[Senate Hearing 113-877]
[From the U.S. Government Publishing Office]
AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2015
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WEDNESDAY, MARCH 26, 2014
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10 a.m. in room SD-124, Dirksen
Senate Office Building, Hon. Mark L. Pryor (chairman)
presiding.
Present: Senators Pryor, Johnson, Tester, Blunt, and Moran.
DEPARTMENT OF AGRICULTURE
STATEMENT OF HON. TOM VILSACK, SECRETARY
ACCOMPANIED BY:
DR. JOSEPH GLAUBER, CHIEF ECONOMIST
MICHAEL YOUNG, DIRECTOR, OFFICE OF BUDGET AND PROGRAM ANALYSIS
opening statement of senator mark l. pryor
Senator Pryor. I'll go ahead and call the subcommittee to
order.
I want to thank all of our witnesses for being here and all
of our Senators.
Let me start with an announcement. The floor has announced
that they're going to have votes, probably a series of votes,
starting at 11. And so, consequently, I'll talk to the ranking
member here and also to the Secretary's office about trying to
shorten our opening statements and trying to get right into
questions and ask as many questions as possible. And then, if
all goes well, we'll probably adjourn around 11:10 or 11:15,
depending on the flow of the meeting. But, if we didn't have a
series, we might try to come back. But I think, with a series,
it will be hard to get Senators to come back.
So again, I want to welcome everyone for being here and
especially, Secretary Vilsack. He's accompanied by Dr. Joseph
Glauber and Mr. Michael Young. And thank you all for your
testimony and your preparation.
Mr. Secretary, we've had several very productive
conversations. I appreciate that. Always appreciate working
with you and your team over there. Obviously, our farmers face
a lot of challenges. You have a new farm bill. There's a lot
going on in your world and a lot of really good things and some
real challenges. So we acknowledge that.
And I just want to say that there are some things in your
proposed budget that I really like and I'm really encouraged
by. And then, I have a lot of questions about other matters and
we'll try to get into those. And, as always, we will leave the
record open for a couple of weeks and allow Senators to submit
questions because we are on this abbreviated schedule today.
So again, I want to welcome you to the subcommittee. And
with that, what I'll do is turn it over to my very fine ranking
member here, Senator Blunt of Missouri, who always shows great
leadership and asks great questions.
So Senator Blunt.
statement of senator roy blunt
Senator Blunt. Well, thank you, Chairman Pryor. And thanks
for your leadership on the committee. We've had a great
opportunity to work together on this committee for a while now
and it's been a real labor of accomplishment, I think, as we
try to work to help this important sector in our economy.
Secretary Vilsack, glad you're here; Dr. Glauber and Mr.
Young. And look forward to the chance we have to ask some
questions. Clearly, we're wanting to talk about the priorities
and the requests in your budget.
Agriculture is one of the brightest spots in our economy
right now. The challenges ahead of us, I think, are also great
opportunities as we see world food needs anticipated to double
by 2060 or 2070. American farmers and American agribusinesses
are going to be an important part of that and what we do to get
ready for that in terms of research and then other committee
work; infrastructure and other things, that allow that to
happen. Very important.
Clearly, while it's been a bright spot, the agriculture
community hasn't been without challenges; the drought we've
seen happen. The fact, though, that we had our farm families
waiting for too long, in probably all of our opinions in this
room today, for a farm bill. And now, the importance of your
Department quickly implementing that farm bill and the
livestock disaster relief programs that had run out. And now,
we're trying to go back and catch up with that means, I think,
it's particularly important to do that. But I'm glad that's
among your priorities. We want it to be among your top
priorities.
In terms of the Farm Service offices that really are the
touchpoint for farm families with the Federal programs and
Federal assistance and Federal research and Federal
information, it's important that those work well. Clearly, the
Government is in a position where we need to be looking at what
the private sector has done more effectively than the Federal
Government has to deliver services and figure out the best way
to do that. I know that's one of the things you're looking at.
I'm hopeful, as we figure out how to deliver those services
better, that is in every way possible. We do that based on a
real specific analysis of where the work is, where the farm
families are, how we bring those two things together.
I know Senator Pryor and I and our colleagues, all want to
get the maximum opportunity to take advantage of your time here
today.
Senator Pryor. Thank you.
And, Secretary Vilsack, thank you.
summary statement of hon. tom vilsack
Secretary Vilsack. Mr. Chairman, Ranking Member Blunt, and
members of the subcommittee, thank you very much for the
opportunity to meet with you this morning. Under President
Obama's leadership, the United States has reached historic
levels of investment in rural communities. With this investment
the agriculture sector has seen strong growth, with farm income
and agriculture exports both reaching highs not witnessed in
decades. Net farm income and net cash incomes after adjusting
for inflation are at near record levels. Since the President
took office, agriculture exports have had the strongest 5-year
period of growth in our Nation's history, and set a new record
in calendar year 2013 at $144.1 billion. A strong agriculture
sector is key to strong rural communities, supporting 9.2
percent of jobs in the economy.
Although the recent agriculture census reports that we have
had a strong agricultural economy, we continue to face some
significant challenges. There is a significant rural component
to poverty in America. Eighty-five percent of the Nation's
poorest counties are rural, and per capita income in rural
America lags behind that in urban areas. Further, populations
in rural areas are dropping as a lack of new jobs is driving
young people away. We continue to see a trend of fewer farmers
and aging farmers. In addition, rural communities face more
complex challenges today because of climate change, which comes
with a hefty price tag. Drought alone was estimated to cost the
United States $50 billion from 2011 to 2013. The fire season is
significantly longer than it was 3 decades ago. These risks
have implications not only for agricultural producers, but for
all Americans.
We must continue our efforts to build on our success and
advance new ideas to address the challenges that rural America
continues to confront. In the budget we talk about individual
line items, individual programs, but we don't look at the
totality of what a budget does and its impact on the people in
rural America and the farm communities and in this country. So
what I'd like to do is discuss Results and Reforms,
Opportunities and Innovation; the ROI of this budget.
Let me start with results. This is a litany of numbers but
the reality is behind each number there's an individual whose
life is impacted by what we do at the U.S. Department of
Agriculture (USDA). Forty thousand farmers will receive
assistance in the form of credit; 85 percent of those farmers
will be beginning farmers and socially disadvantaged farmers.
This budget will provide coverage, crop insurance coverage, for
$63 billion in crops. It will adequately fund our Animal and
Plant Health Inspection Service (APHIS) to ensure the
protection of $165 billion of value in terms of livestock, and
specialty crops and plants that APHIS is responsible for.
We will be focused on ensuring that we continue record
activity in trade. We're looking at, potentially, another
record year of agricultural trade which supports not only
stable farm income but also a million jobs here at home. An
opportunity for us to also provide help and assistance to young
people overseas with our McGovern-Dole Program, helping to feed
nearly 4 million youngsters.
Forty-seven million Americans will receive benefits under
the Supplemental Nutrition Assistance Program (SNAP); 8.7
million women, infant and children will benefit from the
Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC). Thirty million children, 20 million of whom are
on free and reduced lunch, youngsters will receive benefits
under a school lunch program; 14 million will receive benefits
under a school breakfast program; and our summer feeding
program will help support 3.3 million young people.
In addition, our food safety folks will continue to focus
on reducing foodborne illness, and we estimate and expect with
this budget that we can reduce the number of foodborne illness
in the areas that we inspect by 52,000, which is in addition of
an 11-percent reduction from last year.
In addition, we'll continue our work in conservation.
Twenty-three million additional acres added to the record
number of acres that are currently enrolled in conservation;
helping nearly half a million producers in this country do a
better job of land stewardship and water stewardship. This
budget will also allow us to continue an effort in the
Conservation Reserve Program (CRP), with 25 million acres.
We will be focused on rural development. Forty thousand
jobs will be created or retained with this budget. One hundred
and forty thousand families and businesses will receive
expanded broadband access; 2.2 million families will benefit
from cleaner water in communities that receive water projects.
One hundred and sixty-three thousand folks will receive a
single-family loan to allow them to have homeownership; 285,000
will receive assistance in the form of rental assistance in
rural communities; 4.6 million Americans will receive the
benefit of improved electric service as a result of this budget
and over 13 million Americans will see improved community
facilities through the Rural Development component of this
budget.
In addition, we will continue a commitment, a strong
commitment, to research in nearly 100 facilities. Eight hundred
research projects will continue to provide innovation that has
spawned 215 patents in the last 5 years and helps to support
383 licensing agreements that lead to small business
development.
So on total, a substantial number of folks get impacted by
this budget. This budget is also focused on reform since it's a
half a billion dollars less than it was when I became
Secretary. We're focused on model service agencies for our farm
service efforts; reforming the way in which we pay for forest
fires, focusing on a space survey to try and do a better job of
using space here in the Capital area; and rental assistance,
helping to right size our rental systems' portfolio.
In the form of opportunities, we're going to continue to
expand local and regional food systems because that is an
opportunity for us to expand small and mid-size farming
operations which is a concern that I have and I'm sure you do.
We will also continue to focus on the bio-based product
manufacturing opportunity in rural America to create jobs and
additional farm income.
On innovation, we're excited about the innovation
institutes that we're proposing for pollinators, for
antimicrobial resistance and also for bio-product
manufacturing. We're also focused on a new poultry facility
that will take a look at how we might be able to combat
diseases in terms of our important poultry industry.
So I look forward to answering the questions of this
committee but I think it's important sometimes to focus on the
overall results of a budget because many, many people get
impacted positively by our efforts.
[The statement follows:]
Prepared Statement of Hon. Thomas J. Vilsack
Mr. Chairman and distinguished members of this subcommittee, I
appreciate the opportunity to appear before you to discuss the
administration's priorities for the Department of Agriculture (USDA)
and provide you an overview of the President's 2015 budget. I am joined
today by Joseph Glauber, USDA's Chief Economist, and Michael Young,
USDA's Budget Officer.
Under President Obama's leadership, the United States has reached
historic levels of investment in rural communities. With this, the
agriculture sector has seen strong growth, with farm income and
agriculture exports both reaching highs not witnessed in decades. Net
farm income and net cash incomes after adjusting for inflation are at
near record levels. Since the President took office, agriculture
exports have had the strongest 5-year period of growth in our Nation's
history, and set a new record in calendar year 2013 at $144.1 billion.
A strong agriculture sector is key to strong rural communities,
supporting 9.2 percent of jobs in the economy.
Although the recent agriculture census reports that we have had a
strong agricultural economy, we continue to face some significant
challenges. There is a significant rural component to poverty in
America. Eighty-five percent of the Nation's poorest counties are
rural, and per capita income in rural America lags behind that in urban
areas. Further, populations in rural areas are dropping as a lack of
new jobs is driving young people away. We continue to observe the trend
of fewer farmers and aging farmers. In addition, rural communities face
more complex challenges today because of climate change, which comes
with a hefty price tag. Drought alone was estimated to cost the United
States $50 billion from 2011 to 2013. The fire season is significantly
longer than it was 3 decades ago. Such risks have implications not only
for agricultural producers, but for all Americans.
We must continue our efforts to build on our success and advance
new ideas to address the challenges that rural America continues to
confront. The budget before you today delivers on the President's
commitment to provide results, expand opportunity for all Americans,
invest in innovation, and make reforms aimed at improving services and
fiscal responsibility.
USDA has made a concerted effort to deliver results for the
American people, even under the constrained budget mandated by the
Budget Control Act. USDA has made substantial, year-over-year gains in
expanding credit opportunities for farmers and ranchers. We expanded
crop insurance to more than 400 crop types, saved millions of dollars
and provided risk management opportunities to specialty crops and
organic crops. We have supported small businesses by providing job
training, business development opportunities, strategic community
planning and other resources. As I mentioned earlier, we helped boost
exports to a record level by breaking down trade barriers and promoting
U.S. agricultural products.
USDA housing programs have been successful at keeping rural
residents in their homes by allowing current borrowers to take
advantage of historically low interest rates. Since 2009, USDA has
helped more than 804,000 rural families buy, refinance, or repair a
home. We did this while gaining efficiencies in the programs and
increasing the fees making the guarantee program less costly to the
taxpayers.
We are proud of our record to support increased demand for
renewable fuels. USDA has invested in the creation of advanced
biorefineries across the Nation; developed a unique partnership with
the U.S. Navy and Department of Energy to procure new biofuels for
marine and aviation use; and boosted markets for nearly 3,000 U.S.
companies that are producing biobased products from homegrown
materials. USDA has provided financial assistance to farmers, ranchers
and rural small businesses to purchase and install renewable energy
systems and make energy-efficiency improvements that have created or
saved an estimated 9.2 billion kWh of electricity since 2009. USDA also
has entered into unique public-private sector partnerships to expand
wood energy use, which will help improve the safety and health of our
Nation's forests and support job creating renewable energy production.
USDA's conservation efforts have helped us mitigate the negative
impacts of the drought and are helping producers to manage climate
change. USDA has enrolled a record number of acres in conservation
programs that have saved millions of tons of soil and improved water
quality and have contributed to the national effort to preserve habitat
for wildlife and protect the most sensitive ecological areas. USDA has
partnered with more than 500,000 farmers, ranchers and landowners on
these conservation projects since 2009--a record number. In addition to
protecting cropland and critical habitats, conservation strengthens
outdoor recreation, which adds more than $640 billion every year to our
economy. Building on these efforts, the administration entered into a
historic agreement with Minnesota to develop programs for farmers
designed to increase the voluntary adoption of conservation practices
by giving them regulatory certainty that they will not be asked to take
additional conservation actions over the life of the agreement. We are
working with other States to expand the use of these agreements.
In the face of drought and the increasing threat of wildfires, I
recently announced the first ever Regional Hubs for Risk Adaptation and
Mitigation to Climate Change. These climate hubs will address
increasing risks such as fires, invasive pests, devastating floods, and
crippling droughts on a regional basis, aiming to translate science and
research into information to farmers, ranchers, and forest landowners
on ways to adapt and adjust their resource management. In support of
the President's goal to find lasting conservation solutions for some of
the most challenging problems, USDA has undertaken a range of
innovative new landscape-scale initiatives aimed at restoring land and
water. More than 1.6 million acres have been enrolled in landscape
scale initiatives in an ``all lands'' strategy for enhancing water
resources.
The Department has also helped a record number of people in need by
ensuring that they have access to sufficient food and a healthful diet.
The Supplemental Nutrition Assistance Program (SNAP) helps millions of
low-income Americans put food on the table, more than half of whom are
children, the elderly or people with disabilities. The cornerstone of
the nutrition assistance safety net, SNAP kept nearly 5 million people,
including 2.2 million children, out of poverty in 2012. This
administration has achieved historically high payment accuracy rates in
SNAP, among the best in the Federal Government, and the budget includes
additional investments in SNAP program integrity.
USDA continues to improve and enhance the school food environment
such as providing performance-based increases of 6 cents per lunch for
schools meeting the new meal standards, the first real increase in 30
years. We have published new standards for snack foods in schools that
preserve flexibility for time-honored traditions like fundraisers and
bake sales, and provide ample transition time for schools. We have also
issued a final rule to allow food packages for the Special Supplemental
Nutrition Program for Women, Infants, and Children (WIC) to better
reflect current nutrition science and dietary recommendations, support
breastfeeding, provide participants with more variety of foods, and
provide WIC State agencies with greater flexibility in prescribing food
packages to accommodate participants with cultural food preferences. To
increase access to nutritious food, we have increased the number of
farmers markets and made it easier to use SNAP electronic benefits
transfer (EBT) cards at those markets and facilitated direct farm-to-
school marketing of fresh fruits and vegetables.
Food for Progress and the McGovern-Dole International Food for
Education and Child Nutrition Program provided benefits to more than
10.5 million people overseas in 2013, a record number. Also, following
upon the positive reforms enacted in 2014 that mainly address
development food aid, the administration is seeking to enable Public
Law 480 title II to reach 2 million more people in emergency crises
within the same resources and with more timely responses. These reforms
provide a more agile and modern approach to global food assistance,
pairing the continued purchase of the best of American agriculture with
the flexibility of interventions such as increased local and regional
purchase, cash transfers, and electronic vouchers. The budget proposes
the authority to use up to 25 percent of title II resources for these
types of flexible emergency interventions that have proven to be so
critical to effective responses in complex and logistically difficult
emergencies such as Syria and Typhoon Haiyan.
Within the President's Feed the Future initiative to enhance longer
term food security, we are also working with developing countries to
facilitate the adoption of emerging technologies that hold the promise
of improving agricultural productivity by creating crops that better
tolerate drought, toxicity, disease, pests and salinity. These efforts
contribute to economic growth and food security.
We have been implementing a series of policies aimed at preventing
foodborne illnesses before they happen by targeting and eliminating
contaminated products before they come to market. For example, in
fiscal year 2011, the Food Safety and Inspection Service (FSIS)
implemented stricter Salmonella and Campylobacter performance standards
to reduce these pathogens in turkeys and young chickens. In fiscal year
2012, FSIS began testing raw beef products for six additional strains
of shiga-toxin producing E. coli and prohibiting any product found
positive from entering commerce, consistent with FSIS testing and
policies for E. coli O157:H7. In fiscal year 2013, FSIS redesigned its
sampling program to improve detection of E. coli O157:H7 in regulated
products to further protect the public from foodborne hazards. We also
took the common sense action to hold any product being tested for
adulterant until the test results are received. FSIS began a new
program to test comminuted chicken and turkey products for Salmonella
and Campylobacter. FSIS intends to develop new performance standards
for comminuted products based on the results of this testing and risk
assessment analysis. In December, 2013, FSIS announced its Salmonella
Action Plan which outlines additional steps the Agency intends to take
to address Salmonella, including developing Salmonella performance
standards for chicken parts based on FSIS baseline results. FSIS has
seen declines in the total number of illnesses attributed to FSIS-
regulated products--between fiscal year 2011 and fiscal year 2013, the
total number of such illnesses fell 13 percent, which equates to about
64,000 illnesses over the 2-year period.
With passage of the farm bill, we have a great opportunity to build
upon these results by bringing an enhanced array of authorities and
resources needed to address the on-going challenges faced by rural
America and provide a foundation to help rural communities prosper,
enhance the resiliency of forests and private working lands and ensure
access to a safe, diverse and nutritious food supply. It restores
disaster assistance and invests in programs to help beginning, small
and socially disadvantaged farmers and ranchers. Our communities will
have additional resources and new tools to take advantage of new
economic opportunities and create jobs. It provides access to
nutritious food to those that need it. The potential of new products,
production methods, and discoveries will be strengthened through new
agricultural research. Renewed conservation efforts will protect our
natural resources and create new tourism options. The farm bill will
support the next generation of farmers and ranchers, while achieving
meaningful reform and billions of dollars in savings. USDA's dedicated
employees are hard at work to implement the bill effectively and
expeditiously.
The President's 2015 USDA budget proposal builds on the farm bill
and focuses on creating jobs and building a foundation for future
economic growth within the constrained levels of funding. Three months
ago, through the Bipartisan Budget Act of 2013 (BBA), Congress came
together on a bipartisan basis and took an important first step toward
replacing the damaging cuts caused by sequestration with longer term
reforms. Recognizing the importance of the 2-year budget agreement
Congress reached in December, the President's budget adheres to the
BBA's discretionary funding levels for 2015.
USDA's total budget for 2015 we are proposing before this
subcommittee is $141.4 billion, of which approximately $122.4 billion
is mandatory funding. The majority of these funds support crop
insurance, nutrition assistance programs, farm commodity and trade
programs and a number of conservation programs. The budget includes
funds to fully support estimated participation levels for SNAP and
Child Nutrition Programs.
For discretionary programs of interest to this subcommittee, our
budget proposes $19 billion, approximately $242 million below the 2014
enacted level. That level fully funds expected participation in WIC. It
includes the funding needed to meet our responsibility for providing
inspection services to the Nation's meat and poultry establishments.
The budget also includes over $1 billion to renew approximately 243,000
outstanding contracts for rental assistance. We appreciate the
subcommittee's on-going support for this program. For 2015, we are
proposing changes to the operation of the Rental Assistance Program to
ensure its long-term viability.
The budget creates new opportunities and continues to give a
priority to spurring investment in rural businesses that want to take
advantage of emerging markets. The 2015 budget reproposes the
consolidation of several rural development programs into an economic
development grant program designed to assist small and emerging private
businesses and cooperatives in rural areas with populations of 50,000
or less. This program is needed to improve our ability to leverage
private sector resources aimed at developing regional economies. The
budget would also give rural businesses more access to capital by
shifting funding from traditional loan programs to venture capital type
funding that offers a more diverse array of financial products. The
2015 budget supports loans and grants programs that aid in the
development of food retailers in urban and rural food deserts and food
hubs for locally and regionally produced products, including dedicated
funding for the Healthy Food Financing Initiative authorized in the
recent farm bill. We double grant funding to increase broadband access
in the rural communities that are least likely to have broadband
infrastructure needed for economic development.
We understand the new opportunities in rural America that the
biobased economy provides. In addition to the mandatory funding
provided by the 2014 farm bill, discretionary funding is requested for
the Rural Energy for America Program to provide financing for the
purchase of renewable energy systems. We also propose $1 billion to
support environmental upgrades to existing fossil fuel electric
generation facilities and target electric funding to supporting
renewable energy projects to significantly reduce carbon emissions.
The budget request also meets the growing demand for farm credit
with sufficient funding to serve over 40,000 producers in 2015 seeking
to finance operating expenses, to acquire a farm, or keep an existing
one. Approximately 85 percent of the funding will be targeted to new
and beginning farmers and ranchers, including our Nation's veterans, so
that we can ensure that our country's next generation of growers and
producers get off to a good start.
The budget supports our continuing efforts to improve access to
nutritious foods and promote healthy diets. In 2013, USDA and its
partners well exceeded our goal to provide 5 million additional meals
than in 2012 to eligible low-income children through summer meal
programs. Although encouraging, there are more than 21 million such
children participating in school meal programs and fewer than 3 million
who receive Summer Food Service Program meals when school is not in
session, which indicates many kids may not be getting adequate
nutrition during the summer. A key investment in 2015 is $30 million
for summer food EBT demonstration projects, which test the extent to
which providing extra benefits through SNAP and WIC EBT over the summer
for households with school-aged children reduces food insecurity. The
summer EBT pilots funded by this Committee in 2010 are showing real
promise in reducing hunger and improving nutrition, and the budget
proposes to build on that success. The budget also requests additional
funding for school equipment grants, to help our schools prepare and
serve healthy meals.
The 2015 budget makes strategic investments that further innovation
and encourage creative approaches to solving rural America's most
pressing challenges. Our budget emphasizes research that will tackle
major, crosscutting issues facing farmers, including food safety,
renewable energy, climate change and pollinator health, and offer
genetic resources and tools to increase agricultural resiliency and
enhance food production. The 2015 budget includes a significant
investment for the Agriculture and Food Research Initiative (AFRI). We
are also proposing the creation of three Innovation Institutes, public-
private partnerships that will focus on emerging challenges to
agriculture. These institutes will address the decline of pollinator
health, bio-manufacturing and bioproducts development, and anti-
microbial resistance research. In addition to the institute for
pollinator health, the President's budget requests an additional $20
million in USDA's budget for a multi-agency initiative to respond to
the urgent problem of the decline of pollinator populations. USDA's
activities will be coordinated with other departments. The budget also
includes funding to begin the planning and design of the 2017 Census of
Agriculture.
Because the BBA levels are not sufficient to expand opportunity to
all Americans or to drive the growth our economy needs, the President's
2015 budget includes a separate, fully paid for $56 billion
Opportunity, Growth, and Security Initiative. The initiative identifies
additional discretionary investments that can spur economic progress,
promote opportunity, and strengthen national security. For USDA, the
initiative includes $155 million to design and construct facilities to
replace the outmoded Southeast Poultry Research Laboratory in Athens,
Georgia. An additional $60 million is included for AFRI, as well as an
additional $20 million for formula research grant programs that would
be available on a competitive basis. Finally, as part of the Climate
Resilience Fund, $100 million would be provided through the Natural
Resources Conservation Service to enhance support for private
landowners to manage landscape and watershed planning for increased
resilience and risk reduction.
The President's budget proposal includes reforms needed to meet
tight discretionary caps, while ensuring that USDA's millions of
customers across rural America receive stronger service. These include
efforts to reduce administrative costs, streamline operations, and
improve program integrity. Since 2010, USDA has implemented numerous
measures to increase efficiency and reduce spending to absorb
uncontrollable costs and manage significant reductions to discretionary
funding. We have done this by aggressively implementing our Blueprint
for Stronger Service, which has achieved almost $1.2 billion of savings
and efficiencies. We will build on these efforts in 2015 by
consolidating leased and owned office space and requesting authority to
use expired, unobligated funds to invest in facilities and other
capital needs to better manage the Department.
For 2015, we will improve our capacity to help produces and rural
communities that we serve. We will continue efforts to modernize the
farm program delivery system through a Model Service Center concept to
ensure offices are strategically located and have adequate staffing and
equipment to strengthen services to producers. Savings from the
consolidation of 250 Farm Service Agency offices would be re-invested
in the modernization effort. A Rural Corps, comprising economic
development professionals, will be placed in 10 high-need areas to
provide technical assistance and hands-on support at the local level.
This model will increase the likelihood that investments in
infrastructure and economic development are strategic, creating jobs
and long-term economic benefits within in the region.
Throughout the farm bill process, the administration has advocated
for comprehensive legislation that provides meaningful reforms. We are
pleased that many of these reforms have been adopted in the farm bill;
however, we believe further reforms are warranted to reduce the cost of
the crop insurance program. The proposals represent a balanced approach
to reducing the cost of the program, while maintaining a strong safety
net to protect producers from natural disasters and price fluctuations.
Funding for selected programs is reduced or terminated and
resources are reallocated to targeted investments in priority programs
and infrastructure to support sustainable economic growth. Further,
discretionary spending is partially offset through about $1.5 billion
of proposed limits on selected mandatory programs and other
adjustments.
Our budget is roughly $400 million less than it was when I became
Secretary in 2009. I can assure you that we have done and are doing
everything we can to make USDA a more efficient operation without
limiting service to our stakeholders. We will continue to work to be as
efficient as possible, and look to you to provide us the flexibility we
need to be able to use our resources most effectively.
At this time, I will be glad to answer questions you may have on
our budget proposals.
2014 FARM BILL
Senator Pryor. Thank you.
And as I said, you can submit your longer statement for the
record. We would be glad to take that.
Let me just jump right in, if I can, and let me start with
the new farm bill, which I know is a lot of transition, a lot
of changes and that passed, overwhelmingly, in the Senate. But,
one of the big changes is we lose the direct payments. And I
have farmers in my State and I'm sure others do in their States
about how's this new thing going to work and, you know, folks
are waiting on our regulations to come out. Do you have a sense
of the timetable about when the regs will be issued and where
we are in the process?
Secretary Vilsack. Yes, we do. We have an implementation
team that's been focused on this, actually, before the
beginning of the passage of the farm bill.
Let me say, in terms of disaster assistance which I know is
important, we expect and anticipate that by April 15, folks
will begin to apply for disaster assistance under the restored
disaster programs and hopefully checks will be forthcoming
shortly thereafter April 15.
In terms of Agricultural Risk Coverage (ARC) and Price Loss
Coverage (PLC), our focus is on providing and identifying the
land-grant universities that we will be using to get
information out, to get Web-based information to identify ways
in which extension can be triggered to be able to get the
message out about what these programs will be. We hope to be
able to give farmers the ability to update their productivity
and production records sometime in the late part of this
summer. Early fall, they should get a sense of where we are in
terms of what the regulations are liable to be in the elections
that they have to make. And then, we hope by the end of this
year, they'll be in a position to make elections and be able to
be informed about them.
I would say that wheat is a challenge for us because they
will have to make elections and decisions concerning crop
insurance before they make the ARC or PLC decision. What we
will do with wheat is give wheat producers the opportunity to
change the election that they've made in terms of crop
insurance if they determine ARC is the best deal for their
operation but they've already signed up for supplemental
coverage options; you can't have both. We'll give them an
opportunity to sort of rescind that without penalty.
Senator Pryor. Well, will the USDA and/or your partners
like, for example, universities have things like workshops and,
you know, listening sessions, things like that?
Secretary Vilsack. Yes. And that's part of the farm bill--
provided several million dollars to assist in the outreach
effort. That's why we're developing educational and training
tools. So there will be an extensive outreach effort.
FSA OFFICE CLOSURES
Senator Pryor. And one of the changes that's in your budget
is that--I see a proposal to do a, I guess I would say, a
realignment of the Farm Service Agency (FSA) offices in which
it would probably result in quite a number of closures. But, at
the same time, you know, we don't really know where those would
be. And, could you just walk the subcommittee through that,
please?
Secretary Vilsack. I think it's important to put this in
context, Mr. Chairman.
Our FSA budget has been hit pretty hard over the last
several years and the result is we've reduced our workforce by
20 percent. In addition, we are instituting technology changes
which should improve the way in which we do our work and should
save time for our staff.
So what we would like to be able to do is, during the
course of this calendar year, really focus on where the work
is. As Senator Blunt suggested, we need to make sure that as we
make decisions about a realignment of our Farm Service offices,
and a modernization of them, that we actually match-up where
the work actually is.
So we would like to do sort of a work study to identify
where the work is, where the farm families are, and then
suggest three types of offices in the future. Basically, a
central office that would have a supervisor and at least three
or more employees; a branch office that would not have
supervisory personnel but would have at least three employees.
And then, a series of satellite offices where people would be
able to obtain information by appointment. We'd like to propose
that alignment and, when we do, we suspect that that will
probably focus our attention on readjusting workforce so that
we have adequate numbers of people to provide the services that
folks expect.
I would say that we're also very focused on making sure
that we expand the opportunities for Farm Service Agency
offices to provide additional information above and beyond what
they traditionally do. So part of this modernization effort is
really designed to make them a one-stop shop for farmers who
are looking for information about Rural Development programs,
how they might enter into the local and regional food system
opportunity, how they might take advantage of conservation
programs, and have the Farm Service Agency offices act as a
bridge or connector with those other opportunities.
So we aren't expecting and anticipating any closures in
calendar year 2014. We are going to do this work study. I would
say that there are roughly 30 offices that have no full-time
employees today. There are 111 offices that have one employee
within 20 miles of another office. So I think it is time for us
to take a look at how we restructure and modernize the system.
Senator Pryor. Okay, thank you.
Senator Blunt.
Senator Blunt. And, based on that last answer, Secretary,
so would I be right in assuming that your 250 number is an
estimate of where you think you wind up?
Secretary Vilsack. That's correct.
Senator Blunt. So, you're going to do a study of where the
work is and how those offices lay out and then we'll have
access to that information as you do?
Secretary Vilsack. That's correct.
And we would follow the prescriptions of notices and
hearings and things of that nature if we make decisions in
terms of office closures. I would also point out that this is
not about saving money. This is about redirecting resources and
shoring up the system and modernizing the system.
Senator Blunt. Well, thank you for that. And I look forward
to that information being available to us.
MILK INCOME LOSS CONTRACT PROGRAM
On the new farm bill, you know, one of the last issues, as
is always the case with the farm bill, it seems to me to be
resolved, was the dairy program and we move from a contract
loss program, the Milk Income Loss Contract (MILC) program now,
to more of an insurance program. I think MILC lasts until
September. My question is are you going to have the new program
in place by September and what are you doing to ensure that
that program is in place?
Secretary Vilsack. The answer to your question is yes, we
will.
And the reason, and we're confident in this, is we have
this implementation system in place. And we have teams of folks
looking at each title of the farm bill, prioritizing what needs
to be done and in what order. Then we have a convening team
that's looking at the totality of the farm bill and
reprioritizing all of the various steps that have to be taken.
There are over 480 steps and rules, regulations, guidance,
and policy changes that have to be impacted as a result of this
900-page bill, and we have prioritized them. We understand and
appreciate the dairy section as a very important priority, as
is the disaster assistance, as is the other safety net
programs. So our focus and attention is going to be on making
sure those are in place this fall.
DISASTER ASSISTANCE PAYMENTS
Senator Blunt. And, in your testimony, you said that the
disaster assistance checks for the period that wasn't covered
that now is, you'd hope to have those issued in the next month?
Secretary Vilsack. No. What we hope to be able to do is
allow folks to make application for assistance by April 15.
Senator Blunt. By April 15?
Secretary Vilsack. That's correct. I've checked with that
yesterday. We are on track to do that and we're very confident
we'll meet that April 15 deadline. That is historically quick.
It usually takes 6 to 8 months to reinstitute programs of that
nature; we're going to do it in 60 days.
MODERNIZE AND INNOVATE THE DELIVERY OF AGRICULTURAL SYSTEMS
Senator Blunt. The part of updating and upbringing the
system to where it's more serviceable is clearly the Modernize
and Innovate the Delivery of Agricultural Systems (MIDAS)
program. My understanding is that we've already appropriated
more money than it was originally anticipated that MIDAS would
cost. You want to give us a very quick sense of where you are
on that component of getting everything working in an upgraded
way?
