and RD 502 Direct Loan
    Programs. This is the first affordable housing program in Hana in 35
    years. Some of these self-help builders have no electricity or potable
    water in their existing houses. Without these Rural Housing Programs,
    these families, and thousands of rural low income families across the
    country would continue to live in severely sub-standard conditions,
    some without electricity and potable water; conditions I saw as a Peace
    Corps volunteer in third world countries!
        In the past 3 years more than 3,500 low income families in more
    than 37 States have built their own houses through the RD 523 Technical
    Assistance Program in tandem with the RD 502 Direct Loan Program. With
    a cost of approximately $5,000 to subsidize the program over the entire
    33 year amortization period, these programs are less expensive than
    rental subsidy programs. Through these programs not only does the
    family improve their living situation, gain equity, and learn
    invaluable skills in leadership, team work, and building skills, but
    the community benefits with a broadening of the tax base, an
    enhancement of property values, and an establishment of stable
    neighborhoods with well maintained houses. Every 100 homes built in
    this program results in 324 jobs, $21.1 million infused in the local
    economy, and $2.2 million paid in for tax revenues. These significant
    housing programs are assisting to rebuild the economy in rural areas.
        I urge you, as at the leaders of our country, to consider funding
    such valuable community development programs at the fiscal year 2012
    funding levels.
                                     ______

             Prepared Statement of the School Nutrition Association

        The School Nutrition Association (SNA) strongly supports approval
    of the $35 million requested by the Food and Nutrition Service for
    School Meal Equipment Grants. Many School Food Authorities (SFAs)
    throughout the Nation have a significant need to replace and upgrade
    their equipment, particularly as we all work to implement the final
    rule revising school lunch and school breakfast meal standards. Most
    importantly, new equipment will directly benefit the millions of
    children that school food service professionals serve each and every
    school day by enabling SFAs to provide more fruits and vegetables, and
    enabling SFAs to maintain, expand, and establish school breakfast
    programs throughout the Nation.
        Mr. Chairman and Members of the Committee, SNA represents more than
    55,000 members who provide high-quality, low-cost meals to students
    across the country. We appreciate your continuing support for all
    school meal programs. These programs are needed more than ever before
    and we want to work with you to improve the efficiency and integrity of
    school meals.
        Our members are charged with several simultaneous tasks. First,
    they must provide the best meal possible. Second, they must provide the
    safest meal possible. Third, they must do so within extremely tight
    budget limits that often do not leave any resources for replacing and
    upgrading equipment on a regular basis.
        School meals must be nutritious and varied in order to qualify for
    Federal reimbursement, and to maintain student interest. As a result of
    both the new meal pattern standards and requirements of the Healthy,
    Hunger-Free Kids Act of 2010, SFAs are required to serve both a greater
    volume and a wider array of fruits and vegetables. We are prepared to
    meet that challenge, but many SNA members will need additional
    refrigeration equipment, storage equipment, and food preparation
    equipment in order to meet these requirements. Equipment assistance is
    vitally needed to fully achieve the requirement for nutritious and
    varied meals.
        Food safety is a tremendous responsibility. SNA members take great
    care to provide safe food for the benefit of each child, and for the
    integrity of school meal programs. Old equipment that is in need of
    constant repair or is scheduled to be replaced jeopardizes food safety.
    Equipment assistance is vitally needed to help ensure the continued
    provision of safe food.
        And while we certainly recognize and respect the financial
    challenges facing the Federal budget, one school food service
    professional after another is prepared to tell you about the difficult
    budget situations they face in their States, their school districts,
    and their individual schools. Many areas that have traditionally been
    well off financially are facing significant budget difficulties. We see
    this in our schools every day as more and more students move from paid
    meals to reduced price meals to free meals as families face economic
    difficulties. As a consequence, school food service professionals are
    managing tighter and tighter budgets, and are forced to put off
    replacing and upgrading equipment more than they should. Equipment
    assistance is vitally needed to help SFAs deal with little or no local
    resources for replacing and upgrading equipment.
        It is well known that the $100 million provided by the American
    Recovery and Reinvestment Act, and the $25 million provided as part of
    the fiscal year 2010 Agriculture Appropriations Act made a positive
    difference for the 6,500 successful applicants. Yet many more SFAs need
    to upgrade their equipment. There were 25,000 applications submitted
    for the prior program, with priority having been given to school
    districts where 50 percent or more students are eligible for free or
    reduced price meals.
        As an example of what this prior funding accomplished, Burlington,
    Vermont, schools received several ARRA fund grants. Most went into
    walk-in coolers and one went into a Blodgett oven. The new walk-in
    coolers have given the Burlington schools the ability to provide more
    fresh fruits and vegetables to their students daily. Between the use of
    salad bars, the Fresh Fruit and Vegetable Program, breakfast, and
    after-school suppers and snacks they are now providing at least 8+
    fruit and vegetable choices daily, to all students K-12. In addition,
    the increased refrigeration space has improved their food safety and
    storage capacity as well as reducing energy costs, noise and heat in
    their kitchens. The addition of the oven, which replaced a 25+ year old
    electric model, was not only more cost effective, but also reduced
    cooking times and improved food quality.
        The amount requested as part of the fiscal year 2013 FNS budget is
    projected to assist up to 10,000 schools in 15 to 25 States make
    similar improvements.
        We also would like to respectfully point out that many schools
    serving fewer than 50 percent free and reduced price meals need
    equipment assistance. While SNA understands the desire to prioritize
    who may be eligible for this assistance, schools serving fewer than 50
    percent free and reduced price meals face the same budgetary problems
    and equipment needs. The prior program established an assistance scale
    for SFAs with less than 50 percent free and reduced price
    participation. If a school applying had less than 30 percent F&R, they
    would only have been reimbursed for 25 percent of the cost of the
    equipment. This discouraged SFAs from applying at all last time. The
    situation is further complicated by the Paid Equity requirement
    included in the Healthy, Hunger-Free Kids Act. This provision requires
    SFAs with meal prices below the Federal reimbursement rate to increase
    their prices, even if they are already covering all of their costs.
    SFAs are relying on paying students for most of their income, and find
    that any price increase usually means a drop in participation. This
    drop in participation makes it even harder for SFAs to derive
    sufficient revenue to replace equipment absent a full grant. We hope
    that FNS will have the flexibility to consider additional methods for
    prioritization of grant applications in addition to just meal
    participation rates.
        We thank you for this opportunity to share our support for the
    requested $35 million for School Meal Equipment Grants, and look
    forward to continue to work with you in the future.
                                     ______

