[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2014

                              ----------                              


                         THURSDAY, MAY 16, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:05 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mark L. Pryor (chairman) 
presiding.
    Present: Senators Pryor, Udall, and Cochran.

                       DEPARTMENT OF AGRICULTURE

STATEMENTS OF:
        ED AVALOS, UNDER SECRETARY, MARKETING AND REGULATORY PROGRAMS
        DR. CATHERINE WOTEKI, UNDER SECRETARY, RESEARCH, EDUCATION AND 
            ECONOMICS
        DR. ELISABETH HAGEN, UNDER SECRETARY, FOOD SAFETY
        KEVIN CONCANNON, UNDER SECRETARY, FOOD, NUTRITION AND CONSUMER 
            SERVICES
ACCOMPANIED BY MICHAEL YOUNG, BUDGET OFFICER

               OPENING STATEMENT OF SENATOR MARK L. PRYOR

    Senator Pryor. I will call this hearing to order, and I 
want to say thank you to all of our panelists, our witnesses 
today.
    This is the third hearing we've had on the subcommittee, 
and today we're going to have a chance to really talk in detail 
about some of the items in the budget for the U.S. Department 
of Agriculture (USDA).
    I'd also like to thank Senator Cochran for standing in for 
Senator Blunt today. Senator Blunt is in Missouri at a 
commitment in his hometown that he committed to a long time 
ago, and we understand how that goes. So he has left the 
responsibilities in the very capable hands of Senator Cochran.
    Of course, it's a delight to have Senator Cochran here. Not 
only is he a true gentleman but also the former chairman of the 
full committee, former chairman of the Appropriations 
Committee, came here in 1979.
    And, Thad, before I came in this morning, I looked at that 
list of people that you came in with, and it's a very 
impressive list of Senators that you came in with: David 
Durenberger, Max Baucus, Nancy Kassebaum, of course, you, Rudy 
Boschwitz, Alan Simpson, John Warner, William Armstrong, Bill 
Cohen, Paul Tsongas, Larry Pressler, David Boren, Jim Exon, 
Carl Levin, of course, Bill Bradley, Howell Heflin, Roger 
Jepsen, Gordon Humphrey, and then this one guy named David 
Pryor. I don't know whatever happened to him, but I don't think 
he ever amounted to much.
    But anyway, great class. And it's great to have you here. 
And as everyone here knows, Senator Cochran is really one of 
the giants of American agriculture.
    Today, we have four Under Secretaries with us, and so I'm 
going to be very brief in my opening statements. And I'll just 
go ahead and introduce you here in just a moment, but I'd like 
to welcome each one of you to the subcommittee. Well, I'll go 
ahead.
    Mr. Kevin Concannon, the Under Secretary for Food, 
Nutrition and Consumer Services; Dr. Elizabeth Hagen, the Under 
Secretary for Food Safety; Mr. Edward Avalos, Under Secretary 
for Marketing and Regulatory Programs; and Dr. Catherine 
Woteki, Chief Scientist and Under Secretary for Research, 
Education, and Economics.
    The Under Secretaries here today represent a wide range of 
activities carried out by the Department. Their combined budget 
requests are nearly $12.4 billion in discretionary funding, 
which is nearly 69 percent of USDA's total request for fiscal 
year 2014.
    The largest portion of that is for the nutrition programs, 
which include the Women, Infants, and Children (WIC) program, 
the largest single discretionary pot of money in the USDA. The 
fiscal year 2014 budget for WIC is $7.1 billion. That's an 
increase of $286 million from last year, without accounting for 
the sequester. This will support an estimated 8.9 million 
women, infants, and children per month in this country.
    For the Food Safety and Inspection Service (FSIS), the 
budget actually requests a decrease from last year, again, 
without accounting for the sequester. This is in large part due 
to USDA's intent to finalize and implement a new poultry 
slaughter rule.
    This rule will refocus the efforts of the inspectors and 
require fewer Federal resources. I look forward to talking a 
little further with you all about this.
    The budget request also includes a slight decrease for the 
Animal and Plant Health Inspection Service (APHIS) but includes 
a number of programmatic changes to address new and emerging 
issues. I'm interested to hear how you plan to balance the 
needs of new problems in this budgetary environment while 
maintaining appropriate efforts on longer term issues.
    The research budget this year has increased by 
approximately $125 million with the vast majority of that 
increase being provided through the Agriculture and Food 
Research Initiative, AFRI, at the National Institute of Food 
and Agriculture (NIFA).
    I'm always pleased to see increased requests for 
agriculture research, and I think it's an important and sound 
investment of taxpayer dollars.
    Now we talked a bit about this last week, how our farmers 
are going to have to produce more in the next 40 years. They're 
going to have to produce more than they produced in all of 
recorded history. The investments in research are what will 
make this possible.
    However, I would also like to say, briefly, I don't think 
we should focus all of our attention on competitive research. I 
think the land-grant universities and capacity programs funded 
in this bill are vital to the work of America's farmers. They 
allow for continued focus on local and regional problems and 
issues faced by our producers, and they disseminate 
information, so it can be used by everyone. We shouldn't lose 
sight of their importance.
    With that, what I'd like to do is turn it over to Senator 
Cochran and would like to hear his opening statement.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Mr. Chairman, thank you for presiding over 
this hearing this morning. I'm pleased to join you in welcoming 
our distinguished panel of witnesses from the Department, who 
are here to talk about the budget request for the next fiscal 
year.
    Nutrition programs are important, and they're contained in 
the part of the budget that will be discussed this morning, 
along with other activities, Animal and Plant Health Inspection 
Service, funding, and others.
    We thank you for your service through your responsibilities 
to the Department of Agriculture and to our consumers and 
farmers nationwide. We appreciate your diligence and your 
careful attention to our public responsibilities.
    Thank you.
    Senator Pryor. Thank you.
    And I thought what I would do is just, I guess, for ease, 
just start over here with Mr. Avalos and just go down the line 
here. So let's do 5 minutes for opening statements. Now, your 
written statements will be part of the record, so if you want 
to summarize and do it in 5 minutes, that would be great.
    Mr. Avalos.

                     SUMMARY STATEMENT OF ED AVALOS

    Mr. Avalos. Thank you, Mr. Chairman, Ranking Member 
Cochran. Thank you so much for the invitation to be here.
    I'm just going to take a few minutes to talk about our 
budget request. I have a statement that I do have for the 
record. So anyway, I just want to highlight our request.
    We are requesting a total discretionary appropriation of 
$925 million. It's important to note that this is $84 million 
less than 2009. It's $120 million less than 2010.
    Now, we've cut expenses. We've created efficiencies. We've 
reduced staff. We're very much on board for reducing Government 
spending, for reducing the deficit. But we still have to do our 
job.
    At the Agricultural Marking Service (AMS), our budget 
request was about $84 million. It includes additional money to 
support rural communities by helping producers meet the growing 
demand for local and regional foods; also funding to maintain 
confidence in the organic label through enforcement and 
compliance; and finally, to expand international markets 
through equivalency agreements with countries such as Costa 
Rica, Korea, India, and Germany.
    At APHIS, our budget request is about $801 million. This 
includes additional funding to establish a comprehensive 
national feral hog plan. Feral hogs are an invasive species 
found in 38 States. They spread disease and cause damage, 
damage estimated at $1.5 billion.
    Also additional funding to implement our new animal disease 
traceability program. This program has buy-in from producers, 
has buy-in from States, buy-in from the tribes, and it's 
supported by trading partners.
    And funding to eradicate the Asian long-horned beetle, 
which threatens our hardwood forests, and the European 
grapevine moth, which threatens the California wine and grape 
industry.
    The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) request is about $40 million, and it's about making 
sure the seller gets paid, about fairness in the marketplace. 
And this is created by allowing our field agents to do the 
necessary enforcement and compliance work.
    On the grain side, we are requesting funding to purchase 
critical equipment that we've been holding back for a long time 
from purchasing. This is necessary to maintain the strong 
domestic and international trade.

                           PREPARED STATEMENT

    This concludes my opening remarks. I look forward to 
working with the subcommittee, and I'm prepared to answer any 
questions. Thank you very much.
    [The statement follows:]

                    Prepared Statement of Ed Avalos

    Mr. Chairman and distinguished members of this subcommittee, I am 
pleased to appear before you to discuss the activities of the Marketing 
and Regulatory Programs (MRP) mission area of the U.S. Department of 
Agriculture (USDA) and to present the fiscal year 2014 budget proposals 
for the Agricultural Marketing Service (AMS), the Animal and Plant 
Health Inspection Service (APHIS), and the Grain Inspection, Packers 
and Stockyards Administration (GIPSA).
    Secretary Vilsack has stated that the Administration is strongly 
committed to programs that create jobs and expand markets. MRP helps 
accomplish this in a variety of ways. For example, AMS and GIPSA 
certify the quality of agricultural commodities and provide industry 
with a competitive edge earned by the USDA seal of approval for grading 
and inspection. GIPSA also works to help ensure that livestock 
producers have a fair and competitive market environment. APHIS 
protects the health of plants and animals, enhancing the 
competitiveness of U.S. producers by keeping production and marketing 
costs low. All three agencies help resolve international issues to 
maintain and open markets around the world for U.S. products.
    MRP agencies have operated in an environment of tightened budgets. 
We have accomplished this through proactive management of, if not 
reductions in, staffing; internal reorganizations; office closures; 
consolidation of telecommunication services; and reduction of travel 
and other expenses. Further, we have prioritized our activities and 
made decisions to eliminate or reduce programs that are not central to 
our mission. In addition, APHIS has reduced involvement in combating 
those pests where good progress could not be made with available means 
or which are overshadowed by higher priority threats. Successful 
efforts to eradicate pests, such as boll weevil and screwworm allow 
savings as well.
    Still, the MRP agencies have achieved significant accomplishments 
that I would like to highlight. In fiscal year 2012, APHIS resolved 207 
sanitary and phytosanitary trade issues, including opening new markets 
and retaining and expanding existing market access for U.S. 
agricultural products valued at $2.56 billion. This involved more than 
50 countries and plant and animal products such as beef, cherries, 
dairy products, grapes, live swine and cattle, peas and pulses, 
potatoes, poultry, stone fruit, and many more. In fiscal year 2012, 
APHIS personnel stationed overseas successfully secured the release of 
324 shipments of agricultural products worth more than $41 million. 
APHIS, working with California cooperators, reduced populations of 
European grapevine moths (EGVM), so that detections numbered only 77 in 
fiscal year 2012 compared with almost 101,000 in fiscal year 2010. EGVM 
is a threat not only to producers in California but potentially to 
those in 30 other States. APHIS has also achieved success in the animal 
health sector. Subsequent to APHIS promulgating the animal disease 
traceability rule in December, 2012, the Scientific Commission for the 
World Organization for Animal Health (OIE) recommended that the U.S. 
risk classification for bovine spongiform encephalopathy be changed 
from the second-tier risk rating to the lowest risk rating that OIE 
provides. Upon finalization, this will aid efforts to promote U.S. 
cattle and beef products abroad.
    AMS achieved notable accomplishments in fiscal year 2012 as well. 
AMS purchased about $1.4 billion of food produced by America's farmers 
and processors for domestic nutrition assistance programs. In response 
to industry requests to improve procurement processes for canned and 
frozen fruit and vegetable products, and to better meet the Food and 
Nutrition Service's (FNS's) need to supply these products year-round, 
AMS redesigned procurement programs in 2012 in a manner that won praise 
from industry and FNS recipient agencies. AMS established the United 
States-European Union Organic Equivalency Arrangement in June 2012, 
which has opened up a $24 billion market to U.S. organic producers and 
handlers. AMS also facilitated marketing of U.S. organic products to 
Argentina, Australia, Brazil, Costa Rica, China, Germany, and 
Guatemala.
    Finally, GIPSA had many noteworthy accomplishments. GIPSA closed 
2,545 investigative files on potential violations of the Packers and 
Stockyards Act in fiscal year 2012, compared with about 2,050 in fiscal 
year 2011 and less than 580 in fiscal year 2000. In addition, GIPSA 
also implemented use of new grain moisture meters based on technology 
it developed in coordination with the Agricultural Research Service and 
transferred to the private sector for commercial use. Two competing 
manufacturers' moisture meters were subsequently approved by GIPSA, 
which reduced significantly the price paid by the grain industry for 
these instruments.
    The 2014 budget requests total budgetary authority of about $2.4 
billion for the MRP agencies, of which about $925 million is from 
discretionary appropriations, more than $940 million from Customs 
receipts, and about $435 million from fees charged to the direct 
beneficiaries of MRP services. The discretionary appropriations request 
for the MRP agencies combined is about $84 million less than the fiscal 
year 2009 appropriation, a decrease of about 8 percent. Continuing our 
efforts to address core mandates and high-priority needs while using 
taxpayer resources as efficiently as possible, I would like to 
highlight the budget requests for the MRP agencies.

                     AGRICULTURAL MARKETING SERVICE

    The mission of AMS is to facilitate the competitive and efficient 
marketing of U.S. agricultural products. AMS accomplishes this mission 
through a wide variety of activities in cooperation with partners to 
the benefit of U.S. producers, marketers, and consumers. The 
President's budget request for AMS proposes a discretionary 
appropriation of about $84 million and includes a small number of 
important initiatives.
    With additional funding for the Transportation and Market 
Development Program, AMS will help producers respond to growing 
consumer demand for local and regional food and expand their access to 
markets through product aggregation, processing, and distribution. Such 
efforts are intended to provide opportunities for smaller producers to 
scale up, for mid-sized producers to serve a scale-appropriate market 
segment such as institutions and grocers, and for producers of all 
sizes to diversify their sales. Expanding local and regional food 
systems in a community has been found to increase employment and income 
in that community.
    The budget also includes funding to assist the organic sector by 
ensuring the integrity of the USDA organic seal and fostering new 
organic equivalency agreements while taking actions, such as compliance 
monitoring, to maintain existing agreements. As organic sales expand 
and the number of certified operations rises, the National Organic 
Program must have sufficient resources to accredit, audit, and oversee 
the work of certifying agents, keep pace with violation investigation 
and enforcement, and maintain and expand trade opportunities provided 
by equivalency agreements.
    An initiative under the Federal-State Marketing Improvement Program 
(FSMIP) will assist producers in meeting the requirements of the Food 
Safety Modernization Act. Under the FSMIP, AMS provides matching funds 
to State departments of agriculture for projects aimed at improving 
marketing efficiency, reducing marketing costs for producers, and 
lowering food costs for consumers.
    The budget requests funding from section 32 for USDA's Web-Based 
Supply Chain Management (WBSCM) system to begin a technical upgrade 
that must be completed in 2015 to keep the system operating efficiently 
and cost-effectively. AMS manages the WBSCM system, which has improved 
the procurement, delivery, and management of more than 200 foods (4.5 
million tons) through domestic and foreign feeding programs 
administered by AMS, FSA, FNS, FAS, and the United States Agency for 
International Development.

               ANIMAL AND PLANT HEALTH INSPECTION SERVICE

    The Animal and Plant Health Inspection Service has a broad mission 
that includes protecting and promoting the health of U.S. agriculture 
and natural resources, administering the Animal Welfare Act, and 
carrying out wildlife damage management activities. Together with 
customers and stakeholders, APHIS enhances market access in the global 
marketplace and helps ensure abundant agricultural products.
    The budget request proposes discretionary appropriations of about 
$801 million. In addition, existing user fees of more than $210 million 
will support Agricultural Quarantine Inspection activities. The budget 
proposes an elimination of funding for programs such as Johne's disease 
and chronic wasting disease, which can best be managed at a local or 
regional level. Increased cost-sharing will be requested from 
beneficiaries of several pest programs related to specialty crops, 
trees, and wildlife damage management; this allows lesser demand for 
Federal taxpayer resources. These and other carefully considered 
reductions, together with aggressive streamlining steps, allow us to 
steward taxpayer resources and request a small number of increases for 
our highest priorities.
    Given promulgation of the final animal disease traceability rule, 
the budget requests funding to support effective implementation. This 
includes information technology systems to administer animal 
identification devices, allocate location identifiers, and manage the 
animal disease traceability information systems. APHIS will continue to 
provide the premises identification systems to States and tribes that 
wish to use them. Funding for cooperative agreements with State and 
tribes to implement the program, provision of low-cost identification 
tags, and other needs are included in the request.
    Notably, the President's budget requests an increase to address the 
growing problem of feral swine, which are estimated to cause $1.5 
billion in damages that threaten animal and human health; crops and 
livestock; rural, suburban, and urban properties; and natural resources 
and native resources. APHIS will coordinate with other Federal, State, 
and local entities to create a national program to address the more 
than 5 million feral swine currently found in 38 States. With 
populations of feral swine that have increased 21 percent annually in 
recent years, prompt and nationally coordinated action is needed.
    Additional resources are also requested for a variety of efforts. 
For example, the budget includes additional funding to combat the Asian 
longhorned beetle in Ohio and Massachusetts, and to eradicate EGVM in 
California. To implement the APHIS rule to protect pets that are sold 
over the Internet, by phone and by mail and that are currently exempt 
from USDA oversight, the budget requests funds to identify such vendors 
and conduct education and licensing activities.

        GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION

    GIPSA's mission is to facilitate the marketing of livestock, meat, 
poultry, grain, and related agricultural products and to promote fair 
and competitive trade for the benefit of consumers and American 
agriculture. GIPSA fulfills this mission through the Packers and 
Stockyards Program (P&SP) and the Federal Grain Inspection Service 
(FGIS).
    The budget proposes a discretionary appropriation of slightly more 
than $40 million. About $23 million is requested for the P&SP while 
approximately $18 million is for FGIS activities including 
standardization, compliance, and methods development activities. The 
budget also includes existing user fees of about $50 million for grain 
inspection and weighing. The discretionary budget includes a request 
for additional funding to allow the P&SP to facilitate market 
protections for buyers and sellers of livestock and poultry through 
greater compliance, investigative, and enforcement activities in the 
field. Funds would provide equipment and other support expenses needed 
for its field staff to effectively conduct regulatory and investigative 
work. An increase for FGIS will allow it to purchase long-delayed 
scientific equipment, which will provide advanced assessment of rice 
characteristics and effective mycotoxin and pesticide residue testing 
programs for U.S. grain exporters.

                               CONCLUSION
 
   In closing, the budget request for MRP supports our key role for 
the rural economy and for producers and consumers across the Nation. It 
also reflects the comprehensive efforts we have taken to conserve 
taxpayer dollars through targeted, common sense efficiencies. Any 
further reduction in funding would significantly impair our ability to 
deliver critical services and would imperil our efforts to manage an 
increasingly complex workload with constrained staffing levels.
    This concludes my statement. I look forward to working with the 
subcommittee on the 2014 budget and will be glad to answer questions 
you may have on these budget proposals.

    Senator Pryor. Thank you.
    Dr. Woteki.

               SUMMARY STATEMENT OF DR. CATHERINE WOTEKI

    Dr. Woteki. Well, good morning, Chairman Pryor, Senator 
Cochran. It's a real pleasure to appear before you today and to 
describe the budget request for Research, Education, and 
Economics (REE). I'll summarize my written testimony and note 
that USDA really has a very long history of enhancing rural 
prosperity while helping to provide an abundant and diverse 
food supply to rural America and to urban America.
    One of the key ways that these goals are reached is through 
our combined investment in research and education. And this 
encompasses really cutting-edge research on genetics and 
genomics, natural resources and environmental science, human 
and animal nutrition and food safety, and local and global food 
security. USDA has also invested in public education and 
scientific literacy. And details on all of these are available 
in our action plan widely available and posted on our Web site.
    Last year marked 150 years of USDA and also 150 years of 
the partnership that we have with the land-grant university 
community that has been expanded to include historically Black 
colleges as well as tribal colleges. And this research 
partnership is really essential for bringing together the 
research, the education and extension components.
    Public investment in agricultural research is critical to 
the innovations that keep our agricultural sector productive 
and ensure positive benefits to our economy. For every $1 that 
we invest in agricultural research, it returns $20 to the U.S. 
economy.
    For the REE mission area, the budget request for 2014 is 
$2.8 billion for the four agencies that comprise the mission 
area. I'm going to highlight some of the key proposed 
investments for each of these four agencies.
    For the Agricultural Research Service (ARS), the budget 
request is $1.28 billion. This will go to priorities that we've 
identified such as centralizing ARS information technology (IT) 
systems, improving production efficiencies through sustainable 
agriculture, helping producers adapt to and mitigate the 
effects of climate change, protecting crops at high risk of 
infestation from insects, continuing the development of 
alternative fuels, and building on ongoing research in the 
Earth sciences.
    In addition, in 2011, Congress directed ARS to study and 
prioritize infrastructure investments. ARS's capital investment 
strategy identified 21 low-condition facilities that housed 
high-priority research programs that are in need of 
modernization.
    And the President's budget requests $155 million for the 
number one priority, a replacement facility for the Southeast 
Poultry Disease Research Laboratory in Athens, Georgia, where 
we're currently conducting research on the avian influenza 
strain H7N9 that's causing really human health as well as 
animal issues in China.
    USDA's extramural science and education is coordinated 
through the National Institute of Food and Agriculture. The 
budget request is $1.29 billion and does fund the land-grant 
university system through a combination of capacity and 
competitive funds.
    As you noted, the President's budget request increased to a 
total of $383 million for NIFA's flagship competitive program, 
the Agriculture and Food Research Initiative.
    Finally, turning to the statistical agencies, the Economic 
Research Service (ERS) and the National Agricultural Statistics 
Service (NASS), the President's budget requests $78 million for 
ERS. And this is research that addresses all aspects from an 
economic perspective of the agricultural enterprise. Within 
that is a request for $2.5 million for research innovations to 
improve policy effectiveness, to strengthen behavioral 
economics research, as well as the statistical uses of 
administrative data.
    Finally, for NASS, the budget request is just under $160 
million. It will provide funding that will allow the completion 
of the Census of Agriculture, as well as $117 million for the 
agricultural estimates program.
    The REE mission area has been looking to find 
administrative efficiencies in the way we conduct our programs. 
For example, we've cut travel spending by 52 percent below the 
2010 level.
    These are difficult times, we recognize. But as a Nation, 
if we're going to maintain our leadership role in agriculture, 
particularly as it relates to agricultural innovation and 
productivity, we have an obligation to support research, 
education, and extension activities.

                           PREPARED STATEMENT

    Mr. Chairman, I look forward to working with you as we 
continue to support a world-class level of science at the 
Department of Agriculture, and to maintain and increase the 
strength of American agriculture.
    I'm looking forward to your questions, thank you.
    [The statement follows:]

               Prepared Statement of Dr. Catherine Woteki

    Chairman Pryor, Ranking Member Blunt, and members of the 
subcommittee, my name is Catherine Woteki and I am the Chief Scientist 
and Under Secretary for Research, Education, and Economics (REE) at the 
United States Department of Agriculture (USDA). I am pleased to appear 
before you to discuss the President's 2014 budgets for the REE mission 
area agencies.
    My testimony reflects the unwavering commitment of President Barack 
Obama, Secretary Tom Vilsack, and all those who work at USDA to support 
our Nation's farmers, producers, and consumers every step of the way 
from farm to dinner table. USDA has a long history of enhancing rural 
prosperity while helping to provide an abundant and diverse food supply 
to urban and rural America. One of the key ways these goals are 
achieved is through USDA's cutting edge research on genetics and 
genomics, and natural resources and environmental science, nutrition 
and food safety, and local and global food security. USDA has also 
invested in public education and scientific literacy. Our Action Plan 
is available to you at any time and can be found at http://
ree.usda.gov.
    As you know, this commitment to science is one that USDA made long 
ago. Last year marked 150 years since President Abraham Lincoln created 
the Department of Agriculture along with the 150th anniversary of the 
signing of the Morrill Act--the legislation that created our Nation's 
network of land-grant universities. This partnership--which was 
subsequently expanded in 1890 to include institutions serving the 
African American community and in 1994 to include the tribal colleges--
is critical in the advancement of agricultural science in the United 
States today. The internationally recognized Extension system that is 
housed in these land-grant colleges and universities is an important 
incubator for best practices in agriculture.
    The challenges for the next several decades are clear: expanding 
and delivering safe and nutritious food to a growing population, 
keeping agricultural production profitable, bolstering agricultural 
exports, reversing the obesity epidemic, and ensuring that our natural 
resources remain available and abundant for future generations while 
responding to the threat of a changing climate.
    Scientific research is the cornerstone of agricultural production 
and food security. Investing in agricultural research is critical to 
the innovations that keep our agricultural sector productive, offset a 
shrinking farm safety net, and ensure positive benefits to our economy. 
Agricultural productivity is a key component of net farm income, which 
last year was the second highest since 1980. Investments in 
agricultural science will increase the productivity that is essential 
for the long-term prosperity of our Nation. In fact, for every $1 spent 
on agricultural research, $20 is returned to the economy. In tough 
economic times, investing in agricultural science makes sense.
    The challenge to be responsible stewards of taxpayer dollars is one 
that the REE mission area takes very seriously. While each of our four 
agencies serves a particular function and constituency, we also 
coordinate our work to maximize Federal agricultural research funding. 
REE mission area agencies collaborate closely with scientists and 
researchers across the Federal Government, industry, academia, and 
other stakeholders. These collaborations are particularly important in 
conducting scientific research that is not cost-effective for farmers 
or producers to undertake. Another benefit of collaboration is that it 
reduces the duplication of research endeavors.
    These are some of the key principles that have been brought to bear 
as the President's fiscal year 2014 budget request for the REE mission 
area was developed. This budget request reflects the belt-tightening 
and prioritizing that many Americans have been forced to make in a 
challenging economic climate. For the REE mission area, the budget 
requests $2.8 billion for the four mission area agencies. I would like 
to spend some time highlighting some of our key proposed investments 
for 2014 budget.
    For the Agricultural Research Service (ARS), the President's 2014 
budget requests $1.28 billion. Investing in several aspects of the vast 
research agenda of ARS--from increases in important scientific topics 
to responding to emerging priorities and to an aging infrastructure--
this budget request demonstrates the administration's commitment to 
agricultural science.
    For example, the budget request allocates $4.6 million to 
centralize information technology (IT) systems in ARS. Ensuring robust 
systems to capture, track, and compile data will go a long way toward 
accelerating the pace of discovery and effectively explaining and 
building upon ARS's scientific achievements. These investments will 
also help reduce duplication and increase coordination of research 
investigations by enhancing their transparency.
    The 2014 budget request also provides funding for priority 
initiatives that will improve production efficiencies through 
sustainable agriculture ($10 million), help producers adapt to and 
mitigate the effects of climate change ($10 million), protect crops at 
high risk of infestation from insects ($6 million), continue the 
development of alternative fuels ($5 million) and build on ongoing 
research in the earth sciences ($4 million).
    In addition, in 2011 Congress directed ARS to study and prioritize 
ARS's infrastructure investments. The resulting ARS Capital Investment 
Strategy identified 21 low-condition facilities that house high-
priority programs and that are in need of modernization over the next 
decade. The President's budget requests $155 million for the number one 
priority, a replacement facility for the Southeast Poultry Disease 
Research Laboratory in Athens, Georgia. This laboratory is the 
country's leading facility for research on emerging and exotic poultry 
diseases, including avian influenza, and the request will enable ARS 
scientists to advance this critically important area of research.
    The National Agricultural Library has renewed purpose in the 
digital age to facilitate research collaboration on interdisciplinary 
agricultural problems among Government agencies, industry and academia. 
The 2014 budget requests a total of $26 million to continue library and 
information services, support a Government-wide Earth Observation and 
Environmental Data Activities initiative, and develop and provide 
unified and accessible data infrastructure capacity.
    The above proposals represent investments in USDA's intramural 
science programs. USDA's extramural science is coordinated by the 
National Institute of Food and Agriculture (NIFA). The budget proposes 
a total funding level for NIFA of $1.29 billion. NIFA funds capacity-
building programs--grants programs that support a variety of research, 
education, and Extension initiatives at land-grant institutions--as 
well as competitive grant programs to support scientists, researchers, 
and educators from across our Nation that are awarded after a rigorous 
peer-review panel selection process.
    For 2014, the President's budget requests $383 million for NIFA's 
flagship competitive grant program, the Agriculture and Food Research 
Initiative (AFRI). AFRI's programs provide the largest investment in 
agricultural science across a number of disciplines that touch every 
aspect of American lives; from plant and animal health and production, 
to agricultural systems and technologies, to bioenergy and natural 
resources, to food safety, human nutrition, and health. Responding to 
producer's concerns about the need for quicker response to emerging 
problems, the President's budget includes a new Critical Agricultural 
Research and Extension (CARE) Competition in the Agriculture and Food 
Research Initiative. The CARE Competition will permit us to address 
emerging issues important to agricultural production.
    To improve transparency and accountability, the President's budget 
provides $7.8 million to consolidate and modernize NIFA's grant 
management systems. This critical investment will allow NIFA to 
accurately quantify its research successes and help track research 
accomplishments as they transfer from the laboratory to our communities 
and our homes.
    As a former dean of agriculture at a land-grant university, I am a 
strong proponent of ensuring that the bench is deep from which to draw 
our next generation of farmers and scientists. The President's budget 
reorganizes several Science, Technology, Engineering, and Math (STEM) 
programs administration-wide into the Department of Education and the 
National Science Foundation, thereby transferring NIFA's STEM education 
programs to those agencies. However, NIFA will continue to support 
secondary and post-secondary students in other ways. For instance, AFRI 
grants to university researchers routinely support fellowships to pre- 
and post-doctoral students working with principal investigators on 
these grants, representing about $6 million in fiscal year 2010. 
Additionally, the President's budget proposes $9.2 million for 
Hispanic-Serving Institutions (HSI) Education Partnership Grants 
Program.
    Also, the 2014 budget requests $22 million for sustainable 
agriculture, in particular, through the Sustainable Agriculture 
Research and Education (SARE) program. These funds will help SARE 
grantees continue their important research, education, and extension 
activities across the Nation. SARE grants focus on keeping American 
agriculture profitable while ensuring that we can remain responsible 
stewards of our environment.
    In addition to intramural and extramural science, the REE mission 
area provides a valuable service to not only other USDA mission areas 
but also to America's agricultural producers, industry, academia, and 
non-governmental organization (NGOs) through its support of two key 
USDA research and statistical agencies, the Economic Research Service 
(ERS) and the National Agricultural Statistics Service (NASS).
    The President's budget requests $78 million for ERS. ERS 
anticipates and responds to the needs of decisionmakers by applying 
economic and social science research to address all aspects of the 
agricultural enterprise, from scientific investments to food access to 
agricultural trade. For example, the President's budget proposes $2.5 
million for ``Research Innovations to Improve Policy Effectiveness'' to 
strengthen behavioral economics research and statistical uses of 
administrative data. Behavioral economics research is based on the 
concept that humans do not always make the most rational choices, but 
instead are influenced by external factors like emotion or social 
pressure. ERS intends to apply behavioral economics to analyze and 
better understand food and agricultural programs and policies.
    The 2014 budget requests nearly $160 million for NASS--which is 
well known across the Nation by farmers, ranchers, and other producers 
and processors, as well as the commodity markets. For the Census of 
Agriculture that is conducted every 5 years, The budget request will 
fully fund the Census at $43 million. The 2012 Census is currently 
underway and close to 1.9 million responses have been received as of 
early April. The results of the Census will be published in 2014 and 
will provide data important to the agricultural industry as well as to 
the administration of Federal programs. Farmers and commodity markets 
have also come to depend on the impartial forecasts of NASS's 
agricultural estimates that the agency compiles many times each year.
    Mr. Chairman, the President's 2014 budget for USDA's REE mission 
area builds on critical investments in agricultural science. Under the 
strong leadership of Secretary Vilsack, we are continuing to leverage 
our appropriations by streamlining processes and identifying 
efficiencies throughout the Department. REE mission area agencies 
collectively have reduced travel spending, on average, by nearly 52 
percent below 2010 spending. We have provided retirement options for 
those who are eligible and have greatly reduced hiring.
    Mr. Chairman, these are difficult times. Like you, like the members 
of this subcommittee, we understand that all too well. But if we, as a 
Nation, are to maintain our leadership role in the world of 
agricultural innovation and productivity we have an obligation to 
support research, education, and Extension activities.
    At a time when China and Brazil are ramping up their investment in 
agricultural research, we cannot afford to let ours be gutted, or worse 
still, be ignored.
    It is too easy to take for granted the healthy, nutritious, and 
safe foods that are available to us, the clean air we breathe, the 
fresh water we drink, and even the clothes we wear. These are benefits 
that have resulted to a large extent from the discoveries made by 
Federal investments in agricultural science.
    Scientific endeavors are not the kind of activity that we can put a 
bookmark in and come back when funding is flush. Research requires 
ongoing investigation and commitment.
    Mr. Chairman, I look forward to working with you as we continue to 
support a world-class level of science at the Department of Agriculture 
to maintain and increase the strength of U.S. agriculture.
    Thank you again for your time and I would be pleased to answer any 
questions you may have.

    Senator Pryor. Thank you.
    Dr. Hagen.