Secretary Vilsack. We have a project manager who we've
identified who's going to take responsibility for day-to-day
management of this particular project to make sure that it
continues to proceed. By the end of this year, we're confident
producers will be able to go into a county office, any county
office in a State, and be able to access all of their records
not just for the land in that particular county but land that
is located in any other county of that State. That's going to
be a tremendous opportunity for folks to save time and more
convenience. Our challenge and our belief is that the following
year, we will have a circumstance where if you have access to
broadband you will be able to access your records and begin to
do your business with FSA offices from your kitchen table. That
is the goal.
DATA SECURITY
Senator Blunt. And where are we on being sure that nobody
else has access to your records; the whole data security
element of those records and the growing concern about that
information being available to people that it wasn't intended
to be available to?
Secretary Vilsack. We have significant safeguards built
into all of our systems at USDA to make sure that individual
identities are protected whether it's this particular effort
through MIDAS or whether it's our Natural Resources
Conservation Service (NRCS) contracting.
You know, we are very sensitive to this issue of security.
I think things will be easier because of the work that we've
done with the administrative services procedure and process
where we've saved nearly $1 billion of our cost at USDA. Part
of that has been focusing on consolidating our technology to
ensure that we have better safeguards in place.
I would also say that we are equally focused on working
with the private sector that is accumulating a substantial
amount of information. I had an opportunity to talk to Hugh
Grant, the CEO of Monsanto, yesterday. They have a very
significant and concerted effort to try to collect data and use
data to help farmers do a better job. They want to make sure
that the farmers understand that information is the farmer's
information. The farmer gets to choose how much, if any,
information gets to be used or publicized.
Senator Blunt. Do you share that information with other
Government agencies? Would USDA share that information if, for
instance, the Environmental Protection Agency (EPA) asked to
see a farmer's record?
Secretary Vilsack. We're not in the business of sharing
that information, Senator, to my knowledge. But I will tell you
that when some information was disclosed by the Environmental
Protection Agency last year, we expressed deep concern about
that and I think they took those concerns very seriously.
Senator Blunt. Now, was this information they would've
gotten from USDA that they then exposed?
Secretary Vilsack. I don't believe so. I think this is
information that they obtained through their process.
Senator Blunt. Thank you, Mr. Chairman.
Senator Pryor. Thank you. And it looks like we're moving
right along here so we probably will have time for a second
round. So I encourage people to stay if they can.
Senator Moran.
USDA SUPPORT FOR FARMERS
Senator Moran. Mr. Chairman, thank you very much.
Secretary Vilsack, thank you for joining us.
Just in a broad sense, it sure seems like farmers and
ranchers face lots of challenges today from the Government and
elsewhere, from just the environment they operate in is very
challenging. And I just take this opportunity to encourage you
to continue to make sure you're always in agriculture's corner.
There's never enough champions for this way of life, and for
what we do in Kansas and Iowa, in Washington or around the
country, and I would ask you to use your expertise and your
passion for agriculture every day to weigh in, in many cases,
within this administration. We have the Environmental
Protection Agency, just a series of things, the Department of
Labor, most recently, with their decision about the definition
of a farm. And so, I hope that you will use your position as
Secretary of Agriculture to champion a way of life that matters
greatly to you and to me but to this country. It's absolutely
necessary that you do that.
LIVESTOCK DISASTER PROGRAMS
You have answered some of my questions about implementation
of the farm bill. You talked about livestock disaster programs.
And, if signup, April 15, my question is then, after that, how
soon after that could a producer expect to receive the support?
Secretary Vilsack. Well, we have been saying that our goal
is to make sure that shortly thereafter they receive this
support and the assistance. Senator, I don't want to be
flippant about my answer. I'm a little bit concerned about
giving you a specific time in terms of a week or a month
because I'm not sure how many applications we're going to
receive. I suspect we're going to receive quite a few given the
nature of disasters that have occurred over the last couple of
years. But we will do everything we possibly can to get
resources to folks as fast as we can. It's why we have done,
and historically, a quick turnaround of this resumption of
these programs. So we understand how important this is. We will
move quickly.
Senator Moran. I appreciate that answer. I prefer a more
definitive one but I understand perhaps the inability to give
that and I would also remind us, in Congress, that it's our
fault that we're in this circumstance that we're in in which
there was the gap. And then, in addition to the gap, the length
of time it took for Congress to reach a conclusion on a farm
bill. So the burden lies with you, but the fault in many ways
lies with us.
LESSER PRAIRIE CHICKEN
It's expected, as you may know, I mentioned the
Environmental Protection Agency, U.S. Fish and Wildlife Service
is another example, and we are facing a possible Endangered
Species Act listing of the lesser prairie chicken which is a
significant topic in our State but many States across the
country. Producers are wondering what to do with their CRP
contracts.
Have you been working with U.S. Fish and Wildlife Service
on addressing what happens to CRP if there is a listing? Can
producers, under the farm bill, they may be able to take their
land out of CRP and early out? And my thought is there may be
those who would want to do that if there is going to be a
conclusion that once that they're in grass and the listing
occurs, if and when the listing occurs, that that grass then it
becomes something permanent; something that the landowner can't
remove him or herself from. And I guess, most importantly,
would you foresee a situation where CRP contracts expire and
the producer is still forced to keep the ground and grass
undisturbed while being unpaid?
Secretary Vilsack. Senator, what we've attempted to do with
all of the endangered species challenges that farmers and
ranchers and producers face is to try to create an opportunity
for more regulatory certainty for them. We've certainly done
this with the sage-grouse, and our Farm Service Agency office
is working on a similar concept with reference to CRP and
lesser prairie chicken.
And the way it has worked with sage-grouse is, essentially,
when producers agree to a certain suite of conservation
practices, they receive an assurance from the Department of the
Interior that they will not be required to do in addition to
what they've already done for a period of up to 30 years. So we
are trying to provide that advocacy, if you will, as you
mentioned, to create some kind of certainty so that we don't
ask folks to do things and then have the rules change on them
as they have made investments.
In terms of lesser prairie chicken, we will take that same
philosophy. We obviously don't want to make it more difficult
for producers; we want to encourage producers to do what they
need to do for their operations. So consistent with the farm
bill, consistent with that philosophy, we'll do everything we
can to provide as much flexibility and certainty as we can.
Senator Moran. Whose decision is that? Yours or--how does
that work? If the listing would occur, who ultimately
determines whether or not the habitat can be changed? The
contract expires. The farmer concludes they want to grow crops
on that ground. What you're telling me is if you're successful
again, in your advocacy that would be the land owner's choice?
Secretary Vilsack. It would be--yes.
I mean, that's basically what we're trying to say, look,
here is what we know works to produce better habitat for a
particular species. In terms of conservation, we want to
provide you the assistance, financial assistance, to do that
conservation work, and if you agree with us to do the
conservation work then you ought to receive assurance that's
all you're going to have to do in order to comply with whatever
the listing might be.
Senator Moran. Is that the Department of Agriculture's
position or if you make that decision it's what prevails? Does
somebody trump you in this process?
Secretary Vilsack. No, I don't think so. I mean, that's why
we enter into an arrangement or agreement with the agency
that's making the decision about the species. Department of the
Interior, they have to basically agree with us to agree in
advance of what the protections will be and the term will be.
And that's what we've attempted to do with sage-grouse and it's
been pretty successful in terms of farmer participation.
Senator Moran. Mr. Chairman, has my time expired? Is that
what that is?
Senator Pryor. Yes.
Senator Moran. All right.
I appreciate the suggestion of a second round.
Senator Pryor. Senator Tester.
FARM SERVICE AGENCY MODERNIZATION
Senator Tester. Thank you, Mr. Chairman.
I want to thank the Secretary for being here today. I very
much appreciate it. I appreciate your work. You got a new farm
bill that's different from the last one; significantly. You've
done some good work with livestock disaster, expediting that.
You understand the firefighting issue. I appreciate your local
foods system support and your bio-based ag products.
By your previous answer on some of your questions on the
FSA office closure you said that you're going to be doing
research in 2014 and that no offices would be closed between, I
don't want to put words in your mouth, just tell me, between
the first of October of this year and the end of September of
next year?
Secretary Vilsack. No. What I suggested was that we weren't
going to close any offices in 2014 calendar year.
Senator Tester. Calendar year?
Secretary Vilsack. Calendar year, 2014. We're going to use
that time to take, basically, take a look at where the work is.
Now, again, the context of this is important to understand.
Senator Tester. Yes.
Secretary Vilsack. A 20-percent reduction in workforce.
Technology, changing the way in which we do work, allows us to
ask the question: How would we modernize this system? And
that's the analysis we're going to do this year.
Senator Tester. Okay.
I was on the--it was the Agricultural Stabilization and
Conservation Service (ASCS)--board 25 years ago, 24 years ago.
And I can tell you one of the big problems that the FSA had
then, even though it was under a different name, but the FSA
offices was getting the computer programs. That program still
exists. I just got a call from a neighbor that went in, they
didn't have the program set up to do what needed to be done,
they love their FSA agents, but were sent home and said come
back another day when we have our programs updated.
Do you have your arms around that issue? Because, if you--
let me just put it to you this way. If offices are closed and
there's a tardiness in getting--and I understand it's a
difficult situation for you, Mr. Secretary and the people
around you. And if those offices are closed and they don't get
those programs in a timely manner, we're setting ourselves up
for an explosion in rural America.
Secretary Vilsack. Well----
Senator Tester. With the new farm bill.
Secretary Vilsack. Certainly don't want that, and we're not
going to have that.
Senator Tester. Okay.
Secretary Vilsack. We're not going to have that.
Senator Tester. Okay.
So, when you talk about where the work is, you're talking
about how many contracts we're dealing with as far as per farm?
How many entities?
Secretary Vilsack. How many entities; how many, you know,
contracts they have; how many disaster----
Senator Tester. How about distance of travel?
Secretary Vilsack. That is, obviously, you all have
designated a 20-mile issue here. Frankly, there are, as I said,
30 offices that have no full-time employees. There's no one
there, okay. There are 111 offices that have one employee. And
there are some offices that have one employee that are within
30 miles of another office.
Senator Tester. I got it.
I think the big issue here is that we have a new farm bill.
In Montana, we've got some pretty vast distances. I mean, my
brother-in-law travels 70 miles one way to get to the FSA
office, okay. And I'm not saying that one will be closed down.
It probably wouldn't be. But there are other places that are
far more rural than that. And I would just say be very, very,
very careful because these agencies are very helpful and I
would love to be able to fill out my maps and do everything at
home on my kitchen table but we're not even close to that yet.
I mean, you might be, but the farmer isn't. We're not there. I
mean, we've got this up but we don't have the stuff. And so, be
careful when we start talking about closing. Make sure there is
the support there to take care of these folks because direct
payments are gone, this is a new system, and it may be a new
system that we deal with our agents with and not the FSA
office. I don't know about that because it's a new system. I
don't know how it's going to be done. So I would just ask you
be very careful when you start talking about closing offices
because these are the folks that actually determine whether
they like you or not. Honestly.
Secretary Vilsack. Well, the goal here is to make sure that
we serve folks in a proper and effective way and that we
modernize a system that honestly, Senator, requires
modernization but to do it in a way that appreciates the
concerns that you've raised.
Senator Tester. Yes. Okay, good.
And I would just, because my time has run out, I would just
say that the modernizing the system language has been around
for 25 years and it hasn't been done yet.
Secretary Vilsack. Well, it's happening, Senator.
Senator Tester. Okay.
Senator Pryor. Thank you.
I'll now go to the second round. We have another Senator or
two that's going to be coming in in a moment but I'll go ahead
and jump in. Let me follow-up on one of Senator Tester's
questions there about the, sort of, the realignment of the FSA
offices. Has your Department given consideration to just
delaying this for a year while the new farm bill comes into
effect or do you think you can do it right now?
Secretary Vilsack. Senator, I don't think the new farm bill
is going to prevent us from doing what needs to be done given
the context of a reduced workforce and ensuring better service.
This is about better service. It's not about saving money. It's
not about consolidation for the sake of consolidation. This is
about bettering the service to producers.
And the reality is that we can do more for farmers and
ranchers who are challenged. This is a challenging environment
for folks. And I will tell you, it's a real challenging
environment for folks in the middle. The big guys are doing
okay. The small guys are coming up. But what's happening is an
erosion of the middle. And for me, what we can do is help those
folks stay in business. Now the only way to do that is to
provide them information, access to new programs, and the
ability to connect them with new opportunities. That requires a
different cross-trained personnel. You can't do that if you
only got one person in an office.
So you really have to look at how you would realign this.
This is absolutely not going to compromise our ability to get
the farm bill done. We understand that that is a principal,
primary responsibility which is why we're focused on it, which
is why we put in place these implementation teams, why we have
prioritized the rulemaking process, because we know what folks
out in the countryside want us to do and we're doing it.
Senator Pryor. Also, I think one point that he made is
true, and I know you'll consider this as you go through it. It
may be that some of the most rural areas need that FSA office
the most because they don't have the technology on the farm to
otherwise connect. So we've talked about that before and I know
you'll look at that as you go.
MIDAS PROGRAM
Let me also ask about the MIDAS program and the MIDAS
system. Do you have to--MIDAS has been kind of a long time
coming and lots of money in it, you know--anyway, we all know
the history there. But, do you have to make adjustments to it
based on the new farm bill or is it pretty malleable?
Secretary Vilsack. The new farm bill doesn't really impact
the design and the concept of MIDAS. The concept of MIDAS is,
first and foremost, the ability to access information about
your farm holdings regardless of what county you're sitting in
at the time. That's not farm bill related in any way, shape or
form.
The second piece of it is, whatever programs FSA offer,
whatever programs FSA is providing, that you have the capacity
if you have adequate broadband, and so forth, you have the
capacity to access that information from a distant location not
even going into a Farm Service Agency office if you don't have
to. Your convenience; your choice. That's not farm bill
dependent either. So this is about creating an infrastructure
that provides better service regardless of what the farm bill
is and regardless how many changes we have to make in future
farm bills.
AGRICULTURAL RESEARCH
Senator Pryor. All right. Let me also say, I'm very pleased
to see the funding increase for ag research. So, again, thank
you for that. And I know that there's, you know, the capacity
and competitive, it seems like there's an emphasis on
competitive research here. And, could you just talk to the
subcommittee about that and, you know, how you all made those
decisions?
Secretary Vilsack. Well, I think there are three aspects of
research. One is a modernized Agricultural Research Service
(ARS) system which is our internal research efforts. We could
talk about that. Second, is the National Institute of Food and
Agriculture (NIFA), and that really is designed for our
external relationships in which we are trying to leverage
scarce resources. We're trying to stretch scarce resources.
We're trying to create partnerships. But that is a system that
we control within USDA.
The farm bill creates the new foundation which is really
going to be private sector driven; we provide resources but we
don't provide much direction. And what we're proposing with the
institutes, the innovation institutes is filling the gap, where
we would partner with the private sector, but the private
sector would help drive this specific research project. We
would provide funding, we would provide direct assistance but
the private sector would basically make decisions about where
best to focus on pollinators. Should it be on the vector;
should it be on crop diversity; should it be on fort; what
should it be? The private sector would determine that.
So if we had that suite of opportunities, we would have, I
think, all our bases adequately covered and we would have more
resources going into and we would be more effectively
leveraging those resources.
Senator Pryor. Thank you.
Senator Blunt.
INNOVATION INSTITUTES
Senator Blunt. Mr. Secretary, do you see those as specific
locations or are those virtual locations in these new research
development areas that are public and private or how do you
envision that?
Secretary Vilsack. Well, I think, Senator, it's probably a
combination. I think there will probably be some places where
these institutes may have a staff person or so but, honestly,
we are really focused on virtual centers these days in an
effort to try to, again, leverage our resources as effectively
as we can and our technology as effectively as we can. This is
really more about identifying an area of need, pollinators and
microbial resistance issues. And then, saying to the private
sector, within that topic, what do you think the priority
research should be; here's money to do it; let's work together.
As opposed to what NIFA does; which is, NIFA says, we are
focused on pollinators and we're focused specifically on
vectors and we want you to look at that specific aspect of it
and we want to see what you can come up with in terms of
leveraging our resources on that particular, very specific,
topic. So it's a combination of things we're trying to put
together so that we've got all our bases covered.
Senator Blunt. And for those, like the pollinator research,
would you expect people to compete to be the lead agency or the
lead land-grant university, or whatever, in that----
Secretary Vilsack. That could be a way in which it's done
or the private sector could come in and say, look, this is
something that we are specifically interested in. A seed
company that understands the challenge that we face with
pollinators right now, they could come in and say, ``You know
what? We would like to companion partner with you, USDA, on a
joint relationship.'' We might ask University X to participate
with us; we might have our own internal research folks work on
this. It's really about creating as much flexibility and as
much coverage as we possibly can in agricultural research
because it has been underfunded and underappreciated for far
too long. And the President's Council of Advisors on Science
and Technology (PCAST) system basically suggested six of these
institutes and we're proposing three in this budget.
POULTRY SLAUGHTER MODERNIZATION
Senator Blunt. Right. And research, as you well know, is
one of the specific things mentioned when the Department was
created so that you wouldn't have to have research done all
over the country in all States and as part of the 1862 concept
of what this Department would do. Senator Pryor, I'm pleased to
see the research budget increase. I'm concerned on the food
safety inspector budget. That it decreases, if I read these
numbers right. And I suspect a lot of that relates to whether
or not the new inspection regime on poultry happens during this
budget year or not. And so, I'd like you to talk about that a
little bit.
Secretary Vilsack. Well, that's correct. But, I think it's
important to put this budget in a larger context before I
answer your question.
Fifty percent of this budget is spent on four issues; four
areas. It's spent on WIC, it's spent on fire suppression, it's
spent on food safety and it's spent on rental assistance. Fifty
percent of our budget. So when sequester is put into place or
cuts are proposed or reductions have to take place, the other
50 percent of our budget has to bear not only their share of
the cuts but this other 50 percent share because we've seen
increases.
So we have to look for ways in which we can continue to do
the job on food safety but allow, at least for some time, this
other 50 percent to get a little bit of relief as we try to
deal with scarce resources. So, one way to do that is by
improving and modernizing the way in which we inspect poultry
which we have not done for 60 years. And we believe, by doing
this, we can not only save money, but I think more importantly,
we can save lives. We believe that there are thousands of
people who are getting sick that won't get sick under this new
system because it takes our inspectors and gives them
additional responsibilities to look at places where, we know,
based on science, pathogens attached to poultry, as opposed to
what they're currently doing which is focusing more on cosmetic
issues. That's something, obviously, the company itself should
be concerned about because it involves not the safety but the
marketability of a product.
So our theory is that we would restructure the way in which
poultry is inspected, save money, and also save lives.
Senator Blunt. And where are we there? Do we have a
proposed rule out on this?
Secretary Vilsack. We have a rule that's currently in the
process of going through the regulatory process. And, we have
obviously a lot of concerns expressed about this but I think a
lot of folks who are expressing concerns may not fully
appreciate and understand what we're actually focusing on
trying to do here.
Senator Blunt. And what would be a reasonable timetable on
implementing the final rule?
Secretary Vilsack. Well, our hope is that we get this done
in 2014 so that we essentially can factor it into the budget
that you all are working on.
WIC FUNDING INCREASE
Senator Blunt. I'll come back in a minute when we have a
little more time, assuming we get back to another set of
questions. I think you mentioned WIC as part of that 50
percent. I believe, I don't have those numbers in front of me
at this moment, but I believe I saw a WIC increase of $200
million. Am I close to the right number?
Secretary Vilsack. That's for the contingency, I believe.
It's $200 or $150----
Senator Blunt. When you're increasing one category by $200
million it's pretty hard to do the other things that you would
hope to do.
RENTAL ASSISTANCE PROGRAM
Secretary Vilsack. It is but, of course, there is need and
there is a need for--the problem with some of these programs is
that you don't quite know precisely how many people you're
going to serve from year to year so you have to have some
wiggle room within that budget. The same thing is true with the
rental assistance program which is why we're asking for a
reform of that system to give us greater predictability and
certainty about exactly what we actually have to spend in that
category to provide 285,000 families with assistance.
Senator Blunt. Well, I do think the direction you're headed
in in the rental assistance is a good one and I look forward to
working with you on that. And my time is up, Mr. Chairman.
Senator Pryor. We've been joined by Senator Johnson.
Senator Johnson.
ACTIVE PERSONAL MANAGEMENT
Senator Johnson. Welcome, Secretary Vilsack.
The farm bill directed you to develop a framework for
determining whether an individual is actively engaged in a
farming operation and thus their eligibility for farm program
payments. As you know, both the Senate and House bills included
a meaningful hard cap on payments that would allow payments to
the operators and crop share landlords as well as one
additional farm manager. I would urge you to take this approach
which was endorsed with strong bipartisan support in both the
Senate and House. But whatever approach you take in this
rulemaking, can I have your commitment that you will pursue a
structure that maintains an effective payment limit of $125,000
that does not allow farms to manipulate the actively engaged
rules?
Secretary Vilsack. Senator, we will do what the law
requires us to do. I would point out that Congress has given us
limited capacity in this respect based on the definition of
family farm that's included in that discussion of actively
engaged. We will take a look at what latitude we have, in terms
of that definition, and we will do it in a way that maintains
the integrity of the system that allows us to be able to
explain it to ordinary folks as to why it's important to have a
safety net for farmers and we will do it in a way that I think
is consistent with the intent of Congress. But I will tell you,
it is a fairly narrow avenue that you all have created for us
to work in.
Senator Johnson. Do you have a specific timeframe for
developing a rule defining actively engaged?
Secretary Vilsack. Our goal is to have a proposal by the
end of calendar year 2014.
COUNTRY OF ORIGIN LABELING PROGRAM
Senator Johnson. I appreciate the work you've done to
restructure our Country of Origin Labeling Program in a way
that accurately conveys information to consumers while meeting
our international trade commitments. I also appreciated your
commitment to defending the program before the World Trade
Organization (WTO) during the ongoing review. What do you
anticipate the timeframe will be for the WTO process moving
forward?
Secretary Vilsack. Senator, I think the next milestone in
this process is probably sometime in June and July of this
year; receiving some indication from the WTO as to whether or
not we're right that we are in compliance with the WTO ruling
or whether Canada and Mexico's concerns have not been fully
addressed. We believe we have addressed them. We believe we've
done it consistent with the congressional directive as well as
the WTO directive.
SUN GRANT INITIATIVE
Senator Johnson. With respect to the Sun Grant Initiative
I'm disappointed that the budget request, once again, proposes
to eliminate funding particularly since this important program
was recently reauthorized in the farm bill as a competitive
program. Noting that the manager's statement of the farm bill
directs the Department to use the current framework of the Sun
Grant Centers in order to maintain the current leadership and
management of the program, what is your intention for the
future of the Sun Grant Initiative?
Secretary Vilsack. Senator, I think that we are attempting
to address the work that's done by the Sun Grants which is
important work in both the bio-based product manufacturing
innovation institute that is proposed as well as the increases
and the resources that we've asked for under our Competitive
Grant Program in NIFA. We understand the importance of this. We
just think it ought to be rolled into the existing overall
structure of research as opposed to being sort of in its own
little area. Obviously, we will do what Congress instructs us
to do on this but that's the rationale behind it.
LIVESTOCK DISASTER PROGRAMS
Senator Johnson. I sincerely appreciate the steps you've
taken to get the livestock disaster programs out to producers
as quickly as possible, particularly with the April 15 signup
date. Obviously, there is a unique need for these programs in
South Dakota as a result of the terrible Atlas blizzard last
fall.
What is the Department doing to inform producers about the
availability of the program as well as about the information
that will be required to be eligible for payments?
Secretary Vilsack. At this point, we are making sure that
our folks in offices around the country are well acquainted
with what we're proposing and what we're doing so that they
will be in a position to begin that education process very,
very quickly. Our expectation is that folks who have been doing
the disaster programs in the past aren't going to see any
significant change in the way in which the programs are done.
So we don't know that it's necessarily going to be a lot of
education on the producer's side. We do know that we want them
to be in a position to be able to file applications by April 15
and we are on track to get that done.
Senator Johnson. My time has expired.
LIMITED-IRRIGATION CROP INSURANCE PRODUCT PROGRAM
Senator Moran. Mr. Chairman, thank you very much.
Mr. Secretary, unfortunately drought continues in Kansas
and one of the innovative ways of promoting water conservation
and yet allowing farmers a shot at success is the limited-
irrigation crop insurance product program. It's a pilot
program. We've never gotten it beyond the pilot program. Can
you help us accomplish a broader application of this concept?
Secretary Vilsack. Senator, I would love to be able to do
that. But I think we have to do it in a way that is actuarially
sound. And the reality is that we just, in many places in
Kansas and other parts of the country, don't feel that we have
adequate data to be able to do that. So, what we have done and
attempt to do is on a case-by-case, individual-by-individual
basis, come up with some kind of agreement that is akin to crop
insurance and that is being done in a number of counties in
your State. I think until we amass enough information and have
enough data, you know, and which we're attempting to do, I
think it would be a bit premature for us to actually institute
a policy because we have to make sure that it's going to work.
You know, I think we have, you know, we are working on some
strategies but our team has told me that they just simply are
not comfortable with the data yet. So if there's a way in which
we can accumulate more information we'd be happy to work with
you and your----
Senator Moran. Tell me a little bit more about what you are
indicating--about a landowner-by-landowner or farmer-by-farmer
opportunity?
Secretary Vilsack. It's an agreement. As I understand it,
that it's a one-on basically. It's not a policy. It's not a
program. It's working specifically with an individual.
Senator Moran. Managed by the Risk Management Agency (RMA)?
Secretary Vilsack. I believe so, yes.
Senator Moran. Okay.
UNIVERSAL SERVICE FUND REFORM
Mr. Secretary, we've had a conversation about this
previously, maybe a year ago in this similar setting. You know
that the Federal Communications Commission (FCC) issued an
order related to the Universal Service Fund, so-called
Universal Service Fund Reform. That happened in October 2011.
There's been some modifications in my view fortunately by the
FCC to ameliorate some of the problems that we've highlighted
with that order. And one of the concerns I've raised with you,
but with the FCC, is the relationship between that order and
the ability for telephone companies, rural electric--I'm sorry,
rural telephone companies to be able to repay the loans with
the Rural Utility Service.
Can you bring me up to date on the status of that problem
or that circumstance?
Secretary Vilsack. We expressed the same concerns and I
think Chairman Wheeler is sympathetic to this. As I understand
it, they've essentially capped the impact of some of the
changes so it makes it a little bit easier for these small
telecoms, telcos, to be able to make their payments. We have
had very few incidences within USDA's portfolio of the
inability to make payments. We'll obviously continue to work
with folks but at this point in time we're at least
appreciative of the steps that have been taken by the FCC
recently. We also appreciate the fact that they've gone through
a second round of the Connect USA Program, Connect America
Program, with a little bit more flexibility which I think is a
good thing as well.
So we're working with them, we've communicated our
concerns, and I think there's a bit more flexibility than we've
seen in the past, and I think that's positive for rural telcos.
Senator Moran. I do, too.
And I think that you were instrumental in causing that
flexibility to occur and I appreciate that. I just encourage
you to continue to work with us and others to make certain that
the FCC gets an order that is not--the challenges that we face
is that these rural telephone companies were doing what, in a
sense, they were incentivized to do by the Federal Government.
Asked to do, in fact, to expand broadband both in the
President's plan and in the Rural Utility Service's program
that's been around for a long time. And the FCC has an order
that then it creates, certainly, a different financial
circumstance than what was expected when these companies began
the path of expanding broadband to rural America.
FSA OFFICE MODERNIZATION
Let me associate myself with the gentleman from Montana in
his raising concerns about offices, FSA. I've been through this
as a member of Congress back in my House days of colocation,
reducing the number of FSA offices, reducing the number of NRCS
offices, and there are tremendous challenges still with this
concept that farmers have the technology necessary to do this
at home or at their office. And I just would encourage you, and
I think you had this conversation with Senator Blunt, that
information would be provided to us as you develop a plan so
that we can have input in the process. I assume no Secretary
really wants us to have input in the process. But if we could,
I think it will avoid us having the arguments and the debate at
the end. If we can be a partner in this process it would be
useful.
Secretary Vilsack. Senator, more than happy to have that.
But, just again, the context of this is--remember the 50
percent of the budget? And then the other 50 percent? And then,
so when you do sequester and when you do some of the things you
all have done, something's got to give.
Now, in this particular case, this is not about saving
money. It's really about modernizing the system. And I think
that's an important point that I will be emphasizing just as
you emphasize the challenges of this. This system has got to be
modernized.
Senator Moran. I detected your emphasis and I'm not a
supporter of across-the-board cuts. I think it is the reason I
would ask you to include us in this conversation is because we
have a role here to prioritize how money is spent. And I'd like
the opportunity to help accomplish that.
Thank you, Mr. Chairman.
Senator Pryor. Thank you.
And I assume, as part of modernizing that ultimately we do
save money and create more efficiency.
Senator Tester.
PUBLIC CULTIVARS
Senator Tester. Thank you.
Mr. Secretary, I very much appreciate--you talk about the
erosion of the middle. I think you are spot-on. And I think
what you do to encourage the small producers of local food
systems is very, very important.
And I, too, want to talk about what Senator Moran talked
about and that is being an advocate for a way of life that,
quite frankly, in my 57 years on this earth, I have seen
evaporate. The way of life we've had in agriculture, when I
graduated from high school, is leaving exponentially fast. And
I say that not as an outside observer, I say that as someone on
the inside looking out. And it's not your fault; it is a
combination of things that have happened.
One of the things out there that I am very concerned about
is the access to public seed varieties. We visited about this
before and I do know that from a production of agriculture
standpoint it is always great to think about seeds that will
grow without any water or without any nutrients and with
difficult situations with the climate change we have now. And
that may be all well and good but the fact is we're seeing
public cultivars. Those cultivars we don't have to pay for.
Those cultivars that I can buy from you if you're a farmer and
not have to pay a technology agreement for, are disappearing
and disappearing quite rapidly. I've tried to advocate for some
of the money set forth in food research and, by the way, we
have been very remiss from public dollars going into research
for seeds. It has been criminal, as a matter of fact. And we've
seen the private sector do it and we see the private sector
getting rich off of this.
So could you give me any idea on what can happen as far
as--or what needs to happen? What you can do, what we need to
do to be able to have more public cultivars out there that
actually meet the needs of different regions of this country?
Because I think it's very important.
Secretary Vilsack. Well, Senator, I think it's important
for us to understand that we are focused on this as well. We
have essentially over 100 projects in place today; 150 of our
scientists are working on this in all 50 States to ensure that
we continue to have the diversity in agriculture that's
important.
Last year, I think, 700 germplasm samples were distributed
from the 20 seed banks that we have. So there is work being
done in this space, and there is a sensitivity to the need for
all types of breeding systems to be supported. And I think the
fact that you raised it last year, you're raising it this year,
allows me to go back and make sure that our team is sensitive
to this.
If I might just--this issue of the middle is just extremely
important. You mentioned it and at some point in time I'd like
just 1 minute of the committee's time to talk about it. If this
is the right time, I'll do it. If not, I'll wait.
RURAL DEVELOPMENT
Senator Tester. It's not a prime time for me because I've
got questions I've got to ask. But I think the chairman will
let you have at least a minute on this because I think it's a
huge--I would just say it and I'm not going to--you understand
it and you understand it well. I think what I am seeing as a
farmer and I am still actively engaged in Agriculture is I'm
not seeing a lot of options out there as far as public. I can
go buy seed like crazy but as far as public cultivars, there
aren't many around. I'll just tell you that from my
perspective. So that be that.
I want to talk a little bit about that middle a little bit
from my perspective. And it revolves a lot around rural
development. And I told you that in my 50 years of paying
attention on this earth I have watched farmers get bigger and
smaller and rural communities dry up. That's not stopping. It
happens every time I go home and I drive into my little town
that used to have a thousand people in it that now have 600; a
school that used to have 165 kids in high school now has less
than 60. We're seeing rural America continue to dry up.
Can you tell me what's in this budget that you're proud of,
you're particularly proud of that is going to help rural
development; it's going to help bring people back into frontier
and rural America in a way that's positive. And if there are
multiple things, list them very quickly. And tell me what you
would like to see us do to really reinvigorate rural America,
because, quite frankly, we've got a new farm bill right now, I
voted for it, I support it, but it isn't going to do it.
Hopefully there are things out there within your budget that
will do it.
Secretary Vilsack. Well, Senator, I think that we've begun
a process. We now have a strategy which I don't think we had
before and the strategy is very clear: Production agriculture
and exports, local and regional food systems creating new
market opportunities, the bio-based economy, the ability to
take what we grow and what we raise and every aspect of it and
convert it into not just fuel and energy as we have but
chemicals, polymers, plastics, I think that is the future, and
a creative way of using our conservation resources not only to
improve our land and water but also to meet regulatory
responsibilities of regulated industries that can be met as
easily with conservation on the farm as it can be with creating
great infrastructure.
All of those aspects are in our budget, supported in our
budget, and with the assistance of this committee and the
Senate and the House, we will continue to do work in these four
areas. And I honestly believe that will be a difference.
The problem has been that production agriculture is
extraordinarily efficient and as it has become efficient fewer
farmers were needed. What wasn't done was to have a companion
natural resource economy to compliment production agriculture.
We're putting that in place now. It will not be done overnight
but it is where I think we're headed in the right direction.
AGRICULTURAL RESEARCH SERVICE VACANCIES
Senator Tester. I appreciate that.