         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 Committee to increase the fiscal year
    2013 budget authority (BA) appropriations (non-user fees) for the U.S.
    Food and Drug Administration (FDA) to $2.656 billion, resulting in a 6
    percent increase over 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.
        SWHR, a national nonprofit organization based in Washington, DC, is
    widely recognized as the thought leader in research on sex differences
    and is dedicated to improving women's health through advocacy,
    education, and research. SWHR was founded in 1990 by a group of
    physicians, medical researchers and health advocates who wanted to
    bring attention to the myriad of diseases and conditions that affect
    women uniquely.
        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 increase of $150 million to FDA
    reflects the Agency's increased responsibilities and workload.
    Appropriate funding of the FDA by 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 dollar 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, over 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 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 post-market surveillance reporting
    for these differences is placed in the hands of physicians and
    ultimately the patient.
                FDA Must Improve Its IT 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 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 5 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 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 Office of Women's Health (OWH), like the Agency that
    houses it, requires 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. The OWH
    continues to provide women with invaluable tools for their health and
    ensure that the agency is examining sex and gender differences during
    its review of new drugs, devices, and biologics.
        To address OWH's growing list of priorities, SWHR recommends that
    Congress support an additional $1 million budget for OWH for fiscal
    year 2013 within the budget for the FDA. Each year, OWH exhausts its
    budget as OWH's pamphlets are the most requested of any documents at
    the Government printing 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's intramural research program funded over
    23 new and 8 continuing research studies conducted by FDA scientists.
    To date, over 50 concept papers were submitted. OWH has also
    collaborated with CDRH to award a contract to Duke Research Institutes
    for prospective assessment of clinical and patient-reported outcomes
    for female patients undergoing percutaneous coronary intervention (PCI)
    procedures via femoral and radial access. Further, FDA OWH has worked
    closely with CDRH on its publication of the Draft Guidance on the
    Evaluation of Sex Differences in Medical Device Clinical Studies.
        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 website is a vital
    tool for consumers and physicians. It is regularly updated to include
    new and important health information. The website provides free,
    downloadable fact sheets on over 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 provides imperative information to the medical communities in
    the form of web trainings to keep medical professionals up to date with
    emerging science. OWH developed Sex and Gender Differences in Health
    and Behavior, with assistance from the Office of Research on Women's
    Health (ORWH) at the National Institutes of Health (NIH) to develop the
    second in a web series of free courses on the ``Science of Sex and
    Gender in Human Health''. Developed in partnership with the Health
    Resources and Services Administration (HRSA), OWH developed online
    courses in health literacy to help promote best practices for improving
    patient/provider communication and addressing factors such as low
    health literacy that limit a patient's ability to safely use their
    medications.
    OWH 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 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 Committee for its strong
    record of support for the FDA and women's health. SWHR recommends for
    fiscal year 2013 BA appropriations (non-user fees) of $2.656 billion 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 the Office of Women's Health for fiscal year
    2013, and to ensure that future budget appropriations for the OWH never
    fall below fiscal year 2012 funding levels of $6 million.
        We look forward to continuing to work with the Committee 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 2013 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 USDA
    accounts:
      --APHIS/Animal Welfare Act Enforcement--$27,087,000;
      --APHIS/Horse Protection Act Enforcement--$891,000;
      --APHIS/Investigative and Enforcement Services--$16,275,000;
      --FSIS/Horse Slaughter--language mirroring fiscal year 2012 House
            bill provision;
      --FSIS/Humane Methods of Slaughter Act Enforcement--language
            directing FSIS to ensure that inspectors hired with funding
            previously specified for Humane Methods of Slaughter Act
            enforcement 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;
      --OIG/including Animal Fighting Enforcement--$85,621,000;
      --NIFA/Veterinary Medical Services Act--$4,790,000;
      --APHIS/Emergency Management Systems/Disaster Planning for Animals--
            $1,017,000;
      --APHIS/Wildlife Services Damage Management--reduce by $10 million;
            and
      --APHIS/Class B Dealers--language barring expenditures of funds for
            licensing or renewal of licenses of any Class B Dealers who
            sell dogs or cats for use in research, teaching, or testing.
        At this time of intense budget pressure, we thank you for your
    outstanding past support for enforcement of key animal welfare laws by
    the U.S. Department of Agriculture and we urge you to sustain this
    effort in fiscal year 2013. 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 difference, helping to protect the
    welfare of millions of animals across the country and upholding the
    values of the American public. As you know, better enforcement also
    directly benefits American citizens by: (1) preventing the sale of
    unhealthy pets from unlawful commercial breeders, commonly referred to
    as ``puppy mills''; (2) improving laboratory conditions that may
    otherwise impair the scientific integrity of animal-based research; (3)
    reducing risks of disease transmission from, and dangerous encounters
    with, wild animals in or during public exhibition; (4) minimizing
    injury, loss, and death of pets on commercial airline flights due to
    mishandling and exposure to adverse environmental conditions; (5)
    decreasing food safety risks to consumers from sick animals who can
    transmit illness, and injuries to slaughterhouse workers from suffering
    animals; and (6) dismantling orchestrated dogfights and cockfights that
    often involve illegal gambling, drug trafficking, human violence, and
    can contribute to the spread of costly illnesses such as bird flu. In
    order to continue the important work made possible by the Committee's
    prior support, we request the following for fiscal year 2013.
    Animal and Plant Health Inspection Service (APHIS)/Animal Welfare Act
            (AWA) Enforcement
        We request that you support level funding of $27,087,000 for AWA
    enforcement under APHIS. We commend the Committee for responding in
    recent years to the urgent need for increased funding for the Animal
    Care division. The funding has helped improve inspections by Animal
    Care of approximately 12,870 sites, including commercial breeding
    facilities, laboratories, zoos, circuses, and airlines, to ensure
    compliance with AWA standards. In May 2010, USDA's Office of Inspector
    General 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. While Agriculture Secretary Vilsack called for
    more inspections and a tougher stance on repeat offenders, the agency
    must have the resources to follow through on that commitment. USDA is
    also implementing a new responsibility created by 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. Animal Care currently has 122 inspectors (with
    14 vacancies that are in the process of being filled), compared to 64
    inspectors at the end of the 1990s. An appropriation at the requested
    level would help the agency 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.

    APHIS/Horse Protection Act (HPA) Enforcement
        We request that you support $891,000, the amount provided in last
    year's Senate bill, for strengthened enforcement of the Horse
    Protection Act. 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. 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 Office of Inspector General 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 the USDA to do a
    better job enforcing this law. To meet the goal of the HPA, Animal Care
    inspectors must be present at more shows. Exhibitors who sore their
    horses go to great lengths to avoid detection--even fleeing shows when
    USDA inspectors arrive. With current funding Animal Care is able to
    attend only about 10 percent of the more than 500 Tennessee Walking
    Horse shows held annually. We greatly appreciate the enactment of a
    modest increase for Horse Protection Act enforcement last year
    (bringing the budget for this to $696,000), the first time in decades
    that the program received more than $500,000. An appropriation at the
    requested level will help ensure that this program doesn't lose ground
    but instead builds on last year's crucial first step in addressing the
    need for additional inspectors, training, security--for threats of
    violence against inspectors--and advanced detection equipment.

