[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

                              ----------                              


                       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.
---------------------------------------------------------------------------
    \2\ Public Law 111-291, 124 Stat. 3064.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.