                SUMMARY STATEMENT OF DR. ELISABETH HAGEN

    Dr. Hagen. Good morning, Mr. Chairman. Good morning, 
Senator Cochran. I'm Dr. Elisabeth Hagen, Under Secretary for 
Food Safety at the USDA. I am pleased to appear here before you 
in support of the President's fiscal year 2014 budget request 
for the USDA's Food Safety and Inspection Service (FSIS).
    FSIS is the public health regulatory agency responsible for 
ensuring the safety of the meat, poultry, and processed egg 
supply. Much of what we do is mandated by law, originating with 
the Federal Meat Inspection Act, which passed in 1906, and 
later in the 1950s with the passage of the Poultry Products 
Inspection Act.
    Much has happened since that time when our statutes were 
enacted. And as our scientific understanding has increased, 
we're constantly looking for better ways to protect consumer 
from foodborne illnesses.
    For instance, the Centers for Disease Control and 
Prevention (CDC) data shows that, since the mid-1990s, 
significant progress has been made in reducing the incidents of 
foodborne infections from pathogens often associated with the 
products that we regulate. However, disease rates from 
Salmonella have remained stagnant. So reducing these illnesses 
is a top priority for FSIS.
    We must ensure that our inspection activities are aligned 
with food safety risks. That is why, this past December, we set 
new requirements for ground and comminuted poultry 
establishments to reassess their hazard analysis and critical 
control points (HACCP) plans to account for several recent 
Salmonella outbreaks associated with these products. This 
reassessment will increase the likelihood that companies will 
effectively address the hazards that these products present and 
that they will better prevent foodborne illness.
    We've also finalized a baseline study that targets reducing 
Salmonella rates in raw chicken parts. This baseline study 
provides us with important data on the prevalence and 
quantitative levels of Salmonella and Campylobacter in the 
chicken products most commonly purchased by consumers.
    Another important way for us to align inspection with risk 
and reduce Salmonella rates is to modernize poultry slaughter 
inspection. Our proposal focuses inspection on areas of poultry 
production that will have the biggest impact on food safety. 
Currently, many FSIS in-plant personnel perform quality 
assurance tasks, such as looking for visible defects and 
sorting birds.
    If we adopt this proposal, FSIS would shift its focus to 
critical food safety tasks, such as pathogen testing, verifying 
HACCP and sanitation procedures. And the quality assurance 
tasks will be turned over to the company.
    The need for modernizing our food safety system is evident. 
Scientific assumptions that existed when the Poultry Products 
Inspection Act was first enacted in the 1950s are now outdated. 
We must ensure that our regulatory tools correspond with 
current knowledge and that we are able to tackle modern food 
safety challenges. Updating what we do and where we focus will 
help the agency prevent foodborne illnesses more effectively 
and more efficiently as well.
    In addition to improving food safety, we estimate that this 
proposal would save taxpayers approximately $90 million over 
the first 3 years of implementation, and would result in a 
shared benefit to consumers and industry of about $250 million 
annually.
    In our continued effort to better protect public health, 
we're also updating the way we collect and report data. We're 
doing this through the implementation of the Public Health 
Information System, which integrates our data sources to 
support a comprehensive, reliable, and data-driven approach to 
our inspection.
    We must also align our in-commerce activities with current 
risks. For example, FSIS is developing a proposed rule to 
require retail operations to maintain accurate grinding records 
of source materials and practices, and this would greatly 
improve our ability to trace products from retail back to 
slaughter facilities.
    While most of our work is done in-plant, we recognize the 
importance of good pre-harvest practices on the farm and safe 
food handling at home. That is why we're actively engaged in 
improving food safety across the farm-to-table continuum. For 
example, we hosted a summit that brought together key 
stakeholders to discuss pre-harvest practices that will reduce 
the likelihood of contamination at slaughter. We're also 
working with our Federal food safety partners to share best 
practices.
    On the other end of the equation, we provide consumers with 
the tools they need to handle food safely at home. And we reach 
them through mediums such as TV, radio, print, and social 
media.

                           PREPARED STATEMENT

    So in conclusion, I would say that we are continually 
assessing whether we are doing the best job that we can do to 
prevent foodborne illness in the most effective and the most 
efficient way possible. Government can deliver better than 
people expect, and we are committed to doing so.
    I am proud to lead the FSIS workforce in the mission to 
protect public health, and I appreciate the opportunity to be 
here with you today and to answer your questions.
    [The statement follows:]

               Prepared Statement of Dr. Elisabeth Hagen

                              INTRODUCTION

    Mr. Chairman, Ranking Member Blunt, and members of the 
subcommittee, I am Dr. Elisabeth Hagen, Under Secretary for Food Safety 
at the U.S. Department of Agriculture (USDA).
    I am pleased to appear before you today in support of the 
President's fiscal year 2014 budget request for USDA's Food Safety and 
Inspection Service (FSIS) and to discuss the status of FSIS programs. 
The President's fiscal year 2014 budget request for FSIS includes 
slightly more than $1 billion in appropriated funding. This funding 
level ensures that we remain capable of performing our vital regulatory 
mission to ensure the safety of meat, poultry and processed egg 
products. The notable changes in the fiscal year 2014 budget request 
include initial estimated savings from transition to the modernized 
poultry inspection system and sufficient funding to continue 
implementation of the Cooperative Interstate Shipment program.

Who We Are
    FSIS is USDA's public health agency and is responsible for ensuring 
that the Nation's commercial supply of meat, poultry, and egg products, 
whether domestic or imported, is safe, wholesome, and correctly labeled 
and packaged.
    The dedicated men and women of FSIS all across the Nation are vital 
to carrying out our mission. Of the 9,750 people that FSIS employed at 
the end of fiscal year 2012, 8,678 of them were on the front lines 
protecting public health in 6,263 federally regulated establishments, 
in one of the three FSIS laboratories, at approximately 120 ports of 
entry, and in 150,000 in-commerce facilities nationwide.

What We Do
    Our mission is unique because much of it is mandated by law. FSIS 
enforces the Federal Meat Inspection Act (FMIA) and the Poultry 
Products Inspection Act (PPIA), which require the examination and 
inspection of all livestock and poultry slaughtered and processed for 
use in commerce for human food, with few exceptions. FSIS also enforces 
the Humane Methods of Slaughter Act (HMSA), which requires that 
livestock be handled and slaughtered humanely. Livestock and poultry 
slaughter operations cannot operate without the presence of inspection 
personnel, and inspection personnel must also be present at least once-
per-shift per day for meat and poultry processing operations. During 
fiscal year 2012, FSIS personnel inspected about 147 million head of 
livestock and 8.9 billion birds at slaughter establishments nationwide.
    In addition, under the Egg Products Inspection Act, FSIS inspects 
processed egg products, which are primarily used as ingredients in 
other foods, such as prepared mayonnaise and ice cream, and by the food 
service industry, including hospitals and schools. During fiscal year 
2012, FSIS personnel inspected about 4 billion pounds of processed egg 
products.
    FSIS also regulates all imports of meat, poultry, and processed egg 
products intended for use as human food. In fact, before imports of 
FSIS-regulated products are allowed, FSIS establishes the initial 
equivalence of every exporting country's food safety regulatory system, 
on a product-by-product basis.
    In addition, FSIS cooperates with 27 States to develop and 
administer State meat and poultry inspection (MPI) programs that 
enforce food safety requirements that are ``at least equal to'' Federal 
requirements at about 1,700 establishments. These establishments can 
only ship or sell products within their State.
    FSIS has also entered into cooperative interstate shipment 
agreements with three States--Ohio, North Dakota, and Wisconsin. FSIS 
signed its first agreement with Ohio on August 8, 2012, marking the 
implementation of section 11015 of the Food, Conservation, and Energy 
Act of 2008. FSIS signed agreements with North Dakota and Wisconsin on 
January 11 and 14, 2013, respectively.

                      PREVENTING FOODBORNE ILLNESS

    In addition to meeting our statutory obligations, we are constantly 
looking for ways to better protect American consumers from foodborne 
illnesses and evolve our methods to address modern food safety 
challenges.
    In September 2011, FSIS unveiled its Strategic Plan for fiscal year 
2011 through fiscal year 2016, outlining strategies and measureable 
goals to reduce foodborne illness. Since then we have taken a number of 
very significant steps toward accomplishing these goals, which I'm 
proud to share with you today.
    On June 4, 2012, FSIS began testing for six serogroups of Shiga 
toxin-producing E. coli--O26, O103, O45, O111, O121 and O145--in 
addition to O157:H7. Between June 4, 2012, and April 29, 2013, FSIS 
tested 3,531 samples of domestic and imported raw ground beef 
components for non-O157 E. coli, and found 50 of those samples to be 
positive.
    Also, on February 8, we implemented our ``hold and test'' policy, 
which means that since then, meat and poultry establishments have held 
FSIS-sampled product from commerce until the test results have come 
back negative. This new policy will help to prevent meat and poultry 
products that test positive for dangerous pathogens from reaching store 
shelves or consumers' tables. FSIS calculates that if this new 
requirement had been in place between 2007 through 2010, nearly 20 
percent of the meat and poultry recalls that occurred during that time 
would have been prevented, because the product would not have been 
released into commerce in the first place.
    The Centers for Disease Control and Prevention's (CDC) most recent 
Foodborne Diseases Active Surveillance Network (FoodNet) data shows 
that since the 1996-1998 baseline was established, significant headway 
has been made in reducing the incidence of foodborne infection caused 
by pathogens often associated with FSIS-regulated food. Unfortunately, 
the same cannot be said for illnesses caused by salmonella.

                               SALMONELLA

    Our estimates of illnesses caused by salmonella from FSIS-regulated 
products mirror this trend, despite recent interventions and 
significant improvement in contamination rates measured by our 
verification testing. Reducing illnesses due to salmonella remains a 
top priority for FSIS. As long as people continue to get sick from 
food, we must ensure that our inspection activities align with food 
safety risks. A multifaceted effort will be necessary in order to 
achieve reductions in salmonella rates.
    This past December, we advised establishments that produce ground 
and comminuted poultry products that they needed to reassess their 
Hazard Analysis and Critical Control Points (HACCP) plans in light of 
recent developments that could affect how they analyze the hazards the 
products present. Companies producing raw ground or comminuted poultry 
products will be required in their reassessments to account for several 
salmonella outbreaks that were associated with those types of products 
over the past few years. This reassessment will increase the likelihood 
that the establishments will effectively address the hazards these 
products present and thus better prevent foodborne illness.
    We have also finalized a raw chicken parts baseline that targets 
reducing salmonella rates in other poultry products. This 
microbiological baseline study provides us with important data on the 
prevalence and quantitative levels of certain foodborne pathogens, such 
as salmonella, and other microorganisms.
    To stay ahead of emerging risk and trends with salmonella, FSIS has 
charged its newly established Strategic Performance Working Group with 
identifying potential interventions or actions to decrease FSIS-
attributable salmonellosis.

                  MODERNIZATION TO IMPROVE FOOD SAFETY

    Another important method for preventing salmonella illnesses is to 
align inspection with risk by modernizing poultry slaughter inspection, 
which is why we announced a proposed rule that would focus inspection 
on areas of poultry production with the biggest impact on public 
health. Currently, FSIS in-plant personnel perform quality assurance 
tasks such as looking for visible defects, but they are unable to 
detect invisible pathogens and microbes this way. Therefore, FSIS would 
focus on critical food safety tasks, such as pathogen testing and 
verifying HACCP and sanitation standard operating procedures, and the 
quality assurance tasks would be turned over to the company. FSIS would 
continue to inspect every carcass, as required by law. We estimate that 
the new poultry inspection system would prevent at least 5,000 
illnesses from salmonella and campylobacter each year.
    The need for modernizing our food safety system is evident. As 
pathogens evolve, and as our scientific knowledge of what causes 
foodborne illness improves, we must ensure that our food safety system 
and our inspection process responds to these challenges. Scientific 
assumptions that were applied in the 1950s, when the Poultry Products 
Inspection Act was first enacted, are outdated, so we must ensure that 
our regulatory tools correspond with current knowledge.
    This is why modernizing the poultry inspection system is so 
important. Updating our approach would help the Agency prevent 
foodborne illness more effectively and efficiently.
    The implementation of the Public Health Information System (PHIS) 
also provides us with another important decisionmaking tool to enable 
us to protect public health more effectively, efficiently, and rapidly. 
This Web-based system integrates our data sources to support a 
comprehensive, timely and reliable data-driven approach to inspection. 
This approach allows FSIS to identify food safety threats and emerging 
trends more rapidly and accurately. In January 2012, FSIS completed a 
full implementation of the domestic component of the system, and we 
began implementation of the import component in spring 2012. In 
addition, FSIS completed a staggered implementation of PHIS to industry 
users last month and began implementation of the system to State MPI 
programs, which is expected to be completed by the end of this year.
    Until we can ensure that no contaminated product is ever released 
into commerce, we must also align our in-commerce activities, such as 
traceback investigations, with risks. For example, FSIS is developing a 
proposed rule to require retail operations to maintain accurate 
grinding records of source materials and particular practices, which 
would greatly improve the Agency's ability to trace products from 
retail back to slaughter facilities.

                          TARGETING RESOURCES

    In addition to improving food safety, we must be good stewards of 
taxpayer money, and that is why FSIS continues to examine ways to 
target resources where they can be most effective.
    For example, we estimate that the previously mentioned 
modernization of poultry slaughter inspection would save taxpayers 
approximately $90 million over a 3-year period upon full 
implementation. FSIS also believes that participating establishments 
will see lower production costs resulting in a shared benefit to 
consumers and industry of about $250 million annually.

                          LEVERAGING RESOURCES

    While our primary focus is preventing foodborne illness by ensuring 
that industry produces safe food, we can also improve food safety by 
collaborating with our Federal partners and educating consumers.
    For example, we have met with our stakeholders to discuss ways that 
we can promote good pre-harvest practices that will reduce the 
likelihood of contamination at slaughter. We also work with our Federal 
food safety partners to share food safety expertise and best practices.
    In addition to doing everything we can to ensure the safety of 
meat, poultry and processed egg products before they get to the store 
shelves, we feel it is also our responsibility to provide consumers 
with the tools they need to handle food safely at home.
    That is why FSIS, CDC, and FDA teamed up with the Ad Council to 
launch a national public service campaign called Food Safe Families, 
which educates consumers about the risks of foodborne illness and how 
to prevent it. For an investment of $2.8 million over 3 years, the Ad 
Council has been able to run a national TV, radio, and print ad 
campaign worth an estimated $46 million through donated media.
    To better reach consumers and ensure that our food safety messages 
are received by a larger audience, FSIS also utilizes various social 
and new media platforms to reach out about key food safety messages, 
such as recalls and safe food handling practices.
    FSIS actively disseminates food safety messages through its virtual 
food safety expert, Ask Karen; Twitter; Facebook; Blogs; and YouTube. 
For example, the number of views of Ask Karen answers increased from 
444,000 in fiscal year 2011 to more than 1.1 million in fiscal year 
2012. The @USDAFoodSafety Twitter account had 332,600 followers at the 
end of fiscal year 2012, representing a 66 percent increase over fiscal 
year 2011. We are currently able to reach more than 390,000 followers 
with each tweet, and that number grows by about 2,000 weekly.

                               CONCLUSION

    We are continually assessing whether we are doing our best to 
prevent foodborne illnesses in the most effective and efficient way 
possible. Government can deliver better than people expect, and we are 
committed to doing so.
    We at the Office of Food Safety and FSIS are one team, with one 
purpose, working toward a common and extremely important goal. I am 
proud to lead the FSIS workforce in its mission to protect public 
health.
    Thank you for the opportunity to testify before you today.

    Senator Pryor. Thank you.
    Mr. Concannon.