    APHIS/Investigative and Enforcement Services
        We request that you support level funding of $16,275,000 for APHIS
    Investigative and Enforcement Services (IES). We appreciate the
    Committee's consistent support for this division. IES 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. An appropriation at the requested level would
    enable the agency to keep pace with the additional enforcement
    workload.

    Horse Slaughter
        We request inclusion of the same language barring USDA from the
    expenditure of funds for horse slaughter inspection as was included in
    the Committee's fiscal year 2012 Agriculture Appropriations bill. This
    provision is vital to prevent renewed horse slaughter activity in this
    country.

    Food Safety and Inspection Service (FSIS)/Humane Methods of Slaughter
            Act (HMSA) Enforcement
        We request language to ensure strengthened HMSA enforcement. We
    appreciate the Committee's inclusion of language in the fiscal year
    2012 Committee report regarding humane slaughter. USDA oversight of
    humane handling rules for animals at slaughter facilities is vitally
    important not only for animal welfare but also for food safety.
    Effective day-to-day enforcement can prevent abuses like those
    previously documented in undercover investigations, and reduce the
    chance of associated food safety risks and costly recalls of meat and
    egg products. We therefore urge inclusion of language directing FSIS to
    ensure that inspectors hired with funding previously provided
    specifically for Humane Methods of Slaughter Act enforcement 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.

    Office of Inspector General/Animal Fighting Enforcement
        We request that you support level funding of $85,621,000 for the
    Office of Inspector General (OIG) to maintain staff, ensure
    effectiveness, and allow investigations in various areas, including
    enforcement of animal fighting laws. We appreciate the Committee's
    inclusion of funding and language in recent years for USDA's OIG to
    focus on animal fighting cases. Congress first prohibited most
    interstate and foreign commerce of animals for fighting in 1976,
    tightened loopholes in the law in 2002, 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. Its work with State and local agencies to 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, is commendable. Dogs bred and trained to
    fight endanger public safety, and some dogfighters steal pets to use as
    bait for training their dogs. Also, in 2002-2003 cockfighting was
    linked to an outbreak of Exotic Newcastle Disease that cost taxpayers
    more than $200 million to contain. Cockfighting has further been linked
    to the death of a number of people in Asia reportedly exposed to bird
    flu. Given the potential for further costly disease transmission, as
    well as the animal cruelty involved, we believe it is a sound
    investment for the Federal Government to increase its efforts to combat
    illegal animal fighting activity. We also support the OIG's auditing
    and investigative work to improve compliance with the Animal Welfare
    Act, the Horse Protection Act, and the Humane Methods of Slaughter Act
    and downed animal rules.

    National Institute of Food and Agriculture/Veterinary Medical Services
            Act
        We request that you support level funding of $4,790,000 to continue
    the implementation of the National Veterinary Medical Service Act
    (Public Law 108-161). We appreciate that Congress is working to address
    the critical maldistribution 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. 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 support our Nation's defense against
    bioterrorism. The Centers for Disease Control estimates that 75 percent
    of potential bioterrorism agents are zoonotic--transmitted from animals
    to humans. Veterinarians 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 $142,613 on average, with an average starting
    salary of $66,469. 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 repay
    student debt. It also authorizes financial assistance for those who
    provide services during Federal emergency situations such as disease
    outbreaks.

    APHIS/Emergency Management Systems/Disaster Planning for Animals
        We request that you support level funding of $1,017,000 for Animal
    Care under APHIS' Emergency Management Systems line item. Hurricanes
    Katrina and Rita demonstrated that many people refuse to evacuate if
    they are forced to leave their pets behind. The Animal Care division
    develops infrastructure to help prepare for and respond to animal
    issues in a disaster and incorporate lessons learned from previous
    disasters. Funds are used for staff time and resources to support the
    efforts of State, county and local governments and humane organizations
    to plan for protection of people with animals. They also enable the
    agency to participate, in partnership with FEMA, in the National
    Response Plan without jeopardizing other Animal Care programs.

    APHIS/Wildlife Services Damage Management
        We request that funding be reduced for Wildlife Services Damage
    Management by $10 million. This is the amount that the USDA estimates
    it spends annually on lethal predator control to protect livestock. In
    light of record deficits, this is a wasteful subsidy that needs to be
    terminated. Under its ``livestock protection'' program, Wildlife
    Services provides taxpayer-subsidized wildlife extermination services
    to private agribusiness. USDA data show that less than 1 percent of
    livestock are killed by predators. Livestock producers and property
    owners--not U.S. taxpayers--should be financially responsible for
    protecting their property from damage attributed to wildlife. Expensive
    lethal control methods used by Wildlife Services such as aerial
    gunning, poisoning, and trapping are indiscriminate and ineffective,
    often killing non-target species including endangered species protected
    by Federal law and companion animals. Common sense non-lethal methods
    like the use of guard animals (e.g., llamas, dogs), lighting, penning,
    and good animal husbandry practices like shepherding are cheaper and
    proven more effective in reducing predation to livestock. Ranchers have
    no incentive to use these methods if the Federal Government continues
    to pay for unlimited lethal control. By cutting this wasteful and
    unnecessary program, we will ensure that U.S. taxpayers stop
    subsidizing lethal wildlife control for the benefit of private
    livestock producers and property owners.

