[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





            HEARING TO REVIEW THE STATE OF THE RURAL ECONOMY

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 11, 2015

                               __________

                            Serial No. 114-1

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

93-959 PDF                     WASHINGTON : 2015 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001








                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
BOB GOODLATTE, Virginia              DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania         JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio                      SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee          ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York      RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri             CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan               SEAN PATRICK MALONEY, New York
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California             PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia               BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
TOM EMMER, Minnesota
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington

                                 ______

                    Scott C. Graves, Staff Director

                Robert L. Larew, Minority Staff Director

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     1
    Prepared statement...........................................     2
Lujan Grisham, Hon. Michelle, a Representative in Congress from 
  New Mexico, submitted letter on behalf of David Sanchez, Vice 
  President, Northern New Mexico Stockman's Association..........    84
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     3

                                Witness

Vilsack, Hon. Thomas ``Tom'' J., Secretary, U.S. Department of 
  Agriculture, Washington, D.C...................................     4
    Prepared statement...........................................     6
    Submitted questions..........................................    63

 
            HEARING TO REVIEW THE STATE OF THE RURAL ECONOMY

                              ----------                              


                      WEDNESDAY, FEBRUARY 11, 2015

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300 of the Longworth House Office Building, Hon. K. Michael 
Conaway [Chairman of the Committee] presiding.
    Members present: Representatives Conaway, Neugebauer, 
Goodlatte, Lucas, King, Thompson, Gibbs, Austin Scott of 
Georgia, Crawford, DesJarlais, Gibson, Hartzler, Benishek, 
LaMalfa, Davis, Yoho, Walorski, Allen, Bost, Rouzer, Abraham, 
Emmer, Moolenaar, Newhouse, Peterson, David Scott of Georgia, 
Costa, Walz, McGovern, DelBene, Lujan Grisham, Kuster, Nolan, 
Maloney, Kirkpatrick, Aguilar, Plaskett, Adams, Graham, and 
Ashford.
    Staff present: Bart Fischer, Haley Graves, Jackie Barber, 
Jessica Carter, John Goldberg, Leah Christensen, Margaret 
Wetherald, Matt Schertz, Scott Graves, Ted Monoson, Anne 
Simmons, Keith Jones, Lisa Shelton, Liz Friedlander, Mike 
Stranz, and Nicole Scott.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    The Chairman. I now call the hearing to order. I have asked 
Ralph Lee Abraham to open us with a prayer. Ralph?
    Mr. Abraham. Our Father, we thank You for Your presence 
today on this beautiful day. As always, we ask for knowledge 
and understanding, but more importantly, we ask for wisdom, so 
we can take that knowledge and apply it to our country. To our 
servicemen and servicewomen in harm's way today, please give 
them comfort and security always. In Jesus' name we pray, amen.
    Thank you, Ralph, I appreciate that. The hearing will come 
to order. This hearing of the Committee on Agriculture to 
review the state of the rural economy, will come to order. 
Thank you, Mr. Secretary, for appearing before the Committee 
today. We know you are really busy. We appreciate you coming 
here to visit with us today. You have, and we all enjoy, a good 
working relationship with each other, including with our 
previous Chairman, Mr. Lucas, and I look forward to continuing 
that tradition.
    Saturday marked the 1 year anniversary of the signing of 
the Agricultural Act of 2014. As you know, economic conditions 
for many producers have changed dramatically since then, with 
commodity prices plunging up to 50 percent. Drought, and other 
natural disasters, have resulted in disaster declarations in 32 
states across the country last year. The net effect is an 
estimated 43 percent decline in net farm income over the past 2 
years.
    A good many producers are struggling to demonstrate to 
lenders that they can cash flow their operations in order to 
secure credit, and to farm for another year. Adding to the 
anxiety of producers is the implementation of the farm bill, 
where hard decisions, with very significant consequences, will 
have to be made in the coming weeks.
    While the agricultural economy has been turned on its head, 
Mr. Secretary, you and your team have been hard at work 
implementing the 2014 Farm Bill, and I want to publicly thank 
you for the work your team has done thus far. I also want to 
thank, here at this hearing, the RMA Administrator, Brandon 
Willis in particular, for your dogged determination in getting 
the actual production history adjustment, now called the yield 
exclusion, implemented in time for spring planted crops. This 
was a significant lift, and the efforts did not go unnoticed, 
so thank you very much. While there have been a few bumps along 
the way, and certain challenges remain, you and your team 
deserve to be commended for your work in this effort.
    While I thank you for your hard work in implementing the 
farm bill, including several improvements made to crop 
insurance, I must admit that I was disappointed to see the 
Administration's 2016 budget proposal, which slashes $16 
billion from crop insurance, a reduction of over 17 percent. 
With commodity markets plummeting, and producers struggling to 
find financing, now is precisely the wrong time to weaken crop 
insurance.
    I would also note that, despite the economic turbulence in 
rural America, the commodity title of the farm bill is still 
slated to save taxpayers money relative to the old direct 
payment system, and the cost of Federal crop insurance is also 
expected to decline. Moreover, overall farm bill savings 
anticipated during the farm bill debate remain intact under the 
January baseline.
    We are at the beginning of a new Congress, and a new year, 
and just like farmers don't know what the year will bring in 
terms of weather and markets, we too cannot predict the twists 
and turns of the political process. But what we do know is that 
hard work always finds its rewards. To that end, my colleagues 
and I look forward to rolling up our sleeves and getting to 
work.
    Mr. Secretary, again, thank you for being with us today. I 
look forward to your testimony.
    [The prepared statement of Mr. Conaway follows:]

  Prepared Statement of Hon. K. Michael Conaway, a Representative in 
                          Congress from Texas
    Thank you Mr. Secretary for appearing before the Committee today. 
You are a very busy man (we might have contributed to that) so we 
appreciate you taking the time to be here with us today. You have long 
enjoyed a good working relationship with this Committee, including with 
our previous Chairman, Mr. Lucas, and I look forward to continuing that 
tradition, going forward.
    Saturday marked the 1 year anniversary of the signing of the 
Agricultural Act of 2014. As you know, economic conditions for many 
producers have changed dramatically since then, with commodity markets 
plunging by up to 50 percent. Drought and other natural disasters also 
resulted in disaster declarations in 33 states across the country last 
year. The net effect was an estimated 43 percent decline in net farm 
income over the past 2 years.
    A good many producers are struggling to demonstrate to lenders that 
they can cash flow in order to secure credit and farm for another year. 
Adding to the anxiety of producers is the implementation of the farm 
bill where hard decisions with very significant consequences will have 
to be made in the coming weeks.
    While the agricultural economy has been turned on its head, Mr. 
Secretary, you and your team have been hard at work implementing the 
2014 Farm Bill, and I want to publicly thank you for the work your team 
has done thus far. I also want to thank you--and RMA Administrator 
Brandon Willis in particular--for your dogged determination in getting 
the APH Adjustment--now called the Yield Exclusion--implemented in time 
for spring-planted crops. That was a significant lift, and it did not 
go unnoticed.
    While there have been a few bumps along the way--and to be certain, 
challenges remain--you and your team deserve to be commended for your 
work.
    While I thank you for your hard work implementing the farm bill--
including several improvements made to crop insurance--I must admit 
that I was disappointed to see the Administration's FY 2016 budget 
proposal that slashes $16 billion from crop insurance--a reduction of 
over 17%. With commodity markets plummeting and producers struggling to 
find financing, now is precisely the wrong time to weaken crop 
insurance.
    I would also note that, despite the economic turbulence in rural 
America, the commodity title of the farm bill is still slated to save 
taxpayers money relative to the old direct payment, and the cost of 
federal crop insurance is also expected to decline. Moreover, overall 
farm bill savings anticipated during the farm bill debate remain intact 
under the January baseline.
    We are at the beginning of a new Congress and a new year. And just 
like farmers don't know what the year will bring in terms of weather 
and markets, we too can't predict the twists and turns of the political 
process. But what we do know is that hard work always finds its reward. 
To that end, my colleagues and I look forward to rolling up our sleeves 
and getting to work.
    Mr. Secretary, again thank you for being with us today. I look 
forward to your testimony.

    The Chairman. And now an opening statement from the Ranking 
Member, Mr. Peterson.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Well, thank you, Mr. Chairman, for holding 
this hearing, and thank the Secretary for joining us today. 
Welcome back to the Committee, Mr. Secretary. Today we are 
looking at the rural economy, which, over the past few years, 
has done pretty well. I think that is partly why it was so 
difficult to get a farm bill passed, frankly.
    And it is good that we were able to get it done, because 
the farm bill provides a safety net to farmers during difficult 
times. Although I have been to some of these meetings that they 
have been putting on in our state on the provisions of the farm 
bill, I am concerned about some of the things that I have 
heard. And this is no reflection on the Department. They have 
done a great job of implementing it. These are problems that we 
caused with this base acre situation, which was not something 
that Frank Lucas and I were for.
    I am concerned about some of the things that I am hearing. 
And I am a little bit worried that we might run into a time 
constraint of getting this thing done by March 31, because you 
have a lot of farmers out there maneuvering around. So we will 
just have to see how it happens. At least we have the farm bill 
in place, and we still have crop insurance in place, so we will 
see how things work out.
    Even with the budget savings we provided, there are still 
people out there talking about re-opening the farm bill, and 
saving money in crop insurance, or SNAP, or other areas of the 
farm bill. This is, in my opinion, a very bad idea. We had a 
hard enough time getting this bill done. We do not need to get 
back into that quagmire again, and so I hope the Committee 
stays together in opposition to any cuts to farm bill programs, 
or any opening of the farm bill. We have done our work, and we 
were the one committee that stepped up to the plate and 
actually reduced the budget.
    With regard to the implementation, as I said, I have been 
generally pleased. We didn't make this easy, and some of these 
programs, as I have indicated, are more complicated than I 
would have liked, but it seems like things are going along, and 
hopefully people will meet the deadlines of updating their 
bases and yields by the end of this month, and making the 
decisions on which program to choose by the end of next month.
    So, again, I thank the Chairman for holding today's 
hearing, and look forward to hearing from the Secretary, and 
the discussion that ensues.
    The Chairman. I thank the Ranking Member. The chair will 
request that other Members submit their opening statements for 
the record so the witness may begin his testimony, and to 
ensure there is ample time for questions.
    With that, I would like to welcome our witness to the 
table, the Honorable Tom Vilsack, Secretary, 30th Secretary, I 
believe, of the Department of Agriculture in Washington, D.C. 
Secretary Vilsack, please begin when you are ready, sir.

 STATEMENT OF HON. THOMAS ``TOM'' J. VILSACK, SECRETARY, U.S. 
          DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.

    Secretary Vilsack. Mr. Chairman, thank you very much, and 
to Representative Peterson, and Members of the Committee, I 
appreciate the invitation that was extended by the Chairman to 
address you today. Let me spend just a couple of minutes, if I 
might, giving more detail on the implementation of the farm 
bill so the Committee is fully aware of the steps that have 
been taken over the last year.
    We have conducted over 4,600 events and interactions with 
producers to explain some of the complicated provisions of the 
farm bill. We are pleased with the activities of our very 
dedicated people at USDA. Over 546,000 payments have been made 
under the disaster assistance programs established by Congress 
in the farm bill, resulting in close to $4.8 billion being 
provided, primarily to livestock producers who suffered through 
some very difficult times as a result of drought and other 
issues.
    We are excited about the opportunity to continue to promote 
credit to farmers. The microloan program limit has been 
increased, as Congress directed, to $50,000, and we are taking 
a look at how we might be able to help beginning farmers access 
new credit opportunities that were created by the farm bill. 
Supplemental crop insurance, the STAX program has been 
established. Over $500 million has been provided in the Cotton 
Assistance Transition Program. The organic price election is in 
place. Changes have been made to the Noninsured Crop Disaster 
Assistance Program (NAP) to expand opportunities for specialty 
crop producers.
    Over 23,000 producers did, in fact, sign up to participate 
in 2015 in the Dairy Margin Protection Program. Approximately 
55 percent of that number decided to buy up coverage, and it 
may very well be at the end of this year that those who 
purchased buy up coverage may be happy that they did.
    Mention has been made of the safety net, and indeed we are 
in the process of implementing the Agricultural Risk Coverage 
Program (ARC) and the Price Loss Coverage Program (PLC). Over 
\1/2\ million farms have already re-allocated their base acres, 
and over 208,000 farms, which represents roughly nine percent 
of eligible farms, have already made the election of ARC or 
PLC. Obviously, this is an extremely important election.
    Our hope is that farmers who have made up their mind, who 
have looked at the numbers and made the determination of what 
is best for each individual farm will get to make that decision 
quickly, so that we are not faced with a situation where 
everyone makes that decision at the last minute. We obviously 
want to be able to process all of this work in a timely way, so 
to the extent that people can be encouraged to do so early, 
that would be beneficial.
    The Foundation for Food and Agricultural Research has been 
set up. Several meetings have been held: $200 million has been 
directed to an account, and we anticipate and expect that 
private foundation will begin making decisions about research 
projects sometime in 2015.
    We are pleased with the response to the Regional 
Conservation Partnership Program: 115 projects were funded, 
with $372 million. We anticipate another round of this Regional 
Conservation Partnership Program competition at the end of the 
year. Roughly $200 million will be made available at that time.
    Easement programs have been consolidated. In the forestry 
title the stewardship contracting has been extended. We worked 
with governors across the country in 35 states to identify 
millions of acres of forested land that provide an opportunity 
for us to focus our attention, and used a streamlined NEPA 
process to encourage more treatment, and more resilience in 
restoration of our forests.
    We are working on amendments to the section 9003 energy 
program to expand that opportunity to include the bioeconomy. 
Local and regional food systems have benefited from the 
Farmers' Market Promotion Program and the Local Foods Promotion 
Program established in the farm bill. And we are now in the 
process of reviewing over 40 applications we received from 
states to take advantage of the SNAP employment and training 
pilot, and we are very pleased with the interest that that 
program has generated.
    Mr. Chairman, I remain very bullish on the economy, the 
agricultural economy, and the rural economy. I think we are 
focused on an opportunity of not only expanding at a record 
level of exports, a record expansion of local and regional food 
system market opportunities, the development of new ecosystem 
markets, and additional investment in conservation, and the 
expansion of the bio-economy, where we are seeing manufacturing 
returning to the rural economy. We still have work to do, no 
question.
    Obviously, commodity prices are down a bit, but, as I said 
yesterday to our team, it is sort of like major league baseball 
players who begin spring training, you hit .370 one year, you 
hit .320 the next year. Maybe you are down a little bit, but 
you still had a pretty decent year. We have the best farmers in 
the world, the most productive farmers in the world, providing 
the best product in the world. I am confident that that will 
continue.
    [The prepared statement of Secretary Vilsack follows:]

 Prepared Statement of Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
              Department of Agriculture, Washington, D.C.
    Chairman Conaway, Ranking Member Peterson, and Members of the 
Committee, I am pleased to provide an update on the U.S. Department of 
Agriculture's (USDA) progress in implementing the Agricultural Act of 
2014 (2014 Farm Bill) and the state of rural America. First, I would 
like to take this opportunity to thank the Committee for its hard work 
in crafting this critical piece of legislation. The farm bill provides 
the necessary tools to allow the proud men and women of rural America 
to feed hundreds of millions around the world and resources to support 
economic development and job creation in rural America.
    The new farm bill, with 12 titles and more than 450 provisions, is 
a large piece of legislation and implementing it has required a 
coordinated effort across all areas of USDA. We made implementation a 
top priority at the Department. Immediately after enactment, USDA 
established a 2014 Farm Bill implementation team composed of key sub-
cabinet officials and experts from every mission area of the Department 
to put new programs in place and make mandated reforms to existing 
programs. I am proud of the work USDA employees have undertaken to 
implement the farm bill. Through their hard work, this effort has been 
called ``the most successful farm bill implementation'' to date.
    As we mark the 1 year anniversary of the farm bill being signed 
into law, I am pleased to say that we have made major progress on every 
title of the law and achieved significant results for those impacted by 
the law. I have no doubt that these results will only continue as we 
begin year two.
Title I: Commodities
    Farmers, ranchers and those working in supporting industries 
maintain an agriculture sector that has seen strong growth over the 
past 5 years. Agriculture accounts for about $775.8 billion in economic 
activity, supports one out of every eleven jobs in the economy, and 
helps to maintain vibrant, thriving rural communities. U.S. agriculture 
is expanding into new markets around the world, spurring innovation, 
and creating jobs and opportunity on and off the farm.
    The future of rural America depends on the continued leadership of 
our farmers and ranchers, and we must make sure they have the tools 
they need to continue to grow, and a strong safety net to support them 
during tough times.
    At the direction of the President, USDA made the disaster programs 
our number one priority and expedited the implementation of these 
programs. The new farm bill reauthorized disaster assistance programs 
(including the Livestock Forage Disaster Program, the Livestock 
Indemnity Program, the Emergency Assistance for Livestock, Honeybees, 
and Farm-Raised Fish Program, and the Tree Assistance Program) that had 
not been operational since 2011.
    These programs provide much-needed relief to struggling farmers and 
ranchers impacted by natural disasters. I'm proud to say that within 60 
days of enactment, USDA began accepting applications for disaster 
assistance programs restored in the 2014 Farm Bill. This was truly a 
significant accomplishment, as it took a year to implement disaster 
relief programs after the last farm bill was passed in 2008.
    USDA has received over 567,000 applications for these programs and 
more than $4.7 billion in disaster program payments have been issued to 
producers to assist in their financial recovery. While these disaster 
payments will not replace all of the losses farmers and ranchers faced, 
they provided some relief to ensure that extreme weather won't cause 
families to lose their farms.
    In September, USDA ushered in one of the most significant reforms 
to U.S. farm programs in decades by unveiling the Agricultural Risk 
Coverage (ARC) and Price Loss Coverage (PLC) programs. Producers will 
have through the end of March 2015 to select which program works best 
for their operations.
    To help farmers choose between ARC and PLC, USDA helped create 
online tools that allow farmers to enter information about their 
operation that is used to provide projections about what each program 
will mean for their operation under possible future scenarios. USDA 
provided $3 million to the Food and Agricultural Policy Research 
Institute (FAPRI) at the University of Missouri and the Agricultural 
and Food Policy Center (AFPC) at Texas A&M (co-leads for the National 
Association of Agricultural and Food Policy), along with the University 
of Illinois (lead for the National Coalition for Producer Education) to 
develop the tools.
    USDA's Farm Service Agency and Risk Management Agency also worked 
together to offer certified yield data that producers can use to better 
calculate how the new safety net programs can offer the best protection 
against market swings. This is the first time that producers will 
update yields since 1986.
    More than 23,000 of the nation's dairy operations--over \1/2\ of 
all dairy farms in America--have enrolled in the new Margin Protection 
Program. During the 3 months of the enrollment period, USDA conducted a 
robust education and outreach effort to the nation's dairy producers. 
The Department held over 500 public meetings, sent out nearly 60,000 
direct mailings, and conducted more than 400 demonstrations of the Web-
based tool designed to help applicants to calculate their specific 
coverage needs.
Title II: Conservation
    USDA's conservation efforts have enrolled a record number of acres 
in programs that have saved millions of tons of soil, improved water 
quality, preserved habitat for wildlife and protected sensitive 
ecological areas. To accomplish these goals, USDA has partnered with a 
record number of farmers, ranchers and landowners on conservation 
projects since 2009. In addition to protecting cropland and critical 
habitats, conservation can help to boost local economies. For example, 
a 2013 study commissioned by the National Fish and Wildlife Foundation 
found that conservation activities supported more than 600,000 jobs.
    USDA launched the Regional Conservation Partnership Program (RCPP) 
in May 2014. This new farm bill program is an entirely new approach to 
conservation efforts. RCPP is a competitive program where local 
partners, in partnership with Natural Resources Conservation Services 
(NRCS) design conservation projects that are specific to their region. 
It has three funding pools: 35 percent of total program funding 
directed eight to designated critical conservation areas, including the 
Great Lakes Region, Chesapeake Bay Watershed, Mississippi River Basin, 
Longleaf Pine Range, Columbia River Basin, California Bay Delta, 
Prairie Grasslands, and the Colorado River Basin; 40 percent directed 
to regional or multi-state projects through a national competitive 
process; and 25 percent directed to state-level projects through a 
competitive process established by NRCS State leaders.
    Nearly 600 pre-proposals were submitted for RCPP, and the top pre-
proposals were invited to submit a full proposal. This resulted in 210 
full proposals requesting $1.4 billion--four times the available 
funding for the first round ($370 million). In January, USDA awarded 
funding to 115 high-impact, locally-led projects across all 50 states 
and the Commonwealth of Puerto Rico. USDA provided more than $370 
million that will leverage an estimated $400 million in partner 
contributions. The total investment of nearly $800 million will improve 
the nation's water quality, support wildlife habitat and enhance the 
environment.
    These partnerships empower communities to set priorities and lead 
the way on conservation efforts important for their region.
    RCPP builds on the results achieved by USDA's traditional 
conservation programs, which have achieved significant results over the 
past 6 years. USDA has enrolled more than 79 million acres of 
agricultural working lands in the Environmental Quality Incentives 
Program (EQIP) to help producers implement conservation practices. In 
addition, more than 67 million acres, an area about the size of the 
State of Colorado, have been enrolled into the Conservation Stewardship 
Program (CSP) to incentivize the most productive, beneficial 
conservation practices.
    At the end of 2014, USDA published interim final rules for CSP and 
EQIP. The EQIP interim final rule includes efforts to simplify the 
existing regulation regarding conservation practice scheduling, payment 
limitations and other administrative actions.
    The 2014 Farm Bill extended authority to enroll acreage in 
Conservation Reserve Program (CRP) through September 30, 2018 and 
requires enrollment to be no more than 24 million acres beginning 
October 1, 2016. Enrollment under continuous CRP and 1 year extensions 
were offered last year and FSA expects to publish a rule late this 
spring to fully restart the program and implement the remaining farm 
bill changes. With the cap on acreage, the Department is focused on 
ways to increase per acre conservation, wildlife and environmental 
benefits through a variety of targeted approaches.
Title III: Trade
    USDA is supporting America's farmers and ranchers as they build on 
record agricultural exports. In FY 2014, exports of U.S. food and 
agricultural products reached a record $152.5 billion and supported 
nearly one million American jobs. The potential for agricultural 
exports is considerable and USDA is already taking action to help 
producers secure and expand market access for American agricultural 
products. But it is also critically important that we have Trade 
Promotion Authority as we seek approval of trade agreements that 
support and create U.S. jobs while helping American agriculture to 
compete even more successfully. Trade Promotion Authority will help 
ensure that America's farmers, ranchers, and food processors receive 
the greatest benefit from these negotiations, and builds on efforts 
that have helped achieve record agricultural exports over the past 6 
years.
    Thanks to resources in the new farm bill, USDA is also able to 
continue funding for trade promotion and market expansion for U.S. 
agricultural products overseas. An independent study released in 2010 
found that trade promotion programs like Market Access Program (MAP), 
and Foreign Market Development (FMD) provide $35 in economic benefits 
for every dollar spent by government and industry on market 
development. USDA moved quickly to implement trade promotion programs 
reauthorized under the 2014 Farm Bill. Through the MAP, USDA has 
provided $173.2 million in FY 2015 to 62 nonprofit organizations and 
cooperatives to help build commercial export markets for U.S. 
agricultural products and commodities. Participants contribute on 
average a 214 percent match for generic marketing and promotion 
activities and a dollar-for-dollar match for promotion of branded 
products. Through the FMD Program, USDA has provided $26.7 million in 
FY 2015 to 22 trade organizations to help create, expand, and maintain 
long-term export markets for U.S. agricultural products.
    In addition to the MAP and FMD programs, eligible organizations can 
apply for funding through the Quality Samples Program (QSP), Emerging 
Markets Program (EMP), and the Technical Assistance for Specialty Crops 
(TASC) Program, which includes the programmatic change under the 2014 
Farm Bill to allow participants to address technical barriers to trade 
regardless of whether they are related to a sanitary or phytosanitary 
barrier.
Title IV: Nutrition
    The Supplemental Nutrition Assistance Program (SNAP) provisions of 
the 2014 Farm Bill preserve the fundamental structure of the program, 
invest in helping SNAP participants move to self-sufficiency, 
strengthen program integrity efforts, continue to modernize the program 
through technology, and emphasize the importance of good nutrition 
through enhanced retailer standards and grants for incentives that help 
SNAP participants stretch their dollars further to buy fruits and 
vegetables.
    SNAP helps millions of hardworking families put healthy food on the 
table as they get back on their feet. More than \1/2\ of SNAP 
recipients are children and the elderly, and less than 7% of households 
receive cash assistance. Among SNAP households with at least one 
working-age, non-disabled adult, more than \1/2\ work--and more than 80 
percent work in the year before or after receiving SNAP. With a 
stronger economy SNAP participation is beginning to gradually decline. 
Comparing Fiscal Year 2014 with Fiscal Year 2013, average participation 
decreased 2.3 percent or by approximately 1.1 million people. While the 
economic trends are encouraging, SNAP remains critical to millions of 
Americans.
    The farm bill provided $200 million for SNAP employment and 
training pilots to help participants find jobs and increase their 
earnings. The funds will be used to develop and test innovative 
approaches that connect SNAP recipients with the preparation, training, 
work supports, and opportunities they need to enter and remain in the 
workforce, to move off of SNAP, and to build stronger futures for their 
families. The pilots are intended to help recipients build their skills 
and match them with good paying jobs. The goal of the pilots will be to 
increase the number of work registrants who obtain employment, increase 
their earned income, and move toward self-sufficiency. USDA put out a 
request for proposals for pilot projects in August 2014 and plans to 
award funding for up to ten projects. We were pleased with the strong 
response to this RFP with proposals from over 30 states. USDA plans to 
work with all states to maximize the core E&T program, even if they are 
not recipients of the farm bill funding.
    The new farm bill builds on USDA's ongoing efforts to root out any 
waste, fraud, and abuse from the program, protect the taxpayer 
investment in SNAP and make sure that the program is there for those 
who truly need it. In FY 2013, SNAP achieved a record level of payment 
accuracy of 96.8 percent. Payment errors in FY 2013 were almost 64 
percent lower than they were in FY 2000, among the lowest in the 
Federal Government. USDA efforts have also resulted in a significant 
reduction in trafficking--USDA's The Extent of Trafficking in the 
Supplemental Nutrition Assistance Program: 2009-2011 study shows that 
the exchange of SNAP benefits for cash--which was estimated to be as 
high as four percent 15 years ago, down to just 1.3 percent according 
to the most recent data.
    The farm bill authorized a Fresh Fruit and Vegetable Program (FFVP) 
pilot to allow participating schools in at least five states to serve 
canned, frozen, and dried forms of fruits and vegetables through the 
program. Four states--Alaska, Delaware, Kansas, and Maine--applied to 
participate. The pilots are operating this school year. Each pilot has 
an evaluation component and results of the evaluations are expected in 
fall 2016.
    USDA also issued guidance and provided technical assistance to 
state agencies regarding the requirement that state and local agencies 
begin phasing out the participation of women, infants and children in 
the Commodity Supplemental Food Program, resulting in a smooth 
transition to a seniors-only program.
Title V: Credit
    The 2012 Census of Agriculture data indicate there is tremendous 
growth potential for small and mid-sized producers, but many need 
additional support in order to become competitive. Accordingly, USDA 
has expanded efforts to connect small- and mid-sized farmers and 
ranchers with tools and resources to help them access capital, get 
information about land management and conservation practices, manage 
risk, find local markets, and other educational resources that will 
help them grow their operations and expand into new markets. The new 
farm bill expands lending opportunities for thousands of farmers and 
ranchers to begin and continue operations, including greater 
flexibility in determining eligibility, raising loan limits, and 
emphasizing beginning and socially disadvantaged producers.
    USDA has acted quickly to implement changes to Farm Loan Programs, 
including, among other things, eliminating loan term limits for 
guaranteed operating loans; modifying the definition of beginning 
farmers; allowing debt forgiveness on youth loans; and increasing the 
guaranteed amount on conservation loans from 75 to 80 percent and 90 
percent for socially disadvantaged borrowers and beginning farmers. 
USDA also implemented changes in the interest rate on Direct Farm 
Ownership loans that are made in conjunction with other lenders and 
increased the maximum loan amount for the down payment loan program 
from $225,000 to $300,000. On March 25, 2014, FSA issued an agency 
directive implementing non-discretionary microloan provisions. USDA 
also raised the borrowing limit for its microloan program from $35,000 
to $50,000. Since the program began in January 2013, USDA has issued 
more than 10,000 microloans, 70 percent of which went to beginning 
farmers.
Title VI: Rural Development
    USDA has made strategic investments in infrastructure, housing and 
community facilities to help improve quality of life in rural America. 
Since 2009, USDA has helped more than 900,000 families buy, repair or 
refinance a home; extended new or improved broadband service for 1.4 
million Americans; improved or constructed more than 158,000 miles of 
electric line; invested in approximately 7,000 water and wastewater 
projects for nearly 14.5 million Americans; invested in more than 6,600 
critical community facilities projects; and provided grants and loans 
to assist nearly 89,000 small and mid-sized businesses in rural 
America, creating or saving an estimated 420,000 jobs.
    The 2014 Farm Bill reauthorized the tools that enable USDA to 
continue offering municipalities, businesses, and families the 
financing tools that can prompt economic growth and prosperity in rural 
communities. USDA is making good use of these tools in communities 
across the country. Because the farm bill included funding to address 
the backlog of water/wastewater improvement projects across the 
country, USDA acted quickly and on April 22, 2014, awarded $150 million 
in grants, plus an additional $237 million in loans and grants through 
the Water and Environmental Program, to 116 projects in 40 states and 
the Commonwealth of Puerto Rico to improve water and wastewater 
services and ensure that rural communities have access to reliable, 
clean and safe water. These awards go predominantly to very small, 
remote, and poor places.
    USDA has also acted quickly to implement key new farm bill 
provisions that invest in rural businesses and critical infrastructure 
in order to strengthen rural communities and build on its rural 
development initiatives. In FY15 USDA will reopen the farm bill 
broadband program with new rules that align with the changes the 
Congress included in the 2014 Farm Bill and make approximately $50 
million in loans available to help ensure every corner of this country 
has reliable, high-speed Internet access. Similarly, in FY15 USDA will 
accept applications for the Value-Added Producer Grant program, which 
helps agricultural producers generate new products, crate and expand 
marketing opportunities, and increase income. Since 2009, USDA has 
awarded 863 Value-Added Producer Grants totaling $108 million.
    The new farm bill streamlines the Rural Business Opportunity Grant 
(RBOG) program and Rural Business Enterprise Grants (RBEG) program to 
create a new Rural Business Development Grant Program with all the same 
authorities as the previous two programs. In FY 2014, USDA ran RBOG and 
RBEG as separate programs and in FY 2015, will issue a final rule 
establishing the new Rural Business Grant Program. In September 2014, 
USDA announced nearly $3 million in grants to 28 organizations in 12 
states through the two programs.
    Even as we make these investments, rural America continues to face 
a unique set of challenges when it comes to combating poverty. While 
poverty is not limited to rural America, nearly 85 percent of 
persistent poverty counties are located in rural areas. In fact, \1/3\ 
of rural counties have child poverty rates of over 30 percent, at a 
time when research increasingly demonstrates the negative effect of 
poverty on child development and educational attainment. Children are 
our future and we must do more to create better futures for our 
children and families and those striving to reach the middle class--
this is something I look forward to working on with all of you.
Title VII: Research, Extension, and Related Matters
    Scientific breakthroughs have helped our farmers, ranchers and 
growers increase production on the same amounts of land, using fewer 
inputs. Studies have shown that every dollar invested in agricultural 
research returns up to $20 to the economy.
    In the past 6 years alone, research by USDA scientists has led to 
over 750 patent applications covering a wide range of topics and 
discoveries. USDA also continues to aggressively partner with private 
companies, universities and others to transfer technology to the 
marketplace to benefit consumers and stakeholders. In Fiscal Year 2014 
alone USDA received 83 patents, filed 119 patent applications, and 
disclosed 117 new inventions. Helping drive these innovations, USDA 
also had 267 active Cooperative Research and Development Agreements 
with outside investigators, which includes universities and other 
organizations, including 102 with small businesses.
    In July, USDA created the Foundation for Food and Agricultural 
Research (FFAR) and appointed individuals to a 15-member board of 
directors. The foundation's board of directors was chosen to represent 
the diverse sectors of agriculture. Seven of these board members were 
selected by the unanimous vote of the board's five ex officio members 
from lists of candidates provided by industry, while eight 
representatives were unanimously elected from a list of candidates 
provided by the National Academy of Sciences. Congress mandated that 
the ex officio members choose the initial 15 board members from among 
the lists provided by these two groups. The board members have the 
option of adding additional members, if they so choose.
    FFAR will leverage public and private resources to increase the 
scientific and technological research, innovation, and partnerships 
critical to boosting America's agricultural economy. In a time of 
Federal budgetary restraints, the new foundation is another innovative 
way to continue and expand investment in agricultural research. It will 
complement existing Federal and federally-funded agricultural science 
research endeavors and accelerate solutions to the challenges American 
agriculture.
    Other research provisions of the 2014 Farm Bill focus on 
investments at colleges and universities throughout the United States, 
with an emphasis on Land-Grant institutions. The farm bill provides new 
or expanded investments in research critical for the success of 
beginning farmers and ranchers, specialty crop producers, and organic 
producers.
    As authorized by the farm bill, USDA has provided significant sums 
for a variety of research, extension, and education efforts. For 
example, on Feb. 2, 2015, USDA announced more than $18 million in 
grants to educate, mentor, and enhance the potential of the next 
generation of farmers to sustain careers in agriculture through the 
Beginning Farmer and Rancher Development Program. This program aims to 
support those who have farmed or ranched less than 10 years with 
workshops, educational teams, training, and technical assistance 
throughout the United States. USDA's National Institute of Food and 
Agriculture awards grants to organizations that implement programs to 
train beginning farmers and ranchers.
    On October 2, 2014, USDA announced the award of $51.8 million in 
grants through its Specialty Crop Research Initiative to support the 
specialty crop sector by developing and disseminating science-based 
tools to address the needs of specific crops. These research and 
extension project grants fund a wide variety of efforts, including 
research to improve crop characteristics, identifying and addressing 
threats from pests and diseases, improving production and 
profitability, developing new production innovations and technologies, 
and developing methods to respond to food safety hazards.
    Through the Organic Research and Extension Initiative (OREI), USDA 
awarded on September 29, 2014, more than $19 million in grants to help 
producers and processors who have already adopted organic standards 
grow and market high-quality organic agricultural products. OREI's 
priority concerns include biological, physical and social sciences. 
OREI-funded projects assist farmers and ranchers with whole farm 
planning by delivering practical research-based information and will 
improve the ability of growers to develop the Organic System Plan 
required for certification.
Title VIII: Forestry
    Under the new farm bill, the Forest Service is provided greater 
tools to maintain the nation's forests and grasslands, including 
permanent stewardship contracting and Good Neighbor authorities, and 
provisions to aid efficient planning and implementation of landscape 
scale projects that reduce insect, disease and fire risks. These tools 
give the agency increased ability to work collaboratively with states, 
Tribes and a wide range of citizens and stakeholders to accomplish 
critical forest and watershed restoration work and conserve the 
nation's forests and grasslands.
    Last May, USDA designated 94 National Forest areas in 35 states to 
address insect and disease threats that weaken forests and increase the 
risk of forest fire.
Title IX: Energy
    New opportunities in advanced biobased products and renewable 
energy expand the potential to strengthen rural manufacturing, 
particularly of products made from renewable materials from our farms 
and forests. Rural America desperately needs those jobs, and every 
American benefits from our expanded competitiveness in this globally 
emerging market.
    USDA is helping to create markets for advanced biofuels from non-
food, non-feed sources--from the farm field to the end-user. To 
encourage feedstock production for renewable energy, the Biomass Crop 
Assistance Program (BCAP) is incentivizing more than 850 growers and 
landowners farming nearly 48,000 acres to establish and produce 
dedicated, nonfood advanced biofuel feedstocks for energy conversion 
facilities. In July, we selected 36 energy facilities in 14 states to 
accept biomass deliveries supported by BCAP.
    USDA has also invested in the work needed to create advanced 
biofuels refineries. Since 2009, USDA has invested in efforts to create 
nine new advanced refineries nationwide. We have also created six 
regional research centers across America to develop advanced biobased 
energy technology that's appropriate to every region. With the nearly 
$900 million in mandatory money provided in the Energy Title of the 
2014 Farm Bill, we can continue these efforts to expand the biobased 
economy and support economic development opportunities in rural 
America.
    The new farm bill makes significant investments in the bioeconomy 
and renewable energy programs. The legislation preserves the Rural 
Energy for America Program (REAP), which provides critical investments 
in renewable energy and energy efficiency across rural America, helping 
to reduce our dependence on foreign oil. Over the past few years we 
have collected good feedback from folks around the country about how we 
could improve the REAP program--and Congress also provided some 
direction in the 2014 Farm Bill. In December, USDA published a new REAP 
rule, which takes these changes into account and also strives to make 
the program more accessible to rural business owners and producers of 
all kinds. The rule goes into effect this week and USDA will be 
announcing the availability of approximately $280 million in grants and 
loan guarantees for the new REAP program in the near future.
Title X: Horticulture
    A surge in consumer demand for locally-produced food is creating 
jobs and opportunity throughout rural America, for farms as well as 
small businesses that store, process, market and distribute food 
locally and regionally. USDA data indicate that local food sales were 
at least $6.1 billion in 2012, with industry sources estimating the 
market's value at more than $9 billion. Perhaps more important for 
USDA's mission, our research shows that money spent on local food 
continues to circulate locally, creating demand for other businesses 
and services in rural communities. As such, this strategy is a critical 
piece of USDA's work to support rural economies more generally.
    With the release of the Census of Agriculture results last year, 
USDA learned that over 160,000 farmers and ranchers nationwide are 
selling their products locally. They're tapping in to growing consumer 
demand for locally-grown food; consumers want to support their local 
economy when they purchase food, whether that's at a farmers market, a 
grocery store, or their workplace cafeteria.
    Direct-to-consumer sales like those that take place at a farmers 
market help consumers connect with the source of their food and learn 
more about agriculture. Today, we have more than 8,200 farmers markets 
registered with the AMS National Farmers Market Directory. But this 
economic sector is more than that. As it matures, it is opening 
opportunities for farms of all sizes, especially mid-sized farms, to 
supply larger-volume buyers like local retailers. USDA has invested in 
local food infrastructure--from cold storage facilities, to processing 
plants, to food hubs that aggregate and distribute local products--and 
has helped facilitate new market access for these producers. Recently, 
we launched a new set of Local Food Directories to help consumers find 
Community Supported Agriculture enterprises, food hubs and on-farm 
stores.
    The 2014 Farm Bill continues to build on programs established in 
the 2008 Farm Bill to promote local and regional food systems and 
support specialty crop and organic agriculture. Sales of specialty 
crops total nearly $65 billion per year, making them a critical part of 
the U.S. economy. In October, USDA announced $66 million for 838 
Specialty Crop Block Grants to State Departments of Agriculture for 
projects that help support specialty crop growers, including locally 
grown fruits and vegetables, through research and programs to increase 
demand. As directed by the farm bill, the block grants were allocated 
to U.S. States, the District of Columbia, and territories based on a 
formula that took into consideration both specialty crop acreage and 
production value. Nearly all states saw an increase in funds.
    In September, USDA awarded over $27 million in competitive grant 
funds for projects through the new Farmers Market and Local Food 
Promotion Program that support local and regional food systems. As 
directed by the 2014 Farm Bill, priority will be given to projects that 
benefit under-served communities, including those that are located in 
areas of concentrated poverty with limited access to fresh locally or 
regionally grown foods.
    In order to help prevent the introduction or spread of plant pests 
and diseases that threaten America's agriculture economy and the 
environment, in April 2014 USDA allocated $48.1 million to 383 projects 
in 49 states, Guam and Puerto Rico through the Plant Pest and Disease 
Management and Disaster Prevention Program. The projects are helping 
states and other partners continue providing and strengthening 
protections against agricultural threats and could also allow the 
reallocation of resources to other critical programs. In addition, in 
June, USDA allocated $5 million to support 19 projects in 14 states 
through the National Clean Plant Network cooperative agreements 
program.
Title XI: Crop Insurance
    The crop insurance program has become an increasingly important 
component of the farm safety net, and crop insurance protections for 
all farmers, particularly beginning farmers and ranchers, have been 
strengthened under the new farm bill. For example, changes made by the 
2014 Farm Bill have allowed us to provide better crop insurance 
coverage for almost 1,300 beginning farmers and ranchers already, only 
ten percent into the reporting cycle. We've also expanded coverage for 
26 organic crops so that these producers can buy the level of insurance 
that meets their production needs.
    USDA is now able to offer Whole-Farm Revenue Protection plan of 
insurance to provide safety net protection for specialty, fresh fruit 
and vegetable growers and organic producers, as well as reward farm 
diversification through premium discounts on crop insurance coverage. 
The Whole-Farm Revenue Protection plan of insurance was made available 
in 45 states for 2015. USDA has started the work to expand Whole-Farm 
Revenue Protection to the rest of the country. These areas are targeted 
for expansion for the 2016 crop year.
    USDA staff worked hard to implement several 2014 Farm Bill programs 
ahead of schedule, such as ARC, PLC, the Price Loss Coverage, 
Supplemental Coverage Option and Stacked Income Protection Plan. 
Because of that, USDA was able to leverage data from ARC and PLC to 
extract the information needed to implement Actual Production History 
(APH) Yield Exclusion earlier than expected.
    In October, USDA announced that the APH Yield Exclusion will be 
available for farmers of select crops starting in spring 2015. APH 
allows eligible producers who have been hit with severe weather to 
receive a higher approved yield on their insurance policies through the 
Federal Crop Insurance Program. The APH Yield Exclusion is being 
implemented beginning with the 2015 crop year for corn, soybeans, 
spring wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, 
peanuts, and popcorn.
    APH Yield Exclusion will be available for additional crops 
beginning with the 2016 crop year, including winter wheat. USDA is 
currently reviewing crops that will be eligible for APH Yield Exclusion 
for the 2016 crop year. The choice of crops and counties selected for 
2016 and subsequent crop years will be based on data availability 
criteria designed to ensure actuarial soundness and program integrity. 
USDA expects to announce the new crops throughout the year with most of 
the announcements to be made in the fall of 2015.
Title XII: Miscellaneous
    In November, USDA announced Karis T. Gutter, a Marine Corps Reserve 
veteran and current USDA Deputy Under Secretary for Farm and Foreign 
Agricultural Services as the first USDA Military Veterans Agricultural 
Liaison, a position created by the 2014 Farm Bill. The MVA Liaison will 
coordinate USDA leadership across the Department to provide 
information, resources and support for active duty military and 
veterans interested in agriculture. The MVA Liaison will also have 
authority to facilitate formal relationships between USDA and other 
government agencies and nonprofit organizations to strengthen USDA 
support for veterans.
    In December, USDA awarded grants to 62 community-based and 
nonprofit organizations and educational institutions to conduct 
training, outreach and technical assistance for socially disadvantaged 
(including Tribal) and veteran farmers and ranchers through the 2501 
Program. USDA has assisted more than 6,100 beginning, small, veteran 
and socially disadvantaged farmers and ranchers through the program 
since October 2014.
    USDA also implemented the receipt for service requirement in the 
2014 Farm Bill and has issued 101,462 receipts for service to USDA 
customers between December 1, 2014 and January 28, 2015.
Conclusion
    Again, thank you for this opportunity to update you on USDA's 
progress to implement the 2014 Farm Bill. Farmers, ranchers, rural 
communities and other USDA stakeholders have waited several years for 
this legislation, and USDA has made implementation of the bill a high 
priority.
    I am pleased to say that in just over a year, important progress 
has been made on every title, including updates to risk management 
tools, modifications to farm loan programs, announcements regarding 
available funds for agricultural research and much more. Moving 
forward, USDA staff and I will continue to engage with Members of 
Congress and stakeholders during the implementation process and as we 
continue to carry out critical mission of serving America's farmers, 
ranchers and rural communities.