                  SUMMARY STATEMENT OF KEVIN CONCANNON

    Mr. Concannon. Thank you, Mr. Chairman and Ranking Member 
Senator Cochran, for this opportunity to present the 
administration's 2014 budget for the USDA's Food, Nutrition, 
and Consumer Services (FNCS).
    I'm pleased to join you at a time when the economy shows 
promising signs of recovery. New jobs are being added each day, 
and caseloads in the Supplemental Nutrition Assistance Program 
(SNAP) are forecasted to decline.
    Indeed, in some States, SNAP caseloads have already begun 
to drop. This news is encouraging, but I remain concerned that 
many families still struggle to put nutritious food on the 
table. The latest census data shows that almost 49 million 
Americans remain in poverty. And program data shows that 
families participating in SNAP are much poorer than those who 
participated 10 years ago.
    Many of these poor families are in the workforce. Over the 
past 20 years, the source of SNAP households income has shifted 
from welfare to earnings. In 1991, 41 percent of all SNAP 
households received cash welfare and only 20 percent had 
earnings. In 2011, only 8 percent of SNAP households received 
cash welfare, while 31 percent had earnings. And 80 percent of 
SNAP participants who can reasonably be expected to work do so.
    I'm pleased that these families have found employment, but 
I'm troubled that their income may not be sufficient to meet 
their needs. USDA is dedicated to reducing SNAP roles the right 
way, by helping clients transition to good paying jobs.
    As we fight food insecurity and hunger, we're also tackling 
an unprecedented obesity epidemic that threatens our Nation's 
health, budget, and national security. Hunger and obesity are 
connected, and we're working to solve them both, too often in 
the same person.
    The President's budget request reflects the ongoing need 
for nutrition assistance and the longstanding commitment of 
Congress and various administrations to fully fund the major 
programs. And it invests targeted resources to improve program 
integrity to support implementation of the Healthy, Hunger-Free 
Kids Act of 2010 with school equipment grants, and to modernize 
technology and build the foundation for WIC EBT.
    I recognize that this request asks our Nation to entrust to 
us over $102 billion of taxpayer money at a time when resources 
are tightly constrained. I am profoundly aware of our 
responsibility to manage these hard-earned tax dollars with the 
highest accountability, efficiency, and integrity.
    Through state-of-the-art technology and collaboration with 
law enforcement, FNCS succeeded in reducing the trafficking 
rate from 4 percent to 1 percent over the last 15 years. We 
have permanently disqualified the owners of thousands of retail 
stores for trafficking. And since trafficking involves both the 
retailer and the recipient, FNCS is working with States to 
identify clients with suspicious transaction patterns for 
further investigation.
    Additionally, FNCS has successfully worked with States to 
reduce the problem of multiple card replacement. While many 
card replacements are legitimate, repeated and frequent 
requests for replacement cards may indicate fraudulent 
activity.
    FNCS has encouraged States to warn clients with this 
suspicious behavior that they are being monitored. These 
efforts have reduced multiple card replacement card requests 
nationally.
    Our strategies are working, but there's more to be done. 
While rare, fraud undermines public confidence and jeopardizes 
SNAP's ability to serve the struggling families who need it the 
most. We cannot and do not tolerate fraud.
    Our budget includes additional resources for integrity-
focused activities and related information systems to enhance 
integrity efforts across all of our programs, including the 
school meals and the WIC program.
    This request also provides support to improve the eating 
habits of program participants. This past year, we've worked 
closely with our State partners to implement the Healthy, 
Hunger-Free Kids Act of 2010, including new science-based 
school meals nutrition standards that offer flexibility for 
schools while ensuring meals high in nutrients, adequate in 
calories, and reflecting appropriate portion size.
    Almost all of us at every income level could improve our 
diets to better protect our health. The Center for Nutrition 
Policy and Promotion leads that effort to improve the diets of 
all Americans.

                           PREPARED STATEMENT

    In conclusion, the budget fully supports the Nation's major 
nutrition assistance programs so that they can meet their 
missions while making smart investments, promoting integrity, 
and supporting a healthier future.
    Thank you, and I look forward to your questions.
    [The statement follows:]

                 Prepared Statement of Kevin Concannon

    Thank you, Mr. Chairman, and members of the subcommittee for the 
opportunity to present the administration's fiscal year 2014 budget 
request for USDA's Food, Nutrition, and Consumer Services (FNCS).
    I am pleased to join you at a time when the economy shows promising 
signs of recovery. New jobs are added each day and caseloads in the 
Supplemental Nutrition Assistance Program (SNAP), the cornerstone of 
the Nation's nutrition assistance safety net, are forecasted to 
decline. Indeed, in some States, SNAP caseloads have already begun to 
drop--Utah has seen a participation drop of 10.1 percent and North 
Dakota has seen a participation decrease of 12.9 percent from February 
2012 to February 2013. This news is encouraging, but I remain concerned 
for the large number of families who still struggle to put nutritious 
food on the table. The latest data from the U.S. Census Bureau shows 
that almost 49 million families remain in poverty, and the U.S. Bureau 
of Labor Statistics reports that 11.7 million Americans are looking for 
work. Of particular concern, our own administrative data shows that the 
families participating in SNAP are much poorer than those 10 years ago; 
in 2011, 43 percent of SNAP recipients had gross income at or below 50 
percent of the Federal poverty level and 33 percent had no net income. 
In 2001, 38 percent had gross income at or below 50 percent of the 
Federal poverty level and 18 percent had no net income.
    Many of these poor families are in the workforce. Over the past 20 
years, the source of SNAP households' income has shifted from welfare 
to earnings, showing that SNAP is serving as an important support for 
working families. In 1991, 41 percent of all SNAP households received 
cash welfare and only 20 percent had earnings. In 2011, only 8 percent 
of SNAP households received cash welfare, while 31 percent had 
earnings. Further, when you look at employment both before entering 
SNAP, as well as after exiting the program, 80 percent of SNAP 
participants who can reasonably be expected to work do in fact work. I 
am pleased that these families have found employment, but am troubled 
that their income is not sufficient to meet their needs. As we continue 
to ensure that working families can get the nutrition assistance 
support that they need, I am committed to improving work services for 
SNAP recipients through the employment and training program, which 
fills a critical gap in workforce training services and helps SNAP 
recipients obtain and retain jobs.
    These circumstances underscore that while we are steadily 
recovering from the economic downturn, the nutrition assistance 
programs managed by the Food and Nutrition Service remain critically 
important to millions of low-income Americans. Programs like SNAP, the 
school meals programs, and the Special Supplemental Nutrition Program 
for Women, Infants and Children (WIC) help bridge the gap for families 
in need by preventing hunger or extreme economic hardship as they 
regain self-sufficiency.
    At the same time we are fighting food insecurity and hunger in our 
Nation, we are also tackling an unprecedented obesity epidemic that 
threatens are Nation's health, budget, and national security. It is 
important to understand that these two problems, hunger and obesity, 
are connected. We are working to solve them both, too often in the same 
person.
    The President's budget request for nutrition assistance reflects 
the ongoing need for these programs, and the longstanding commitment of 
Congress and various administrations over the years to fully meet 
anticipated funding needs for the major nutrition assistance programs. 
The budget also makes targeted investments to:
  --Focus additional resources on program integrity and payment 
        accuracy;
  --Extend the enhanced SNAP benefits provided through the American 
        Recovery and Reinvestment Act (ARRA) until March 31, 2014;
  --Support implementation of the Healthy, Hunger-Free Kids Act of 2010 
        with school equipment grants; and
  --Continue to modernize technology and build the foundation for WIC 
        EBT.

              IMPROVING THE WAY FEDERAL DOLLARS ARE SPENT

    I recognize that this budget request asks the Nation to entrust us 
with over $102 billion of taxpayer money to maintain a robust nutrition 
safety net, at a time when resources across Government are tightly 
constrained. I am profoundly aware of the depth of this responsibility, 
and the imperative to manage these hard-earned tax dollars with the 
highest accountability, efficiency and integrity. Now more than ever, 
we must ensure that every dollar helps to feed a person in need, and is 
not wasted or misused, in order to maintain public confidence in the 
programs. I am committed to good stewardship, reducing inefficiency and 
increasing cost-effectiveness. USDA has reduced its costs through the 
Department's Blueprint for Stronger Service, which is modernizing and 
accelerating service delivery while improving the customer experience 
through use of innovative technologies and business solutions. FNCS has 
methodically reviewed its policies and procedures, maximized our 
limited resources, and saved Federal dollars by centralizing SNAP 
retailer operation functions. Reengineering the authorization process 
of retailers in SNAP into one nationalized, integrated structure 
provides stronger oversight, greater consistency, better communication, 
and improved quality of operations. This streamlining process 
consolidated 31 field offices in 28 States into a single national 
office. The newly formed national retailer management organization 
continues to take full advantage of available technology and improved 
policies and procedures to better fight fraud and protect Federal 
dollars.
    Americans expect and deserve a government that operates with 
integrity and efficiency, and we are committed to fighting error and 
waste. Over the past decade, SNAP successfully reduced the payment 
error rate from 8.9 percent in 2000 to 3.8 percent in 2011--the lowest 
ever payment error rate in the history of the program. The result of 
the error rate reduction from fiscal year 2000 to fiscal year 2011 is a 
decrease in erroneous benefits of more than $3.67 billion had the 
fiscal year 2000 rate stayed the same for fiscal year 2011. However, we 
are not satisfied with this historic achievement and remain engaged and 
committed to collaborating with our State partners in order to identify 
additional strategies to improve the program's accuracy even further.
    FNCS has also made substantial strides in reducing the prevalence 
of trafficking, the illegal selling of SNAP benefits for cash. We have 
strengthened procedures, established a stronger front-end retailer 
screening process, toughened sanctions, and acted to better hold 
retailers that violate program rules accountable. Through state-of-the-
art technology and collaboration with law enforcement partners, FNCS 
succeeded in reducing trafficking from 4 cents of every benefit $1 to 
about 1 cent of every benefit $1 over the last 15 years. Along with 
these efforts, FNCS permanently disqualified the owners of 8,300 retail 
stores for trafficking during the last 10 years, and sanctioned or 
disqualified the owners of almost 2,100 stores in 2012 alone.
    Since trafficking involves both the retailer and the recipient, 
FNCS is working with State agencies to identify client households that 
have suspicious transaction patterns for further investigation of 
potential recipient trafficking violations. In fiscal year 2011, State 
agencies conducted nearly 798,000 fraud investigations and disqualified 
over 46,000 individuals for intentional program violations. 
Additionally, FNCS has focused on and successfully worked with States 
to reduce the number of multiple replacement cards requested by each 
household. While many replacement requests are legitimate, repeated and 
frequent requests for replacement cards may indicate fraudulent 
activity. I am happy to report that the majority of States now use the 
model letter as a trigger to warn clients with this suspicious behavior 
that they are being monitored; these efforts have resulted in a 
reduction in multiple replacement card requests nationally.
    Our strategies are working, but there is more to be done. While 
rare, fraud undermines public confidence and jeopardizes the ability of 
SNAP to serve the tens of millions of struggling families who need it 
the most. Despite these achievements, any amount of fraud cannot be 
allowed in a program that is the cornerstone of our efforts to reduce 
food insecurity. We cannot and do not tolerate it. Our budget includes 
additional resources for integrity-focused activities and related 
information technology systems to enhance our program integrity efforts 
further. Fraud is not a static. FNCS and our State partners must remain 
vigilant, ready to identify those few bad actors that try to exploit 
the program in new ways and ready to make the necessary technological 
or systems changes that will thwart those efforts.
    FNCS is committed to ensuring the integrity of all of our nutrition 
assistance programs. We have been working to reduce improper payments 
in the school meals programs for several years, while making sure that 
these efforts do not compromise access for low-income children or 
unduly burden schools. We continue to implement new program integrity 
tools provided by the Healthy, Hunger-Free Kids Act of 2010. We are 
restructuring and increasing the frequency of oversight program 
reviews, strengthening direct certification, and implementing rules 
that provide additional oversight and integrity tools for the schools 
meals program. Direct certification not only reduces administrative 
costs for schools, but also reduces the burden on eligible families. 
FNCS has provided States with extensive technical assistance and grants 
to improve direct certification systems to certify children receiving 
SNAP for free meals without an additional application from their 
families.
    FNCS is also committed to ensuring program integrity in WIC. 
Nationwide data show that payment accuracy is relatively high in WIC--
certification errors were approximately 3 percent and vendor charging 
errors were about 1.1 percent of food spending. But as with the other 
programs, no level of improper payments is acceptable. When WIC vendor 
management problems were discovered in a few States last year, we took 
quick, decisive action, investigating these issues thoroughly and 
working to develop solutions that did not impair program operations for 
clients. FNCS continues to monitor these States to ensure the problems 
are resolved.

            PREVENTING HUNGER AND SUPPORTING HEALTHY EATING

    This budget request sustains the nutrition assistance safety net 
and provides support to improve the eating habits of participants in 
its programs and of all Americans. The support of healthy eating is 
perhaps best observed in our implementation of the provisions of the 
Healthy, Hunger-Free Kids Act of 2010. This past year, we have worked 
closely with our State partners to implement new science-based school 
meals nutrition standards that provide meals high in nutrients, 
adequate in calories, and reflecting appropriate portion sizes to help 
children lead healthy lifestyles. Some schools have implemented these 
changes with ease, such as those that were already following approaches 
similar to the new nutrition standards, while other schools have had to 
make greater changes to improve the nutrition quality of meals they 
provide each day. FNCS has provided extensive technical assistance to 
these schools, including offering increased flexibilities as the 
schools make this important transition.
    The Department also recently published a proposed rule implementing 
new authority to set nutrition standards for foods sold in vending 
machines and a la carte lines in schools. In the coming years, FNCS 
will develop educational and training standards for school nutrition 
professionals and will help schools strengthen their local wellness 
policies.
    Additionally, FNCS works to help improve the diets of all 
Americans. Almost every household in this Nation--of any income level--
could make substantial improvements in their diet to better protect 
their health. The Center for Nutrition Policy and Promotion (CNPP) 
works hard to provide Americans with information and tools to make 
their food and physical activity choices more consistent with the 
Dietary Guidelines for Americans. We are pleased with the success of 
the popular Web site, MyPlate SuperTracker, which allows all Americans 
to track their food intake, physical activity, and weight online. More 
than 2 million people regularly use the program. MyPlate SuperTracker 
uses the new MyPlate icon, which prompts consumers to think about 
building a healthy plate with fruit, vegetable, grains, proteins, and 
dairy food groups.
    The mission of FNCS provides us with a powerful opportunity to 
promote healthy diets, physically active lives, and healthy weights for 
those we serve. Our strong commitment to improve the health of 
Americans can be found in our work with MyPlate, which educates 
Americans about healthy diets, and in our nutrition assistance 
programs, which provide eligible low-income families in need with 
access to healthy foods. The efforts of the Food and Nutrition Service 
(FNS) and CNPP thus complement each other; both are critical to the 
health and future success of our people.
    Let me turn now to a few highlights of the budget request.

               SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM

    The President's budget requests almost $78.4 billion for SNAP, 
enough to serve an average of 44.7 million people each month in fiscal 
year 2014. This is a projected 2.4 million person decrease from the 
number of participants estimated for fiscal year 2013. We've included a 
proposal in this year's budget to extend the Recovery Act portion of 
the SNAP benefit for an additional 5 months until March 31, 2014. We 
currently estimate that on November 1, a family of four will see their 
SNAP benefit reduced by about $37. This proposal will enable SNAP to 
continue to provide an enhanced benefit to low-income American families 
as they continue the effort to get back on their feet.
    In addition, because rooting out fraud, waste and abuse is a top 
priority for this administration, the budget builds on our current 
program integrity efforts by seeking additional funds to invest in 
compliance specialists, investigators, quality assurance and data 
mining efforts as well as more frequent integrity reviews, management 
evaluations and fraud investigations. Fraud and trafficking--and even 
unintentional errors that allow SNAP assistance to be provided to 
households that do not need it--risk undermining the credibility of the 
program and distract attention from the real needs of low-income 
Americans who turn to SNAP to put food on the table.
    The budget also fully supports authorized food purchases for The 
Emergency Food Assistance Program (TEFAP). Local food banks, soup 
kitchens and food pantries have seen increased demand for food 
assistance, and TEFAP plays a critical role in ensuring that these 
organizations have a stable source of food and administrative funds to 
get food to those in need.

                        CHILD NUTRITION PROGRAMS

    The budget requests about $20.5 billion for the Child Nutrition 
Programs, to assist State and local governments in serving nutritious 
meals to children in public and private schools, child care 
institutions, and summer recreation programs. The budget renews a 
request for $35 million to provide school meals equipment grants to 
school districts to purchase the equipment needed to serve healthier 
meals as required by the Healthy, Hunger-Free Kids Act (HHFKA), improve 
food safety, and expand access. The need for updated equipment is 
great; FNS has received requests totaling $600 million from States and 
school districts around the country and the current budget request will 
be an important step toward addressing this need. These equipment 
grants also support the establishment or expansion of the School 
Breakfast Program since our prior experience shows that lack of 
adequate kitchen equipment is a prime reason why many schools are not 
able to initiate or expand their breakfast programs. The budget also 
includes a request for $3 million in increased resources for Child 
Nutrition integrity efforts including support for State integrity 
efforts and technology solutions to local program management and 
monitoring challenges.