    APHIS/Class B Dealers
        We also ask that you include a funding limitation as suggested
    below regarding Class B Dealers. A September 2010 Government
    Accountability Office report to Congress found that numerous Animal
    Welfare Act violations have been documented during inspections of Class
    B dealer facilities, seven of the nine licensed Class B dealers of
    live, random-source dogs and cats at that time had one or more
    violations, and several Class B dealers were under further
    investigation by the USDA because of repeated violations. The USDA is
    spending an inordinate amount of its limited resources in an attempt to
    regulate these Class B dealers, especially considering that a 2009
    study by the National Academies--``Scientific and Humane Issues in the
    Use of Random Source Dogs and Cats in Research''--found that Class B
    dealers are not necessary to supply random-source dogs and cats for
    NIH-funded research.
        Requested bill language: ``Provided, That appropriations herein
    made shall not be available for any activities or expense related to
    the licensing of new Class B dealers who sell dogs or cats for use in
    research, teaching, or testing, or to the renewal of licenses of
    existing Class B dealers who sell dogs or cats for use in research,
    teaching, or testing''.
        Again, we appreciate the opportunity to share our views and
    priorities for the Agriculture, Rural Development, FDA, and Related
    Agencies Appropriation Act for Fiscal Year 2013. We are so grateful for
    the Committee's past support, and hope you will be able to accommodate
    these modest requests to address some very pressing problems affecting
    millions of animals in the United States. Thank you for your
    consideration.
                                     ______

     Prepared Statement of The Humane Society of the United States--Equine
                                   Protection

        On behalf of the undersigned animal welfare and horse industry
    organizations, with combined supporters exceeding 12 million, and
    former Senator Joseph Tydings, we submit the following testimony
    seeking funding for the USDA/APHIS Horse Protection Program of $891,000
    for fiscal year 2013. We recognize that 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 $891,000 is urgently
    needed to begin to fulfill the intent of the Horse Protection Act--to
    eliminate the cruel practice of soring--by allowing the USDA to
    strengthen its enforcement capabilities for this law.
        In 1970, Congress passed the Horse Protection Act 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.
        The Horse Protection Act 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 10 percent of
    Tennessee Walking Horse shows. So the agency set up an industry-run
    system of certified Horse Industry Organization (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, and has begun to work with the Department of Justice
    in prosecuting criminal cases as provided for under the act. In 2011, a
    Federal prosecutor sought the first-ever criminal indictments under the
    act and as a result, a well-known, winning trainer in the Spotted
    Saddle Horse industry is serving a prison sentence of over 1 year. A
    former Walking Horse Trainers' Association Trainer of the Year and
    winner of the Tennessee Walking Horse World Grand Championship was
    recently indicted on 52 counts (18 of them felony) of violating the act
    and is awaiting trial.
        While these are significant actions which should have a deterrent
    effect, there are many other violators who go undetected, and many
    cases which go unprosecuted--all due to a lack of resources. USDA needs
    enhanced resources to carry out its responsibilities under this act, as
    Congress, and the public, expects.
        In years past, inspections were limited to physical observation and
    palpation by the inspector. Protocols for the use of new technologies,
    such as thermography and ``sniffer'' devices (gas chromatography/mass
    spectrometry--or GC/MS--machines), have been implemented, which can
    help inspectors identify soring more effectively and objectively. The
    results of USDA's recent GC/MS testing for prohibited foreign
    substances used by violators on the legs of horses (either to sore
    them, or to mask underlying soring and evade detection by inspectors)
    are staggering: 97.6 percent of the samples taken at various Tennessee
    Walking Horse competitions in 2011 tested positive for illegal foreign
    substances, and 86 percent tested positive in 2010.
        Effective though this inspection protocol may be, due to budget
    constraints, USDA has been unable to purchase and put enough of this
    testing into use in the field, allowing for industry players to
    continually evade detection. In 2011, USDA was able to afford to
    collect and test samples at only three of the industry's largest shows;
    in 2010, only five. With increased funding, the USDA could purchase
    more equipment and hire and train more inspectors to use it properly,
    greatly increasing its ability to enforce the HPA.
        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. Armed security is
    frequently 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.
        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.
        The egregious cruelty of soring is not only a concern for animal
    protection and horse industry organizations, 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 . . . allocated to the USDA to
    enforce these rules and regulations.''
        The USDA Office of Inspector General conducted an audit of the
    Horse Protection Program, and issued its final report in September
    2010. The report recommends the abolition of the DQP program, and an
    increase in funding for APHIS enforcement of the Horse Protection Act.
    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 would 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 the Horse
    Protection Act, the USDA still lacks the resources needed to end this
    extreme form of abuse. It is time for 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.

                           UNDERSIGNED ORGANIZATIONS

        Friends of Sound Horses, Inc.; former U.S. Senator Joseph Tydings;
    Animal Welfare Institute; American Society for the Prevention of
    Cruelty to Animals (ASPCA); American Horse Protection Association;
    American Horse Defense Fund; Plantation Walking Horses of Maryland; Red
    Rover; National Plantation Walking Horse Association; Plantation
    Walking Horse Association of California; United Pleasure Walking Horse
    Association; Gaitway Walking Horse Association; International Pleasure
    Walking Horse Registry; Sound Horse Outreach (SHO); One Horse At a
    Time, Inc. Horse Rescue; Northern California Walking Horse Association;
    Tennessee Walking Horse Association of Oklahoma; Pure Pleasure Gaited
    Horse Association; Northwest Gaited Horse Club; New York State
    Plantation Walking Horse Club; Northwest Pleasure Tennessee Walking
    Horse Association.
                                     ______

                   Prepared Statement of The Wildlife Society

        The Wildlife Society appreciates the opportunity to submit
    testimony concerning the fiscal year 2013 budgets for the Animal and
    Plant Health Inspection Service, National Institute of Food and
    Agriculture, Natural Resources Conservation Service, and Farm Service
    Agency. The Wildlife Society represents over 11,000 professional
    wildlife biologists and managers dedicated to sound wildlife
    stewardship through science and education. The Wildlife Society is
    committed to strengthening all Federal programs that benefit wildlife
    and their habitats on agricultural and other private land.
    Animal and Plant Health Inspection Service
        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
    President's request is a $7 million decrease from fiscal year 2012 and
    a $10 million decrease from fiscal year 2011. In recognition of the
    important work that Wildlife Services performs regarding methods
    development and wildlife damage management, we request that Congress
    appropriate $94 million to Wildlife Services in fiscal year 2013.
        A 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.
    We recommend funding Methods Development at $18 million in fiscal year
    2013.

    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 four to one, with a focus on private landowners. The need for RREA
    educational programs is greater than ever because of continuing
    fragmentation of land ownership, urbanization, diversity of landowners
    needing assistance, and increasing societal concerns about land use and
    increasing human impacts on natural resources. The Wildlife Society
    recommends that the Renewable Resources Extension Act be funded at $10
    million.
        The McIntire-Stennis Cooperative Forestry Program is essential to
    the future of resource management on non-industrial private forestlands
    while conserving natural resources, including fish and wildlife. As the
    demand for forest products grows, 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-term 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 $33 million
    in funding allocated in the fiscal year 2012 appropriations process and
    urge that amount to be continued in fiscal year 2013.