    The Chairman. Well, thank you, Mr. Secretary. Again, thank 
you for being here today. The chair would remind Members that 
they will be recognized for questions in order of seniority, 
for the Members who were here at the start of the hearing. 
After that, Members will be recognized in order of arrival. I 
appreciate our Members' understanding. I recognize myself for 5 
minutes.
    Mr. Secretary, again, thanks. Crop insurance is clearly the 
backbone of our safety net, and for several budgets in a row 
the Administration has proposed additional cuts, on top of the 
money that was cut in 2008, on top of the money that was cut as 
a result of the SRA. You are on record with Politico saying 
that you think the company returns are way too healthy. I am a 
CPA, and return on investment, and whether or not somebody is 
making money, that is a mathematical computation, and there 
seems to be some differences of opinion.
    RMA thinks that the companies are making a lot--in the six 
percent range, well south of the 14 percent cap that is put 
into the farm bill. We have had crop reinsurance folks come to 
us saying they are exiting the business, they are making very 
difficult decisions whether or not they can continue to 
allocate capital to this important initiative. It is the 
public-private team that has driven the success of crop 
insurance.
    Could you give us your thoughts on this? Could you share 
with us how RMA computes the numbers, and can we get a better 
sense of why the Administration believes that crop insurance 
folks are making too much money?
    Secretary Vilsack. Well, first of all, Mr. Chairman, I 
certainly acknowledge the importance of crop insurance as a 
critical component to the safety net. Over $55 billion has been 
paid out since I have been Secretary in crop insurance payouts, 
so obviously it is extraordinarily important.
    It is a balance between producers, insurance companies, and 
the taxpayer. And the reality is that both the Government 
Accountability Office (GAO), our own Inspector General, have 
raised questions and concerns about various aspects of the 
program.
    What we have proposed is a reform in the Prevented Planting 
Program. Essentially, it creates a current disincentive for 
planting the second crop. We think that should be dealt with 
and addressed. In terms of the harvest price option loss 
coverage, that is a question of whether or not we, or you, or 
us, believe that the partnership should be more of a 50/50 
partnership, instead of a 65/35 partnership, in terms of the 
level of subsidy.
    The bottom line is you can look at any 1 year, and you can 
make a conclusion about whether or not this is a profitable or 
not profitable enterprise. The reality is, if you look at a 
long enough period of time, and it is important because folks 
can point to a year where maybe it was a loss, 1 or 2 years out 
of the last 15 or 16. We can also point to a place where the 
return on premiums was 34 percent, 32 percent, so you have to 
look at the long trend.
    What we have found is that this enterprise can be 
actuarially sound at 12 percent on balance. Over history, the 
return has been somewhere between 14 and 17 percent. So it is 
just a matter of the long term. This is a healthy industry, and 
we are seeing an expansion of the number of insurance policies 
and crops being insured.
    The Chairman. You are clearly saying that, but you are not 
saying it expands the number of folks. If this is such a 
profitable business, there would be folks trying to get in it, 
and what we are being told is that there are folks getting out. 
It seems like there is a sense at OMB that they don't want a 
public-private partnership. They want crop insurance to be 
solely public, and that makes no sense to many of us.
    Secretary Vilsack. Well, I don't think that is quite 
accurate, Mr. Chairman. I think that OMB's position, and our 
position, is that it is a balance. It is a proper balance, and 
a partnership. When subsidies are as high as 65, 70, 80 
percent, the question is, is that the right level?
    The Chairman. And those have been coming down.
    Secretary Vilsack. They----
    The Chairman. In those early years, I mean these guys are 
in the arena for today forward. I get the historical look back, 
but the trend is in the wrong direction. Much of that happened 
before the 2008 Farm Bill, as well as the standard reinsurance 
agreement that was done in 2011. I am hard pressed to see how 
those previous years can be used as an excuse for further cuts.
    Secretary Vilsack. Well, again, we have seen years where 
the profits have been pretty good----
    The Chairman. All right, which year was that, post-2011?
    Secretary Vilsack. I will get that to you. I think it is--
--
    The Chairman. Okay.
    Secretary Vilsack.--2012, 2011-2012.
    The Chairman. Right: 2012 was a disaster drought year. The 
other thing I would like to get, if we could, is an agreement 
that whatever RMA is using to drive the conversation, that that 
would be shared with the rest of us so we could see the 
numbers. This isn't rocket science. This is premiums in, 
expenses out. What expenses get included in the number ought to 
be a part of the conversation, so rather than talk about what 
it ought to be we can talk about what it is, and then talk 
about what it ought to be?
    Secretary Vilsack. Well, I am happy to provide you, but 
2011 was 18 percent.
    The Chairman. Was what?
    Secretary Vilsack. It was 18 percent.
    The Chairman. Yes, and 2011 was prior to the SRA 
renegotiation, which stripped another $8 billion out of the 
system, so I have you on that. I understand the 2008. This is 
an important industry, all of us believe that. Your statement 
is full of compliments to the crop insurance system. We need to 
keep it in business, and my personal opinion is we need to keep 
it as a public-private partnership, so----
    Secretary Vilsack. I don't disagree with that, Mr. 
Chairman. I think you are right about that.
    The Chairman. Okay. Thank you. My time has expired. Mr. 
Peterson, for 5 minutes.
    Mr. Peterson. Thank you, Mr. Chairman. Secretary, you and I 
have had many conversations about the future of CRP. We are in 
agreement that this has been a good program, and it has a 
number of different aspects which I support, improving water 
quality, protecting highly erodible land. But one of the 
components is also wildlife, and we made that \1/3\ of the 
components.
    So as we go forward, because we had to lower the cap, and 
we have all these different continuous programs within the 
system and so forth, I am concerned that we are going to lose 
kind of the way it was spread across the landscape when it 
started. And it started not as a conservation program, but as a 
way to get land out of production, so it is a little different 
situation.
    But one of the reasons, in my opinion, it has been so 
successful with wildlife is the fact that it kind of was all 
over the place, and we had big tracts that spread out 
predators, and allowed these birds to survive. What are your 
thoughts about doing a general sign-up? I know there are things 
that are being looked at, in terms of programs within the 
system, but we have 1.9 million acres coming out this year, and 
we have room to do a million acre general sign-up. And, 
according to your folks you are considering it, but you haven't 
made decisions yet? I would like to know where you are at with 
that.
    Secretary Vilsack. We are taking a look at this, and the 
decision-making process is probably going to lead us to an 
early spring decision-making process, in terms of what we do.
    I am confident we will have, at some point, a general sign-
up. I think the general sign-up will focus, as it should, on 
highly erodible areas, and making sure that we use our precious 
resources in the most effective way. We obviously will continue 
some of the continuous programs that have been pretty popular, 
the Safe Program, for example, the programs that refocused on 
upland bird populations, that, obviously, will continue.
    And we are also looking at a way in which we could use 
Conservation Reserve Program creatively to complement the 
regional conservation partnership efforts to the extent that 
folks are not able to qualify for the competitive resources in 
that program. There is a possibility of using CRP in a very 
creative way to enhance larger watershed and larger scale 
conservation efforts. I don't think you are going to be 
disappointed, Congressman, in terms of our commitment to CRP.
    Mr. Peterson. And are you looking at using some of the 
grassland reserve to maybe take the place of some of this land 
that is going out? Have you looked at that?
    Secretary Vilsack. That is a possibility. It is also a 
possibility of taking a look at the new easement programs in an 
effort to try to encourage utilization of these. We have 
created greater flexibility in those programs to be able to 
adjust to the individual state requirements and needs.
    Mr. Peterson. And I don't know what the answer to this is, 
but I understand we want to protect highly erodible land, but 
if you focus the whole program on that, what you are going to 
do, at least in my part of the world, is concentrate this in a 
very narrow area, and exclude a whole bunch of other people. I 
am not sure that is where we want to go long term.
    There should be some way to move this CRP into some of 
these areas where you have traditionally had CRP that are going 
to be excluded because they don't meet the highly erodible land 
test. In terms of wildlife, I am concerned about that. I don't 
know what the answer is, necessarily, but that is what I am 
worried about.
    And you have people concentrating on these highly erodible 
areas, and you have the wildlife groups involved, and what you 
have happening is you have a lot of folks that are going out 
there and buying farms for wildlife, and using these programs 
to fund it? Which I guess is okay, but we want to have the 
ability for ordinary farmers to be involved in this too, 
farmers that are going to put this land into CRP, and open it 
up for hunting. If this goes to only people that are buying 
things for wildlife, they are not going to let anybody on the 
land except their friends. So I am just concerned about making 
this too restrictive.
    Secretary Vilsack. Well, I certainly hear you, and I would 
also say that you have raised an issue that is an even larger 
issue to converse about, which is this issue of land tenure, 
and who is going to own the land, and who is going to operate 
the land in the future. In the next 10 to 15 years we are 
facing a significant shift in transfer of land ownership, based 
on the age of existing landowners. And it is something that I 
have just instructed our beginning farmer and rancher advisory 
group to take a very concerted look at this issue. It is a 
serious one.
    Mr. Peterson. Thank you. Thank you, Mr. Chairman. I yield 
back.
    The Chairman. Thank you, sir. Mr. Neugebauer, for 5 
minutes.
    Mr. Neugebauer. Thank you, Mr. Chairman. Mr. Secretary, 
thank you for being here this morning. Now, first of all, I 
want to also thank you for your efforts to go ahead and resolve 
the production history issue. That was very important to people 
in my district. I also want to associate myself with the 
remarks of the Chairman.
    As you know, Mr. Secretary, when we did the farm bill, we 
moved a lot of the safety net to, basically, the risk 
management area, and so a lot of the safety net for farmers 
across the country today relies more on crop insurance than it 
did on the commodity programs, and so protecting them is 
extremely important.
    An issue that has come up, and maybe you can reflect on it 
a little bit, over the past few weeks we have been hearing from 
the cotton producers and cotton marketing cooperatives that 
there is a large amount of uncertainty surrounding the payment 
status on any gains realized in the cotton loan program as it 
relates to payment limits. And while this issue affects 
individual producers, there is some concern that it will impact 
the marketing practices for cotton, and the follow of cotton, 
through the supply chain and the textile mills.
    The issue is, with the payment limits in place, some of the 
producers don't know exactly what their gains are. In certain 
circumstances, they might have to pay those monies back. Is the 
Department working on a real-time basis to kind of keep 
producers up to date on what the status is?
    Secretary Vilsack. We are aware of this, and we have been 
working with the Cotton Council to try to figure this out. Part 
of the challenge is the statute is written in such a way that 
we don't have a great deal of flexibility, in terms of the 
timing of all of this, but we are working to try to figure out 
a way in which producers will not be harmed and not be hurt by 
this. And we are working directly with the Council to try to 
figure this out.
    I don't know that we have found the answer yet, but we are 
certainly aware of the problem, and we are diligently working 
to try to figure out how to do it in the confines of the fairly 
strict direction from the statute. We can't create the 
flexibility that you might be able to create by waiting for 
another year to institute the program. We don't think we have 
that flexibility, so we have to figure something out.
    Mr. Neugebauer. I appreciate that. And if you could keep 
the Committee advised on that process, I would appreciate it. 
The other thing that I wanted to visit with you, when you came 
to sit with some of the Members of the House Agriculture 
Committee last week, and talked about what is going on in 
trade. As you know, trade is extremely important to 
agriculture. With the recent defeat at the WTO with cotton with 
the Brazil case, we were forced to kind of basically re-draft 
our farm program, particularly for cotton producers.
    One of the concerns that a lot of the people in cotton have 
right now is, particularly with China, are they playing by the 
rules? Their policy is not very transparent, and they have a 
huge influence on the world price of cotton. Right now the 
price is down. Can you kind of expand on what the Department is 
doing to help make sure that our friends in China are playing 
by the rules?
    Secretary Vilsack. That is a big challenge, Congressman. I 
would say that we are heartened by the announcement today from 
the U.S. Trade Representative's office beginning the process 
within the WTO to raise questions about the export subsidies 
that China is engaged in, and agriculture is one of the 
industries that was identified as being part of that effort. 
And certainly it is fairly clear that they have not necessarily 
been playing by the rules in a number of areas.
    We have also urged them, in terms of their reserves, their 
cotton reserves, to have much greater transparency in terms of 
what they have, and where they have it, and what they are going 
to do with it, because that obviously does indeed impact and 
create instability in the market, which we don't need. This is 
an issue that is raised in every meeting that we have with the 
Chinese, along with several other issues that we have with 
them.
    In the last meeting I have had, we suggested that there 
needs to be a strategic dialogue with China, a much more in-
depth dialogue and conversation about a variety of issues, from 
biotech, to regulatory processes, to subsidies, to the way in 
which they control markets. And they have agreed to the 
strategic dialogue. We will be submitting to them a proposed 
agenda, and the hope would be that that dialogue will begin 
this spring.
    They are our number one customer, and so we obviously have 
to be sensitive to that. But, at the same time, we want a 
science-based and rules-based system, because if everyone plays 
fair, we will do just fine in that system. If we are at a 
disadvantage, obviously that is a problem. We are calling them 
out, and we should.
    Mr. Neugebauer. Thank you, Mr. Secretary.
    The Chairman. The gentleman's time has expired. Mr. Scott, 
for 5 minutes.
    Mr. David Scott of Georgia. Thank you, Mr. Chairman. 
Welcome, Mr. Secretary.
    Mr. Secretary, the Federal Government has had a drastic, 
very dangerous decline in their Federal purchases of peanut 
butter. This is very devastating to our peanut producers and 
farmers, and all throughout our retail industry. This is going 
on while peanut butter is perhaps one of the most nutrient 
packed protein foods that you can eat. It helps fight our 
children's obesity, and it helps with our nutrition and food 
program.
    Yet, just listen to this fact, Mr. Chairman: 20 years ago, 
in 1995, the Federal Government was purchasing 80 million 
pounds of peanut butter; 20 years later, last year in 2014, it 
is just below 13 million pounds. That is almost 150 percent 
loss. I mean, that is devastating to any industry, but can you 
imagine what that is to the peanut industry? And we have to 
find out a reason for that.
    So what I want to ask you to do, Mr. Chairman, is to stop 
by the side of the road here for a moment and help the peanut 
industry. Help particularly in Georgia. Many of our states 
share this problem, but Georgia leads the nation. I want you to 
know that I am leading the fight to get an answer to this 
situation.
    So what I want to ask you, if you would be kind enough, and 
your staff, to review this situation with the urgency that 
these farmers and producers are sensing. We are losing farms. 
Our children are not getting the nutritious food that they 
need. Our food and nutrition program is losing. To go from 80 
million pounds of purchasing down to less than 30 million, that 
is unacceptable. Mr. Secretary, I know you care about our 
children and our families; so, please, will you direct your 
staff to report back to this Committee some solutions that we 
can go to work on to turn this train around?
    Secretary Vilsack. Congressman, I will direct my deputy, 
who is a Georgia native, to pay some attention to this issue 
and get back to you. It is a question I am not prepared to 
answer today, but you have raised it, and you deserve an 
answer.
    Mr. David Scott of Georgia. Thank you so much, and you 
couldn't have a better person leading the fight than a good 
citizen from Georgia.
    Let me go back to COOL for a second, the Country-of-Origin 
Labeling. How do we fix this problem, Mr. Secretary, with the 
country-of-origin labeling? It is a grave concern to our beef, 
our poultry folks, who are very concerned. Can you give us an 
update on COOL, and how we will be able to fix this problem so 
it doesn't cause any more harm to the United States agriculture 
industry?
    Secretary Vilsack. Well, Congressman, I would say three 
things. One, we are in the process of appealing the adverse 
decision in the WTO. That decision is likely to come out 
sometime this spring, and, obviously, that would potentially 
solve the problem. If we aren't successful in that appeal, we 
have looked at this from a regulatory perspective, and we have 
concluded that we cannot, at the agency and Department level, 
navigate the difficult path between what Congress has mandated 
to us, and what the WTO says is acceptable.
    So Congress is either going to have to rescind the rule, or 
modify the rule, to create some kind of more generic label, a 
North American label, for example, that would enable 
enforcement and implementation without segregation of 
livestock. I would say that our Canadian friends, with all due 
respect, overstate the challenge and the issue that it is 
created for them, in terms of the damages they sustained. There 
is a recent report by the National Farmers' Union that suggests 
that they have not been damaged anywhere near as much as they 
claim.
    Mr. David Scott of Georgia. All right, Mr. Secretary, thank 
you. I have just a few seconds. Could you give us an update on 
the proposed rule that could very well allow South American 
beef entering into this country? And many of our farmers are 
concerned about that, because it could bring in foot and mouth 
disease.
    Secretary Vilsack. If I can ask the chair for just about 30 
seconds to respond to this, because it is a very important 
question. We have traveled around the country, and around the 
world, touting American agriculture, and suggesting that we 
need in our trading relationships a rules-based and science-
based system, which means that we have to live by that system 
that we advocate. If we are asking the Chinese to play by a 
certain set of rules, we obviously have to play by those rules 
as well.
    That involves, basically, a focus on risk assessment, and 
our folks at Animal and Plant Health Inspection Service (APHIS) 
have done a very detailed risk assessment, and have concluded 
that certain regions of countries can indeed be allowed to 
export fresh and chilled beef to the United States without 
raising an undue risk relative to foot-and-mouth. In other 
regions, the risk assessment has not indicated safety. So the 
ability to export to the United States would be restricted to 
those areas where we have already done a very extensive risk 
assessment. There would obviously also be checks at the border 
when this beef comes in.
    If we don't do this, then it is very difficult for me to go 
to China and say, ``You need a rules-based and science-based 
system for GMOs,'' or to Europe and say, ``Hormone beef ought 
to be allowed to be traded, because the science says it is 
okay, and the rules say it is okay.'' It is about consistency, 
and it starts with a very strong and significant risk 
assessment that we have done over the course of years.
    Mr. David Scott of Georgia. Right. Well, thank you very 
much, Mr. Secretary, but the major point I want to make in 
conclusion is that we need to give our beef, and our pork, and 
our poultry folks here some kind of relief. Particularly our 
beef, because there is a reason why they are fearing that this 
South American beef could cause foot-and-mouth disease. And I 
just hope that before we let the chickens out of the barn here, 
so to speak, that we close the barn door.
    The Chairman. The gentleman's time has expired. Mr. Lucas 
for, 5 minutes.
    Mr. Lucas. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for participating in a little anniversary, the first 
anniversary of the farm bill when you were in Oklahoma a couple 
weeks ago.
    Secretary, I think we would all agree, and certainly you 
and I would agree, that using cover crops is a good 
conservation practice. In fact, I know the Administration has 
been doing a lot to encourage the use of cover crops. You can 
imagine my surprise when I hear from my producers that perhaps 
FSA may not be counting cover crops as eligible for ARC or PLC 
on generic base. Can you help us make sure that we don't punish 
producers who are trying to adopt sound conservation practices 
like planting cover crops?
    Secretary Vilsack. I am used to referring to you as Mr. 
Chairman, so I may slip, Mr. Chairman, if I----
    Mr. Lucas. No, that title goes with you, no matter where 
you are----
    Secretary Vilsack. It goes both sides----
    Mr. Lucas. Absolutely.
    Secretary Vilsack. Congressman, look, we are indeed a 
strong proponent of cover crops, and we have seen a 350 percent 
increase in the amount of cover crop activity in the last 
several years, which is a good thing. We recognize that cover 
crops are part of the stewardship ethic that farmers and 
ranchers have. The problem is that we are not certain that 
there is the kind of flexibility that we would need to have in 
terms of the definition under ARC and PLC to be able to cover 
this. It is an interpretation of the statute.
    So the question is whether or not we can work together to 
see whether or not there is a change, or a modification, or if 
there is additional information you want to supply to us that 
would suggest that our interpretation of the statute is not 
correct.
    Mr. Lucas. I would just note, Mr. Secretary, the practice 
is a solid conservation practice. The Department has encouraged 
whatever we can do to work together to help make sure this 
continues forward would be in the best interest of the 
environment and the soil out there. That said, while you were 
in Oklahoma, some peanut producers expressed their concerns--
and not just in Oklahoma, but a number of adjoining states--of 
their issues where they were contracted with a company for 
their peanut crop that is now going through bankruptcy. Can you 
assure us that you are doing everything in your power to 
protect those producers, and to ensure that they are able to 
stay in their marketing--which is a really important issue with 
them.
    And I know this is sort of a unique circumstance, we have 
not gone through this process before, but can you shed a little 
light on that, Mr. Secretary?
    Secretary Vilsack. Congressman, indeed there were a number 
of producers that did business with this entity that has now 
filed bankruptcy. We are working with the lawyers of the new 
licensee, or the new owner of the facility, in an effort to try 
to navigate the tricky bankruptcy laws to ensure we do 
everything we possibly can to protect producers. I am hopeful 
that we can get something worked out, but I don't want to over-
represent where we are in this process. We are trying to get to 
a place where producers can be protected, those contracts can 
be honored, and it doesn't cause significant financial harm to 
those producers. But it does depend a great deal on the new 
owner, or licensee.
    Mr. Lucas. Thank you, Mr. Secretary. And I would simply 
note to my colleagues on the Committee that farm bills are 
written not for the good times, but the bad times. And when we 
started this process, Mr. Chairman, some years ago, corn, 
wheat, things were in an amazingly different set of 
circumstances, and now we are in potentially some challenging 
times.
    But that is what the farm bill is for, and that is the 
effort that we put into it, and how we implement all that is 
critically important to our constituents, our neighbors' 
ability to survive. I would just simply, once again, I thank 
the Secretary for his help through that long and daunting 
process, and the patience of everyone, from our present 
Chairman on down. And by the way, I have gotten to the point 
where I kind of like the phrase Chairman Conaway.
    The Chairman. Well, thank you, Mr. Chairman, I appreciate 
that very much, and the gentleman yields back. Mr. Costa for, 5 
minutes.
    Mr. Costa. Thank you very much, Mr. Chairman, and Ranking 
Member, for holding this timely hearing, and, Mr. Secretary, 
for your good efforts in implementing the farm bill on the 
first year anniversary. I have a number of questions. I want to 
go quickly. A number of them relate to California specifically.
    You came out almost about a year ago this month with myself 
and the President and, firsthand, looked at the impacts of this 
devastating drought, that now is in its fourth year, that is 
having catastrophic impacts. I would like to get a sense from 
you as to what the USDA is doing for farmers in the San Joaquin 
Valley who are suffering because of a lack of a reliable water 
supply, 600,000 acres out of 6 million acres in California have 
been fallowed last year. Could you please quickly talk about 
any mitigation efforts?
    Secretary Vilsack. Obviously additional livestock disaster 
assistance, $109 million, additional EQIP resources have been 
provided, additional emergency community water resources have 
been provided. Emergency water grants totaling roughly $40 to 
$50 million, that are in the process of being distributed and 
provided to producers to look at irrigation systems. There is 
also additional research that is taking place, not just in 
California, but around the country, through the Conservation 
Innovation Grant, to see how we might be able to deal with the 
consequences of drought.
    Mr. Costa. Well, I would like to talk with you about this 
at greater length. Let me move on. This is more West Coast 
oriented. Has the Department conducted an economic analysis on 
the results of the labor dispute on West Coast ports?
    The Administration obviously has a mediator that is 
involved right now. I don't know if the President has been made 
aware of the current strain on products that have been sold 
that are sitting at Long Beach, L.A. Harbor, Oakland, up the 
West Coast now for several months. It is really having the 
ripple effect, in terms of from the farm to the selling of 
these products. Well, the products have been sold, and they are 
sitting there.
    Secretary Vilsack. Congressman, I personally wrote a letter 
to the President several weeks ago, advising him of the 
concerns that we had about the situation at the port. I can you 
tell you that we know from prior history, where there have been 
labor issues at the port, that it is a serious issue to 
containerized supplies. Bulk grain supplies are moving, but the 
containerized supplies have been, as you have indicated, 
delayed. So we are looking at a very serious situation in----
    Mr. Costa. The implications for employees, retailers, 
processors, transportation sector, farmers, ranchers, 
consumers, are significant.
    Secretary Vilsack. We are fully aware of this. We meet on a 
day to day basis encouraging the sides to get this resolved. It 
is my understanding that there are just a couple of remaining 
issues. They are serious issues, but the hope is that these 
folks can get the last two issues resolved so this thing can--
--
    Mr. Costa. Well, your support, and your efforts with the 
Secretary of Labor, would be very much appreciated to bring 
this to an end for all the right reasons.
    The trade agreements, both TPA, T-TIP, have potential 
benefits to America's agriculture economy, and I am wondering 
if you have been doing an economic analysis that we could look 
at on a region by region basis, sector by sector benefits to 
American agricultures, and have that finalized before Fast 
Track is proposed, or comes to the Congress?
    Secretary Vilsack. Congressman, we will get you an 
evaluation we have done by Congressional district.
    Mr. Costa. That would be terrific. A year ago, as a part of 
the negotiations with the farm bill, we had a segment in there 
as it related to allowing California dairy industry to 
participate in the Federal Milk Marketing Order. Can you assure 
me that we are moving ahead on schedule? Three of the major 
dairy industries have written a letter, and they would like to 
get moving, that you have done your due diligence, and we 
appreciate that?
    Secretary Vilsack. If I am not mistaken, a petition has 
been filed, and the process----
    Mr. Costa. Yes.
    Secretary Vilsack.--has started. That involves, obviously, 
a hearing, and then there is a referendum, but we are moving 
forward. We have had folks go out there on four occasions to 
talk about this issue.
    Mr. Costa. Yes, and they have done a good job. I want to 
thank you and the Department. Finally, this Argentine lemon 
import situation, will the Department be following up with 
APHIS in permitting access of Argentine lemons to the U.S. 
market?
    Secretary Vilsack. It will, consistent with an appropriate 
pest risk analysis and assessment. It gets back to this issue 
of science-based and rules-based systems. Absolutely.
    Mr. Costa. Right. And I just want to add my thoughts on the 
COOL effort. This does need to be resolved sooner than later. 
You and I have had a different take on it, but whether or not a 
North American labeling is a solution I am not sure, but, for 
the benefit of good trade for our partners, and for America, we 
need to resolve it.
    The Chairman. The gentleman's time has expired. Mr. Gibbs, 
5 minutes.
    Mr. Gibbs. Thank you, Mr. Chairman. Thank you, Secretary, 
for being here. There is one big issue that the agriculture 
community is really concerned about, and you mentioned in your 
testimony the EPA and the Army Corps WOTUS rule, and almost 
every agricultural organization and agricultural entity is 
opposed to the proposed rule. The majority of the states are.
    We had a hearing in another committee last week, with the 
EPA Director and Secretary of the Army, Civil Works, and one 
thing they talk about is significant nexus, meaning that waters 
that have biological or chemical relationship to navigable 
waters could be a significant nexus, which is kind of open-
ended, case-by-case determination.
    And we also learned that if, in furrows, grassed waterways, 
if they have significant nexus under that determination, then a 
farmer and an adjoining land owner would come into that 
dictate, that they would have to get a section 404 permit if 
they are doing any plowing activities, dredge or fill, or a 
section 402 permit from the EPA in regard to apply pesticide 
and herbicides if they are waters of the United States. And we 
heard from, I think it was the Deputy Attorney General of 
Oklahoma that said that that can cost over $300,000.
    So the impact to American agriculture can be quite severe 
in this area. What has USDA done to advocate for farmers on 
this? Did you make comments during the comment period that has 
been ongoing? What has USDA's role been to address the 
agricultural community's issues?
    Secretary Vilsack. Congressman, we have indeed discussed 
this issue with the Administrator, and with EPA officials. The 
ephemeral issue is one that we have specifically commented on, 
the difficulty of establishing something with a bank and a bed, 
and an occasional water resource, and how that actually in the 
real world works. So we have educated--that is--we see our role 
as educating, as providing input in terms of how this might 
impact. Obviously, it is not our decision to make. It is 
another sister agency, we have to respect that, but we have 
expressed some issues and some concerns about the ephemeral 
definition.
    Mr. Gibbs. Well, if I was in your position, I would take a 
tough stance advocating, which I I assume you are. But with the 
aspect of saying that agriculture is so important, and that 
they ought to go back and work back with the states. They did 
not involve the states. They are saying they are involving the 
states now, but they didn't, because we have had a majority of 
the states actually testify that there was no interaction with 
them.
    And the Clean Water Act was really set up to be a 
partnership with the Federal Government and the states, with 
the states implementing the Clean Water Act and enforcing it 
under the guidance and advisement of the Federal Government, 
and not just a complete power grab.
    The other issue I wanted to mention, and Mr. Costa 
mentioned a little bit, a concern about the work slowdown on 
the West Coast ports, and especially when we are looking at the 
trade agreements, and the possibility, as this continues or 
even gets worse, of losing market share because our foreign 
customers are going to look for other options if they don't 
think we are a reliable customer.
    You made the comment that you have and the Administration 
tried to work on this, but if it comes to a complete lockout or 
a strike, would the USDA advocate to the President to invoke 
the Taft-Hartley Act?
    Secretary Vilsack. Congressman, the issue with Taft-Hartley 
is an interesting one, because, as you know, it requires a 
Federal Judge being convinced to issue an injunction. Thirty 
years ago that was a relatively simple process. Recent port 
difficulties, and recent requests for Taft-Hartley, have 
indicated a much higher bar, from an evidentiary standpoint, to 
inject that.
    Frankly, the preferred option, obviously, is for the 
parties to get this resolved. And it is my understanding that, 
as I said earlier, there are just a couple of issues. If there 
are only a couple of issues left, it----
    Mr. Gibbs. Well, I think the couple of issues are pretty 
significant.
    Secretary Vilsack. They are significant. I am not 
suggesting they are not. But, as you all have outlined, the 
impact of this is quite significant. And when you take a look 
at how this could ripple throughout not just agriculture, but a 
variety of other parts of our economy, at a time when we are 
seeing the economy begin to pick up, it seems to me that the 
parties ought to be doing everything they possibly can----
    Mr. Gibbs. I guess I would just advocate that the 
Administration needs to use all the resources they can to make 
sure that the slowdown ends, and it doesn't get worse, because 
the ripple impact, even to my state, to Ohio, is significant.
    Secretary Vilsack. I can tell you that we have reached out 
to both parties, encouraging them to get this done, and we have 
literally daily meetings on this.
    Mr. Gibbs. Thank you.
    The Chairman. The gentleman's time has expired. Ms. 
DelBene, for 5 minutes.
    Ms. DelBene. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, for being with us today, and I want to thank you and 
your staff for all the work you are doing to quickly implement 
the farm bill. And I would also like to extend an invitation 
for you to come out and visit Washington's First Congressional 
District and see some of the great work happening with our 
farmers and agriculture there. I sent you a more formal 
invitation, but I hope you will be able to find the time to 
come out. Plus, we are getting starting to get to the time of 
year where weather gets better, and it will be pretty beautiful 
out there.
    I have very high hopes for the new SNAP employment and 
training programs that are out there, the pilots that are out 
there. We introduced a bill that was based on work we had done 
in Washington State, and that has kind of been the model of the 
program that we included in the farm bill, and I wanted to get 
your feedback. I think you said you had 43 responses so far, 
but I wanted your feedback on how the request for proposal 
process has been going, what types of proposals you have 
received, and are you on track to make a decision on those 
later this month?
    Secretary Vilsack. There have been 35 states, over 40 
applications. They are in the process of being reviewed. I 
believe that our decision-making will probably take place in 
the first part of March.
    Ms. DelBene. Okay.
    Secretary Vilsack. The projects range everywhere from 
demand job opportunities--some of these folks are obviously 
very difficult, in terms of their circumstances, their barriers 
to employment, so there will be a concerted effort in some of 
these projects to remove those barriers, and to provide the 
help and assistance that folks need to get to work. Some are 
folks on potentially apprenticeships that could potentially 
lead to gainful employment. So there is a broad array of 
options.
    You are correct, Washington is a model for the rest of the 
country, and our hope is that, through these ten projects, that 
we create a best practices model, if you will, or manual that 
other states can follow. We also hope that the conversation 
allows states that are currently receiving over $300 million to 
utilize those resources fully and more efficiently. Many states 
do not take full advantage of the 50/50 money in employment 
training, which is unfortunate, and many states may not be 
using those resources as efficiently and as effectively as they 
can.
    We have put a lot of time and effort into this, and I am 
personally involved.
    Ms. DelBene. Well, thank you. I look forward to hearing the 
results in March. On trade, in your testimony you highlighted 
the importance of trade to agriculture, definitely in our 
region, and making sure we open new markets. Ambassador Froman 
came out to my district and met with my farmers on the Trans-
Pacific Partnership in particular, and it is very, very 
important to our dairy farmers that any access that U.S. grants 
under imports is balanced with commercially meaningful access 
in Canada and Japan.
    And my farmers are very concerned at this point that there 
may be new access to the U.S. market without making sure that 
we have made meaningful new access into Japan and Canada. And 
while we made great progress on the safety net in the farm 
bill, I hope you will encourage a positive deal for our dairy 
farmers, and I wondered if you have engaged with your Canadian 
counterparts at all on this issue, or have any other feedback 
for us on this issue.
    Secretary Vilsack. Well, we have engaged with the 
Canadians, but they have been very reluctant to negotiate. Very 
reluctant to negotiate. And, in fact, they have acknowledged an 
unwillingness to put any real significant deal in the 
discussion. I am not quite sure whether it is their politics, 
or whether they are concerned about whether or not we can make 
a deal without the President having the trade promotion 
authority that every President has had since Franklin 
Roosevelt, but, whatever the reason, they have been far less 
willing to negotiate than the Japanese.
    We have been making some progress in terms of our 
conversations with the Japanese. There is still work to be 
done, but the with the Canadians are another matter. My hope 
is, given the magnitude of this deal, and the importance of it 
to American agriculture, and to the American economy, that the 
Canadians take a different view and engage more meaningfully in 
negotiations.
    Ms. DelBene. Thank you.
    Secretary Vilsack. I would say--let me, if I----
    Ms. DelBene. Go ahead.
    Secretary Vilsack.--could just say, this is not about 
getting a deal, it is about getting a good deal. And if it is 
not a good deal, then there won't be a deal.
    Ms. DelBene. Thank you. This is a very important issue, so 
thank you for being engaged and involved there, and I will 
yield back the remainder of my time, Mr. Chairman.
    The Chairman. I thank the gentlelady for yielding back. Mr. 
Austin Scott, for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. 
Secretary Vilsack, thanks for being here today. And I want to 
just kind of, again, follow up on what Chairman Lucas said 
about when a producer is planting multiple crops, a cover crop, 
or a grazing crop. And I hope that you will continue to work 
with the Committee to give the farmer the flexibility that they 
need. I certainly don't pretend to speak for the Committee as a 
whole, but if you do need flexibility or additional language, I 
hope that you will let us know sooner rather than later so that 
we can work together to resolve that issue.
    When we talk about the economy in rural Georgia, in my part 
of the state, it revolves on a couple of different commodities. 
One of them is cotton. And I have read the most recent World 
Agricultural Supply and Demand Estimates. I have watched cotton 
prices lately, and I can tell you I am extremely concerned 
about what I see happening in the cotton market. And I am going 
to give you a couple of numbers, and then I am just going to 
ask, if you would, that someone from your Department could 
maybe look a little further into this and follow up with us. 
But the National Cotton Council is estimating 15 percent fewer 
acres. We, the USDA, in the most recent report revised export 
projections up, yet, on the World Agricultural Supply and 
Demand Estimates, our expected price is holding at 61, the 
61, 65 range.
    One of the things that we are seeing is that Pakistan's 
production would actually go up in our report. News reports 
from Pakistan actually estimate that they may miss their crop 
by as much as 3 million bales of cotton. So I would just ask, 
if we could, that we would have your specialist in cotton look 
at that, again, specifically with regard to Pakistan. I am 
extremely concerned about what appears to be a dysfunction in 
the market with price, and that is coming from some 
manipulation in some other countries, not Pakistan, but China 
more so, and a couple of others.
    And I would just ask if you could get your people to check 
that Pakistan estimate again? Because we are saying it is that 
we are anticipating that it is going up, their reports are 
suggesting that it is going down, and it would be helpful to 
our producers if we just took a second look at that. Because I 
am extremely concerned that, if these prices stay where they 
are, that the number of acres planted will be significantly 
less than 15 percent.
    Secretary Vilsack. Congressman, you made the request, and 
we will follow up on it.
    Mr. Austin Scott of Georgia. Thank you for that. And one 
other thing that I would mention, in the President's budget, he 
has given no authority for guaranteed lending, but given $2.2 
billion for direct lending. And my question is since the USDA, 
in the past, has worked in this partnership with the guaranteed 
lending, and why have we seen the shift to 100 percent direct 
lending, instead of the guaranteed lending from the 
Administration?
    Secretary Vilsack. Congressman, I want to make sure I know 
which loan program you are talking about. Are you talking about 
the Community Facility Program?
    Mr. Austin Scott of Georgia. Yes, sir.
    Secretary Vilsack. Okay. First of all, we have had better 
luck with the direct program working with folks locally. We 
have seen a continued interest in this. It has to do with the 
subsidy rate. Guaranteed program, obviously, the subsidy rate 
is less and less of the impact on the budget. Part of the 
challenge that we face is that our discretionary budget, which 
this is part of----
    Mr. Austin Scott of Georgia. Yes.
    Secretary Vilsack.--is less than it was in Fiscal Year 
2010: more than 50 percent of the budget is in four areas, WIC, 
it is in fire suppression, and forest maintenance. It is in 
food safety, and it is in rental assistance. And part of the 
challenge is that, when you are dealing with sequester, and 
dealing with cuts, and dealing with reductions, when 50 percent 
is going up, the other 50 percent, obviously, you have to take 
a look at it. We can continue to do as much work with the 
guaranteed as with the direct, but it doesn't cost as much to 
the budget.
    Mr. Austin Scott of Georgia. I would appreciate it if you 
would be willing to share the loss ratios in both of those 
programs. And it just seems to me that with the lending 
program, where we have the private sector participating, we 
actually get more dollars into the economy than if it is the 
direct lending.
    Mr. Chairman, I will yield my time, and apologize, 
Secretary Vilsack. I am going to be stepping out to an Armed 
Services Committee meeting.
    The Chairman. The gentleman's time has expired. Ms. 
Plaskett, for 5 minutes?
    Ms. Plaskett. Yes, thank you, Mr. Chairman, Ranking Member, 
and a pleasant good day to you, Mr. Secretary. I first also 
want to invite you to visit the U.S. Virgin Islands, which I 
hope you and your staff could make a visit to, I am sure you 
will find the weather to be much more pleasant now, if you make 
that trip earlier rather than later.
    But the U.S. Virgin Islands, in all seriousness, at one 
time was considered the bread basket of the Caribbean. 
Particularly on the island of St. Croix, which was primarily 
agriculture at one time, and has since fallen off of the track, 
in terms of its agricultural--not only it--feeding itself, but 
also its exports.
    I notice so many of the programs that are available in the 
Department of Agriculture, your MAP, your Farmers' Market 
Development Programs, particularly the Emerging Markets 
Program, which would be of great assistance to us in the U.S. 
Virgin Islands, we seem to have a bottleneck because so many of 
those offices come through Puerto Rico.
    And I wanted you to speak on the availability of this 
funding to those areas that your agency has identified as being 
remote, small, and impoverished as well. We have, over the 
entire island, \1/3\ of the children in the U.S. Virgin Islands 
living in poverty. So I wanted to know if you could talk about 
the effectiveness of these programs on growing new markets, in 
terms of agriculture, and how the Virgin Islands could benefit 
from that.
    Secretary Vilsack. Well, Congresswoman, the programs you 
mentioned are primarily export promotion programs----
    Ms. Plaskett. Yes.
    Secretary Vilsack.--that work with commodity groups and 
organizations that are involved in exports. I think what I 
would suggest, in terms of rebuilding the economy, is that 
there may be an opportunity for us to focus on some of our 
value-added processing resources, some of our local and 
regional food promotion resources to create more product that 
could potentially be available for export and/or to furnish the 
needs of the island.
    We are seeing a significant increase in local and regional 
food systems, and it is a multi-billion dollar opportunity, and 
we have a number of programs under our Know Your Farmer, Know 
Your Food initiative that would potentially be useful. I would 
be happy to have our team at USDA reach out to your staff to 
give you a full briefing on both the export assistance 
programs, as well as the local and regional food promotion 
programs.
    Ms. Plaskett. Additionally, with respect to that, if you 
would also talk about the rural development? We are, in fact, 
as your statement talks about, very small, remote, and a poor 
place. We know that your water and environmental programs were 
available to 40 states, as well as the Commonwealth of Puerto 
Rico received the benefit from those programs. We, in fact, 
have infrastructure, as well as housing and community 
facilities issues which are at an extreme rate.
    In terms of our facilities, we haven't had a new school 
built in the U.S. Virgin Islands in over 30 years, so you can 
imagine the great need that the people of the territories have 
for some of the availability that comes under the agency. And I 
was hoping you would talk about the awarding of that $150 
million grant that those other places, who had access to--in 
terms of our waterways--and some of the other things that those 
things could be used to strengthen rural communities.
    Secretary Vilsack. Well, the $150 million was an allocation 
from the farm bill, but we have a series of infrastructure 
projects under Rural Development. Electric, water, community 
facilities, and broadband, and all of those would potentially 
be available----
    Ms. Plaskett. Yes.
    Secretary Vilsack.--for utilization in the Virgin Islands. 
In fact, we have been having conversations with folks down 
there about some of the high costs of electricity and power----
    Ms. Plaskett. Yes.
    Secretary Vilsack.--and whether or not--either the Rural 
Energy for America Program, or our general electric program 
could provide help and assistance to create more reliance on 
renewables, and less reliance on high cost energy sources. So 
all of those programs, again, are available. It is just a 
matter of prioritizing and figuring out what is the most 
important thing you need, and having our teams work with your 
office to identify the program, and to make sure that the 
application is in an appropriate form.
    Ms. Plaskett. Well, my office wants to work very vigilantly 
with you on alleviating any bottlenecks, or any problems we may 
have in those applications. With our cost of electricity at 
potentially, in some instances, 49 per kilowatt, when, here on 
the mainland it is about 11 to 14, that is cataclysmic to 
families, as well as businesses there.
    Secretary Vilsack. It may be helpful for one member of your 
staff to attend a function we are holding on March 23 down at 
the Department, where we are going to outline some of our 
programs to a group of folks who are interested in knowing more 
detail about them. So we will get an invitation out to your 
staff.
    Ms. Plaskett. Thank you very much. I yield the balance of 
my time. Thank you, Mr. Chairman.
    The Chairman. The gentlelady's time has expired. Mr. 
Crawford, 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman. Mr. Secretary, a 
couple of quick questions, but first I want to thank you on 
behalf of Arkansas rice farmers. We had a little bit of a snafu 
due to a price reporting issue that would have delayed 
payments, PLC and ARC payments, specifically to rice farmers, 
and you and your staff have been very diligent in helping us 
rectify that problem. So, on behalf of Arkansas rice farmers, 
thank you for that, I appreciate it.
    I have an issue with the safety net sign-up deadline. I 
know you and your team have been working on the farm bill 
implementation, and I certainly appreciate that. What I am 
hearing at home from my farmers is that there is still an awful 
lot to learn about it, and they are working with the decision 
aides in evaluating their options. Do you suspect that there is 
going to be adequate FSA resources at local offices to handle 
what I would assume would be a rush of farmers here in the 
latter part of the sign-up window?
    Secretary Vilsack. That is why we are encouraging folks who 
have made a decision, Congressman, to let us know now, as over 
200,000 producers have. And, obviously, if they decide now, and 
a week or 2 from now they decide they wanted to change, they 
could do that. So we are encouraging folks as they make 
decisions to basically implement those decisions.
    We are obviously going to do what we have to do to make 
sure that we meet the demand, but it would be lot easier for us 
if it was spread out over a period of time, than----
    Mr. Crawford. Sure.
    Secretary Vilsack.--everybody waiting until the last 
minute.
    Mr. Crawford. Is there a protocol possibly in place for a 
situation that might arise, where the appointment slots are 
unavailable, due to just the volume? Is there a possible 
protocol to address that issue?
    Secretary Vilsack. Well, we have in the past, in situations 
like this, created a process. At this point it really is an 
issue of folks going online, taking a look at the models, and 
making a decision. And it really is not quite as detailed as 
perhaps making an appointment to sign up for disaster 
assistance. It is a little bit different than that.
    Mr. Crawford. Yes.
    Secretary Vilsack. So I am not sure that we necessarily 
need a specific protocol. We have already done 4,600 meetings, 
so we are obviously getting out there. And hundreds of 
thousands of hits on the model, so this is about folks getting 
online, doing the calculation, coming to a conclusion, and just 
simply letting us know.
    Mr. Crawford. Okay. Last question here, and I know I am 
going to sound like a broken record, particularly to my 
colleagues here, and I am hoping this is the last time I will 
have to ask this question, but we had this hearing last year, 
and I asked this question at the same time last year, when 
would USDA issue a final rule implementing a catfish inspection 
program? And you told me then it will be ready to go by 
December of 2014, and we still haven't got that. December has 
come and gone, and I haven't seen the progress we need. This 
was authorized 7 years ago. Can you give me a date-certain when 
we can actually expect a final rule on catfish inspection?
    Secretary Vilsack. Well, I am very, very hopeful that you 
will see something in April of this year.
    Mr. Crawford. Okay. All right. I appreciate you being here, 
and look forward to working with you. I yield back.
    The Chairman. The gentleman yields back. Ms. Lujan Grisham, 
5 minutes.
    Ms. Lujan Grisham. Thank you, Mr. Chairman, and thank you, 
Secretary Vilsack. I get to be one of the Members that says 
thank you for coming to New Mexico, and meeting with me, and 
our farmers and ranchers, and thank you very much for 
increasing the staff of USDA, in New Mexico and in the region. 
I think that that is going to facilitate many of the programs 
and heighten the success of the rural economic development 
investments that you have made in New Mexico, and I appreciate 
all those.
    I want to focus today, really, on the SNAP program in the 
state. As you know, New Mexico still ranks last. We are the 
worst for child hunger. We are third in the nation for adult 
hunger. We have one of the worst economies in the country, if 
not the worst. Our unemployment is much higher than the 
national average. And, basically, in fact in most of rural New 
Mexico, there are no job opportunities, except for oil and gas, 
and actually that is beginning now to diminish in the state, so 
we are really suffering.
    So, as a result, we have many able-bodied adults without 
dependents that are looking for work, but remain unemployed, 
because, quite frankly, there are just no jobs in the state. I 
am very concerned that the state did not seek a Federal waiver 
of the SNAP work rules, despite the economic situation in the 
state. And, in addition, the state has developed a 2015 
employment and training program, which USDA has approved, that, 
as we all know, requires additional participants to sign up 
online for job searches, to appear in local benefit offices, 
and, in many cases, do community service.
    And while I think that these are all productive 
requirements in circumstances where they are available, many 
New Mexicans cannot meet these requirements because they don't 
have access to technology, and they frequently lack access to 
child care and transportation. So instead of helping New 
Mexicans find jobs, or access job training opportunities, I am 
afraid that the unworkable employment and training (E&T) plan 
will, in fact, result in more needy families getting kicked off 
SNAP.
    While the 2015 E&T plan was put on hold due to court 
action, I expect the states to resume the programs, in 
limitation, later this year. Can you talk to me a little bit 
about what kind of oversight you conduct when evaluating and 
approving state E&T programs, and maybe in light of the fact 
that New Mexico has such a terrible economic situation, and the 
hunger rates are so high, would that oversight be enhanced in 
some way?
    Secretary Vilsack. Well, we are going to learn something 
from the pilots that we are trying to fund through the farm 
bill pilot program. I am not sure if New Mexico applied, if 
they are one of the 35 states that did. If they didn't, they 
should have, given the outline of the circumstances that you 
have addressed.
    We are spending more time taking a look at this issue 
because of the fact that so little of the 50/50 money is 
actually spent by states, and the money that is spent, the $90 
million that is 100 percent Federal money, I have raised 
questions about whether or not it is as effectively spent as it 
should.
    I can tell you that our teams have gone out and actually 
have visited Workforce Development Centers, they visited human 
resource departments, they have visited states throughout the 
country to identify who is doing well and who is not doing very 
well. And I am happy to have our team take a specific look at 
New Mexico, if they haven't already taken a look at that. So 
there has been heightened oversight, and we are very focused on 
trying to make sure that these dollars are used wisely and 
effectively.
    Ms. Lujan Grisham. Mr. Secretary, I would really welcome 
more attention to New Mexico. Given my opening remarks, I think 
that you have done an outstanding job investing in the state, 
and really taking a look. We don't want to see any of these 
pilots, or these initiatives, cause more hunger in the state, 
and I would really encourage you not just to look at the 
operations of the state, but really the impact on the 
beneficiaries.
    And, in fact, New Mexico does have some of USDA money that 
would help with the reimbursements for participants to pay for 
transportation and child care costs in the E&T program, but the 
problem is they can't fund those costs, so getting a 
reimbursement when you are at or below the poverty line isn't 
helpful. And, also, the state only requested funding for about 
900 people, but we have tens of thousands of individuals who 
were affected, and are on SNAP, and now required to do either 
the E&T or the work requirements.
    So I am very concerned we are not seeing the kind of 
movement to move away from the really tragic hunger problems we 
have in New Mexico. So I appreciate that offer.
    I would like to submit the following letter and two 
supporting reports that were sent to our office by the Northern 
New Mexico Stockmen's Association (NNMSA) on February 11, 2015. 
The letter details NNMSA's concerns regarding the Forest 
Service's management of grazing permits and Forest Service's 
inconsistent implementation of regulations toward minority 
ranchers.
    [The documents referred to are located on p. 84.]
    Ms. Lujan Grisham. I know I am out of time, and anything 
else that we can do to support you to do that oversight, you 
can count on my office. Mr. Chairman, thank you, I yield back.
    The Chairman. The gentlelady yields back. Mr. Benishek, 5 
minutes.
    Mr. Benishek. Thank you, Mr. Chairman. Thank you for being 
here today, Secretary Vilsack. The many rural areas in the 
country that are very dependent on the timber industry for 
their economic sustainability and growth, including my 
district, which covers northern Michigan, I have three large 
Federal forests in my district, what changes are being 
advocated by the Department that would encourage the Forest 
Service to focus on growing the timber harvest, enhancing 
mineral development, and offering additional recreational 
opportunities on Federal forest land?
    Secretary Vilsack. Well, there are several things, 
Congressman. First of all, we are, each and every year, 
attempting to treat more wood so that we create more 
opportunities for timber industry. Last year it was close to 
2.8 billion board feet. I think the goal is close to 3 billion 
board feet this year. Second, we are focusing on wood energy 
opportunities. There are over 230 wood energy projects that the 
Department has funded. We have looked at a way of streamlining 
the NEPA process so that we can get work done more quickly, and 
that is some of the areas that have been designated as a result 
of the farm bill.
    We have created a new wood energy--a wood contest that is 
taking a look at cross-laminated timber to create a new 
industry that doesn't exist in this country that would allow 
wood to be used as structural materials in multi-story 
buildings. The contest is essentially challenging someone to 
come up and actually build a----
    Mr. Benishek. Well, no, that is very admirable, but, to 
tell you the truth, Secretary Vilsack, in my experience, it is 
very difficult to get the timber out of the woods. In the last 
5 years, the three National Forests of Michigan, all of which 
are in my district, have just sold over 49 percent of their 
ASQ. What is preventing you from getting a higher percentage of 
the ASQ out of the forest?
    Secretary Vilsack. Part of the challenge is the budget, and 
the reason it is a challenge is because 40 percent of our 
budget is spent on fire suppression. That is 15 years ago it 
was about 15 percent. And so what happens is we cannot do the 
kind of work that we would like to be able to do because we 
have to borrow from the restoration resiliency funds to put 
fires out. That is----
    Mr. Benishek. Well, and this is the answer I get from you 
guys a lot, and that is in the private sector, when you cut 
down trees in your forest, you make money, and you produce 
money. And, actually, in the Federal forests, in our areas, 
part of the income from the Federal forests goes to local 
schools. And from industry, you are talking about the timber 
industry, and the structural timber stuff, and that is all well 
and good, but the real problem is we have difficulty getting 
the timber out of the forest.
    And a lot of it is due to the fact that, to get timber out 
of the forest, it costs the Federal Government a lot more than 
it costs the average person on the state forest, or on a 
private forest. And when you keep asking for more budget, it 
doesn't make any sense to me, because states and private 
industry, they make money when they cut trees down, and you are 
supposed to be the steward of America's resource, the American 
forest, which belongs to the American people. And you should be 
able to find a way to harvest these resources, manage these 
resources that provide a return for the American people, not 
asking for more budget, so----
    Secretary Vilsack. Well----
    Mr. Benishek.--tell me a way we can make that more 
efficient.
    Secretary Vilsack. Congressman, we are not asking for more 
money. We are asking it to be structured and budgeted in a 
slightly different way. It is not more money. Essentially, we 
would like some of these catastrophic fires to be treated as 
the disasters that they are, and funded out of that source. 
That would free up the resources----
    Mr. Benishek. Well, Mr. Vilsack, let me tell you this. If 
you could give me some guidance into how to direct this 
Committee to change the law that would allow the Forest Service 
to be more efficient in managing the Federal forest, I will be 
right there to make that happen. Because I have been looking 
for some ideas to make the Forest Service more efficient and 
not cost so much to manage our forests. And I would look for 
your, or anyone else's, input as to how to make that happen.
    Secretary Vilsack. Well, we have created a lot of 
efficiencies. I am happy to sit down with you and talk about 
the efficiencies that we have had to create because our budget 
is less than it was when I first became Secretary.
    Mr. Benishek. I have time for maybe one more question here. 
When you submitted your budget last year, you requested a 
budget increase of $50 million, and estimated that you would 
harvest 3.1 billion board feet, but you didn't get to that. Why 
weren't you able to achieve your original goal?
    Secretary Vilsack. It gets back to the point I tried to 
make to you, sir, that when we have to borrow money from the 
restoration and resiliency portions of the budget because 
Congress doesn't provide adequate resources to fight fires, it 
creates a situation where we can't contract for the work that 
you would like us to do because we don't have the resources. 
Congress repays the fund the following year, but there is never 
the stability.
    That is why it is important to treat these catastrophic 
fires as the catastrophes they are, fund that out of the 
emergency fund. That frees up resources, and provides stability 
that would allow us to do a lot more work. We have been asking 
for this for a couple years. That is the answer.
    The Chairman. The gentleman's time has expired. Mr. 
McGovern, for 5 minutes.
    Mr. McGovern. Thank you, Mr. Chairman. I have another 
hearing, so I am going to be very brief. Mr. Vilsack, as you 
know, hunger still remains a problem in this country. Ms. Lujan 
Grisham talked about the situation in New Mexico, but it is all 
over this country. And USDA has reported that last year that 
nearly 60 million children, one in five, lived in households 
that were food insecure, and they found that a food insecure 
household is a household at a level with an economic and social 
condition of limited access to food. And this is an issue that 
impacts not only urban areas, but rural areas as well.
    I am concerned about reports that there are some in this 
body who want to go back after the SNAP program. It is one of 
the most efficiently run Federal programs that we have. I think 
there is more than enough data to prove that. It is a benefit 
that, quite frankly, is inadequate for a lot of people. They 
end up going to food banks and food pantries as well. But this 
idea of going back after the program would be a huge mistake. I 
don't think SNAP should be used as an ATM machine to pay for 
other priorities, or to balance the budget. There are people 
who literally depend on it to put food on the table.
    My request to the Administration, and to you, is to draw a 
line in the sand on this issue. No more cuts to SNAP, no more 
cuts to food and nutrition programs. We cannot balance the 
budget on the backs of poor people. I am all for, if you want 
to do oversight hearings, that is fine. You want to find ways 
to make the program more efficient, but not at the expense of 
taking benefits away from people who need it.
    The majority of people on this program are children, and 
are senior citizens, and are people who are disabled. Of those 
who work, the majority do work, but they don't earn enough to 
be able to not require this benefit. So my request is simple. 
It is important to draw a line in the sand so we don't start 
going down a road that would be detrimental to a lot of people 
in this country.
    This is an important program, again, SNAP is given. We gave 
it in the farm bill, gave for the Child Nutrition 
Reauthorization Act. The ARRA monies weren't extended enough, 
and we need some strong pushback from the Administration to 
make it clear to everybody here that we are not going to 
tolerate any more cuts in this program.
    Secretary Vilsack. Did the gentleman have----
    Mr. McGovern. Yes. If you could give me the answer yes, 
that that is all I am looking for, and then I am done.
    Secretary Vilsack. I think the President is the person who 
draws the lines in the sand, and I am certainly not going to 
pre-empt him, but I will certainly, obviously, express concerns 
we have about the level of food insecurity. I will express 
concerns about folks who suggest that this is a program that is 
overrun by fraud when the fraud rate is a little over one 
percent, one of the lowest in the Federal Government. Or the 
error rate, which is about 3\1/2\ percent. So, combined, it is 
the lowest it has been in history.
    And you are correct, that 80 percent of the folks that are 
on SNAP are either people with disabilities, senior citizens, 
children, or folks who are actually in the workforce. The right 
way to deal with the cost of this program is to figure out ways 
in which we can get folks who are able-bodied and want to work 
to work.
    Mr. McGovern. And I will just point out that CBO estimates 
show that the costs are starting to fall as a result of the 
fact that we didn't extend the ARRA monies, but also the 
economy is getting better.
    Secretary Vilsack. Two percent reduction apart from the 
recovery money not being extended because, as you indicated, 
the economy is getting better, and people are finding 
opportunities. That is the right way to do this, which is why 
we are putting a lot of time and emphasis on the employment and 
training aspect of it.
    Mr. McGovern. All right. Well, I appreciate it. Again, the 
strongest possible signal should be sent for the 
Administration, that enough is enough, and I appreciate all 
your work, and your service, and the people who work with you 
over at USDA. They do a great job, and they are always 
responsive, and so we are very grateful, so thank you. I yield 
back.
    The Chairman. The gentleman yields back. My apologies to 
Mr. Ashburn, you should have gone ahead of Mr. McGovern. Mr. 
Yoho for, 5 minutes.
    Mr. Yoho. Thank you, Mr. Chairman. Secretary Vilsack, thank 
you for being here, and I want to commend you on implementing 
so much of the farm bill so fast, especially the emphasis put 
on citrus. I come from Florida, and Florida is the number one 
citrus producer in the country. But you also realize that we 
have 90 percent of our trees affected by citrus greening, and 
it is a devastating situation.
    Florida without oranges would be like, for those old enough 
to remember, Sears without Roebuck. They kind of go hand in 
hand. And it is important that we work--and I commend you--what 
the University of Florida, and IFAS, the Institute of Food and 
Agricultural Science is doing in that area. It is estimated in 
our area that the citrus industry is a $1.3 billion in lost 
revenue just from citrus greening, and it has roughly put 6,500 
people out of work.
    One of my questions to you is that I have heard from 
growers in Florida that the antimicrobials and bactericides 
seem to be key in developing a cure for this. How does the USDA 
plan to work with the CDC, the FDA, EPA, to ensure these 
treatments are approved in a timely manner? And if we can focus 
on fast-tracking, because if we lose those groves, they are 
going to go into condominiums, they are going to go into 
something else, and I would prefer to keep them in ag.
    Secretary Vilsack. Congressman, I certainly understand the 
challenge that citrus greening represents to your state. It is 
a $9 billion industry, and 76,000 jobs impacted and effected. 
We will do everything we can to make sure that whatever the 
treatments are, or whatever the solutions are, get into the 
marketplace as quickly as we can. As you know, we announced 
yesterday $30 million of assistance divided among a variety of 
different avenues. We have had an entity that involves state 
and local folks working with us to try to prioritize where we 
should spend this money. When we come up with a solution, I 
guarantee you we will do everything we possibly can to get it 
implemented as quickly as we can.
    Mr. Yoho. Okay. And then I agree with Mr. Scott on a couple 
things. We are going to have to work together, Mr. Scott, to 
revisit peanuts, especially peanut butter, and look at ways to 
increase the consumption here domestically. And if you look at 
the nutrient contents of that, it is a high protein, high 
energy source, and it can solve a lot of the problems we have 
here.
    In addition, when we look at other countries and foreign 
aid, I hope that we put a lot of emphasis on the assistance to 
other nations instead of money, we look at ways of giving 
trade, not aid. And the aid and, good, healthy nutritional 
sources, and that would help solve a problem here with our 
oversupply of domestic peanuts. So if you would work on that 
with the trade people, I know a lot of people would really 
appreciate that.
    And going, again, back to what Mr. Scott said about foot-
and-mouth disease in our beef imports from South America, 
Brazil, and northern Argentina, you said our policy should be 
based on science, and it is what our policy should be based on. 
We sent a letter to Mr. Shea, in charge of APHIS, requesting 
transparency on the studies. Because if you look at what they 
have done over there, as far as a study with APHIS, what they 
have come out with it is not a requirement for the written 
reporting or documentation of the visits by the APHIS 
personnel, so we don't know really when they got there, when 
they inspected the plants.
    And since that region is still actively vaccinating for 
foot-and-mouth disease, and looking at the rules, Title 9 of 
the Code of Federal Regulations, they can't be deemed free of 
foot-and-mouth disease. That economic impact on our country, if 
foot-and-mouth disease, came to America, would be devastating 
to our livestock industry. Reports I have heard is $50 to $100 
billion, and it would kill our export market. So I implore you 
to really stand strong on that.
    And if it is based on science, we could use that same 
argument on BSE in our cattle. You know, going to other 
nations, as far as a source of contamination, which it is not. 
When we have had two cases in the span of--since it has been 
diagnosed, two cases, and one of them was an atypical case, and 
we have 330 million people here, and a lot of us are meat 
consumers, and that is a pretty good study, that we don't 
really have a problem, but yet other nations are using that to 
prevent us from importing our beef.
    Secretary Vilsack. We make that case to the Chinese every 
single time we meet with them. It is the case we made to re-
open in Japan. It is the case we made to re-open in Korea. It 
is the case we made to re-open in Hong Kong. It is the case we 
made, and are making, in Taiwan. So this is the consistency 
issue, Congressman.
    Mr. Yoho. It is.
    Secretary Vilsack. You have to be consistent. You can't say 
to China, follow science, follow the risk assessment. And then 
disagree when the risk assessment and science tells us that we 
have to open up opportunities here in the U.S. to import, we 
have to be consistent.
    Mr. Yoho. But without the transparency----
    Secretary Vilsack. That is a fair point.
    Mr. Yoho.--and we need to get that out. And the last thing 
is that I hope----
    Secretary Vilsack. That is a fair point.
    Mr. Yoho.--you stand strong on WOTUS, especially with our 
agricultural income down 25 percent, the net income, and stay 
strong on the ag side. Thank you, and I yield back.
    The Chairman. The gentleman's time has expired. Ms. Adams, 
for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman. Thank you, Secretary 
Vilsack. North Carolina is the nation's third most diverse 
agricultural state, with nearly all climatic and soil 
conditions represented. The state is also home to a strong 
public university system, with robust research in the 
agricultural sciences, and this includes North Carolina 
Agricultural and Technical State University, of which I am a 
proud graduate, twice, of.
    The USDA budget requests $10 million for research at 1890 
institutions, and that includes North Carolina A&T. The budget 
also requests $2 million for facilities improvement. My 
question is, how will these funds translate into improvements 
at individual institutions, such as North Carolina A&T?
    Secretary Vilsack. It is an application process, where 
universities will come to us with plans, in terms of how they 
could use the resources most effectively, and then those 
applications are sort of judged and scored, and the folks who 
have the strongest application, the folks who have leveraging 
resources, the folks that have partnerships with other 
universities or other entities, obviously score higher. And it 
is an effort to try to compliment the additional resources that 
are provided on a formula basis to the 1890s.
    Ms. Adams. Okay. My next question, when I look at the 
budget, and there is no new funding for STEM programs through 
the National Institute for Food and Agriculture, why was this 
program cut, and what can STEM schools do for funding through 
other programs? How can they seek that funding?
    Secretary Vilsack. Well, NIFA has a variety of programs. If 
someone has a STEM opportunity, they can participate in the 
other competitive programs that NIFA is engaged in. We provide 
hundreds of millions of dollars of competitive grants every 
single year. Again, I don't know specifically about the STEM 
budget item. I know that there was a conversation with a number 
of other entities, NASA, the National Science Foundation, the 
Department of Education, in an effort to sort of coordinate all 
STEM programs.
    So they were sort of put under a different heading in the 
budget, so the resources are still there, but there is a more 