                                  WIC

    The President's budget includes over $7.1 billion for the Special 
Supplemental Nutrition Program for Women, Infants and Children, or WIC, 
to ensure that all eligible persons seeking to participate can be 
served. The request will allow local communities to provide food, 
nutrition education and a link to healthcare to 8.9 million women, 
infants and children expected to participate in the program in an 
average month. The budget request also includes $30 million to continue 
the work with State agencies, food retail vendors and the payments 
industry to implement WIC EBT nationwide by 2020. Recognizing the 
established benefits of breastfeeding for mothers and infants, the 
budget sustains the investment in breastfeeding peer counseling at $60 
million. The budget also maintains a $125 million Contingency Fund and 
includes an additional $5 million in Federal Administration and 
Oversight for additional program integrity efforts including providing 
direct technical assistance to States on vendor management, monitoring 
competitive price criteria and maximum allowable reimbursement rates; 
performing in-depth, targeted reviews of high-risk program areas; and 
development of model software to assist State agencies in preventing 
and identifying program abuse.

                      COMMODITY ASSISTANCE PROGRAM

    The President's budget includes $272 million for the Commodity 
Assistance Program, including an increase of almost $16 million for the 
Commodity Supplemental Food Program (CSFP). Funding for CSFP continues 
to support the current caseload by providing supplemental food 
assistance to many low-income seniors and others struggling to meet 
their monthly food needs. The request also includes over $51 million 
for The Emergency Food Assistance Program (TEFAP) administrative costs. 
This funding enables hundreds of regional food banks, soup kitchens and 
food pantries to provide food to families who need it. Of the $51 
million requested, $2 million would fund oversight activities such as 
management evaluation reviews and technical assistance for State and 
local TEFAP operations, to help ensure that program funds are being 
spent in accordance with law and regulation.

                   NUTRITION PROGRAMS ADMINISTRATION

    Finally, the President's budget requests $146.6 million to fund 
Nutrition Programs Administration and the Center for Nutrition Policy 
and Promotion. The request includes $2 million to complete phase I of 
developing unified, Federal dietary guidance for infants and very young 
children from birth to 2 years of age. To date, the Dietary Guidelines 
for Americans have focused on Americans over the age of 2 because of 
the complexity of assessing the scientific evidence on the dietary 
needs and health outcomes of children in this age group. However, in 
light of emerging science on the importance of early nutrition on long-
term health outcomes, unified Federal guidance is needed. The budget 
request also includes $2 million for promotion of the Dietary 
Guidelines and MyPlate.
    In conclusion, the President's budget supports the Nation's 
nutrition assistance programs so that they can fulfill their vital 
missions and provide benefits to eligible families who wish to 
participate. This budget makes smart investments that will improve the 
way Federal dollars are spent, while avoiding waste and focusing on 
program integrity. It also focuses resources on promoting better eating 
choices, both among program clients and the general population, to 
support a healthier future. I look forward to your questions.

    Senator Pryor. Thank you and we're not going to ask Mr. 
Young to say anything, but you're welcome to if you like to.
    Mr. Young. I'm fine, thank you.
    Senator Pryor. You'll stay right where you are?
    Okay, listen, I have several questions for each of you, so 
I'll just jump right in. And we'll do 5-minute rounds, and then 
Senator Cochran I know has lots of questions as well.

                            RESEARCH FUNDING

    Let me start with Dr. Woteki, if I may. I'll say I was 
pleased to see the funding increase request for NIFA. We're the 
world leader in agricultural production, and the demands on the 
industry are growing. We're being far outspent by China, India, 
Brazil, and others, when it comes to agricultural research. If 
we want to remain the world leader, we need to keep up our 
game.
    While competitive funding is an important tool, capacity 
funding at our land-grant universities is equally important. 
Unlike competitive research, it provides a steady stream of 
revenue to allow a wide range of real-time, real-world research 
that can solve local and regional problems immediately and can 
be disseminated through the extension service to make that 
research effective when it's implemented.
    Our land-grant universities have provided the bedrock 
support that has made our agricultural research system the envy 
of the world and helped position the United States to be the 
world's largest food exporter.
    Now some of the benefits that go along with this are lower 
transaction costs, increased relevancy for local stakeholders, 
assurance of broader distribution of funds, more diverse 
agricultural landscape, lower overhead, consistent support for 
core base and foundation research.
    So, in addition, and one last thing, these funds are often 
highly leveraged with State and local governments often putting 
in as much as 10 times as much to do matching and to help 
maximize the effectiveness.
    So, Dr. Woteki, I know you know this. I know you understand 
the value in the formula grant programs, even though the budget 
doesn't provide an increase for that. So why isn't the research 
increase provided in USDA's budget split between competitive 
and formula programs?
    Dr. Woteki. Well, Mr. Chairman, we do agree with you on the 
importance of having a balanced portfolio of capacity and 
competitive funds. And the budget, we believe, expresses that 
continued commitment to have a balanced portfolio.
    Our emphasis on increasing the competitive grants program 
is based on a series of studies and recommendations that have 
been made over the last decade-plus, the most recent one from 
the President's Council of Advisors on Science and Technology, 
which was issued in December of last year. And these studies 
have recommended that in our portfolio of agricultural research 
we should be changing that balance to include a greater 
proportion in the competitive grants area.
    So this budget is reflecting that outside advice that has 
come through this most recent President's Council of Advisers 
on Science and Technology, as well as other studies that the 
National Academy of Sciences has done.

                             FSIS FURLOUGHS

    Senator Pryor. We may have some follow-up on that in a few 
minutes, but, first, I wanted to ask Dr. Hagen about the FSIS, 
which is something that Senator Blunt and I worked on recently 
to make sure that we found some funding to make sure there were 
going to be no furloughs and layoffs, et cetera.
    Can you provide assurance to the subcommittee that no FSIS 
inspectors will be furloughed in fiscal year 2013, and that 
plant operations will not be impacted due to any lack of 
inspectors onsite?
    Dr. Hagen. Thank you. Thank you for your question, Mr. 
Chairman.
    And I'd like to take this opportunity to thank you and 
Senator Blunt for coming to our assistance in that situation. 
We are very grateful.
    And yes, I can assure you that the supplemental funding 
that we received is going to be adequate to avoid furloughs for 
the workforce. And therefore, the economic impacts that 
would've been attached to those furloughs will not be incurred 
by the regulated industry.

                               WIC BUDGET

    Senator Pryor. Right. That's great news.
    Mr. Concannon, the budget includes a total of $7.1 billion 
for WIC. Will this amount fully fund the anticipated 
participation?
    Mr. Concannon. Yes, Mr. Chairman, the amount funded in the 
budget will fully fund WIC. As the chair and members of the 
subcommittee may be aware, WIC now serves in excess of 50 
percent of American infants in the first year of life, and 
nearly as many births.
    We anticipate next year, this budget is based on a forecast 
of 8.9 million participants each month, and the budget will 
fully fund the WIC program.

                           WIC PARTICIPATION

    Senator Pryor. Okay, so, given the, I guess I'd say 
volatile nature of this program, I guess you can say that, are 
you concerned that food prices or participation will increase 
over the next several months?
    Mr. Concannon. Mr. Chairman, we have been working with 
State agencies across the country, urging them to particularly 
review their food packages in an effort to make sure they are 
fully availing themselves of efficiencies, and we have been 
seeing the effects of that in a lowered average food cost 
package.
    For example, we're urging States not to reduce the amount 
of calories or the food groups, obviously, available to these 
moms or their children, but rather to look at, for example, 
moving from name brand, for example, whole grain breads to 
generic brands or house brands, which we have seen in some 
States make a considerable difference in the average food 
package cost.

                        WIC CONTINGENCY RESERVE

    Senator Pryor. Okay. And I've noticed also that the budget 
includes an increase of $50 million for the WIC contingency 
reserve. Do you anticipate using any of that reserve in this 
fiscal year?
    Mr. Concannon. Yes, Mr. Chairman. We anticipate relying 
upon that contingency reserve to get through this year. That's 
why the request is there for the contingency reserve for next 
year. It will be necessary.
    Senator Pryor. Do you know how much of that you will use?
    Mr. Concannon. I don't off the top of my head. I know that 
the $50 million is needed for next year, but I don't know how 
deep we're going to have to go this year.

                     IMPACT OF SEQUESTRATION ON WIC

    Senator Pryor. And what impact has sequestration had on 
WIC, if any?
    Mr. Concannon. Well, earlier, the earlier forecast would've 
been an impact on 600,000 participants, between sequestration 
and the budget that was enacted. But we have been able to--with 
additional resources provided, are assured that we can serve 
all of the caseload this year without reductions.
    Senator Pryor. Okay.
    Senator Cochran.

                        CHILD NUTRITION PROGRAMS

    Senator Cochran. Mr. Chairman, it's a pleasure to join you 
and other members of the subcommittee in reviewing the budget 
request that will provide funding for food safety, research, 
nutrition, marketing, regulatory mission areas of the 
Department of Agriculture. That's a lot of stuff to keep up 
with and to monitor and administer in a fair way.
    We were talking about food programs in the schools, and I 
couldn't help but remember back when my father was a principal 
of a small school in North Mississippi when I started school. 
And inevitably, there would be some children that didn't have 
lunch money that would be turned into the classroom teachers at 
the beginning of the week, and tickets could be bought to go 
through the lunchroom line. It was a soup and sandwich program, 
really, and totally locally administered and managed and funded 
through contributions either from the students themselves who 
could afford to contribute at very modest amounts to go through 
the line.
    Anyway, we've come a long way since that, and I'm glad 
we're beyond that stage in our history, and we have programs 
now whose intent and purpose is to provide access to nutritious 
lunch programs in schools.
    And my question is, is there something that we need to be 
doing that we're not doing to help achieve these goals? Are 
there weaknesses in the way the programs are operating or do we 
need to provide additional funding earmarked--oh my gosh--for 
certain special attention, if that's required?
    Mr. Concannon. Well, Senator, the Healthy, Hunger-Free Kids 
Act authorized and funded by Congress has made a huge leap 
forward in terms of assuring that American children, not only 
the 32-plus million that participate in the National School 
Lunch Program, but all American schoolchildren, nearly 50 
million, will be affected by that Healthy, Hunger-Free Kids 
Act.
    Where there remains real challenges, as I've traveled the 
country, is in the equipment available to schools across the 
country. The President's budget request is for $35 million for 
equipment grants. The stimulus fund of several years ago 
authorized $100 million for schools across the country. We 
received $600 million in requests.
    As we've traveled to schools, particularly heating 
equipment and cooling equipment--schools for the most part have 
set aside those deep fryers and so on for deep-frying foods. 
They're using convection ovens. They're serving healthier 
foods.
    And I would say the challenge for schools across the 
country, beyond the reimbursement provided in this bill for 
school meals, which is adequate, is really going to be in the 
equipment, the capital equipment area. And that's why there is 
a request for $35 million this year.
    Senator Cochran. Thank you.
    Thank you, Mr. Chairman.
    Senator Pryor. Thank you.
    Senator Udall.
    Senator Udall. Thank you, Mr. Chairman.
    And it's good to see Mr. Ed Avalos here, a fellow New 
Mexican, and I know very popular in our State and a real credit 
to the Department.
    So good to see you here today, Ed.

                       COUNTRY OF ORIGIN LABELING

    As you're very well aware, I've been working since I've 
been in the Congress, both the House and the Senate, on the 
COOL issue. I was wondering if you could bring us up to date on 
that. Is the USDA on track to get the rule to modify country of 
origin labeling provisions finalized by May 23? And can you 
share with the subcommittee what kind of input you receive from 
producers on the proposed rule?
    Mr. Avalos. Absolutely, Senator Udall. Before I answer your 
question, I just wanted to comment. I got calls this week that 
we're actually getting rain in New Mexico.
    Senator Udall. The next question was going to be about 
drought. Good to hear, so go ahead. Yes, that's very exciting, 
especially when we're in this exceptional drought situation for 
a big chunk of the State and also extreme drought for other 
parts of it, so it's a very difficult situation.
    Mr. Avalos. Well, as you know, we did publish a proposed 
rule. The proposed rule had labeling requirements that had to 
show the production steps to identify where the animal was 
born, where it was raised, and where it was slaughtered.
    The comment period closed, I think it was April 11. We 
received hundreds of comments. And I just want to assure you 
that we do plan to move forward with a final rule before the 
deadline of May 23.
    Senator Udall. Great, thank you very much.

                      DROUGHT MITIGATION RESEARCH

    And Under Secretary for Research, Education, and Economics, 
you've heard me talk a little bit about the drought and New 
Mexico's situation. I'm wondering if you could share with the 
subcommittee the ways in which your mission area is currently 
helping producers face water and drought challenges, and share 
your vision of how these efforts can be increased in the 
future. How does the President's fiscal year 2014 budget 
reflect this need for new ideas and research on dealing with 
water scarcity?
    Dr. Woteki. Senator Udall, one of the themes that runs 
through our current research priorities is building resilience 
into agricultural systems, cropping systems or livestock 
systems. And in that concept of resiliency is how do we make 
the best use of water resources; how do we develop new crop 
varieties that are going to be able to sustain too much water 
or too little water, depending on what time of the season it 
may come; and also how to build in disease resistance and pest 
resistance at the same time. So water is a central focus of our 
research priorities.
    And the way that we're addressing it is through a 
combination of research programs to develop livestock systems 
and cropping systems with the resiliency to drought as well as 
to flooding conditions. Doing economic analysis is going to be 
helpful to farmers to understand what the impacts of this most 
recent drought has been, as well as future perspectives. And to 
work with the cooperative extension and our land-grant 
university partners to get information that's coming from 
research programs, whether it's the intramural program at ARS 
or work that's being funded at the land-grant universities, and 
to get that information into farmers' hands, so that they can 
be making the best choices on seed purchases for an upcoming 
planting season, based on the projections of weather conditions 
for that region. So it's kind of a package of activities.
    And we've also been using a lot of forecasting and remote-
sensing information, cooperating with our partners in the 
National Oceanic and Atmospheric Administration (NOAA) to 
provide more information in easily accessible forms like our 
drought Web pages that have received, literally, tens of 
thousands of visits, so it's a package approach.
    Senator Udall. That's a good approach. Thank you both for 
your answers and really appreciate the service of all of the 
panel members. Thank you.
    I yield back, Mr. Chairman.
    Senator Pryor. Thank you.

                   NATIONAL POULTRY IMPROVEMENT PLAN

    Mr. Avalos, let me start with you, if I may. The National 
Poultry Improvement Plan (NPIP) for almost 70 years now has 
been recognized as the gold standard here and around the world 
when it comes to poultry disease control.
    Are you aware of any proposed changes to the governance, 
structure, or mission of NPIP that would jeopardize USDA's 
avian influenza surveillance in commercial poultry, the 
continued indemnification of poultry workers in case of a 
disease outbreak, or make more difficult to U.S. ability to 
meet all appropriate World Organization for Animal Health 
standards?
    Mr. Avalos. Mr. Chairman, I just want to emphasize that 
avian health is very important to us at APHIS. Just last week, 
we had representatives from the poultry industry that came in 
to visit with us. They talked about the National Poultry 
Improvement Plan and how important it was to them.
    And I just want to emphasize that we feel that the National 
Poultry Improvement Plan is a model, really a model for the 
world. It demonstrates tremendous cooperation between the State 
and Federal Government and the poultry industry. And we are 
going to fully support it in 2014, just like we do today.
    On surveillance, the budget cuts that we have would not 
impact whatsoever on surveillance. It's a top priority for us, 
and we are going to maintain the same level of surveillance for 
the poultry industry.
    Senator Pryor. Okay. So you don't anticipate any changes at 
all that will hurt your ability to do that?
    Mr. Avalos. We do not.
    Senator Pryor. Great.