Just a passing note that I also want to get on the record,
we have an ARS facility in Sidney, Montana. They have three
openings there that are very, very important when it comes to
research. Very important. Not just seed crops but pests, all
sorts of good stuff they do. I would hope that, since we're out
of sequestration now, that those vacancies might be able to be
filled.
GIPSA RULE
The last thing I would say is that I was going to get into
the Grain Inspection, Packers and Stockyards Administration
(GIPSA) rule but the fact is that, you know, the challenges
there. If we're going to have a free market system, a
capitalistic system in agriculture, GIPSA is pretty damn
important from my perspective and I appreciate anything you can
do to make sure that happens.
Secretary Vilsack. We tried, Senator.
Senator Tester. I know you did.
Thank you.
Senator Pryor. Go ahead and speak your piece on the middle.
Secretary Vilsack. I actually did in 30 seconds.
Senator Pryor. Okay. Just want to give you a chance to do
that.
WIC FOOD COSTS
Let me also clarify something. I think that the WIC
increase is $107-plus million, say $108 million, am I reading
that right? There is a number, there's a $322 million that
where you're doing a new WIC package, there's increase but you
have other offsets and changes in the program. But I do have a
question about that because I think one of the challenges there
is food prices go up and down and I think the USDA is expecting
a 3.5 percent increase in food prices this year. And so, you
know, they can rise sharply in any given year. So I guess the
question would be--sounds like you're building in a contingency
but you feel like you have sufficient contingency there to
cover any increase in food cost this year?
Secretary Vilsack. We do, based upon our best estimate as
to what the package would likely be. There's been a lot of
conversation about food inflation recently. Unfortunately,
folks are comparing it to the previous year where inflation was
pretty low. But even this year, as I think Dr. Glauber will
attest, it's within historic ranges. So despite our challenges,
I think we're still going to see, you know, not an
extraordinarily high rate of inflation. We think we're pretty
confidant with our WIC numbers.
COUNTRY OF ORIGIN LABELING PROGRAM
Senator Pryor. Senator Blunt, you have a question.
Senator Blunt. Yes, I do.
Secretary, on the Country of Origin Labeling Program where
are we in terms of the WTO action on that? And do we have a
planned response if that action is an action against us?
Secretary Vilsack. Senator, I think we will get a read, a
basic read, in June of what the WTO is likely to do and in July
perhaps a more formal response. And I think it's important for
us to allow that system to play out. That's why we were
concerned about trying to change what we were doing in the
middle of this process. I think the answer to your question,
what do we do if we lose? I think a lot of it depends on
precisely what the WTO says and if they don't agree that we've
been in compliance, why we're not in compliance. Because, when
they ruled the last time it was you can label. Our view was,
from what they said, you weren't specific enough. Well, now
we're quite specific. So we will see what they determine.
Senator Blunt. And was, on the not so quite specific
options, was one of the options North America label or not?
Secretary Vilsack. There was a lot of that type of
conversation, but I think what we took from the WTO ruling was
that you had to be quite specific in terms of the various steps
in the process: where was the animal raised; where was the
animal processed; where was the animal slaughtered; et cetera.
And I think we have done that. We will see what the WTO says
and once we see what they say, we will respond and react
accordingly.
Senator Blunt. And I assume the packers are having to
adjust their processing lines to meet those various pedigrees
of animal?
Secretary Vilsack. They do. And obviously they have raised
concerns about that.
REGULATORY PROCESS
Senator Blunt. You and I were in Brazil this summer for a
couple of days talking to them about their regulatory
environment on science-based changes, on biotech changes. Like
what we saw there was they have come where they have what
neither of us would have considered a back log of any kind.
Whether that's accurate or not, what are your thoughts about
what we can do to get our process to where it meets every
requirement we need to meet but isn't needlessly slowing down
this process of meeting world food needs and other things that
we're involved in?
Secretary Vilsack. Senator, first of all, our Brazilian
friends, they had a different starting point for when they
began their regulatory process. And if you actually start it
where we start our regulatory process, their timelines were
very consistent with our current timelines. We have reformed
the system. We have reduced the amount of time it takes for the
regulatory decisions to take place. I think we've cut out
somewhere in the neighborhood of 360 days in that system. We
still have a little more work to do. We have also begun the
process of reducing the backlog that I inherited when I became
Secretary. I'd say we've probably cut it nearly in half and we
are projected to continue that reduction to the point where we
will be on time.
We've made certain commitments about activities in
connection with this new system and we've lived up to those
commitments at this point in time. So I'm reasonably confident
that we now have a very good streamlined system that does the
due diligence that is required but doesn't have a
disproportionate delay just simply because the regulatory
system is clogged up.
Senator Blunt. I'm going to look at that chart again, if I
can get my hands on it, and see. I do think we're a little
slower but I'm prepared to take your word for that and look and
see what that starting point is.
REGULATORY SYSTEMS
On that similar topic, Senator Pryor and I hosted a
discussion session with Bill Gates a few days, about 10 days
ago with this subcommittee to talk about what they're doing
with ag research and application around the world, and I guess
my question is what are we doing if anything to help other
countries meet a standard that's acceptable and at the same
time not needlessly slow in meeting the needs that they have.
Secretary Vilsack. Well, I would say a couple things. First
of all, we have worked with Brazil in an effort to have the two
largest producers of biotechnology crops to speak on the same
page at the same time with the same message to the rest of the
world. And we are in the process now of taking a look at how we
might be able to enlarge that in terms of membership both in
Latin America and South America so that we, at least, have
consistency.
We are sending the same level of messages to our friends in
China about the importance of them understanding that it's in
their long-term best interest to have a regulatory system
that's more synchronized with ours. We have a pilot project
that we're attempting to work with them on so that they can
learn that synchronization is not going to put them in a
disadvantageous position. So we are working with China to try
to embrace this.
Obviously, we have some challenges with our European Union
(EU) friends on this topic and I think that's going to be part
of the overall conversations as we look at trade agreements and
free trade agreements. We're not going to have a free trade
agreement unless there is some better understanding upon the
part of the EU of acceptance and market access to biotechnology
crops. So it's a combination of things.
And then I'd say the last thing we are working with
producers in Africa, in particular, to encourage them to
understand the opportunities that new technology has created in
terms of increased productivity. It's rolled up into our
efforts of Feed the Future and work with the U.S. Agency for
International Development (USAID) on embracing these new
technologies in developing countries. So there's a multiple
process, multiple-step process, in place.
Senator Blunt. Thank you, Mr. Secretary.
And thank you, Mr. Chairman.
Senator Pryor. Thank you.
And our vote has started, so let me say that I'd like to
thank you and your team for being here today and your
preparation and all your answers. We've covered a lot of ground
and what we'll do is, because we have to run to this vote,
we'll go ahead and leave the record open.
ADDITIONAL COMMITTEE QUESTIONS
We'd ask our members of the subcommittee who are not able
to either ask questions today or weren't able to complete their
questions today, we'd ask them to get all of their questions in
by Wednesday, April 2. And then, we would appreciate the
Department, if you could get us answers back within 4 weeks
that would be great with us. And then, of course we want you to
answer our questions first, right? Is that right?
Yes, okay.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Mark L. Pryor
agriculture buildings and facilities
Question. Secretary Vilsack, the Department is proposing the
decentralization of the General Services Administration (GSA) rental
payments and Department of Homeland Security (DHS) security payments. I
understand that the increases to USDA Agency budgets are the equivalent
shares of the costs based upon current space occupancy across the
United States and that the central account has been reduced
accordingly.
Can you please tell me the rationale behind the shifting of funds
from the central account into the each Agency account?
Answer. The U.S. Department of Agriculture (USDA) agencies occupy
centrally funded space for which they have no direct accountability or
incentive to use in an efficient and effective manner. The centralized
funding mechanism for GSA rent and DHS Security does not link these
costs directly to the agencies' programs and delivery activities.
Having agencies pay for the full cost of their GSA-leased space will
encourage them to make good business decisions to further consolidation
efforts, reduce space through teleworking and hoteling strategies and
affect other economies of scale such as open space. Currently, the
central account still pays the majority of their space costs and
results in a lack of ownership by agencies for their occupied space.
The shift of the rent and security funding will encourage agencies to
make the best use of scarce funds.
Question. Will this shift result in savings for the Department? If
so, will the Department reduce their appropriations request
accordingly?
Answer. In the short run this shift will not result in savings for
the Department. Agencies will have to assume the full costs for the GSA
rental payment and the DHS Security payments for their occupied space,
along with any rental or security cost overruns when they begin direct
payment in fiscal year 2015. Also, GSA is now directing agencies into
green space leases that often cost more than traditional office space.
It will take time for the economies of scale to be effective.
Eventually by having agencies totally responsible for their space usage
and security payments there will be cost avoidance if not savings to
the USDA agencies as a result of this initiative as they further their
consolidation efforts, reduce total space needs through teleworking and
hoteling strategies, effect other economies of scale such as open
office space, or move to non-GSA space.
agricultural research service
Redirection of Funds
Question. Mr. Secretary, I do understand some research projects
should be discontinued for higher priority research and I am happy to
see that the funding and staff years will remain at the Rice Research
Facility in Stuttgart, Arkansas. However, I am not sure why the
research funds for the Development and Characterization of Genetic
Resources for Agronomic and Quality Traits Using Genomic Tools is being
redirected to Livestock Genetic Improvements and Translational Breeding
for Enhanced Food Production.
Can you please explain the rationale for redirecting the funds to
this new initiative?
Answer. Thank you for the opportunity to highlight USDA's continued
support for the U.S. rice industry, U.S. rice research, and rice
breeding. Arkansas is the largest rice producing State and the Dale
Bumpers National Rice Research Center (DBNRRC), Stuttgart, Arkansas,
and its scientists are key to that continued success.
The fiscal year 2015 President's budget initiative for ``Advanced
Crop and Livestock Genetic Improvements and Translational Breeding for
Enhanced Food Production'', is a cross-cutting initiative that includes
research locations like the Dale Bumpers National Rice Research Center
that are 100-percent crop research, and locations that are 100-percent
animal research.
To be clear, the focus of the research at DBNRRC remains on rice
and the rice industry's needs. As you mentioned, the Stuttgart team is
currently focused on the Development and Characterization of Genetic
Resources for Agronomic and Quality Traits Using Genomic Tools.
Under the President's budget initiative for fiscal year 2015, the
Stuttgart team will conduct similar work but gain access to key genetic
resources, knowledge and tools for classical and genomics enabled rice
breeding. This initiative is an example of USDA deploying its resources
more effectively.
national institute of food and agriculture
Innovation Institutes
Question. Mr. Secretary, the report from PCAST recommended the
creation of six large, multidisciplinary innovation institutes focused
on emerging challenges to agriculture, supported by public-private
partnerships. In 2015, the National Institute of Food and Agriculture
(NIFA) is requesting $75 million for three new institutes which include
pollination and pollinator health, manufacturing innovation and anti-
microbial resistance.
Why were these three institutes chosen?
Answer. The research foci of these three innovation institutes are
on important agricultural problems in the public domain, but where
private sector participation can be essential in advancing the research
goals and also deploying the research outcomes. Their selection was the
ultimate product of stakeholder listening sessions conducted by the
Department, administration priorities, and the feedback brought to us
by members of Congress and a wide cross section of citizens with
legitimate concerns about pollinator protection, anti-microbial
resistance, and the state of the rural economy.
Question. How did USDA determine the scope of the three proposed
Innovation Institutes?
Answer. USDA has based actions to date regarding the innovation
institutes on five organizing principles:
--1. Public-private partnerships are integral to solving important
agricultural issues.
--2. Competitive processes will be used to select the participants in
the Institutes.
--3. Institutes are to address the challenges to agriculture:
--a. that the President's Council of Advisors on Science and
Technology (PCAST) identified,
--b. in a manner consistent with the intent of Congress, and
--c. informed by the President's fiscal year 2015 budget request.
--4. Institutes will take advantage of university, private sector,
and ARS infrastructure.
--5. Funds should go to research, not to bricks and mortar. The
expectation is that multiple partners in diverse universities
and organizations will mean a distributed virtual organization.
The PCAST report suggested several models that fit into these five
guiding principles. They include bioenergy institutes established by
the Department of Energy and British Petroleum, as well as the energy
hubs and energy frontier research centers established by that same
Department. USDA used these models, listened to stakeholder feedback,
and determined the scope for the three proposed Innovation Institutes
that fit into our established guiding principles.
Question. What criteria will the Department use when selecting the
recipients of these grants?
Answer. The National Institute of Food and Agriculture will conduct
a competitive process to select the recipients of these grants.
Selection criteria will include the grant recipient's ability to form
and maintain a high quality public-private scientific consortium; the
scientific merit of the proposal; the qualifications of project
personnel, the adequacy of facilities and project management; and the
relevance of the project, which includes the project's potential for a
dramatic and demonstrable impact on the defined problem to be addressed
by the particular innovation institute.
Question. Will the recipient be expected to match or meet a certain
funding level?
Answer. There are no preset funding levels at this time for
recipients. There is a desire for significant non-Federal investment in
the innovation institutes, as well as public and private intellectual
capital, which is shared by both the PCAST report and the Department.
This desire led the National Institute of Food and Agriculture to
propose forming the innovation institutes under the authority of 7
U.S.C. section 450a. It was determined that this was the best of many
existing authorities under consideration for this purpose because it
authorizes agreements, including the receipt of funds, from any State,
other political subdivision, organization or individual for the purpose
of conducting research projects.
foundation for food and agricultural research
Question. Will the new Foundation for Food and Agricultural
Research receive funding from existing National Institute of Food and
Agriculture programs?
Answer. Currently we do not believe that the Foundation for Food
and Agricultural Research will receive any funding from existing
National Institute of Food and Agriculture programs in fiscal year 2014
or fiscal year 2015.
national animal health laboratory network
Question. New funding is authorized in the farm bill for the
National Animal Health Laboratory Network to enhance the capability of
the Secretary to respond to emerging and existing threats to animal
health and to coordinate enhancement of national veterinary diagnostic
laboratory capabilities using existing Federal, State, and university
facilities.
How would USDA ensure that this new funding would be leveraged to
enhance current national veterinary diagnostic laboratory capabilities
to detect, respond to and recovery from emerging and existing threats
to animal health across the United States of America?
Answer. If funding were provided for the National Animal Health
Laboratory Network (NAHLN) as authorized in the farm bill, the
Department would prioritize activities based on the NAHLN strategic
plan, carry out emerging disease detection and response initiatives,
and increase the capacity and capability of the network. Specifically,
USDA would increase support for laboratory infrastructure; dedicate
funding to support the identification of emerging diseases; enhance
support for animal health community preparedness needs, such as
business continuity plans and validating diagnostic assays to fill
identified gaps; and continue to support laboratories' capabilities
through expanded outbreak scenario exercises. The existing network of
laboratories across the country, established in 2002--based on long-
standing cooperation, communication, accountability, and adherence to
standards--would be leveraged through participation in emergency
response exercises and in development and validation of diagnostic
methods and techniques. The function of and commitment to the network
has become integral to many of NAHLN's approximately 60 laboratories.
The current diagnostic capabilities, facilities and expertise within
these laboratories will be the basis for moving the network forward and
addressing identified gaps.
agricultural research
Research Investment Balance
Question. Does USDA anticipate reconfiguring the balance between
major crop and specialty crop research? If so, how?
Answer. The President's Council of Advisors on Science and
Technology (PCAST) raised the issue of the balance of the portfolio of
research on agriculture in its report to the President on Agricultural
Preparedness and the Agriculture Research Enterprise issued in December
2012.
The Under Secretary for Research, Education and Economics has
suggested to the National Agricultural Research, Extension, Education,
and Economics Advisory Board that it examine the question of the
current balance of research in the Research, Education and Economics
(REE) portfolio and give her its view of how the balance should be
regarded and set in the future.
No decision has been made on reconfiguring the balance between
major crops and specialty crop research at this time.
national science foundation
Question. The President's 2012 PCAST report included a
recommendation that the National Science Foundation increase its budget
for basic science relevant to agriculture to $250 million per year as
compared to the current $120 million. How has USDA worked with NSF in
this regard to ensure that there is no overlap?
Answer. The President's Council of Advisors on Science and
Technology (PCAST) recommended in its report to the President that the
National Science Foundation (NSF) should receive an increase to $250
million in its funding for basic science relevant to agriculture, which
would have been an increase of $130 million. USDA is not aware that NSF
has received such an amount for agricultural sciences in recent
appropriations.
Across the Department, there is a very cooperative relationship
with NSF. The joint objective is to maximize the benefits of
agricultural research and minimize duplication of effort. REE agencies,
in particular the Agricultural Research Service (ARS) and the National
Institute for Food and Agriculture (NIFA), consult with NSF about
research priorities on a consistent basis. Specific projects are
coordinated with NSF when appropriate and relevant. Because USDA's REE
agencies have an Action Plan that is posted on our Web site,
researchers across the country that may be seeking to apply for
currently available NSF grants can understand what USDA is doing, and
NSF reviewers can also check on current research projects underway at
USDA. NIFA grants are also a matter of public information and made
available through the Current Research Information System and the
Research, Education, and Economics Information System.
Through the Agriculture and Food Research Initiative, the
Department's flagship extramural funding program, the NIFA conducts
several joint programs with NSF: Ecology and Evolution of Infectious
Diseases, the National Robotics Initiative, and Water Sustainability
and Climate. The Ecology and Evolution of Infectious Diseases program
supports research on the ecological, evolutionary, and socio-ecological
principles and processes that influence the transmission dynamics of
infectious diseases. The goal of the National Robotics Initiative is to
accelerate the development and use of robots in the United States that
work beside, or cooperatively with, people. The goal of the Water
Sustainability and Climate (WSC) solicitation is to understand and
predict the interactions between the water system and climate change,
land use (including agriculture, managed forest and rangeland systems),
the built environment, and ecosystem function and services through
place-based research and integrative models. This programmatic
cooperation speaks to the close working relationship of the two science
agencies that helps to avoid duplicative research.
nifa grants
Question. How many competitive agriculture research grants were
awarded in fiscal year 2014 and fiscal year 2013 compared to fiscal
year 2012?
Answer. USDA awarded 996 non-formula agricultural research and
integrated grants in fiscal year 2012. There were 808 non-formula
agriculture research and integrated grants awarded in fiscal year 2013.
Preliminary data show there were 966 non-formula agricultural research
and integrated grants awarded in fiscal year 2014. The number of grants
decreased in fiscal year 2013 due to funding reductions including
rescissions, sequestration, elimination of mandatory funds, and the
continuing resolution in that fiscal year.
Question. How many research grant applications were received in
fiscal year 2014 and fiscal year 2013 compared to fiscal year 2012?
Answer. USDA received 4,301 research grant applications in fiscal
year 2012 and preliminary data shows we received 5,650 research grant
applications in fiscal year 2013. Preliminary data shows we received
6,191 grant applications in fiscal year 2014.
Question. Has the median award amount for agriculture research
grants decreased since fiscal year 2012?
Answer. Yes, the median award amount for agriculture research
grants from USDA has decreased from $202,483 in fiscal year 2012 to
$192,500 in fiscal year 2013. We will not know if it has decreased or
increased in fiscal year 2014 until all awards are made for the fiscal
year.
farm-vets program
Question. Mr. Secretary, the Department is requesting $2.5 million
to establish the FARM-Vets program to promote competition for basic and
applied research that explores career opportunities and pathways,
therapeutic interventions, resource conservation, and related studies
for the veteran population in the food and agriculture sector. I
understand that the funds will be used for projects that help veterans
develop farming and ranching skills, business plans, and agriculture
systems management.
Please explain how the FARM-Vets program will work?
Answer. The $2.5 million request to fund the Food and Agriculture
Resiliency Program for Military Veterans (FARM-Vets) program is
designed to promote competition for basic and applied research.
Research will explore career opportunities and pathways, therapeutic
interventions, resource conservation, and related studies for the
veteran population in the food and agriculture sector. Understanding
why and how best to engage veterans in the agricultural sector is
congruent with the critical need to identify a new generation of
farmers, livestock producers, and entrepreneurs as an aging workforce
transitions to retirement, especially in rural areas where shortages
are acute. Similarly, there is a limited body of research that points
to the therapeutic value of working the land in terms of psychological
and behavioral health function and benefit.
The Department expects FARM-Vets basic and applied research
projects to inform the establishment and scalability of educational
programming that helps veterans develop farming and ranching skills,
business plans, agriculture systems management skills, knowledge and
access to credit. FARM-Vet research will complement the Beginning
Farmer and Rancher Development Program (BFRDP) which the USDA also
administers. BFRDP is an education, training, technical assistance and
outreach program designed to help U.S. farmers, ranchers, and managers
of non-industrial private forest land--specifically those who have been
farming or ranching for 10 years or less and those who aim to start. As
a result of the 2014 farm bill, at least 5 percent of available BFRDP
funding will be allocated to programming and services for military
veteran farmers and ranchers annually through 2018. Since BFRDP cannot
support research, future FARM-Vets discoveries will inform, improve and
enhance BFRDP programming.
Question. How many veterans will benefit from this new program and
will they receive cash grants?
Answer. The Food and Agriculture Resiliency Program for Military
Veterans (FARM-Vets) program will be administered as a competitive
research grant program in cooperation and coordination with colleges
and universities. The FARM-Vets program will not provide direct cash
grants to veterans. It will fund basic and applied research that will
explore career opportunities and pathways, therapeutic interventions,
resource conservation, and related studies for the veteran population
in the food and agriculture sector. NIFA expects FARM-Vets basic and
applied research projects to inform the establishment and scalability
of educational programming that helps veterans develop farming and
ranching skills, business plans, agriculture systems management,
knowledge and access to credit, and land use issues. Any veterans
participating in FARM-Vets research projects will benefit directly or
indirectly based upon outcomes and findings. Actual numbers of veterans
benefiting will be determined by the number of research studies funded,
subset size participating, and results extrapolated to the full veteran
population. The research conducted would also help ensure an evidence-
based foundation on which program and policy can be built.
animal and plant health inspection service
Question. Mr. Secretary, what is the status of implementation of
the national feral hog initiative?
Answer. The Animal and Plant Health Inspection Service (APHIS) is
implementing a national, cooperative effort to reduce damage caused by
feral or free ranging swine. APHIS is utilizing available funding to:
(1) control feral swine population; (2) test animals for diseases; and
(3) conduct research to identify better methods of managing feral swine
damage. APHIS has established operational programs in all States where
there is a recognized feral swine population. APHIS is leading the
effort, tailoring activities to each State's circumstance and working
closely with other Federal, State, tribal, and local entities.
APHIS has formed State-level task forces, to coordinate approaches
and further ensure program success. We have begun to conduct
operational activities in cooperation with our partners. APHIS has
allowed variation among State agreements to account for individual
State interests, regulations, along with variation in habitat and
resources. APHIS' strategy is to provide resources and expertise at a
national level, while allowing flexibility to manage operational
activities from a local or State perspective. In States with relatively
few feral swine we are collaborating on efforts to eliminate the
animals from those States. In other States where feral swine are more
abundant we are cooperating to suppress populations in targeted areas
to reduce damage to agriculture and other resources. APHIS has been
building upon previous successes, such as the 2013 New Mexico feral
swine eradication project. Through this continuing effort, APHIS has
removed feral swine from more than 5.4 million acres in New Mexico.
Another key part of the national program will include surveillance
and disease monitoring to protect the health of our domestic swine.
APHIS is testing feral swine for diseases of concern for U.S. pork
producers, such as classical swine fever, which does not exist in the
United States, as well as swine brucellosis, porcine reproductive and
respiratory syndrome, swine influenza, and pseudorabies. APHIS is
currently establishing procedures for disease monitoring, including the
development of new surveillance and vaccination methods. Ensuring that
diseased feral swine are not a threat to domestic swine keeps U.S.
export markets open.
APHIS is conducting research to develop and evaluate new tools to
further reduce damage inflicted by feral swine. Examples of potential
tools that could dramatically influence the population growth of feral
swine include toxicants and fertility control agents, coupled with safe
delivery systems.
Question. What roles are States playing and how are costs being
shared?
Answer. States will play a critical role in the success of this
program. APHIS established strong partnerships with organizations such
as State Associations of Fish and Wildlife Agencies, the National
Association of State Departments of Agriculture, and the National
Association of State Animal Health Officials. APHIS is collaborating
with other Federal agencies, as well as tribal and local cooperators.
Since environmental conditions and laws governing feral swine vary
considerably among States, APHIS' strategy is to provide resources and
expertise at a national level, while allowing flexibility to manage
operational activities from a local or State perspective. Most States
are developing feral swine task forces to enhance communication among
entities that share a common interest in reducing or eliminating
problems caused by feral swine. APHIS serves on these task forces,
providing guidance on management options and utilizing available
resources.
State, tribal, and local cooperators are providing both financial
resources and in-kind services. In-kind services offered vary among
States, ranging from housing for employees working in remote sites to
supplying helicopters in the aerial program. States also are providing
staff to assist with operational removal of feral swine in joint-
projects. In fiscal year 2014, cooperators have pledged to provide more
than $7 million in funding and more than $1 million via in-kind
services toward reducing problems associated with feral swine.
Question. How will you determine priorities among States with
existing heavy infestations and States with small hog populations in
which elimination is a viable possibility?
Answer. APHIS will establish an operational program in all States
where feral swine are recognized. Estimated populations within States
vary from less than 1,000 feral swine, to more than 750,000 feral
swine. APHIS worked with State Agencies and groups, such as State
Association of Fish and Wildlife Agencies, the National Association of
State Departments of Agriculture, and the National Association of State
Animal Health Officials, to determine the appropriate strategy to
address feral swine in each affected State. Consideration was given to
such things as, estimated State current population, current and future
damage prevented, as well as considering individual State laws and
regulations.
In States where feral swine populations are large and widely
distributed, our goal will be to suppress populations to a manageable
level. At that point, we will work with States to utilize control
methods to ensure agricultural and natural resources remain properly
protected. Additionally, we will utilize funding where there is an
opportunity to eliminate animals from a State or targeted area where
rapid re-establishment is unlikely. As feral swine are eliminated from
targeted areas, APHIS will shift support to increase emphasis in other
areas, while maintaining the capacity to monitor for newly introduced
animals.
program reductions
Question. Mr. Secretary, this budget proposes a reduction of $37
million in APHIS program funding. These reductions are largely focused
on programs that are high Senate priorities. Please explain the
rationale for choosing these programs for reductions.
Answer. The fiscal year 2015 budget proposes reductions to the
Avian Health, Cotton Pests, Plant Protection Methods Development,
Specialty Crop Pests, and Tree and Wood Pests programs. In regard to
the first two programs listed, APHIS and cooperators have made
significant progress in meeting program goals. Because of the level of
surveillance and analysis APHIS has already conducted regarding avian
influenza, APHIS is able to make targeted reductions in the Avian
Health program. Additionally, APHIS has eradicated boll weevil from
99.5 percent of cotton producing land in the United States and is
beginning a series of surveys to confirm that the pink bollworm has
been eradicated. The proposed decrease in the Plant Protection Methods
Development program is for the National Clean Plant Network, for which
Congress provided ongoing funding through the Agricultural Act of 2014.
In regard to the reductions proposed for the Specialty Crop Pests and
Tree and Wood Pests programs, APHIS is continuing its longstanding
effort to balance the contributions of the Federal Government and
cooperators, recognizing that there are national, regional and local
benefits of pest and disease management.
Question. What assurances can you provide that Senate priorities
regarding combating invasive pests and diseases will be honored?
Answer. USDA realizes the importance of these programs, but also
believes that these activities should be a cooperative effort and a
shared responsibility between the Federal Government and the State and
local governments whose people will most directly and immediately
benefit. The Department's budget represents our determination to find
the correct balance in these responsibilities. USDA realizes the
importance of these programs, but also believes that these activities
should be a cooperative effort and a shared responsibility between the
Federal Government and the State and local governments whose people
will most directly and immediately benefit. The Department's budget
represents our determination to find the correct balance in these
responsibilities.
citrus greening
Question. Mr. Secretary, please bring us up to speed on how the $20
million in funds to combat citrus greening are being used and the
prospects for controlling this ruinous disease.
Answer. USDA recognizes the devastating impact citrus greening, or
Huanglongbing (HLB), is having on the Florida citrus industry and the
threat it poses to other citrus-producing States. USDA established the
new Multi-Agency Coordination (MAC) response framework in December 2013
to help address the industry's immediate needs in a more direct way. To
jump start this initiative, USDA provided $1 million to support
projects that can bring practical and near-term solutions to combat the
disease, and Congress also provided $20 million through the Fiscal Year
2014 Consolidated Appropriations Act. In addition to APHIS, the MAC is
comprised of representatives from the Agricultural Research Service
(ARS); the National Institute of Food and Agriculture (NIFA); the Risk
Management Agency; the Environmental Protection Agency; State
representatives from Florida, Arizona, California, and Texas; and
industry representatives from Florida, California, and Texas. The HLB
MAC Group's priority is to fund projects that are ready to be taken
from the research arena to the field and used to help growers right
now. The HLB MAC Group has decided to establish two parallel processes
for funding short-term, practical HLB research projects: (1) a direct
funding process and (2) a stakeholder suggestion process.
Direct Funding Process
The HLB MAC Group will develop project proposals for some of the
most promising tools identified by group members, with input from
stakeholders. The MAC Group plans to provide funding for several of
these projects in early May 2014. Examples of the activities that will
be funded include scaling up biological control (using specialized
wasps to control Asian citrus psyllid populations), field testing of
promising anti-microbial treatments against HLB, and field-delivery
systems for using thermal therapy to treat HLB-infected trees.
Stakeholder Suggestion Process
The HLB MAC Group will also use an online suggestion system.
Industry, academia, and State and Federal researchers can submit short-
term, practical solution suggestions for potential funding. The MAC
Group is developing specific criteria for evaluating the suggested
projects, including the stipulation that the tool or technique be ready
to test in the field, implement immediately, or promise to provide a
tool or solution for the industry in the near term. After the MAC Group
reviews the project suggestions to ensure they meet the criteria, a
science panel made up of Federal, academic, and industry experts will
further evaluate them.
The MAC Group is moving as quickly as possible to provide funding
as we know the urgent need for tangible tools to help growers in the
most effective ways. Complementing these near-term, ready-to-implement
solutions the MAC Group is funding, Congress directed at least $125
million over 5 years to establish a research and extension program to
combat citrus diseases and pests under the USDA Specialty Crop Research
Initiative in the Agricultural Act of 2014 (farm bill). This funding,
administered by NIFA and with input from stakeholders, will greatly
expand USDA's ability to combat HLB with new science and technology for
the mid- and long-term. USDA is hopeful that the short-term solutions
funded by the MAC Group will help citrus growers deal with HLB while
longer term solutions are developed.
Question. This budget requests reduced funding to combat citrus
greening. Is this request adequate for the task?
Answer. The reduction proposed for Citrus Health efforts is not
designed to reduce overall funding for the program. The reduction is
part of USDA's longstanding effort to better balance the Federal
portion of the costs of cooperative pest and disease programs that
protect national, local, and industry interests. The budget requests
sufficient funds to address this pest but relies on States and industry
partners to increase their contributions to the program to ensure that
the same level of effort will continue. Additionally, in fiscal year
2014, Congress provided an additional $20 million in 2-year funding for
the USDA Multi-Agency Coordination (MAC) Group related to citrus
greening. The MAC Group will make these funds available in fiscal year
2014 and fiscal year 2015 to help develop field-delivery systems for
promising tools to combat citrus greening.
food safety and inspection service
New Methods of Poultry Slaughter Inspection
Question. Mr. Secretary, what is the current status of implementing
the new poultry inspection processes?
Answer. We are hopeful that the final rule will be published soon
so we may begin implementation.
Question. The Department's position has been that these new
processes would improve food safety. However, we continue to hear
dissenting opinions on this issue. What new information do you have
since our hearing last year, and can you provide additional assurances
that food safety will be improved as a result of these inspection
processes?
Answer. The proposal to modernize inspection allows the Food Safety
and Inspection Service (FSIS) to realign the duties of our inspectors
so that they can focus on pathogen prevention and on proven food safety
measures. Under the proposed new system, all FSIS inspection activities
would focus on the critical food safety inspection and verification
tasks, and the quality assurance tasks would be performed by industry.
FSIS would continue to conduct carcass-by-carcass inspection, as
mandated by law. A peer-reviewed risk assessment shows that a system
that provides for increased off-line food safety inspection activities
results in greater compliance with regulations, as well as lower levels
of fecal contamination and equivalent or lower levels of Salmonella
contamination. The risk assessment estimates that this new approach
will prevent at least 5,000 fewer Salmonella and Campylobacter
illnesses each year.
We recognize that there have been concerns expressed about the
proposed rule based on findings in a GAO report about the pilot
program. However, while GAO found that there were limitations in the
Agency's data analysis in evaluating the poultry pilot--the one
significant finding that GAO outlined with respect to the poultry
pilot, GAO acknowledged in their report that FSIS plans to address
these limitations in the final rule. It should be noted that the report
was not an indictment against the poultry slaughter rule (PSR). In
fact, GAO described the pilot project, and the effort to deploy
inspection resources more effectively, as a positive step.