    Natural Resources Conservation Service
        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. The Natural Resources
    Conservation Service (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 2013 request for
    Conservation Operations is $828 million, level with fiscal year 2012
    but down from $871 million in fiscal year 2011. Conservation
    Operation's Technical Assistance (TA) subactivity provides funding for
    NRCS to support implementation of the various farm bill programs. The
    fiscal year 2013 budget recommends level funding for TA, which is a
    decrease of $26 million from the fiscal year 2011 level of $755
    million. The Wildlife Society encourages you to return funding for TA
    to the fiscal year 2011 level of $755 million.
        Overall, The Wildlife Society 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, 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 OMB that are more than
    what was historically allocated if NRCS is to fulfill congressional
    intent as expressed in the 2008 farm bill. Recently, Congress allowed
    the use of mandatory funds for TA and, under current economic
    conditions, The Wildlife Society believes that such funds must continue
    to be utilized for effective delivery to occur. The Wildlife Society
    urges 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 Congress to explore new ways of funding technical
    assistance in fiscal year 2013 and beyond.
        The Wildlife Society also supports the continuation of funding 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.
        The Wildlife Society recommends farm bill conservation programs be
    funded at levels mandated in the 2008 farm bill. 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 like to specifically highlight the Wildlife Habitat
    Incentive Program (WHIP), a voluntary program for landowners who want
    to improve wildlife habitat on agricultural, non-industrial, 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 appreciate the
    proposed increase in WHIP funding, to $73 million in fiscal year 2013
    from $50 million in fiscal year 2012, but would urge Congress to fully
    fund WHIP at $85 million.
        The Voluntary Public Access and Habitat Incentives Program was
    first authorized in the Food, Conservation, and Energy Act of 2008
    (2008 farm bill) for $50 million for fiscal year 2008-2012, and was
    administered by the Farm Service Agency. This funding has expired, and
    the fiscal year 2013 budget includes $5 million for the program within
    the NRCS budget. The Wildlife Society commends the administration for
    continuing to fund this program in fiscal year 2013. 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.

    Farm Service Administration
        The administration's request would increase funding for the
    Conservation Reserve Program (CRP) to $2.2 billion in fiscal year 2013,
    up from $2.07 billion in fiscal year 2012. This increase assumes a CRP
    enrollment of 6 million acres in 2012. The Wildlife Society applauds
    FSA efforts to have a 6 million acre general sign-up in 2012, and to
    more fully utilize CRP enrollment authority to address conservation
    needs. Lands enrolled in CRP are important for the conservation of 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. We strongly encourage Congress to fund CRP at
    a level that fully utilizes program enrollment authority through CRP
    general sign-up. We are pleased with and support the general sign-up
    and target enrollment of 6 million acres FSA included in the fiscal
    year 2012 budget. However, we are concerned about the proposed
    reduction in the acreage cap from 32 million to 30 million.
        Thank you for considering the views of wildlife professionals. We
    look forward to working with you and your staff to ensure adequate
    funding for wildlife conservation. Please feel free to contact Laura
    Bies, Director of Government Affairs, at laura@wildlife.org if you need
    further information or have any questions.
                                     ______

                      Letter From the USA Rice Federation
                                                        March 30, 2012.
    Hon. Herb Kohl, Chairman,
    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 2013 Agriculture Appropriations
            Requests

        Dear Chairman Kohl and Ranking Member Blunt: This is to convey the
    rice industry's requests for fiscal year 2013 funding and related
    policy issues 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, Illinois, Kentucky, Louisiana, Mississippi,
    Missouri, Tennessee, 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. The rice
    industry annually supports about 128,000 jobs and more than $34 billion
    of economic output nationally.
        USA Rice understands the budget constraints the subcommittee faces
    when developing the fiscal year 2013 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 this year, is paid for, and
    represents a five-year contract with America's producers. USA Rice also
    strongly opposes reducing the farm-safety net to appropriate funds for
    other Federal programs. We urge that the President's fiscal year 2013
    legislative proposals be rejected that would eliminate farm-bill
    commodity programs, change crop-insurance provisions, and reduce
    conservation-program funding. We also urge that the Natural Resources
    Conservation Service technical-assistance user-fee proposal be
    rejected.
        A list of the programs the USA Rice Federation supports for
    appropriations in fiscal year 2013 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 $4 in matching funds for each $1 of
    FAS funds received. The USA Rice Federation uses MAP and FMD funding in
    over 20 markets to conduct successful export-market-development
    initiatives.
        The Foreign Market Development Program allows USA Rice to focus on
    importer, foodservice, and other non-retail promotion activities around
    the world. This program should be fully funded for fiscal year 2013 at
    the authorized level of $34.5 million.
        The Market Access Program (MAP) allows USA Rice to concentrate on
    consumer promotion and other activities for market expansion around the
    world. This program should also be fully funded for fiscal year 2013 at
    the authorized level of $200 million.
        In addition, the Foreign Agricultural Service should be funded to
    the fullest degree possible to ensure adequate support for trade-policy
    initiatives and oversight of export programs. These programs are
    critical for the economic health of the U.S. rice industry.

                                    FOOD AID

        Food-aid sales historically account for an important portion of
    U.S. rice exports. 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 2013 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.
        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 U.S. 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 2013 budget estimate of $170 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 strongly 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.
                                     ______