                    POULTRY SLAUGHTER MODERNIZATION

    And let me go ahead and jump back to Dr. Hagen, and let me 
just say the Department is continuing to move forward with the 
implementation of new methods of poultry inspection. And we 
appreciate the USDA, that it has piloted and analyzed these 
procedures at a variety of plants for some years.
    If you could discuss with us the results of your analysis 
of the pilot, particularly to provide assurances that food 
safety will be improved, and worker safety, both inspectors and 
plant employees, will not be impaired.
    Dr. Hagen. Thank you for your question, Mr. Chairman.
    And I just want to be clear when I start that we are not 
yet moving forward. This is a proposed rule. We don't have a 
final rule. And obviously, we can't really predict the outcome 
of notice-and-comment rulemaking.
    This is an opportunity, a rare opportunity, the regulatory 
agency has to actually move our mission forward, which is to 
protect consumers and to reduce illnesses. While we do this at 
greater efficiency and while we are better stewards of taxpayer 
dollars, often we find that in order to do something better, it 
costs more. And in this case, we're finding a way to do it more 
efficiently.
    We also find that there are real, tangible benefits beyond 
the food safety for consumers and for the industry in the way 
of shared financial benefits.
    So this is a top priority for us. We have been inspecting 
poultry for the same way basically since the 1950s, so we've 
got to do better.
    So we started with the premise that we need to be focused 
on the things that matter most for food safety, that the things 
that we knew about in the 1950s were not the things that we 
should be focused on now. We started with a very common-sense 
premise. We took a look back at our experience. We've been 
engaged in a pilot program since 1998 in 25 establishments, 
three of which are in your State, Mr. Chairman, or three of 
which are in your State. I think two are in your State, Senator 
Cochran.
    And we looked at a series of performance standards that 
were set from the beginning of that pilot program, everything 
from visible defects and contamination rates in comparison 
plants versus pilot plants, to bacterial contamination rates. 
And across-the-board, we found that the plants in the pilot 
actually were doing better when it came to these performance 
measures.
    So we found that we had not only an equal level of consumer 
protection but an enhanced level of consumer protection.
    We then went ahead and analyzed what we thought would 
happen if we implemented this across the board, so we did a 
quantitative, peer-reviewed risk assessment, an internationally 
accepted tool for supporting public health policy. And we asked 
how many illnesses will be reduced if we take these people off 
of these tasks on the line, and we have them do more of these 
tasks over here. And we found that, at minimum, 5,200 illnesses 
per year would be prevented simply by changing where our 
inspectors are focused and the tasks that they are performing.
    Those assessments didn't include additional interventions 
that might be employed by the industry. They didn't include 
additional data that we anticipate gathering on Campylobacter 
as we implement our verification program there.
    So I think this is a real opportunity for us. We have the 
data to prove that we're headed in the right direction. And we 
look forward to hopefully finalizing this proposal.
    Senator Pryor. And I guess my next two questions are, why 
is it not already final, because you've been working on this 
for a long time, and it seems like the evidence is steering you 
in that direction? So why is it not already final? And then, 
when do you think it will be final?
    Dr. Hagen. We don't control the timetable for all of 
notice-and-comment rulemaking. We have a piece of that. We 
really value the public input, that's a cornerstone of the 
notice-and-comment rulemaking process.
    So we received thousands of comments about this rule. There 
are a lot of opinions from multiple different perspectives, and 
we have an obligation to actually consider and address every 
single one of those opinions that has been expressed to us.
    So that's the process that we have been engaged in.
    We've also been trying to make sure that we are focused to 
the extent that we can on worker safety issues. We know what 
the limits of our expertise are. We know what the limits of our 
authority are. We know the leadership in the administration 
that has that expertise, at the Occupational, Safety, and 
Health Administration (OSHA) and at the National Institute for 
Occupational Safety and Health (NIOSH), and so we've been 
focused on whether there is some ability for us to facilitate 
better data-gathering by those entities and to support them as 
they make worker safety policy. So we've been focused on that 
to some extent.
    But we are in the process of preparing the final rule, and 
we hope to get it through the interdepartmental review process 
very soon.

                      POULTRY INSPECTOR POSITIONS

    Senator Pryor. Do you have a sense of if, once the rule 
becomes final--you might not be able to answer this yet. But do 
you have a sense of how many fewer poultry inspectors you'll 
need in the system?
    Dr. Hagen. Over time, we anticipate that there will be 500 
to 800 fewer positions, on-line positions. I want to be clear 
that we aren't eliminating individuals' jobs. We have a plan 
for every inspector to have an opportunity to take a different 
position in the agency.
    We actually have a significant amount of attrition every 
year in the inspection workforce, so we're going to be managing 
this through simply not filling, backfilling vacancies as they 
come about.

                              AQUACULTURE

    Senator Pryor. I want to ask something, if I may, to Mr. 
Avalos, and this is something that both Senator Cochran and I 
have in our States, and that is aquaculture.
    Since APHIS's Wildlife Service has reduced funding for 
aquaculture, it's my understanding that on-site visits to fish 
farms in most States have been stopped. These visits, among 
other things, are an extremely important part--in fact, a 
central part of the process for farmers to apply to the U.S. 
Fish and Wildlife Service Migratory Bird Depredation Permit.
    Can you look in to this matter and make sure that our fish 
farmers will be able to protect their products? And also, would 
you support a budget line item that will prevent aquaculture 
funding from being taken away in future years?
    Mr. Avalos. Mr. Chairman and Ranking Member Cochran, first, 
I want to say that at USDA, we really appreciate the importance 
of aquaculture industry to the United States, and the 
importance it has to the rural communities, especially in the 
South. I personally am very familiar with the catfish industry. 
And I understand and I acknowledge a lot of the difficulties 
they've had in the marketplace with depressed prices.
    In fact, last year, we did a section 32 buy for catfish. We 
removed $10 million worth of catfish from the marketplace. This 
year, we're looking at another section 32 buy for catfish.
    So first of all, I want you to know we're not abandoning 
the aquaculture industry, whatsoever. Just with the budget 
cuts, we did have to prioritize. We only have so much money to 
go around, and we did have to cut aquaculture. But I want to 
emphasize that we still have the research facility in 
Mississippi. It's a very, very important component at USDA.
    And our Wildlife Services people will still be able to 
verify bird damage, and we'll still be able to help producers 
obtain the depredation permits.
    Senator Pryor. Yes, I think the way it's worked up to this 
point is pretty much that person has to come out on the farm 
and there's various things, information that's shared and data 
that's gathered and whatnot. And that's been an essential part 
of getting those permits. So we just need to make sure that if 
the visits stop, that the permitting process doesn't stop.
    Mr. Avalos. I understand that very well, Mr. Chairman, 
absolutely.
    Senator Pryor. Thank you.

                        SNAP CONTINGENCY RESERVE

    Next, for Mr. Concannon, the budget proposes an increase of 
$2 billion for SNAP contingency reserve. If participation is 
expected to decrease slightly, why are you asking for an 
increase in reserve?
    Mr. Concannon. Mr. Chairman, the request this year in this 
budget is for a $5 billion contingent, contingency fund, which 
is approximately 1 month of benefits. This year, we are reliant 
upon $2.7 billion in contingency to get through the year for 
SNAP. And we're able to accommodate that this year. But the 
request for that increase in the contingency fund next year 
recognizes that it's about 1 month of benefits and that we want 
to be assured that we can successfully get through the next 
year.
    Senator Pryor. But am I correct that you think 
participation is expected to decrease?
    Mr. Concannon. Yes, Mr. Chair, where the budget forecasts a 
2.4 million reduction based on again, as I mentioned in my 
testimony earlier, we're seeing signs already in about eight or 
so States of reductions year to year, looking back over the 
past year. So I anticipate that reduction, that proposed budget 
forecast, the 2.4 million average participation reduction.
    Senator Pryor. Does that translate into a guess that you 
will not need the reserve amount this fiscal year?
    Mr. Concannon. We will need $2.7 billion that is moved 
forward from last year for this current year.
    Senator Pryor. You think you'll use that? You'll actually 
use the $2.7 billion?
    Mr. Concannon. Yes, sir.
    Senator Pryor. All right, let me ask Dr. Hagen another 
question, this time about the hazard analysis and critical 
control points. I know that you have been working with several 
interested parties on the HACCP plan reassessment for not-
ready-to-eat poultry products. I don't have a question really, 
I just want to encourage you to continue those good faith 
discussions and want you to know that if I can be of assistance 
in that, I want to try to help on that, if I can.

                DALE BUMPERS SMALL FARMS RESEARCH CENTER

    Again, Dr. Woteki, let me ask you about a facility in 
Arkansas, the small farm center in Booneville, actually named 
the Dale Bumpers Small Farms Research Center. And I talked to 
the Secretary about this last week, and I'm not going to go 
through all the details of it, but basically, I'm just going to 
assume that the reason the funding is the way it is in this 
budget, or the lack of funding, is just because of the unusual 
timing of the request. And I just mentioned to Secretary 
Vilsack last week, but it does bear repeating, that I don't 
intend to close Booneville ARS lab in this bill, so as we're 
working on things for next year, I hope we'll take that 
possibility off the table and just continue to work on that.
    But I do have a question about the ARS extramural human 
nutrition centers. We have one in Arkansas. It's at the 
Arkansas Children's Hospital. And it's unique among the human 
nutrition centers at ARS, and it is housed within Arkansas 
Children's, as I mentioned. And I would just like in another 
setting to visit with you about that funding, what makes it 
unique, and make sure that we all understand what's going on 
there with the ARS system and, hopefully, continue that 
funding.
    Dr. Woteki. We'd be happy to do that, Senator.

               AGRICULTURAL RESEARCH SERVICE ASSESSMENTS

    Senator Pryor. Thank you. And also, Dr. Woteki, I'm really 
not trying to pick on you. I just have a few questions for you.
    But in the ARS budget, the budget itself, as you know, is--
let's be kind and say it's somewhat difficult to navigate. Can 
we just say that? That it's a hard budget to understand, and 
it's difficult just to get your hands around. And I'd like to 
find a better and maybe simpler way to improve it or at least 
make it more transparent.
    And without a line item for administrative expenses, can 
you please discuss the different types of assessments that 
might be levied on your various research locations as well as 
on your extramural cooperators, and why they would ever vary 
from one location to another?
    Dr. Woteki. To answer the first part of your question about 
what are the types of costs that are in the overhead that ARS 
is charging against all of its locations, we have a centralized 
administrative and financial management unit that's responsible 
for human resources, for contract activities, for all of our 
financial oversight and management. And so all of those costs 
are built in to the overhead.
    We have had, as you point out, some extraordinary problems 
over the last 3 years. The total budget cuts that have come to 
the mission area are approaching 20 percent. And in 2012, we 
were implementing the closures of 12 programs within ARS that 
were located at 10 different locations that required the 
closing of those 10 locations.
    The costs that are associated with that have to be taken, 
and ARS imposed an additional levy on all of its facilities in 
order to manage that one-time cost associated with closure of 
facilities. So that was another source of the overhead costs 
that you're referring to in 2012.
    Senator Pryor. I think what we'd like to do is, I'd like to 
get a better understanding of how that works. I know it's hard 
to follow and hard to understand, and maybe there are ways that 
we can improve it. Sometimes you need to be careful of what you 
ask for, but hopefully, maybe we can find ways to improve it 
and make sure that we're doing our role here and doing some 
oversight and making sure it's working as it should.
    Let me turn it over to Senator Cochran, he has a few more 
questions.
    Senator Cochran. Mr. Chairman, thank you.

                          CATFISH INSPECTIONS

    In connection with the inspection programs, I wonder what 
is the status of our effort to increase the effectiveness of 
our inspection of domestic fish production.
    The catfish industry is very important in some Deep South 
States now. And there's concern that even though we have 
authorized and provided funding, which we hope would be used by 
the Food Safety and Inspection Service to assure that supplies 
of catfish that are being produced in several southern States 
now, and maybe others too, are fit for human consumption and 
are safe to eat.
    What is the status of our effort to make sure we're meeting 
the challenge of the catfish inspection and grading program?
    Dr. Hagen. I'll take that question, Senator. I know how 
important this is to you. I remember that you and I visited 
about this issue when I was coming up through confirmation, and 
I remember that we visited again in your office as we were 
getting close to a proposed rule. So I know how important this 
is for you and for the producers in your State. And I 
understand the frustration with the delay.
    I think it has turned out to be more complicated than we 
thought it would be. I am committed to trying to get this out, 
getting a final rule out by the end of the fiscal year. And as 
I alluded to earlier with the chairman, sometimes there are 
pieces of that timetable that we don't control. But our staff 
knows that this is a priority, and I look forward to visiting 
with you about a final rule.
    Senator Cochran. Thank you very much. We appreciate your 
good efforts.
    Senator Pryor. Thank you, Senator Cochran.

                     ADDITIONAL COMMITTEE QUESTIONS

    And with that, we have other questions that we're going to 
submit for the record. And I know that some of our colleagues 
who could not join us today will have some questions. So I 
would like to thank all of our panelists today, all of our 
witnesses for being here, and tell you how much I appreciate 
your time and your testimony, and all the follow-up that will 
come with it.
    I also want to give a special thanks to Senator Cochran. 
Thank you not just for being here today but for all that you've 
done for American agriculture.
    So for all of the members of the subcommittee, what we're 
going to do is we'll leave the record open for 1 week, which is 
Thursday, May 23. And we would appreciate if you would get your 
questions in as quickly as possible and then get it to USDA. 
We'll try to get those back as quickly as we can as well.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                    Questions Submitted to Ed Avalos
              Questions Submitted by Senator Mark L. Pryor

                  PLANT AND ANIMAL PESTS AND DISEASES
                              FERAL SWINE

    Question. Mr. Avalos, the Animal and Plant Health Inspection 
Service (APHIS) is responsible for controlling domestic plant and 
animal pests and diseases, and guarding against the introduction of new 
threats from foreign sources. This budget seeks a substantial increase 
in funding to address the spreading feral hog problem, but cuts funding 
for other established, but uncompleted, programs (such as the cotton 
pests program, emerald ash borer, and chronic wasting disease).
    Feral hogs are a growing menace, and pose substantial health and 
economic risks to agriculture and rural areas. But, how do you evaluate 
the relative threats of pests and diseases, and determine that for this 
budget feral hogs pose the most immediate or potentially costly menace?
    Answer. APHIS continues to evaluate its existing animal and plant 
health programs to determine the best use of resources. For example, 
the longstanding Cotton Pests program remains a priority for the agency 
but we have proposed reductions due to the progress made over the years 
toward eradication. As of the end of fiscal year 2012, we have 
eradicated the boll weevil from 98 percent of 16 million acres of U.S. 
cotton and pink bollworm from 99 percent of infested cotton acreage. 
APHIS has also proposed reductions for other programs because we are 
unable to make progress, such as in addressing the emerald ash borer 
where tools to control the pest do not currently exist, or because the 
States and industry are in a better position to address the disease, 
such as where States have implemented herd certification programs for 
the detection and prevention of chronic wasting disease. In addition, 
for pest and disease programs that have been in place for many years, 
and where State and local partners directly benefit from the program 
activities, it is expected that all parties share in the cost of the 
program.
    Feral swine pose a growing threat and we do not currently have a 
coordinated effort to address the problem. The expanding range and 
increasing population of feral swine are significantly affecting animal 
and human health; crops and livestock; rural, suburban and even urban 
areas; and natural resources, causing an estimated $1.5 billion in 
damages annually. The sooner we can begin a broad scale program, the 
more likely we can minimize further expansion and damage, and minimize 
expenditures, program duration, and ecological impacts. We have an 
opportunity now to resolve an economic and public health problem before 
the swine population is too large and too distributed to contain. In 
addition, our plan to reduce feral swine is strongly supported by a 
broad array of Federal and State, and tribal partners.

                         RESOURCE FLEXIBILITIES

    Question. Please describe the flexibility that you have to address 
new and emerging threats during the year.
    Answer. APHIS' budget is structured by commodity group, such as 
Cattle Health and Specialty Crop Pests. The structure provides the 
agency the flexibility to prioritize existing as well as new and 
emerging threats within each of these commodity groups and adjust 
resources as necessary throughout the year. APHIS works with its 
partners to develop an action plan for addressing the various threats, 
including the estimated resources to be provided by each party. When a 
new or emerging threat requires additional Federal resources of a 
smaller scale in nature, the agency may use its Contingency Fund, which 
was established for the prevention, control, and management of animal 
and plant threats. In recent years, contingency funds allowed for an 
initial response to the European grapevine moth in California and a 
pilot effort in addressing feral swine in New Mexico. The Secretary of 
Agriculture also has the authority to transfer funds, as necessary, to 
address animal and plant health emergencies. In fiscal year 2012, APHIS 
used flexibility within the Tree and Wood Pests line item, along with 
additional funds the Secretary transferred from the Commodity Credit 
Corporation, to respond to an infestation of Asian longhorned beetle 
detected in Ohio, which was of larger scale in nature. These resource 
flexibilities, along with the early detection and emergency response 
capabilities of the agency, ensure that new and emerging agricultural 
threats can be addressed as they arise.