Question. The fiscal year 2015 request assumes implementation of
these processes by the beginning of the fiscal year, and significant
savings during the year. If the process is not implemented by October,
do you plan to submit a budget amendment to ensure that FSIS has
adequate administrative resources for the year?
Answer. At this time we do not plan to submit a budget amendment. A
determination of adequate administrative resources for FSIS would have
to be based on when the final rule for PSR is published and the balance
of remaining appropriations.
inspector shortage
Question. Mr. Secretary, we have been told that USDA's decision to
rely more on temporary inspectors has resulted in an inspector
shortage, which is stressing the entire system. Is this
characterization accurate? Please explain what is going on.
Answer. This characterization is not accurate. Although the Agency
has been hiring temporary inspectors, all positions required to
maintain food safety are being staffed. Meat, poultry and processed egg
facilities legally cannot operate without FSIS inspectors present, and
a shortage of FSIS inspectors would result in reduced production or
facility closures. It is important to note that this has not occurred.
In the course of normal operations there will be unexpected absences
that cause temporary staffing shortfalls until another inspector is in
place. However, no recalls have been due to lack of inspectors on the
job. The Agency maintains a standing corps of permanent and temporary
or relief employees to provide inspection services in the event of
illnesses, vacations, retirements and general scheduling issues. The
Agency is committed to ensuring that we have the staffing, training,
lab support, oversight and other resources that are necessary to ensure
the safety of the food supply.
catfish inspection
Question. Mr. Secretary, as you know both this subcommittee and the
Agriculture Committee are very interested in USDA issuing a new
regulation on catfish inspections. The farm bill requires
implementation within 60 days of enactment. However, your recently
issued report on the status of the regulation indicates you plan to
publish the final rule in December 2014. Please let us know if there is
anything this subcommittee can do to help expedite this process.
Answer. When the proposed rule was published in February 2011, the
Department solicited comments on several options for the definition of
catfish in accordance with the 2008 farm bill, which left the
definition of ``catfish'' open. Now that Congress has determined that
all fish in the order Siluriformes are under FSIS jurisdiction, the
matter is settled. While it is still necessary for a final rule to go
through the necessary Departmental and OMB reviews, that clarification
will help expedite the process towards publishing a final rule. FSIS
estimates that the final rule will be published by December 2014.
office closings and agency reductions
Question. Mr. Secretary, I want to discuss your budget request for
the Farm Service Agency. We all know the important role this Agency has
in helping our farmers and ranchers. When comparing apples to apples,
the budget cuts FSA by nearly $66 million from last year.
Taking this steep reduction and office closures into account, do
you believe now is a good time to be cutting FSA especially when a new
farm bill is being implemented?
Answer. During preparation of the fiscal year 2015 budget, FSA
conducted a review of current county offices and staffing levels, and
found the potential to consolidate approximately 250 field offices.
There are steps that need to be taken to reshape and restructure FSA's
county offices and workforce, however, before FSA can begin preparing
any office consolidation plan. The Agency has not yet identified
specific offices for closure.
Question. How can we reassure our farmers that FSA will be
responsive when there will be fewer personnel and fewer offices open?
Answer. FSA's salaries and expenses budget request reflects USDA's
continued commitment to achieving cost-savings and increased
efficiencies, while continuing to provide farmers and ranchers with the
highest levels of customer service.
FSA is presently working on a service center structure concept that
will realign workforce and invest in improved technology to provide
quality customer service by providing a full range of access to FSA
programs, increased efficiencies through specialization, expanded
customer flexibility and options in program delivery, and serve as a
referral gateway to other agricultural and rural services.
The concept is intended to establish a more flexible footprint in
each State to best utilize staff resources, improve program outreach to
new and current customers and enhance cross training of FSA employees.
The centralization of program service, resulting in generally larger
staffs, will provide managers with greater employee supervision and
oversight, increased opportunities to train employees, and improved
internal controls that ultimately will improve efficiencies in program
delivery and enhance public trust in the Agency.
Question. Do you believe it's reasonable for this Committee to
agree to close offices when we don't even know which offices will be
closed?
Answer. FSA will conduct a study during 2014 to identify areas for
realignment. Until then, no specific offices have been identified for
consolidation, and there is no list of offices under consideration for
consolidation. Before attempting to close any office, USDA is
committed, per statute, to hold public meetings in each affected county
within 30 days of any announcement of pending closure as well as
providing necessary Congressional notifications. However, FSA needs the
flexibility to change its county office structure in the face of
declining resources. Maintaining underutilized offices reduces our
capacity to adequately serve the Nation's farmers and ranchers.
Question. Please provide detailed information regarding USDA's plan
to determine which offices to close, including a proposed timeframe,
and all information that will be considered, including the weight given
to each factor.
Answer. FSA is working to more strategically locate and structure
its workforce, workload, location, office staffing structures, and
customer needs. This approach is not fully developed and information is
not yet available.
midas
Question. Since fiscal year 2009, this subcommittee has spent
roughly $300 million on Modernize and Innovate the Delivery of
Agricultural Systems (MIDAS). While we are committed to modernizing IT
systems of the Department, we are concerned there is no clear direction
for the MIDAS program.
Can you please update us on the status of MIDAS?
Answer. MIDAS is live and deployed nationwide to 9,000 employees
across 2,124 State and county offices to manage 11 million customer
records and 5 million farms with 8.1 million tracts and 38 million
fields. For the first time ever, the system consolidates land and
producer information on one computer screen, which dramatically
improves customer service and FSA processes. MIDAS has improved
customer service by modernizing FSA processes in the county office,
streamlining the process to reconstitute a farm replacing manual
processes with automated workflows, reducing manual handling and paper
tracking, and accelerating the synchronization of Social Security death
notifications, reducing erroneous payments. Our roadmap includes
continued simplification of the IT portfolio, partnering with key USDA
Agencies and teams, and enhancing service delivery.
Question. How will MIDAS be used to implement the new farm bill?
Answer. Because MIDAS is the platform for producer and land
information, FSA is coordinating the capabilities of MIDAS to meet the
timelines for farm bill implementation. For example, MIDAS is in use
today by FSA field office staff supporting producer updates of farm
information required for farm bill program enrollments.
Question. After all this investment, how will MIDAS help our
farmers?
Answer. Prior to MIDAS going live last year, all field offices and
employees had to use multiple systems when serving producers who
visited the county offices. They were required to move between systems
(e.g. on the AS400, the Web systems, mainframe systems, GIS systems,
etc.) to enroll producers into programs. They needed to print farm maps
to work with producers on acreage volumes/content, as well as numerous
manual processes. Along with providing a single view of producer data,
MIDAS allows a producer to conduct their farm management business with
any service center nationwide through a single visualization of the
farm.
Question. The budget proposal includes maintenance funding for
MIDAS. Is additional funding required if MIDAS will be able to, as has
been stated, allow farmers to access USDA programs from their kitchen
table?
Answer. The fiscal year 2015 budget proposes funding for the
continued operations and maintenance of MIDAS, including support for
service desk and application maintenance support, software licensing,
and hosting. The development and maintenance of customer self-service
that will allow farmers and ranchers to access USDA programs over the
Internet is included within a larger portfolio of FSA initiatives aimed
at transforming FSA business processes, service delivery practices, and
information technology tools.
food and nutrition service
Summer EBT Demonstration
Question. The budget is requesting an additional $30 million to
expand the summer EBT (electronic benefit transfer) demonstration
project.
Can you please explain how you intend continue these demonstration
projects?
Answer. USDA's Food and Nutrition Service (FNS) implemented the
Summer Electronic Benefit Transfer for Children (SEBTC) at sites in 10
States and Indian tribal organizations which provided the families of
low-income school aged children with benefits similar to the
Supplemental Nutrition Assistance Program (SNAP) and the Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC),
giving them more resources to use at retail food stores during the
summer months when school was out of session. A rigorous, independent
evaluation of the demonstrations shows impressive results, i.e., that
SEBTC can reduce food insecurity among children substantially. In
addition, participating children in households with SEBTC ate more
fruits and vegetables, whole grains, and dairy foods while consuming
fewer sugar-sweetened beverages. These impacts were present at sites
using the SNAP EBT model and the WIC EBT model.
Based on these encouraging results, FNS is proposing to continue
these demonstration projects in fiscal year 2015, possibly by
capitalizing on the strength of existing sites through further
expanding in the same and adjacent areas as were included in the
original demonstrations, or by testing the model through a full-State
implementation in one or two small States. The information gleaned from
statewide implementation in one or two States would provide important
information on the feasibility of expansion of the pilots--in
particular, whether the WIC EBT model or the SNAP EBT model has a
higher possibility of success in implementation.
Question. Will you be using the WIC EBT model or SNAP EBT model?
Answer. USDA anticipates using both the SNAP and WIC models, and
will make determinations based on an individual State's capacity.
Currently, there are only eight States with statewide WIC EBT systems.
FNS would likely make State selections based on a number of factors,
such as rates of poverty and food insecurity, and Summer Food Service
Program participation. Further, we would use this opportunity to
further examine the efficacy of the WIC and SNAP models, to determine
whether future activities should focus on one model over the other.
wic food package
Question. The budget also includes an increase of $322 million to
implement the new WIC food package.
Can you please describe how these funds will be utilized?
Answer. The $322 million will be obligated for food grants in
fiscal year 2015 as compared to fiscal year 2014. This increase is
comprised of $207 million in new budget authority and about $115
million of carryover from prior years. Approximately $102 million of
the increase in food funding is attributable to normal food inflation.
The remaining $220 million increase is due to improvements in the food
package to increase participants' access to fruits and vegetables,
whole grains and low-fat dairy. The fruit and vegetable cash-value
voucher for children is increased from $6 to $8 per month, the level
recommended by the Institute of Medicine. Yogurt has been added as a
partial milk substitute for children and women. Whole grain and fish
options have been expanded to include pasta products and canned Jack
mackerel, respectively.
These science-based revisions will improve the nutrition and health
of the Nation to fiscal year 2014. This increase is comprised of $207
million in new budget authority and about $115 million of carryover
from prior years.
Question. If this Committee is unable to provide these additional
funds, how would the Department prioritize overall WIC funding?
Answer. We will continue work with the Committee to secure adequate
funding to serve all who are eligible for the program and support the
changes in the WIC food packages. Please note that all State agencies
are required to implement the increase in the cash value voucher by
June 2, 2014, and the budget request reflects the implementation of
that change. The other major changes in the food package provide added
options and flexibilities for State agencies in meeting the nutritional
needs of participants. However, once the funding level is known for
fiscal year 2015, State agencies will need to determine if they are
able to implement the remaining food package improvements based on
their specific food grant.
public law 480, title ii
Question. While I appreciate the budget keeps funding for Public
Law 480 within the jurisdiction of this subcommittee, I do have
concerns with your request allowing 25 percent of the emergency funds
to be used for local purchase or cash.
How is providing less U.S. commodities for this important program
better for our farmers?
Answer. When Public Law 480 became law in 1954, Congress was
responding to both international hunger needs and an increasingly
costly Government-held farm surplus commodities program. At the time,
USDA was storing significant quantities of surplus commodities at
considerable cost to the U.S. taxpayers. Donation for international
food assistance was an effective means to dispose of the surplus
commodities. Such surpluses do not exist today.
Given today's market, our food assistance operations need to
balance market realities and food aid needs while also striving to
reduce costs, especially in times of emergencies. With the strength of
commercial agricultural exports, we would not expect substantial
economic impact from the use of up to $350 million of the Public Law
480 title II appropriations in emergencies for interventions such as
local or regional procurement of the agricultural crises, food vouchers
or cash transfers to provide for improved food aid delivery.
The administration's budget request seeks additional steps to
improve the efficiency and effectiveness of the food aid programs. We
know from the crises in the Philippines, Syria, and Somalia this year
that these flexibilities helped to get food to thousands of families in
need and were critical to our success, especially in the immediate
response.
The administration continues to seek reforms in food aid due to the
importance of these life-saving tools and the potential for cost
savings. Products can be delivered more quickly to recipients, because
the purchase and delivery of U.S. products can take on average between
4 and 6 months, while locally and regionally procured products can
arrive as much as 11-14 weeks sooner. Studies have shown that local and
regional procurements can reduce costs by 25-63 percent in specific
situations. The increased efficiency and cost savings would allow USAID
to reach up to 2 million additional people per year.
Question. Shouldn't we allow the changes made in the farm bill to
happen before we start altering the program again?
Answer. The administration appreciates the additional flexibilities
that the Agricultural Act of 2014 provided for the food aid programs.
The budget request for increases in flexibilities reflects the same
spirit of the farm bill provisions. The intent is to allow for our food
assistance response to meet the need of the emergency whether it is
cash, local procurement, prepositioned U.S. commodities or U.S.
commodities shipped from the United States.
rural development
Question. Mr. Secretary, this subcommittee values the income
generation and job creation opportunities that Rural Development
programs provide in rural America. However, this budget cuts overall
Rural Development (RD) funding by 9 percent in budget authority and
over 4 percent in program levels, compared to fiscal year 2014. Mr.
Secretary, please explain why this budget doesn't focus more on the
residents of rural America.
Answer. This budget continues USDA and Rural Development's
commitment to serving rural America. While some programs see proposed
reductions, others are increased and overall, Rural Development's
portfolio continues to grow, currently standing at just under $200
billion. In a time of fewer resources available across the Federal
Government, this is a time of difficult choices. The funding levels
requested will enable Rural Development to continue to serve
individuals, businesses, and communities throughout rural America. His
proposal builds on RD's foundational support in rural communities.
[The information follows:]
Rural Development's reach to residence of rural America is
significant and will continue under the current budget:
--RD provided home ownership opportunities for 170,000 residents in
2013 (2012: 153 thousand residents).
--RD's community facilities programs provide 5.4 percent (3.1 million
residents), 3.4 percent (1.9 million residents) and 9.3 percent
(5.4 million residents) of rural residents new and/or improved
essential communities facilities in health facilities, public
safety facilities and educational facilities respectively in
2013 (2012: 7.42 percent: health 4.3 million residents; 3.71
percent safety. 2.1 million residents; 6.41 percent
educational, 3.7 million residents).
--Through Rural Utilities Service, RD provided 8.7 million residents
with new and/or improved Electric services in 2013 (2012: 8.3
million residents). RD provided 129,000 residents with new and/
or improved telecommunications and broadband services in 2013
(2012: 63,000 residents). And RD provided 1.8 million residents
with new and/or improved Water services in 2013 (2012: 2.5
million residents).
--Through Rural Business-Cooperative Service, RD created or saved
39,000 jobs through investments in business, entrepreneurship,
cooperatives and industry in 2013 (2012: 52,000 jobs). RD
provided assistance to 2,240 small business and cooperatives in
2013 (2012: 443 small business and cooperatives). RD provided
renewable energy and efficiency opportunities with 14,734
million of kWh of generation (2012: 7,279 million kWh), and
1,379 million gallons of biofuels for rural residents in 2013
(2012: 1,232 million gallons).
RD expects to increase these significant contributions to rural
American residents in the approved 2014 budget fiscal year and with the
2015 fiscal year budget proposal.
rental assistance
Question. Mr. Secretary, this budget includes proposed reforms to
the Rental Assistance program, which provides rent subsidies to the
poorest rural residents served by the Department. Approximately 6,000
rural Arkansas households rely on Rental Assistance to obtain
affordable housing, with about 3,500 of these households being headed
by the elderly. We need to make this program sustainable for the long
term.
Please explain how these reforms will save money while continuing
to protect the most vulnerable rural households.
Answer. The Rental Assistance program provides benefits that enable
low-income Americans in rural communities to enjoy safe, decent and
affordable rental housing. The cost of Rental Assistance has increased
substantially. We are committed to maintaining the program, but
recognize its increasing cost has caused significant budget pressure
for many Rural Development programs. The 2015 budget requests new
authorities to improve the management of the Rental Assistance program
and ensure the long term viability of the program is ensured. Three of
the authorities will provide systemic changes to increase program
integrity and predictability. These changes will ensure that the Rental
Assistance program continues to provide a safety net that assists the
neediest rural residents and ensures the program's long-term
sustainability.
One of the systemic changes to the Rental Assistance program
establishes a minimum rent requirement of $50 per month regardless of
tenant income level. The proposal is similar to the minimum rent
requirement used in HUD affordable rental housing programs. The
proposal includes hardship exemptions for tenants that can demonstrate
they are unable to pay the minimum, and eviction of tenants is
prohibited if they cannot afford to pay the minimum rent. The second
proposal would provide access to income verification through the
National Database of New Hires. The third proposal would change Rental
Assistance agreements so they renew on the 12-month anniversary date of
the agreement, rather than automatic renewal if funding is exhausted
prior to the anniversary date.
Rural Development estimates that the systemic proposals could save
as much as $20 million in 2015. The other two requested authorities
will increase flexibility to manage the program, particularly in times
of reduced budgetary funding or delayed funding under continuing
resolutions. Having flexibility in renewal amounts and timing will
extend the available funding to as many properties as possible during
the reduced funding period.
Question. Under the minimum rent, how many households will see
their rent payments increase?
Answer. The 2015 budget requests the authority to require a minimum
rent payment of $50 per month regardless of tenant income level. The
proposal includes hardship exemptions for tenants that can demonstrate
they are unable to pay the minimum. These hardships may include the
loss of family income due to the termination of employment, termination
of benefits from other programs, or the death of an income earner. The
proposal also prohibits the eviction of tenants if they are financially
unable to pay the minimum rent.
There are currently about 42,000 households that pay between $0 and
$50 per month as their tenant contribution toward the rent payment. The
actual number that would see their tenant contribution increase to $50
per month would depend on the number of exemptions approved.
Question. How much will these reforms save?
Answer. The budget assumes that minimum rent and eliminating
automatic renewals will save approximately $20 million in fiscal year
2015. The savings estimated could decrease depending on the households
that could be exempted from paying the minimum rent. Additional savings
can be achieved in the future as all expiring contracts are renewed
Access to the National Directory of New Hires database will assist in
maintaining a low improper payments rate and reduce the amount of
subsidy. The other reforms will provide program flexibility in times of
reduced funding: ``partial year funding'' and selective renewals both
will enable the program to utilize available funds to the maximum
extent possible and will not provide savings.
Question. Are you considering other reforms to further increase
savings and improve program management?
Answer. RD has reached out to stakeholders to discuss the future
sustainability of the Rental Assistance program and has solicited input
in developing a long-term plan. Discussions have centered on how to
determine if properties continue to meet the mission of providing low
income rural residents with assistance. Rural Development has also
asked about potential alternatives to improve the predictability of the
program's funding needs, as RD proposes to achieve through the proposal
to only fund Rental Assistance agreements once a year, on their 12-
month anniversary date.
direct single family housing loan program
Question. Mr. Secretary, the direct single family housing loan
program has been the flagship housing program in this Department for
years. Very low- and low-income rural households are provided
homeownership opportunities with no down payment and low interest
rates. This is the most efficient Federal homeownership program of its
type, with its portfolio credit quality at least matching FHA and VA,
and far exceeding the commercial subprime market.
This budget cuts this program by 60 percent from the fiscal year
2014 level, reducing the loan level from $900 million to $360 million.
Mr. Secretary, we rejected this proposal in fiscal year 2014. Why
are you bringing it up again, so soon?
Answer. The Department acknowledges the importance of the Section
502 Direct Loan program in providing the only way for many low- and
very low-income families an opportunity to attain homeownership in
rural America. Our budget authority request for fiscal year 2015 has
actually increased from $24 million provided last year to $27 million;
however the subsidy rate has also increased due to cost of borrowing
for the Federal Government and additional subsidy provided to the
borrower thereby causing a decrease in program level. With continued
low interest rates and the increased use of our guaranteed program, we
project at that about 43,000 of low- and very low-income rural families
will be served with guarantees of loans from participating lenders.
Last year, about 22 percent of our nearly 163,000 guarantees went to
low-income families and 4 percent to very low-income families. The
Single Family Direct loan program request will still assure families
participating in Self-Help housing and those with greater needs will
have access to credit to own their own homes.
Question. Is there any other Federal homeownership program that can
help families the way that Section 502 does? If not, where will these
families go to get housing assistance?
Answer. Single Family Housing Direct Loan program plays an
important role in meeting USDA's commitment to improving the economic
vitality and quality of life in rural America. It is anticipated that
at the fiscal year 2015 proposed funding level of $360 million for
Section 502 approximately 2,900 low- and very low-income families will
achieve homeownership.
USDA also intends to continue developing partnerships with
qualified nonprofit organizations in rural areas to deliver program
funds where they are needed most. These partnerships occur with our
field offices and local nonprofits. We are also establishing a
certified loan packager program where trained nonprofit staff would
assure program funds go to those who lack other housing opportunities.
We recognize that families living in more rural, poorer communities
have difficulties accessing programs and services that promote long-
term wealth. The Department anticipates that the assistance from
nonprofit groups will provide targeted delivery of program funds to the
most economically distressed and lower income communities.
Question. What is the current backlog of Section 502 applications?
Answer. [The information follows:]
DIRECT 502 LOAN PROGRAM PENDING REQUESTS THROUGH 30-SEP-2012, 30-SEP-
2013, 26-MAR-2014
------------------------------------------------------------------------
Report date Number pending Requested amount
------------------------------------------------------------------------
30-Sep-12........................... 10,430 $1,305,987,908
30-Sep-13........................... 7,826 978,056,660
26-Mar-14........................... 7,386 917,123,159
------------------------------------------------------------------------
These numbers represent the number of unprocessed applications on-
hand and the estimated amount of the requests, including any
applications carried over from previous years. Upon notification of
processing, applicants must update information as needed or the request
is withdrawn.
Question. A $360 million program level would only fund 60 loans in
each State. How would you allocate such a small program in the face of
huge demand in rural areas?
Answer. With a program level of $360 million funds will be
allocated to the States using the current allocation formula found in
Rural Development Instruction 1940-L, which utilize a number of
criteria, including: State substandard households; population areas
less than 2,500; rural population; rural households between 50 and 80
percent of the area Median Household Income (MHI); and households below
50 percent of the area MHI. If it is determined that program objectives
cannot be met using the formula allocation an administrative allocation
could be substituted. An administrative allocation per 1940-L guidance
would provide greater flexibility to direct limited funds to assure the
funds best meet the intent of the program. Greater priority could be
given to Self-Help participants and those most in need of this
assistance, such as to remote areas and to underserved groups.
water and waste disposal loan and grant program
Question. The Water and Waste Disposal Loan and Grant Program
provides loan/grant combinations to remote, low-income rural
communities. Lower income communities receive a larger grant share,
while higher income communities are required to rely more heavily on
loans. Mr. Secretary, this budget cuts Water and Waste grants by almost
$150 million.
With this cut, how will the poorest and most remote rural
communities afford the investments they need to provide residents with
clean water and sanitary waste disposal?
Answer. Rural Development is committed to continuing to serve small
and economically challenged rural communities. The majority of the
funds issued through the Water and Waste Disposal Loan and Grant
program are loans. In most years the program maintains a 70-percent
loan to 30-percent grant ratio as directed by appropriations. Through a
scoring system and strict underwriting the program has been successful
in ensuring that small rural communities have access to funding. In
2013, 46 percent of the projects funded served populations of 1,500 or
more and 70 percent of the projects funded were to serve populations of
2,500 or fewer.
The reduced subsidy rate on our loan portfolio, combined with the
low interest rates will make loans more affordable for many
communities. This will allow Rural Development to ensure that grants
are reserved for the smallest, most economically challenged
communities. We will also make use of our Special Evaluation Assistance
for Rural Communities and Households (SEARCH) program, to provide
grants for predevelopment, planning, design assistance and technical
assistance for financially distressed communities with 2,500 or fewer
residents. In addition, we will continue to partner with other State
and local programs to fund projects requiring grants. In cases where
sufficient grant funding for a project is not available, we will work
with communities to consider other alternatives, such as phasing of
projects.
Question. Mr. Secretary, was this proposal included simply to take
advantage of the $150 million in mandatory funding that the recently
passed farm bill provides for this program?
Answer. No. The mandatory funding provided in the Agricultural Act
of 2014 to address the backlog of applications will allow Rural
Development to provide assistance to more rural communities needing
grant to construct water and waste infrastructure and to maintain
affordable rates for the customers they serve. In April 2014, USDA will
announce funding for projects. The funding will include the $150
million in 2014 mandatory farm bill grants, partnered with loan and
grant funding made available in the fiscal year 2014 appropriations.
rural corps
Question. Mr. Secretary, this budget proposes to hire 150 economic
development experts to pilot a new initiative, the Rural Corps, to
deliver development expertise to disadvantaged rural areas. Ten rural
areas will be selected to participate in the pilot.
Please describe how this pilot initiative will operate.
Answer. To clarify, the budget proposes 250 additional staff years.
Of this total, approximately 100 would fill portfolio management and
other core functions in the national office. The remaining 150 staff
would be located in the field. Of the 150 placed in the field, about 50
would be part of the proposed 21st century workforce pilot called Rural
Corps.
Question. What exactly will the pilot be testing?
Answer. [The information follows:]
This pilot would test ways of:
--a. Serving high-need areas, like the Delta, Appalachia, the
Southwest border, and Indian country.
--b. Modernizing Rural Development's field structure to suit a 21st
century workforce and to reflect the changing dynamics of rural
America, new technology, and the deep challenges in areas of
persistent poverty.
--c. Leveraging Federal investments through increased coordination
among Federal, State, local, private, and nonprofit partners;
and
--d. Building a modern workforce that is mobile, flexible,
responsive, outcome-oriented and accountable.
Question. How will the 10 pilot areas be chosen?
Answer. Rural Development will identify pilot areas first by
characterizing the pool of communities with greatest demonstrated need
defined as high poverty and low capacity for economic development.
Rural Development will then select specific pilot areas applying
preference for geographic and other forms of diversity in order to best
apply learnings from the pilot to potential future delivery of RD
programs.
Question. How will you measure success or failure?
Answer. [The information follows:]
In reviewing our efforts to reach new people and organizations we
will measure:
--Number of applications received in pilot vs. comparable non-pilot
areas;
--Portion of applications awarded in pilot vs. comparable non-pilot
areas;
--Number of new contacts and partnerships built vs. comparable non-
pilot areas;
--Non-Federal dollars leveraged in pilot vs. non-pilot areas;
--Periodic surveys of staff and partner organizations in pilot vs.
non-pilot areas; and
--Mapping and tracking of where Rural Development investments are
made.
Question. Doesn't 150 staff seem like a very high density of
experts to be focused on only 10 areas? That would be 15 staff per
area.
Answer. The proposed pilot requests no more than 50 staff in 10
pilot locations with up to 5 staff per area.
Question. This new staff would deliver technical assistance and
coordinate and leverage resources from all Federal agencies. How do
these responsibilities differ from responsibilities of current Rural
Development employees?
Answer. While there are exceptions, most Rural Development staff
that to work in State, area, and field offices are hired for a very
specific and relatively limited and inflexible set of duties. In many
offices more than 50 percent--60 percent of staff work specifically and
exclusively on Rural Housing Service loans, loan guarantees, and Multi-
Family housing programs. In a State with 50-60 employees, this means
approximately 30 people who do housing work, 10 run Rural Development's
other programs including community facilities, water/wastewater,
business, energy. Add in administrative staff, an engineer, an
architect, someone to do Human resources work, a public information
coordinator and that's a full team.
To better serve and meet the needs of rural communities and to do
more to support locally identified economic development priorities,
staff who are part of Rural Corps would be selected for a different and
broader skill set. For example, Rural Corps staff might be selected for
expertise in community planning or economic development, and be cross-
trained to understand resources and opportunities across USDA and
across the Federal Government, as well as in the State and region where
they work.
department initiatives
Strikeforce Initiative
Question. Mr. Secretary, please describe some of the successes the
StrikeForce initiative, and lessons learned to date.
Answer. Since 2010 through the StrikeForce for Rural Growth and
Opportunity Initiative, USDA has partnered with more than 400 community
organizations, businesses, foundations, universities and other groups
to support greater than 80,300 projects and ushered more than $9.7
billion in investment in rural America. Because of StrikeForce efforts,
USDA is improving access to capital, markets, healthy, affordable
foods, electricity, broadband and water, increasing homeownership
opportunities, and overall, improving the quality of life for rural
families in areas of persistent poverty.
For example, in Alabama, Arkansas, and Mississippi, members of
farmers' agricultural cooperatives are now providing locally grown
peas, greens and watermelons to national grocery chains for sale in
selected stores. They have received direct and indirect assistance from
USDA, as well as support from their 1890s land-grant universities.
Also in Arkansas, our partnership with the Arkansas Delta Seeds of
Change Coalition of 40 different organizations helped to create five
new farmers markets in southeast Arkansas and the first summer feeding
program using locally grown produce (in Forrest City). They are now
seeking to expand farm to school opportunities in multiple school
districts.
In New Mexico, USDA finalized 75 home loans and grants to families
living in the colonias communities of Luna, Hidalgo, and Dona Ana
counties along the United States-Mexico border in 2013--a 30-percent
increase from the 2012 fiscal year.
In South Dakota, USDA helped to create the South Dakota Indian
Business Alliance and the South Dakota Native Homeownership Coalition
with the Governor's office, other Federal agencies and private funding.
In the poorest county in the country, the Crow Creek Sioux Tribe just
began work with another organization to assist with rural housing loan
applications to increase the success in improving houses on the
reservation.
Question. Do you have plans to continue to expand the initiative?
Answer. StrikeForce now operates in almost 800 rural counties,
parishes, boroughs, tribal reservations and colonias in 20 States.
Because of the success of StrikeForce in these States, numerous States
are requesting to be included as official StrikeForce States. At their
request, StrikeForce State coordinators are providing briefings and
materials that explain the approach of the initiative. We will consider
adding new States, as has happened every year since inception.
Question. How are you tracking and measuring success?
Answer. StrikeForce success is measured by the increase in program
participation in the persistent poverty communities designated as
StrikeForce areas (more than 20 percent poverty over 30 years).
Increases in applications, eligible applications, loans, grants,
contracts and outreach meetings are all StrikeForce performance
indicators. Participation by socially disadvantaged, limited resource
producers, women and beginning farmers and increases in local and
regional food systems are also performance indicators measured by
StrikeForce. These indicators are tracked and reported throughout the
year across various USDA agencies.
In 2013, the Natural Resources Conservation Service saw
applications in StrikeForce areas increase 82 percent and the Farm
Service Agency had a 14-percent increase over the year before. In the
three original pilot States (Arkansas, Georgia, and Mississippi),
program applications have increased 76 percent since 2010.
Question. Isn't the proposed Rural Corps initiative duplicative of
the StrikeForce initiative? Please explain the differences.
Answer. StrikeForce is an outreach and partnership initiative that
uses existing USDA personnel to raise awareness of, and break down
barriers to participation, in all USDA programs in the poorest parts of
20 States. The participating USDA staff are not trained economic
development professionals, as proposed under the Rural Corps. By
working with communities and organizations, StrikeForce seeks to assist
through available USDA resources, which includes Rural Development as
well as all the Service Center agencies (FSA and NRCS), as well as
other USDA agencies. Rural Corps would be able to draw on Rural
Development resources and public and private resources to expand the
capacity to assist these rural areas of concentrated poverty.
promise zone initiative
Question. Mr. Secretary, will you please describe the
administration's Promise Zone initiative?
Answer. Under the Promise Zones initiative, and the Department of
Housing and Urban Development and USDA are partnering with high-poverty
urban, rural, and tribal communities to create jobs, increase economic
activity, improve educational opportunities, leverage private
investment, and reduce violent crime. The Promise Zones will benefit
from a comprehensive approach to development that will enhance and
connect local assets ranging from schools to housing to jobs.
The first five Promise Zones are in San Antonio, Philadelphia, Los
Angeles, southeastern Kentucky, and the Choctaw Nation of Oklahoma. A
second round of Promise Zones selections will begin fall 2014 and will
be announced Spring 2015.
The Promise Zones designation commits the Federal Government to
partner with local leaders who are addressing multiple community
revitalization challenges with on-the-ground technical assistance to
help navigate Federal programs and regulations. This intensive
engagement will help communities make the most of funding already
available.
The participating agencies will be working with selected Promise
Zones to improve the coordination among Federal resources to enhance
place-based strategies and increase the progress of community
revitalization initiatives. As outcomes are achieved and best practices
are developed, Federal agencies will apply that learning in the
delivery of Federal funding and services to other communities working
toward similar goals.
Question. How were the two rural Promise Zones selected?
Answer. The first round of Promise Zone designations was made in
January 2014. In this first round, only communities that had previously
received Federal support from a certain set of selected programs
(Promise Neighborhoods, Stronger Economies Together, Sustainable
Communities, Rural Jobs Accelerator, etc.) were eligible to apply.
These communities had demonstrated their capacity in one area of the
Promise Zones work and have already demonstrated their preparedness to
broaden their efforts to additional revitalization priorities.
In the next cycle, all high-poverty communities that meet the
eligibility requirements will be able to apply.
Applications were scored according to the selection criteria and
points set forth in the final Application Guide for the appropriate
category of Promise Zone (urban, rural, or tribal).
In order to be selected, an application must have scored a total of
75 points or more. Once scored, applications were ranked competitively
within each of the three Promise Zone categories. Rural applications
were ranked against other rural applications, tribal applications were
ranked against other tribal applications, and urban applications were
ranked against other urban applications.