               Prepared Statement of the Wisconsin Walnut Council

        Mister Chairman, Ranking Member and Members of the subcommittee,
    thank you for the opportunity to submit testimony for the record. I am
    writing to share my concerns regarding a recently recognized Thousand
    Cankers Disease (TCD) that poses an enormous economic and ecological
    risk to our Nation's black walnut resources. Over the past decade, TCD
    has caused the death of millions of black walnut trees in nine western
    States (Arizona, California, Colorado, Idaho, Oregon, New Mexico,
    Nevada, Utah, and Washington) and recently has been discovered in the
    native walnut range (Tennessee, Virginia and Pennsylvania). The USDA-
    APHIS has estimated the standing value of walnut timber as being $539
    Billion. This does not include potential loss of: Jobs related to
    logging, transportation, and domestic milling; derivatives of the
    domestic milling industry to make veneer and lumber for furniture,
    cabinetry, paneling, flooring, and gun stocks; export market accounts
    for about 60 percent of the harvested logs; and nuts are shelled into
    nutmeats and the shells are processed for many industrial uses.
        The negative economic impacts of TCD will be felt by private
    landowners with immature walnut timber and by home owners with millions
    of walnut trees in residential areas of the Midwest and Eastern States.
    It will be any ugly site and very expensive to safely remove all the
    walnut trees as they succumb to TCD over the next couple of decades if
    this disease is not contained, suppressed, and locally eradicated.
    Research efforts to date have been limited to monitoring, ecological
    studies of the walnut twig beetle, epidemiology of the fungal pathogen,
    and development of phyto-sanitation treatment of walnut logs harvested
    in quarantined areas. Insecticide and fungicide application is not
    feasible or practical as a means of controlling the spread of TCD.
    Development of biological insect control of the walnut twig beetle is
    expected to be the most effective and feasible technique in stopping
    the advancement of TCD through the native range of black walnut.
        While States are attempting to stop the spread of TCD through
    surveys and quarantines, greater Federal assistance and funding are
    needed. I request dedicated funding be allocated to the USDA-ARS for
    leadership in the development of biological insect control techniques
    of the walnut twig beetle and to the USDA-FS for continued efforts in
    monitoring for TCD for fiscal year 2013.
    What Is TCD?
        TCD is a recently recognized disease in which a tiny walnut twig
    beetle (Pityophthorus juglandis) spreads a fungal organism (Geosmithia
    morbida) that causes cankers under the bark which prevents nutrient
    flow to the foliage leading to dieback of branches and ultimately death
    to the tree. While the walnut twig beetle advances only a mile or two
    per year, humans are the vector that spread TCD great distances within
    days by hauling walnut slabs with fresh bark attached that harbor the
    tiny beetles and fungal spores. Such shipments are believed to be the
    reason TCD moved into the native walnut range from the western States.
    Movement of firewood, logs, stumps, and burls with fresh bark attached
    can spread the disease great distances.
    Need for Greater Federal Funding and Specific Directives
        The USDA-APHIS considers both the walnut twig beetle and the fungal
    pathogen to be indigenous to the USA (historical evidence shows them to
    reside on a different walnut species in Arizona and New Mexico). Since
    neither is considered exotic to the USA, APHIS is not productively
    serving any role in combating TCD.
        Federal funding needs to be directed to the USDA-ARS to lead
    research and development of techniques that will contain, suppress, or
    potentially locally eradicate the walnut twig beetle. Additional
    funding needs to be directed to the USDA-FS for continued effort in
    monitoring and development of phyto-sanitization treatment of walnut
    logs harvested in quarantined areas.
        I thank the committee for this opportunity to provide testimony on
    this important subject. Please do not hesitate to contact me if you
    should require additional information.
                                     ______

                Letter From the Wyoming State Engineer's Office
                                       Herschler Building, 4-E,
                                     Cheyenne, Wyoming, March 29, 2012.
    Hon. Herb Kohl, Chairman,
    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: Support for Designation to the Colorado River Basin Salinity
            Control Program of Not Less Than $18 Million of the Total
            Environmental Quality Incentives Program (EQIP) Funding
            Recommended in the President's Fiscal Year 2013 Budget

        Dear Chairman Kohl and Ranking Member Blunt: This letter is sent in
    support of the designation of $18 million of the fiscal year 2013
    Environmental Quality Incentive Program (EQIP) funding for the
    Department of Agriculture's (USDA's) Colorado River Salinity Control
    (CRSC) Program. Realizing that agricultural on-farm strategies \1\
    provided some of the most cost-effective strategies to control
    salinity, the Congress in 1984 directed the USDA to implement its CRSC
    Program. Since enactment of the Federal Agriculture Improvement and
    Reform Act of 1996 (FAIRA; Public Law 104-127), the USDA's CRSC Program
    is a component program within EQIP. Wyoming views the inclusion of the
    CRSC Program in EQIP as a congressional recognition of the Federal
    obligation and commitment to maintaining the EPA-adopted, basin-wide
    water quality standards for salinity in the Colorado River. The USDA
    has played a vital role in meeting that commitment over the past 25
    years we have observed and encouraged Agriculture's efforts effectively
    reducing salt loading into the Colorado River system through proven and
    cost-effective irrigation water application and management practices.
    Each of the seven Colorado River Basin States, acting collectively
    through the Colorado River Basin Salinity Control Forum, have actively
    assisted the U.S. Department of Agriculture in implementing its unique,
    collaborative and important program.
    ---------------------------------------------------------------------------
        \1\ These strategies include reducing deep percolation of
    irrigation water through salt-bearing shale formations below farmlands
    across the Upper Colorado River Basin through improving irrigation
    water application efficiency by changing from flood and furrow
    irrigation methods to gated pipe, side-roll sprinkler and center-pivot
    sprinkler and low-energy, precision application (LEPA) irrigation
    practices.
    ---------------------------------------------------------------------------
        Established in 1973, the seven State Colorado River Basin Salinity
    Control Forum coordinates with the Federal Government on the
    maintenance of the basin-wide Water Quality Standards for Salinity in
    the Colorado River System. The Forum is composed of gubernatorial
    representatives and serves as a liaison between the seven States and
    the Secretaries of the Interior and Agriculture and the Administrator
    of the Environmental Protection Agency. The Forum advises the Federal
    agencies on the progress of efforts to control the salinity of the
    Colorado River. Its annual recommendation process includes suggesting
    to the Department of Agriculture the funding amount the Forum believes
    USDA should expend in the subsequent 2 years for its CRSC Program. The
    combined efforts of the Basin States, the Bureau of Reclamation and the
    USDA have resulted in one of the Nation's most successful nonpoint
    source control programs.
        The Colorado River provides municipal and industrial water for
    nearly 33 million people and irrigation water to approximately 4
    million acres of land in the United States. The River is also the water
    source for some 3 million people and 500,000 acres in Mexico. The high
    concentration of total dissolved solids (e.g., the water's salinity
    concentration) in the water limits users' abilities to make the
    greatest use of this water supply. This remains a major issue and
    continuing concern in both the United States and Mexico. The water's
    salinity concentration especially affects agricultural, municipal, and
    industrial water users. The Bureau of Reclamation presently estimates
    direct and computable salinity-related damages in the United States
    amount to more than $300 million per year.
        At its recent October 2012 meeting, the Forum recommended that the
    USDA CRSC Program expend not less than $18 million of the Environmental
    Quality Incentive Program's funding. In the Forum's judgment, this
    funding is necessary to implement one of the most successful Federal/
    State cooperative nonpoint source pollution control programs in the
    United States.
        The State of Wyoming greatly appreciates the Subcommittee's support
    of the Colorado River Salinity Control Program in past years. We
    continue to believe this important basin-wide water quality improvement
    program merits support by your Subcommittee. We request that your
    Subcommittee direct the allocation of $18 million of the Environmental
    Quality Incentives Program funding for the USDA's CRSC Program during
    fiscal year 2013. Thank you in advance for your consideration and this
    statement's inclusion in the record for 2013 appropriations.
                Respectfully submitted,
                                            Patrick T. Tyrrell,
                                                Wyoming State Engineer,
                                          Member, Colorado River Basin,
                                                Salinity Control Forum.
                                                   Dan S. Budd,
                                        Interstate Stream Commissioner,
                                          Member, Colorado River Basin,
                                                Salinity Control Forum.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Ad Hoc Coalition, Prepared Statement of the......................   163
    American:
        Commodity Distribution Association, Prepared Statement of the   164
        Farm Bureau Federation, Prepared Statement of the............   166
        Forest & Paper Association, Prepared Statement of the........   168
        Honey Producers Association, Inc., Prepared Statement of the.   169
        Indian Higher Education Consortium, Prepared Statement of the   174
        Phytopathological Society, Prepared Statement of the.........   177
        Public Power Association, Prepared Statement of the..........   178
        Society:
            For:
                Microbiology, Prepared Statement of the..............   178
                Nutrition, Prepared Statement of the.................   182
                The Prevention of Cruelty to Animals, Prepared
                  Statement of the...................................   183
            Of:
                Agronomy; Crop Science Society of America; and Soil
                  Science Society of America, Prepared Statement of
                  the................................................   180
                Plant Biologists, Prepared Statement of the..........   187
    Animal Welfare Institute, Prepared Statement of the..............   188