                              AVIAN HEALTH

    Question. What role does USDA have in monitoring the new H7N9 virus 
in China?
    Answer. USDA personnel continue to work closely with the Centers 
for Disease Control and Prevention, the Department of the Interior 
(DOI), and other Government agencies to monitor the H7N9 virus 
situation, assess potential pathways for introduction, and modify 
existing preparedness and response plans if deemed appropriate. USDA, 
in collaboration with DOI, concluded that the potential for whole 
genome introduction of H7N9 in North America is low. USDA has also 
determined that the current sampling strategy for domestic commercial 
poultry is more than adequate to detect avian influenza H7N9 from China 
if it were introduced to the United States.
    USDA officials overseas facilitate agricultural trade, maintain 
contact with host country agricultural officials, monitor agricultural 
health, and lead efforts in sanitary and phytosanitary standard 
setting. USDA offices located in Asia provide points of contact for 
U.S. agricultural interests and help collect relevant real-time 
information, including updates on avian health and the current 
situation with regard to the H7N9 virus. Specifically, APHIS' office in 
Bangkok, Thailand, remains focused on avian health in Southeast Asia's 
lesser developed economies. APHIS conducts surveillance and capacity 
building activities, provides training and oversees epidemiology and 
diagnostic testing throughout the region.
    Question. How is the Department working to ensure the virus does 
not infect our domestic poultry flocks?
    Answer. USDA protects against the introduction of highly pathogenic 
avian influenza into the United States and the spread of low pathogen 
avian influenza within the United States. USDA personnel work 
cooperatively with State animal health officials and the poultry 
industry to conduct surveillance of breeding flocks at slaughter 
plants, live-bird markets, livestock auctions, and poultry dealers. The 
agency continues to work closely with stakeholders to address issues 
and ensure program activities are sufficient to protect the health of 
U.S. poultry.
    USDA has determined that the risk of spread of the novel low 
pathogenic avian influenza virus, H7N9, from China to the United States 
through migratory waterfowl and trade is low. USDA surveillance 
activities in wild birds would detect the virus should an introduction 
occur. Our current efforts in monitoring for avian influenza meet the 
requirements of our trading partners. Furthermore, USDA has trade 
requirements in place to prevent the legal entry of potentially 
infected materials.
    The United States does not import poultry, unprocessed poultry 
products, or non-domestic birds (with the exception of pet birds that 
are quarantined and tested) from China. Additionally, low pathogen 
influenza viruses are not found in meat or eggs. Therefore, there is 
also a low risk of spread through products brought illegally into the 
United States. Finally, our current efforts in monitoring for avian 
influenza meet the requirements of our trading partners.

SEQUESTRATION AND FURLOUGHS OF GRAIN INSPECTION, PACKERS AND STOCKYARDS 
                        ADMINISTRATION EMPLOYEES

    Question. The Grain Inspection, Packers and Stockyards 
Administration's (GIPSA's) Grain Regulatory Services program 
facilitates and promotes domestic and international trade of grains and 
oilseeds, etc., by establishing standards, inspections, and weighing 
services. Will sequestration disrupt provision of these services and 
harm the domestic and international markets for these commodities?
    Answer. Due to cost-savings efforts, GIPSA was able to avoid 
furloughs in fiscal year 2013, and continue to provide the necessary 
services for establishing standards, inspections, and weighing services 
for the domestic and international trade of grains and oilseeds. As a 
result, we do not anticipate any disruptions of services this fiscal 
year.
    Question. If so, do you foresee long-term damage to our export 
trade?
    Answer. Since GIPSA did not furlough employees, we do not currently 
foresee immediate or long-term damage to our export trade. However, 
continued decreases in funding for the Grain Regulatory Services may 
require GIPSA to make reductions in the inspection and weighing 
services that provide support for U.S. grain producers, handlers and 
marketers of U.S. grain, domestic and export.
                                 ______
                                 
                Questions Submitted by Senator Roy Blunt

                     FRESH PRODUCE IMPORT PROTOCOLS

    Question. How often does APHIS review and evaluate existing fresh 
produce import protocols given the many advancements in agricultural 
sciences and technology, historical sampling data and risk level 
assessment?
    Answer. APHIS monitors and evaluates data from multiple sources on 
a continual basis to ensure that inspection protocols provide 
protection for U.S. agriculture without over-burdening importers. 
Customs and Border Protection (CBP) agricultural specialists at U.S. 
ports of entry conduct inspections on APHIS' behalf and enter the 
inspection results into APHIS-managed databases. APHIS continually 
evaluates this data to detect significant pest interception trends and 
changes to produce import trends (for those commodities inspected by 
CBP). APHIS may adjust port-of-entry inspection protocols based on 
these trends and, depending on the situation, may require changes in 
inspection techniques or changes in the levels or frequency of 
inspections. For example, APHIS and CBP developed the National 
Agricultural Cargo Release program several years ago to facilitate the 
entry of high-volume, low-risk commodities such as onions, carrots, and 
parsley from three major trading partners (Mexico, Guatemala, and 
China). Currently, 34 commodities are covered by the program, which 
expedites the entry of cargo by significantly reducing the frequency of 
inspections. Low-risk cut flowers from five countries are also covered 
through the Cut Flower Release Program. Through these programs, more 
than 400,000 shipments of fruits and vegetables and 1.9 billion stems 
of flowers were imported in fiscal year 2012. Since the programs began 
in fiscal year 2006, more than 2.9 million shipments of fruits and 
vegetables and more than 16.6 billion stems have been imported using 
these streamlined risk-based efforts.
    In addition to inspection protocols, APHIS uses other means to 
ensure that the appropriate pest mitigation measures are in place to 
protect U.S. agriculture while considering agricultural technology 
advances. For example, APHIS partners with USDA's Agricultural Research 
Service and universities to develop molecular and other diagnostic 
techniques for improved identification, coordinates with counterparts 
overseas to identify and address pest risk issues at their source, and 
makes regulatory changes on an emergency action basis, if necessary, to 
address immediate and significant risks. In addition, APHIS collects 
pest information (for example, reports of new pests, pests in a new 
area, or found attacking new hosts) offshore from various sources. 
APHIS uses this information to assess potential import pathways and 
determine whether regulatory or inspection protocol changes are 
necessary to mitigate the risks. Additionally, APHIS evaluates new 
phytosanitary treatments developed through technological advances as 
they become available.
    When the treatments are effective and/or exporting countries 
request it, APHIS may adjust import regulations and protocols to permit 
additional commodities to enter the United States and provide new 
options for U.S. consumers and importing businesses. For example, the 
use of irradiation as a phytosanitary treatment is currently used on 
mangoes from Mexico and persimmons from South Africa.
    Question. Is CBP data taken into consideration when APHIS revises 
inspection protocols and does APHIS discuss these protocols with CBP?
    Answer. Customs and Border Protection (CBP) agricultural 
specialists at U.S. ports of entry conduct inspections on APHIS' behalf 
and enter the inspection results into APHIS-managed databases. APHIS 
continually evaluates these data, as well as information from a variety 
of other sources, to detect significant pest interception trends and 
changes to produce import trends. If APHIS determines that inspection 
protocols need to be adjusted to protect U.S. agricultural health, 
APHIS discusses the situation and the specific recommendations for 
protocol changes with CBP. Inspection protocols consist of both 
recommendations related to amount, frequency, and methodology for 
sampling, as well as inspection techniques designed to focus on high 
risk pests and methods to best find them on various commodities. The 
discussions with CBP take place in advance of implementing changes to 
ensure that resources are available to conduct the work in a manner 
that minimizes disruption to trade. APHIS is currently working with CBP 
through the Automated Commercial Environment/International Trade Data 
System to enhance data sharing, which will further improve APHIS' risk 
evaluation and trend analysis.
    Question. How does USDA work with CBP to ensure maximum efficiency 
for safe and timely entry of fresh produce and adequately allocate 
resources relative to the level of risk without creating an excessive 
financial burden on the importer, thereby negatively impacting local, 
regional businesses and consumers?
    Answer. USDA works closely with Customs and Border Protection (CBP) 
to focus resources towards inspection activities that will have the 
greatest impact to ensure the safe and timely entry of fresh produce by 
using data collected through the inspection process by CBP as well as 
data from external resources, such as APHIS' offshore risk analysis 
efforts. USDA provides guidance to CBP in various forms, including 
import manuals, pest notifications, and inspectional training, to help 
maximize the efficiency and effectiveness of port-of-entry inspections. 
For example, APHIS and CBP developed the Cargo Release Authority (CRA) 
program several years ago to ensure that cargo is not held 
unnecessarily for pests of low risk. Through this program, APHIS 
provides training to CBP agricultural specialists to identify 
frequently intercepted, low-risk insects. CBP agricultural specialists 
can earn CRA for 173 different species or groups of organisms. Once CBP 
agricultural specialists have demonstrated the ability to reliably 
identify a particular insect and have earned the CRA for that insect, 
they can release future shipments affected by that insect without 
waiting for additional confirmation from APHIS.
    Additionally, APHIS and CBP developed the National Agricultural 
Cargo Release program several years ago to facilitate the entry of 
high-volume, low-risk commodities such as onions, carrots, and parsley 
from three major trading partners (Mexico, Guatemala, and China). 
Currently, 34 commodities are covered by the program, which expedites 
the entry of cargo by significantly reducing the frequency of 
inspections. Low-risk cut flowers from five countries are also covered 
through the Cut Flower Release Program. Through these programs, more 
than 400,000 shipments of fruits and vegetables and 1.9 billion stems 
of flowers were imported in fiscal year 2012. Since the programs began 
in fiscal year 2006, more than 2.9 million shipments of fruits and 
vegetables and more than 16.6 billion stems have been imported, saving 
importers time through less frequent inspections. APHIS and CBP 
continue to work together to ensure that agricultural inspections are 
effective, efficient, and risk-based.
    Question. How does USDA collaborate with CBP to ensure proper 
resources are available so that USDA inspections can be completed 
within on 1 day of freight being available after discharging from the 
vessel?
    Answer. Customs and Border Protection (CBP) agricultural 
specialists conduct inspections on APHIS' behalf, and these inspections 
may not always be conducted within 1 day of freight discharge. Once 
shipments are inspected, CBP forwards any interceptions for which the 
CBP agricultural specialist does not have CRA to APHIS identifiers 
located at 32 ports of entry. In most cases, APHIS identifiers can make 
the identification immediately. Additionally, identifiers have a state-
of-the art digital imaging system so that, in the event of an unusual 
or difficult specimen to identify, images of the organism can be 
forwarded to a network of highly specialized experts in the various 
fields of entomology, plant pathology, botany, etc., to help make the 
identification. In certain cases, APHIS port-of-entry identifiers need 
to send specimens to APHIS national specialists or to specialists at 
the USDA Agricultural Research Service Systematic Entomology 
Laboratory, all of whom understand the need for immediate 
identification and treat these specimens as urgent cases. In these 
cases, APHIS is able to complete the vast majority of identifications 
and report back to CBP within 1 working day.
                                 ______
                                 
              Questions Submitted to Dr. Catherine Woteki
              Questions Submitted by Senator Mark L. Pryor

         AGRICULTURAL RESEARCH SERVICE BUILDINGS AND FACILITIES

    Question. Dr. Woteki, the Agricultural Research Service (ARS) 
budget includes $155 million to build a new poultry lab. Why did you 
decide, in this budget climate, to ask for a brand new, very expensive 
building, instead of attempting to take care of some of the deferred 
maintenance needs at the rest of the ARS labs?
    Answer. At the request of Congress and the Secretary of 
Agriculture, the USDA Agricultural Research Service (ARS) conducted a 
review of its research facilities and presented a report to Congress in 
April 2012, which details a Capital Investment Strategy for the agency. 
The report establishes criteria for assessing and determining capital 
investment needs and priorities for ARS scientific research 
laboratories, based upon relative facility physical conditions and 
research program priorities. The highest priority facility need 
identified through this process was a new National Poultry Research 
Center which will enable needed research on poultry diseases to be 
conducted.
    ARS research on poultry diseases is critical to American 
agriculture. The United States is the world's largest poultry producer, 
the second-largest exporter of poultry meat, and a major egg producer. 
Poultry diseases such as avian influenza, virulent Newcastle disease, 
Marek's disease, and avian leukosis threaten our national poultry 
industry and our export markets. ARS currently conducts poultry disease 
research at the Avian Diseases and Oncology Laboratory (ADOL) in East 
Lansing, Michigan, and at the Southeast Poultry Research Laboratory 
(SEPRL) in Athens, Georgia. The fiscal year 2014 President's budget 
proposes to consolidate ADOL with SEPRL in Athens, Georgia. The 
proposed consolidation of ARS poultry resources into a National Poultry 
Research Center will enable the integration of our avian genomics 
research program at ADOL with our avian diseases research program at 
SEPRL and provide significant programmatic synergies and critical mass 
needed to implement a national research program responsive to the needs 
of the poultry industry.
    The existing facilities at both ADOL and SEPRL require major 
improvements because the structures and systems have exceeded their 
useful service life. Both of these facilities have outdated equipment 
for biological containment, insufficient laboratory space, and 
facility-imposed inefficiencies in program and facilities operations. 
SEPRL has Biosafety Level (BSL)-2 Laboratory and BSL-3 Ag facilities 
that were constructed in 1964 and 1976. There are 32 small, inefficient 
buildings designed for four scientists and support staff. Currently, 
there are 11 ARS scientists and their support staff. Critical, cutting-
edge research that is needed to address poultry diseases cannot be 
conducted because of these facility limitations. A new facility is 
required to continue efforts to protect our poultry industries from new 
and emerging influenza viruses and emerging/exotic poultry diseases 
which threaten the Nation's poultry industry and potentially U.S. 
public health. The new National Poultry Research Center will have ABSL-
3E animal and BSL-3E laboratory space which will enable ARS scientists 
to handle and conduct research on exotic poultry diseases. These are 
facilities that meet requirements for handling infectious materials and 
have special engineering and design features to prevent exposure to 
dangerous diseases. ARS infrastructure, including our laboratories, is 
a valuable asset for science and we are committed to leveraging our 
assets to increase USDA's capacity to conduct critical research and to 
solve emerging problems.
                                 ______
                                 
               Questions Submitted to Dr. Elisabeth Hagen
              Questions Submitted by Senator Mark L. Pryor

                COOPERATIVE INTERSTATE SHIPMENT PROGRAM

    Question. Dr. Hagen, your request includes $2.4 million and a staff 
increase of 15 employees to continue implementation and expansion of 
the Cooperative Interstate Shipment Program. This program will assist 
small and very small meat and poultry plants in expanding business 
opportunities through interstate commerce.
    Please describe how this program works and the need for 15 
additional employees.
    Answer. Section 11015 of title XI of the Food, Conservation, and 
Energy Act of 2008 (the 2008 farm bill), enacted on June 18, 2008, 
amended the Federal Meat Inspection Act (FMIA) and the Poultry Products 
Inspection Act (PPIA) to establish the Cooperative Inspection Shipment 
(CIS) program under which certain small and very small State-inspected 
establishments will be eligible to ship meat and poultry products in 
interstate commerce. The law provides that the Secretary of Agriculture 
(FSIS by delegation) ``in coordination with the appropriate State 
agency of the State in which the establishment is located,'' may select 
State-inspected establishments with 25 or fewer employees to ship meat 
and poultry products in interstate commerce. The program is limited to 
establishments located in States that have established and continue to 
maintain an ``at least equal to'' State meat or poultry inspection 
(MPI) program. Inspection services for these establishments must be 
provided by State inspection personnel that have ``undergone all 
necessary inspection training and certification to assist the Secretary 
with the administration and enforcement of [the acts]''. Meat and 
poultry products inspected and passed by the State inspection personnel 
will bear a ``Federal mark, stamp, tag, or label of inspection'' and 
will be permitted to be shipped in interstate commerce.
    The law requires that FSIS designate an employee to ``provide 
oversight and enforcement'' of the program. The statute requires FSIS 
to appoint a Federal employee to be a Selected Establishment 
Coordinator (SEC) and the SEC is required by statute to visit selected 
establishments with a frequency that is appropriate to ensure that such 
establishments are operating in manner that is consistent with the FMIA 
and PPIA. Based on a mission analysis, we estimate that full 
implementation of the CIS will require 15 full-time equivalent FSIS 
employees to provide oversight and enforcement as well as complete 
periodical audits of the State inspection program laboratory systems to 
ensure the sampling and testing program are equivalent to the Federal 
program.
    FSIS published a final rule to implement the CIS program on May 2, 
2011 (see ``Cooperative Inspection Programs: Interstate Shipment of 
Meat and Poultry Products,'' available on the Internet at: http://
www.fsis.usda.gov/OPPDE/rdad/FRPubs/2008-0039F.pdf). The regulations 
that implement the CIS program are in 9 CFR 321.3, 9 CFR part 332, 9 
CFR 381.187, and 9 CFR part 381 subpart Z.
    Question. How are costs shared between the Department and 
participating States?
    Answer. The law requires that FSIS reimburse a State for costs 
related to the inspection of selected establishments in the State in an 
amount of not less than 60 percent of eligible State costs. Currently, 
FSIS is reimbursing States for 60 percent of their eligible costs. The 
law also states that FSIS ``may provide grants to appropriate State 
agencies to assist the appropriate State agencies in helping 
establishments covered by this Act to transition to selected 
establishments''. This includes normal operating expenses associated 
with field operations including office space, communications costs, 
information technology costs such as laptops, other equipment, and 
travel costs.
    Question. What do you think the ultimate potential is in terms of 
increasing the value of products shipped, jobs and income generated?
    Answer. Under the CIS program, small, State-inspected businesses 
will be allowed to sell meat products across State lines. Prior to the 
establishment of this program, State-inspected businesses could only 
sell products within their State. The Cooperative Interstate Shipment 
(CIS) program will expand economic opportunities for America's small 
meat and poultry processors, strengthen State and local economies, and 
increase consumer access to safe, locally produced food. The CIS 
program allows a small processor to sell products to neighbors in 
nearby States. A number of small plants believe that access to this 
interstate shipment will help them develop profitable niche markets for 
their products. The CIS program expands the market opportunities for 
meat from local processors and makes these small businesses more 
viable, while also ensuring that participating establishments have 
robust food safety systems in place to produce safe food for consumers. 
In addition, the CIS program is going to focus on strengthening the 
critical connection between farmers and consumers and supporting local 
and regional food systems.