An inter-agency team led by Housing and Urban Development (HUD) ran
the selection process for 2013, with USDA co-leading the rural and
tribal selections. The Departments of Education, Justice and Health and
Human Services participated as reviewers and provided input on the
application materials.
Question. How will you track and measure success in these zones?
Answer. USDA will measure and track success with two processes.
First, USDA will work with Promise Zone designees, HUD, and the other
Federal agency partners to track Federal and private-sector activities
and investments that occur in the Promise Zones. In addition, the
Department of Health and Human Services (HHS) will lead a rigorous
external evaluation to assess the outcomes of creating jobs, increasing
economic activity, improving educational opportunities, and reducing
violent crime in the Promise Zones. Both of these processes will be
supported by the commitment that all Promise Zone designees have made
to tracking progress and sharing data across their community partners
(private-sector, nonprofits, Federal, State, and local agencies, etc.).
This will help all partners work towards improvement and
accountability.
Question. How does the Promise Zone program differ from the
Empowerment Zone/Enterprise Community program of some years ago?
Answer. The Promise Zones Initiative has several key components
that were absent in the Empowerment Zone/Enterprise Community program.
The first is the role of Promise Zone lead applicants as the backbone
organization with leadership responsibility and authority. The second
is the engagement of high-level officials from across the partner
agencies who can help create smart and fast solutions to delays or
issues that may arise for Promise Zone designees. Lastly, the
initiative does not include an influx of significant grant dollars.
made in rural america initiative
Question. Mr. Secretary, the President recently announced the Made
in Rural America export and investment initiative. Will you please
explain and discuss this new initiative?
Answer. The Made in Rural America export and investment initiative
was established by the President in February 2014, with the goal of
bringing together Federal partners to help rural businesses take
advantage of export opportunities within the Federal Government. The
President believes that exporting is a key opportunity for American
businesses to expand and improve, and that access to Federal resources
currently underutilized by businesses in rural America should be made
more readily available. I strongly echo that belief, and have increased
access to programs facilitating exports a priority in 2014. The
President tasked the White House Rural Council, in coordination with
the U.S. Department of Agriculture, the U.S. Department of Commerce,
the Small Business Administration, the Export-Import Bank, the Office
of the United States Trade Representative, and other agencies, to
commit to connecting more rural businesses with resources that can help
them in all phases of the export process, including beginning
exporting, expanding current exporting operations, and accessing new
customers in foreign markets. Federal agencies involved in the
promotion of export resources will provide assistance to help rural
businesses and leaders take advantage of new investment opportunities
and access program information and resources from all across the
Federal Government.
[The information follows:]
The Made in Rural America initiative sets out to do this by laying
out a comprehensive strategy focusing on the following initial
objectives:
--Host five Made in Rural America regional forums dedicated to
promoting rural exports;
--Convene an Investing in Rural America conference later this year to
connect major investors with rural business leaders, high-level
Government officials, economic development experts, and other
partners;
--Host training sessions to equip local USDA Rural Development staff
in all 50 States plus territories with the tools they need to
counsel businesses on export opportunities and resources;
--Provide enhanced export counseling for rural businesses to connect
with foreign buyers through the Department of Commerce's U.S.
Export Assistance Center trade specialists in over 100 domestic
locations and in collaboration with USDA's field staff;
--Coordinate across the administration to promote rural-produced
goods and services at trade events including trade missions,
buyer programs, trade shows, and other promotion programs;
--Educate local leaders across the country on the importance of rural
exports in partnership with NACo and through the Trade
Promotion Coordinating Committee;
--Use the BusinessUSA online platform to better connect rural
businesses with export and investment resources and coordinate
support from across the Federal Government.
Question. What do you estimate the administrative costs to USDA to
be for this initiative?
Answer. Administrative costs are expected to be minimal and no
further funds are expected to be needed, due largely to the partnership
between the agencies involved and the shared nature of costs.
Question. Do you have estimates on the job creation, income
generation, and export enhancement benefits the initiative will foster?
Answer. Estimates for job creation, income generation, and export
enhancement have not been developed, but appropriate metrics are being
developed to measure the impact the initiative will have.
Question. How long is the initiative planned to last?
Answer. The Made in Rural America initiative has been implemented
with the intent of increasing rural businesses' access to Federal
programs and opportunities that can help connect them with investment
opportunities and expand their reach to markets abroad. This will be an
ongoing area of focus for the partners involved. The specific actions
announced by the White House in February 2014 are expected to be
delivered within 9 months from the time of the announcement of the
initiative.
biotechnology
Question. I understand and appreciate the work the Department has
been doing to try to make deregulation decisions on biotech products in
a more timely fashion. Secretary Vilsack has stated that USDA has
reduced the time it takes to deregulate a biotechnology-derived
agricultural product by roughly 360 days. In reviewing data from APHIS-
BRS, that reference appears to apply to only one product, which was
deregulated in 658 days.
BRS's figures show that it took USDA, on average, almost 900 days
to make deregulation decisions on the eight products approved in 2013,
with a range of 650 days to 1,366 days. However, Federal regulations
require USDA to actually make a final decision within 6 months (180
days) after companies submit a petition for deregulation.
Can you help us better understand what further improvements will be
implemented at USDA to ensure ag-biotech products are reviewed and
deregulation decisions are made in a timely and predictable?
Answer. In November 2011, USDA announced improvements to its
process to grant nonregulated status for genetically engineered
organisms, and published the implementation of this process in a
Federal Register notice in March 2012. The goal of these efforts was to
significantly decrease the length and variability of the process
without compromising the quality of the analyses that support our
decisions. Our process improvement analysis revealed an estimated
timeline of 13-15 months is required to conduct quality analysis to
support our decisions and protect plant health. Additional information
is provided for the record.
[The information follows:]
Prior to implementing our process improvements in March 2012, USDA
had a backlog of 23 petitions. The average completion time for
petitions prior to this announcement was nearly 3 years (1,034 days).
USDA transitioned 12 in-process petitions into the improved process.
Since our announcement, USDA has also received 10 new petitions that
are also following the improved process.
USDA reduced its backlog from 23 petitions to 7 petitions. The
Department currently has 16 petitions in review. Of those 16 in review,
9 of the petitions are in the new process and 7 are dependent on the
preparation of Environmental Impact Statements (EISs). Only one
petition currently under review, not requiring an EIS, is part of the
backlog. Petitions that require preparation of an EIS, take longer to
complete nevertheless we have aggressive schedules to complete them.
USDA expects to complete the remaining backlogged petitions in fiscal
year 2015. Completion timelines will continue to decrease as the
backlog is cleared.
The improved petition process includes five major phases. Though we
have not yet reached our overall timeline targets for completing
petitions, we have made significant progress in decreasing timelines
for multiple phases of the petition process.
--1. Review of nine petitions for completeness resulted in an average
time savings of 257 days (8.5 months).
--2. Publication of the petition for 60-day public comment occurred
for 16 petitions.
--3. Preparation of 12 plant pest risk assessments (PPRA) resulted in
an average time savings of 53 days.
--4. Preparation of 10 environmental assessments (EA) in an average
of 267 days (target = 180 days). USDA expects completion times
to decline towards the 180 day target as the backlog is
cleared. USDA has prepared 10 EAs under the new process. USDA
had recently improved the EA-preparation process, and since
2005 was completing them in an average of 213 days. The present
slow-down is attributed to the large petition backlog moving
nearly synchronously through the EA-drafting phase; USDA
expects completion times to decline towards the 180 day target
as the backlog is cleared.
--5. Publication of PPRAs and EAs has two possible paths:
--Path 1.--This path is for petitions involving genetically
engineered (GE) organisms that raise no substantive new
issues. USDA publishes the PPRA and EA for a 30-day public
review in the Federal Register with a preliminary
determination. The target timeline for Path 1 petitions is
just shy of 14 months (420 days).
Five petitions completed Path 1 in an average of 798 days. Two of
these petitions were the first to go from start to finish
under the improved process, and they completed the process
in 658 days (1.8 years), about a year faster than the old
process.
--Path 2.--This path is for petitions involving GE organisms that
raise substantive new issues. USDA publishes the PPRA and
EA for 30-day public comment in the Federal Register,
revises the documents based upon public input, then
publishes a final PPRA, EA and determination in the Federal
Register. The target timeline for Path 2 petitions is about
15 months (460 days). Two petitions transitioned into the
improved process completed Path 2 in 1,364 days. To date,
no petitions completed Path 2 from start to finish.
Question. Is there a role for Congress in helping to improve
predictability so that farmers continue to gain access to the best
tools in a timely way?
Answer. USDA appreciates the efforts of Congress to provide the
necessary resources to USDA's biotechnology program and its continuing
efforts to oversee certain genetically engineered (GE) organisms that
might pose a risk to plant health. The level requested in the
President's fiscal year 2015 budget proposal for biotechnology
regulatory services will provide sufficient funding to meet the new
process timelines.
Question. The subcommittee also notes, in December 2013, at USDA's
annual stakeholder public meeting, the Department promised to eliminate
the current backlog of 16 biotech petitions by the end of 2014. At the
same meeting in 2011, USDA committed to eliminating the backlog of 22
petitions in ``about a year.'' In 2 years, USDA was able to decrease
the backlog by only six petitions.
How does USDA intent to accomplish its goal of clearing the backlog
by the end of 2014?
Answer. Prior to process improvement implementation in March 2012,
USDA had a backlog of 23 petitions. Since implementation, USDA has also
received 10 new petitions that also follow the improved process. USDA
has reduced its backlog from 23 petitions to 7, while also managing 10
new petitions since implementation. USDA expects to complete the
remaining backlogged petitions in early 2015. Completion timelines will
continue to decrease as the backlog is cleared. Though we have not yet
reached our overall timeline targets, we have made significant progress
in decreasing timelines. For example, complete reviews have decreased
from 324 days to 67 days; and plant pest risk assessment preparation
has decreased from 143 days to 90 days. We remain committed to meeting
the target timelines.
______
Questions Submitted by Senator Dianne Feinstein
drought
Question. I want to extend my thanks and gratitude for your efforts
in assisting California farmers, ranchers, communities, and citizens
with our historic and unprecedented drought disaster.
I have no greater priority than leveraging all available resources
to conserve and maximize water within California, and to help my State
and its agriculture industry mitigate the impacts of worsening drought
conditions.
In just my State alone, the California Farm Bureau estimates that
500,000 acres of farmland will go fallow. It is also my understanding
that an estimated 100,000 head of cattle will be lost from my State's
herds. The California Department of Public Health has estimated that 17
rural communities are already at risk of running out of drinking water,
and it is clear that drought conditions will continue to worsen over
the coming months since there is little chance of significant rain
beginning this summer.
How does the Department plan to target conservation programs and
other resources to safeguard lives, maintain the drinking water
supplies of rural communities, and help farmers conserve water and save
their crops, especially permanent crops?
Answer. USDA is exploring every avenue of assistance through its
programs to address the drought and its impacts. Since 2012, USDA has
focused more than $78 million of its Natural Resources Conservation
Service (NRCS) conservation program assistance in States with extreme
or exceptional drought to assist producers with mitigation efforts. Of
these efforts in fiscal year 2014, USDA has made $25 million available
through the Environmental Quality Incentive Program (EQIP) to help
California agricultural operators use water more efficiently, stabilize
fallow cropland, and protect their agricultural lands for future use.
Funds are available statewide to install a number of conservation
practices including irrigation efficiency, cover crops, rehabilitation
of existing spring developments, protection of grazing lands, and other
supporting components.
In addition to California, USDA provided $10 million of EQIP funds
for drought recovery in Nevada, Idaho, Nebraska, Colorado, Kansas, New
Mexico, Texas, and Oklahoma. These funds will implement long-term
strategies for conservation practices to mitigate the effects of future
droughts. Providing this targeted funding allows States to prioritize
drought mitigation activities through their locally led process.
Beginning October 1, 2013, the Emergency Assistance for Livestock,
Honeybees and Farm-Raised Fish Program (ELAP) assists livestock
producers in recovering losses resulting from the additional cost of
transporting water to livestock due to an eligible drought. The cost of
transporting water includes costs associated with water transport
equipment fees, labor, and contracted water transporting fees.
The Department has participated in informational drought meetings
throughout California that are sponsored by the California Department
of Food and Agriculture. We are diligently addressing questions from
growers, insurance companies, industry groups, the Farm Bureau, and
other interested parties on the impact of water availability. We have
provided explanations of crop insurance policy coverage and prevented
planting provisions. As a result of significant concern over saving
perennial crops, the Department has provided information that allows
producers to consider options to mitigate the impacts of drought
without jeopardizing their insurance coverage.
Rural Development is actively working with impacted communities in
California to determine potential assistance. Through the Water and
Waste Disposal Loan and Grant Program, loans and grants for immediate
and longer term infrastructure solutions can be provided to communities
with populations of 10,000 or fewer to provide safe water and deal with
waste water.
The Agency can also provide funding thru the Emergency Community
Water Assistance Grant (ECWAG). In January 2014, USDA Rural Development
launched a new simplified process for the ECWAG program. The new
process will reduce the filing burden on eligible applicants and
improve the Rural Development's ability to deliver assistance to
effected areas more quickly.
Currently, 19 impacted communities have expressed interest in our
ECWAG Program. The California Rural Development Office is working with
these communities on application requirements, reviewing submitted
applications and utilizing the new simplified ECWAG process wherever
possible.
In addition, USDA Rural Development Water and Waste Circuit Riders
are available to impacted communities to provide technical assistance
and support as they identify needs and explore solutions.
food safety
Question. Mr. Secretary, I am deeply concerned about the increasing
food safety risk from Salmonella and Campylobacter. As you are aware,
an ongoing outbreak linked to poultry facilities in California has
sickened 481 consumers. It is my understanding that there are more
cases that may be linked to this outbreak, according to the Centers for
Disease Control.
According to testing done by the Food Safety and Inspection Service
during 2012 in processing facilities; approximately 26 percent of
chicken parts tested positive for Salmonella and 21 percent tested
positive for Campylobacter.
Testing by the National Antimicrobial Resistance Monitoring System
of retail meat in California in 2011 found that 71.7 percent of chicken
breasts tested positive for Campylobacter. This disturbingly high rate
has remained essentially the same since this testing began in 2002.
I am deeply disturbed by the fact that we have not made progress
over the last 10 years in reducing the number of illnesses and deaths
attributed to Salmonella and Campylobacter.
Mr. Secretary, your Acting Under Secretary of Food Safety, Brian
Ronholm, told me your Department will create a new Salmonella standard
for poultry parts by the end of September and a revised Salmonella
standard for ground chicken by the end of the year. I sincerely hope
that they will be strong enough to result in a significant decrease in
the number of foodborne illnesses linked to this pathogen.
I am deeply concerned your Department has no timeline for when it
will develop Campylobacter standards for these products. When
specifically will you create Campylobacter standards for poultry parts
and ground chicken?
Answer. In May 2010, FSIS announced performance standards for
Campylobacter in turkey and young chickens. The Agency issued a Federal
Register notice for not-ready-to-eat (NRTE) ground or otherwise
comminuted chicken and turkey products in December 2012. This notice
announces FSIS will conduct Campylobacter testing from samples taken
from establishments producing these products and also announces FSIS'
intention to develop new Campylobacter performance standards for these
products. Efforts are underway toward gathering data and other
information so that next steps on reducing Campylobacter prevalence can
be determined. Once these steps are completed it will allow us to
provide a more specific timeline.
Question. Mr. Secretary, I applaud your Agency's actions in 2012 to
declare six additional deadly strains of E. coli as adulterants in
meat. These bacteria presented a clear and present public health
threat, and your Agency took a zero-tolerance stance against them.
I am also gravely concerned that multi-drug resistant strains of
Salmonella are equally deadly and should also be addressed with a zero-
tolerance standard.
There have been three multi-State outbreaks of multi-drug resistant
Salmonella associated with poultry products since 2011, causing 751
known illnesses and 1 death. According to the Centers for Disease
Control and Prevention, only 5 percent of Salmonella cases are part of
recognized outbreaks. Therefore, these highly visible outbreaks may
only represent the tip of the iceberg.
What is deeply disturbing to me about the multi-drug resistant
Salmonella strains is that they are often resistant to medically
important antibiotics. These multi-drug resistant strains have caused
alarmingly high rates of hospitalizations and blood infections compared
to what is normally expected with human cases of Salmonella.
This is why I wrote to you this past fall, urging you to take a
stronger regulatory stance against these strains because they represent
a greater public health risk. Based on your response, it is my
understanding you do not believe your Department has the authority to
do so.
Mr. Secretary, what actions can your Department currently take to
combat multi-drug resistant Salmonella strains?
Answer. In the fiscal year 2015 budget, there is funding for
collaborative work with Centers for Disease Control (CDC) and Food and
Drug Administration (FDA) Centers for Veterinary Medicine, as well as
sister USDA Agencies including Agricultural Research Service (ARS) and
other departments to better understand the source, distribution and
genetic evolution of antimicrobial resistant strains encompassing the
entire transmission chain. FDA has the biggest role in combating these
types of strains, but USDA absolutely sees ourselves as part of the
solution and cooperates with our sister agencies to that end. In the
Salmonella Action Plan, FSIS outlines several actions it will take to
drive innovation that will lower Salmonella contamination rates,
including establishing new performance standards; developing new
strategies for inspection throughout the full farm-to-table continuum;
addressing all potential sources of Salmonella; and focusing the FSIS
education and outreach tools on Salmonella. The action plan also
involves enhancing Salmonella sampling and testing programs to ensure
they factor in the latest scientific information available and account
for emerging trends in foodborne illness.
Question. Do you believe USDA needs additional authority to better
protect the public from multi-drug resistant Salmonella?
Answer. Under relevant case law, Salmonella is not considered an
adulterant, but using the existing legal framework, FSIS has
established situations in which food that is contaminated with
Salmonella is considered to be adulterated. FSIS is always adapting
regulatory strategies to maximize their public health benefit. For
instance, while FSIS has reduced the national average of Salmonella on
young chicken carcasses during the past decade, our experience this
past year with the Salmonella outbreak associated with Foster Farms
poultry products reinforces the need to control this pathogen on
chicken parts. A recently completed baseline survey found the national
average of Salmonella on chicken parts to be approximately 24 percent.
FSIS believes setting a performance standard for chicken parts will
help reduce consumer exposure to Salmonella. Frequent presence of
Salmonella in a product may indicate that the production process is not
adequately controlled, and in situations like this, food that is
contaminated with Salmonella is considered to be adulterated. In these
instances, the Agency has the authority to close an establishment for
failing to produce safe food and to keep it closed until adequate
control measures are in place. The Agency has exercised this approach
when supported by evidence that the facility in question was producing
a product that was injurious to health.
Question. Mr. Secretary, the Centers for Disease Control reports
that our food safety system has not made progress in the last decade in
reducing the number of illnesses and deaths caused by Salmonella. The
CDC also reports that poultry products remain the most common commodity
associated with foodborne outbreaks and the most common source of
Salmonella.
Mr. Secretary, the Animal and Plant Health Inspection Service runs
the National Poultry Improvement Program, which tests for Salmonella
strains that are important to the health of live poultry. The program
also tests for a strain that causes illnesses associated with eggs.
However, the National Poultry Improvement Program has not focused
on testing for Salmonella strains that cause foodborne illness in
humans, such as Salmonella Heidelberg, the strain implicated in recent
outbreaks.
Mr. Secretary, what additional actions can your Department take
regarding poultry farms to help reduce the incidence of Salmonella
strains that cause foodborne illness in humans?
Answer. The Department has identified Salmonella as a top priority
for FSIS in the 2011-2016 Strategic Plan. To remain on target, the
Agency convened a working group, which developed a Salmonella Action
Plan to itemize specific innovations to reduce Salmonella contamination
rates in meat and poultry products. The Agency's authority starts at
the establishment, not at the farms. However, FSIS works with its
sister agencies, the Food and Drug Administration and Animal and Plant
Health Inspection Service (APHIS) to reduce the prevalence of foodborne
illness. In order to help decrease the prevalence of Salmonella on
FSIS-regulated products at pre-harvest, the Agency will develop a
document summarizing the lessons learned from previous poultry and beef
pre-harvest meetings, and lessons incorporated into FSIS policies. The
Agency will also continue to work with industry members on specific
outbreaks to identify best practices and organize and host pre-harvest
poultry meetings to inform future multi-agency Government policy or
best practice guidelines.
antibiotic use
Question. Mr. Secretary, I have become very concerned about the
overreliance on antibiotics in agriculture and how this trend directly
contributes to increasing antimicrobial resistance and virulence in
foodborne pathogens.
Over the last few years, we have seen the emergence of multi-drug
resistant, highly virulent Salmonella in poultry products. For example,
between 2002 to 2011 resistance to Ceftriaxone, an important antibiotic
used to treat children who have Salmonella, increased from 10 percent
to 34 percent in chicken, and from 8 percent to 22 percent in ground
turkey.
This is why I have introduced legislation to ban the non-
therapeutic use of medically important antibiotics in animal feed. I
have also worked closely with the Food and Drug Administration on their
important efforts to achieve this goal through administrative action.
Specifically, FDA Commissioner Hamburg recently published guidance
that will require all medically important antibiotics used in animal
feed to be administered only upon the order of a licensed veterinarian
and only for therapeutic reasons.
What will be critical is that veterinarians take a leadership role
in working closely with producers to prevent infections without using
antibiotics, and to use antibiotics only when no alternatives exist.
What steps is USDA taking to reduce antibiotic use in agriculture
and prevent the development of antibiotic resistance?
Answer. The issue of antimicrobial resistance (AMR) requires
multidisciplinary coordination from both the public health and animal
health sectors. USDA remains firmly committed to working with State and
Federal partners, veterinarians, and producers to analyze the various
uses of antibiotics in food animal production and to promote practices
justified by sound science that could reduce the use of antibiotics on
the farm while protecting animal health. The Food and Drug
Administration (FDA) has been developing new Guidance for Industry
(GFI) related to the AMR issue for the past several years. USDA
participated in discussions with FDA on several of these Guidance
documents, most recently GFI 213, which seeks the voluntary removal of
label claims for growth promotion or feed efficiency for medically
important antimicrobials which would bring all feed and water uses of
medically important antimicrobial drugs under the oversight of a
veterinarian. USDA is supportive of FDA AMR policies that effectively
secure human and animal health. In addition, we are working with FDA to
identify metrics to assess the impacts of current and future policy
actions related to antimicrobial drug use in livestock and poultry.
USDA is at the forefront of promoting biosecurity practices to
reduce disease exposure and spread to keep livestock and poultry
healthy, which can reduce the need for antimicrobial use. These efforts
include the development of new vaccines, enhanced diagnostics, and
alternative treatments to antimicrobial products such as
immunomodulators (drugs which can enhance immune response and could
potentially reduce some uses of antimicrobials). Furthermore, USDA has
worked to develop a better understanding of the ecology and
epidemiology of animal disease agents on-farm and at harvest and
processing to identify ways to mitigate the risk of animals becoming
infected and the risk of transmission of disease agents by foodborne
routes. These efforts, combined with educational efforts promoting the
judicious use of antimicrobials, will support a strong, healthy, and
thriving U.S. animal-agriculture system as well as public health. In
this regard, USDA is working with Federal, State and industry partners
to help ensure the effectiveness of antimicrobials. Antimicrobials are
beneficial in animal agriculture to improve the health and welfare of
animals. We are committed to helping provide sound science to inform
appropriate policy decisions regarding antimicrobials. The appropriate
use of health management practices is pivotal to an on-farm strategy to
optimize antimicrobial use on U.S. livestock and poultry operations.
Question. How is USDA helping to increase veterinary oversight of
antibiotic use?
Answer. USDA has been assisting the Department of Health and Human
Services (specifically the Food and Drug Administration (FDA)) in its
development of policies related to the use of antimicrobial drugs in
food-producing animals. We have provided FDA with results of analyses
from a small producer survey conducted in part to gain information
about producers' access to veterinarians. This information was critical
for FDA to make decisions about how best to require veterinary
involvement in the selection and use of medically important
antimicrobial drugs via feed or water in livestock and poultry
production. In addition, we work with producer groups and veterinary
organizations to help assure the judicious use of antimicrobial drugs
through quality assurance programs and educational modules. Further, we
are working with producers, practitioners, and the pharmaceutical
industry to describe antibiotic use practices by producers, determine
the prevalence of antimicrobial resistance on the farm, identify risk
factors for resistance development, and, develop and implement
interventions to reduce antimicrobial resistance.
downed non-ambulatory veal rule
Question. Mr. Secretary, I have been concerned over the years by
the fact that downed, non-ambulatory veal calves can be slaughtered for
human consumption.
I wrote to your Department in 2009 asking that the slaughtering of
downed veal calves be halted, and I have introduced legislation in the
past to ban this inhumane practice. I was happy to see that your
Department announced in 2013 that it would propose a rule to finally
accomplish this important goal.
However, I was deeply disturbed by the recent, egregious inhumane
handling of veal calves at a plant in New Jersey. What was particularly
troubling about this specific situation is that the inhumane handling
clearly happened over a long period of time and was identified by an
undercover video, rather than by Federal inspectors that were present
at the establishment.
This is why I recently wrote again to Acting Under Secretary
Ronholm, requesting that USDA move as quickly as possible to propose
and finalize a rule to ensure that downed veal calves are ineligible
for slaughter, and that they receive prompt and humane euthanasia.
Mr. Secretary, do you believe this is a rule you can propose and
finalize before the end of fiscal year 2015?
Answer. FSIS anticipates publishing the proposed rule by the end of
calendar year 2014. In addition, the Agency will continue to use its
existing authority to ensure that veal calves and other livestock are
humanely handled in connection with slaughter.
federal inspector's training
Question. Will you agree to re-evaluate the training and deployment
of your Federal inspectors to better ensure that the health and
handling of livestock receive adequate oversight?
Answer. We are fully committed to consistent improvements in our
training and deployment of our Federal inspectors. We are actively
developing and implementing action plans to ensure better oversight and
to fulfill our obligations under the Humane Handling Act at regulated
industry establishments.
specialty crop pest program
Question. Mr. Secretary, specialty crops are a tremendous part of
California's $44.7 billion agriculture industry. In fact, my State
produces the vast majority of the produce, fruits, and nuts consumed
across the United States.
I am concerned about the proposed cut to the Specialty Crop Pest
program. This program received $152 million last year, but your budget
request for this program is only $137 million. This represents a
significant cut of 10 percent to this critical program.
The Specialty Crop Pests program helps to combat devastating pests
that destroy crops or could result in the loss of critical markets to
these crops. For example, the Citrus Health Response Program is
critical to combating citrus greening disease and the pest that spreads
it. I am deeply concerned that reduced funding for the program could
allow this disease to spread across California and devastate our citrus
industry.
The Specialty Crop Pests program also combats the European
Grapevine Moth and the Light Brown Apple Moth, two pests of significant
economic impact to producers in my State. In fact, significant progress
has been made towards eradicating the European Grapevine Moth from the
Napa region of California, and it is critical that work continue to
meet this goal.
How will the Department plan to safeguard the specialty crop
industry when faced with a 10 percent cut to the Specialty Crop Pests
Program?
Answer. APHIS recognizes the importance of the programs for which
reductions are proposed. These efforts not only help ensure the
availability of fresh produce, they also support U.S. producers'
ability to export their products. USDA realizes the importance of these
programs, but also believes that these activities should be a
cooperative effort and a shared responsibility between the Federal
Government and the State and local governments whose people will most
directly and immediately benefit. The Department's budget represents
our determination to find the correct balance in these
responsibilities. USDA realizes the importance of these programs, but
also believes that these activities should be a cooperative effort and
a shared responsibility between the Federal Government and the State
and local governments whose people will most directly and immediately
benefit. The Department's budget represents our determination to find
the correct balance in these responsibilities.
domestic flower growers
Question. Mr. Secretary, I am proud that California is home to many
of our Nation's top domestic flower growers. I believe one important
way to support the domestic flower industry is to highlight the
importance of sourcing locally and domestically grown fresh cut
flowers.
This is why I urged the First Lady in 2012 to display domestically
grown flowers in the White House. I was delighted that the recent State
Dinner for French President Francois Hollande used domestic flowers--
including blue and purple irises grown in California.
Mr. Secretary, America's cut flower industry is at a critical
juncture. Since the early 1990s, the United States cut flower industry
has rapidly lost market share to imported flowers from South America as
a result of trade preferences contained in the Andean Trade Preferences
Act.
Before the enactment of this law, American producers contributed 64
percent of the cut flowers sold in this country. Today, American
producers supply just 20 percent of the total domestic market.
Mr. Secretary, I am grateful that your Department has been
supportive of the domestic flower industry, including in the effort to
have domestic flowers displayed at White House events.
What additional actions can your Department take to promote the use
of domestically grown flowers in the United States and to expand this
unique and important sector of our Nation's agriculture industry?
Answer. USDA supports the marketing of domestically grown flowers
through a number of programs. Market News, for example, improves market
transparency for domestic growers by reporting market prices for cut
flowers and other ornamental crops at wholesale and shipping points,
and by reporting the volume of imports through the key entry points
such as Miami and various Mexican crossing points. Market News also
publishes several specialized market reports on ornamental crops,
including the Miami Shipping Point Ornamental Price Report, the Boston
Wholesale Ornamental Price Report, the Miami Ornamental Shipping Point
Trends, and the Weekly Summary for Ornamentals. AMS is working toward
expanding Market News reporting of local and regional markets, which
will capture cut flowers and other ornamental crops that are sold
locally. Current reports on farmers' auctions include flower sales.
Farmers' markets are another sales outlet for domestic flowers.
USDA also supports marketing by developing and updating U.S. grade
standards, which are an essential element in resolving disputes
concerning product quality, provide a basis for domestic and
international trade, and promote efficiency in marketing. There are
currently three U.S. grade standards for cut flower products which
describe the quality of flowers in the marketplace. AMS will work with
the cut flower industry as needed to develop, update, or otherwise
improve U.S. grade standards so that they reflect current cultural and
marketing practices.
Finally, the Specialty Crop Block Grant Program has funded 23
projects specifically focused on cut flower research, marketing,
production, and consumer and producer education since 2009, for a total
of more than $1.4 million. The 2014 farm bill increased the funding
available to each State for Specialty Crop Block Grants and these
resources continue to be available to support industry proposals.
horse welfare
Question. Mr. Secretary, I have long been an advocate of horse
welfare. One particular egregious example of inhumane treatment of
horses that concerns me is the practice of soring.
As you are aware, Mr. Secretary, ``soring'' is a practice employed
by bad actors to inflict pain, injury, and disfigurement to horses'
legs to force them to produce an exaggerated gait.
As you are aware, a 2010 report by the Inspector General found that
the current legal structure of low fines, weak horse welfare
safeguards, and a reliance on industry self-regulation have proven
completely ineffective in ending the abuse of horses.
It is my belief that USDA would benefit from increased authority
and additional resources to end the disturbing practice of horse
soring.
To that end, I am a cosponsor of the Prevent All Soring Tactics
Act, along with 50 other members of this chamber. This act would ban
the use of soring devices like chains, end the failed system of
industry self-regulation, and increase penalties for violators. This
legislation is strongly supported by animal welfare groups, the
national horse industry, and the veterinary community. It is my hope
that this bill will pass soon.
Mr. Secretary, how important will the ``Prevent All Soring Tactics
Act'' be to your Department in its efforts to end the abusive practice
of horse soring?
Answer. Soring is a concern, and USDA's Horse Protection Program
aims to reduce or eliminate the abusive practice of soring of horses.
Currently, horse show sponsors and/or show management have statutory
responsibility under the Horse Protection Act (HPA) to prevent unfair
competition and must identify and disqualify sored horses. USDA works
collaboratively with the 12 current Horse Industry Organizations (HIOs)
to train and license designated qualified persons used to inspect
horses for soring at all events covered by the HPA. In fiscal year
2013, APHIS' Investigative and Enforcement Services issued 1,255
official warnings and, in collaboration with USDA's Office of the
General Counsel, pursued administrative enforcement actions against 36
alleged violators of the HPA. Beyond this, APHIS obtained 19 decisions
and orders to resolve alleged violations of the HPA, which resulted in
orders assessing $4,200 in civil penalties and disqualifying 10
individuals from participating in HPA-regulated activities.
Under the proposed Prevent All Soring Tactics Act, USDA would take
the necessary action to license, train, assign, and oversee horse
inspectors as required to continue efforts to reduce and eliminate
horse soring.
______
Questions Submitted by Senator Roy Blunt
farm bill implementation
Question. Enactment of a farm bill this February ended a 2-year
holding pattern for farmers and ranchers. It authorized new commodity,
dairy, disaster, and risk management programs and represents the most
significant change in farm policy in a generation. USDA has already
started the process of implementing the livestock disaster programs
with a goal of producer signup starting April 15, 2014. Producers are
eager for USDA to continue implementation of farm bill programs.
How are you prioritizing implementation of farm bill programs?