collaborative process in deciding where they are spent, so that 
we have a coordinated and consolidated approach to STEM. And, 
in fact, the budget the President submitted actually has a 50 
percent increase over last year for those programs. So there is 
more money, it is just not necessarily in our budget. It is 
sort of a U.S. Government-wide effort.
    Ms. Adams. Okay. First of all, let me just make this 
comment: North Carolina is a specialty crop state, third most 
diverse state for crops, 90 commodity groups. Specialty crops 
include fruits, vegetables which are fundamental to a healthy 
diet. The USDA Specialty Crops Grant Program is a good start to 
help support all of these specialty crops, which are important 
to North Carolina, but much more could be done to improve the 
yield, the variety, the drought tolerance, and nutritional 
value. What is the Department's plan to improve research for 
specialty crops?
    Secretary Vilsack. Well, there is a specific Specialty Crop 
Research Initiative, which is designed to focus on greater 
protection and productivity of specialty crops. It is a 
different part of the farm bill, and that is part of that also 
we had the discussion about citrus greening, and it is sort of 
included in that. But I believe it is over $100 million that 
was allocated for this initiative, so there is a research 
initiative.
    The block grant initiative is essentially money that is 
given to states to promote, to market, to create new market 
opportunities for specialty crops. It is a slightly different 
program.
    Ms. Adams. Thank you, sir. I yield back.
    The Chairman. The gentlelady yields back.
    Mr. Ashford, I apologize to you one more time. I skipped 
you again. You need to be more vocal or something down there. 
No, not yet. Mrs. Walorski, for 5 minutes.
    Mrs. Walorski. Thank you, Mr. Chairman. Mr. Secretary, I am 
grateful that you are here today. We have never formally met, 
and I am thrilled to already hear the discussion that has been 
going on about the SNAP program. And I will be chairing the 
Subcommittee on Nutrition, and I am grateful for that 
opportunity. We are going to take on a full scale review of the 
SNAP program. It is intended to be a thoughtful, deliberative 
process, so as we approach re-authorization, we will be 
prepared to make meaningful improvements to the program to 
benefit the recipients, the program administrators, and the 
taxpayers. I want to ensure that we protect the most vulnerable 
populations, that we have already talked about here, and find a 
collective means to not have hungry kids in America. That is a 
passion of mine.
    As legislators, we are accountable to the taxpayers who 
fund the program. We have an obligation to ensure that these 
programs run in the most efficient and effective way possible. 
To do this, it is going to take a systematic approach to 
reviewing the various aspects of the SNAP program, from its 
overall mission down to the administration of benefits, and 
ultimately the recipient experience. The review process will 
include a range of stakeholder perspectives, including current 
and former recipients, nonprofits, the on the ground service 
providers, states, and localities, the food industry, nutrition 
experts, and policy researchers.
    I know you have an incredible history, and I commend your 
history on being active in this program. You have been a 
positive force, and I appreciate that as well for the changes 
that came out in the last farm bill. One of the things I am 
asking for is your commitment to fully engaging with us on this 
dialogue in this thoughtful, deliberative process that we are 
going to embark upon, and that your staff will be a useful 
resource to us so we all get to the end goal here. And I just 
wanted just to give you the opportunity to say that you are 
going to be a willing partner, and not be wary in the ensuing 
process. So, sir?
    Secretary Vilsack. We, obviously, will cooperate, and try 
to be as helpful as we possibly can in the review that you 
undertake.
    Mrs. Walorski. Well, and I believe we share the same goal. 
We want to see what works too, and we want to be able to stand 
by some of the programs you have already been talking about 
here for the last hour and a half. And I appreciate that you 
are holding the task of getting that stuff done, even from the 
new farm bill.
    I also want to just go on the record quickly, like many of 
my colleagues here, on the issue with the WOTUS Program, the 
Waters of the U.S. I live, obviously, in northern Indiana. We 
have about 12,000 family farms. This has been one of the 
general concerns since I was elected to Congress, and I just 
want to make sure that you are on board.
    And I appreciate some of your answers in this, but being 
able to stand up in the position you are in and fight for both 
rural and urban farms, this is one of the most devastating 
regulations that I hear about in my district. Can you take just 
a second and just speak to that again?
    Secretary Vilsack. Well, first of all, we have made a 
concerted effort to--myself directly, with the Administrator, 
and through our senior staff, and through our technical staff 
to do what we can to educate folks at EPA, as they formulate 
policy, on the impacts of potential policies on folks in the 
real world.
    Second, we have encouraged Administrator McCarthy to 
actually talk to farmers, to go out and visit farm areas, which 
she has. Third, we have encouraged the Administrator to meet 
regularly with commodity groups so that there is a vehicle for 
which they can express concerns. And we have clearly indicated 
some issues that have arisen, especially as I related to 
earlier with ephemeral streams. The reality is that those of us 
who own farmland are very familiar with those circumstances and 
situations, and it is a very difficult task, and so we have 
conveyed that.
    Now, it is a sister agency, and I have to respect that. And 
it is sort of like asking you to make sure the Senate does what 
it should do. Well, you can't dictate to the Senate, can you? I 
mean, you try, maybe, but----
    Mrs. Walorski. True, I appreciate that, and I do appreciate 
the bully pulpit, though, you do have. I think there is a 
difference when you are a Secretary, and you have the 
opportunity to speak to another Secretary. I would just 
encourage you to keep holding a line for the family farmers. 
They don't feel like they are being heard by this 
Administration, so I feel like, with my fellow Hoosier farmers, 
they feel like there is really nobody at the table arguing for 
them. But I want to thank you for what you have done for it.
    Secretary Vilsack. If I can respond to that, there are a 
multitude of ways in which this Department is speaking up for, 
and defending, and advocating on behalf of American farmers. We 
were engaged in making sure that folks across the country 
understood the importance of having a farm bill to them. Not 
just to the producers, but to the entire country. We have been 
very aggressive in our trade promotion. We have been very 
aggressive in opening up new markets here locally, so that big 
guys and small guys can co-exist and prosper.
    This Department is not very well understood by a lot of 
folks, and we are trying our best to make sure that everybody 
understands how significant and important it is. And I go out 
and speak to groups all across the country in an effort to try 
to make sure that rural America and farmers are not forgotten.
    Mrs. Walorski. I appreciate that, sir, and I was one that 
voted for the farm bill three times, every which way it came, 
every which way but loose, and I appreciate that as well, and I 
want to commend you for that. But I wouldn't be doing my duty 
as well if I didn't stand up for Hoosier farmers today and say 
thank you, and please keep them in mind. We appreciate it. 
Thank you, Mr. Chairman.
    The Chairman. The gentlelady's time has expired. Mr. 
Ashford, for 5 minutes.
    Mr. Ashford. Thank you, Mr. Chairman. Secretary, just as a 
quick aside, I am from Omaha, and when you were Governor, I 
want to thank you for the vision that you had then in 
developing the riverfront between Council Bluffs and Omaha. We 
are now seeing a 50 year vision statement that started, really, 
with your Administration, and it is a big deal for Sarpy 
County, and Douglas County, and Pottawattamie County, Iowa too. 
I want to thank you publicly for starting that process. It is a 
big deal for our state.
    My question, one topic is the USDA Center, Clay Center. And 
I know we did ask the Mead Animal Research Center issue that 
was focused upon in The New York Times article a couple of 
weeks ago, or 10 days ago or so. What is going on in that area? 
We did send a letter over, and I know we will get a response, 
but the University of Nebraska is very concerned about it, as 
are Nebraskans generally. Do you have any comments or thoughts 
on----
    Secretary Vilsack. Sure. I would say three things. First of 
all, obviously, we take any assertions along the lines of that 
article very seriously. I would point out that some of the 
issues that were raised in that article are no longer the 
practice, and no longer the case, and haven't been for a number 
of years. But, nevertheless, out of respect for the concerns 
that had been raised, I ordered a 60 day independent review, 
outside of our people, to take a look at processes and 
procedures that are taking place, in terms of approvals of 
research projects, and the oversight of research projects.
    We appointed an ombudsman, so that individuals who are at 
research facilities who have concerns about practices, and want 
to raise those concerns, but are fearful in doing so, that they 
will now have an outlet to be able to do that without 
retaliation.
    And, third, after we get the report, and whatever 
recommendations are made, we will certainly take a look at 
those and implement them as quickly and as effectively as 
possible, and then we will follow up with a more general review 
of other facilities in the USDA network that are involved maybe 
not as much as the Center is in animal research. So we are 
taking a look at this, we are being thoughtful about it, and we 
are being proactive about it.
    Mr. Ashford. Thank you. There are many at the University 
that are very concerned, because they are involved, to some 
extent, at the Center.
    Secretary Vilsack. They are.
    Mr. Ashford. It is a USDA facility, obviously, and there 
have been some concerns raised by veterinarians, and others at 
the University of Nebraska, and researchers. So I appreciate 
that, and I will yield back the rest of my time. Thank you.
    The Chairman. I thank the gentleman. The gentleman yields 
back. Mr. Allen, for 5 minutes.
    Mr. Allen. Mr. Secretary, first I want to thank you for 
coming before the Committee today, and thank you for your works 
for agriculture across America. I would also like to echo a few 
of my colleagues' statements, and encourage you, as the voice 
of agriculture in the President's cabinet, to stand up for 
America's farmers and ranchers, and defend these hardworking 
men and women against any policies that could threaten their 
livelihood.
    As you know, in my home State of Georgia, agriculture is 
the number one economic industry. In 2012 alone, Georgia 
planted over 1 million acres of cotton. Specifically, in my 
district, cotton is among the largest crops planted, and 
currently many of my farmers are very concerned. The 2014 Farm 
Bill made necessary changes to the cotton program, and with 
extremely low prices, many of my farmers are worried, and even 
debating whether or not they should plant cotton.
    You had mentioned good progress in the implementation of 
the STAX Program, but what can USDA do to address some of their 
concerns, or what would your advice be to some of the cotton 
farmers in my district?
    Secretary Vilsack. Well, first of all, we did provide 
nearly $\1/2\ billion of transition assistance to cotton 
producers. We have the STAX Program up and going. We continue 
to promote exports, and we continue to try to make sure that 
countries like China play by the rules. Those are four very 
important points to be made. And that last point, in 
particular, is that I am very pleased with the USTR's 
announcement today of additional actions potentially against 
China to try to get them to play by the rules. At the end of 
the day, that is extremely important, especially in the cotton 
area.
    Mr. Allen. Yes.
    Secretary Vilsack. And greater transparency from our 
friends in China. I recognize they are our number one customer, 
and I respect that, and we, obviously, are providing them a 
good quality product at an affordable price, but they are, at 
times, unpredictable in their approach towards trade. And to 
the extent we can get them more aligned with a science-based 
and rules-based system, it would beneficial not just for us, 
but also for them.
    And we are just going to continue to promote trade as a 
vehicle for advocating for all of agriculture. We have the best 
farmers in the world, and we have the best product in the 
world, and it is affordable. The current situation with the 
dollar makes it a little bit more challenging, but that means 
that we need to do an even better job of aggressively promoting 
agriculture overseas. That is why these trade agreements are 
important. That is why we believe the trade promotion authority 
is important.
    This Trans-Pacific Partnership is a big deal. Just to give 
you a sense of this, you may know this already, but I want you 
to know that I know that, in Asia, we are looking at 525 
million middle class consumers today, and in 15 years, that 
number is 2.7 billion. So there is an enormous opportunity 
there for high value products that American producers can 
provide.
    But if we are shut out of that, if we cannot conclude that 
agreement, it is not as if nothing else happens. China fills 
the void, creates agreements that is an all Asia trade 
agreement that doesn't have side standards, doesn't provide us 
a fair opportunity, or members of TPP negotiate their own 
individual side deals, at which point we are also left out. So 
it is extremely important long term for your producers that we 
continue to promote fair, high standards, trade opportunities 
where everyone plays by the same set of rules.
    Mr. Allen. I agree. Also, one other follow up question. The 
Conservation Reserve Program has changed considerably over the 
last 30 years. As you know, the Agricultural Act of 2014 
reduces the CRP acreage cap. What do you see is the future of 
the CRP Program?
    Secretary Vilsack. Well, it is a continuation of the good 
work that it does. In earlier discussions I pointed out that 
there no doubt will be a general sign-up, and there will be a 
continued focus on the continuous programs that have been 
popular.
    I do think, because we are seeing a reduction in acres, 
that we need to find creative ways to encourage CRP, and one of 
the creative ways that I am interested in doing is a better 
coordination between NRCS and FSA, in terms of this regional 
conservation partnership effort, and CRP. I think there is an 
opportunity to leverage, potentially, and get more acres 
involved in conservation. Maybe not specifically in CRP, but 
leverage those resources more effectively. We are looking at 
creative ways to do that.
    Mr. Allen. I want to put on your radar that I have some 
constituents who are having trouble with the opt-out provision 
in the CRP Program, and I may ask for your help at a later 
date, should some of these issues not get resolved.
    Secretary Vilsack. Mr. Batta is right behind me----
    Mr. Allen. Okay.
    Secretary Vilsack.--he is our person. Let us know what the 
issue is, and we will definitely get you an answer. Hopefully 
it will be the answer you want, but we will definitely get you 
an answer.
    Mr. Allen. Okay.
    I yield back my time.
    The Chairman. The gentleman's time has expired. Mr. Rouzer?
    The Chairman. David Rouzer?
    Mr. Rouzer. Thank you, Mr. Chairman. Mr. Secretary, I 
appreciate you coming--did I lose my microphone? There we go. I 
appreciate you coming before the Committee today. I have had to 
step out a couple times, and I apologize, during the course of 
one of my excursions, on the way back, I heard you talking a 
little bit about Country-of-Origin Labeling. This is such an 
important trade matter that I want to bring that back up, and 
forgive me if I am asking a duplicate question.
    I know the farm bill, which was enacted a little bit more 
than a year ago, included language requiring USDA to conduct an 
economic analysis of the impact of our nation's current 
mandatory country-of-origin labeling regulations on consumers, 
livestock producers, and packers. I understand this report was 
due last August. Do we know when this report will be completed?
    Secretary Vilsack. I just wanted to check with my staff. We 
have contracted with an outside entity, and we expect their 
report shortly.
    Mr. Rouzer. Very good. One follow-up associated with this. 
Can you take a moment to outline the timetable associated with 
the current WTO process on this COOL case?
    Secretary Vilsack. Well, we expect and anticipate sometime 
this spring seeing where we are headed, in terms of the appeal. 
And if we win the appeal, then, obviously, that is one route. 
If we lose the appeal, then the question is whether or not 
Canada and Mexico decide to retaliate, and if so, what. There 
will be some issues relative to the size of the retaliation, 
based on studies that I have seen.
    There is also the opportunity for Congress to weigh in on 
this. The problem, Congressman, is that Congress has said to 
us, ``Look, we want a label that identifies U.S. product.'' The 
problem, from a WTO perspective is that, once you have that 
label, then you have to segregate livestock that comes in from 
different sources. WTO says once you segregate, that is a 
problem, that is an undue burden, you can't do that. So there 
is no way we can square the hole here. We either have to get 
rid of the rule, or we have to amend the rule to provide a more 
generic label that gets away from segregation. Or we win the 
appeal. One of those two routes.
    Mr. Rouzer. Assuming we would lose the appeal, how soon do 
you anticipate Mexico and Canada would retaliate?
    Secretary Vilsack. Well, our hope would be that we would be 
able to, first and foremost, talk about the extent. There are 
some serious differences of opinion about how dramatic this has 
been, for Canadian producers in particular, and so that would 
have to be resolved. I don't think it would be immediate, as in 
the next day or next week, but certainly would be in the short 
term, there would be an effort. We looked at this, we tried to 
figure out, if there is a regulatory way around this? We tried 
a couple of times, and we have not been successful, so either 
we win the appeal, or Congress has to act.
    Mr. Rouzer. Thank you. One final question with the time I 
have remaining. I represent southeastern North Carolina. We 
have everything from tobacco, to sweet potatoes, to 
strawberries, to blueberries, a lot of livestock. My question 
for you with regard to the implementation of the unified 
payment limit: how is that proceeding? How is that coming 
along?
    Secretary Vilsack. Congressman, I am going to have to get 
back to you on that. I don't know the answer to that question, 
and I will find out, and get back to you immediately.
    Mr. Rouzer. I have a lot of producers that would have an 
interest in that.
    Secretary Vilsack. Okay.
    Mr. Rouzer. Thank you very much, Mr. Chairman. I yield back 
my time.
    The Chairman. The gentleman yields back. Mr. Emmer, for 5 
minutes. Mr. Emmer, for 5 minutes.
    Mr. Emmer. I have to--sorry.
    The Chairman. Excuse me.
    Mr. Emmer. I think in the old country it was Congressman.
    Secretary Vilsack. Excuse me for just a second.
    The Chairman. I am sorry, yes, sir? Secretary.
    Secretary Vilsack. I didn't understand your question. If 
you are asking about the actively engaged definition, if that 
is what you are asking about, yes, sir, then I can tell you 
that we are in the process of completing work on that, and we 
would anticipate something perhaps this spring in terms of what 
it is.
    Let me just simply point out to you, and to everyone who is 
interested in this issue, the area that we are dealing with, 
and the number of farmers that we are dealing with, and the 
type of farmers we are dealing with is very narrow. This does 
not apply to family farms. It doesn't apply to corporations. It 
is really pretty much limited to partnerships and limited 
partnerships, based on the language that is in the farm bill, 
so we are talking about a relatively very small percentage of 
producers that may be impacted by whatever we decide. But we 
are completing work on this, and I would anticipate sometime 
this spring.
    Mr. Rouzer. Thank you.
    Secretary Vilsack. Sorry, I----
    The Chairman. Thank you, Mr. Secretary. Mr. Emmer, 5 
minutes.
    Mr. Emmer. Thank you, Mr. Chairman. Thank you for having 
this hearing. Mr. Secretary, it is nice to have a dialogue. I 
will just say to you I have been very impressed. When we get 
the little sound bites that you see, it is not quite the same 
as when we have an opportunity to have a dialogue with you, and 
listen to you.
    There are three areas that I am going to try to cover in 
the limited time that I have. One, I just want to quickly go 
back to the issue on waters of the U.S. that you have commented 
a couple times already today. It is my understanding that the 
Small Business Administration's Department of Advocacy had 
written a letter to the EPA asking to pull the rule. And I 
listened to your answer to Representative Walorski, if I said 
it right, earlier, where you pointed out, or you commented that 
it is a sister agency, and because of that you respect the 
agency process.
    But I guess my question to you is, if it is harmful, and I 
hear this all over Minnesota, where I come from, not just in 
the district that I represent, they are very concerned with 
this potential rule, the finalization of the rule, based on the 
one that was proposed. If there has been a call by others to 
pull the rule, and you have some concerns that you have even 
expressed, why wouldn't you, or your agency, request the EPA 
actually pull the rule?
    Secretary Vilsack. Well, it is about how you could have the 
most effective relationship on not just a single issue, but on 
all issues impacting agriculture. EPA is engaged in quite a 
few. I wake up every morning, when I say my prayers, and I am 
thankful that I am not the EPA Administrator, because we are 
involved in a multitude of issues with the EPA. And so it is a 
question of style, I guess. Some people want a more open style, 
some people think it is more effective to work, in a sense, 
behind the scenes. You and I can have a difference of opinion 
about that, but I am concerned about making sure that I have a 
relationship so that I am in a position to have an impact on 
not just one rule, but on all of the rules.
    Mr. Emmer. And I take that back, Mr. Secretary. I 
appreciate that. After listening to you today, even though we 
might disagree on some things, I would actually be happy if you 
were at the EPA, but we will leave that alone.
    Secretary Vilsack. You obviously----
    Mr. Emmer. I didn't mean to upset----
    Secretary Vilsack. You have some serious concerns with me, 
if that is the case.
    Mr. Emmer. No. I am teasing too. I hope you appreciate the 
levity. Trade Promotion Authority, very quickly. You have 
talked about that a little bit. That is something that I am 
seriously interested in. We have a letter going around right 
now amongst Republican freshmen, trying to encourage them to 
give the President a strong message that we are supportive of 
trade promotion authority in getting these deals done.
    I asked the Trade Representative the other day, Michael 
Froman, he said that the President is going to make actual 
phone calls to people in his party to get support for an 
eventual vote. What are you doing personally, or your agency, 
to try and educate and encourage votes on the President's side?
    Secretary Vilsack. I have a list of 13 individual Members, 
either Representatives or Senators, that I am responsible for 
calling, and I am looking at a couple of them as I speak that I 
call on a regular basis to inform on the impacts of trade. I 
have made two rounds of calls. We have also created, within the 
Department, fact sheets so that folks understand and appreciate 
the impact that trade has on their state, or on their 
Congressional district, and the importance of getting this 
done. And we have also, obviously, in public appearances, 
expressed support for a strong effort on the part of TPA, 
because without it it is very difficult to negotiate, when the 
folks on the other side of the table think that you can't 
actually deliver whatever it is you are negotiating, because 
somebody else is going to have the ability to amend or modify.
    Mr. Emmer. You probably already know this, but I met with 
some of the Canadian folks in our area the day before 
yesterday, and they told me the reason that they are hesitating 
doing anything is because they want to know that when they come 
to the table that the Administration has the ability to do a 
final deal. At least, that is their position.
    Secretary Vilsack. I think that is part of it. I think they 
are waiting to see what other deals are negotiated, and they 
also have an eye on their own politics, which is----
    Mr. Emmer. Right.
    Secretary Vilsack.--understandable.
    Mr. Emmer. Well, and that is all the more reason to 
eliminate another excuse, by taking----
    Secretary Vilsack. Right.
    Mr. Emmer.--care of TPA. Last, with whatever little time I 
have left, could you just give me a thumbnail as to how the 
Beginning Farmers and Ranchers Loan Program is working?
    Secretary Vilsack. Sure. Well, there are two aspects of 
this. The first aspect is roughly $18 million is allocated to a 
number of entities to basically create systems that impress 
upon young people, veterans, and others who are interested in 
farming the various programs that are available. The second 
piece of this is the loan portfolio that we have. We do roughly 
42,000 loans a year. Well over 50 percent of those loans go to 
beginning farmers. I think the budget the President proposed 
would be roughly 23,000 loans would be made available, either 
operating or ownership loans.
    Third, there is a new opportunity with reference to crop 
insurance, where beginning farmers are given a slight break on 
premiums. The last is the conservation part of it. Most of our 
conservation programs require match, and require up-front 
investment for beginning farmers. There is a little flexibility 
in terms of advancing conservation resources. So all of that is 
taking place right now. And we have a very aggressive effort 
that the deputy is leading to go out and make sure that folks 
are aware of these programs.
    We are trying to encourage the Department of Defense to 
allow us to come on to bases before people are discharged from 
their military service to give them a sense of what the 
programs are. And we are also heavily engaged in encouraging 
them to even look at our microloan program. A number of 
beginning farmers have taken advantage. We have done about 
10,000 of those loans in the past. The majority of them are to 
beginning farmers.
    The Chairman. The gentleman's time has expired. Mr. Gibson, 
for 5 minutes.
    Mr. Gibson. Well, thanks, Mr. Chairman. And, Mr. Secretary, 
thank you for being here today. I think this hearing has been 
very productive. I have read very closely your testimony, and 
have also been enlightened by your elaboration here today. And 
let me also say, and I believe I have shared this with you when 
you have come here before, that my area in upstate New York 
deeply appreciates your commitment to agriculture, and to 
helping New York. You have been to our area a number of times, 
and certainly, from a nonpartisan perspective, we view you as 
somebody who has been very helpful. And I know you have some 
roots there with Hamilton College and Albany Law, so thank you 
for all that you are doing.
    I do want to make another pass at waters of the U.S. I am 
opposed to this proposed rule, very concerned about it, but I 
am going to come at it in a slightly--perhaps a different way 
here, and I have a question for you. It is a difficult one, but 
I would appreciate your response to it. And, really, thinking 
about it conceptually, how important the environment is to all 
us, and to future generations, and you would be hard pressed to 
find stronger stewards of our environment.
    And, when you think about how the Administration is 
approaching this, it seems to me that, from a conceptual 
standpoint, you have the EPA, that is bringing forward this 
proposed rule at the same time the Administration is proposing 
cuts to conservation programs, like EQIP, which is a really 
good program that helps with the environment. So I just wonder, 
has anybody engaged--and I understand that you have a purview, 
and you have a charter, and you have to work with your 
colleagues, and I certainly appreciate that, but has anybody 
broached that just as a point that it seems contradictory that, 
while we all want to advance balanced policies that help 
promote the economy, and balance our need to protect the 
environment, that we are bringing forward, what I would 
describe as an onerous regime under the EPA, at the same time 
we are taking back money from farmers, who are good stewards of 
the environment.
    Secretary Vilsack. Well, I have a slightly different view 
on terms of the overall financing of conservation, in the sense 
that it may very well be that individual programs may not have 
as much increase as they were destined to, based on the farm 
bill, based on the authority, but that doesn't necessarily mean 
that less money is being spent on conservation. And the reason 
I say that is because we are really focused at USDA in trying 
to figure out how best to leverage the dollars we have.
    So creating ecosystem markets, creating incentives for 
corporations to invest in conservation to fulfill some social 
responsibility that they have identified--we do business with 
Coca-Cola. We recently had Chevrolet purchase some carbon 
credits for a working ranch, that is extending the amount of 
money that is actually invested. And we actually have a record 
number of acres enrolled in conservation today, and a record 
number of participants and producers, and we are doing an 
assessment, trying to make sure that people understand that 
this conservation is working.
    I understand the point you are trying to make, but what we 
are trying to do is to work around tight budgets and difficult 
budgets to figure out ways in which we can be creative to use 
the dollars we have, to leverage them to actually do more work 
in the field. And the great deal of interest in the Regional 
Conservation Partnership Program is reflective of that. We are 
going to double the amount of conservation activity in those 
115 projects because of the leveraging opportunity.
    Mr. Gibson. Well, I certainly appreciate those comments. 
And, to your broader point that, how smartly we use these 
resources is at least as important as the total extent of 
investment. I agree with that point. I would also share with 
you that, in our area, we always have a list of folks who want 
to be involved in these conservation programs. We don't get to 
all those that want to use these programs, and I think that 
they have been a good investment, by way of the American 
taxpayer dollars, and so we will continue to work with you on 
this. And, once again, I just appreciate your diligence and 
your commitment.
    I am going to submit for the record--we have been working 
with you guys on broadband extensively. Thank you for that as 
well, and we will be submitting, a question for the record on 
that score too, in terms of this year, and the years to come. 
So with that, Mr. Chairman, thank you. I think this has been a 
productive hearing, and I appreciate that very much. So thank, 
you, Mr. Secretary.
    The Chairman. The gentleman yields back. Mr. LaMalfa, for 5 
minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. Thank you, Secretary 
Vilsack, for appearing today. To echo just a little bit on what 
Mr. Benishek was very frustrated, as am I, on our forestry, 
U.S.--National Forest Service in northern California as well, 
we appreciate your visit to Trinity County a year or 2 ago. The 
neighboring county, Siskiyou County, suffered 250,000+ acres of 
fire loss last year, much of that on national lands, but it 
also affects the neighbors as well.
    The point you brought up, separating the funding, the 
emergency funding, that is something we will work on. We 
understand, and get that. That should be a separate pot so you 
can do your work, but also there is a component that there is 
revenue generated by getting these sales out there. And when 
one of the forest units, all they could put out was a couple of 
sales for a couple loads of firewood, we are not going to get 
very far at that rate, so we need to be much more aggressive on 
meeting these numbers for how each of these forest units would 
perform.
    Of critical importance to the West Coast, obviously, coming 
back to the ports that have been mentioned a couple times here, 
we have estimates of beef sales are down $40 million for a 
recent period of time, per week, I think. Citrus exports, of 
course, \1/3\ of our citrus in California is exported. It is 
getting to the point where it is spoiling, and they don't have 
the time period to wait for this much longer. It will take 4 
months to clear a backlog: $20 million a week to the citrus 
industry. Almonds, we grow a lot of those in California as 
well, and we have a lot of containers sitting on the port 
docks, as well as back at their facilities at home, and so this 
is a very real effect. We are looking at--if this gets to its 
worst--one estimate, $2.1 billion a day to the national 
economy. In an economy that is trying to recover, that doesn't 
help much.
    So what I would ask you, as one arm of the Administration, 
is to be really aggressive, and urge your colleagues inside the 
Administration--and I know you are. You have been working at 
them, but this needs to be taken to the next step, because of 
the effect on the ag economy, on all of our exports, and the 
American economy.
    One more stat I have is that USDA released, just yesterday, 
an estimate of farm income decreasing 43 percent in this coming 
year. Sir, how much of this decrease can be attributed to 
either the drought in California, the western states, and/or 
this West Coast port slowdown?
    Secretary Vilsack. The answer to your question would 
probably be better answered by our Chief Economist, and I am 
going to have him provide a more detailed response to your 
question.
    But let me suggest that the primary reason we are seeing a 
decrease is because commodity prices have come down across the 
board. This is not just one or two areas of agriculture, this 
is--and you would expect that, because we had bumper crops.
    Mr. LaMalfa. You see market share from this port thing 
being a part of that, or because of drought?
    Secretary Vilsack. Not today, if this thing continues to 
linger, there is always that risk, because we become a less 
reliable supplier. One of the things we market to the rest of 
the world is how reliable a supplier we are. So there is a 
consequence to this, which is why we meet on a daily basis, and 
are encouraging these folks to get these things worked out. 
There are two issues, as I understand it, and both of those 
issues, it seems to me, could be worked out if reasonable 
people got in a room, and really were dedicated to getting it 
done. And I hope that they do.
    Mr. LaMalfa. Let us get the reasonable people in the room, 
then.
    Secretary Vilsack. Well, there are other issues. There is 
the rail issue, which we haven't talked about today, which is 
not as acute as it was maybe a couple of months ago, but it is 
still something that is a long term challenge, especially in 
the upper Midwest, in terms of the competition for rail, and 
the need for rail service, and the rail companies to continue 
to invest in new locomotives, and new cars, and new track, and 
improved track.
    Mr. LaMalfa. Certainly.
    Secretary Vilsack. There is also the fact that other parts 
of the world have also had pretty good crops. So, I mean, it is 
a combination of things, but----
    Mr. LaMalfa. There is a market, we just need to be sure we 
are as strong as possible. I am sorry, my time is so limited 
here. To the waters of the United States, this really is a vast 
overreach of property rights, and we need you to be a strong 
voice to have sense restored back to that. We have things we 
can do here to slow it up via funding, like that, but it really 
needs to go back to the drawing board, and not have them put in 
this rule that is devastating--they are already getting ahead 
of the curve in my district, enforcing things that go against 
the section 404 of what is a legitimate farming practice. They 
are interpreting beyond their bounds.
    Last, I know----
    The Chairman. The gentleman's time has expired. We have 
other Members to come, so the gentleman's time has expired.
    Mr. LaMalfa. Thank you.
    The Chairman. Mr. DesJarlais, for 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman. Thank you, 
Secretary Vilsack, for being here today. I have two issues. 
First, each year, in Tennessee's Fourth Congressional District, 
we host the Tennessee Walking Horse National Championship, 
known as The Celebration, and since my election in 2010, my 
staff and I have been working closely with the staff and 
members of APHIS to find an amenable solution to some of the 
discrepancies that have been highlighted in the current 
inspection process. I think horse owners, trainers, staff 
members, and Members of this Committee all can agree that the 
welfare of these beautiful animals are certainly worthy of our 
concern.
    However, as I learn more about the process, it is my belief 
that many participants, in fact, the overwhelming majority, 
have been subjected to an inspection process system that is 
inconsistent, and overly subjective. And I simply bring this 
issue to your attention today, Mr. Secretary, to ask for your 
agency's continued engagement to find a common sense workable 
solution that will allow this time-honored tradition to 
continue and flourish. So can I have your assurance that your 
staff will continue to work with me in this matter?
    Secretary Vilsack. As we have, and the key here is to 
continue to focus on technologies that would allow us to do a 
good job of making sure that we protect these wonderful 
animals, and at the same time allow this important tradition. I 
am very well aware of this issue, and I know it is hotly 
contested among a lot of folks down your way.
    Mr. DesJarlais. Well, I think that people are coming 
together, and we are just trying to have a set of rules that 
everybody can play by that is fair. And I appreciate the 
efforts of USDA, and them coming to the table and talking, I 
really do. So we will look forward to continuing to work with 
you on that.
    Second, this issue has been plaguing a lot of farmers and 
cattlemen throughout Tennessee and other states, and that is 
getting compensated for losses by the black vultures. And, in 
one instance, the farmer had pictures of a live calf, and a 
couple hours later another picture of the same calf that was 
dead, with the vultures flying around it, but yet it is hard to 
get compensation.
    Losses are higher this year, and we have been working 
primarily with Fish and Wildlife Services on this issue. But 
one of the issues my constituents have raised is the trouble 
they are having getting necessary documentation of such losses 
to satisfy the requirement for FSA offices. The Tennessee 
Cattlemen's Association said that FSA is claiming that they 
need someone from a Federal agency to come out to farms and 
verify losses. However, FSA believes that Fish and Wildlife 
folks are not able to come and make such verifications, so 
currently it seems as though there is no way for producers to 
receive payment through the Livestock Indemnity Program for 
such losses.
    Long story short, this seems to be a communication issue, 
and I would greatly appreciate if your staff could follow up 
with mine to see if we can sort through this matter.
    Secretary Vilsack. We will absolutely do that. The 
wonderful thing about this Department is that you get things 
like black vultures, and issues involving black vultures.
    Mr. DesJarlais. Thank you for your time, sir. I yield back.
    The Chairman. The gentleman yields back. Mr. King, for 5 
minutes.
    Mr. King. Thank you, Mr. Chairman. And, Mr. Secretary, I 
thank you for your testimony here today. It is a bit of a long 
haul through here. A whole series of things come in front for 
me, and some of it has been addressed. I wanted to take up the 
case, and ask if you are aware, or if not, I encourage you to 
take a look at, a case that was decided in the Central District 
of California in Federal Court. A Canadian company, a French-
Canadian corporation also, Hot's Restaurant Group, Inc. v. 
Harris, (Association des Eleveurs de Canards et D'Oies du 
Quebec, a Canadian nonprofit corporation; HVFG LLC, a New York 
limited liability company; and Hot's Restaurant Group, Inc., a 
California corporation, Plaintiffs, v. Kamala D. Harris) the 
Attorney General of California on foie gras liver. Have you 
happened to see that decision at this point?
    Secretary Vilsack. I have not, Congressman.
    Mr. King. Thank you. I will briefly, then, touch that, and 
direct your attention to it. There has been an objection on the 
part of some of the animal rights organization, included HSUS, 
against force feeding ducks and geese to enlarge their liver, 
the French foie gras liver. And, in that case, it was decided, 
this is a couple of weeks ago, by my information, that Federal 
pre-emption supersedes California law.
    And it would be a case, I believe, exactly on point with 
the ag issue in California that I know you are aware of. And so 
I want to direct the attention of you and your office to that 
case, and perhaps we could get some support for our egg 
producers who are watching as California is dictating the cage 
size in all of the states, and created the beginnings of a 
patchwork of regulations.
    The second thing I would bring up, then, would be the 
President's State of the Union Address. It caught my attention 
when he said that they would be creating new jobs by converting 
sunlight into liquid fuel. I am an Iowan. That sounded like 
ethanol to me. How did you interpret that statement?
    Secretary Vilsack. I think that is a consistent 
interpretation.
    Mr. King. Thank you. Then I will take it that way as well. 
And you also mentioned that there have been $55 billion in 
payouts in crop insurance. And that $55 billion in payouts, can 
you tell me what percentage of that is the unsubsidized portion 
of the producer premium versus the subsidized portion of the 
premium, and then, of course, the shortfall?
    Secretary Vilsack. I am not sure I understand the question, 
Congressman, but, basically what I know is that $55 billion has 
been paid out in indemnification, so----
    Mr. King. That means $55 billion worth of----
    Secretary Vilsack. Total.
    Mr. King.--claims--total. When I ask the question of the 
premiums that are billed to our producers, a portion of that 
premium is out of their pocket, a portion of that premium is 
subsidized. And so can you break that down as to how much of 
that is paid for by the producers, and how much of it is paid 
for by the taxpayers?
    Secretary Vilsack. Well, I will try to answer the question, 
and if I don't answer it correctly, we will get you the correct 
answer. What I do know is that roughly 62 percent of overall 
premiums are subsidized by the taxpayer, paid by the taxpayer, 
and 38 percent is paid by the producer.
    Mr. King. That is generally what I am looking for. Have you 
or your office looked at this from any perspective on 
disparity, could you identify if there were a geographical 
transfer taking place consistently under Federal crop indemnity 
payments?
    Secretary Vilsack. In other words, is one region of the 
country paying a disproportionate share of premiums, and not 
getting much in the way of recovery versus another that is--I 
don't know that that exists. I am fairly certain that the 
Midwest, obviously, pays a significant part of those premiums, 
because of the commodities that are grown there. We could 
certainly ask our folks to take a look at that.
    Mr. King. And you do have people that are the go-to people 
for me to have a conversation with----
    Secretary Vilsack. Sure.
    Mr. King.--as well?
    Secretary Vilsack. Yes. I do know that there is a disparity 
in terms of the size of operations, and the amount of premium 
subsidy, and so forth; whether it is geographic--but certainly 
the size of the operation, there are significant disparities.
    Mr. King. And did you know how broad the span is of years 
we use to measure and set those premiums?
    Secretary Vilsack. I don't know the answer to that 
question, but I know that we have, in the past, talked about 
10, 15 year timeframes, but that may not be what is used. I----
    Mr. King. And I am aware we have 30 years' worth of 
records, and so raise this topic, and I would like it if you 
could inform my office of who my contact person should be in 
your Department to drill into this a little deeper, if you 
could, Mr.----
    Secretary Vilsack. Well, Brandon Willis, the RMA 
Administrator, would probably be the best place to start.
    Mr. King. Thank you, Mr. Secretary. I yield back, Mr. 
Chairman.
    The Chairman. The gentleman yields back. Mr. Newhouse--I 
missed you a while ago. You are recognized for 5 minutes. I am 
sorry about that.
    Mr. Newhouse. It is hard to see me down here, Mr. Chairman. 
I appreciate the----
    The Chairman. That is outpost forward.
    Secretary Vilsack. It is easier for me to see you.
    Mr. Newhouse. Yes. We are closer. But thank you, Mr. 
Chairman, Mr. Ranking Member, Mr. Secretary. I appreciate you 
sticking it out to the bitter end here, and the opportunity to 
be part of this conversation. I very much appreciate your 
answers so far this morning, and I look forward to working with 
you, just let me say that. Let me agree with one of your 
earlier statements, our American farmers are some of the best 
farmers in the world, producing some of the best products in 
the world, which I have had the honor and privilege to 
represent in different venues. And I agree with that statement, 
and it truly is a privilege to represent agriculture in the 
United States of America.
    Having said that, let me add to what some of my other 
colleagues are talking about, as far as the labor dispute we 
are experiencing on the West Coast ports. Being from the State 
of Washington, this is a huge issue for us. If we can produce 
the best products, and can't get them to our markets, what good 
is that? Just to personalize this a little bit, some of my 
friends, my farmer friends, are experiencing potential 
bankruptcies because of the slowdown at the ports because of 
the labor disputes.
    We are seeing, as you know, in Washington State we have a 
record apple crop this year, which we had plenty of challenging 
marketing, even without the labor problems, so that is causing 
a huge upheaval in the apple industry. We were seeing layoffs 
of people at warehouses, loss of jobs. I am seeing a tremendous 
loss in opportunities when it comes to marketing those apples 
in Asia, or some of our primary markets. We just can't get the 
fruit there at particular times, like the Chinese New Year, 
which is a huge marketing window for us we are losing.
    Just, daily I am hearing stories about the hardships people 
are facing. Organic poultry producers are unable to get organic 
feed greens and are at the risk of losing their certification. 
So just huge implications all up and down the agricultural 
sector. As you know, Washington State is a very--I hate to use 
the word dependent, but we are very involved in exports. At 
least 30 percent of our crops are exported, but on some 
commodities it is upwards of 90 percent. When you are talking 
about hops or wheat, potatoes, 40 percent. It is a huge part of 
our economy.
    From a little different perspective, investments in MAP 
dollars, certainly the Foreign Agricultural Service, trade 
partnerships, all those things add up to a huge investment in 
this area. And so I guess my question is, how can we help you? 
I know you have been a tremendous advocate, and that is 
something that we would like to get to the bottom of, and 
puzzle it out.
    Secretary Vilsack. Well, Congressman, you have helped 
producers in your area, and producers who are impacted by this, 
by the series of questions that have been raised here, because 
obviously that has been a focus of our conversation here today, 
and that will, obviously, be reported, and that will strengthen 
the resolve that we have to try to put appropriate pressure on 
both sides to work out whatever differences remain, because 
there are real people being affected in a real way by all of 
this, and it is not just the people around the negotiating 
table who get impacted. There are good, hard-working folks who, 
through no fault of theirs, are faced with some very serious 
issues, which you have outlined.
    The very fact of bringing it up, and continuing to bring it 
up, puts the spotlight on it. As the spotlight gets brighter 
and brighter, the hope would be that people would be reasonable 
and get it worked out.
    Mr. Newhouse. I appreciate that. Let me switch gears really 
quickly, limited amount of time. Headlines every year, the West 
is burning. In my state we had a record forest fire approaching 
500,000 acres, so the issue of forest management by the Federal 
Government is at the top of a lot of people's minds. I know in 
the 2014 Farm Bill there was a section that allowed states to 
designate some landscape scale area. Just maybe briefly an 
update on that, and maybe get some help on where Washington's 
application is, and how can we move the dial improving the 
partnership with states and local entities in order to improve 
forest management?
    Secretary Vilsack. Thirty five states have expressed a 
desire to have segments of their forest involved in that 
program. The Forest Service Chief expanded the acreage, so it 
now constitutes 45 million acres that have been identified, in 
terms of pest and disease issues. Unfortunately, the farm bill 
basically provides for the accelerated NEPA process for 3,000 
acres, which is important, but, obviously, we are talking about 
millions of acres, not thousands of acres. We will use that 
power.
    The other thing the Forest Service has done is they have 
created a large scale NEPA, where they are basically taking a 
look at large scale landscapes, which means that when 
individual projects come up, the time it takes to do the NEPA 
analysis that is required for the project will be less. So we 
are trying to figure out ways in which by using a large scale 
effort we can reduce the amount of time overall to get 
projects.
    The other thing we are doing is we are trying to expand 
market opportunities across the board. It is traditional, it is 
wood to energy, and it is new market opportunities. And this--
the structural material--we at the Forest Service, every 
building over 10,0002 has to be first and foremost 
built with wood, if it can be. That is sort of a directive that 
we have provided as part of a green building initiative. So 
there are a number of things we are doing in that space.
    The Chairman. The gentleman's time has expired. Mr. 
Goodlatte, for 5 minutes.
    Mr. Goodlatte. Thank you, Mr. Chairman. Secretary, welcome. 
In the new farm bill, there is a key bipartisan compromise that 
I was proud to spearhead with Congressman David Scott that 
protects dairy farmers, as well as restaurants, food 
processors, grocery stores, and consumers. This amendment 
formed the framework for the dairy title of the farm bill, and 
was designed to provide our nation's dairy producers with a 
viable safety net, without supply management, or new 
administrative burdens. And it was supported by more than 140 
diverse groups, and 291 Members of the House voted for it.
    In implementing the regulations, as I understand it, they 
restrict individuals with significant ownership interest in one 
dairy from establishing ownership in a new dairy, and gaining 
eligibility. Could you please confirm the ability of a dairy 
farmer to expand his dairy production capacity through new farm 
operations, and maintain eligibility in the MPP?
    Secretary Vilsack. I think we are still in the process of 
working on precisely how that can be done, and we have 
solicited input from the producers in terms of how we navigate 
the ability to expand against the assurance that the program 
will not be misused. And we are still in the process of 
formulating a final determination and decision about that. It 
is not an effort to try to avoid expansion, but we have to be 
sensitive, obviously, to making sure that folks don't take 
advantage of the system when it is inappropriate.
    Mr. Goodlatte. Well, we certainly understand that, but we 
also want to encourage having an abundant supply of milk, both 
for use here at home, and for export, and would encourage you 
to take an open-minded approach to not replacing one form of 
supply management with another. So thank you.
    I would also like to switch gears and talk about demand 
management, I am not from Iowa, as you are, and my friend Mr. 
King is. I am from a district where my livestock producing 
farmers do not have demand management on the chickens, and 
turkeys, and beef cattle, and dairy products that they produce. 
And, therefore, I am concerned about the continued growth of 
the consumption of corn under the Renewable Fuel Standard.
    According to the Congressional Budget Office, if 
implemented, the heightened 2017 RFS requirements would 
increase the amount of total U.S. food expenditures by $3\1/2\ 
billion in just that 1 year, and it is going to continue to 
accelerate and get worse in years where there is a shortage of 
corn production, and in years down the road, when you get 
closer to 2022, when the requirement is that we produce 36 
billion gallons of ethanol a year.
    This problem is only going to get worse, so I would like to 
ask if you would let us know how the Department of Agriculture 
is working with the EPA and impacted livestock producers to 
ameliorate the cost of what I consider to be, and an increasing 
number of Americans considered to be, unworkable RFS standards. 
That seems to pit one sector of U.S. agriculture against 
another.
    Secretary Vilsack. Well, you and I are going to have to 
respectfully disagree about this, Congressman.
    Mr. Goodlatte. We always have. I----
    Secretary Vilsack. I mean, I am sure that you are not 
surprised by that. And the reason why I feel as strongly as I 
do on the other side of this is because of the productivity of 
American agriculture. Corn production has increased 
significantly. I remember practicing law in 1975 with my 
father-in-law, and doing income tax returns, and producers were 
planting, in my state, about 16,000, 17,000 seeds per acre. 
Today those very same producers, on that very same land, are 
actually utilizing somewhere between 30,000 and 40,000 seeds 
per acre. The technology has allowed us to grow more. So, in 
terms of the percentage of food--of corn that is being used for 
production of feed, and food, and exports, that hasn't changed. 
The excess is basically going into production of ethanol.
    Second, when ethanol is produced, it is not just ethanol, 
it is also co-products and byproducts, as you well know. And 
the DDGs are a feed supplement that is pretty significant, and 
represent roughly \1/3\ of everything that goes into the 
ethanol production. And then, finally, we are obviously 
gravitating away from an over-reliance on corn towards corn 
stover, towards woody biomass, towards perennial grasses. And 
there are plants now that are up and running, and work towards 
commercial-sized operations, where you are not going to have--
--
    Mr. Goodlatte. Mr. Secretary, reclaiming my time, which is 
running out, I don't disagree with the ability to produce fuel 
from a wide variety of sources, and certainly from non-
productive sources today. That would be a good thing, but that 
has been the promise for a long, long time. In the meantime, 
there are growing concerns by consumer groups, hunger 
organizations, environmental organizations, as well as those of 
us who traditionally believe in free market agriculture, to 
make sure that our corn crop is not manipulated the way it is 
by an artificial government policy.
    So I understand your disagreement. I understand that you 
are, as Mr. King noted, from Iowa, the capital of ethanol 
production, but I will just note that it doesn't sell as well 
in the hinterlands of many other parts of American agriculture, 
or the American economy in general.
    Thank you.
    The Chairman. The gentleman's time has expired. Mr. Davis, 
5 minutes.
    Mr. Davis. It is good to be sandwiched between Mr. King, 
and then my colleague, Mr. Goodlatte. And I come back to you 
and say I agree with many of your statements. It is good, 
maybe, not to be the king of ethanol like Iowa is, but we are a 
close second in Illinois, and I do believe that many in the 
livestock industry are going to be taking advantage of the low 
prices, and also the oversupply of some of our corn this year. 
And I am concerned about what EPA is going to do with the RFS 
myself, so thank you for your support on that issue, and I will 
respectfully disagree with my friend and colleague Mr. 
Goodlatte.
    A couple of issues that have already been brought up, I 
don't want to continue to ask you questions about them, but I 
at least want to give my thoughts. I hope that the 
Administration can do whatever it takes to help end the strike 
on the West Coast, because it is severely impacting products in 
the Midwest. And I would urge you to do whatever you can, and 
thank you for your vigilance.
    Also, crop insurance, I am concerned with the President's 
proposal. I oppose the President's call for a $16 billion cut 
to crop insurance. Farmers have endured an estimated 43 percent 
decline in net farm income over the last 2 years, and now is 
not the time, as Chairman Conaway said, to cut out this public-
private partnership. And this is working, and it requires 
producers to have skin in the game.
    Now, a question I have, it relates to a provision that I 
helped author in the farm bill that would give agriculture a 
seat at the table as part of the EPA Science Advisory Board. I 
think we need agriculture to have a seat at the table as part 
of this board, and I was hoping that the EPA has consulted with 
you on appointing new members, since they extended the time 
period. Have they--has Administrator McCarthy reached out to 
USDA on this issue?
    Secretary Vilsack. There has been communication about this, 
and I know that there has been communication--two-way 
communication, in terms of our suggesting and responding. The 
application period is extended to March----
    Mr. Davis. Right.
    Secretary Vilsack.--30, and they have focused on a variety 
of agricultural expertise that they are looking for, so----
    Mr. Davis. Great. But they have reached out to you, and you 
guys have been in communication? That is great. Thank you. I am 
actually very glad to hear that. I reinforced last week to 
Administrator McCarthy, Mr. Secretary, the Congressional intent 
of this bill, and I would hope the USDA would agree with me 
that we want somebody who is not just an agricultural scientist 
to be a part of this board. We want some real world production 
agriculture experience. And I would hope that you would take my 
Congressional intent to the Administrator when the decision is 
made. So thank you very much for your time there.
    Now, the issue that I always talk to you about, school 
nutrition. I wanted to thank you for putting out the guidance 
memo for the exemption that our schools can apply for, if they 
show hardship, for the whole grain requirement. And, also, I 
want to thank you for implementing the freeze in current sodium 
levels until science can further back up target levels, which 
would be shown to benefit the health of children.
    In your view, how are the schools going to be able to 
benefit from these provisions, and do you support efforts to 
continue providing this flexibility?
    Secretary Vilsack. Well, throughout this process we have 
indicated a willingness to be flexible, as circumstances 
dictated. We are very excited about the opportunities that we 
are pursuing with our Team Up For Success Initiative, which is 
designed to mentor and pair up school districts that are having 
a difficult time dealing with the new requirements, for 
whatever reason, with school districts that are similarly 
situated, similar size, similar geographic location.
    There was a day and a half seminar that was done down in 
Mississippi, University of Mississippi. We sort of piloted this 
notion. It was very well received, and so we want to see if we 
can continue doing that. We obviously want to continue the 
smarter lunchroom grants, and the school equipment grants, and 
the other financial resources that we are making available. So 
it is a combination of a variety of things, and that is why we 
are seeing----
    Mr. Davis. Yes.
    Secretary Vilsack.--general acceptance notwithstanding, 
some of the concerns that have been expressed by school 
districts and by students. A recent survey showed 70 percent of 
elementary students, and 63 percent of high school students, 
were okay with what is going on. When I was governor, I would 
have died for a 63 or 70 approval rating, and I suspect Members 
of Congress would too.
    Mr. Davis. I wouldn't die, but I would be very excited for 
that approval rating. I want to thank you for sending members 
of the USDA to my district to talk with school lunch officials, 
and hear some of their concerns. And I appreciate what you are 
doing in implementing the flexibility, Mr. Secretary, and I 
look forward to working with you on this issue as we continue 
to move forward, and express the concerns of my school 
districts. And I still have an open invitation to have you come 
to central Illinois and talk to our superintendents. Thank you.
    The Chairman. The gentleman's time has expired. Mr. 
Thompson, for 5 minutes.
    Mr. Thompson. Thank you, Mr. Chairman. Secretary, good to 
see you.
    Secretary Vilsack. Good to see you.
    Mr. Thompson. I wanted to revisit, as a number of Members 
have, Title VIII--Forestry. A robust forestry program through 
USDA and the Forest Service, U.S. Forest Service, that is best 
for a healthy forest and healthy rural communities. And you had 
talked about wildfires as being a big issue, and it certainly 
is, but my perspective on that is that, quite frankly, we have 
had decades of bipartisan neglectful management within our 
forests, which has resulted in forests that are not healthy, 
that have not been well maintained. And a lot of that comes 
from outside influences, through courts, and sometimes not 
through courts, onto the USDA and the Forest Service.
    But the fact is, though, I sense that we are making some 
progress, let me just say. I want to thank you for the 230 wood 
energy projects. I think that is a part of what we are working 
together, putting together to make progress, but we have a long 
ways to go.
    And what I would like to do is work with you and the 
Subcommittee that has shared, once again, responsibility for 
forestry and conservation to look at that. How do we continue 
that transition, going from burning money, and that is what we 
do when we don't properly manage our forests, to making money, 
to growing money. We know that we can do that, because timber 
is a commodity. It is an ag commodity. I am pleased with the 
things that we are doing that you have talked about, as I have, 
about the construction, mobile storage. We are creating market 
demand, and that is really good.
    So there were a couple tools that we did give you that you 
didn't address in the testimony that you submitted, and I just 
wanted to touch base on--these are additional helpful tools to 
help us in that transition. If we properly manage the forest, 
and get close to that yield rate, we will reduce wildfires. We 
can never totally eliminate them, but we will reduce 
dramatically. And taking money away from marketing and selling 
timber only compounds wildfires, so we really need to step back 
and look at that.
    So some of the things that we had in there--just three 
things real briefly, and get an update, if you can, for me. The 
Bio-Preferred Program, where we actually added timber, first 
time ever, into the Bio-Preferred Program was really good for 
forest products. That helps our domestic timber industry. That 
speaks to increasing demand.
    The forest roads--a point source of pollution designation 
was, quite frankly--if we are going to get in and do good 
timbering, we have to re-open some of the roads. A lot of our 
roads were shut down in the 1990s. Thirty percent of National 
Forest roads were shut down in the 1990s by an Administration, 
and I am hoping that this non-point source of pollution would 
help us get more roads.
    And, finally, the categorical exclusion, which we granted 
for routine activities on the forests, but, quite frankly, we 
were sucking money out of timbering, and harvesting, and 
production of green timber sales. Stewardship contracting is 
good, but it is the green timber sales that really makes the 
most progress, and helps, financially, in rural communities. So 
the categorical exclusion for routine activities I hope will 
help strengthen the budgets. In the end, we won't be taking 
monies.
    So those are at least three tools we provided in the farm 
bill. Just real briefly, I didn't know if you had any update on 
any of those three.
    Secretary Vilsack. We are moving forward on the Bio-
Preferred Program. In fact, I have this on the list that I ask 
our folks on a monthly basis about when progress is being made. 
And we are looking at guidelines for designating those entities 
sometime summer to late summer.
    Mr. Thompson. Great.
    Secretary Vilsack. I am trying recall the issue of roads, 
and, honestly, right now I am having a hard time remembering--
--
    Mr. Thompson. Well, of course, we are pushing this into a 
point source----
    Secretary Vilsack. Right.
    Mr. Thompson.--pollution designation, which means we 
wouldn't be able to get in to access the natural resources of 
the forest.
    Secretary Vilsack. I will have to get back to you on it. I 
think there has been progress on that, but I want to make sure 
that I give you the right answer on that, so I will ask staff 
to get back to you.
    On the categorical exclusion, we definitely want to move 
forward on that. We have designated areas where that can be 
used, and we are looking at not just the 3,000 acres that are 
involved in that. We have, as I said, 45 million acres.
    Mr. Thompson. Correct.
    Secretary Vilsack. To your point earlier, there is plenty 
of blame to go around here. This is not about blame. It is 
really about what we do about this.
    Mr. Thompson. Where we go in the future.
    Secretary Vilsack. And so we are aggressively using this, 
and we are aggressively looking at ways in which we can comply 
with all the requirements, and evaluations, and assessment 
requirements, but also get this thing moving.
    Mr. Thompson. Well, I look forward to working with you as 
we transition away from burning money to growing money, so 
thank you.
    The Chairman. The gentleman's time has expired. Mr. 
Secretary, I have a second question I want to ask you really 
quickly. It is rumored that the Dietary Guidelines Advisory 
Committee----
    Secretary Vilsack. Yes.
    The Chairman.--is wanting to eliminate red meat from our 
diets as a part of those guidelines. Coming from cattle 
country, I am a little fired up about that. I hope that the 
whole panel is focused on nutrition science in developing those 
guidelines. Can you talk to us a little bit about if, in fact, 
you have all the authorities you need to insist that it is 
nutrition science that drives that train?
    Secretary Vilsack. Yes, and the operative word of your 
question was rumored. That is just not the case.
    The Chairman. Well, with reducing portion sizes, all 
those----
    Secretary Vilsack. No, first of all, these are 
recommendations, which the Department of Health and Human 
Services, and Department of Agriculture are free to accept, 
reject, or modify, based on, ultimately, the decision-making 
that we are responsible for. Second, these folks get together, 
they look at a literature review of the latest science. It is 
supposed to be driven by science, and it needs to be driven by 
science. There are a lot of issues that have to be resolved 
yet. This is by no means finalized.
    The Chairman. Okay.
    Secretary Vilsack. And then last, but not least, I would be 
surprised if the recommendations relative to meat are 
fundamentally different than they were in previous guidelines.
    The Chairman. Okay. Can you give me a sense of what the 
timeline is, and the steps between here----
    Secretary Vilsack. Sure.
    The Chairman.--and that final recommendation and report, 
whatever it is that goes on?
    Secretary Vilsack. I think that we will be getting the 
recommendations, rather, very soon, within a matter of weeks, 
if not days. Then our team basically begins the process of 
working collaboratively with HHS, and they are the lead agency 
in this go-round.
    The Chairman. Okay.
    Secretary Vilsack. I would anticipate and expect by the 
fall to early winter we have whatever the guidelines are going 
to be.
    The Chairman. All right. Well, again, we have mentioned 
this science-based decision-making process, and nutrition 
science ought to drive the train, and not sustainability, or 
environmental things, or other things like that. It ought to be 
nutrition based science, so I appreciate that. Mr. Peterson has 
one more question.
    Mr. Peterson. Thank you, Mr. Chairman. When I was out, I 
apologize, but I was talking to our State DNR Commissioner, and 
he reminded me, this issue where the court stopped the wolf 
management system in Minnesota, and Wisconsin, and Michigan. 
Hopefully the Fish and Wildlife is going to appeal this, 
although they have not told us, and it has to be done pretty 
quick, so whatever you could do there.
    But his concern is that if we turned over the management to 
the state, and they were using that system to trap and hunt the 
wolves to keep them in line. Now that they have been put back 
on the endangered species list, or whatever they have done, 
their concern is that there is no funding for the Wildlife 
Services situation in Grand Rapids. Apparently you had $\1/2\ 
million in your budget for Wildlife Services for wolf control, 
and you transferred that, because there wasn't need anymore or 
something. And so his question is, in light of what happened 
with this court case, is there going to be a way that we can 
get money back into Wildlife Services to deal with this?
    Secretary Vilsack. There was a little over $700,000 that 
was essentially taken out in the Fiscal Year 2011 budget 
process, and I am not sure whether we took it out or you all 
took it out, but in any event, it was taken out.
    We are currently providing technical assistance to 
producers, and we will, obviously, be careful in how we are 
providing resources and prioritizing those, but we are still 
able to provide technical assistance.
    Mr. Peterson. What does that mean?
    Secretary Vilsack. Well, basically providing information as 
to how they might be able to control against predators, and if 
they have a predator problem, the possibility of partial or 
full reimbursement for losses.
    Mr. Peterson. Now, they were using the money to hire 
trappers, so would technical services include that?
    Secretary Vilsack. I don't want to say yes or no to that 
because I am not sure of the answer, so let me get back to you.
    Mr. Peterson. That is what they need. There are some 
trappers out there----
    Secretary Vilsack. Okay.
    Mr. Peterson.--so I wanted to put it on your radar, that it 
is a big issue out there. And the other thing, in the previous 
discussion we had on CRP, our State DNR Commissioner 
corroborated what I was trying to bring up to you about where 
this stuff could end up, so I would request you--if you could, 
if you could have your people talk to the state? Because they 
had a big summit out there on CRP, and they have some of the 
same concerns that I have. And if you could have your people 
visit with them? And they have some good ideas about what maybe 
should be looked at, going forward.
    Secretary Vilsack. This would be the DNR of Minnesota.
    Mr. Peterson. Yes.
    Secretary Vilsack. Okay.
    Mr. Peterson. State DNR, yes.
    Secretary Vilsack. Okay.
    Mr. Peterson. Thank you, Mr. Chairman.
    The Chairman. Mr. LaMalfa, the Secretary has a meeting at 
1:00, so be very brief.
    Mr. LaMalfa. Yes, sir, thank you. I did not get another 
shot, so one more time on the drama with Waters of the United 
States, what we have is pretty clear, pretty sensible section 
404 exemptions on what a farming activity is, with regard to 
plowing, disking, land use, planting, things like that, and 
that is what is not being interpreted well, to reasonable 
people. So we really need your strong voice in those 
discussions you have with fellow Secretaries, and in the 
Administration. We really need that help on that, because they 
are doing it to us up in the district at home.
    Coming back to the ports issue here, please get the word 
out, with additional force with Secretary of Labor and others 
in the Administration that have a piece of that, because we 
have citrus in my state, and others, they are going to go bad, 
as well as the almonds I mentioned that are sitting on the 
dock. And I will finish on the almonds.
    I slipped you a note, in case I didn't get a chance to talk 
to you again, on almond exports to Pakistan, and there is a lot 
of funny business going on with that, and how they are also 
getting pushed in through India without our tariffs, without 
our pricing on that. So they are underselling the value of our 
almonds, mislabeled as some other fashion. So we will need to 
have that discussion in the USTR to help make sure that that 
the integrity of that trade with our almonds going over there 
is held in place, and----
    Secretary Vilsack. We will make sure that they know you are 
concerned about this.
    Mr. LaMalfa. Okay. Congressman Denham, my colleague, is 
also very interested in that too as well.
    Secretary Vilsack. Yes, I have it.
    Mr. LaMalfa. So, thank you, Mr. Chairman, and thank you, 
Mr. Secretary. I appreciate the indulgence.
    The Chairman. I thank the gentleman. Ranking Member, you 
have a----
    Mr. Peterson. Mr. Secretary, thank you so very much. I want 
to reiterate what I said at the beginning of the meeting. You 
and your team did a great job on implementing the farm bill to 
date, and I don't want any kind of nits and nats remain to 
cause us to lose sight of the very hard work that went into not 
having nits and nats in a lot of other places.
    But as we go forward, there will be some things that we 
will need to have conversations with, but I want to thank you, 
your team, Brandon Willis over at RMA as well, for the work 
that they did on getting us to where we are today, and we 
shouldn't discount all that other hard work that kept it from 
being a problem, should we have anything like that, going 
forward. So thank you for your views today. We all share a keen 
interest in a vibrant rural America, and it is based in 
production agriculture at its core, and so we all share that 
goal. And I appreciate you being here today, and I appreciate 
the working relationship that we have had so far, and that we 
intend to have in the future.
    Secretary Vilsack. Thank you. Mr. Chairman, I appreciate 
the opportunity, and certainly look forward to working with you 
and the Committee.
    The Chairman. All right. Under the rules of the Committee, 
the record of today's hearing will remain open for 10 calendar 
days to receive additional material and supplementary written 
responses from the witness to any question posed by a Member. 
This hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 12:49 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
                          Submitted Questions
Response from Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
        Department of Agriculture
Questions Submitted by Hon. K. Michael Conaway, a Representative in 
        Congress from Texas
    Question 1. During consideration of the farm bill it was estimated 
that CC would affect a very limited number of producers. What is the 
number of producers that have been notified (total and per state) that 
they don't have an AD-1026 on file in order to be eligible for crop 
insurance premium subsidy?
    Answer. In December 2014, the Risk Management Agency sent letters 
to those (see chart below) that were identified as possibly not having 
an AD-1026 on file. However, this is not necessarily an accurate 
reflection of the number of producers affected by conservation 
compliance as many producers may have received multiple letters due to 
the fact that a producer could be a member of several entities such as 
a corporation or LLC. Further, some of these individuals and entities 
may no longer farm or be in existence. Therefore, a significant amount 
of the letters went to individuals or entities that may not actually 
need to file an AD-1026, but this methodology was the only way to 
ensure that everyone was notified. The cost benefit analysis associated 
with the interim conservation compliance rule estimated 16,000 to 
25,000 persons or entities would be impacted by the expanded 
requirements, and that slightly less than \1/3\ of those producers will 
need a conservation plan.