             IMPLEMENTATION OF NEW POULTRY INSPECTION RULE

    Question. The Department is continuing to move forward with the 
implementation of new methods of poultry inspection. These new 
procedures will shift more of the visual inspection responsibilities to 
industry personnel. This will reduce the number of FSIS online carcass 
inspectors, allow faster line speeds, and re-focus FSIS efforts on 
improved food safety. We appreciate that USDA has piloted and analyzed 
these procedures at a variety of plants, for some years.
    Several swine slaughter plants were included in this pilot project. 
The Office of Inspector General (OIG) has just released an audit of 
swine slaughter operations which includes a review of these plants.
    The OIG found that ``The swine HIMP pilot program lacks sufficient 
oversight.'' Specifically, it found that FSIS did not evaluate whether 
the program resulted in measurable improvements to the inspection 
process. FSIS allowed one plant to forgo standard policy and not 
perform required visual inspections. Furthermore, three of the five 
pilot plants audited had some of the highest numbers of regulation 
violations (``non-compliance records'') of all plants nationwide.
    What is your response to these criticisms?
    Answer. It is important to note that HIMP for poultry and HIMP for 
swine are not the same pilot programs, so they cannot be compared to 
each other.
    FSIS intends to complete an evaluation of HIMP market hog 
establishments by March 31, 2014, including an analysis of HIMP 
establishments' performance compared to non-HIMP establishments as well 
as their performance with respect to performance standards established 
by an independent consulting firm contractor. In the meantime, it is 
important to note that the same criteria for regulatory compliance are 
applied to both non-HIMP and HIMP establishments. Establishments that 
exhibit a pattern of serious regulatory non-compliance may be subject 
to a Notice of Intended Enforcement Action, a suspension of inspection 
activities, and even withdrawal of the grant of inspection.
    Question. What are your plans regarding future changes in swine 
inspection procedures?
    Answer. FSIS has no plans to change swine inspection procedures at 
this time. If the agency decides to make any changes in the future, 
FSIS will follow the normal notice-and-comment rulemaking process.
    Question. If you expand the regulation to include swine slaughter, 
can you provide assurance that the Nation's food safety will not be 
jeopardized?
    Answer. Yes. FSIS does not make policy changes unless the agency 
determines that those changes will help us to better ensure food safety 
and protect public health.
                                 ______
                                 
              Questions Submitted By Senator Thad Cochran

                  MECHANICALLY SEPARATED POULTRY MEAT

    Question. USDA is actively considering proposals to impose new 
requirements on the treatment of mechanically separated poultry meat. 
There are concerns that these new rules could impose significant 
economic harm on the poultry industry--particularly with regard to 
exports. The export value of these products make up about 5 percent of 
the value of all U.S. poultry exports each year. We certainly do not 
want to place this market in jeopardy.
    Has USDA conducted a full economic impact analysis of the 
requirements and policies announced in the notice dealing with 
mechanically separated poultry meat?
    Answer. FSIS did not analyze the economic impact of the notice 
because the notice did not impose any new sampling requirements on 
establishments.
    Question. Is the USDA coordinating with industry and other 
departments to ensure these rules don't unnecessarily disrupt valuable 
markets?
    Answer. Yes. Although no country has taken action against these 
products at this time, we understand the industry's concerns about the 
potential impact on trade if this action is misunderstood by trading 
partners. Since the announcement of this action, FAS has assisted 
industry in exploring alternatives that could minimize the potential 
for negative responses by foreign governments.
    FSIS solicited comments from the public, including industry, in the 
December 6, 2012, notice. On March 7, 2013, FSIS extended the original 
comment period until April 20, 2013 (78 Federal Register 14635.) The 
agency expects to respond to the comments in a separate Federal 
Register notice.
    Development of the December 2012 notice was based on protecting the 
public health and fulfilling FSIS' statutory and regulatory obligations 
to ensure food safety. The outbreaks described in the notice indicate a 
change that requires a reassessment of HACCP plans based on the 
existing regulation (9 CFR 417.4(a)(3)). There are no new requirements 
as a result of the notice. Establishments can continue to export 
comminuted product, even if FSIS conducts testing of the product.
                                 ______
                                 
                 Questions Submitted to Kevin Concannon
              Questions Submitted by Senator Mark L. Pryor

                  COMMODITY SUPPLEMENTAL FOOD PROGRAM

    Question. Mr. Concannon, the budget requests a significant increase 
for Commodity Supplemental Food Program (CSFP). When looking at the 
increase it seems the majority is not for food costs but for 
administrative expenses.
    Can you explain why the budget is requesting such a large increase 
for this program?
    Answer. The increased funding for CSFP is necessary to maintain 
current program participation, and will be used for food purchases. 
Administrative grants are determined by a legislatively mandated 
adjustment in the State and local expenditure index for State and local 
agencies.
    Question. Since no new States are being added, is the majority of 
the increase due to food costs or administrative expenses?
    Answer. Ninety-two percent (92 percent) of the increase in funding 
for CSFP is due to food costs.

                    PUBLIC HEALTH INFORMATION SYSTEM

    Question. We have been apprised that the Public Health Information 
System (PHIS) is very slow and unwieldy for users. If data input is 
interrupted due to other work requirements, PHIS ``times out'' the user 
and forces them to re-enter data. We are told that users frequently 
take their laptops home to enter data uninterrupted. Surely with the 
investments made in PHIS, we can expect a better product than this.
    Are you aware of these problems?
    Answer. The agency is aware of some customers experiencing 
connectivity issues when trying to use PHIS and improving connectivity 
of PHIS is the top priority of the Administrator. It is important to 
note that the agency does not expect, nor does it allow its inspection 
program personnel to take their laptops home to enter data into PHIS 
outside of their tour of duty. That being said, issues such as the 
system being ``slow and unwieldy,'' are typically caused by Internet 
connectivity and not by PHIS. These connectivity issues have to do with 
available commercial technology in an area, the use of mandated 
contract carriers and USDA network traffic; much of this is outside of 
the agency's control. In addition, PHIS meets Federal security 
guidelines and times out when users are inactive.
    FSIS has inspection personnel in plants across the country, and 
unfortunately, connectivity is not as consistent in some rural parts of 
the country as it is in more urban areas. A small percentage of FSIS 
field personnel, who are mostly located in rural areas, are 
experiencing connectivity issues. The agency is working toward 
implementing additional wired and wireless solutions for our personnel 
with Internet connectivity issues. One solution that has already been 
implemented is the availability of a disconnected version of PHIS. 
Personnel can enter data into this disconnected version when Internet 
connectivity is unavailable, and upload that data to PHIS once the 
Internet is available. Connectivity is not provided at every 
establishment; rather it is provided at large and/or high-volume 
establishments and at least at one point on every patrol assignment.
    Question. How much has been invested in PHIS to date?
    Answer. As of May 2013 the agency has invested $57.9 million in the 
Development and Operations and Maintenance of PHIS.
    Question. Is development of PHIS complete now or are you still 
enhancing the product?
    Answer. PHIS development continues. Initially, FSIS' immediate 
focus was on its domestic component and getting approximately 4,500 
field employees transitioned onto the system. Once full domestic 
implementation was completed in January 2012, FSIS turned its attention 
to the system's import component. Having completed implementation of 
these two high-priority components, FSIS launched the system to 
industry users and State meat and poultry inspection programs. In the 
next fiscal year, FSIS will continue improving and enhancing the 
components that have already been implemented, while also integrating 
the agency's foreign equivalence and export processes.
    Question. What are the annual operating costs of PHIS?
    Answer. The agency projects future operations and maintenance costs 
for PHIS to be approximately $1,340,903 per year.
    Question. What are your plans to increase the speed and usefulness 
of this system?
    Answer. The agency is taking a multifaceted approach to enhancing 
the system for speed and utility. We are constantly looking at ways to 
improve the system, agency processes, training and support guidance as 
well as new enhancements and updates released on a regular basis. In 
addition, we are prioritizing increased use of the disconnected version 
of PHIS with personnel located in areas where Internet connectivity is 
unavailable. This disconnected version allows personnel to record 
critical food safety information while Internet connectivity is 
unavailable and upload it to PHIS at a location on their assignment 
where the Internet is available.

                               FOOD WASTE

    Question. There has been some concern that increasing the nutrition 
standards for foods has caused increased plate waste. Kids are simply 
throwing out that apple and going to class hungry. The Little Rock 
School District has come up with an innovative approach to dealing with 
this. All food groups are represented by a color and students must 
select three groups including at least one fruit or vegetable.
    Are you concerned with increased plate waste?
    Answer. Plate waste has been a long-standing concern of USDA, which 
has examined the issue in various studies and developed several 
policies to decrease plate waste. For instance, ``offer versus serve'' 
is a service method that allows students to select only those foods 
they intend to eat. It was developed to prevent food waste and 
encourage the consumption of healthful foods. Additionally, USDA 
continues to offer extensive technical assistance to States and local 
agencies in an effort to assist in the reduction of plate waste in 
cafeterias, including the Recipes for Healthy Kids Competition, Chefs 
Move to Schools, fact sheets, and other resources offered through Food 
and Nutrition Service's (FNS's) Team Nutrition.
    USDA is committed to future research to expand understanding of the 
issue. A study will be conducted in school year 2014-2015 that will 
examine the extent of plate waste in the school meal programs, looking 
at both types of foods and specific nutrients lost.
    Question. What is FNS doing to encourage school districts to come 
up with creative ways to help students eat more fruits and vegetables, 
as we're seeing in Little Rock?
    Answer. FNS recognizes that innovative approaches can increase 
consumption of school meals. FNS is collaborating with the Economic 
Research Service to support research conducted by the Cornell Center 
for Behavioral Economics in Child Nutrition Programs. The Center's 
Smarter Lunchrooms Initiative focuses on new efforts to reduce plate 
waste, particularly fruits and vegetables, in school meal programs by 
going beyond what is served to how it is served--including lighting, 
placement of foods, creative food item names, and signage. For 
instance, the Center has found that relabeling foods with appealing 
names resulted in an increase in the sale of vegetables in the school 
cafeteria by 27 percent. We are currently working to increase State and 
local awareness of and access to the ample resources and training 
available from the Center.
    We also know that it is very important that schools provide enough 
time to eat, and at the right time of day. For example, implementing 
``grab and go'' meals in addition to traditional meal service in the 
school cafeteria may provide students with the flexibility to eat in a 
preferred setting and at a time when they are most hungry. Providing 
meals just before or after physical activity can also increase student 
appetite and meal appeal. Lastly, we recognize the importance of 
resource sharing, and have created the Best Practices Sharing Center 
Web site, which allows States and schools to share their own innovative 
menus, training materials, and signage with a nationwide audience.
                                 ______
                                 
               Questions Submitted by Senator John Hoeven

                         WIC ENROLLMENT TRENDS

    Question. The WIC program is designed for low-income infants, 
children up to age 5 and pregnant and postpartum women. The USDA and 
WIC repeatedly point to its own data to show that the program is being 
increasingly utilized by women and children. The data reflects that WIC 
enrollment encompasses 53 percent of all the infants in the country. 
This seems to be a figure that exceeds other measures of infant and 
child poverty. Accordingly, please outline what policies have led to 
such an increase in WIC enrollment?
    Answer. A USDA analysis released in January 2013 estimated that 
just over 2 million infants, fully half of the infants in the United 
States, had family incomes below 185 percent of the Federal Poverty 
Guidelines in 2010 (National and State-Level Estimates of Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC) 
Eligibles and Program Reach, 2010). These infants would be income 
eligible for WIC because they meet the income requirements established 
by the Child Nutrition Act. The increase in enrollment was not a result 
of changes in WIC policies.
    USDA's most recent analysis of State WIC administrative data showed 
that 69 percent of WIC participants received benefits through SNAP, 
TANF, or Medicaid in 2010. But that same data finds that the great 
majority of those WIC participants reported incomes below 185 percent 
of the poverty guidelines. Among all participants for whom we have 
income information in 2010, just 2.9 percent reported incomes above the 
185 percent threshold. For infants, the number was 2.7 percent.

             LOCAL AND STATE INCOME ELIGIBILITY DISCRETION

    Question. The Government Accountability Office (GAO) produced a 
study showing extensive State-level and local WIC agency discretion 
regarding aspects of measuring income for assessing eligibility. States 
and local WIC agencies set the terms of what to include or exclude when 
counting income, including what time periods must be considered when 
measuring income, or the size of the family unit used to calculate 
income. Apparently, over 60 percent of the States require income data 
reflecting only the last 30 days, even though the Federal standard for 
WIC eligibility is ``annual gross household income.'' Furthermore, the 
States evaluate only the income of the mother and child, and disregard 
income of any other member of the household. We understand that in 
response to the GAO report in April 2013, FNS issued new income 
eligibility guidance to the States that is uncannily similar to FNS's 
14-year-old 1999 income eligibility determination guidance in effect at 
the time GAO identified extensive inconsistencies across State and 
local WIC agency income eligibility determinations. How does FNS intend 
to monitor State and local WIC agency compliance with this new 
guidance, given that there is no training or technical assistance 
provided along with the new guidance to ensure compliance?
    Answer. In April 2013, FNS issued updated guidance to State 
agencies to help standardize income eligibility determinations. The 
guidance consolidates policy memoranda issued over the past several 
years. Included in the guidance are various aspects of WIC 
certification, including, but not limited to: income eligibility 
guidelines, definition of income (including military income), 
determination of family/household income and adjunctive/automatic 
income eligibility, clarification on the use of ``current'' income, and 
the number of temporary certifications allowed when an applicant lacks 
necessary income documentation. FNS is also hosting regional webinars 
for State agencies to provide technical assistance on the guidance.
    In addition, management evaluations (MEs) conducted by FNS 
routinely address issues related to income eligibility determinations. 
The WIC ME Tool, a Web-based, interactive tool implemented in fiscal 
year 2010, establishes standard questions to be used across regions and 
allows FNS to generate reports to identify common findings and develop 
policies or other corrective actions. FNS will develop a process, which 
will be effective October 1, 2013, for the systematic review and 
analysis of WIC certification/eligibility MEs at the national office 
level. The process will help FNS identify areas in need of correction 
or improvement so that additional guidance and technical assistance can 
be provided to FNS regional offices and WIC State agencies as necessary 
and appropriate.

            FOOD AND NUTRITION SERVICE OVERSIGHT AND REVIEW

    Question. Apparently, FNS for some years has been collecting USDA 
regional offices' reports of State and local WIC agencies' compliance 
with Federal WIC policy, including income eligibility determinations. 
However, the GAO observed that FNS refrains from examining those 
reports to assess State or local WIC agency compliance with Federal 
regulations. How can FNS be assured of the integrity of the WIC program 
when it does not monitor State and local WIC agencies' compliance with 
Federal policies, especially in the area of income eligibility 
determinations? What does FNS intend to do to rectify these issues in 
the future?
    Answer. FNS routinely reviews all WIC State agencies for compliance 
with Program operation and administration requirements, including the 
critical area of certification and eligibility, during its management 
evaluation reviews. Where deficiencies are found, FNS requires that 
State agencies undertake corrective actions and monitors compliance 
with those corrective action plans. To improve WIC oversight and 
administration, and in response to the GAO's recommendation, FNS will 
develop a process, effective October 1, 2013, for systematically 
reviewing its monitoring reports to assess national program risks and 
target assistance specific to WIC certification and eligibility.

                          SUBCOMMITTEE RECESS

    Senator Pryor. The subcommittee will meet again for its 
final fiscal year 2014 budget hearing at 10 a.m. on Thursday, 
May 23, in this room. At that time, we'll hear testimony from 
USDA undersecretaries for Farm and Foreign Agricultural 
Services, Natural Resources and Environment, and Rural 
Development.
    So again, I want to thank you all for your attendance 
today. And with that, the hearing is recessed.
    [Whereupon, at 11:05 a.m., Thursday, May 16, the 
subcommittee was recessed, to reconvene at 10 a.m., Thursday, 
May 23.]
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