Answer. Farm bill program implementation has been designed to
create certainty for our customers, to be orderly for our staff, to
recognize the deadlines established by law, and to recognize any
pressing priorities of the farming and ranching community regarding
markets, weather, and crop cycles. Our initial prioritization,
therefore, involved making livestock disaster payments to producers
affected by disasters since October 1, 2011. Payments for those years
had not been possible until disaster assistance authority was restored
in the recent farm bill. We sent a clear message that livestock
producers would be quickly paid for past losses, and started signup on
April 15--with payment starting shortly thereafter. As of late June,
over $1 billion in payments have been made, largely under the Livestock
Forage Program. We also made sure that programs continuing under the
new farm bill were available to producers this past spring, such as the
marketing assistance loan program. For example, loan rates were
announced shortly after bill passage, so that winter wheat producers
could take out marketing assistance loans as soon as their crop was
harvested.
We know that producers are conservers of our soil and water, which
is also a priority. On June 9, FSA restarted continuous signups in the
Conservation Reserve Program, as well as the CRP Transition Incentives
Program for beginning and socially disadvantaged farmers and ranchers.
In lieu of a general sign-up this year, we're allowing producers with
CRP contracts expiring this September to receive a 1-year contract
extension. And we've implemented the farm bill requirement that in
certain cases producers enrolled through general sign-up for at least 5
years can opt-out of their contracts. Resumption of the Biomass Crop
Assistance program began in early June to assist with the peak season
for the removal of forest residues that pose a fire threat.
Implementing new programs--such as the new dairy program and
Agricultural Risk Coverage/Price Loss Coverage (ARC/PLC) is also a
priority, and this work has been on-going for several months. We are
very much focused on having these programs be as effective as possible,
and ensuring that producers understand how best to use them. A robust
outreach and education plan is being developed to help farmers prepare
for complex decisions they will make later this year under ARC/PLC, the
new margin protection program for dairy, and enhanced protection under
Crop Disaster Assistance Program. These programs will be available, and
producers will need to start making decisions, this fall.
Question. The farm bill included $100 million for implementation
costs. How do you plan to allocate those resources?
Answer. The 2014 farm bill provided this funding to assist in the
implementation of title I programs, which continues many programs from
the 2008 farm bill, but also creates several new programs, a new Margin
Protection Program for dairy and a new safety net approach for
agriculture, the Agricultural Risk Coverage and Price Loss Coverage
programs. These programs all have important implementation activities
for fiscal year 2014 and fiscal year 2015, including the development of
software, hiring temporary employees, training field office staff and
producer outreach and education. Under FSA's current spending plan
estimates, approximately $33.1 million would be utilized in fiscal year
2014. The assumptions include $6.2 million for temporary employees,
$6.4 million for travel related to training, $3.7 million for postage
and other operating expenses, $10.8 million for IT development and $6.0
million for extension and education. The remaining $66.9 million would
be utilized in fiscal year 2015. The assumptions include $27.0 million
for temporary employees, $10.9 million for travel related to training,
$8.6 million for postage and other operating expenses, and $20.4
million for IT development. The spending plan assumptions are subject
to change as FSA begins the implementation process for each program and
a clearer understanding of specific administrative requirements are
better defined.
Question. USDA has already fast-tracked implementation of livestock
disaster programs. When can livestock producers expect payments to be
made for their losses?
Answer. Payments are issued within a few days of contract approval.
The timing of a particular payment depends on the complexity of the
application, the time needed for review, and whether documentation of
losses provided to FSA offices is complete or requires follow-up. As of
April 8, just 4 months after the farm bill was signed, USDA has
received more than 160,000 applications for help and issued more than
$1 billion in disaster relief to farmers and ranchers nationwide.
Question. When can producers expect signup to begin for Price Loss
Coverage and Agricultural Risk Coverage programs?
Answer. Late this summer FSA plans to provide producers information
on their current base acres, yields and 2009-2012 planting history and
offer them an opportunity to verify this information with their local
FSA office. Then later this fall, there will be an opportunity to
update yields and reallocate bases--this is the critical first step in
rolling out the ARC/PLC program. By mid-winter all producers on a farm
will be required to make a one-time election between price protection,
county revenue protection, and/or individual revenue protection for the
2014-2018 crop years.
midas implementation
Question. MIDAS was chartered in 2007 to reengineer and modernize
the Farm Service Agency's antiquated IT systems. The ultimate goal of
the system was to streamline delivery of farm programs and give
producers access to farm programs online.
The original cost of MIDAS was reported to be $305 million with
full implementation to be completed in March 2014--this month. However,
it is clear that USDA will not be able to meet the goals and timelines
originally envisioned and repeatedly reported to this subcommittee.
At this time, the subcommittee has already invested over $305
million in MIDAS, and USDA is far behind schedule on implementing the
system.
Further, GAO has reported on separate occasions, in 2008, 2011, and
2013, that successful implementation of MIDAS is at risk, warning that
USDA's ability to deliver system capabilities on time and within budget
is limited by its failure to adopt sound management practices.
USDA recently embarked on a process to re-scope the timeline and
cost of the project. This process is ongoing.
I understand that the Department is in the process of updating cost
and implementation goals for MIDAS. How much do you expect the scope
and cost of MIDAS to change?
Answer. To ensure effective implementation of the 2014 farm bill,
changes will need to be made to the MIDAS plan. Modernization of the
FSA acreage reporting and inventory reporting processes included in the
MIDAS Acreage Reporting/Inventory Reporting release will be placed on
hold so focus could be placed the Acreage Crop Reporting Streamlining
Initiative (ACRSI). The original AR/IR release was focused on a
solution for just FSA, whereas ACRSI is a multi-agency approach to
acreage reporting and inventory reporting. All remaining MIDAS funds
are to be focused on the Business Partner release due to be rolled out
in early fiscal year 2015.
Question. USDA was given plenty of warning that the MIDAS plan was
flawed, why did it take the Department so long to address program
deficiencies and inform the subcommittee of program changes?
Answer. In recognition of the strategic importance of the MIDAS
investment to the future transformation of FSA, the Department and FSA
have been intensely focused on developing a MIDAS plan to address
program deficiencies. In January 2013, USDA initiated a re-baseline of
the MIDAS investment. It was expected that the re-baseline would
produce an approach to mitigate risks and provide improved program
outcomes. Recommendations provided by oversight bodies such as the
Government Accountability Office (GAO) regarding the original program
plan are being incorporated into the re-baseline.
FSA will take several steps to strengthen the management and
budgetary controls over the MIDAS program to improve program delivery
effectiveness. First, it will intensify the focus on business needs and
program delivery driving the technology and business process changes.
Second, it will strengthen managerial oversight and accountability to
focus on FSA's Farm Program Delivery business needs. Third, it will re-
align FSA's organizational structure to better leverage resources
between/across program delivery and production. Finally, it will
implement controls and check points on budgetary decisions.
ped virus
Question. There is a threatening animal disease that has severely
impacted the pork industry in a very short period of time. In the last
year alone, farms in 27 States have tested positive for the PED virus
and over 4 million pigs have died as a result. Little is known about
how the disease came to the United States, nor much about how it is
spreading, but the potential economic impacts could be devastating.
Many eyes will be on USDA's quarterly hog report on March 28.
Demand for pork products is highest in the coming summer months
when families and friends gather for barbecues, and grocery store
prices will inevitably reflect supply impacts due to the PED virus.
How much is the price of pork expected to increase in the coming
months?
Answer. The USDA's Economic Research Service forecasts second-
quarter prices of live 51-52 percent lean equivalent hogs to average
$78-$82 per cwt (hundredweight), about 22 percent above prices a year
ago.
Question. What is USDA doing to help mitigate the economic impacts
to industry and consumers?
Answer. To prevent further spread of the disease and, evaluate
control and elimination strategies, USDA is participating and assisting
in epidemiological investigations and risk assessments of incidents.
These actions are designed to determine how to minimize the impact of
porcine epidemic diarrhea virus (PEDV)'s impact on swine producers and
the swine industry. In addition, the Department is negotiating with
China to relax their restrictions on live swine shipments from the
United States. We expect that this issue will be resolved in June 2014.
We are considering what additional actions, such as assistance with
diagnostic testing and additional on-farm biosecurity, may be necessary
to reduce the spread and impact of PEDV.
Question. Does the budget request dedicate sufficient resources to
research, surveillance, and other areas to gain control of the virus?
Answer. Because USDA developed the fiscal year 2015 budget before
the Porcine Epidemic Diarrhea virus (PEDV) situation became prominent,
we have not included a specific request for funding in our fiscal year
2015 request for monitoring and management activities. If additional
funds are needed in fiscal year 2015, the Department will pursue
alternative funding sources. Agencies have used programmatic
flexibility to support activities such as:
--APHIS, in conjunction with State and industry partners, has been
working to develop appropriate responses to PEDV and Swine
Delta Coronaviruses at a national level.
--Furthermore, since the PED virus was identified in the spring of
2013, ERS economists have used expert opinions from industry
contacts to develop a balance sheet that calculates ranges of
production losses due to the virus. ERS took this approach
because, as a non-reportable disease, there is no data series
that explicitly itemizes PED losses. The forecasts that ERS has
submitted to the inter-agency process incorporate calculated
production loss estimates. These estimates help to form the
basis of pork production and other sectorial indicators that
are published monthly in USDA's World Agricultural Supply and
Demand Estimates.
--Moreover, a Hatch Multi-State Group, Enteric Diseases of Food
Animals: Enhanced Prevention, Control and Food Safety (NC1202),
is in place as a result of the ongoing Hatch capacity funding.
This group is funded from October 2012 through September 2017.
It is taking steps to address this disease, particularly
through work being conducted at The Ohio State University. For
example, it developed new diagnostic tests for detection (real-
time RT-PCR; immunofluorescent antibody). Also funds have been
used to support early stages of PEDV vaccine development.
Additionally, the National Animal Health Laboratory Network,
funded in part through NIFA Food and Agricultural Defense
Initiative dollars, is cooperating with disease surveillance on
PEDV. Because the disease is so recent, no competitive projects
have received funding to date.
--Lastly, ARS has been developing plans to focus research at the
National Animal Disease Center (NADC), in Ames, Iowa, on
Porcine Epidemic Diarrhea Virus (PEDV). The aim of the research
is to provide scientific information needed to enable the
development of countermeasures and enhance on-farm biosecurity.
Emphasis will be placed on identifying mechanisms of viral
pathogenesis, transmission, and immunity to PEDV, including
other emerging coronaviruses of swine.
biotech regulation
Question. The United States remains the global leader in
agriculture production because American farmers are the best at doing
what they do if given a level playing field. Improved seed technology
enables farmers to increase yields or mitigate losses due to drought or
disease. More than 90 percent of soybeans, corn, and cotton grown in
the United States are biotech products.
Before any of these products can be brought to market, they must
receive approval from USDA. While I recognize that USDA has attempted
to make improvements to their process, what Americans are witnessing is
that it takes as much as three times longer to gain approval for a new
seed in the United States than it does in competing countries like
Brazil and Argentina--putting American farmers at a competitive
disadvantage.
How can USDA improve its review and permitting processes to allow
for more timely approvals?
Answer. In fiscal year 2010, USDA conducted an internal review on
its petition process for genetically engineered (GE) organisms to
identify ways to speed up the time to reach a deregulation decision.
While our regulations provide a timeline of 180 days, our process
improvement analysis revealed an estimated timeline of 13-15 months to
conduct quality analysis to support our decisions and protect plant
health. USDA uses the Plant Protection Act and National Environmental
Policy Act as the framework for its regulatory processes and decision-
making, which ultimately drive our timelines. Other countries do not
have to necessarily adhere to the same requirements.
USDA has implemented process improvements to quickly establish what
path our reviews will take and what level of environmental review is
necessary.
In regard to timelines in competing countries, Canada's directive
does not specify the length of time that they are supposed to finish
their reviews (with the exception of the timeframes for crops with
stacked traits). Brazil's timeframe in regulation is 270 days, but they
do not always meet this.
Canadian Food Inspection Agency data compiled from February 2010 to
June 2013 covering 21 applications have a range of 7 months to 3.5
years, with an average of 22 months. The average timeframe for a
Canadian cultivation approval for a single event is 24 months. Canadian
cultivation involving breeding stack adds an additional 2 months on
average.
Brazil is taking about 12 months to complete their reviews (prior
to 2007, length of time was 4-8 years). The average timeframe for a
Brazilian cultivation approval of a single event is 27 months.
Brazilian approvals for cultivation of breeding stacks add an
additional 15 months on average.
We are making good progress on reducing the time it takes to review
and complete biotech approvals. USDA is committed to continuing efforts
to meet the new timeframes it set. We assure the Committee that this is
a high priority for USDA.
Question. What is the current backlog of applications and when does
USDA expect to clear out the backlog?
Answer. The backlog petitions, or as we generally refer to them as
legacy petitions, totaled 23 in March 2012. Any petition received after
that date was not counted as part of the backlog because they were new
petitions.
The 23 petitions considered as part of the backlog are:
------------------------------------------------------------------------
------------------------------------------------------------------------
03-104-01p*............................... Scott's/Monsanto HR Creeping
Bentgrass
03-323-01p................................ Monsanto glyphosate-tolerant
sugar beet (Partial
Deregulation)
09-015-01p................................ BASF imidazolinone tolerant
soy
09-055-01p................................ Monsanto drought tolerant
corn
09-063-01p................................ Stine Seed GT corn
(extension)
09-183-01p................................ Monsanto stearidonic acid
soy
09-201-01p................................ Monsanto modified-oil HT soy
09-233-01p*............................... Dow AAD-1 HT corn
09-328-01p................................ Bayer glyphosate/
isoxaflutole tol soy
09-349-01p*............................... Dow 2,4-D glufosinate
soybean
10-070-01p................................ Virginia Tech blight
resistant peanuts
10-161-01p*............................... Okanagan non-browning apple
10-188-01p*............................... Monsanto Dicamba soybean
10-281-01p................................ Monsanto MS glyphosate
tolerant corn
10-336-01p................................ Syngenta's Rootworm
Resistant Corn
11-019-01p*............................... ArborGen cold-tolerant
eucalyptus
11-063-01p................................ Pioneer GT Canola
11-182-01p................................ Simplot Low-Browning
Potatoes
11-188-01p................................ Monsanto GT Canola
11-202-01p................................ Monsanto Increased-yield
Soybean
11-234-01p*............................... Dow 2, 4-D, glyphosate,
glufosinate soybean
11-244-01p................................ Pioneer BT/GT corn
11-342-01p................................ Genective glyphosate
resistant corn
------------------------------------------------------------------------
The petitions in the chart above highlighted with an asterisk (*)
are still pending. These account for seven of the 23 backlog petitions.
The remaining items have been completed; that is, we have made a
determination of nonregulated status or they were withdrawn by the
submitter. We have completed 16 petitions since the implementation of
the process improvements in March 2012. Of the seven still in review,
Okanagan apples is the only one that is not associated with an
Environmental Impact Statement (EIS), which are not subject to the
timeline goals of the petition process improvements and take
significantly longer to complete. We expect to complete that petition
sometime this summer. With this determination, all petitions that do
not require an EIS will be cleared from the backlog.
Six of our petitions require an EIS; in its November 2011
announcement, USDA indicated that petitions that require an EIS will
take more time and could not be completed in the timeframes
established. With respect to the petitions associated with an EIS, we
anticipate making final determinations on the following petitions by
the end of fiscal year 2014:
--Dow's ADD-1 HT corn;
--Dow's 2, 4-D, glufosinate soybean; and
--Dow's 2, 4-D, glyphosate, glufosinate soybean.
In addition, we are scheduled to complete Monsanto's Dicamba
soybean by the end of the calendar year.
Finally, we are projecting a final determination on ArborGen's
cold-tolerant eucalyptus petition in early calendar year 2015. With
this determination, APHIS will have cleared the backlog of petitions.
international agriculture development
Question. The subcommittee had the pleasure of hosting Bill Gates a
couple weeks ago for a discussion about research, innovation, and the
global landscape of agriculture. He mentioned that one of his
foundation's greatest challenges is the lack of regulatory processes
related to biotechnology approvals in many developing countries and the
hardships faced with trying to introduce improved seed and technology.
As you alluded to in your opening statement, can you talk about the
efforts of the Foreign Agricultural Service, and that of USDA in
general, in working with these countries to develop a regulatory
process?
Answer. Promoting agricultural production and biotechnology exports
to increase food security in the world is a stated strategic goal for
USDA. It remains one of the key guiding principles for the work of the
Foreign Agriculture Service (FAS), both in our policy and capacity
building activities. USDA promotes sustainable, market-led growth
across the entire food production and market chain.
Specific capacity building activities organized by USDA include:
regulatory workshops aimed at science-based, predictable, transparent,
World Trade Organization (WTO)-compliant regulatory development;
farmer-to-farmer exchanges; establishment and strengthening of networks
or associations of farmers; communication trainings for civil society
and members of the media; information and resource sharing for the
local academic community; and capacity strengthening of African
countries to engage in relevant international discussions that impact
the development or trade of biotechnology products.
In implementing this activity, USDA works with other relevant U.S.
Government (USG) agencies, the U.S. university system, and the U.S.
private and non-governmental sectors. Where applicable and useful, USDA
also works closely with other like-minded country governments, such as
Argentina, Australia, Brazil, and Canada.
Question. With half of the world's remaining planted acreage
available in Africa, is there a particular focus on African countries?
Answer. USDA's biotech outreach and capacity building efforts in
Africa focus on Burkina Faso, Egypt, Ghana, Kenya, Mozambique, Nigeria,
South Africa, and Uganda. These countries have been identified as
priority countries based on their acceptance and adoption of the
technology and the influential role they can play in their respective
regions. In addition, USDA has been engaging with regional
organizations, such as the Common Market for Eastern and Southern
Africa (COMESA) and the Southern African Development Community (SADC).
In COMESA and SADC, USDA supports the development and implementation of
regional biosafety regulatory frameworks to help African countries with
limited resources take advantage of the benefits of the technology.
Examples of USDA's recently concluded biotech outreach and capacity
building activities include the following:
--COMESA Regional Biosafety Framework.--In August 2013, USDA
facilitated endorsement of a regional policy on biotechnology
and biosafety in eastern and southern Africa. The policy will
allow for sharing of regulatory information and resources, and
enable adoption of biotechnology in the region. USDA continues
its engagement with COMESA to support the implementation of the
policy.
--United States-Brazil Biotech Workshop.--In April 2013, the United
States and Brazil concluded a successful outreach initiative on
biotechnology to nine influential African countries to develop
pro-biotechnology African champions and further strengthen
United States-Brazil collaboration in biotechnology.
data security in agriculture
Question. Farmers have been sharing data with agribusiness, State
agencies, and USDA for decades. Much of this data is personal and
includes information about specific farming practices. The use of data,
combined with technology, has given U.S. farmers new tools to maintain
their competitive edge. However, as with any scenario where a farmer
shares personal information about their property, farming practices,
and yield, privacy concerns are raised. It's fair to say a lot of data
on farmers is out there in the private and public domain, and American
farmers are rightfully concerned that their data remain private.
This concern is not unfounded, especially following the
Environmental Protection Agency (EPA) release of personal information
on more than 80,000 farmers in 29 States. Lawsuits have been filed to
stop EPA from disclosing more personal information about farmers.
In almost every mission area, USDA collects and procures a
significant amount of producer data for research and statistical
analysis.
What assurances do farmers have that personal data collected by
USDA is protected from public dissemination? Are these protections in
law or regulation?
Answer. USDA is committed to protecting a producer's personal data,
as required by the Privacy Act (5 U.S.C. section 552a--as amended), the
Freedom of Information Act (5 U.S.C. section 552--as amended), and,
more specific to the protection of producer data, as identified in
section 1619 of the Food, Conservation and Energy Act of 2008 (7 U.S.C.
8791). Since enactment in 2008, 7 U.S.C. 8791 has served as the
foundational baseline outlining USDA's requirement to protect
information that has been provided by a producer in order to
participate in a USDA program and to protect geospatial information
maintained by USDA. For participants in the Federal crop insurance
program, information provided by the producer is protected from public
dissemination by the Federal Crop Insurance Act, section 502(c) (7
U.S.C. 1502(c)), Protection of Confidential Information, which
precludes the Department from releasing to the public information
provided by the producer, unless the producer consents to the release
of such information.
Question. Are privacy standards consistent within the Department at
different agencies? Should they be consistent?
Answer. USDA agencies are generally governed by the Privacy Act,
Freedom of Information Act, and E-Government Act of 2002. In addition,
some programs or agencies within USDA may have program authorizing
statutes that impose additional, and sometimes differing, privacy
standards. Also, each USDA Agency has the authority to develop detailed
policy that is specifically designed to address the protected data
types most commonly processed within the Agency. For example, Farm
Service Agency has Agency-specific protected data policy identifying
the responsibility to safeguard any information that sheds light on a
producer's financial situation or farm operations, such as farm loans
or farm loan application information, farm lease agreements, owner and
operator/tenant agreements, actual crop production amounts, actual crop
yields, cropland acres, farmland acres, specific crop acres, number of
livestock, or irrigation/non-irrigation data. Also, the Federal Crop
Insurance Act specifically prohibits the Department and approved
insurance providers from disclosing to the public information furnished
by a producer participating in the Federal crop insurance program.
Question. Does USDA ever share farmer data with other governments
to entities outside the Department, such as EPA? If an Agency were to
request such data, would the Department share it?
Answer. USDA has shared protected producer data with Government
entities outside the Department, however, the sharing of protected
producer data can occur only if the requesting non-USDA Government
entity meets the authorized disclosure criteria that control USDA's
ability to share protected producer data. 7 U.S.C. section 8791
establishes the standard baseline USDA must follow concerning the
sharing of protected producer data. Within 7 U.S.C. section 8791 there
is policy indicating that USDA is able to make an authorized disclosure
of protected producer data when the requesting individual or
organization is working in cooperation with the Secretary in a USDA
program. If a non-USDA Government entity were to request that USDA
share protected producer data, under 7 U.S.C. section 8791 USDA is
required to confirm that the requesting non-USDA Government entity is
in fact working in cooperation with the Secretary by providing
technical or financial assistance concerning a Department program.
Based on a thorough evaluation of applicable documentary material, USDA
will make a determination as to whether the requesting non-USDA
Government entity will or will not be certified as a USDA Cooperator.
If a non-USDA Government entity does qualify for USDA Cooperator status
under the authorized disclosure provision within 7 U.S.C. section 8791,
USDA will share only that protected producer data that is necessary for
the non-USDA Government entity to participate in the identified USDA
program. By way of example, when USDA Cooperator status is confirmed
the Farm Service Agency uses a USDA Cooperator memorandum of
understanding to document the terms and conditions associated with the
disclosure of protected producer data to a certified USDA Cooperator.
If a non-USDA Government entity does not qualify for USDA Cooperator
status under the authorized disclosure provision within 7 U.S.C.
section 8791, USDA will not release protected producer data to the
requesting non-USDA Government entity.
For participants in the Federal crop insurance program, farmer data
is not generally shared with other Federal, State, or local agencies
outside of USDA unless it is to aid in the administration and
management of the Federal crop insurance program. Farmer data is not
normally released to other Federal, State, or local agencies unless a
demonstrated need exists that may impact the Federal crop insurance
program. However, these agencies are also bound by the same public
disclosure restrictions contained within section 502(c) of the Federal
Crop Insurance Act that apply to USDA, insurance companies, etc.
Generally, the Department's published routine uses of this data guide
such sharing of the information and can be found in the Privacy Act
system of records, FCIC-10, entitled ``Policyholder.''
food safety inspection
Question. Since fiscal year 2013, the budget request has assumed
implementation of a final rule on modernization of poultry slaughter
operations and the savings associated with it. OMB has not indicated a
firm date for publishing the final rule, and USDA would seemingly need
time after its publishing to negotiate with its labor unions before
implementation could take place. Given these factors, there is little
confidence that the new inspection system will be implemented in fiscal
year 2015 and the proposed operational savings will be realized.
Without taking decentralized rent and security payments into
account, the request for FSIS is nearly $20 million below current
operating levels, and that figure assumes pay increases.
If the modernized inspection system is not implemented in fiscal
year 2015, does the budget request propose adequate resources for the
Agency to fully meet its inspection obligations?
Answer. We are fully committed to maintaining all mandated
inspection obligations. If poultry inspection modernization is not
implemented in fiscal year 2015, FSIS would prioritize available
resources to ensure mandated inspections are performed.
Question. When can we expect a final rule to be issued on poultry
slaughter modernization? What is the cause of the delay?
Answer. FSIS is in the process of preparing a final rule on poultry
slaughter after considering the comments received. It is not possible
to provide a specific timeline.
Question. What is a reasonable timeline for implementing the final
rule?
Answer. We anticipate the rule to be fully implemented within 18-24
months from the date of publication of the rule in the Federal
Register.
country of origin labeling
Question. The budget request assumes continued enforcement of the
amended final rule on country-of-origin labeling (COOL) that was issued
by USDA in May 2013. Like the original final rule, Canada and Mexico
have challenged its compliance with international trade obligations
under the World Trade Organization (WTO) agreement. Indications suggest
that a WTO panel will issue an interim report with their decision in
June of this year, with a final report the following month.
Should the WTO panel rule against the United States in its report,
would USDA further amend its final rule to avoid retaliation?
Answer. We expect a final report to be circulated publicly this
fall. Any appeal of the panel report will not be resolved until
sometime in 2015. USDA's 2013 final rule constitutes compliance.
Therefore, it would be very premature to speculate on what actions
would be necessary to further modify the COOL program.
Question. What would be the Department's COOL activity in fiscal
year 2015 in the event of an unfavorable ruling?
Answer. We do not expect the Appellate Body to issue its report
until sometime in 2015. We consider that the 2013 final rule
constitutes compliance. It is premature to speculate what actions would
be necessary following that report.
forest service issues
Question. I understand that the Department of Agriculture, through
the Forest Service, along with other Federal agencies and the State of
Missouri, is engaged in discussions with The Doe Run Company concerning
their legacy liabilities in southeast Missouri. As I hope you will
appreciate, Doe Run is vital to the regional economy of southeast
Missouri, and I want you to understand that the continued viability of
the company is a matter of keen interest and importance to me.
Are you aware of the ongoing discussions involving your Department?
Answer. Yes, I am aware of the matter.
Question. Can I get your personal assurance that you will pay close
attention to this matter, and that you will make sure that Doe Run
receives fair treatment, consistent with the importance of this company
to the long-term economic interests of southeast Missouri?
Answer. Throughout this process, the USDA and the other Government
agencies have endeavored to treat Doe Run fairly and with respect.
rural electric user fee
Question. The budget proposes a new user fee on RUS borrowers to
cover administrative expenses for environmental assessment costs
associated with electric transmission infrastructure projects. Little
to no explanation is provided as to the origin of the fee proposal, the
parameters of how fees would be assessed, or the intended use of the
fee's revenue other than to supplement salaries and expenses.
Have current borrowers been consulted during the process of
formulating the user fee proposal?
Answer. The origin of this action was a recommendation of the
inter-agency Rapid Response Team for Transmission (RRTT). The RRTT is
an outgrowth of the 2009 memorandum of understanding between nine
Federal agencies regarding coordination in Federal agency reviews of
electric transmission facilities on Federal land, and other Executive
orders and Presidential memorandums on expediting the review and
permitting of electric transmission facilities. A specific goal of the
RRTT was to ``improve the overall quality and timeliness of electric
transmission infrastructure permitting, review, and consultation by the
Federal Government on both Federal and non-Federal lands.''
Of all of the Federal agencies involved in the review and
permitting of electric transmission facilities, the Rural Utilities
Service (RUS) was the only Agency that did not have cost recovery
authority. This action proposes to give RUS cost recovery authority.
The proposed cost recovery language is consistent with the intent of
that for the Federal land management agencies and, if authorized, is
expected to greatly improve RUS' ability to more effectively manage and
process transmission related applications for financial assistance from
its borrowers.
Transmission line proposals can be very complex covering multiple
jurisdictions including States with the potential for environmental,
historic preservation, and landscape-level effects. Many projects are
locally and regionally significant and controversial and having a
greater Agency presence is desirable to ensure that the Agency's and
the public's interests are adequately addressed.
In many cases RUS is serving as the lead Agency for the
environmental review activities under the National Environmental Policy
Act and as the lead Agency in the National Historic Preservation Act,
Section 106 review process. Not being able to be as hands-on with face-
to-face meetings when necessary has been a deterrent in expediting the
review and permitting processes for these proposals.
Current borrowers were not consulted specifically on this proposal.
However, over the years, many of the RUS's Generation and Transmission
rural electric cooperative borrowers have requested to be allowed to
contribute travel expenses for environmental staff to attend meetings.
These past offers have not been accepted.
Question. How much revenue is USDA anticipating the user fee to
incur?
Answer. RUS estimated that the cost implications for borrowers
would be modest. The user fee will be limited to travel and per diem
expenses. RUS estimated that the costs per project would be no more
than $15,000-20,000 per project ($2,500 per travel event at a maximum
of 8 travel events per project). RUS estimated that these costs would
apply to 4-7 projects per year. With a cost of $15,000-20,000 per
project for 7 projects, the total estimated revenue would be between
$105,000 and $140,000 per year.
Question. What will be the fee structure?
Answer. The fee structure would be limited to and based on the
General Services Administration's per diem rates, www.gsa.gov/perdiem.
Question. Will the additional resources for salaries and expenses
lead to additional RUS staff?
Answer. All proposed resources will be used by existing RUS staff
for travel and per diem expenses.
______
Questions Submitted by Senator Thad Cochran
commodities/crop insurance
Question. Secretary Vilsack, as you are aware, cotton producers are
transitioning to a crop insurance based safety net known as the Stacked
Income Protection Plan (STAX). Because STAX will not be available to
producers before the 2015 crop year, the 2014 Agricultural Act provides
transition assistance for upland cotton producers using their 2013
cotton base acres. It is my understanding that the payments for the
2014 crop should be available on or after October 1, 2014. This is
especially important since the only other risk management tools
available to cotton growers for the 2014 crop are existing crop
insurance products and the marketing assistance loan.
Will it be necessary for the Department to conduct a separate
signup for the cotton transition payments and if so what information
will be required from participants?
Answer. There will be a separate signup for the cotton transition
program later this summer. Among other eligibility criteria, eligible
producers should have an upland cotton base on the farm as of September
30, 2013. Additionally, the Department plans to make STAX available for
the 2015 crop year, and believes it will be able to offer coverage on
most of the traditional planted cotton acreage. Materials and areas of
availability are projected to be released by late summer 2014.
Question. When do you expect to hold signups for cotton transition
assistance?
Answer. We anticipate signup will begin later this summer and
payments will be made this fall.
Question. Mr. Secretary, it is important to note that beyond
defining the term ``significant contribution of active personal
management,'' the 2014 farm bill does not instruct the Department to
make any changes to the way individuals and entities are determined to
be ``actively engaged in farming.'' The limited authority Congress
granted the Department to change this definition was designed to
complement existing rules and regulations. It is vitally important to
maintain consistency, to the extent practicable, with the regulations
promulgated as a result of the significant changes made by the 2008
farm law which eliminated the three-entity rule and moved to direct
attribution. When implementing the provisions of the 2014 farm law, I
urge you to consider the extensive changes made as a result of the 2008
law and the costs to many operations associated with making the
organization changes necessary to comply with the new rules. Any
further changes that go beyond the scope of the new law will result in
unnecessary costs to growers and result in uncertainty for our farmers
and their lenders.
Additionally, the implementation of the new adjusted gross income
limit, as well as the new unified payment limitation, in 2014 will have
a substantial impact on a wide range of farming operations. The
magnitude of that impact is particularly daunting when such changes are
considered in combination with the application of possible changes to
the definition of ``significant contribution of active personal
management'' beginning with the 2015 crop year. Some farmers will need
to make substantial adjustments in their farm plans in order to comply
with the new rules, and those farmers who will no longer be eligible
for program benefits will have to take that into consideration when
financing their 2015-18 crops.
In order for these reforms and related provisions to be well
understood and implemented in a manner that minimizes confusion, the
Department should conduct outreach to affected stakeholders in advance
of promulgating a regulation and, in so doing, provide adequate time
for public comment on any proposed changes to the regulations.
I would expect that USDA will publish these regulations for public
comment at the earliest possible date so our farmers have an
opportunity to review and comment on the proposal. The timing of
publication of the final rule and flexibility to comply with the new
regulations is paramount to applying the new requirements in a manner
that will be fair, equitable, and enhance program integrity.
When do you intend to publish the proposed rule?
Answer. USDA intends to have the proposed rule published by the end
of 2014.
Question. What process, including outreach activity, is the
Department considering to develop the proposed definition for
``significant contribution of active personal management?''
Answer. USDA conducted a listening session on March 27, 2014,
regarding all Farm Service Agency and Risk Management Agency programs,
including a session on the forthcoming actively engaged proposal. The
proposed rule will be published in the Federal Register to seek public
comment. We will also issue a press release soliciting comments.
Further outreach, public meetings or avenues for public input will be
explored as the proposal is developed.
Question. Will the Department consider the impact of these changes
on different regions and organizational structures as suggested in the
conference report?
Answer. Yes, the Department is taking into consideration the
regional and organizational structure impacts of any proposed changes.
Question. Will the Department provide adequate time for comment and
for adjustment to any changes to the rules?
Answer. The public will be provided with sufficient time to
evaluate the proposed rule and submit comments for consideration.