                            Producer Letters
------------------------------------------------------------------------
      State               Sent              State             Sent
------------------------------------------------------------------------
      Non-U.S.                 12                 MT               628
            AK                 15                 NC             1,007
             AL               378                 ND             2,013
            AR                551                 NE             2,582
            AZ                265                 NH                33
            CA             11,029                 NJ               111
            CO              1,058                 NM               221
            CT                124                 NV                83
          D.C.                  4                 NY               845
            DE                 48                 OH             1,346
             FL             3,196                 OK               931
            GA              1,118                 OR               791
            HI                 67                 PA               716
            IA              2,853                 RI                13
            ID                530                 SC               353
             IL             3,333                 SD             1,222
            IN              1,221                 TN               694
            KS              3,140                 TX             5,401
            KY              1,468                 UT                64
              LA              506                 VA               486
            MA                256                 VI                 1
            MD                168                 VT               153
            ME                170                 WA             2,261
            MI              1,163                 WI             1,376
            MN              2,965                 WV                51
            MO              2,260                 WY               211
                                                       -----------------
            MS                418           Total               61,909
------------------------------------------------------------------------


    Question 2. Does the USDA support working in partnership with the 
Private Sector regarding investments in rural infrastructure and 
projects to provide essential services?
    Answer. Yes, USDA is working to ensure that rural communities have 
increased financing options for investments in rural infrastructure and 
essential services. For example, in July 2014, the White House Rural 
Council, Chaired by USDA Secretary Vilsack, convened the inaugural 
Rural Opportunity Investment Conference (ROI) to promote the investment 
opportunities that exist throughout rural America. At the event the 
Rural Council announced a new public private partnership to drive more 
investment to rural infrastructure. The U.S. Rural Infrastructure 
Opportunity Initiative represents a new approach to catalyzing private 
investment in infrastructure projects in rural America.
    USDA currently uses a variety of ways to encourage public-private 
partnerships to provide affordable and sustainable infrastructure 
projects through financing and technical assistance. StrikeForce was 
launched in 2010 as a pilot project to strengthen economies. Since 
2010, StrikeForce teams have collaborated with more than 500 community 
partners and public entities across twenty states to bring targeted 
assistance to rural areas experiencing chronic poverty. USDA's Rural 
Utilities Service funds projects and provides training in rural areas 
to ensure the delivery of quality water and wastewater service, 
necessary for healthy, growing rural communities.

