[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

                               __________


                  U.S. GOVERNMENT PRINTING OFFICE
72-302                    WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  


                      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 [email protected], 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) 
([email protected]), 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 [email protected] 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

                                   - 