Question. Please provide some insight regarding how USDA intends to
manage structural changes made to operations as a result of the new
farm bill programs and new eligibility requirements.
Answer. Although this cannot be assessed before public comments are
received, or before the regulation is promulgated, USDA will closely
consider and evaluate these issues regarding the proposed definition
change during the rulemaking comment period.
Question. Will you commit to ensuring that farmers are not
penalized for making changes to the structure of their operations to
minimize regulatory burdens and manage risks associated with modern
agriculture, including changes in land values and changes in operating
and compliance costs?
Answer. The process for the proposed rule provides an opportunity
to evaluate and assess the issues associated with the development of
the proposed definition.
Question. Mr. Secretary, the president's fiscal year 2015 proposed
budget for the Department includes $14.3 billion in reforms to crop
insurance. As you know, the president signed the Agricultural Act of
2014 into law on February 7 of this year. This new law, which Congress
debated for almost 3 years, makes significant reductions in the title I
safety net programs in favor of greater reliance on the crop insurance
programs. In fact, the new law reduces the overall level of Federal
financial support for production agriculture even though the risk of
loss emanating from natural disasters and global market disruptions
persist.
My farmers in Mississippi asked for a new farm bill that would
provide a reasonable period of certainty in a financial safety net as
they carry on in a highly risky business. We often hear from this
administration about how we need to move to risk management programs
and away from paying farmers just for being farmers. Given the lower
rates of participation in crop insurance in my area and the additional
cost of premiums, it wasn't an easy task to convince my growers in
Mississippi that they needed to balance price risk protection programs
with crop insurance as the cornerstone of the farm safety net. I fear
that if the proposed budget cuts were adopted, crop insurance may
remain affordable for some parts of the country and become a less
viable tool for other parts of the country, specifically the mid-south.
The administration's budget proposal to cut crop insurance just a few
weeks after Congress minimized the strength of the traditional title I
safety net is deeply concerning.
The President's budget proposal indicates the rate of return for
crop insurance companies is currently expected to be 14 percent and
that an additional $2.9 billion can be removed from the reimbursement
rate of administrative and operating expenses without harming the
delivery system. The simple statement equating conditions 8 years
earlier with today's program is not compelling.
What was the actual pre-tax rate of return on retained premium for
crop insurance companies for the crop insurance years 2010, 2011, 2012,
and 2013?
Answer. The rate of return on retained premium for insurance
companies is provided for the record.
[The information follows:]
------------------------------------------------------------------------
Return on
Reinsurance year retained
premium
------------------------------------------------------------------------
2010.................................................... +32 percent
2011.................................................... +18 percent
2012.................................................... -15 percent
2013 \1\................................................ +8 percent
------------------------------------------------------------------------
\1\ As of April 2014. The return is likely to decrease somewhat as
additional losses are reported.
Question. Please provide the analysis, including any and all
assumptions therein, for the discovery of these rates of return on
retained premium for the crop insurance companies.
Answer. No assumptions have been made. The rate of return on
retained premium for crop insurance companies for 2010 through 2013 is
calculated directly from accounting data maintained by the Department.
Question. In 2011, the administration stated that the crop
insurance companies had an expected rate of return of 14 percent
(``Living Within our Means and Investing for the Future, The
President's Plan for Economic Growth and Deficit Reduction,'' page 18).
That claim was made again with each of the President's budget proposals
for fiscal year 2013, fiscal year 2014 and fiscal year 2015. Please
provide the assumptions and analysis that has supported this 14-percent
estimate in each of these years and indicate how the performance of the
program in the most recent years has or has not affected this estimate.
Answer. At the time the current Standard Reinsurance Agreement
(SRA) was implemented in 2011, the expected rate of return on retained
premium for insurance companies was around 14 percent. This is the
assumption that was used in the President's budget proposals for fiscal
year 2013, fiscal year 2014, and fiscal year 2015.
At this point in time, complete data is available for only 2 years
under the current SRA--therefore, at this time RMA does not have a
basis to change the original return of 14 percent.
Question. Please provide the analysis, including any and all
assumptions therein, for the discovery of total administrative and
operating expenses by the private delivery system.
Answer. The total administrative and operating (A&O) subsidy paid
to insurance companies is calculated directly from accounting data
maintained by the Department. The total A&O subsidy for the last
several years is provided for the record.
[The information follows:]
[Dollars in billions]
------------------------------------------------------------------------
Year A&O subsidy
------------------------------------------------------------------------
2010.................................................... $1.37
2011.................................................... 1.36
2012.................................................... 1.40
2013.................................................... 1.39
------------------------------------------------------------------------
Question. How will the total cost of selling, servicing and
adjusting polices change with the addition of the new crop insurance
programs and other requirements contained in the new farm bill?
Answer. The impact of the 2014 farm bill on the cost of selling,
servicing, and adjusting policies is not anticipated to change
significantly with the addition of new programs. The most significant
changes, the Supplemental Coverage Option (SCO) and Stacked Income
Protection (STAX) programs, will be accompanied by additional A&O
subsidy paid to insurance companies for their costs of selling and
servicing. In addition, they will have the opportunity to earn
underwriting gains.
Question. If costs increase, will the insurance companies be
provided any additional compensation?
Answer. The two most significant changes to the crop insurance
program, SCO and STAX, will be accompanied by additional A&O subsidy
paid to insurance companies based upon the additional premium collected
from sales of the new programs. These reimbursements will not be
subject to the A&O cap in the current SRA.
To the extent that most other farm bill measures will likely result
in the increase of crop insurance policies sold, such increase in sales
will be accompanied by additional A&O subsidy reimbursement, subject to
any applicable A&O reimbursement limitations as specified under the
current SRA.
conservation
Question. Secretary Vilsack, the 2014 Agricultural Act consolidates
several existing conservation program authorities into a single
initiative known as the Regional Conservation Partnership Program
(RCPP) with the primary purpose of leveraging Federal conservation
investments in conjunction with local and regional partners. Projects
carried out through this new authority are to improve soil quality,
water quality and quantity, and wildlife habitat on a regional or
watershed scale in areas of the country with a significant presence of
agricultural production. One major component of the program allows for
the Secretary of Agriculture to designate eight Critical Conservation
Areas as geographic priorities within the program. Can you share with
me the timeline and process by which the Department of Agriculture
intends to name these regions of the country? I would like to request
that you and your staff keep me aware of any significant developments
as this implementation process advances and I hope that the region of
the Lower Mississippi River Valley receives serious consideration for a
designation as a Critical Conservation Area within the new Regional
Conservation Partnership Program.
Answer. USDA's NRCS has been reviewing the application of the
statutory criteria to various watersheds through a rigorous, science-
based process in order to designate Critical Conservation Areas (CCAs)
under the RCPP program. The Lower Mississippi River Valley is among the
watersheds receiving serious consideration for designation. Selections
of Critical Conservation Areas along with the RCPP announcement of
program funding are expected in late May or early June.
Question. Secretary Vilsack, upon enactment of the 2014
Agricultural Act several conservation programs were repealed causing
USDA to request a new apportionment from the Office of Management and
Budget (OMB) to implement the new law. It is my understanding that USDA
has not received this new apportionment to date; however, the
Department's anticipated timeframe to start new enrollments for certain
conservation programs is this summer. Do you think that USDA will be
able to conduct sign-ups and obligate all of the fiscal year 2014
funding in this amount of time? What will happen to the remainder
fiscal year 2014 funding in the event USDA cannot spend all of it
within that timeframe?
Answer. USDA has been working to update guidance and to effectuate
system changes necessary to manage the funding for the continuing and
new conservation programs, and is currently holding sign-ups and
processing applications for most of the conservation programs. USDA
plans to obligate funds for all programs by September 30, 2014;
however, any unobligated funds will be fully utilized in the first
quarter of fiscal year 2015.
Question. The 2014 Agricultural Act establishes a single easement
program, the Agricultural Conservation Easement Program (ACEP), through
consolidating the authorities of the Wetlands Reserve Program (WRP),
the Grassland Reserve Program (GRP), and the Farmland Protection
Program (FPP). Earlier this month you made some remarks at the
Commodity Classic in San Antonio, Texas, in regards to the
implementation plan and program sign-ups USDA intends to conduct for
the new easement program during the remainder of fiscal year 2014,
particularly with regards to enrollment of new wetland easements. I
understand there is currently a backlog associated with prior year
enrollments of WRP restoration agreements totaling approximately $500
million. Can you tell me how USDA intends to address this backlog in
the context of implementing a new, consolidated easement program moving
forward? What is the status of USDA's Natural Resource Conservation
Service's (NRCS) fiscal year 2014 apportionment request associated with
this issue and do you anticipate any complications from the Office of
Management and Budget (OMB) in regards to receiving the full
apportionment request to address this backlog? Can you verify if NRCS
will be utilizing prior year funds available to address this problem or
will this issue have to be addressed through the use of new program
funding provided in the Agricultural Conservation Easement Program?
Answer. USDA has set WRP State acreage targets to complete closing
and restoration on prior year enrollments over an anticipated 3-year
timeframe. Closing and restoration targets are set for each State
annually and are administered at the State level. States will be able
to focus more effort on closing, restoration, and monitoring of prior
year enrollments of WRP in fiscal year 2014 due to the reduction of
land permitted to be enrolled in ACEP this year compared to prior year
WRP enrollment levels.
USDA will be utilizing prior year funds to address the closing and
restoration of prior year WRP enrollments to the fullest extent
possible. States will receive an allocation of the restored fiscal year
2009 through fiscal year 2013 WRP funds for financial and technical
assistance to complete this work on prior year enrollments. It is
anticipated that the outstanding work on existing enrollments will
consume the entire amount of the prior year WRP balances over the next
3 fiscal years. Once the prior year balances are exhausted, any
remaining work on prior year enrollments will be financed by new ACEP
funds.
Question. New conservation compliance requirements for crop
insurance eligibility were included in the 2014 Agricultural Act.
Section 2608 of the farm bill allows for USDA to implement the rules
and regulations for this new requirement as an interim rule effective
upon publication with an opportunity for public notice and comment.
Implementation of conservation compliance will require input from at
least the Farm Service Agency (FSA), the Natural Resource Conservation
Service (NRCS), and the Risk Management Agency (RMA). Many outside
organizations are interested in the outcome of this rule. Since the
rule will be effective upon publication, how much stakeholder
involvement will be part of this rulemaking process? Given that
landowners must be in compliance with sodbuster and swampbuster
requirements in order to receive payments from USDA, will USDA publish
a conservation compliance rule that reflects all commodity and crop
insurance program changes made by the 2014 Agricultural Act? Should
producers anticipate USDA to issue new regulations for conservation
compliance and all commodity and crop insurance program changes
simultaneously? In the past under the leadership of Chief Dave White,
NRCS tried to address a series of administrative issues in regards to
wetland compliance such as precipitation data, tile setback distances,
tract vs. field determinations, etc. What, if any, of these prior
issues will be addressed in the conservation compliance regulation?
Answer. NRCS, the Risk Management Agency (RMA) and the Farm Service
Agency (FSA) meet weekly to ensure a rulemaking, implementing the
conservation compliance provisions of the Agricultural Act of 2014
addresses all applicable FSA, NRCS and RMA programs. The original
conservation compliance provisions from the Food Security Act of 1985
that require producers to farm highly erodible lands according to an
approved conservation system and avoid draining wetlands remain. The
2014 FB rulemaking will offer the public an opportunity to comment.
Prior to initiating development of the rulemaking, FSA will hold a
listening session to receive public input on March 27, 2014.
RMA plans to amend crop insurance policies effective for the 2015
reinsurance year (July 1, 2014-June 30, 2015) to inform every
policyholder of the new conservation compliance requirements.
Section 2611 of the Agricultural Act of 2014 authorizes the
Secretary of Agriculture to use existing processes and procedures for
producers to certify compliance with the conservation compliance
provisions for crop insurance purposes. Therefore, RMA plans to use the
same processes that FSA has used since enactment of the 1985 Food
Security Act.
energy
Question. The 2014 Agricultural Act includes changes in the
Biobased Markets Program to address the treatment of forest products
within the Biopreferred Procurement and the Biobased labeling programs.
The conference report includes several examples USDA should consider as
it develops what constitutes ``innovative approaches'' in the growing,
harvesting, sourcing, procuring and manufacturing of forest products in
order to qualify for entry into the program. Will you commit to
implement the 2014 farm bill program changes as expeditiously as
possible, consistent with Congressional intent, and in a manner that
treats all forest products fairly?
Answer. USDA's BioPreferred program commits to implementing the
2014 farm bill program changes as expeditiously as possible, consistent
with Congressional intent, and in a manner that treats all forest
products fairly. We are also fully engaged in carrying out the law as
written in compliance with the Administrative Procedures Act. To that
end, program staff first implemented a farm bill listening session
(March 2014) where we summarized the farm bill-mandated program changes
with approximately 100 program participants, outlined our approach for
accommodating these changes, and received stakeholder feedback on both.
BioPreferred program staff is also working with USDA's Forest
Products Laboratory (Madison, Wisconsin) to draft a procedure to
determine eligibility for wood-based products for mandatory Federal
preferred procurement and voluntary product certification and labeling.
catfish
Question. Secretary Vilsack, nearly 6 years have passed since the
enactment of the 2008 farm bill, which requires the USDA Food Safety
Inspection Service (FSIS) to create a new science-based program for the
inspection of all catfish--foreign and domestic. I am concerned about
the Department's seeming unwillingness to implement a law passed in
2008--and fortified in the 2014 farm bill--to ensure healthy and safer
food for consumers.
Can you provide me assurance that your Department will honor the
law enacted by the legislative body?
Answer. Upon the enactment of the 2014 farm bill, FSIS immediately
began the process of updating a draft final rule on catfish inspection
to ensure that it covers all fish in the order Siluriformes. FSIS
estimates that the final rule will be published by December 2014.
Question. What is the current status of the Catfish Inspection
Program, which was mandated by Congress to be fully implemented within
1 year of the date of enactment of the new farm bill law?
Answer. Upon enactment of the 2014 farm bill, FSIS immediately
began the process of updating a final rule on catfish inspection in
accordance with the law. FSIS has established an implementation team
representative of all program areas from within the Agency and pre-
decisional involvement discussions with union officials has been
scheduled to occur on May 1, 2014. FSIS estimates that the final rule
will be published by December 2014.
Question. What is the current status of your efforts to develop a
memorandum of understanding (MOU) with the Food and Drug Administration
(FDA) in order to improve inter-agency cooperation and to ensure that
inspections of dual jurisdiction facilities are not duplicative?
Answer. Upon enactment of the 2014 farm bill, FSIS and the Food and
Drug Administration (FDA) immediately began to engage in discussions
regarding a draft MOU in order to ensure that inspection oversight will
be non-duplicative, that requirements for domestic and foreign
Siluriformes products will be met, that information sharing will
support these efforts, and that the intent of Congress will otherwise
be met. A tentative MOU completion date is the end of April 2014.
food safety
Question. Secretary Vilsack, the administration is requesting fewer
funding resources for the Food Safety Inspection Service (FSIS)--
despite significant food safety challenges facing the American public
and a growing workload. Are you confident that FSIS can adequately
protect our Nation's food supply with fewer resources?
Answer. Yes, we are confident that FSIS can protect our Nation's
food supply. Both USDA and FSIS have created efficiencies that allow
for maintaining food safety while utilizing fewer resources.
Efficiencies such as billing process improvements, travel and other
operational cost reductions along with a consolidation of District
offices, are just a few actions the Agency has taken.
Question. We have received a number of inquiries from industry
stakeholders regarding USDA's efforts to finalize a rule intended to
improve poultry slaughter inspection systems, known as HIMP (HACCP-
based Improvement Models Project). When does the Department plan to
issue this final rule? In light of stakeholder concerns regarding
worker safety in slaughter facilities, how does the Department intend
to help improve safety conditions for workers?
Answer. FSIS is in the process of preparing a final rule on poultry
slaughter after considering the comments received. It is not possible
to provide a specific timeline. The safety of FSIS and plant employees
is an issue we take very seriously. FSIS received numerous comments
raising worker safety as a potential side effect of the rule, and it
has partnered with the Federal agencies responsible for worker safety
to address these concerns in the draft final rule. To ensure that food
safety improvements are made with the safety of workers in mind, FSIS
committed in the proposed rule to requesting five Health Hazard
Evaluations by the National Institute of Occupational Safety and Health
(NIOSH) to assess the impact these changes could have at poultry
facilities. The first of these evaluations has been completed, and the
report can be found at: http://www.cdc.gov/niosh/hhe/reports/pdfs/2012-
0125-3204.pdf. In its report, NIOSH found that working conditions,
injury rates, and the number of birds processed per employee did not
change at this plant after implementation of HIMP. It also made several
recommendations to improve worker safety at this facility, which FSIS'
Administrator has called on the industry to implement. USDA will
continue to do everything it can within its authority to encourage
safer working conditions for its personnel and that of the
establishments it regulates.
______
Questions Submitted by Senator Jerry Moran
brazilian beef rule
Question. I am aware of the current proposed rulemaking which would
allow fresh and frozen beef from Brazil to be imported into the United
States. Can you tell me the last time that USDA employees were in
Brazil for site visits regarding this rule and what their impression is
of the commitment and follow through from the Brazilian Government to
keep the United States safe from foot and mouth disease?
Answer. USDA employees conducted a rigorous risk analysis of the
region and visited Brazil five times to verify and complement the
information provided by the Brazilian authorities. The most recent
visit was in February 2013. USDA officials found that the surveillance,
prevention, and control measures implemented by Brazil in the States
under consideration are sufficient to minimize the risk of introducing
foot and mouth disease (FMD) into the United States via the importation
of fresh/frozen boneless beef. Based on the findings of the visits and
through evaluation of the FMD situation in the region, APHIS concluded
that the commodity under consideration can be safely imported into the
United States.
Question. My constituents tell me that they have asked APHIS for
documents which were used to prepare this proposed rule, but they have
only received some of those documents and most of them were in
Portuguese. Did APHIS not translate these documents in order to take
their information into account while preparing this rule? Is there a
reason why the constituents shouldn't have access to these documents to
help them better understand USDA's rationale for this proposed rule?
Answer. USDA has shared all of the documents that Brazil provided
with any constituents who requested them. Some of the documents APHIS
used as a reference in the risk analysis were submitted to us in
Portuguese. USDA personnel involved in the evaluation had sufficient
language skills to read these documents without requiring they be
translated into English. In addition, in most instances the same or
related data were provided in other documents or verbally presented to
USDA during site visits. The information provided by Brazil and the
conclusions reached are thoroughly described in the risk analysis that
was made available for public comments.
Question. Did USDA work with our domestic producers while preparing
this rule?
Answer. In December 2013, USDA published a proposed rule to allow
fresh/frozen beef with foot and mouth disease mitigations to be
imported from 14 States of Brazil. In March 2014, the Department
extended the comment period by 60 days, until April 22, 2014. This
extension provided domestic producers with ample opportunity to
register their input on this rule. USDA is carefully considering all
comments received on this rule, and will determine whether to finalize
or modify the regulatory changes. USDA wants to continue encouraging
other countries to import more U.S. foods, but these countries will not
comply if we do not hold ourselves to the same standards we are asking
of the rest of the world.
dietary guidelines
Question. I know that USDA and HHS are in the process of working
through your scientific advisory committee process to potentially
modify the 2010 dietary guidelines. The dietary guidelines are
important to ensure they are based on the most recent scientific
information that's available to advise Americans on how a healthful
diet fits into their lifestyles. Reading some of the information after
the second meeting about topics outside of nutrition leaves me to
question the mission of this scientific advisory committee. Can you
please share what the mission of this committee is and what the process
will be moving forward?
Answer. Similar to previous Dietary Guidelines Advisory Committees,
the 2015 Advisory Committee is currently assessing the nutritional and
diet-related health status of Americans and will focus on topics that
they believe are relevant and timely. Because different factors are
important today than were a decade ago, the 2015 Committee is
addressing topics not addressed previously. The Advisory Committee has
acknowledged a need to move away from focusing on individual foods,
food groups, and nutrients, and is reviewing dietary patterns as a
whole. They view the diet to be more powerful as a sum of its parts
rather than being focused on specific aspects of the diet. They have
also noted that historical focus on specific aspects of the diet may
have had unintentional consequences that have not been beneficial to
diet and health over time. Since the diets of Americans have not
changed much over the past few decades and are in need of improvement,
the 2015 Advisory Committee has placed an emphasis on behaviors and
strategies for improving the diets of Americans. Also, in their initial
deliberations, the 2015 Advisory Committee identified a desire for
their recommendations to ensure a healthy, nutritious, safe, and
sustainable diet. The Advisory Committee has discussed the relationship
between sustainability and our ability to meet dietary goals in the
future, and plans to look at how other countries have addressed similar
topics in their guidelines, but they currently have not discussed using
sustainability as a rationale to change the dietary guidelines.
The dietary guidelines are based on the preponderance of current
scientific evidence, and the Committee is currently undergoing an
extensive, rigorous, transparent review process in developing their
report. This report will be used by the Government to create the
dietary guidelines. The Committee examines the state of current
scientific evidence using systematic reviews (with support from CNPP's
Nutrition Evidence Library), data analyses, and/or food pattern
modeling analyses. Additional sources of information may include
existing evidence-based reports, input from expert guest speakers, as
well as oral and written comments from the public. Thus, while
individual studies and personal testimonies may suggest convincing
results, the Committee is tasked to look at the evidence collectively
to inform their recommendations. The Advisory Committee is still early
in its review process and no conclusions or recommendations are
available at this time.
The Committee's report informs the Government's development of the
Dietary Guidelines for Americans, but not all recommendations made by
the Committee are included in the final policy document. The guidance
in the policy document is based on those topics with the strongest
available evidence. Additionally, some topics discussed in the
Committee's report may only be included contextually in the dietary
guidelines and thus do not have policy implications.
it investments
Question. Describe the role of the Department of Agriculture Chief
Information Officer in the oversight of IT purchases. How is this
person involved in the decision to make an IT purchase, determine its
scope, oversee its contract, and oversee the product's continued
operation and maintenance?
Answer. In compliance with the Clinger-Cohen Act, USDA established
a Capital Planning and Investment Control division in the Office of the
Chief Information Officer (OCIO) that also has IT Governance
responsibility. This division reviews USDA investments and provides a
monthly report to the Chief Information Officer (CIO).
In addition, USDA's annual appropriations act that requires the CIO
approval requests CIO approval for new systems or major upgrades to
existing systems. Moreover, the purchase of information technology
projects over $25,000 requires written approval by the CIO.
Technical reviews of investment progress through the System
Development Life Cycle (SDLC) are handled by the Integrated Advisory
Board (IAB), chaired by the Associate CIO for Technology, Planning,
Architecture, and E-Government. The IAB is comprised of the following:
Enterprise Architecture Advisory Council, Capital Planning Advisory
Council, Enterprise Security Governance Council, and the Critical
Partners Advisory Group. Each of these bodies is made up of subject
matter experts (SMEs) from each of the USDA Mission Areas (reflecting
USDA Agencies and Staff Offices) within the areas of capital planning,
security, enterprise architecture, records management, Section 508,
budget, procurement, and enterprise infrastructure and applications. At
each stage of the SDLC, the IAB evaluates IT investments to make
recommendations to agencies and offices on corrective actions and to
make final recommendations to the CIO and senior policy officials.
Question. Describe the existing authorities, organizational
structure, and reporting relationship of your Department Chief
Information Officer. Note and explain any variance from that prescribed
in the Information Technology Management Reform Act of 1996 (aka, the
Clinger-Cohen Act) for the above.
Answer. The Office of the Chief Information Officer is a component
staff office within Departmental Management, which is led by the
Assistant Secretary for Administration. This allows for regular
interaction with other staff office directors. However, the CIO reports
directly to the Secretary on matters regarding information technology,
consistent with the Clinger-Cohen Act. The existing delegation of
authority for the Chief Information Officer can be found in Secretary's
memorandum 1030-30, dated August 8, 1996, at 7 CFR section 2.89.
Question. What formal or informal mechanisms exist in your
Department to ensure coordination and alignment within the CXO
community (i.e., the Chief Information Officer, the Chief Acquisition
Officer, the Chief Finance Officer, the Chief Human Capital Officer,
and so on)? How does that alignment flow down to Agency subcomponents?
Answer. The formal mechanisms are two-fold. First, in 2009,
Departmental Management was created as an umbrella organization that
includes several administrative offices. This structure allows the CXO
community to be brought together on a regular basis to coordinate
efforts. Departmental Management is led by the Assistant Secretary for
Administration, who also serves as the Chief Acquisition Officer for
USDA.
Second, specifically pertaining to IT, the CXO positions are
represented on USDA's Executive Information Technology Investment
Resources Board, or E-Board, chaired by the Deputy Secretary. In
addition to the CXOs, the E-Board also includes the Assistant Secretary
for Administration (vice-chair) and USDA's Under Secretaries. The E-
Board ensures that USDA maximizes the value and manages the risk of IT
investments; aligns investment recommendations with the USDA mission,
strategic plan, budget, enterprise architecture, and information
security; develops corrective action plans for IT investments that are
not performing in accordance with established cost, schedule, or
technical/business performance; and works to minimize duplicative or
overlapping investments across USDA.
Informally, the Chief Information Officer and the Director of the
Office of Procurement and Property Management (OPPM) meet bi-weekly
with a few staff from the OCIO and OPPM to explore opportunities for
improving the acquisition of IT goods and services. This coordination
has yielded both a closer working relationship and several specific
initiatives. For example, OPPM staff have been instrumental in
assisting in the development of several enterprise contracts that have
saved the Department thousands of dollars and reduced security risks by
eliminating the use of old versions of software that were vulnerable to
hackers. Through the utilization of these enterprise contracts, USDA
has eliminated the widespread duplication of software. Working directly
with agencies, the Department as a whole will have achieved a
combination of cost-savings and cost-avoidance from eliminating
contracts totaling $1.23 million between 2013 the end of fiscal year
2014.
Question. How much of the Department's budget goes to
Demonstration, Modernization, and Enhancement of IT systems as opposed
to supporting existing and ongoing programs and infrastructure? How has
this changed in the last 5 years?
Answer. During the past 5 years, the Department consolidated and
completed the migration of all USDA agencies into one enterprise
financial system through the Financial Management Modernization
Initiative (FMMI). Consequently, the Department's financial systems
currently have no budget going to Demonstration, Modernization, and
Enhancement (DME) for IT systems. FMMI completed the DME phase in June
2013. FMMI is currently in the steady state operations and maintenance
state, supporting existing and ongoing programs and infrastructure.
Question. Where and how is the Department of Agriculture taking
advantage of this administration's shared services initiative? How do
you identify and utilize existing capabilities elsewhere in Government
or industry as opposed to recreating them internally?
Answer. The Department is enthusiastic about our opportunities to
participate in the administration's shared services initiative, both as
a service provider to other Federal agencies, and as a consumer of
financial services. The overall vision of the Financial Management Line
of Business (FMLoB) is to improve the cost, quality, and performance of
financial management (FM) systems by leveraging shared service
solutions and by implementing other Government-wide reforms that foster
efficiencies in Federal financial operations.
In fiscal year 2014, the Department has completed the formal
application process to become a financial shared service provider. The
Department's Financial Management Modernization Initiative (FMMI) has
resulted in a state-of-the-art financial management system that all
USDA agencies use. Our objective is to make USDA's financial management
system available for other Federal entities, providing economies of
scale and cost savings across the Federal Government. Our National
Finance Center (NFC) offers a complete Enterprise Resource Planning
(ERP) software solution, which integrates all aspects of financial
management services with a program management support structure.
The NFC's mission is to provide effective and efficient tools and
services that are used to ensure proper financial management at the
Department-wide level, and to ensure that adequate financial records
are maintained for accountability and reporting to the Inspector
General, Congress, other Federal agencies, and to the public. NFC
accomplishes this by maintaining the FMMI ERP financial management
system, reporting through the Financial Data Warehouse, an automated
cash reconciliation work sheet used for daily reconciliation with the
United States Treasury, the Purchase Card Management System, the Travel
System, the Personal Property System, and the Purchase Order System.
USDA's primary objectives for this NFC shared services effort are
to provide:
--an enterprise financial management service that allows other
organizations to reap the benefits in less time and less money
with less risk and increased service quality as compared to
starting from scratch with a new ERP or financial management
implementation;
--integration with NFC payroll processing services;
--complete audit compliant financial solution with full documentation
meeting financial requirements;
--continuous process improvements, operational and organizational
improvement, for those shared services retained in the future
State portfolio;
--more powerful and flexible financial management and reporting;
--administrative payments, collections, and certifications;
--computerized editing/auditing capabilities; and
--customer focus/advocacy to provide the best possible customer
service and support.
The Department is also looking for opportunities to leverage
expertise and services from other agencies for applications that they
could provide more efficiently. For example, the Treasury is offering a
Centralized Receivable service. USDA has also scheduled an April
briefing by the Grants Center of Excellence at the Department of Health
and Human Services. The Department is committed to using its resources
with optimal effectiveness and efficiency regardless of where these
services are obtained.
Question. Provide short, two-page, summaries of three recent IT
program successes, projects that were delivered on time, within budget,
and delivered the promised functionality and benefits to the end user.
How does your Department define ``success'' in IT program management?
Answer. [Follows:]
success #1: usda financial management systems
USDA plays a critical role in the financial management of the
Federal Government by providing financial services to other Federal
agencies. USDA's National Finance Center (NFC) administers and operates
over 20 financial and administrative service systems in support of all
agencies of USDA and over 100 non-USDA customers. These systems include
such services as: payroll/personnel, central accounting, billing and
collections, and travel. In 2013, USDA processed time and attendance
and payroll for over 655,000 Federal employees on a bi-weekly basis,
including the Department of Commerce, and others.
NFC has successfully invested in the reengineering and operation of
financial management and administrative systems in USDA, consistent
with the goals and objectives of both the USDA 5-Year Financial
Management Plan and the Chief Financial Officer's Strategic Plan. This
has resulted in three important improvements in financial management
for the Federal Government.
The Financial Management Modernization Initiative (FMMI) project
was initiated in 2009 to modernize the technology underlying the USDA
financial system environment. This initiative replaced the Corporate
Financial Management System (CFMS), including the mainframe-based
Foundation Financial Information System (FFIS) financial system, with
SAP Inc. Enterprise Resource Planning (ERP), migrating the current
distributed, multi-instance mainframe system to a federally compliant,
consolidated, single-instance Web-based system. FMMI is operational in
all USDA Department Staff Offices and Agencies.
USDA has also increased the usefulness of financial information to
its customers by deploying SAP Inc. business software, including the
SAP BusinessObjects (BOBJ) reporting tool, SAP HANA, and more. The BOBJ
technologically advanced reporting system delivers an ad-hoc financial
reporting tool and a comprehensive dashboard delivery tool. This
implementation continues to provide a foundation for future plans to
support real-time reporting. BOBJ has approximately 4,000 users and
continues growing.
Similarly, USDA deployed the SAP HANA software as a means of
gaining access to real-time financial data, which increases the
accuracy of financial projections. The Department was an early Federal
adopter of HANA, and has presented demonstrations to numerous Federal
audiences.
USDA also completed software enhancements to the SAP ERP Central
Component (ECC) and Governance Risk and Compliance (GRC) software
components, Business Intelligence (BI) and Public Budget Formulation
(PBF).
Overall, USDA developed, tested, and implemented in excess of 250
software changes related to FMMI that enhanced USDA's ability to
operate efficiently, including: timely payments to vendors, improved
billing and collections processing, and enhanced reporting. These
changes were a combination of enhancements and corrective actions that
improved the usability of the financial system and the accuracy of the
data reported.
Finally, USDA has improved IT governance and monitoring of its
financial systems. For example, USDA became a certified SAP Center of
Excellence (CoE). This effort includes the strengthening of service
delivery, process controls, governance and customer advocacy. The USDA
also initiated the establishment of a business process repository to
establish a single point of access for all system monitoring and
enhancements and business process modifications.
Through these financial system IT modernization and enhancement
projects, USDA has improved the Federal Government's ability to conduct
financial business with accuracy, timeliness, and integrity. This
benefits the many private industry partners with which the Government
does business, along with the Federal workforce and their communities
who can rely on prompt, accurate payments. For example, the
Department's financial systems have successfully provided seamless,
uninterrupted operation and delivery of payroll to Federal employees
despite the impact of major disruptions such as the 2013 Government
shutdown, weather storm closures, and Hurricanes Sandy and Irene. This
continues the tradition demonstrated by the USDA's financial system
uninterrupted reliability in spite of the destruction of our primary
data center by Hurricane Katrina.
Question. What best practices have emerged and been adopted from
these recent IT program successes? What have proven to be the most
significant barriers encountered to more common or frequent IT program
successes?
Answer. The USDA continues to address Agency issues and concerns
resulting from their increased knowledge of FMMI by conducting business
process re-engineering and listening sessions. This results in a clear
understanding of the issues being faced, expedites the correction
process and builds a trusted relationship between the Department and
agencies. The outcome continues to enhance the software and business
process improvements.
Question. Describe the progress being made in your Department on
the transition to new, cutting-edge technologies and applications such
as cloud, mobility, social networking, and so on. What progress has
been made in the CloudFirst and ShareFirst initiatives?