    Question 3. Wouldn't the Public-Private Partnership model be 
enhanced if a more balanced budget allocation were applied to the 
guaranteed lending program rather than the USDA being the sole lender 
with the taxpayers' money entirely exposed through the direct loan 
program?
    Answer. The direct lending done by the Federal government occurs 
primarily to achieve a policy goal that is not be fulfilled by the 
private sector or through loan guarantees. This is the case with USDA's 
direct loans. Many of USDA's direct lending programs were established 
to serve those families, farmers, and communities whose rural and 
economic condition do not afford them access to private lending. Many 
of these programs have a ``credit elsewhere test''. The public-private 
partnerships found in the guaranteed lending programs administered by 
RD and FSA are robust and growing. In addition, the Department has 
successfully used Community Facilities (CF) Direct funds to leverage 
over $1.2 billion of private investment into 335 of the CF Direct 
projects built between FY11 and FY14. Every year CF Direct loans 
combine with hundreds of millions from institutional investors and the 
capital credit markets to strengthen investment in critical community 
infrastructure projects spurring economic growth, job creation and 
access to improved health care, education and other critical services. 
Working together, the direct and guaranteed programs expand access to 
credit into markets not well served by private lenders, in a way where 
the underwriting risk is captured in the subsidy rate and budgetary 
decisions to fund these programs to achieve the policy goals can be 
debated with the cost to the taxpayers clearly defined.