    Blunt, Senator Roy, U.S. Senator From Missouri:
        Questions Submitted by......................................74, 145
        Statement of................................................. 2, 90

    Catholic Relief Services, Prepared Statement of..................   191
    Cochran, Norris, Deputy Assistant Secretary, Office of Budget,
      Department of Health and Human Services........................    89
    Collins, Senator Susan M., U.S. Senator From Maine, Questions
      Submitted by...................................................    78
    Colorado:
        River:
            Basin Salinity Control Forum, Prepared Statement of the..   194
            Board of California, Prepared Statement of the...........   196
        State University, Prepared Statement of......................   197
    Copperhead Hill Ranch--John A. and Karen M. Buchanan, Owners,
      Prepared Statement of..........................................   198
    Cystic Fibrosis Foundation, Prepared Statement of the............   199

    Farmers Market Coalition, Prepared Statement of the..............   201
    Federation of American Societies for Experimental Biology,
      Prepared Statement of the......................................   203
    Feinstein, Senator Dianne, U.S. Senator From California,
      Questions Submitted by.........................................   134
    Florida Home Partnership, Inc., Prepared Statement of............   202
    Fong, Hon. Phyllis K., Inspector General, Office of Inspector
      General, Department of Agriculture, Prepared Statement of......   153
    Friends of Agricultural Research--Beltsville, Inc., Prepared
      Statement of...................................................   204

    Glauber, Joseph, Chief Economist, Office of the Secretary,
      Department of Agriculture......................................     1
    Global Health Technologies Coalition, Prepared Statement of the..   206

    Hamburg, Dr. Margaret, Commissioner, Food and Drug
      Administration, Department of Health and Human Services........    89
        Prepared Statement of........................................    94
        Questions Submitted to.......................................   123
        Statement of.................................................    91
    Harkin, Senator Tom, U.S. Senator From Iowa, Questions Submitted
      by.............................................................    77
    Hoeven, Senator John, U.S. Senator From North Dakota, Questions
      Submitted by...................................................   157
    Housing Development Alliance, Inc., Prepared Statement of the....   209
    Hunger Task Force, Prepared Statement of the.....................   210

    Izaak Walton League of America, Prepared Statement of the........   212

    Johnson, Senator Tim, U.S. Senator From South Dakota, Questions
      Submitted by...................................................    82

    Kohl, Senator Herb, U.S. Senator From Wisconsin:
        Opening Statements of........................................ 1, 89
        Questions Submitted by......................................60, 123

    Lautenberg, Senator Frank R., U.S. Senator From New Jersey,
      Questions Submitted by.........................................   157
    Little Dixie Community Action Agency, Inc., Prepared Statement of
      the............................................................   213
    Lummi Nation, Prepared Statement of the..........................   214

    Massachusetts Vegetable & Flower Grower, Prepared Statement of
      the............................................................   216
    McGarey, Patrick, Assistant Commissioner, Office of Budget, Food
      and Drug Administration, Department of Health and Human
      Services.......................................................    89
    Merrigan, Kathleen, Deputy Secretary, Office of the Secretary,
      Department of Agriculture......................................     1
    Metropolitan Water District of Southern California, Prepared
      Statement of the...............................................   218
    Moran, Senator Jerry, U.S. Senator From Kansas, Questions
      Submitted by..................................................82, 149

    National:
        Association of:
            County and City Health Officials (NACCHO), Prepared
              Statement of the.......................................   219
            State Energy Officials (NASEO), Prepared Statement of the   221
        Commodity Supplemental Food Program Association (NCSFPA),
          Prepared Statement of the..................................   221
        Organic Coalition (NOC), Prepared Statement of the...........   223
        Rural Housing Coalition (NRHC), Prepared Statement of the....   226
        Sustainable Agriculture Coalition (NSAC), Prepared Statement
          of the.....................................................   228
    Northwest Regional Housing Authority, Prepared Statement of the..   232

    Oregon Water Resources Congress, Prepared Statement of the.......   232
    Organic Farming Research Foundation, Prepared Statement of the...   234

    Pickle Packers International, Inc., Prepared Statement of........   236
    Pryor, Senator Mark, U.S. Senator From Arkansas, Questions
      Submitted by...................................................    84

    Rural:
        Coalition/Coalicion Rural, et. al, Letter From the...........   241
        Housing Development Corporation, Prepared Statement of the...   244

    School Nutrition Association, Prepared Statement of the..........   247
    Self-Help:
        Enterprises, Prepared Statement of the.......................   245
        Housing Corporation of Hawaii, Prepared Statement of the.....   247
    Society for Women's Health Research, Prepared Statement of the...   249
    Strom, Leland A., Chairman and Chief Executive Officer, Farm
      Credit Administration, Prepared Statement of...................   158

    The:
        Humane Society of the United States, Prepared Statement of...   251
            Equine Protection, Prepared Statement of.................   255
        Wildlife Society, Prepared Statement of......................   257

    USA Rice Federation, Letter From the.............................   259

    Vilsack, Hon. Thomas, Secretary, Office of the Secretary,
      Department of Agriculture......................................     1
        Prepared Statement of........................................     5
        Summary Statement of.........................................     3

    Wisconsin Walnut Council, Prepared Statement of the..............   260
    Wyoming State Engineer's Office, Letter From the.................   261

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

                                 SUBJECT INDEX

                                  ----------

                           DEPARTMENT OF AGRICULTURE

                          Office of Inspector General

    Goal 1: Strengthen USDA's Safety and Security Measures for Public
      Health.........................................................   154
    Goal 2: Strengthening Program Integrity and Improving Benefit
      Delivery.......................................................   155
    Goal 3: OIG Work in Support of Management Initiatives............   156
    Goal 4: Improving USDA's Stewardship of Natural Resources........   157
    Office of Inspector General's (OIG's):
        Fiscal Year 2013 Budget Request..............................   157
        Oversight of Recovery Act Programs...........................   153