Answer. The USDA National Finance Center (NFC) already provides
cloud-like services for Department applications and the Financial
Management Modernization Initiative (FMMI) system. The Department is
evaluating how to utilize and provide cloud services to better support
our mission. The models offered by NFC can be grouped into two
categories: (1) Software as a Service (SaaS) in which software is
deployed as a hosted service and accessed over the Internet, and (2)
Platform as a Service (PaaS) in which platforms can be used to more
efficiently develop and deploy new applications. The NFC is working
towards FedRAMP certification for both SaaS and PaaS service offerings.
Question. How does the Department of Agriculture implement
acquisition strategies that involve each of the following: early
collaboration with industry; RFP's with performance measures that tie
to strategic performance objectives; and risk mitigation throughout the
life of the contract?
Answer. USDA has developed management guidelines that are used in
acquisitions throughout the Department. These include the following:
--(1) Early collaboration with industry through market research, and
interactive vendor participation in pre-proposal activities
such as the Request for Information (RFI) process.
--(2) All contract RFPs are performance-based, which reduces the risk
to the Government. All service contracts include performance
measures and metrics that are tracked on a regular basis (bi-
weekly, monthly, and quarterly). These are tied to the
Department's strategic performance objectives by the USDA
budget formulation process.
--(3) Risk management is performed for each contract throughout its
complete lifecycle. The contractor is required to submit and
maintain a risk management plan, and provide a risk register
with mitigation strategies at least monthly. In addition, each
contractor is required to submit a quality assurance plan with
appropriate surveillance metrics.
Question. According to the Office of Personnel Management, 46
percent of the more than 80,000 Federal IT workers are 50 years of age
or older, and more than 10 percent are 60 or older. Just 4 percent of
the Federal IT workforce is under 30 years of age. Does your Department
have such demographic imbalances? How is it addressing them? Does this
create specific challenges for attracting and maintaining a workforce
with skills in cutting edge technologies? What initiatives are underway
to build your technology workforce's capabilities?
Answer. Yes, USDA shares these demographic imbalances with other
Federal agencies. We have implemented a succession plan to actively
recruit IT talent under 30 years of age. The Department actively
recruits through college visits and via college alumni within USDA to
attract younger recruits. In addition, we are cross-training USDA
resources to shift responsibilities from IT personnel resources
scheduled for retirement.
Question. What information does your Department collect on its IT
and program management workforce? Please include, for example, details
about current staffing versus future needs, development of the talent
pipeline, special hiring authorities, and known knowledge gaps.
Answer. The Department uses the individual development plan (IDP)
to plan and monitor employee skills and knowledge. USDA agencies
maintain a 2-year staffing plan to ensure alignment to the mission of
the organization. This combination, along with new employee recruiting,
acts as our talent pipeline to ensure the Department has skilled
employees in sufficient numbers to fulfill its evolving needs. USDA
also has special hiring authorities for the IT workforce. Where
knowledge gaps are identified, the Department uses contracting services
to fill these gaps as required until such time as they can be
integrated into the permanent IT workforce. For example, the Department
uses contractors from Deloitte and Accenture to provide subject matter
expertise in emerging Big Data analytics.
______
Questions Submitted By Senator John Hoeven
county offices
Question. Mr. Secretary, as USDA's budget proposal includes closing
250 FSA county offices, I want to make sure you are aware of the fact
that North Dakota FSA offices are having difficulty in the western part
of North Dakota recruiting and retaining FSA personnel. Can you tell us
how the Department determines which offices should close? Are you
conducting some type of workload assessment or simply selecting offices
by physical location?
Answer. FSA is aware of the challenges western North Dakota is
experiencing with recruiting and retaining employees in FSA service
centers. FSA has been working with the States in the Bakken area to
lessen the impact of these issues by providing approval for additional
hiring and authority to offer relocation and retention incentive
payments. In preparing the fiscal year 2015 budget, FSA estimated the
potential to close or consolidate approximately 250 offices. This
projected level assumed continued declining funding as evidenced in
previous years, and a shift in workload activity. Although FSA will
benefit from the efficiencies gained through office consolidations, no
office closure plan has been approved at this time and the Agency has
no compiled a list of specific offices to close. Before attempting to
close any office USDA is committed, per statue, to hold public meetings
in each affected county within 30 days of any announcement of pending
closure.
Question. Mr. Secretary, as you know, the Federal crop insurance
program provides producers with risk management tools to address crop
yield and/or revenue losses on their farms and is the best tool North
Dakota farmers have for managing risks inherent to farming. I
understand that the provision to link conservation compliance to crop
insurance, despite my opposition to its inclusion, is being done on an
accelerated rule making process and will be put out as an interim final
rule. Can you share with me how you plan to develop the rule to ensure
penalties for farmers found out of compliance are not unreasonable and
are widely understood?
We included wetlands mitigation bank provision in the farm bill to
help farmers deal with conservation compliance costs. Will you commit
to working with our producers to make sure that the bank works for
North Dakota farmers?
Answer. USDA plans to amend crop insurance policies effective for
the 2015 reinsurance year (July 1, 2014-June 30, 2015) to inform every
policyholder of the new conservation compliance requirements, and
publish a rule (7 CFR, part 12) late this summer to provide the details
involved with connecting conservation compliance with crop insurance.
Additionally, a fact sheet and frequently asked questions will be
published to assist in educating producers. Finally, USDA intends to
provide a list of policyholders currently out of compliance with the
provisions to their approved insurance providers during the 2015
reinsurance year to extend individual outreach. Any violations do not
result in the loss of premium subsidy until the reinsurance year
following the violation.
Question. Mr. Secretary, USDA's budget for fiscal year 2015 once
again calls for over $14 billion over 10 years in cuts to the crop
insurance program. When I talk to North Dakota farmers, they tell me
crop insurance is absolutely critical to their operations, critical to
their ability to make it through bad weather and markets. That's why I
supported language in the recently passed farm bill called the ``SRA
Sideboard'' provision that prevents USDA from cutting crop insurance
unilaterally through what are called Standard Reinsurance Agreements
(SRAs). Is it your understanding that none of USDA's proposed $14
billion in crop insurance cuts could be implemented without an act of
Congress?
Answer. Yes, the recent farm bill language amended the Federal Crop
Insurance Act making the SRA budget neutral with respect to A&O subsidy
and the financial terms related to risk sharing. In addition, terms for
premium subsidy are also prescribed in the act and may only be changed
by Congress.
wetland mitigation
Question. Mr. Secretary, included in the farm bill is report
language that recommends NRCS adopt an acre-for-acre mitigation
standard; given congressional intent in this area, how is the
Department adjusting wetland mitigation policy?
Answer. The Department is aware of the need to make wetland
mitigation options more transparent and available for producers. In
certain situations current policy allows for mitigation to occur on an
acre-for-acre basis, as recommended by the farm bill report. These
situations include farmed wetlands and wetland sites with disturbed
herbaceous vegetation.
wic food package
Question. Mr. Secretary, on behalf of North Dakota's potato
growers, I am disappointed by the Department's recent decision to
exclude fresh white potatoes in the food packages for WIC in
contradiction to the clear direction Congress gave you in the fiscal
year 2014 Omnibus. What troubles me is the lack of consistency in the
program and its development. For example, Both the 2005 and the 2010
DGA notes that potassium and dietary fiber are nutrients of concern,
potatoes are specifically excluded from purchase despite that both
nutrients are readily available in fresh white potatoes at an
affordable price;
Should changes to WIC food packages be based on the most recent
Dietary Guidelines for Americans?
Answer. The WIC food packages are based on scientific
recommendations from the National Academies' Institute of Medicine
(IOM).
The restriction of white potatoes, which was recommended by the IOM
in 2005 and has been in place since 2007, is based on data indicating
that consumption of starchy vegetables meets or exceeds recommended
amounts, and food intake data showing that white potatoes are the most
widely consumed vegetable.
Continuing the exclusion of white potatoes maintains consistency
with the IOM's recommendations and minimizes the introduction of
additional confusion for WIC participants. That said, the Department
recognizes the language included in the fiscal year 2014 appropriations
bill expressing the expectations of Congress that all varieties of
vegetables be included in the food package. Additionally, the
Department continues to be committed to a science-based review process
for the food packages provided by WIC. In order to accommodate both of
these goals, as we advised Congress in our February 28 letter, the
Department intends to jumpstart its regular review of the WIC food
packages in order to seek the assistance of the IOM to learn if the
basis for its recommendation for the exclusion of white potatoes from
the WIC food packages is still supported.
______
Questions Submitted by Senator Patty Murray
country of origin labeling
Question. The World Trade Organization (WTO) is expected to make a
ruling this summer on the ongoing dispute over country-of-origin
labeling (COOL) requirements brought against the United States by
Canada and Mexico. While I have supported COOL since its inception in
the 2002 farm bill, I am concerned with the U.S. Department of
Agriculture's decision to continue to implement a final rule,
``Mandatory Country of Origin Labeling of Beef, Pork . . . ,'' despite
direction from Congress not to. The Fiscal Year 2014 Consolidated
Appropriations Act strongly recommends the ``Department delay
implementation and enforcement of the final rule (78 Federal Register
31367) until the WTO has completed all decisions related to cases WT/
DS384 and WT/DS386.'' It is my understanding that the Department
continues to expend resources to implement the final rule, including
conducting outreach and education for employees who will be responsible
for compliance activities.
What actions will the Department take to comply with the Fiscal
Year 2014 Consolidated Appropriations Act?
If the Department does not comply, what--if any--legal requirements
prevent you from doing so?
Answer. USDA is proceeding with enforcing the May 2013 final rule
in accordance with the statute and with the need to bring us into
compliance with our WTO obligations. Should the United States not
enforce the May 2013 final rule, it could be construed that USDA has
not taken action to address the findings by the WTO panel.
wic food package
Question. On February 28, the U.S. Department of Agriculture issued
a final rule to update the food package for the Special Supplemental
Nutrition Program for Women, Infants, and Children (WIC). I commend the
Department's work to increase access to fruits and vegetables, whole
grains and low-fat dairy based products. I also believe that the WIC
food package should be based on the best scientific research available.
However, I would like to know more about the metrics used to justify
the continued exclusion of fresh white potatoes. Specifically, in a
letter to this subcommittee, you stated that ``the restriction of white
potatoes, which was recommended by the Institute of Medicine (IOM) in
2005 and has been in place since 2007, is based on data indicating that
consumption of starchy vegetables meets or exceeds recommended amounts,
and food intake data showing that white potatoes are the most widely
used vegetable.'' However, in your testimony you note that the WIC food
package was updated to ``better reflect current nutrition science and
dietary recommendations.'' According to 2009-2010 data from the Centers
for Disease Control and Prevention (CDC), women and children are
consuming too few starchy vegetables today. Women aged 19-30 consume
only 2.4 cups per week, meeting less than half of the 2010 dietary
guidelines recommended intake of 5 cups. Children also fall short of
the 2010 dietary guidelines with girls aged 2-4 consuming 0.6 cups per
week less than the maximum recommendations and boys in the same age
group consuming 1.4 cups less.
Given the 2010 dietary guidelines recommended intake and CDC
consumption findings for women and children, can you explain which
metrics the Department used to determine that ``consumption of starchy
vegetables meets or exceeds recommended amounts?''
Answer. The changes to the WIC food packages were made based on
scientific recommendations from the National Academies' Institute of
Medicine (IOM). The IOM was charged with reviewing the nutritional
needs of the WIC population--low income infants, children, and
pregnant, postpartum and breastfeeding women who are at nutritional
risk--and recommending changes to the WIC food packages. The exclusion
of white potatoes, as recommended by the IOM, is based on the amounts
suggested in the 2005 Dietary Guidelines for Americans (DGA) for
consumption of starchy vegetables; food intake data indicating that
consumption of starchy vegetables meets or exceeds these suggested
amounts; and food intake data showing that white potatoes are the most
widely used vegetable.
The 2010 dietary guidelines were issued subsequent to the IOM
report that formed the basis of the WIC food package changes. IOM
determined that the addition of white potatoes in the WIC food packages
would not support the goal of expanding the types and varieties of
fruits and vegetables used by program participants. The next regular
review of the WIC food package is set to begin this year. IOM will
utilize current science and the 2015 Dietary Guidelines for Americans,
when available, as it develops its recommendations to the Department to
inform our next course of action with respect to the WIC food package.
Question. Furthermore, what nutritional data was used to justify
the continued exclusion of fresh white potatoes? The white potato is a
known source of potassium, fiber, vitamin C, and many B vitamins.
Several of these vitamins have been found to be lacking or inadequate
in the diets of young children by the IOM.
Answer. The final WIC Food Package Rule continues to authorize a
wide variety of choices within the authorized fruit and vegetable
options. Additionally, the final rule includes several significant
improvements to the food package that more closely align with the
National Academies' Institute of Medicine's (IOM) recommendations and
will increase WIC participants' access to fruits and vegetables, whole
grains and low-fat dairy.
Consistent with a major recommendation of the Dietary Guidelines
for Americans, increasing fruit and vegetable intakes by WIC
participants was cited as a priority by the IOM. This provision
supports the goal of expanding the types and varieties of fruits and
vegetables available to program participants. The WIC Program does,
however, continue to promote white potatoes as a healthful source of
nutrients and an important part of a healthful diet, through nutrition
education provided to WIC participants. WIC clients who also
participate in the Farmers' Market Nutrition Program (FMNP), may use
their FMNP vouchers to purchase white potatoes offered at farmers'
markets.
Question. Can you provide a timeline for when the Department
intends to begin its regular review of the WIC food package? What steps
will you take during this process to ensure the best scientific
research available is used to determine both sufficient consumption and
nutritional value when determining what should or should not be
included in the food package?
Answer. The Department continues to be committed to a science-based
review process for the food packages WIC provides and intends to
jumpstart its regular review of the WIC food package. Initially
scheduled for mid-to-late 2015, the review is now set to begin more
than a year earlier, so that we can seek the assistance of the
Institute of Medicine (IOM), to learn if the basis for its
recommendation for the exclusion of white potatoes from the WIC food
packages is still supported by the most current science available. This
review will incorporate current science and the 2015 Dietary Guidelines
for Americans recommendations. The Department will use the updated
scientific information it receives from the IOM to inform its next
course of action with respect to the WIC food package.
SUBCOMMITTEE RECESS
Senator Pryor. So, but anyway, the subcommittee will meet
again at 10 a.m. on Thursday, April 3. And we will have the
Food and Drug Administration.
So again, I want to thank you for being here today. It's
been a very useful and productive hearing.
And with that, we will adjourn.
Thank you.
[Whereupon, at 11:10 a.m., Wednesday, March 26, the
subcommittee was recessed, to reconvene at 10 a.m., Thursday,
April 3.]
MATERIAL SUBMITTED SUBSEQUENT TO THE HEARING
[Clerk's Note.--The following testimony was received
subsequent to the hearing for inclusion in the record.]
Prepared Statement of Hon. Phyllis K. Fong, Inspector General, Office
of Inspector General, Department of Agriculture
Thank you, Chairman Pryor, Ranking Member Blunt, and members of the
subcommittee, for the opportunity to submit a statement concerning the
Office of Inspector General's (OIG) recent and planned audit and
investigative work, as well as OIG's fiscal year 2015 budget request.
Despite the past year being a period of restricted resources, OIG
continues to achieve substantial and far-reaching results that serve
American taxpayers' interest in more effective government. In fiscal
year 2013, our audit and investigative work obtained potential monetary
results totaling over $1.2 billion. We issued 54 audit reports intended
to strengthen Department of Agriculture (USDA) programs and operations,
which produced about $1.1 billion in potential results. OIG
investigations led to 551 convictions with potential results totaling
almost $122.7 million.\1\
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\1\ As established by Congress in the Inspector General Act of
1978, audit monetary impacts derive from funds put to better use and
questioned/unsupported costs. Investigation monetary impacts come from
recoveries, court-ordered fines, restitutions, administrative
penalties, as well as other judgments.
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These monetary results far surpass our annual budget. From fiscal
year 2006 to fiscal year 2013, the potential dollar impact of OIG
audits and investigations has totaled $8.5 billion, while our
appropriations have been just $670 million. For every $1 invested, we
have realized potential cost savings and recoveries of about $12.62.
This figure does not capture the significant, but less easily
quantified, results of our efforts to improve public safety or
implement program improvements.
After summarizing our most significant recent audit and
investigative activities under our major strategic goals, I will
conclude with a description of what OIG has done over the past several
years to live within its budget constraints.
Before I do so, however, I would like to address one of the broader
concerns facing USDA. In our work, we often find that the Department
and its agencies need to focus more on how they monitor their programs
and ensure that participants are complying with requirements. As we
have identified in our 2013 Management Challenges, many USDA agencies
place their primary focus on administering programs and providing
benefits--often at the cost of designing sufficient controls to ensure
that program funds serve their intended purposes. This problem cuts
across USDA and has emerged in agencies in all departmental mission
areas.
While individual audits and investigations may bring to the fore
problems specific to particular agencies and programs, USDA needs to
prioritize compliance and monitoring as vital elements of proper
program management. In this vein, OIG is evaluating the Farm Service
Agency's compliance activities; a related project involves reviewing
the Risk Management Agency's (RMA) national performance reviews and
determining how useful they are in ensuring program compliance.
goal 1--safety and security
Strengthen USDA's Ability To Implement Safety and Security Measures To
Protect the Public Health as Well as Agricultural and
Departmental Resources
To help USDA and the American people meet critical challenges in
safety, security, and public health, OIG provides independent audits
and investigations. Our work addresses such issues as the ongoing
challenges of agricultural inspection activities, the safety of the
food supply, and homeland security.
Investigation Leads to Judgment Against California Meat
Packing Plant
In June 2012, two defendants entered into a settlement agreement to
pay the United States over $304,000 and pay the Humane Society of the
United States (HSUS) over $19,000. In October 2013, six defendants,
including individuals and companies, entered into a settlement
agreement to pay the United States approximately $2.7 million and pay
HSUS approximately $112,000. In addition, one of the companies entered
into a consent judgment in favor of the United States Government in the
amount of $155 million. The settlements resulted from a qui tam civil
complaint filed by HSUS in February 2008 against the company and its
entities; the complaint prompted an investigation by OIG and the U.S.
Attorney's Office for the Central District of California into
allegations that a California company mistreated cattle destined for
slaughter and adulterated meat, including some products distributed to
the National School Lunch Program.
The Food Safety Inspection Service (FSIS) Needs To Ensure
That Swine Slaughter Plants Follow the Federal Meat
Inspection Act
FSIS inspects over 600 plants that slaughter swine, and our audit
of plants subject to FSIS' enforcement found that the agency's actions
do not deter swine slaughter plants from becoming repeat violators of
the Federal Meat Inspection Act. As a result, plants have repeatedly
violated the same regulations with little or no consequence. We found
that, in 8 of the 30 plants we visited, inspectors did not always
examine the internal organs of carcasses in accordance with FSIS
inspection requirements, or take enforcement actions against plants
that violated food safety regulations. As a result, there is reduced
assurance that FSIS inspectors effectively identified pork that should
not enter the food supply. Agency officials concurred with our
recommendations.
The Agricultural Marketing Service (AMS) Needs To Ensure
That Organic Dairy Cattle Have Appropriate Access
To Pasture
OIG also conducted an audit of how AMS implemented the ``access to
pasture'' rule as part of its National Organic Program (NOP). While the
agency has generally implemented this rule successfully, we noted that
NOP officials had not clearly defined how producers should demarcate
herds of organic milk-producing cattle, which meant that some
certifying agents treated organic dairy producers differently, allowing
some to add cattle to organic dairy herds, when other agents would not.
Because the regulations are not clear in defining herds of organic
cattle, consumers may not always be receiving the high-quality organic
product they expect. We also noted that NOP needs to include organic
feed brokers within the NOP certification process to ensure that
organic feed is not commingled or contaminated. Finally, we found that
smaller operations were often unaware of recordkeeping requirements of
the access to pasture rule regarding livestock confinement, grazing, or
the cattle's dry matter intake. AMS concurred with our recommendations.
Among other audits in process, OIG is evaluating how FSIS has
implemented the Public Health Information System (PHIS) for Domestic
Inspection, and whether PHIS adequately addresses the agency's key
mission elements.
goal 2--integrity of benefits
Reduce Program Vulnerabilities and Strengthen Program Integrity
One of OIG's most important goals is helping USDA safeguard its
programs to ensure that benefits are reaching those they are intended
to reach. Given the importance of the Food and Nutrition Service's
(FNS) Supplemental Nutrition Assistance Program (SNAP)--its $86 billion
in fiscal year 2013 represents 56 percent of USDA's budget--OIG
continues to direct a large percentage of its resources to combatting
the trafficking of SNAP benefits. In 2013, OIG's combined audit and
investigative work was selected for a Council of the Inspectors General
on Integrity and Efficiency award for excellence. The award cited audit
findings and criminal prosecutions resulting in more than $84 million
in questioned costs, funds to be put to better use, restitutions,
seizures, and other means, as well as FNS' agreement to 58 of OIG's
recommended program improvements.
As a recent example of our investigative SNAP work, an employee of
a Philadelphia supermarket who trafficked in SNAP benefits was
sentenced to prison time, and was ordered to pay approximately $2.3
million in restitution. In California, a husband and wife who owned six
stores that engaged in SNAP trafficking were sentenced to 40 months and
18 months in prison, respectively. They were also ordered to share in
paying $6.5 million in restitution to FNS.
Working jointly with FNS, OIG has also developed a new approach,
called the SNAP Initiative, which is a tool for further identifying and
addressing fraud in SNAP on a multi-agency level. The initiative
combines the resources, ingenuity, and prosecutorial efforts of local,
State, and Federal law enforcement partners with the common goal of
preventing and prosecuting SNAP fraud. This multi-step approach helps
identify SNAP fraud offenders on both the retailer and recipient side
of trafficking. A vital aspect of the initiative is prevention, to be
achieved through community outreach and media efforts educating
citizens and retail owners on Federal regulations concerning SNAP
benefits. OIG is in the process of rolling out this promising
initiative with FNS in 2014.
FNS Needs To More Closely Screen SNAP Retailers
Likewise, OIG audits have shown how SNAP may be improved to better
serve its intended purpose. Recently, OIG reviewed how FNS authorizes
retailers to participate in SNAP to determine if disqualified retailers
were allowed to continue participating in the program. We found that
FNS does not have clear procedures and guidance to carry out key
oversight and enforcement activities to address SNAP retailer fraud, or
adequate authority to prevent multiple instances of fraud--either by a
particular owner or within a particular location. As a result, FNS does
not consistently penalize retailers who illegally exchange SNAP
benefits. From a sample of 316 locations, we found that FNS did not
properly determine potentially $6.7 million in penalties, and
authorized 51 ineligible store owners, who redeemed over $5.3 million
in benefits since 2006. In addition, we identified 586 owners allowed
to continue participating in SNAP at other locations after being
permanently disqualified, and 90 retail locations that had two or more
firms permanently disqualified. FNS and OIG agreed on 12 of 20
recommendations; however, further action from the agency is needed
before management decision can be reached for the other 8
recommendations.
OIG also has several upcoming projects that will address food
benefits. We are currently reviewing the National School Lunch/
Breakfast Program to evaluate the methods FNS is using to lower the
improper payment error rates for both programs. In a separate project,
we are determining whether FNS and the State agencies responsible for
administering SNAP have adequate controls in place to ensure that SNAP
payment error rates are accurately determined and reported, appropriate
actions are taken to reduce the error rates, and errors are timely
corrected when detected. Finally, in a third review, we are evaluating
the factors causing high average food costs reported for States
participating in the Special Supplemental Nutrition Program for Women,
Infants, and Children.
RMA Needs To Ensure That Its Prevented Planting Provisions
Do Not Discourage Farmers From Planting Crops
With approximately $4.6 billion in claims paid to producers who
were prevented from planting from 2008 to 2011, RMA's prevented
planting provisions offer another opportunity for USDA to achieve
improved efficiency. OIG determined that RMA needs to improve the
prevented planting provisions to be more cost effective; to encourage
producers to plant a crop, where possible; and to make eligibility
criteria more objective and clear. Specifically, we found that, out of
concern for covering a producer's pre-planting costs in all cases, RMA
set current prevented planting coverage levels above the percentages of
guarantees that farmers needed to cover average pre-planting costs. As
a result, by establishing coverage levels that provided over $480
million in potentially excessive payments, we believe that RMA
inadvertently provided incentives to actively encourage prevented
planting claims. Also, we found that loss adjusters did not fully
document and support eligibility for over $43 million in prevented
planting payments. RMA needs to improve its guidance to better hold
approved insurance providers accountable, and prevent acres that are
regularly too wet for crop production from receiving prevented planting
coverage. The agency generally agreed with our recommendations.
Also in the area of farm-related programs, in December 2013, OIG
concluded an investigation into a multi-year scheme to circumvent farm
program payment limitations. As a result, three producers, collectively
with several of their corporations and limited partnerships, signed a
settlement agreement in which they repaid $5.4 million to the
Government. Our investigation revealed that the three men (the
principal owner of an Illinois farm, his son, and son-in-law) created
limited partnerships with other individuals who did not have the
financial means or ability to operate farming operations that would
qualify for the program. During crop years 2001-2008, the three men
participated in at least 17 limited partnerships for which they
maintained full control and signature authority as general partners,
even though, on paper, they held only a 2-percent or 4-percent share of
each. The 17 limited partnerships received farm program payments of
approximately $6.7 million.
goal 3--management improvement initiatives
Support USDA in Implementing Its Management Improvement Initiatives
OIG works to aid the Department in improving the processes and
systems it needs to function effectively. Notably, we have recently
issued several reports intended to improve how USDA settles civil
rights complaints and promotes foreign trade.
Efforts To Monitor Settlement of Civil Right Complaints
USDA continues its work concerning complaints filed by different
civil rights groups. In response to requirements of the Claims
Resolution Act of 2010,\2\ OIG performed an audit of the In re Black
Farmers Discrimination Litigation (known as BFDL) claims process. Our
statistical sample of 100 randomly selected claims found instances
where the arbiter had reached differing conclusions for claims that
were essentially identical, allowed multiple claims for the same
farmer, and approved ineligible claims. The arbiter and the claims
administrator agreed with our concerns and took action to correct these
issues and maintain the integrity of the process.
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\2\ Public Law 111-291, 124 Stat. 3064.
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OIG is currently performing a review, at the Secretary's request,
intended to determine if the claims review process for women and
Hispanic farmers is adequate and functioning. OIG is also performing
additional audit work on the adjudicated BFDL claims to determine if
awards were granted to eligible claimants.
The Office of Advocacy and Outreach (OAO) Needs To Improve
Its Process for Selecting Outreach Candidates
OAO initially selected applicants to receive fiscal year 2012
grants through the Outreach and Assistance for Socially Disadvantaged
Farmers and Ranchers Program, even though these applicants may not have
been the most meritorious and deserving candidates. OAO officials
disregarded regulatory requirements and guidelines cited in the Funding
Opportunity Announcement in making those selections. Also, they had no
documentation to support their decisions and could not explain why some
applicants that appeared more deserving were not selected to receive
grant funds. OAO agreed with our recommendation to strengthen the
selection process and re-selected applicants in a more impartial and
transparent manner.
The Foreign Agricultural Service (FAS) Should Improve Its
Strategic Plan for Increasing Trade
A recent audit determined whether USDA and FAS have developed and
implemented measurable strategies that are effectively promoting trade.
We found that, although FAS recently updated its strategic plan to
include measurable goals and objectives, these goals and objectives
(which measure the dollar value of exports) do not present the whole
picture of how FAS' actions are affecting the global market for
American agricultural goods. FAS' measures are not outcome-based and do
not show how the United States is performing in a given market compared
to its competitors. OIG acknowledges that developing outcome-based
performance measures for FAS' trade efforts is difficult, but we
maintain that a change in U.S. market share is an outcome-based measure
that would be of great use to policymakers. FAS generally agreed with
our recommendations.
FAS Needs To Improve Controls Over Agricultural Aid to
Afghanistan
After the U.S. Agency for International Development transferred
$86.3 million to USDA for capacity-building activities in Afghanistan
in 2010, OIG was required to monitor how these funds were used. A
recent review found that senior managers at FAS were aware of general
control weaknesses before first receiving the funding; nevertheless,
FAS had not implemented performance monitoring plans for all projects
until over 2 years after the first project began. Without adequate
management controls in place, FAS cannot effectively monitor these
projects and faces difficulty in providing adequate assurance that the
funds are effectively accomplishing program goals. FAS agreed with all
recommendations.
USDA Continues Its Efforts To Improve the Reporting of
Improper Payments and High Dollar Overpayments
OIG continues to aid the Department in its efforts to reduce
improper payments as part of the Improper Payments Elimination and
Recovery Act of 2010 (IPERA).\3\ In our annual report on this topic, we
found that USDA did not fully comply with IPERA for a second
consecutive year. Although USDA made progress in improving its
processes to substantially comply with IPERA, the Department was not
compliant with several IPERA requirements. By taking more effective
measures to avoid these noncompliances, USDA could have avoided
approximately $74 million in improper payments by meeting reduction
targets.
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\3\ Public Law 111-204, 124 Stat. 2224.
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USDA has improved in its efforts to report high dollar
overpayments, according to our annual report. OIG found that USDA
reported more comprehensive information about high dollar overpayments
than it did in previous years. Specifically, due to improved reporting
oversight and processes, USDA reported 239 overpayments, totaling
approximately $20.3 million in fiscal year 2012. This represents an
increase of 67 percent over the number of overpayments reported the
previous year. However, we determined that the quarterly reports
included errors and were published up to 102 days after the due date.
Without accurate and timely reporting, the effects of USDA's actions or
strategies to eliminate the errors causing high dollar overpayments are
not fully known. USDA's Office of the Chief Financial Officer agreed
with our recommendation.
The National Agricultural Statistics Service (NASS) Must
Improve How It Releases Sensitive Information
OIG has also recently audited how NASS controls access to sensitive
market data and whether information is being released according to
established criteria. We found that NASS did not adequately enforce
critical procedures and physical security measures meant to protect the
security of NASS information. Notably, OIG was able to bring a cell
phone into lockup and witnessed a reporter using an iPad during lockup,
although these items are banned from NASS' facility. As a result,
sensitive information could be compromised or leaked before its
official release, which could adversely affect equitable trading in
commodity markets. We concurred with the actions NASS has taken to
address 14 of the 17 recommendations made in the report.
OIG conducts investigations of USDA employees alleged to have
engaged in criminal activity. In November 2012, an official with Rural
Development pled guilty to committing wire fraud by depositing $6.2
million in checks, issued by 10 water authorities and one electric
authority, into a bank account for which he had the sole signatory
authority. A joint investigation with the Federal Bureau of
Investigation disclosed that the employee then transferred those funds
to his personal accounts. The employee separated from Federal
employment in January 2013. In March 2013, the employee was sentenced
in U.S. District Court, Middle District of Alabama, to 60 months in
prison. In June 2013, the man was ordered to pay $3.9 million in
restitution to seven water authorities and one electric authority.
In other upcoming work that may be of interest, OIG is performing,
at Congressional request, a review to determine the adequacy of USDA's
management controls over the Department's Economy Act transfers and the
collection and use of funds under Department-wide reimbursable
agreements, commonly referred to as ``greenbook'' charges.
Additionally, OIG is reviewing FAS' controls over private voluntary
organizations, as well as developing a ``lessons learned'' report
concerning our Recovery Act oversight.
oig budget and cost-saving initiatives
In response to the budgetary constraints throughout the Federal
Government, OIG has streamlined its operations to create a leaner, more
effective agency. In fiscal year 2012, we conducted a functional
analysis to ensure that OIG, as an agency, is appropriately positioned
to continue to operate in the most efficient and effective manner.
Based on this analysis and the limited fiscal year 2013 budget, we took
the following steps:
--reduced staffing through attrition;
--reduced leased office space and office structures;
--increased use of webinars, video, and teleconferencing to reduce
travel costs;
--allowed employees to fill GS-14 and GS-15 positions without moving,
which has reduced relocation costs; and
--shifted Investigations and Audit employees away from headquarters
and to the field to carry out OIG's audit and investigative
operations more effectively.
These steps enabled OIG to continue performing its oversight role
despite the fact that OIG is presently functioning at its lowest level
of staffing in its history.
The increase in OIG's fiscal year 2014 budget allows us to fill
some critical vacancies that will enhance our ability to deliver high-
quality products. We appreciate the Committee's support in providing
these much needed resources.
For fiscal year 2015, the President's budget request proposes a
total increase of $7.3 million and 12 staff years. Much of this
increase (about $5.2 million) is intended to pay for decentralizing
General Services Administration rental payments and Department of
Homeland Security payments. In addition, we have requested funding for
staffing an Audit Center of Excellence, an initiative that will review
agency program vulnerabilities and enhance the Department's oversight
of improper payments. Audit's Center of Excellence would have a data
analysis component which would isolate data anomalies within USDA's
high-risk program payments and allow OIG to better validate how
agencies calculate their improper payment error rate. We anticipate
that this initiative will help the Department administer its programs
more effectively and implement corrective actions necessary to reduce
improper payments.
This concludes my statement. My senior management team and I would
be pleased to address any questions that you and the subcommittee's
staff may have, at your convenience.