    Question 4. Doesn't the probability of loan defaults become 
elevated if the Private Sector is excluded from shared underwriting, 
monitoring and overall risk?
    Answer. Consistent with Federal policies, credit assistance should 
be targeted to avoid displacing private markets, and where assistance 
is warranted, partial guarantees through private lenders should be used 
unless a deeper subsidy is necessary to meet policy goals, or loans on 
reasonable financing terms are not available. Moreover, there is no 
evidence that Federal direct loans default more frequently than private 
sector loans in a similar risk category. USDA's careful underwriting 
and servicing standards maintain strong portfolio performance with 
modest delinquency and foreclosure rates.

    Question 5. Considering the burden on the Agency's reduced staff to 
deploy a $2.2 billion in Community Facilities Direct loans annually, 
how can USDA assure this Committee that monitoring loans made in prior 
years remains a top priority?
    Answer. The Community Facilities (CF) Direct Loan program continues 
to make the soundness of its portfolio a top priority, as shown by 
consistently low delinquency and default rates. RD is cognizant of our 
responsibilities to properly manage credit risk, and has not changed 
its strong underwriting criteria and practices despite the opportunity 
presented by increased program levels. It should also be noted that CF 
staffing was increased by 44 percent in the first quarter of FY15. All 
of the new hires are underwriters.
    CF Direct Lending is also expanding its monitoring of loans through 
public private partnerships (PPP) with institutional investors and the 
capital credit markets. PPPs bring additional underwriting and 
monitoring to a transaction, and distribute risk among the partners. CF 
has also used the PPPs to improve its knowledge and technical expertise 
on financing large and complex community infrastructure projects and 
build long-term partnerships for future transactions, servicing current 
loans, and communicating with applicants and borrowers.

    Question 6. Since commercial banks are highly regulated by Federal 
or state authorities, won't the safety and soundness of the USDA's loan 
portfolio be strengthened when partnering with the Private Sector 
instead of ``going it alone''?

    Question 6a. Consider the following when partnering with the 
Private Sector:
    Commercial bank partners will underwrite the entire risk of the 
loan, not just their share to determine the financial health and 
repayment ability of the borrower. Their conclusions are submitted to 
the USDA for their secondary review and concurrence thus easing the 
burden on Agency staff, especially for highly complex situations such 
as hospital loans.

    Question 6b. Risk underwriting will follow bank policies and 
procedures which are examined annually by Federal or state regulators 
to ensure safe and sound lending practices (banks will have ``skin'' in 
the game).

    Question 6c. Continuous monitoring is required after loan 
origination as the risk of default and loss is inherent throughout the 
life of a loan. Partnering with the Private sector enhances the 
proactive nature and effectiveness of this critical area of credit 
management.

    Question 6d. In the event of a default, Private sector partners 
collaborating with the Agency provide additional attention and 
strategies to correct deficiencies and avoid loss.
    Answer 6-6d. USDA-RD is not going it alone. The largest portion of 
RD's loan portfolio comes from its Guaranteed Loan programs. These 
loans are originated by commercial lenders in accordance with their 
regulators. For those markets commercial lenders do not serve, loans 
may be originated directly by RD in accordance with an equally 
effective set of laws, regulations and practices that assure the safety 
and soundness of its portfolio. The Department welcomes private sector 
lending to families and communities whose rural and economic conditions 
do not currently afford them access to commercial credit.

    Question 7. I am sure you are aware of the many concerns that the 
agriculture community have raised over the Administration's waters of 
the U.S. proposed rule. The rule, as proposed, will have far reaching 
consequences for the agriculture community. Can you give us some 
examples of how have you advocated for rural America throughout this 
rulemaking process?
    Answer. USDA is aware that its role in the development of waters of 
the U.S. proposed rule is one of informing and educating, and that the 
authority and responsibility for developing and implementing 
regulations to achieve the objectives of the Clean Water Act reside 
wholly with the Environmental Protection Agency (EPA) and U.S. Army. 
Throughout the rulemaking process, USDA consistently emphasized 
agriculture's outstanding stewardship track record in delivering water 
resource benefits locally, regionally, and nationally. The commitment 
in the proposed rule to maintaining and clarifying existing 
agricultural exemptions underscored the recognition of agriculture as a 
valuable partner in achieving clean water objectives. USDA also 
highlighted the need for straightforward language for the many complex 
concepts contained in the proposed rule, for example in definitions of 
tributaries and other waters, as the agricultural community has 
consistently called for clarity.

    Question 8. What role will USDA play during the interagency review 
of the waters of the U.S. proposed rule?
    Answer. USDA is invited to review and provide comments on Waters of 
the U.S. rule via the Office of Management and Budget (OMB) interagency 
review process. The Department is in the process of reviewing that 
draft currently and will be providing comments to OMB for EPA and Army 
for consideration as it works to finalize the rule. USDA's objective in 
this process is to continue to ensure the impacts on agriculture are 
fully evaluated.

    Question 9. Do you feel that stakeholders in rural America where 
properly consulted in the development of the waters of the U.S. 
proposed rule?
    Answer. The Federal Government has established processes and 
procedures for developing regulations that allow for public input. In 
general, the public is normally provided 60 days to provide comments on 
a proposed rule. However, recognizing the significant public interest 
in this rulemaking, the EPA and Army, extended the comment period on 
the proposed rule several times. All involved recognize that this is an 
important rule with potential to affect many sectors in achieving its 
objective of good water quality for all Americans, rural and urban 
alike.

    Question 10. The Committee is aware of APHIS' proposed rule to 
establish a performance standard for authorizing the importation and 
interstate movement of fruits and vegetables. This appears to be a 
significant modification of the current process for reviewing import 
petitions by foreign governments, as it eliminates certain economic 
analysis requirements and also eliminates interagency review. 
Therefore, the Committee is interested in how the important rights of 
due process that are embedded in the current process will be maintained 
under this modified proposal. Additionally, the Committee would like an 
explanation as to why this modification only addresses fruits and 
vegetables rather than the full scope of import petitions for which 
APHIS is responsible.
    Answer. In September 2014, USDA's Animal and Plant Health 
Inspection Service (APHIS) proposed a rule to streamline the approval 
of fruit and vegetable imports into the United States and the 
interstate movement from Hawaii and the U.S. territories. Reducing the 
regulatory burdens associated with our import approval process will 
give us more leverage with trading partners when negotiating more 
streamlined approvals for U.S. exports and access to new markets, to 
the benefit of U.S. producers. By putting in place a process that will 
allow us to be more responsive to our trading partners' requests, we 
expect to obtain quicker and more immediate access for U.S. commodities 
into their markets.
    Under the proposed rule, instead of codifying region- and 
commodity-specific requirements in the Code of Federal Regulations, 
APHIS would use a streamlined noticed-based process. However, USDA 
would continue to use the same rigorous, science-based pest risk 
evaluations it does now when it reviews import requests. Further, the 
public would still be able to provide comments on the Agency's proposal 
at two separate times: for 30 days when APHIS publishes the draft pest 
risk assessment, and for 60 days when APHIS publishes the notice. 
APHIS, as it does under the existing process, would not take final 
actions before considering and responding to the public's comments. 
APHIS would also ensure that the Office of Management and Budget and 
other interested Federal agencies receive advanced notice of APHIS' 
actions and have the opportunity to provide input. APHIS would also 
continue to analyze the economic effects of a potential pest 
introduction as part of the pest risk analysis process.
    In developing the proposed rule, APHIS actively solicited feedback 
from the public and reached out to explain the need for the rule; APHIS 
twice extended the comment period to allow stakeholders more time to 
provide comments and held a webinar with interested stakeholders to 
address their questions. APHIS is currently reviewing the comments and 
input it has received--including comments expressing some of the same 
concerns in your question--and will address them and incorporate them, 
as appropriate, when publishing a final rule.
    Although the 2014 proposed rule only addresses fruits and 
vegetables, it is not the only instance of APHIS using this type of 
approach. A 2007 rule established a notice-based process for certain 
fruits and vegetables that do not have region- or commodity-specific 
phytosanitary import requirements, such as irradiated or fumigated 
fruit. There are other instances of APHIS using this notice-based 
approach. This includes notices that recognize the animal health 
disease status of certain countries; notices to prohibit entry of 
certain articles under the plants-for-planting regulations; and notices 
that quickly add or remove acceptable treatments for imported 
commodities. APHIS will continue to look for opportunities to 
streamline its regulations to provide more flexibility and 
adaptability, especially where the regulations lay out clear 
performance-based standards.

    Question 11. The President's FY16 budget request states that under 
the goal of enhancing mitigation capabilities, APHIS provides technical 
assistance and develops new mitigation tools and strategies to address 
plant pest outbreaks. In FY14, APHIS spent $17.6 million on 73 projects 
in this goal area.
    How many of these projects addressed Mexfly exclusion and 
eradication?
    Answer. The projects referenced in the question are specific to 
those funded by section 10007 of the 2014 Farm Bill, Plant Pest and 
Disease Management and Disaster Prevention Programs. In 2014, there 
were two Farm Bill projects for Mexfly exclusion and eradication, 
totaling $1.793 million. There is a separate appropriated line item 
that specifically includes fruit fly activities.

    Question 11a. What was the total funding level allocated to Mexfly?
    Answer. Aside from the farm bill funding mentioned above, APHIS 
funds ongoing activities to detect and respond to exotic fruit flies, 
including Mexfly, from the Specialty Crop Pests line item. In FY 2014, 
APHIS spent $56.175 million on fruit fly activities, with $11.6 million 
of this amount going towards Mexfly eradication and prevention 
activities. APHIS plans to use $59 million from the Specialty Crop 
Pests line item in FY 2015 for fruit fly activities overall and 
anticipates spending a similar amount on Mexfly as in FY 2014.

    Question 12. The Mexican Fruit Fly Rearing Facility located in 
Edinburg, Texas is a critical component of the USDA APHIS Mexfly 
Eradication program. However, APHIS's ability to effectively manage and 
prevent Mexfly populations has been hindered due to the condition of 
the Edinburg sterile fly production facility, which is nearly 30 years 
old.
    How does this facility rank based on the APHIS facility condition 
index (FCI)?
    Answer. The last FCI rating evaluation of the Edinburg, Texas 
sterile fly facility was in 2011. The facility scored 0.21, which 
placed it into the category of USDA facilities that need the most 
repair.
    Based upon the results of the FCI, and the needs of the sterile 
insect program (notably a need for an increased insect-rearing 
capacity), APHIS is developing a plan for potential construction or 
renovation of the facility.

    Question 13. PPQ requires 200 million sterile fly releases per week 
in order to manage Mexfly populations in Texas, but as a result of 
constant problems and lack of production capacity at the Texas facility 
this goal is never achieved. In addition, Mexfly populations have 
significantly increased in Mexico within the last year, meaning it is 
imperative that USDA take immediate action to reduce the threat of 
Mexfly in Texas and other citrus producing states.
    How many sterile flies are currently being released on a weekly 
basis?
    Answer. On average, APHIS is releasing approximately 100 million 
sterile male Mexflies per week produced by the Texas facility. In 
addition, APHIS brings in approximately 70 million sterile male 
Mexflies per week from the facility in Guatemala to supplement the 
Texas program.

    Question 13a. How many more are needed to address increased Mexfly 
populations?
    Answer. Based upon the technical review APHIS has conducted of the 
needs of the fruit fly program in the Lower Rio Grande Valley, the 
Agency believes the total needs are 400 million sterile male Mexflies, 
over 200 million more than it currently produces. APHIS recognizes that 
the demand for sterile insects in the Lower Rio Grande Valley is unable 
to be met by the existing sterile insect facility in Texas. 
Accordingly, the Agency is preparing a report to evaluate how best to 
meet those needs and what resources may be required.

    Question 14. It has been reported that APHIS is in the process of 
developing a construction and renovation plan for the Edinburg sterile 
Mexfly production facility.
    When will this report be finalized?
    Answer. APHIS expects the report on design and construction 
specifications to be completed in summer of 2015.

    Question 14a. What can you tell me about USDA's plans for upgrading 
this facility? More specifically, what is the timeline for construction 
and when is the earliest date the facility can be completed? What 
resources are needed?
    Answer. APHIS recognizes that the demand for sterile insects in the 
Lower Rio Grande Valley is unable to be met by the existing sterile 
insect facility in Texas. Accordingly, the Agency is preparing a report 
to evaluate how best to meet those needs and what resources may be 
required.

    Question 14b. What is APHIS strategy for future investments?
    Answer. APHIS recognizes that all of the fruit fly rearing 
facilities in Florida, Texas, and California are aging facilities and 
are likely in need of significant improvement or replacement. A 
systematic review of facility needs is being conducted to develop 
technical specifications, the statement of work, and other requirements 
for these three facilities. The information will be used in developing 
future plans for ensuring adequate production in all three facilities.

    Question 15. In order to limit the economic damage caused by 
Mexfly, PPQ has successfully contained, controlled, eradicated pest 
populations and lifted Federal quarantines within the span of one 
growing season. However, on January 23, 2014, the Texas Department of 
Agriculture filed an emergency quarantine that has since been extended 
through January 2015.
    What steps has APHIS taken to address this quarantine?
    Answer. To prevent the spread of Mexfly to noninfested areas of the 
United States, APHIS and the Texas Department of Agriculture 
established a Mexfly regulated area that restricted the interstate 
movement of regulated articles in the quarantine area. APHIS has 
activated its emergency response protocols for fruit fly which include 
mobilizing Agency personnel to the Brownsville area and concentrating 
sterile fly resources in this area. The emergency response also 
includes intensive trapping and the use of chemical treatments. APHIS 
and the Texas Department of Agriculture are implementing additional 
strategies which include ``new attract and kill'' stations and targeted 
insecticidal ground sprays.

    Question 15a. How does APHIS intend to improve Mexfly management 
and eradication efforts?
    Answer. APHIS will continue with eradication efforts until full 
eradication is achieved. Central to this is the ongoing evaluation of 
the program's technical and infrastructure needs referenced in the 
previous question. Additionally, the Mexfly Technical Team, which 
includes APHIS and its international partners, is closely evaluating 
the outbreak and making recommendations to enhance detection and 
control.
    APHIS is also working to establish systems in Mexico to reduce the 
influx of the Mexfly population from Mexico into the United States, and 
is conducting risk analysis to understand the epidemiology of the 
outbreak in order to respond more effectively.

    Question 16. We keep hearing from NIFA about an ``iterative 
process'' to improving the SCRI review. What recommendations have been 
received and how are they being implemented?
    Answer. NIFA received 18 recommendations from the Specialty Crops 
Committee of the NAREEE Advisory Board and provided detailed responses 
to each recommendation. The Specialty Crops Committee recommendations 
and NIFA's responses are included in the Farm Bill mandated Secretary's 
report to the Congress, which is currently under development.

    Question 17. The farm bill specifically included the statement, 
``final awards determinations should, to the maximum extent 
practicable, emphasize the results of the merit/relevance review 
process.'' How did each grant application score on merit/relevancy 
review and how did this impact the final awards decision?
    Answer. For the Specialty Crop Research Initiative Program, six 
page pre-applications were evaluated by panels of industry experts 
using a specific and consistent criteria for relevancy. The relevancy 
criteria include the level of stakeholder involvement in developing 
project goals and program evaluation, their continued engagement in the 
activities, and whether information developed by the project team will 
be delivered to stakeholders in ways that allow them to implement new 
and/or improved practices. These panels decide which pre-applications 
would be invited to submit full proposals for the program. If a pre-
application was not deemed highly relevant, it was not invited to 
submit a full proposal. Full proposals are first evaluated for 
scientific merit. After the scientific merit discussion, the panel 
considers both evaluations (relevancy and scientific) and the comments 
of the relevancy reviewers to decide on the final ranking of priority 
for funding. Final award recommendations are developed by consensus 
after all evaluations are considered. The merit review panel also has a 
specific set of criteria on the scientific merit, including the 
potential impact of the work on the industry and outreach to the 
stakeholders.