                            Office of the Secretary

                                                                       Page

    Additional Committee Questions...................................    60
    Agricultural:
        Marketing Service (AMS)......................................    66
        Research.....................................................41, 42
            Facilities...............................................    21
            Service..................................................    62
                Fiscal Year 2012 Funding.............................    84
                Grazing Research.....................................    40
                Lab Closures.........................................39, 75
                Program Reallocation.................................    80
    Agriculture Research Funding.....................................    36
    Animal:
        And Plant Health Inspection Service (APHIS)..................    63
            Funding and Staffing.....................................    28
        Welfare......................................................    64
    Beginning Farmers................................................    22
    Biotechnology Regulatory Services (BRS)..........................    65
    Blender Pumps....................................................    26
    Blueprint for Stronger Service...............................18, 34, 41
    Broadband:
        Access.......................................................    22
        Program Rule.................................................    30
    Budget Impact of:
        Competitive Standards Rule...................................    77
        School Meals Regulations.....................................    76
    Capital Asset and Construction Plan..............................    75
    Catfish Inspection...............................................    86
        Program......................................................    24
    Civil Rights.....................................................42, 72
    Closing Costs of Research Laboratories...........................    76
    Community Facilities.............................................    70
    Competitive Food Rule............................................    82
    Conservation.....................................................    66
        Programs.....................................................    24
    Country of Origin Labeling.......................................    83
    Crop Insurance...................................................    38
    Dale Bumpers Small Farms Research Center.........................    85
    Delta Obesity Prevention Unit....................................    86
    Diversity of Rural Electric Programs.............................    74
    Extramural Research..............................................    75
    Farm Service Agency (FSA):
        Information Technology (IT)..................................    15
        Office:
            Closures.................................................    86
            Consolidation....................................17, 18, 33, 35
                Criteria.............................................    17
    Field Office Closings............................................    60
    Food:
        For Peace Title II Grants....................................    27
        Safety.......................................................    78
            And Inspection Service (FSIS)............................    60
                Poultry Inspection...................................    12
    Free Trade Agreements With Colombia and Panama...................    74
    House Budget Resolution..........................................    83
    Housing..........................................................    69
    International Food Assistance....................................    27
    Lacey Act........................................................    65
    Lean Finely Textured Beef (LFTB).........................20, 21, 77, 79
    National:
        Institute of Food and Agriculture (NIFA) Crop Protection
          Program....................................................    80
        School Lunch Program.........................................    79
    Non-O157.........................................................    61
    Northeast Regional Agricultural Research.........................    81
    Nutrition........................................................    71
        Programs Fraud Detection.....................................    14
    Office Closures..................................................    82
    Pesticide Recordkeeping Program..................................    66
    Research Lab Closures............................................    31
    Rural:
        Development..................................................36, 68
        Jobs Accelerator.............................................    70
    Streamline:
        Decisions for Genetically Engineered Plants..................    28
        Veterinary Biologics Licensing Process.......................    29
    Sun Grant Initiative.............................................    83
    Supplemental Nutrition Assistance Program (SNAP):
        Contingency Fund.............................................    11
        Program Integrity............................................    11
    Universal Service Fund (USF).....................................19, 20
    Water Bank Program...............................................    25
    Watershed Rehabilitation Program.................................    23
    Women, Infants, and Children (WIC) Program.......................    25
        Funding......................................................    11
        Increases in California......................................    13

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                          Food and Drug Administration

    Additional Committee Questions...................................   123
    Addressing Drug Shortages........................................   143
    Animal Antibiotics...............................................   148
    Antibiotics......................................................   136
        Animal.......................................................   148
        Livestock....................................................   110
    Antimicrobial Resistance.........................................   143
    Arsenic in Chicken Studies.......................................   135
    Artificial Pancreas..............................................   119
    Biosimilars......................................................   140
        User Fee Program.............................................   139
    Blood Platelets..................................................   131
    Budget:
        Fiscal Year 2013.............................................    92
        Request......................................................    93
    China............................................................   104
        Import Initiative............................................   125
    Cosmetics......................................................103, 128
    Courier..........................................................   128
    Definition of Valid Prescription.................................   137
    Devices and Diagnostics..........................................   141
    Drug:
        Approvals....................................................    92
        Labeling During Pregnancy....................................   128
        Shortages..................................................117, 126
    Enforcement......................................................   109
    Facilities.......................................................   115
    Fiscal Year 2013 Budget..........................................    92
    Food:
        And Drug Administration (FDA):
            Fiscal Year 2013 Budget Request..........................    97
            Investments and Results..................................    94
        Contact Notification (FCN) User Fee..........................   128
        Safety.....................................................123, 136
            Modernization Act (FSMA).......................92, 93, 101, 136
    Foods and Veterinary Medicine (FVM) Program......................   128
    Foreign Importer.................................................   109
    Generics.........................................................   102
    Globalization....................................................    92
    Imported Drugs...................................................   108
    Information Technology (IT)......................................   120
        Progress.....................................................   121
    Internal Efficiencies............................................   147
    KV Pharmaceutical................................................   107
    Lab Funding......................................................   127
    Life Sciences-Biodefense Laboratory.............................93, 122
    Maximizing the Impact of FDA Funds...............................    96
    Medical:
        Countermeasures (MCMs).................................93, 122, 124
        Product Reinspection.........................................   127
        Research.....................................................   147
    Menu:
        Boards.......................................................   106
        Labeling..............................................105, 142, 144
    Nano.............................................................   115
    National Center for Toxicological Research (NCTR)................   115
        Collaboration................................................   116
    Nutrition Labeling...............................................   113
        Standards....................................................   139
    Premarket Approval (PMA).........................................   120
    Preparing FDA for the Challenges Ahead...........................    96
    Prescription Drug User Fee Amendments of 2012 (PDUFA)............   127
    Rare and Neglected Diseases......................................   131
    Registry of Legitimate Online Pharmacies.........................   137
    Reinspection Fee.................................................   103
    Repackaging......................................................   109
    Seafood:
        Consumption During Pregnancy.................................   129
        Safety.......................................................   130
    User Fees.......................................................93, 127

                           FARM CREDIT ADMINISTRATION

    Condition of the Farm Credit System (FCS)........................   160
    Examination Programs for Farm Credit System Banks and
      Associations...................................................   159
    Federal Agricultural Mortgage Corporation (FAMC).................   161
    Mission of the Farm Credit Administration (FCA)..................   158
    Regulatory and Corporate Activities..............................   160

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