    Question 18. As you know, Congress has indicated its very clear 
intent through the most recent Farm Bill that industry be substantively 
and significantly involved in the review of the competitive grants 
programs including, but not limited to the Specialty Crop Research 
Initiative. Please tell us specifically what changes you are making in 
this year's Request for Proposals to ensure that the projects funded 
are industry's top priorities.
    Answer. This year, content of pre-applications and full 
applications, as well as the process includes, industry representation. 
Currently SCRI has two separate and sequential review stages: relevancy 
review by the industry representatives and merit review by scientists 
from academia and industry. Only the preliminary proposals rated highly 
relevant by the industrial representatives are invited as full 
proposals. The merit review panel also contains industry scientists and 
considers both relevancy review panel comments as well as scientific 
merit in determining the ranking. Thus industry is involved in the 
initial selection of project pre-proposals as well as in final ranking 
of the projects for funding.
    NIFA has always strived to ensure and improve industry involvement 
in the SCRI review process. In addition to the involvement of industry 
representatives during the relevancy review, industry scientists have 
been, and will continue to be, involved in the scientific merit review 
process. Whenever possible, other NIFA competitive programs include 
industry representatives and scientists on the review panels. NIFA 
offers several methods to submit stakeholder input including webinars 
and ongoing solicitation of comments on requests for proposals. NIFA 
considers this feedback when new requests for proposals are developed.

    Question 19. Please describe in detail for us how the industry 
ranking of the most recent proposals to the SCRI will be conducted.
    Answer. The Request for Applications, posted March 3, 2015, (http:/
/nifa.usda.gov/sites/default/files/rfa/15_SCRI%20final%20to%20post.pdf) 
details how NIFA will conduct the industry relevancy review and the 
scientific merit review and how the outcomes of these processes will be 
combined to develop a funding recommendation. There are 3 points in the 
overall process where industry ranking will be considered. Industry 
relevancy reviewers will recommend which applicants will be invited to 
submit full applications. NIFA intends to abide by those 
recommendations.

    Question 20. Please tell us exactly how the industry rankings were 
considered during the scientists' review of the proposals. Were all of 
the proposals considered by the science panel regardless of their 
industry rankings? Were the industry rankings communicated to the 
science panel reviewers?
    Answer. SCRI is competed as two distinct areas: SCRI and the Citrus 
Disease Research and Extension program (CDRE). For both programs in 
2014, applicants were invited to submit full applications based on the 
recommendation of the industry relevancy review panels. Presumably, the 
industry panels only recommended submission of applications that were 
highly relevant to their industries. All applications reviewed by the 
scientific merit panels contained the pre-application containing the 
Stakeholder Relevance Statement, and the reviews and comments from all 
industry reviewers. CDRE was competed after NIFA consulted with the 
SCC, so industry rankings were considered as described in the SCRI 
Management Plan.

    Question 21. Mr. Secretary on November 13, 2014, the U.S. Forest 
Service issued a press release (http://www.fs.fed.us/news/releases/
forest-service-exceeds-yearly-forest-restoration-goals) stating that 
you had exceeded your yearly restoration goals for Fiscal Year 2014. 
Among other things, the Forest Service claimed that they had maintained 
or restored 2.9 million acres and resulted in 2.8 billion board feet of 
timber volume sold. Since over 1 million acres appear to have been 
prescribed burned (89% of which was in the Southeastern Region), please 
provide for the committee the following information:
    Of the 2.8 million acres on which the Forest Service conducted 
restoration work, how many acres:
    Were treated with prescribed fire? Which Regions were these 
treatments in?
    Answer. There were a total of 1,357,791 acres treated with 
prescribed fire.

------------------------------------------------------------------------
               Region                            Rx Fire Acres
------------------------------------------------------------------------
                     01                                24,559
                     02                                19,968
                     03                                61,681
                     04                                38,422
                     05                                23,522
                     06                                64,084
                     08                             1,045,312
                     09                                80,040
                     10                                   203
                                     -----------------------------------
  Grand Total.......................                1,357,791
------------------------------------------------------------------------


    Question 21a. Were treated by wildfires being allowed to burn 
within prescription, or allowed to burn for resource benefit?
    Answer. For 2014, 246,018 acres burned by wildfire were judged to 
have met land management objectives and were counted as fuel treatment 
accomplishments. NOTE: The 2009 guidance for federal fire policy does 
not categorize certain fires as ``beneficial'' at their onset as was 
the previous policy. Current policy guidance does continue to recognize 
that fire effects can produce beneficial results, however it does not 
require that there be explicit management intent to seek beneficial 
outcomes from a wildfire in order to count its' effects as beneficial. 
As a result, many wildfires are found to produce effects that are 
beneficial to natural resource objectives even though protection 
concerns required that they be suppressed either in part or in whole. 
At the discretion of the local Forest Supervisor, any wildfire 
initiated from a natural ignition source, such as lightning, may be 
assessed after the fire has been controlled to determine where fire 
effects have improved resource conditions and where they did not.

    Question 21b. Were treated during fire suppression operations by 
ignition of backfires or other burnout operations?
    Answer. We do not attempt to attribute acres burned to either the 
wildfire or firefighting efforts, because such estimates would be 
highly suspect and unreliable. When timing and conditions allow, 
firefighters may design their fire suppression actions with the intent 
of controlling the intensity and patterns of burning so as to minimize 
the negative effects and possibly even improve forest conditions. 
However, the convergence of the wildfire and any burnout actions 
initiated by firefighters typically occurs out of sight of the 
firefighters because safety concerns do not permit personnel to linger 
near the convergence zone; smoke, vegetation and terrain obscure the 
view from any vantage point; the convergence may occur at night or 
several days or even weeks after the burnout occurred, so we do not 
have the means to track the information requested.

    Question 21c. Were treated by mechanical removal of hazardous 
fuels?, including:

  i.  Removal of non-commercial trees or brush

  ii.  Removal of commercial timber that was sold pursuant to a timber 
            sale or IRTC

    Answer. 107,083 acres saw the removal of biomass which includes 
non-commercial trees and brush. ``Removal of Biomass'' is the physical 
removal of biomass from the site which is typically done by trucking 
the materials to a site where the biomass is stored for utilization. 
150, 951 acres were treated with commercial timber harvest. This 
includes acres treated through Integrated Resource Timber Contracts 
(IRTC).

    Question 21d. Were treated by other methods including:

  i.  Removal of noxious weeds

  ii.  Hand trimming of brush

  iii.  Treatment of lakes or streams to improve water quality.

    Answer. The number of acres treated on Forest Service lands for 
invasive plants (noxious weeds) was 229,587. In addition, 30,721 acres 
of lakes and 3,488 miles of streams were treated for water quality and 
aquatic habitat restoration. Forest Service does not discern between 
hand trimming/thinning and other methods of trimming/thinning nor do we 
discern between activities in brush vs. tree forms of vegetation. Any 
manipulation done by hand is lumped together with mechanical treatments 
according to the treatment classifications found in table below.

                                                      2014 Forest Service Hazardous Fuels Treatment Acres Accomplished by Region and Method
                                                                                            2014 \6\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Biomass                                                               Lop and    Machine Pile  Mastication
    Region        Rx Fire      Fire Use     Biological      Removal      Chemical      Chipping      Crushing       Grazing       Scatter         \1\       or Mowing     Thinning      Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
          01         24,559        51,788             0        11,711             0           212           140         4,500        10,950         4,102            0       17,573      125,535
          02         19,968         1,571             0        39,921            89           659           920         1,930        11,329         6,016            0       38,634      121,037
          03         61,681        63,833             0         4,985             0             0           514           534         5,754         6,003            0       54,789      198,093
          04         38,422        53,789             0         2,266             0         5,131         6,003         1,500        10,411         5,177           35       31,474      154,208
          05         23,522        35,876             0        11,561             0         2,703         2,794         1,974         4,334        14,352            0       54,927      152,043
          06         64,084        38,305             0        14,157             0         6,045         1,524             0        16,508        27,271          272      108,235      276,401
          08      1,045,312           842             0        11,163         6,519           605         3,158           610         2,276         6,023            0       78,955    1,155,463
          09         80,040            14             0        11,273           123         1,363            69           389         3,168         4,314            0       27,330      128,083
          10            203             0             0            46             0            52             0             0             0            99            0           43          443
          15              0             0             0             0             0             0             0             0             0             0            0            0            0
              ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 Grand Total      1,357,791       246,018             0       107,083         6,731        16,770        15,122        11,437        64,730        73,357          307      411,960    2,311,306
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Includes Recovery Act acres
\1\ FY14 Data Source: NFPORS Extract as of 11/01/2014 a.m.
\2\ Includes Hand and Machine Pile acres.


    Question 22. How many projects do you intend to implement this 
fiscal year under the Farm Bill Insect and Disease Treatment Areas 
authority? Please include how many acres you believe will be treated, 
and where those acres are.
    Answer. Currently, nine farm bill projects have been entered in the 
Agency's Planning Appeals and Litigation System (PALS) database. Seven 
are categorical exclusions and two are EAs. Two of the seven CEs have 
decisions associated with them, and the Forest Service plans to 
implement them this year. The estimated size of these two projects to 
be implemented in FY 2015 is approximately 700 acres. The initial 
projects were developed in California, Idaho, Montana, New York and 
Utah where the new insect and disease provisions were identified as 
appropriate tools to address insect and disease issues on units of the 
National Forest System and where the projects are in areas where there 
has been support from the state and other partners. These initial 
projects will help the agency and its partners better understand and 
implement the new CE authority while additional projects are 
identified, planned and implemented.

    Question 23. Please provide the Committee a detailed breakdown on 
CFLR project accomplishments, particularly:

  a.  The state of NEPA documentation on CFLR projects, including:

     Project selection date.

     Date of scoping initiation.

     NEPA documentation method selected (Decision Notice, 
            CE, EA, EIS).

     NEPA completion date (signed final EIS).

  b.  How many acres have actually been treated on each CFLR project.
    Answer. The agency has funded 23 projects through the Collaborative 
Forest Landscape Restoration Program. Through the CFLRP, the agency and 
partners have made significant progress in reducing wildfire threats 
while exceeding the 5 year target for timber volume sold by nearly 25 
percent. In addition to making 1.45 million acres more resilient to 
wildfire, the program improved the health of 1.33 million acres of 
wildlife habitat, and helped local economies support an average of 
4,360 jobs each year.
Questions Submitted by Hon. Rodney Davis, a Representative in Congress 
        from Illinois
    Question 1. Mr. Secretary, the U.S. Department of Agriculture's 
(USDA) Animal and Plant Health Inspection Service (APHIS) has proposed 
a new rule (``the proposed rule'') that would revise Agricultural 
Quarantine and Inspection (AQI) fees on commercial transportation 
arriving at U.S. ports. This proposed new rule would affect incoming 
aircraft, ships, trucks and railroad cars. According to the summary of 
the proposed rule, APHIS is:

          [We are] proposing to amend the user fee regulations by 
        adding new fee categories and adjusting current fees charged 
        for certain agricultural quarantine and inspection services 
        that are provided in connection with certain commercial 
        vessels, commercial trucks, commercial railroad cars, 
        commercial aircraft, and international passengers arriving at 
        ports in the customs territory of the United States. We are 
        also proposing to adjust or remove the fee caps associated with 
        commercial trucks, commercial vessels, and commercial railcars. 
        We have determined that revised user fee categories and revised 
        user fees are necessary to recover the costs of the current 
        level of activity, to account for actual and projected 
        increases in the cost of doing business, and to more accurately 
        align fees with the costs associated with each fee service.\1\
---------------------------------------------------------------------------
    \1\ Summary of Proposed Rule available at http://
www.regulations.gov/#!documentDetail;D=APHIS-2013-0021-0002 (last 
visited Feb. 11, 2015).

    However, according to certain industries, under the proposed fee 
structure, a single international passenger flight would pay somewhere 
between $225 and $1,800 in AQI fees. In contrast, an all-cargo flight 
(regardless of size and how much cargo it is carrying) would pay a flat 
fee of $225. Private flights (regardless of size and how many 
passengers or how much cargo it is carrying) would pay nothing at all. 
All flights--as you know--are subject to inspection.
    It is unclear to individuals and entities outside of government 
what level engagement APHIS had with industry and affected parties, 
prior to drafting the proposed rule. In the future, I would encourage 
APHIS and any other rulemaking body to engage in dialogue with affected 
parties prior to proposing rules.
    As to my questions and requests, please provide the following 
documents and information to the U.S. House Agriculture Committee and 
my personal office:

  b A narrative justifying the proposed fee structure and its failure 
        to account for commercial carrier's cargo size.

  b All documents and communications related to the analysis APHIS did 
        to determine the proposed fee structure.

  b All AQI cost data for both commercial cargo and passenger aircraft. 
        With regard to passenger aircraft, identify which AQI costs for 
        these flights are not covered by air-passenger paid AQI fees.

  b A narrative justifying APHIS' decision to collect amounts from air 
        passengers that exceed their inspection costs in order to fund 
        reserves rather than collect amounts from commercial air 
        passengers.

    Answer. USDA agrees that stakeholder engagement is an important 
part of rulemaking; and in that spirit, went to great lengths to 
educate interested parties and obtain their feedback about this rule. 
Throughout the process, APHIS held meetings with industry and affected 
parties to:

   Explore potential regulatory alternatives to adjusting user 
        fees,

   Determine the need for a formal review of AQI user fees,

   Share the user fee review methodology,

   Provide an overview of the detailed findings of the user fee 
        review,

   Explain the proposed user fee adjustments, and

   Receive feedback from affected stakeholders on the proposed 
        changes.

    In total, APHIS conducted six formal stakeholder meetings between 
2011 and 2015 along with numerous small group meetings with affected 
stakeholders upon request. In addition, APHIS published information on 
its site about the user fee review, including two reports prepared by 
Grant Thornton on the fee setting process and the comprehensive 
findings of the review. In April 2014, when APHIS published the 
proposed rule to adjust user fees, the Agency conducted extensive 
outreach to impacted and interested stakeholders. This included 
briefings for House Agriculture Committee staff and other congressional 
Committees; courtesy calls and direct emails to representatives of 
affected industries, national associations, and potentially interested 
industry groups; and a conference call with interested stakeholders. In 
addition, APHIS sent messages through the APHIS Stakeholder Registry to 
announce the proposed changes and inform stakeholders of upcoming 
stakeholder meetings. Messages sent via the Registry in 2014 and 2015 
were delivered to more than 11,000 unique subscribers.

  b A narrative justifying the proposed fee structure and its failure 
        to account for commercial carrier's cargo size.

    APHIS followed federal guidance, including OMB A-25, Government 
Accountability Office (GAO) guidance for fee setting, and Federal 
Accounting Standards Advisory Board Statement of Accounting Standards 
Number 4, to appropriately account for the AQI program costs used to 
determine the appropriate fees. The proposed fees represent the true 
cost to the Federal government for providing AQI services for 
commercial air carriers for cargo and passenger inspection. All 
arriving international commercial flights, except those specifically 
exempted under 7 CFR  354.3(e)(2) (exclusive government aircraft, 
emergency landings, etc.) are subject to inspection because they may 
pose a sanitary or phytosanitary risk and are therefore subject to 
paying the commercial airline user fees.
    In establishing AQI user fees, the proposed rule did not 
differentiate based on cargo size. Any cargo could carry insect pests, 
weed seeds, waste material from garbage, or other waste that is capable 
of harboring animal disease and may therefore be subject to inspection. 
Rather, the costs of our AQI activities were made contingent upon the 
time and effort required of APHIS and Customs and Border Protection 
(CBP) staff to perform those activities identified via activity based 
cost modeling. Those activities must be performed regardless of the 
size or volume of the shipment; therefore, the size of the shipment 
does not determine the amount of the fees.

  b All AQI cost data for both commercial cargo and passenger aircraft. 
        With regard to passenger aircraft, identify which AQI costs for 
        these flights are not covered by air-passenger paid AQI fees.

    The 2010, 2011 and 2012 actual cost data for both air passenger and 
commercial aircraft used in the model for calculating the proposed fees 
are available at http://www.regulations.gov/#!docketDetail;D=APHIS-
2013-0021.
    The air passenger fee covers the cost of inspections related to 
passengers and the passenger and crew compartments of the plane, while 
the commercial aircraft fee covers cargo-related inspection costs. 
Specifically, the air passenger fee covers the costs for, among other 
things, screening passengers upon arrival for agricultural products by 
CBP Agriculture Specialists and CBP Officers; inspecting baggage using 
CBP agriculture canines and specialized non-intrusive inspection 
equipment; inspecting the interior of the passenger aircraft; 
monitoring the storage and removal of regulated international garbage 
from the aircraft; safeguarding and disposing of any seized or 
abandoned prohibited agricultural products; and identifying pests found 
on prohibited agricultural products brought into the country by air 
passengers.
    The commercial aircraft fee charged to passenger flights covers, 
among other things, costs incurred in reviewing manifests and 
documentation accompanying incoming cargo; targeting higher-risk cargo 
for inspection or clearance; inspecting agricultural and agricultural-
related commodities, international mail, expedited courier packages, 
containers, wood packaging and other packing materials and determining 
entry status; inspecting the aircraft hold or exterior for 
contaminants, pests, or invasive species; identifying pests found 
during those inspections; and safeguarding shipments pending PPQ 
determination for treatment or final disposition. If cargo being 
transported on a passenger flight requires treatment due to pest 
infestation, there would be an additional fee for such treatment.

  b A narrative justifying APHIS' decision to collect amounts from air 
        passengers that exceed their inspection costs in order to fund 
        reserves rather than collect amounts from commercial air 
        passengers.

    The proposed air passenger fee is $4 per passenger--a reduction of 
$1 from the current fee structure--and represents the true cost to the 
Federal government for providing AQI services. Section 2509(a) of the 
Food, Agriculture, Conservation, and Trade Act of 1990 (21 U.S.C. 136a, 
FACT Act) authorizes APHIS to establish fees in a reasonable manner to 
recover funds spent on safeguarding activities. In addition to 
authorizing APHIS to collect user fees for inspection and related 
activities, the FACT Act directs APHIS to ensure that the fees cover 
the costs of administering the user fee program and maintaining a 
reasonable balance, also known as a ``reserve,'' to ensure that funding 
is available in the event that there are temporary reductions in the 
demand for AQI services leading to reduced fee collections, as was 
experienced in the past. As there are fixed costs (i.e., cost that do 
not fluctuate with demand for AQI services) that the program incurs, a 
reserve is needed to ensure continuity of service in times of reduced 
fee collection. This provides certainty to importers regarding the 
availability of inspection services. In addition, the FACT Act, as 
amended, also requires that the cost of AQI services with respect to 
passengers as a class should include the cost of inspections of the 
aircraft or other conveyance. In the case of air passengers, the 
inspection of the aircraft includes the passenger and crew 
compartments.

  b All documents and communications related to the analysis APHIS did 
        to determine the proposed fee structure.

    In April 2014, APHIS published the proposed rule, User Fees for 
Agricultural Quarantine and Inspection Services, with a 60 day comment 
period that was extended 30 days. APHIS made several documents 
available with the proposed rule outlining the data used and analysis 
conducted in support of the proposed fee structure. These documents, 
``Fee Setting Process Documentation and Recommendations, October 2011'' 
and ``AQI Fee Schedule Assessment and Alternatives, May 2012'' along 
with the approximately 250 stakeholder comments submitted on the 
proposal are available at http://www.regulations.gov/
#!docketDetail;D=APHIS-2013-0021.*
---------------------------------------------------------------------------
    * Editor's note: the docket, in toto is retained in Committee file.

    Question 2. Mr. Secretary, on the subject of pollinators and 
pollinator health, I have the following questions:
    What research is currently being conducted on proper habitat and 
nutrition for managed bees? Are forage and nutrition significant 
contributors to bee health? How significant is the Varroa mite problem 
for bee health and what steps is the Department taking to address this 
problem?
    Answer. Currently, investigations are underway through the 
Agricultural Research Service (ARS). These investigations study the 
nutritional needs of colonies throughout the year and the effects of 
nutritional stress on immunity, queen retention, and colony growth and 
survival. Studies are conducted at multiple levels. At the molecular 
level, the role of beneficial microbes in the bees and the colony food 
stores are being investigated by scientists in Tucson, Arizona, to 
determine the contributions of microbial communities to nutrient 
synthesis and food digestion and storage.
    The effects of nutrition on the chemical communication system in 
the colony, especially as it relates to worker-queen interactions, also 
are being investigated. This is particularly important due to high 
queen losses experienced by commercial beekeepers. Studies were 
conducted comparing the nutritional quality of supplemental diets and 
natural forage and the effects on colony health. The resulting pathogen 
loads, and queen and overwintering colony loss, were determined and 
found to be higher in colonies fed the supplements. The nutritional 
analyses can serve as a basis for improving the nutritional quality of 
commercially available supplements. The study results pointed to the 
need for natural forage to ensure colony health and survival.
    ARS scientists in Logan, Utah, are also evaluating the use of 
Conservation Reserve Program acreages to provide floral forage to 
multiply alfalfa leafcutting bees to supplement commercial populations 
for alfalfa seed production. Canadian populations must now be bought to 
pollinate alfalfa for seed. After 2 years of successful pilot trials, 
the scientists are now monitoring commercial production efforts (in 
collaboration with Forage Genetics). ARS scientists are quantifying 
pollen and nectar production, the bees' nest cell production, and 
specific losses (e.g., release dispersal) and mortality factors that 
subtract from reproduction. Sweet clover is delivering annual, 
profitable population increases, which will be improved once several 
pestilence problems are fixed.
    ARS scientists are addressing the continued feeding and 
reproduction of blue orchard bees for almond pollination after that 
crop's petal fall. Working with commercial growers, they are field-
testing growing flowering resources that bloom right after almond, 
monitoring flower use, and later, provisioning and reproduction back at 
the nests. This promising strategy is needed to sustain these 
pollinators' managed populations for almond pollination, thus making it 
an economically attractive complement to honey bees.
    These scientists are also studying ways to improve shelter designs 
for managed leafcutting bees. Diverse shelter designs in use today vary 
greatly in interior microclimate, and some are harmful (too hot) for 
bees or their progeny. Shelter design may also be influencing when and 
under what conditions healthy diapausing (a state of metabolic arrest 
similar to hibernating bears) alfalfa leafcutting bee brood is 
produced. The goal is to understand variation in shelter microclimate 
so that changes to design and/or board placement can provide 
environmental conditions most favorable for brood production.
    ARS scientists are studying ways to improve the acceptability and 
practicality of nesting materials for cavity-nesting mason bee species, 
such as the blue orchard bee, which are useful for pollinating western 
U.S. berry and nut (almond) crops. New and practical designs are being 
tested to improve a prototype design by ARS of an affordable, portable 
nesting shelter. Alternate cavity designs to supplant straw inserts in 
polystyrene nesting boards are being explored with a manufacturer. A 
foolproof emergence box design has been designed and tested. A bee 
nesting attractant product was developed and a patent application has 
been filed. This product attracts blue orchard bees to nesting blocks, 
thus increasing the ability to maintain these orchard pollinators in 
commercial domiciles.
    ARS scientists recently completed studies about wildflowers used by 
bees and grazing management practices, specifically their effect on the 
abundance and diversity of wildflowers utilized as forage by native 
bees in rangeland pastures of Wyoming. They found that, over time, a 
large-scale (30,000 acres) nest-rotation, pasture management scheme 
used by The Nature Conservancy led to less bare ground and shrub cover 
and more grass for cattle to eat. Wildflower diversity and densities 
remained mostly the same, although highly variable from pasture to 
pasture. At more favorable sites and years, wildflowers used by bees 
benefited. In harsh sites or drought years, the effect was not 
apparent.
    NIFA also funds extramural research to address honey bee nutrition. 
NIFA-funded researchers at Iowa State University a combination of 
laboratory and field-based studies to examine the effects of three 
viruses and nutritional stress on worker bees and their colonies to 
determine whether these two negative factors together can cause the 
symptoms of CCD. These findings may lead to changes in apicultural 
management, such as: more informed virus quarantine practices, colony 
supplementation with multi-source pollen when bees are nutritionally 
stressed, allowing bees to forage on crops of high nutritional value 
after low, and encouraging farmers and beekeepers to use land 
management practices that increase floral diversity.
    NIFA-funded researchers at University of Florida, Gainesville are 
assessing the effects of exposure to pesticides and other xenobiotics 
on the survival, health and productivity of honey bee colonies and 
pollinator abundance and diversity. One component of this project is to 
determine how land management practices affect pollinator nutrition and 
how nutation affects honey bee colony productivity and success in the 
context of pesticide and xenobiotic exposure.
    The Animal and Plant Health Inspection Service (APHIS) supports 
surveys and research to protect the health of honey bees and other 
pollinators. APHIS is funding projects with the Pollinator Partnership 
to test the associations between honey bees and common nursery plants 
to determine the current capacity of the nursery industry to promote 
bee forage. In addition, this will help identify plants for which the 
nursery industry should actively investigate alternative pest and 
disease management strategies. In addition, Project Apis m. is 
conducting an APHIS-funded study to support an increase in the quality 
and amount of habitat and forage for honey bees, and to relate the 
impact of that forage on mitigating honey bee pests and diseases.
    USDA is also monitoring and assessing the effectiveness of CRP and 
EQIP conservation covers established to provide honey bees and other 
pollinators with nutritious forage habitat. FSA and NRCS have entered 
into an agreement with USGS's Northern Prairie Wildlife Research Center 
to identify the plants used by honey bee colonies in 5 states: 
Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin. This 
information will combined with observations of colony survival rates to 
enhance USDA honey bee conservation effectiveness. In addition, FSA has 
agreements or contracts with USGS in Ft. Collins, the Oklahoma State 
University USGS Cooperative Study Unit, Iowa State University, and the 
Pollinator Partnership to monitor and assess the effectiveness of 
various CRP practices on honey bee productivity and native pollinator 
use.
    As for the Varroa mite problem, Varroa is one of the most important 
threats to honey bee health worldwide. Beekeepers rely on a variety of 
control measures including resistant lines of bees, two of which were 
developed by ARS scientists in Baton Rouge, Louisiana, that have won 
Federal Consortium Technology Transfer awards. Other measures include 
chemical and non-chemical control strategies, e.g., the commercial 
HopGuard developed by ARS scientists in Tucson, Arizona.
    ARS continues to screen compounds for activity in controlling 
Varroa. Research into the interactions of Varroa and viruses is ongoing 
and ARS is involved in working to control Varroa with a variety of 
sustainable techniques, including RNAi (gene silencing) and biological 
control agents.
    NIFA also funds a variety of work on pests and diseases of 
pollinators. University of Minnesota extension specialists are 
assisting honeybee queen breeders in selecting for hygienic behavior, a 
trait that helps bees defend against Varroa mites and two other 
diseases, American foulbrood and chalk brood.
    NIFA-funded Cornell scientists are testing the hypothesis that 
producing smaller colonies will give the mites fewer opportunities to 
reproduce and so will lower the per capita level of mite infestation of 
the bees.
    NIFA-funded researchers at Penn State University are investigating 
the overall role of formulation ingredients added to chemicals used to 
control Varroa mites. The bulk of synthetic organic chemicals are 
formulation ingredients, generally recognized as safe, having no 
mandated tolerances, and whose residues remain unmonitored. Surfactants 
and solvents are showing high eco-toxicity to fish, amphibians, honey 
bees and other non-target organisms.
    Varroa mites are a particularly detrimental honey bee pest so APHIS 
is supporting research to monitor for resistance to pesticides used for 
Varroa control. APHIS also collaborated with ARS and EPA to register 
oxalic acid as an active ingredient in pesticides for Varroa control. 
In addition, ARS and North Carolina State University are investigating 
interactions between Varroa and viruses through APHIS-funded projects.

    Question 2a. Two summits on pollinator health were conducted last 
year on the impact of Varroa (February) and forage and nutrition 
(October). When will the findings from those summits be finalized and 
made public?
    Answer. The proceedings from the Varroa Mite Summit and the Forage 
and Nutrition Summit are completed, have been reviewed by USDA and EPA, 
and have been released in support of the Strategy developed in response 
to the Presidential Memorandum on Creating a Federal Strategy to 
Promote the Health of Honey Bees and Other Pollinators.

    Question 2b. Reliable data on bee population is challenging to 
find. What work is USDA doing to create a reliable system for a bee 
census so that a baseline can be determined?
    Answer. USDA's National Agricultural Statistics Service (NASS) 
plans to measure colony loss on a quarterly basis. Survey work is 
anticipated to begin this spring. The current plans are for NASS to 
publish its first colony loss estimates in April 2016.
    Additionally for FY 2016, NASS has requested an increase of 
$500,000 for Pollinator Health Surveys as part of the government-wide 
Pollinator Health Initiative on Colony Collapse Disorder (CCD). These 
additional funds will allow NASS to collaborate with USDA and other 
Federal partners to create an annual survey designed with the primary 
purpose of providing:

  (a)  Improved baseline data and annual data to determine the extent 
            of CCD,

  (b)  Quantitative information on potential causal factors.

  (c)  Enable more analysis of the Colony Loss survey data;

  (d)  Determine if a larger sample size is needed for the Colony Loss 
            surveys;

  (e)  Discover if and the extent to which pollination costs for any 
            commodities have increased in association with CCD; and

  (f)  Enable more analysis of the pollination cost data.

    NASS is committed to collaborating with USDA and the other 
departments on a unified and complementary approach to develop and 
support the Pollinator Health Initiative. This will allow NASS and its 
collaborators to address critical information needs at an accelerated 
pace and guide honey bee management at a national scale.

    Question 2c. EPA has encouraged State Departments of Agriculture to 
work with local stakeholders to determine the best practices for 
managed pollinator partnership plans. How is USDA coordinating with 
State Departments of Agriculture and providing any needed expertise or 
resources to help the departments develop plans?
    Answer. The USDA Office of Pest Management Policy (OPMP) staff is 
participating in the process with the American Association Pest Control 
Officials (AAPCO), which is the association that is spearheading the 
development of these plans. OPMP staff is also involved with individual 
states, and the land-grant universities in those states, in the 
development of the crop specific pollinator plans. USDA also contracted 
with the Pollinator Partnership in producing baseline data on adoption 
of best management practices by major cropping systems in protecting 
honey bees. That report was posted in 2014.

    Question 2d. What steps is the Department taking to ensure that 
findings from research and other pollinator-related activities are 
coordinated with any actions EPA is taking to enhance bee health?
    Answer. USDA-ARS has worked closely over the past few years with 
EPA to enhance our understanding of the potential role of pesticide 
exposure on pollinator health. Activities include several ARS 
scientists serving on an EPA Science Advisory Panel to examine protocol 
testing and potential improvements needed to test for sub-lethal 
effects. ARS scientists have worked closely with EPA to design research 
protocols that would generate data to inform EPA of potential pesticide 
impacts. Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) 
Scientific Advisory Panels (SAP), providing a public review of their 
reports, include:

   Characterization and non-target organism data requirements 
        for protein plant pesticides, Arlington, VA, 1999.

   Bt plant pesticides risk and benefit assessments, Arlington, 
        VA, 2000.

   Pollinator Risk Assessment Framework, Arlington, VA, Sept. 
        11-14, 2012. Jenkins, R., M. Berenbaum, K. Delcos, N. 
        Fefferman, G. Hunt, R. James, S. Klaine, J. McManaman, N. 
        Ostiguy, J. Pettis, J. Pistorius, T. L. Potter, M. Sandy, A. 
        Schwab, D. Schlenck, D. Tarpy. A set of scientific issues being 
        considered by the United States Environmental Protection Agency 
        regarding pollinator risk assessment framework. Advisory Panel 
        Meeting Sept. 11-14, 2012. Environmental Protection Agency, 
        Washington, D.C. (Government Report).

    The Bee Research Laboratory in Beltsville, Maryland, has hosted two 
workshops specifically for EPA personnel to help educate individuals 
within EPA on pollinator biology. ARS continues to consult regularly 
with EPA on a variety of pollinator related issues, including sub-
lethal pesticide effects and the need for alternative Varroa mite 
controls. ARS worked closely with EPA in 2015 to bring a new mite 
control product to market, oxalic acid, which provides a new tool to 
beekeepers to manage Varroa mites.
    Another contribution is in the area of bee and mite population 
modeling. Quantifying the effects of pesticides on honey bees is 
difficult due to the social structure of colonies. Effects from 
sublethal exposure to pesticides might not be obvious or immediate. One 
tool that may facilitate the evaluation of pesticide effects on honey 
bees that also incorporates multiple stressors that bees encounter is a 
model that simulates the processes of a honey bee colony and the 
impacts on the colony following pesticide exposures.
    There are several models in the literature with varying levels of 
complexity and evaluation (e.g., validation with empirical data, 
analysis of model sensitivity and uncertainty); however, none of the 
models were considered suitable for pesticide risk assessments in a 
regulatory context by the EPA because the models did not adequately 
account for effects of pesticides on bees.
    When reviewing the existing honey bee colony models, EPA identified 
the BEEPOP model developed by ARS scientists in Tucson, Arizona, as one 
of the most important of the colony simulation models given that 
portions of other models that simulate in-hive dynamics are based on 
BEEPOP. The model allows for consideration of site-specific weather, 
which makes the model transferrable to different locations in the 
United States. Furthermore, ARS scientists updated BEEPOP to include 
the effects of Varroa mite infestation and treatments on colony growth 
and survival (VARROAPOP). ARS scientists are now working with EPA to 
incorporate pesticide exposure in the VARROAPOP model to determine the 
effects on colony population dynamics. With these modifications, 
VARROAPOP will be readily parameterized using existing biological and 
pesticide-specific data to determine the effects of pesticides on 
colony growth and survival.
    ARS scientists also contribute to EPA collaboration by presenting 
talks, e.g., the Webinar, ``3,500 Species of bees: what to do with them 
all?'' for the Environmental Protection Agency, Arlington, VA, 2011.
    ARS and other USDA, EPA, and other government agencies also 
participate in the Bee Health and Colony Collapse Disorder Steering 
Committee (since 2007) and now the Pollinator Health Task Force, 
initiated in response to a memorandum by President Obama on pollinator 
health (2014).
Questions Submitted by Hon. Ted S. Yoho, a Representative in Congress 
        from Florida
    Question 1. Secretary Vilsack, in most instances, fine schedules 
are made public, for example with traffic infractions, because the 
public has a right to know.
    In that same regard, the general public has a right to know how 
government agencies, like USDA's Animal and Plant Health Inspection 
Service (APHIS), calculate fines. Could you tell me why USDA or APHIS 
have not shared the table of penalty guidelines as disclosed in a March 
2013 press release with the regulated community? As I understand it, 
some in the regulated community were denied the opportunity to see this 
information by FOIA and even Members of both the House and Senate are 
still waiting for a response to a letter asking for this.
    Secretary Vilsack, transparency in government is an important facet 
of democracy and a pillar of principle with the current Administration. 
I and several other Members requested to see information regarding a 
table of penalty guidelines that USDA and APHIS use to enforce the 
Animal Welfare Act. Could you tell me, so I may share with my 
colleagues, the status of our request to see the table and when could 
we expect a response?
    Answer. I appreciate your interest in this issue and am happy to 
provide you with additional information on this issue. As outlined in 
my June 9, 2014, response to your and several other Members' letter on 
this issue, APHIS takes into account four factors outlined by the 
Animal Welfare Act (AWA) for assessing penalties: (1) the size of the 
business; (2) the gravity of the violation(s); (3) whether or not the 
regulated entity has shown good faith; and (4) the history of previous 
violations. APHIS staff would be happy to brief you or your staff on 
the factors we take into consideration in determining penalties under 
the AWA.
    While I understand the interest in reviewing the AWA penalty 
guidelines themselves, USDA has not provided the guidelines in their 
entirety to the regulated community or others because the guidelines 
contain agency procedures and techniques for enforcing the AWA and 
assessing penalties for violations of the AWA. Moreover, release of 
these guidelines could lead to circumvention of the AWA. For example, 
the penalty guidelines contain additional information considered policy 
and guidance that would allow licensees to calculate the cost of doing 
business with certain AWA violations and to circumvent the penalty 
assessment. Additionally, subjects of enforcement actions may try to 
use them as a basis for arguing for reduced penalties in their own 
cases. If you are interested in receiving a copy of the version of the 
redacted guidelines we have released previously, I am happy to provide 
it to you. In addition, I am sharing below a simplified version of the 
AWA penalty worksheet that has been released publicly by the USDA 
Office of Inspector General and provides a general overview of how 
penalties are currently calculated.

                  Table 1 Simplified Penalty Worksheet
------------------------------------------------------------------------
 
------------------------------------------------------------------------
AWA Maximum Penalty for One Violation                       $10,000
------------------------------------------------------------------------
Factors to Consider       Range of Reduction               Scenario
------------------------------------------------------------------------
  Size of Business......       \1\ 0 to 50%                ($5,000)
  Prior History.........           0 to 30%                ($3,000)
  Gravity...............           0 to 17%                ($1,700)
------------------------------------------------------------------------
             Penalty Subtotal                                  $300
------------------------------------------------------------------------
  Good Faith............  0 or 25% of Penalty                 ($75)
                                   Subtotal
------------------------------------------------------------------------
               OGC Amount \2\                                  $225
------------------------------------------------------------------------
  Settlement............  0 or 75% of OGC Amount         \3\ ($169)
------------------------------------------------------------------------
          Initial Stipulation                                   $56
------------------------------------------------------------------------
  Discretionary.........  Up to R30% of Initial               ($17)
                                Stipulation
------------------------------------------------------------------------
        Final Stipulation \4\                                   $39
 
Highest Reduction Possible \5\                                99.6%
------------------------------------------------------------------------
\1\ This reduction is up to 50 percent for dealers. For all others, the
  reduction is up to 43 percent.
\2\ The OGC amount may also be affected by the use of the discretionary
  reduction.
\3\ The actual effect of this reduction in most of the cases we reviewed
  was significantly higher than all other reductions on the worksheet.
\4\ This hypothetical example is for one violation only; stipulations
  usually include fines for multiple violations, which would increase
  the stipulation accordingly.
\5\ This is the highest reduction possible; the highest reduction in the
  cases we reviewed was 97 percent.

    I would like to note, however, that the USDA Office of Inspector 
General published an audit in December 2014 that focused on APHIS' 
oversight of research facilities. OIG raised concerns with respect to 
two examples of reduced penalties that APHIS had calculated; therefore, 
the Agency is reviewing the penalty guidelines and worksheets to 
determine whether APHIS should adjust the reductions offered when 
determining penalties under the AWA.
Questions Submitted by Hon. James P. McGovern, a Representative in 
        Congress from Massachusetts
    Question 1. I have heard from farmers in my district with questions 
about H.R. 609, the Safe Food Act of 2015, which would establish a 
single Federal food safety agency. What are your thoughts on this 
legislation? How might it impact animal and meat inspections by USDA 
and USDA food safety programs such as GAP and harmonized GAP?
    Answer. While USDA has not fully evaluated the Safe Food Act, 
proposals such as H.R. 609 are part of a larger conversation on 
improving public health.
    The Administration's FY 16 budget included a proposal for a single 
food safety agency. The Center for Disease Control (CDC) estimates that 
48 million Americans are affected by foodborne illness each year. 
128,000 of these individuals become hospitalized and 3,000 die. It is 
clear that the food safety system could benefit from increased 
coordination beyond the extensive efforts that already exist. Nothing 
about the way FSIS conducts its work changes as a result of the 
President's proposal. This is an initial step in what, if it goes 
forward, will be a long process. Constant line inspection is the 
cornerstone of FSIS' work and the President's budget requests $1.012 
billion dollars in operational funds for FSIS to continue this year 
within USDA. FSIS employees will continue their important work of 
ensuring the safety of America's supply of meat, poultry and processed 
egg products.

    Question 2. I have also heard from several farmers about the issue 
of soil health. I understand that NRCS has a main focus on soil health 
and works with growers nationally on the importance of soil health for 
successful crop production and environmental stewardship. What role, if 
any, does EPA have in soil health? Does USDA have a plan to work 
cooperatively with EPA on soil health?
    Answer. USDA-NRCS has a major emphasis on Soil Health and works 
with many partners to promote soil health systems and practices. Fully 
functioning, healthy soils absorb and retain more water, cycle 
nutrients better, are easier to manage, and suppress pests and 
pathogens more effectively. Healthy soils are more resilient to drought 
as they store more water that plants can access. With lower runoff and 
erosion during heavy rainfall, the risk of flooding of downstream 
communities and water pollution is reduced, and food production can be 
maintained even with extreme weather events. Additionally, soil health 
management practices help maintain biodiversity, including supporting 
habitat and food for agriculturally critical pollinators, among other 
important functions.
    USDA-NRCS has been working to expand the tools and approaches and 
partnerships to accelerate the adoption of soil health management 
systems (SHMS). In 2014, USDA awarded $9.5 M in NRCS Conservation 
Innovation Grants to 23 partners in 24 states to evaluate and increase 
adoption of SHMS. The new Regional Conservation Partnership Program 
awarded at least 17 projects with a soil health focus in FY 2015. A 
National Cover Crop and Soil Health Conference in 2014 conducted in 
partnership with the Howard G. Buffett Foundation, reached 
approximately 6,000 landowners on the benefits of cover crops and SHMS. 
USDA already partners with many entities to enhance soil health, and is 
open to expanding that partnership to include any agency or 
organization with a mission and an interest in adoption of soil health 
management systems.
    EPA's Farm, Ranch, and Rural Communities Federal Advisory Committee 
(FRRCC) established in 2008, provides independent policy advice, 
information, and recommendations to the Administrator on a range of 
environmental issues and policies that are of importance to agriculture 
and rural communities. In January 2015, this Committee dedicated its 
deliberations to soil health and the environmental benefits of healthy 
soils. Those deliberations culminated in discussions about 
opportunities to advance soil health, agricultural certainty, and 
outreach to agriculture. So while soil health is not a specific mission 
for EPA, the agency has demonstrated interest in the potential benefits 
of soil health practices related to issues over which the agency has 
regulatory responsibilities, such as water or air quality.

    Question 3. The rule for the Agriculture Conservation Easement 
Program (ACEP) is pending at the White House Office of Management and 
Budget (OMB). Do you have an estimate on when that rule will be 
published? Because this program was a consolidation of three well-known 
existing programs, the need for stakeholder engagement and farmer 
education will be significant. Can you tell us what your plan is to get 
farmers and organizations up to speed on the new program and rule 
changes so we can best utilize this program? What is the timeline for 
that process?
    Answer. The ACEP Interim Rule was published on February 27, 2015 
and has a 60 day public comment period that ended April 28, 2015. NRCS 
will be conducting outreach and providing educational opportunities to 
stakeholders through a series of instructional and question and answer 
webinars. For example, NRCS will provide `ACEP-ALE 101' and `ACEP-ALE 
Certification Process' webinars for partners in April. Additionally, at 
the invitation of various stakeholder groups, NRCS State and National 
Headquarters staff will be participating in stakeholder meetings over 
the coming months to provide information and address questions. NRCS is 
also providing extensive training for Agency employees at the state 
level to ensure that they are well equipped to provide assistance to 
interested applicants on the new ACEP policy and procedures. Throughout 
April, NRCS will participate in a series of at least four live net-
conferences hosted by Tribes to provide specific information and answer 
questions on the ACEP related to Tribal lands and opportunities for 
Tribes to participate in the program.

    Question 4. I understand that because the ACEP rule is currently 
under review you can't talk about specific provisions, but I would like 
to take this opportunity to highlight the need to make this program 
work for farmers of all sizes--specifically access to this program for 
beginning and new farmers. As you know, the farm bill included specific 
language that talked about the viability of these easements for keeping 
land in agriculture and keeping farmers on the farm. That is especially 
critical to my constituents in Massachusetts. Can you talk about your 
strategy for beginning farmers and this program?
    Answer. During the process of developing and finalizing the interim 
rule, NRCS actively engaged the stakeholder community to outline key 
statutory changes. NRCS paid attention to the needs of beginning and 
new farmers in the process. For example, the ACEP interim rule 
addresses important issues such as, identifying as a criterion for 
projects of special significance whether a farm or ranch is operated 
for the purpose of increasing participation in agriculture and natural 
resource conservation by under-served communities, veterans, beginning 
farmers or ranchers, or farmers or ranchers with disabilities.
    NRCS has skilled professionals at the field level who work with 
beginning and new farmers as well as other historically under-served 
producers, to recommend conservation solutions to their current natural 
resource concerns that may be available under ACEP, and assist with 
establishing long-term viability of their operations through ACEP and 
other NRCS programs. In addition to its dedicated county staff, NRCS 
has entered partnership agreements with Community Based Organizations, 
Tribal Organizations, 1890 and 1994 Land-Grant Institutions, to expand 
the agency's reach to historically under-served farmers and ranchers.

    Question 5. I have also received questions about regional equity, 
which as I understand, is no longer based on a flat $15 million 
minimum, but on a percent of overall funding. Can you tell me what that 
percentage will likely translate to in available dollars per state this 
year?
    Answer. The Agricultural Act of 2014 (2014 Farm Bill) revised the 
calculation for regional equity from a flat amount of $15 million per 
state to a calculated amount based on 0.6 percent of the funding made 
available for the conservation programs authorized under subtitle D, 
(except the Conservation Reserve Program), subtitle H, and subtitle I 
of the Food Security Act of 1985. For FY 2015, the regional equity 
calculation for the covered programs is shown below:

------------------------------------------------------------------------
         Program             Funding Provided          RE per State
------------------------------------------------------------------------
             EQIP            $1,347,000,000              $8,082,000
             ACEP               393,975,000               2,363,850
             RCPP                92,700,000                 556,200
             CStP             1,164,151,375               6,954,908
                         -----------------------------------------------
  Total.................      1,950,477,000              17,956,958
------------------------------------------------------------------------

    States are required to annually submit a State Resource Assessment 
that reports on the resource needs in the State and demonstrates the 
State's ability to use at least 0.6 percent of the funds made 
available, as required by Section 1241(e) of the Food Security Act of 
1985 (16 U.S.C. 3841), as amended by section 2603 of the 2014 Farm 
Bill. The State Resource Assessment is the basis, in part, for 
allocating available funding across the States.

    Question 6. I have also received questions about allocations 
between the ALE and WRE programs. How will USDA decide allocations 
between ALE and WRE this year? What percent of FA will go to each? What 
percent of TA?
    Answer. NRCS is implementing Agricultural Conservation Easement 
Program (ACEP) to respond to demand on an annual basis and is not 
establishing a funding split between the Agricultural Lands Easement 
(ALE) and Wetlands Reserve Easement (WRE) components of ACEP over the 
life of the farm bill. We anticipate that the funding proportion will 
fluctuate reflecting partner and landowner demand and the dynamic 
nature of agricultural lands.
    Funding for ACEP is less than \1/2\ of that previously available 
under the repealed programs (Wetlands Reserve Program (WRP), the 
Grassland Reserve Program (GRP), and the Farm and Ranch Lands 
Protection Program (FRPP)). Despite reduced funding, in FY 2014, 90,000 
acres of farm and ranch lands were enrolled in ACEP-ALE; about 46 
percent of the historic average acres under FRPP/GRP. Over 55,000 acres 
of wetlands were restored and protected through new ACEP-WRE; about 31 
percent of the historic average acres under WRP. NRCS worked diligently 
to provide an equitable allocation of acres and funds across states and 
will continue to do so in FY 2015.

    Question 7. Overall, I am pleased with the Regional Conservation 
Partnership Program in the new farm bill. Can you talk about ways we 
can encourage partnerships back home in our districts? What have you 
seen as successful projects so far and how can we apply lessons learned 
to our own states? For those projects that weren't selected, will NRCS 
be giving us more information as to how those applications can rise to 
the top during the next round?
    Answer. The Regional Conservation Partnership Program (RCPP) 
demonstrates the importance of strong public-private partnerships in 
delivering local solutions to tough natural resource challenges. In the 
first offering of RCPP funding, over 230 strong final proposals were 
submitted by partners nationwide, and of those 115 proposals were 
selected for funding. These final projects demonstrated strong, diverse 
partnerships; leveraged significant contributions to the project; 
showed innovative solutions to identified natural resource challenges; 
and an emphasis on demonstrating positive results.
    NRCS is committed to continuing outreach work to engage with 
interested partners to expand the reach of RCPP and further leverage 
the federal investments. NRCS provided feedback to partners who were 
not selected for funding in order to help improve future proposals the 
partners may wish to submit. On the RCPP website, NRCS provided 
guidance about strengths and opportunities for improvements for 
applications submitted at the pre-proposal stage.
    NRCS plans to increase webinars and outreach meetings, both 
nationally and at the state level, once the FY 2016 RCPP Announcement 
of Program Funding is released in April. Further, the agency is open to 
and regularly meets with applicants that were not selected in the 
initial round to provide additional feedback on ways to strengthen or 
improve the application.

    Question 8. Finally, the allegations of horrific animal welfare 
abuse uncovered by The New York Times at the Agricultural Research 
Service's (ARS) U.S. Meat Animal Research Center (USMARC) shocked the 
American public. During your testimony before the Committee on February 
11th, you mentioned that some of the practices in the article were 
outdated and no longer in use. Can you expand upon your comments? What 
practices in the article have been phased out and what practices 
described in the article are still in place?
    Answer. The New York Times article alleging mistreatment of 
livestock at USMARC is of great concern to me. Therefore, I established 
an expert panel of veterinarians and experts in animal welfare to 
review ARS's animal welfare policies, to assess the status of animals 
at USMARC, and to make recommendations to address any shortcomings they 
uncovered the draft report was released on March 9th (http://
www.ree.usda.gov/ree/news/USMARC_AWHR_Panel_Report_PrePublic_
Hearing_030602015.pdf).
    The Department has solicited public input since release of the 
draft report. On March 18, 2015, a public teleconference was convened 
to present the expert panel's findings. A public email address has 
received thousands of comments. And on April 14, 2015, the NAREEE 
Advisory Board held a public teleconference to share their review of 
the expert panel report, offer their comments, and listen to public 
input. The final report will be provided to the committee upon 
completion.
Questions Submitted by Hon. Ann Kirkpatrick, a Representative in 
        Congress from Arizona
    Question 1. What have USDA and the USDA Office of Tribal Relations 
done to expand outreach efforts to assist Native American farmers and 
ranchers start and grow their businesses? What has USDA done to address 
underutilization of the Farm Service Agency and rural development 
programs within our tribal communities? How is USDA working to assist 
these under-served populations?
    Answer. USDA provides outreach to Native American Farmers and 
Ranchers at the federal level as well as the state level. The USDA 
Office of Tribal Relations in the Office of the Secretary (OTR) serves 
as a singular point of contact for Tribal leaders, representatives, 
producers, and business owners seeking to gain more information on the 
USDA programs that can benefit their Tribe, business, or organization. 
The OTR works to ensure questions are answered and to arrange meetings 
with local USDA representatives in the tribes'/farmers'/ranchers' 
locale as well as in Washington, D.C. Through the Secretary's 
StrikeForce Initiative for Rural Growth and Opportunity, targeted 
assistance addressing poverty has been the focus in 880 counties, 
parishes, Colonias, boroughs and tribal reservations across 21 states 
and Puerto Rico.
    The Office of Tribal Relations administers the USDA Council for 
Native American Farming and Ranching (CNAFR), a FACA Committee 
established pursuant to the Keepseagle legal settlement. The CNAFR has 
made numerous recommendations to the Secretary that have resulted in 
USDA programs becoming better accessible to tribes and tribal citizens 
and other historically disadvantaged communities as well as small and 
beginning farmers and ranchers.
    The role of the CNAFR is to:

   advise the Secretary of Agriculture on issues related to the 
        participation of Native American farmers and ranchers in USDA 
        programs including farm loan programs;

   transmit recommendations concerning any changes to USDA 
        regulations or internal guidance or other measures that would 
        eliminate barriers to program participation for Native American 
        farmers and ranchers;

   examine methods of maximizing the number of new farming and 
        ranching opportunities created through USDA programs through 
        enhanced extension and financial literacy services;

   examine methods of encouraging intergovernmental cooperation 
        to mitigate the effects of land tenure and probate issues on 
        the delivery of USDA programs;

   evaluate other methods of creating new farming or ranching 
        opportunities for Native American producers; and

   address other related issues as deemed appropriate.

    In FY 2013, USDA's Farm Service Agency (FSA) provided over $71 
million in direct farm loans to 1,200 Native American-owned farming and 
ranching businesses. These funds were used to purchase land, equipment, 
and breed stock. The program assists Native American farms and ranches 
with their initial financing needs, providing the ability to create or 
enhance credit and strengthen small businesses, to improve rural 
economies. Additionally, the Agency guaranteed over $35 million in 
commercial loans made to Native American farmers and ranchers. In the 
last 5 years the Agency has made or guaranteed $470 million in 
assistance to Native American farmers and ranchers. Additionally, the 
USDA Farm Service Agency is working closely with Treasury's Community 
Development Financial Institutions (CDFI) Fund and the Native American 
CDFI Network to certify Native American owned CDFIs as eligible lenders 
for FSA's Guaranteed Loan Program. This partnership of FSA and Native 
CDFI's will improve access to capital for Native American farmers and 
ranchers.
    USDA made significant investments in economic development, housing 
and infrastructure projects to benefit Tribes in 2014. For USDA Rural 
Development alone, $290.8 million was invested to directly benefit 
American Indians/Alaska Natives (AI/AN).
    USDA Rural Development Business Programs guaranteed four loans to 
AI/AN-owned businesses. The loans provided $30.9 million in financing. 
Additionally, 18 Rural Business Enterprise Grants (RBEG) (totaling $2.7 
million) and 11 Rural Business Opportunity Grants (RBOG) (totaling 
$812,000) were awarded to Tribes and tribal entities, which will help 
create and save AI/AN jobs. One RBOG award will be used by the United 
South and Eastern Tribes (USET) to develop a comprehensive economic 
development plan for 26 Tribes in the southern and eastern United 
States, while the Passamaquoddy Tribe in Maine received a $99,500 RBEG 
grant to establish a revolving loan fund for maple syrup businesses.
    In Fiscal Year 2014 USDA Rural Development invested $12.7 million 
to help Tribes finance essential community facilities including schools 
and clinics. Twenty-nine grants ($4.1 million) were provided to 1994 
Tribal Land-Grant Colleges and Universities through the USDA Rural 
Development Community Facilities Program.
    USDA loans and grants also provide much needed financing for AI/AN 
families to purchase and repair single-family homes. This year, AI/AN 
homeowners received 116 direct home loans ($14.8 million) and 961 
Single Family Housing loan guarantees ($133.3 million). USDA also 
provided $1.4 million, through 229 grants and loans to elderly and very 
low income AI/AN homeowners to help make safety and efficiency repairs 
and improvements to their homes.
    Through the Housing Preservation Grant program, USDA provided 
funding to assist tribes improve low income and elder housing in six 
states (Alaska, Arizona, California, Nevada, Utah and Washington). For 
example, in California the Los Coyotes Band of Cahuillo and Cupeno 
Indians received $50,000 to rehabilitate the homes of 15 tribal 
families. The Nevada Rural Housing Authority also received $50,000 to 
weatherize homes in four counties, including homes of tribal members. 
In Washington, the Lummi Nation Housing Authority received over $54,000 
to help 24 very-low-income Tribal families rehabilitate and repair 
their homes.
    In 2014, USDA's Telecommunications Programs provided 26 Distance 
Learning and Telemedicine (DLT) grants totaling $9.6 million to 
entities serving Tribal lands. Funding helps grantees purchase 
equipment to facilitate distance learning and telemedicine services. 
Navajo Technical College received a DLT grant of $447,000 and the Saint 
Regis Mohawk Tribe received $336,000 to create virtual learning and 
telemedicine networks that will bolster educational opportunities and 
facilitate AI access to specialized medical care.
    USDA invested in 71 water and environmental projects benefiting 
Tribal communities throughout FY 2014. In total $53.3 million directly 
benefited AI/AN. Total development cost of these projects--including 
funding from additional investors--totaled $147.7 million. Nearly 57 
percent of the project financing came from USDA. In total, 18 of these 
projects were in Alaska and 11were funded through the Rural Alaska 
Village Grant program.
    This year, USDA's Electric Programs invested $17.2 million in 
direct loans to rural electric utilities. This investment brought new 
and improved electric infrastructure to 10,086 Native American electric 
consumers. USDA also provided four High Energy Cost Grants for Tribal 
projects, totaling $6.2 million. Two of these grants were awarded to 
the Anchorage-based Alaska Village Electric Cooperative, which serves 
communities in Southwest Alaska, one was provided to the Denali 
Commission and another was awarded to Sacred Power Corporation for 
projects within the Navajo Nation.

    Question 2. In 2010, you visited my District at the beginning of 
the 4 Forest Restoration Initiative, to restore the fire adapted 
ecosystems and prevent deadly forest fires in the Ronto, Kaibab, 
Coconino, and Apache-Sitgreaves National Forests. What additional 
resources does the U.S. Forest Service need to expeditiously complete 
the environmental impact study for 4FRI?
    Answer. The final Record of Decision on the phase one environmental 
impact study for 4FRI was signed April 17, 2015. The selected 
alternative includes mechanical treatment on approximately 430,000,000 
acres, and just under 600,000 acres of prescribed burning, in addition 
to spring and stream channel restoration, road decommissioning, and 
aspen and grassland restoration. This summer, the Kaibab and Coconino 
will begin preparing timber from the EIS for harvest, and both forests 
expect to issue task orders and contracts under the 4FRI project 
beginning in late 2016. 4FRI is now shifting from a planning focus to 
an implementation focus. The Forest Service continues to work toward 
full staffing for successful implementation of the EIS.
                                 ______
                                 
 Submitted Letter by Hon. Michelle Lujan Grisham, a Representative in 
 Congress from New Mexico; on Behalf of David Sanchez, Vice President, 
               Northern New Mexico Stockman's Association
February 9, 2015

  Hon. Michelle Lujan Grisham,
  House Committee on Agriculture,
  Washington, D.C.

Subject: February 11, 2015 Agriculture Hearing Rural Economy

    Honorable Representative Lujan Grisham,

    Greetings, the purpose of this letter is to identify and 
communicate Rural Economic issues and concerns for the upcoming 
Agriculture House Committee [hearing] on the Rural Economy. Northern 
New Mexico Stockman's Association represents twenty thousand farmers 
and ranchers in northern New Mexico and southern Colorado. These 
farmers and ranchers are examples of the economic engines of rural 
America. Their origins in agriculture are the longest standing in 
record for the history of American Agriculture. The information in this 
letter and the attached documents are being submitted for the upcoming 
subject hearing on Rural Economy. The most important issue we can raise 
for the hearing that impacts the rural economy of our state is the 
availability of land and natural resources which directly sustain 
agriculture families economically and also socially.
    Important fact's to reference with regard to ``agriculture land 
mass'' is the percentages of private property vs. Federal lands in the 
rural counties. We would like to make example of just one county in our 
state ``Rio Arriba'' in this economic scenario, only 22 percent of the 
land mass is private property and the majority of the land is being 
controlled by Federal agencies such as the U.S. Forest Service under 
the United States Department of Agriculture (USDA). The huge 
agriculture dependency on Federal lands is at the heart of the economic 
and social issues for the people of New Mexico. The Social and Economic 
sustainability of our people is directly tied to land and access of 
natural renewable resources. Historic Grass Root Industries such as 
ranching and farming have sustained the Hispanic and Native American 
populations since the late fifteen hundreds (Livestock Grazing).
    We would like to identify a critical economic dilemma for the 
Committee hearing: Grass Root industries such as farming and ranching 
are diminishing at an alarming rate in northern New Mexico. The income 
losses from these industries make it impossible for these families to 
remain economic or socially viable. Our county governments and school 
districts are also suffering from the lack of economic activity and the 
diminishing Payment In lieu of Taxes revenue from the Federal 
Government. The Forest Service Agency is a major contributor to this 
economic dilemma and has stifled the ability of the two minority groups 
in this region ``Hispanic and Native Americans'' agriculture families 
to remain economically and socially sustainable. At this point in our 
correspondence we would like to identify and submit as evidence for the 
subject hearing the: Economic, Social, and Cultural Aspects of 
Livestock Ranching on the Espanola and Canjilon Ranger Districts of the 
Santa Fe and Carson National Forests: A Pilot Study, by USDA Forest 
Service, General Technical Report RMRS-GTR-113, September 2003, authors 
Carol Raish, Alice M. McSweeney. Report attached.
    This Pilot Study examines current and historic economic, social, 
and cultural aspects of livestock operations owned by ranchers 
dependent on Federal lands U.S. Forest Service Federal grazing permits. 
The study focuses on both the economic and non-economic contributions 
of livestock ownership to local families and communities. The Pilot 
Study also identifies harsh economic actions by the U.S. Forest Service 
agency against minority ranching families in the reduction of Federal 
Grazing Permits as depicted on page 5, under the ``American Period'', 
right column, paragraphs 7 and 8, Example: ``On the Carson and Santa Fe 
National Forests there were 2,200 individuals holding permits in 1940, 
which by 1970 had been reduced to fewer than 1,000 (de Buys 1985)''. 
``One community had herd reductions of 60 percent, while the ranchers 
of another lost permits for 1,000 cattle in a period of a few years (de 
Buys 1985''). Also identified in the Pilot Study on page 6 is the 1968 
Hassell Report this report also identifies economic conditions in the 
rural economy: ``Problems remain in the area, and many of the 
situations discussed in the Hassell Report (1968) have not improved. 
Severe poverty, disappearance of traditional life ways.'' The Pilot 
Study reports on economic conditions on Page 5, 6 and provides shocking 
information on the negative impacts the U.S. Forest Service has had on 
the two minority classes of people in northern New Mexico 
``economically and socially''.
    The second USDA report we would like to bring to the attention of 
the Committee for the Hearing is the recent Forest Service Compliance 
Review Report Civil Rights Program Review (copy attached), which was 
released in June 2013 by the United States Department of Agriculture's 
(USDA) Office of Civil Rights, through the Office of Compliance, 
Policy, Training, and Cultural Transformation (OCPTCT). The report 
determined that the U.S. Forest Service were non-compliant with several 
civil rights requirements and that there had been inconsistent 
implementation of USDA/Forest Service regulations toward minority 
ranchers Hispanic and Native Americans. The report identifies several 
program areas of noncompliance which includes at page 5, the process 
used in ``Terminating or suspending grazing permits.'' This report much 
like the Pilot Study referenced above identify the negative actions by 
the U.S. Forest Service Agency against the same ``minority groups'' of 
people that has caused great economic determent.
    In closing, the economic state of the rural counties in the State 
of New Mexico is below the national poverty levels. The rural 
agriculture community has a very clear and complete dependency in the 
USDA Forest Service Federal Lands and USDA programs. The reports 
provided give a narrative of the current and historic economic and 
social issues with regard to USDA's role in the economic and social 
well being of northern New Mexico Families. We need a vigorous effort 
by our Representatives in Congress to return the Federal lands as an 
economic productive engine revitalizing the economy of rural New 
Mexico. Utilizing natural and renewable natural resources is healthy 
for the entire ecosystem. Northern New Mexico Stockman's Association 
has communicated the Forest Service agency issues, and the current 
economic social state to Secretary Vilsack. We feel at this time it is 
justified to ask for a ``Congressional Hearing'' for northern New 
Mexico families on the many Forest Service Grazing issues, and the 
economic status of northern New Mexico. Secretary Vilsack has ignored 
the formal cries for help from a destitute people.
            Sincerely,
            
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
            
David Sanchez,
Vice President, NNMSA.

CC:

Congressman Ben Ray Lujan;
Carlos Salazar, NNMSA President;
Ted Trujillo, Attorney;
Alma Acosta, U.S. Congressional Staff;
Rudy Arredondo, NLFRTA;
Jamie Chavez, Rural Coalition/Coalicion Rural.
                              attachment 1
                              
                              
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                                  [all]